**ROO
      GROUP, INC.**





Mr.
      Robin
      Smyth


500
      East
      77th Street, Apartment 728


New
      York
      NY 10162





Re:  Separation
      and Re-Employment Agreement





Dear
      Robin:





This
      Separation and Re-Employment Agreement (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 30, 2008 (the “Effective Date”)
      and, except as otherwise herein provided, your Employment Agreement thereupon
      shall be of no further force and effect.




2.  Except
      for a salary payment for the period ending March 31, 2008 at the per annum
      rate
      of US$180,000 per year, which remains outstanding, and 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.




3.  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 fifteen (15)
      days
      after the Effective Date hereof, a lump-sum payment in the sum of two hundred
      and seventy-five thousand (US$275,000), less applicable tax withholding and
      deductions (the “First Cash Payment”), a lump-sum payment of one hundred
      thousand (US$100,000), less applicable tax withholding and deductions, within
      nine (9) months of the Effective Date (the “Second Cash Payment”), and another
      lump-sum payment of one hundred thousand (US$100,000), less applicable tax
      withholding and deductions, within thirteen (13) months of the Effective Date
      (the “Third Cash Payment”). The First, Second and Third Cash Payments (the first
      being a non-contingent, guaranteed obligation of the Company and the latter
      two
      being contingent only upon you not being dismissed for cause--within the meaning
      of that term in the Employment Agreement--or having resigned from the Company
      prior to the Second or Third Cash Payments being made) 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). The Company will
      make best efforts to facilitate you to obtain a Dubai residency
      visa.







4.  As
      the
      holder of 1,500,000 million shares (the “Preferred Shares”) of the Company’s
      Series A Preferred Stock (the “Series A Stock”), and as the beneficial holder of
      40,000 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.




5.  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.




6.  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.




7.  A.  Upon
      execution of this Agreement, the parties agree that you shall be hired back
      by
      the Company on an “at will” basis in the position of Chief Financial Officer
      (reporting to the Chief Executive Officer), with base compensation of One
      Hundred Eighty Thousand Dollars (US$180,000) per annum, a discretionary
      performance bonus, a commensurate options package to be no fewer than 400,000
      stock options (which options shall have been issued to you prior to the
      Effective Date hereof in accordance with the Company’s 2008 Employee Stock
      Option Plan (the “ESOP”)), and such other benefits that the Company customarily
      provides to other executives at your level. In addition, you shall receive
      two
      (2) tranches of warrants (collectively, the “Warrants”) upon the Effective Date,
      the first tranche granting you the right to purchase up to 1,650,000 common
      shares in the Company (the “First Tranche”) and the second tranche giving you
      the right to purchase up to 1,200,000 common shares in the Company (the “Second
      Tranche”) both at an exercise price equal to the 3-day trailing weighted average
      closing price per share as of the Effective Date. The First Tranche shall vest
      immediately upon the Effective Date and 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. The Second Tranche shall vest during the 3-year
      period commencing upon the Effective Date (1/36 th per
      month) and shall cease to vest at any time during which your employment with
      the
      Company terminates for any reason. If the Company experiences a change of
      control (as defined in the Company’s current 2008 Employee Stock Option Plan)
      prior to all of the Warrants in the First Tranche becoming exercisable, all
      the
      remaining Warrants in the First Tranche shall immediately become fully
      exercisable. In the case where the Second Tranche shall cease to vest, the
      vested portion must be exercised within ninety (90) days or be surrendered.
      With
      the exception of this 90-day exercise provision, the Second Tranche shall be
      governed by the terms and conditions of the ESOP, including but not limited
      to
      the terms related to vesting acceleration upon change of control.




B.  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.







C.  Notwithstanding
      anything in this Agreement to the contrary (except as provided above with
      respect to the 90-day exercise provision), 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
      the
      3-day trailing weighted average closing price per share as of the Exercise
      Date.








8.  You
      agree
      that your re-employment by the Company is expressly conditioned upon and subject
      to the restrictive covenants set forth in the Employment Agreement as if same
      where fully set forth herein. 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.  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.




10.  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.




11.  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.




12.  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.




13.  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.





14.  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.




15.  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.




16.  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.




17.  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.







18.  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 March 30, 2008.





Very
                truly yours,ROO
              GROUP, INC.By:
            /s/
                Kaleil Isaza TuzmanName:
                Kaleil Isaza TuzmanTitle:
                Chief Executive Officer





ACCEPTED
                AND AGREED TO:/s/
Robin
                SmythRobin
                SmythMarch
                30, 2008