EXHIBIT
      10.17

     

    NOTE

     

    THE
      SECURITY REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”),
      OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD
      OR
      OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR
      PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
      AND APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY IS SUBJECT
      TO
      THE TERMS OF THE PURCHASE AGREEMENT, DATED AS OF JULY 21, 2006, AS AMENDED
      AND
      RESTATED ON MAY 16, 2007 (THE “PURCHASE
      AGREEMENT”),
      AMONG DIGITAL DOMAIN, INC. (THE “COMPANY”),
      WYNDCREST DD HOLDINGS, INC., THE SUBSIDIARY GUARANTORS NAMED THEREIN AND THE
      PURCHASERS NAMED THEREIN. A COPY OF SUCH PURCHASE AGREEMENT IS AVAILABLE AT
      THE
      OFFICES OF THE COMPANY.

     

    FOR
      PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986,
      AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS NOTE IS BEING ISSUED
      WITH ORIGINAL ISSUE DISCOUNT. THE ISSUE DATE IS JULY 21, 2006. FOR INFORMATION
      RELATING TO (1) THE ISSUE PRICE, (2) THE YIELD TO MATURITY AND (3) THE AMOUNT
      OF
      THE ORIGINAL ISSUE DISCOUNT, PLEASE CONTACT YVETTE MACALUSO, VICE
      PRESIDENT-FINANCE OF THE COMPANY, AT (310) 314-2842. 

     

    SENIOR
      SECURED NOTES DUE 2011

     

    
      	
              No.
                1

            	
               

              $12,500,000

            


    

    


    Digital
      Domain, Inc., a corporation duly organized and existing under the laws of
      Delaware (herein called the “Company,”
which
      term includes any successor person under the Purchase Agreement), for value
      received, hereby promises to pay to FALCON MEZZANINE PARTNERS II, LP, or
      registered assigns, the principal sum of TWELVE MILLION FIVE HUNDRED THOUSAND
      DOLLARS ($12,500,000) on July 21, 2011 (the “Stated
      Maturity Date”).

     

    Reference
      is hereby made to the further provisions of this Note set forth on the reverse
      hereof, which further provisions shall for all purposes have the same effect
      as
      if set forth at this place.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      under its corporate seal.

     

    Dated:
      May ___, 2007

    DIGITAL
      DOMAIN, INC.

     

     

    By:
      ______________________________

    Name: 

    Title: 

     

    Attest:

     

    __________________________

    Title:



    
      
        
        

      

      
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    [Form
      of Reverse of Note]

     

    1.
      General. This
      Note
      is one of a duly authorized issue of Notes of the Company designated as its
      Senior Secured Notes due 2011 (herein called the “Notes”),
      limited in aggregate principal amount to the sum of (a) $12,500,000, and
      (b) the amount of interest which, in accordance with the terms of Paragraph
      2 below, may be paid through the issuance of new Notes, in each case, issued
      pursuant to the Purchase Agreement, dated as of July 21, 2006, as amended
      and restated as of May 16, 2007 (herein called the “Purchase
      Agreement”),
      among
      the Company, the Guarantors named therein, the Agent named therein and the
      Purchasers named therein, to which Purchase Agreement and all amendments thereto
      reference is hereby made for a statement of the respective rights, limitations
      of rights, duties and immunities thereunder of the Company and the Noteholders
      and of the terms upon which the Notes are, and are to be, issued and
      delivered.

     

    Principal
      on this Note shall be payable only against surrender therefor, while payments
      of
      interest on this Note shall be made, in accordance with the Purchase Agreement
      and subject to applicable laws and regulations, by wire transfer in immediately
      available funds to such account as any Noteholder shall designate by written
      instructions received by the Company no less than 5 days prior to any applicable
      Interest Payment Date, which wire instruction shall continue in effect until
      such time as the Noteholder otherwise notifies the Company or such Noteholder
      no
      longer is the registered owner of this Note.

     

    2.
      Interest. The
      Company promises to pay interest on the principal amount of this Note from
      the
      date of issuance of this Note (or any Predecessor Note) (which, in the case
      of
      any Note which is a PIK Note (as defined below), shall be the Interest Payment
      Date to which such PIK Note relates) or from the most recent Interest Payment
      Date to which interest has been paid or duly provided for, quarterly in arrears
      on March 30, June 30, September 30 and December 30 in each
      year commencing September 30, 2006 (each, an “Interest
      Payment Date”)
      and at
      the Stated Maturity Date at the Applicable Rate until the principal hereof
      is
      paid; provided,
      however,
      that if
      any Interest Payment Date falls on a date which is not a Business Day, interest
      due on such Interest Payment Date shall be paid on the Business Day immediately
      preceding such Interest Payment Date; provided,
      further,
      that
      such interest payment shall include interest accruing to the calendar day
      immediately preceding such Interest Payment Date.  On
      each
      such Interest Payment Date the Company may, at its option and in its sole
      discretion, in lieu of the payment in whole or in part of interest due on this
      Note, which is in excess of 12.0% per annum (other than default interest as
      described below), pay such amount in excess of 12.0% per annum (and only such
      excess amount) on this Note through the issuance of additional Notes (each
      a
“PIK
      Note”)
      in an
      aggregate principal amount equal to the amount of such excess interest that
      would otherwise be payable in cash with respect to this Note and otherwise
      substantially in the form of this Note. If the Company elects to pay all or
      a
      portion of such excess interest due on this Note through the issuance of a
      PIK
      Note as provided above, the Company shall, at least fifteen (15) calendar days
      prior to each relevant Interest Payment Date, deliver to the Noteholder of
      this
      Note notice of such election, which notice shall also state the amount of
      aggregate interest to be so paid in cash on such Interest Payment Date and
      the
      amount of such interest to be paid in the form of such PIK Note. Without in
      any
      way diminishing the notice requirement in the immediately preceding sentence,
      if
      the Company shall fail to deliver such notice, the Company will be deemed to
      have elected to pay all of such excess interest in the form of a PIK
      Note.


