**ROO
        GROUP, INC.**
  
 Mr.
        Robert Petty
 228
        East
        45 th Street,
        8 th Floor
 New
        York,
        NY 10017
 
 Re:  Separation
        Agreement and Release
 
 Dear
        Robert:
 
 This
        Separation Agreement and Release (this “Agreement”) sets forth the terms
        governing your separation from ROO Group, Inc. (together with its subsidiaries
        and affiliates, the “Company”).
 
 The
        Company and you hereby agree as follows:
 
 1.  Your
        employment by the Company pursuant to that certain employment agreement dated
        as
        of November 1, 2004 (together with any amendments thereto, the “Employment
        Agreement”), shall terminate effective March 26, 2008 (the “Effective Date”)
        and, except as otherwise herein provided, your Employment Agreement thereupon
        shall be of no further force and effect.
  2.  Notwithstanding
        anything to the contrary contained in your Employment Agreement and except
        as
        otherwise provided in Paragraph 3 below, you agree that the compensation
        you
        have received from the Company on or prior to the Effective Date of this
        Agreement represents all of the compensation you are entitled to receive
        from
        the Company under your Employment Agreement or otherwise. For avoidance of
        doubt, you unequivocally surrender any rights to any compensation that may
        or
        may not have been due to you in the past, including but not limited to any
        lacking 401-K contributions to be paid on your behalf by the Company.
  3.  A.  In
        exchange for your release and other promises under this Agreement and
        s ubject
        to
        Paragraph 4 below, you shall receive from the Company, within eight (8) days
        after the Effective Date hereof, (i) a lump-sum payment in the sum of Six
        Hundred Seventy-Five Thousand Dollars (US$675,000), to be allocated as mutually
        agreed between severance and relocation expenses (in aggregate, the “Cash
        Payment”), less applicable tax withholding and deductions, and (ii) fully
        vested warrants (the “Warrants”) granting you the right to purchase up to
        7,000,000 common shares in the Company at an exercise price equal to the
        3-day
        trailing weighted average closing price per share as of the Effective Date
        (the
“Exercise Price”). The Cash Payment may be paid to you in Dubai, UAE provided
        your residency visa in that jurisdiction has been approved by the local
        authorities at the time of such payment (and may also be deferred by you
        until
        such time as this residency visa is approved), and the Company will make
        best
        efforts to facilitate you to obtain a Dubai residency visa. The Warrants
        shall
        be exercisable in one-twelfth (1/12 th )
        increments during the period commencing six (6) months after the Effective
        Date
        and ending on the first (1 st )
        anniversary date thereafter, provided however that if the Company experiences
        a
        change of control (as defined in the Company’s current 2008 Employee Stock
        Option Plan), the Warrants shall immediately become fully exercisable. You shall
        have piggyback registration rights with
        respect to the Warrants, subject
        to underwriter cut-back in the case of an underwritten offering. In the event
        the Company, on behalf of any selling shareholder (other than selling
        shareholders who purchased stock in a private placement offering who were
        granted registration rights), proposes to file a registration statement for
        the
        registration of the sale of common stock, the Company shall include the Warrants
        (if exercised) and the Warrants or the shares underlying the Warrants in
        such
        registration statement. The Company shall make best efforts to register the
        shares underlying the Warrants in the most timely fashion possible. The Warrants
        may be transferred to a third-party with the Company’s prior written consent,
        and such consent shall not be unreasonably withheld.
  
