RESTRICTED STOCK AGREEMENT


 


This Restricted Stock Agreement (the “Agreement”)
is entered into by and between NeuMedia, Inc., a Delaware corporation (the “Company”), and Vivid Entertainment,
LLC, a California limited liability company (”Vivid”).


 


WHEREAS, the
Company and Vivid have entered into that certain [Settlement Agreement] (the “Settlement Agreement”) as of the
date hereof pursuant to which the Company has agreed to issue Two Million Five Hundred Thousand (2,500,000) shares of Common Stock
(the “Shares”) of the Company to Vivid in connection with the terms of the Settlement Agreement.


 


NOW, THEREFORE, in consideration
of the mutual covenants and other agreements contained in this Agreement and the Settlement Agreement, the Company and Vivid hereby
agree as follows:


 


1.          Issue
of Common Stock.


 


(a)          Subject
to the terms and conditions of this Agreement and the Settlement Agreement, the Company hereby issues, and Vivid hereby accepts
as payment in full in accordance with the terms of the Settlement Agreement, the Shares.


 


(b)          The
Board of Directors of the Company has authorized the issue of the Shares pursuant to the terms of the Settlement Agreement.


 


2.          Closing.


 


(a)          On
the date hereof, the Company shall deliver or cause to be delivered the following:


 


(i)          a
duly executed copy of the Settlement Agreement; and


 


(ii)         the
Shares registered in the name of Vivid to a brokerage account designated in writing to the Company by Vivid.


 


(b)          On
the date hereof, Vivid shall deliver or cause to be delivered a duly executed copy of the Settlement Agreement.


 


3.          Company
Representations and Warranties. The Company hereby represents and warrants to Vivid that as of the date hereof:


 


(a)          Organization
and Business. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except
where the failure to be so qualified or in good standing would not have a Material Adverse Effect. As used in this Agreement, the
term “Material Adverse Effect” means any material adverse effect on the business, operations, assets (including intangible
assets), liabilities (actual or contingent), financial condition, or prospects of the Company and its subsidiaries, taken as a
whole.


 



    	C-0



    	 



    

 


(b)          Valid
Issuance. When issued and delivered in accordance with the terms of this Agreement and the Settlement Agreement, the Shares
will be duly and validly issued, fully paid, and non-assessable, and will be free of Liens other than restrictions on transfer.
The Shares are not subject to preemptive rights or any other similar rights.


 


(c)          Authorization;
Enforceability. All corporate action on the part of the Company and its officers necessary for the authorization, execution
and delivery of this Agreement and the authorization, issuance, sale and delivery of the Shares has been taken, and this Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms,
except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors’ rights and general principles of equity that restrict the availability of equitable or legal
remedies.


 


(d)          No
Conflict. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions
contemplated hereby and thereby will not: (i) conflict with or result in a violation of any provision of the charter or by-laws
of the Company or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event
which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement or instrument to which the Company is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations
of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or by which
any property or asset of the Company is bound or affected. Except for filings pursuant to Regulation D of the Securities Act,
and applicable state securities laws, which have been made or will be made by the Company in connection with the issuance of the
Shares, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with,
any court, governmental agency, regulatory agency, self regulatory organization or stock market or any third party in order for
it to execute, deliver or perform any of its obligations under this Agreement.


 


(e)          No
General Solicitation. Neither the Company nor any person participating on the Company’s behalf in the transactions contemplated
hereby has conducted any “general solicitation,” as such term is defined in Regulation D promulgated under the Securities
Act, with respect to the Shares.


 


(f)          Offering.
Subject to the accuracy of the representations and warranties of Vivid in Section 4 of this Agreement, the issuance of the
Shares pursuant to this Agreement constitutes transactions exempt from the registration requirements of Section 5 of the Securities
Act and from the registration or qualification requirements of applicable state securities laws.


 


4.          Vivid
Representations and Warranties. Vivid represents and warrants to the Company that as of the date hereof:


 



    	1



    	 



    

 


(a)          Authorization;
Enforcement. This Agreement has been duly and validly authorized by Vivid, (ii) has been duly executed and delivered by Vivid,
and (iii) will constitute, upon execution and delivery by Vivid and the Company, the valid and binding agreements of Vivid enforceable
in accordance with their terms, except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict the
availability of equitable or legal remedies.


 


(b)          Investment
Purpose. Vivid is acquiring the Shares for investment for its own account only and not with a view to, or for resale in connection
with, any “distribution” thereof within the meaning of the Securities Act. Vivid further represents that it does not
presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to
such person or to any third person, with respect to any of the Shares.