    
      
        
        

      

      
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    “Applicable
      Rate”,
      with
      respect to any Interest Period, shall mean (i) prior to the occurrence of a
      QIPO, 15.0% per annum, (ii) if a QIPO shall have occurred and if the Market
      Capitalization Threshold shall have been satisfied on the first day of such
      Interest Period, 12.0% per annum for such Interest Period and (iii) if a QIPO
      shall have occurred and if the Market Capitalization Threshold shall have been
      satisfied on the first day of such Interest Period and the immediately preceding
      Interest Period, 12.0% per annum for that and each subsequent Interest
      Period.

     

    “Interest
      Period”
shall
      mean the period commencing on and including an Interest Payment Date and ending
      on and including the day immediately preceding the next succeeding Interest
      Payment Date, with the exception that the first Interest Period shall commence
      on and include July 21, 2006 and end on and include September 29,
      2006.

     

    “Market
      Capitalization”
means
      as of the first day of any Interest Period the market capitalization of Holdings
      determined on a fully diluted basis (but only to the extent that in the case
      of
      derivative securities, such derivative securities are both exercisable and
      in-the-money for the entire reference period) using the average of the Reference
      Closing Prices from the 60 consecutive Trading Days ending on such
      date.

     

    “Market
      Capitalization Threshold”
shall
      mean as of the first day of any Interest Period occurring following the
      consummation of a QIPO, a Market Capitalization of not less than
      $100,000,000.

     

    “Reference
      Closing Price”
shall
      mean on any date the closing sale price per share (or, if no closing sale price
      is reported, the average of the bid and ask prices or, if more than one in
      either case, the average of the average bid and the average ask prices) on
      that
      date as reported in composite transactions for the principal U.S. securities
      exchange on which the Common Stock is traded or, if the Common Stock is not
      listed on a U.S. national or regional securities exchange, as reported by the
      Nasdaq National Market (at a time when the Nasdaq National Market is not a
      U.S.
      national securities exchange).

     

    “Trading
      Day”
shall
      mean a day during which (1) trading in the Common Stock generally occurs and
      (2)
      a Reference Closing Price for the Common Stock may be obtained for that
      day.

     

    To
      the
      extent that the payment of such interest shall be legally enforceable, in the
      event of any Default on this Note, (x) the interest rate borne by this Note
      shall immediately increase by, and (y) any principal of, or premium or
      installment of interest on, this Note which is overdue shall bear interest
      (“default
      interest”),
      in
      each case, at the rate of 2% per
      annum
      in
      excess of the rate of interest then borne by this Note from the date of such
      Default until cured or waived, and the entire amount of such default interest
      (and not just the amount payable in cash as of any Interest Payment Date) shall
      be payable in cash.

     

    Interest
      on this Note shall be computed on the basis of a 360-day year of twelve 30-day
      months.

     

    All
      interest payable on any Interest Payment Date will, as provided in the Purchase
      Agreement, be paid to the person in whose name this Note (or one or more
      Predecessor Notes) is registered at the close of business on the “Regular
      Record Date”
for
      such interest, which shall be the fifteenth calendar day (whether or not a
      Business Day) immediately preceding such Interest Payment Date. Notwithstanding
      the foregoing, if this Note is issued after a Regular Record Date and prior
      to
      an Interest Payment Date, the record date for such Interest Payment Date shall
      be the original issue date.

     


    
      
        
        

      

      
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    3.
      Optional Redemption. The
      Company may, at its option, redeem this Note, in whole or in part, at any time
      through to and including the Stated Maturity Date at a Redemption Price stated
      as a percentage of the principal amount being redeemed as set forth below plus
      accrued and unpaid interest, if any, and fees to the Redemption
      Date:

     

    
      	
              Period:

            	
              Redemption
                Price

            
	
              First
                Closing Date - July 20, 2007

            	
              132.5%

            
	
              July
                21, 2007 - July 20, 2008

            	
              125.0%

            
	
              July
                21, 2008 - July 20, 2009

            	
              110.0%

            
	
              July
                21, 2009 - July 20, 2010

            	
              105.0%

            
	
              July
                21, 2010 - July 20, 2011

            	
              102.5%

            
	
              Stated
                Maturity Date

            	
              100.0%

            


    

    


    4.
      [Omitted.]