  B.  Notwithstanding
        anything in this Agreement to the contrary, the Warrants shall expire if
        not
        exercised within four (4) years of the Effective Date (the “Expiration
        Date”).  Warrants
        may be exercised at any time prior to the Expiration Date (the “Exercise Date”)
        upon (i) surrender to the Company of the Warrants, together with the form
        of
        election to purchase properly completed and executed by you, and (ii) payment
        to
        the Company of the Exercise Price for each share of common stock issuable
        upon
        exercise of such Warrants. The Exercise Price may be paid (i) in cash or
        by
        certified or official bank check or by wire transfer to an account designated
        by
        the Company for such purpose (a “Cash Exercise”), or (ii) without the payment of
        cash, by reducing the number of shares of common stock that would be obtainable
        upon the exercise of a Warrant and payment of the Exercise Price in cash
        so as
        to yield a number of shares of common stock upon the exercise of such Warrant
        equal to the product of (a) the number of shares of common stock for which
        such
        Warrant is exercisable as of the Exercise Date (if the Exercise Price were
        being
        paid in cash) and (b) the Cashless Exercise Ratio (as defined below). An
        exercise of a Warrant in accordance with clause (ii) of the immediately
        preceding sentence is herein called a “Cashless Exercise.” In the event of a
        Cashless Exercise, the Company shall purchase from you such number of Warrants
        as would have entitled you to receive the excess of the number of shares
        of
        common stock deliverable upon a Cash Exercise over the number of shares of
        common stock deliverable upon a Cashless Exercise, for a purchase price equal
        to
        the Exercise Price multiplied by the excess of the number of shares of common
        stock purchasable upon a Cash Exercise over the number of shares of common
        stock
        purchasable upon a Cashless Exercise. Upon surrender of a Warrant Certificate
        representing more than one Warrant in connection with your option to elect
        a
        Cashless Exercise, the number of shares of common stock deliverable upon
        a
        Cashless Exercise shall be equal to the number of shares of common stock
        issuable upon the exercise of Warrants that you specify are to be exercised
        pursuant to a Cashless Exercise multiplied by the Cashless Exercise Ratio.
        Upon
        surrender of the Warrants and payment of the Exercise Price in accordance
        with
        this Agreement, the Company shall issue shares of common stock of the Company
        for each Warrant, subject to adjustment as described herein. In the case
        of a
        Cashless Exercise, the Company shall deliver to you a certificate setting
        forth
        the Cashless Exercise Ratio. For purposes hereof, the term “Cashless Exercise
        Ratio” means a fraction, the numerator of which is the excess of the current
        market value per share of common stock on the Exercise Date over the Exercise
        Price per share as of the Exercise Date and the denominator of which is the
        current market value per share of common stock on the Exercise Date, where
        current market value per share is defined as the
        3-day
        trailing weighted average closing price per share as of the Exercise
        Date.
  
 
 4.  Additionally,
        the Company s hall
        indemnify you,
        up
        to the total sum of Two Hundred Twenty-Five Thousand Dollars (US$225,000),
        against any liability or expense you may incur (including reasonable attorney’s
        fees and court costs) excluding any expenses actually paid to date by the
        company in connection with the pending lawsuit filed by Royce Ritchie, Midnight
        Bay Holdings Pty Ltd., and Royce Ritchie and Associates Pty, Ltd., in the
        Supreme Court of Victoria, Proceeding No. 10567 of 2006. Such indemnification
        shall be held in escrow by the Company for a period of up to one (1) year
        from
        the Effective Date.
  5.  A.  As
        the
        holder of six (6) million shares (the “Preferred Shares”) of the Company’s
        Series A Preferred Stock (the “Series A Stock”), and as the holder of 1,360,000
        shares of the Company’s common stock (the “Common Shares”) and in consideration
        for the payments described in Paragraph 3 above, you irrevocably and
        unconditionally agree to vote all your Preferred Shares and Common Shares
        in
        favor of that certain resolution to amend the Company’s certificate of
        incorporation, a copy of which is annexed as Exhibit A hereto (the
“Resolution”), and to take such other and further necessary and appropriate
        action as may be necessary to effectuate the Resolution. You understand and
        acknowledge that any breach by you of your agreement set forth in this paragraph
        will give rise to unquantifiable damages and that, accordingly, the Company
        may
        seek and obtain injunctive relief against you for breach or threatened breach
        of
        such agreement, and you hereby submit to personal jurisdiction by and in
        any
        court in New York County, New York, for the purposes of the Company obtaining
        such relief.
 
 B  As
        the
        holder of six (6) million shares (the “Preferred Shares”) of the Company’s
        Series A Preferred Stock (the “Series A Stock”), and in consideration for the
        payments described in Paragraph 3 above, you irrevocably and unconditionally
        agree to vote all your Preferred Shares in favor of that certain resolution
        to
        amend the Company’s Certificate of Designation of Series A Preferred Stock, a
        copy of which is annexed as Exhibit B hereto (the “Designation Resolution”), and
        to take such other and further necessary and appropriate action as may be
        necessary to effectuate the Designation Resolution. You understand and
        acknowledge that any breach by you of your agreement set forth in this paragraph
        will give rise to unquantifiable damages and that, accordingly, the Company
        may
        seek and obtain injunctive relief against you for breach or threatened breach
        of
        such agreement, and you hereby submit to personal jurisdiction by and in
        any
        court in New York County, New York, for the purposes of the Company obtaining
        such relief.
  