 


(c)          Professional
Advice; Investment Experience. Vivid has reviewed, or caused its representatives to review, the publicly available filings
made by the Company with the SEC, and Vivid has carefully considered such filings in connection with its entry into this Agreement.
Vivid has such knowledge, skill, and experience in technical, business, financial, and investment matters so that it is capable
of evaluating the merits and risks of an investment in the Shares. Vivid has retained, and relied upon, appropriate professional
advice regarding the technical, investment, tax, and legal merits and consequences of this Agreement and owning the Shares.


 


(d)          Reliance
on Exemptions. Vivid understands that the Shares are being issued to it in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws (the “Securities Laws”) and that the Company is relying
upon the truth and accuracy of, and Vivid’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of Vivid set forth herein in order to determine the availability of such exemptions. Vivid is an “accredited investor”
within the meaning of Regulation D under the Securities Act.


 


(e)          Restricted
Securities. Vivid understands that the Shares are “restricted securities” under applicable Securities Laws and that,
pursuant to these laws, Vivid must hold the Shares indefinitely unless they are registered with the SEC and qualified by state
authorities, or an exemption from such registration and qualification requirements is available. Vivid acknowledges that the Company
has no obligation to register or qualify the Shares for resale, except as provided in this Agreement. Vivid further acknowledges
that if an exemption from registration or qualification is available, it may be conditioned on various requirements including,
but not limited to, the time and manner of sale, the holding period for the Shares, and requirements relating to the Company which
are outside of Vivid’s control, and which the Company is under no obligation and may not be able to satisfy.


 


(f)          Risk
of Loss. The Purchaser is capable of sustaining a complete loss of the investment in the Shares, and Vivid has no need for
liquidity in the investment in the Shares. Vivid understands and acknowledges that an investment in the Shares is highly risky
and that it could suffer a complete loss of its investment.


 


(g)          No
Other Representations. Other than the representations and warranties contained herein [or in the Settlement Agreement], Vivid
has not received and is not relying on any representation, warranties or assurances as to the Company, its business or its prospects
from the Company or any other person or entity.


 



    	2



    	 



    

 


5.          Market
Stand-Off. Except as otherwise expressly provided in this Agreement, during the two (2) year period (the “Restricted
Period”) beginning on the date hereof, Vivid shall not, without the prior written consent of the Company (i) lend, offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares, or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the
Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of stock or such other
securities, in cash or otherwise. In the event of the declaration of a stock dividend, a spin-off, a stock split, a recapitalization
or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted
or additional securities that are by reason of such transaction distributed with respect to the Shares, any such new, substituted
or additional securities shall immediately be subject to the restrictions set forth in this Section 5. To enforce the restrictions
set forth in this Section 5, the Company may impose stop-transfer instructions with respect to the Shares until the end
of the Restricted Period. In the event that any holders of the Company’s equity securities that are affiliated with any
of Trinad Capital, Coast Asset Management or Peter Guber (together, the “Specified Stockholders”) agree to subject
to any restrictions on transfer that extend beyond the end of the Restricted Period with respect to their respective equity securities
of the Company, Vivid agrees that the Restricted Period with respect to its Shares shall be extended for the same period of time
as is applicable to the shortest period applicable to any of the Specified Stockholders, provided, that, in no event shall the
Restricted Period applicable to the Shares be extended more than one (1) year after the end of the Restricted Period.


 


6.          Restrictive
Legends and Stop-Transfer Orders.


 


(a)          Legends.
The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable
state corporate law and the Securities Laws):


 


		(i)	THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (OR OTHER EVIDENCE) IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.



 


		(ii)	THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AGREEMENT
BETWEEN THE COMPANY AND THE SHAREHOLDER DATED JANUARY 1,2011, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.



 



    	3



    	 



    

 


		(iii)	Any legend required to be placed thereon by any appropriate securities commissioner.



 


(b)          Stop-Transfer Notices. Vivid
agrees that, to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations
to the same effect in its own records.


 


7.          Piggyback Registration.


 


(a)          Piggyback
Registration Rights. The Company agrees that if, after the date hereof, the Board shall authorize the filing of a registration
statement under the Securities Act (other than a registration statement on Form S-8, Form S-4 or any other form that does not
include substantially the same information as would be required in a form for the general registration of securities) in connection
with the proposed offer of shares of Common Stock of the Company, the Company shall: (A) promptly notify Vivid that such registration
statement will be filed and that the Shares issued pursuant to this Agreement and then held by Vivid (hereinafter the “Registrable
Securities”) may be included in such registration statement at the request of Vivid; (B) use its commercially reasonable
efforts to cause the registration of such Registrable Securities that Vivid requests to be registered; and (C) use its commercially
reasonable efforts to cause such registration statement to become effective as promptly as reasonably practicable. If Vivid desires
to include in such registration statement all or any part of the Registrable Securities held by /it, it shall, within ten (10)
days after the above-described notice from the Company, so notify the Company in writing. If Vivid decides not to include all
of its Registrable Securities in any registration statement thereafter filed by the Company, Vivid shall nevertheless continue
to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as
may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. Notwithstanding
the foregoing, if any of the Specified Stockholders at any time desire to register any shares of stock of the Company held by
them: (i) the Company shall, at Vivid’s option, use its commercially reasonable efforts to cause registration of the Restricted
Stock, simultaneously with registration of the stock of the Specified Stockholders, to the extent necessary to permit their unrestricted
sale and (ii) the restrictions set forth in Section 5 shall immediately terminate should any Specified Stockholders sell stock
of the Company.