     

    5.
      Procedures for Redemption. If
      less
      than all the Notes are to be redeemed, the Notes shall be redeemed pro
      rata from
      each
      Noteholder.

     

    In
      the
      event of redemption or purchase pursuant to an offer to purchase this Note
      in
      part only, a new Note or Notes for the unredeemed or unpurchased portion hereof
      will be issued in the name of the Noteholder hereof upon the cancellation
      hereof.

     

    6.
      Events of Default. If
      an
      Event of Default shall occur and be continuing, the principal of this Note
      may
      be declared due and payable in the manner and with the effect provided in the
      Purchase Agreement.

     

    7.
      Offers to Repurchase Notes. The
      Purchase Agreement provides that the Company shall be required to offer to
      repurchase all or a specified portion of the Notes in certain
      circumstances.

     

    8.
      Amendments, Modifications and Waivers. The
      Purchase Agreement permits, with certain exceptions as therein provided, the
      amendment thereof and of the Notes and the modification of the rights and
      obligations of the Company and certain rights of the Noteholders under the
      Purchase Agreement and the Notes at any time by the Company with the consent
      of
      the holders of a majority in aggregate principal amount of the Notes at the
      time
      outstanding. The Purchase Agreement also contains provisions permitting the
      Noteholders of specified percentages of the aggregate principal amount of the
      Notes at the time outstanding, on behalf of the Noteholders of all the Notes,
      to
      waive compliance by the Company with certain provisions of the Purchase
      Agreement and of the Notes and certain past defaults under the Purchase
      Agreement under the Notes and their consequences. Any such consent or waiver
      by
      the holder of this Note shall be conclusive and binding upon such Noteholder
      and
      upon all future Noteholders of any Note issued upon the registration of transfer
      hereof or in exchange herefor or in lieu hereof, whether or not notation of
      such
      consent or waiver is made upon this Note.


    
      
        
        

      

      
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    9.
      Restrictions on Transfer; Registration of Transfer. This
      Note
      is subject to restrictions on transfer as set forth in the Purchase Agreement.
      As provided in the Purchase Agreement and subject to certain limitations therein
      set forth, the transfer of this Note is registrable in the Security Register,
      upon surrender of this Note for registration of transfer at the principal
      offices of the Company, duly endorsed by, or accompanied by a written instrument
      of transfer in form satisfactory to the Company duly executed by, the holder
      hereof or his attorney duly authorized in writing, and thereupon one or more
      new
      Notes, of authorized denominations and for the same aggregate principal amount,
      will be issued to the designated transferee or transferees.

     

    The
      Notes
      are issuable only in registered form without coupons in denominations authorized
      under the Purchase Agreement. As provided in the Purchase Agreement and subject
      to certain limitations therein set forth, Notes are exchangeable for a like
      aggregate principal amount of Notes of a different authorized denomination,
      as
      requested by the Noteholder surrendering the same.

     

    No
      service charge shall be made for any such registration of transfer or
      exchange.

     

    Prior
      to
      due presentment of this Note for registration of transfer as permitted by the
      terms of the Purchase Agreement, the Company and any agent of the Company may
      treat the person in whose name this Note is registered as the owner hereof
      for
      all purposes, whether or not this Note be overdue, and neither the Company
      nor
      any such agent shall be affected by notice to the contrary.

     

    10.
      Miscellaneous. All
      terms
      used in this Note which are defined in the Purchase Agreement and not otherwise
      defined in this Note shall have the meanings respectively assigned to them
      in
      the Purchase Agreement.

     

    THIS
      NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
      OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE
      THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.


    
      
        
        

      

      
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    OPTION
      OF HOLDER TO ELECT PURCHASE

     

    If
      you
      want to elect to have this Note purchased in its entirety by the Company
      pursuant to Sections 6.15, 6.16 or 7.06 of the Purchase Agreement, check the
      box: 

    □

    If
      you
      want to elect to have only a part of the principal amount of this Note purchased
      by the Company pursuant to Sections 6.15, 6.16 or 7.06 of the Purchase
      Agreement, state the portion of such amount: $_______________.

     

    
      	
              Dated:

            	
              Your
                Signature: 

            	 
	 	(Sign exactly as name appears
              on
              the other side of this Note)
	 	 	 
	 	 	 
	
              Signature
                Guarantee: 

            	 
	 	(Signature must be guaranteed
              by a
              financial institution that is a member of the Securities Transfer Agent
              Medallion Program (“STAMP”), the Stock Exchange Medallion Program
              (“SEMP”), the New York Stock Exchange, Inc., Medallion Signature Program
              (“MSP”) or such other signature guarantee program as may be determined by
              the Security Registrar in addition to, or in substitution for, STAMP,
              SEMP
              or MSP, all in accordance with the Securities Exchange Act of 1934,
              as
              amended.)


    

     

    
      
        
        

      

      
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