 
 6.  In
        consideration for the payments promised you in this Agreement and other good
        and
        valuable consideration the receipt of which is hereby acknowledged, you
        irrevocably and unconditionally release and discharge the Company, its
        subsidiaries, affiliates, predecessors, successors and assigns, and each
        of
        their respective past and present officers, directors, shareholders, agents,
        and
        employees, from any and all claims and liabilities of any kind, known or
        unknown, whether civil or administrative or otherwise in nature, which arose
        prior to the Effective Date hereof. The claims waived and discharged include,
        but are not limited to, all claims arising from or related to your employment
        and separation of employment, including without limitation:
  a.  claims
        for wrongful or unjust discharge, breach of contract, promissory estoppel,
        negligence, intentional infliction of emotional distress, defamation, libel,
        slander, breach of any implied covenant of good faith or fair dealing;
  b.  claims
        based on theories of contract or tort, whether based on common law or otherwise;
  c.  claims
        arising under the Title VII of the Civil Rights Act, Age Discrimination in
        Employment Act, the Older Workers Benefit Protection Act, the Americans with
        Disabilities Act, Family and Medical Leave Act, or any other federal, state
        or
        local law dealing with discrimination in employment; and
  d.  subject
        to Paragraph 3 above, claims
        for compensation, wages, bonuses, fringe benefits, vacation pay, severance
        pay,
        back pay, legal fees, costs, expenses or otherwise.
  7.  You
        agree
        not to bring any legal action against the Company for any claim waived and
        you
        represent and warrant that you have not filed any such claim to date. You
        agree
        that if you bring such legal action, it shall constitute a material breach
        of
        this Agreement.
  8.  You
        agree
        to terminate, completely and irrevocably, your current employment relationship
        with the Company (whether pursuant to your Employment Agreement or otherwise)
        and expressly waive and relinquish any claim for reinstatement or rehire
        on a
        preferential basis or otherwise. For avoidance of doubt, the Company is not
        requiring you to resign from your status as a Director of the Company at
        this
        time, though you agree to resign at any time in the future as a Director
        of the
        Company or any of its affiliates immediately upon request by the Company’s chief
        executive officer.
  
 
 9.  You
        agree
        that FOLLOWING THE TERMINATION OF YOUR EMPLOYMENT, YOU SHALL HONOR AND ABIDE
        BY
        THE CONTINUING TERMS OF ANY NONDISCLOSURE, NONINTERFERENCE, NONSOLICITATION,
        OR
        NONCOMPETITION AGREEMENTS YOU HAVE SIGNED WITH THE COMPANY ,
        INCLUDING THOSE PROVISIONS SET FORTH IN YOUR EMPLOYMENT AGREEMENT .
 
 10.  The
        parties agree that, at your election, you may be hired back into the Company
        at
        any point immediately following the execution of this Agreement, in an “at will”
sales position, which would carry a base compensation of US$120,000 per annum,
        participation in standard company sales incentive and bonus plan(s), and a
        commensurate options package to be no fewer than 120,000 options.
  11.  The
        parties acknowledge and agree that your obligations and undertakings as a
        shareholder of the Company hereunder are necessary and appropriate and in
        the
        best interests of the Company. Accordingly, the Company hereby agrees fully
        and
        unequivocally to indemnify you in perpetuity for any and all legal actions
        that
        may arise from your performing such obligations and undertakings, such
        indemnification to include the provision of defense counsel (of the Company’s
        choosing) and reimbursement of all reasonable costs incurred by you in
        connection with any such legal action. Such costs will either be paid directly
        by the Company or shall be reimbursed within seven (7) business days.
  12.  The
        parties shall (i) use their best efforts to maintain in strict confidence
        the
        existence of this Agreement, the contents and terms hereof and the consideration
        therefor; (ii) subject to the provisions of subsection (iii) below, take
        every
        reasonable precaution to prevent disclosure of any information contained
        herein
        to third parties and agree that there will be no publicity, directly or
        indirectly, concerning any such information, without the other party’s express
        written consent; and (iii) take every precaution to disclose information
        only to
        those attorneys, accountants, governmental entities and family members who
        have
        a reasonable need to know of such information, or in compliance with
        law. The above section notwithstanding, you acknowledge that the Company
        will be required to disclose certain information contained in this Agreement
        in
        public securities filings and press releases, and shall make such disclosure
        in
        its best reasoned judgment without any recourse or penalty.
  13.  Neither
        party shall knowingly vilify, disparage, slander or make disparaging or
        derogatory remarks, whether oral or written, about the other party, its business
        or business practices, or any of its past, present, or future officers,
        directors, shareholders, employees, agents, affiliates or
        clients.
  