 


(b)          Underwriting
Requirements. In connection with any registration statement subject to Section 7(a) involving an underwritten offering
of shares of the Company’s capital stock, the Company shall not be required to include any of the Registrable Securities in such
underwriting unless Vivid accepts the terms of the underwriting as agreed upon between the Company and its underwriters, and then
only in such quantity as such underwriter in its sole discretion determines will not jeopardize the success of the offering by
the Company. If the underwriter determines that less than all of the Registrable Securities that Vivid has requested to be registered
(the “Requested Securities”) can be included in such offering, then the securities to be registered and sold by any person
other than the Company shall be allocated among such persons in proportion (as nearly as practicable to) the number of shares of
Common Stock requested to be registered by each such person. Notwithstanding the foregoing, in no event shall the number of Requested
Securities included in the offering be reduced if any shares of Common Stock of the Company owned by any of the Specified Stockholders
are included in such offering.


 



    	4



    	 



    

 


(c)          Abandonment
or Delay of Registration. Notwithstanding any other provision of this Section 7, the Company may at any time abandon
or delay any registration commenced by the Company. In the event of such abandonment by the Company, the Company shall not be required
to continue registration of the Registrable Securities requested by the Vivid for inclusion and the Purchaser shall retain the
right to request inclusion of the Registrable Securities as set forth above.


 


(d)          Expenses.
Vivid shall be responsible for all underwriting discounts and selling commissions with respect to the Registrable Securities being
sold by Vivid to the extent paid, or to be paid, by all other holders of equity securities of the Company and all fees and expenses
of any counsel retained by Vivid. The Company will pay all other expenses incurred by the Company associated with each registration,
including, without limitation, all filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated
with clearing the Vivid’s Registrable Securities for sale under applicable Securities Laws, and listing fees.


 


(e)          Effectiveness.


 


(i)The Company may delay the disclosure
of material non-public information concerning the Company by suspending the use of any prospectus included in any registration
statement contemplated hereunder required to contain such information, the disclosure of which at the time is not, in the good
faith opinion of the Company, in the best interests of the Company (an “Allowed Delay”); provided, that the Company
shall promptly (a) notify Vivid of the existence of an Allowed Delay, (b) advise Vivid in writing to cease all sales under the
registration statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay
as promptly as practicable.


 


(f)          Other
Registration Rights Agreements. Nothing in this Agreement shall limit the Company’s right to grant registration rights to other
persons. In the event of any change or changes in the Company’s outstanding Common Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination or any similar transaction, the Company shall adjust the number of
shares of the Company’s Common Stock granted to Vivid to prevent substantial dilution of the rights granted to Vivid.


 


8.          Miscellaneous.


 


(a)          Governing
Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall
be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles
of conflicts of law.


 


(b)          Entire
Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the parties relating
to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement,
nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement.
The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such
party.


 



    	5



    	 



    

 


(c)          Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. If the parties cannot reach a mutually agreeable and enforceable replacement for such provision,
then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such
provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.


 


(d)          Construction.
This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel,
if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.


 


(e)          Notices.
Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally
or sent by fax or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party’s address or fax number as set forth below or as subsequently modified by written notice.


 


(f)          Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together
shall constitute one instrument.


 


(g)          Successors
and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors
and assigns. The rights and obligations of Vivid under this Agreement may only be assigned with the prior written consent of the
Company.


 


(h)          Third
Party Beneficiary. This Agreement is intended for the benefit of the undersigned parties and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


(i)          Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.


 


(j)          Expenses. Each party shall pay
all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of the Agreement.


 


[Remainder of Page Intentionally Left
Blank]


 



    	6



    	 



    

 


IN WITNESS
WHEREOF, the Company and Vivid have executed this Agreement effective as of January 1, 2011.


 


	VIVID ENTERTAINMENT, LLC:	 	NEUMEDIA, INC.:
	 	 	 
	By:	[ILLEGIBLE]	 	By:	[ILLEGIBLE]
	 	 	 	 	 
	Name:	[ILLEGIBLE]	 	Name:	[ILLEGIBLE]
	 	 	 	 	 
	Its:	CEO	 	Its:	CFO


 



    	7