  14.  Regardless
        whether you are employed by the Company, you agree to provide the Company
        with
        assistance concerning any dispute, investigation, or litigation concerning
        your
        activities related to the Company or as to which you have
        knowledge.
  15.  You
        agree
        that if asked to do so by the Company’s chief executive officer, you shall
        immediately return to the Company all of the Company’s property in your
        possession including: (i) c ustomer
        and prospect lists or information regarding clients; (ii) client confidential
        information or documents; (iii) working papers or work papers of the Company;
        (iv) financial and accounting information; (v) price lists; (vi) manuals,
        handbooks, policies and procedures books; (vii) telephone, computer, hand-held
        computing device, keys, and parking cards; and (viii) all tangible and
        intangible property belonging to the Company or relating to your employment
        with
        the Company.
 
 16.  You
        acknowledge and agree that:
 
 a.  The
        payments described in Paragraph 3 are payments to which you would not have
        been
        entitled had you not signed this Agreement, and the promises made by the
        Company
        in this Agreement constitute sufficient consideration and value for you to
        sign
        this Agreement.
 
 b.  You
        have
        voluntarily and knowingly signed this Agreement with full understanding of
        its
        terms and meaning;
 
 c.  This
        Agreement shall in no way be deemed an admission of liability on the part
        of the
        Company in any manner whatsoever.
 
 d.  You
        have
        had the opportunity to consult with an attorney of your choice;
 
 e.  You
        have
        been given at least twenty-one (21) days to consider this Agreement;
 
 f.  The
        Company has advised you that you may revoke this Agreement within seven (7)
        days
        after signing it; and
 
 g.  The
        Agreement shall be enforceable immediately without further action by either
        party upon expiration of the revocation period.
 
 17.  This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York, without regard to principles of conflicts of
        law.
  
  18.  In
        the
        event that any provision or term of this Agreement, or any provision of the
        Employment Agreement that survives the Effective Date of this Agreement,
        is held
        to be invalid, void or unenforceable for any reason the remainder of the
        Agreement shall remain in full force and effect as if such invalid, void
        or
        unenforceable provision or term was not contained in this Agreement.
  19.  This
        Agreement shall be binding on and shall inure to the benefit of your heirs,
        executors, administrators, representatives, successors and assigns and the
        successors in interest and assigns of the Company. Neither party may assign
        any
        of his or its rights or duties hereunder, except with the written consent
        of the
        other.
  20.  This
        Agreement contains the entire agreement between you and the Company and
        supersedes and cancels any prior agreement or understanding between the parties
        on the subjects covered herein and no agreements, representations or statements
        of either party not contained in this Agreement shall bind that party. You
        represent that you have not relied on any statements or promises, written
        or
        oral, that are not included in this Agreement. This Agreement can be modified
        only in writing signed by all parties hereto.
  21.  This
        Agreement may
        be
        executed in multiple counterparts, the combination of which shall constitute
        one (1) original
        and complete agreement. The signatures required for execution of this Agreement
        may be provided by facsimile transmission, and such facsimile signatures
        shall
        have the same force and effect as originals and shall constitute effective,
        binding agreements on the part of the signer. All
        counterparts shall be exchanged promptly between the parties.
 
 If
        this
        Agreement is acceptable to you, please return a signed original to me no
        later
        than ____________, 2008.
  Very
                  truly yours,ROO
                  GROUP, INC.By: /s/Kaleil Isaza TuzmanName:
                  Kaleil Isaza TuzmanTitle:Chief
                  Executive Officer
 
 ACCEPTED
                  AND AGREED TO:/s/
                  Robert PettyRobert
                  Petty
                
                March
                  30, 2008Date