EXHIBIT
      10.23

     

    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (the “Agreement”)
      is
      made as of July 26, 2007, by and between Wyndcrest DD Holdings, Inc. (the
“Company”),
      a
      corporation organized under the laws of the State of Delaware, with its
      principal offices at 300 Rose Avenue, Venice, California 90291, and the
      purchaser whose name and address is set forth on the signature pages hereto
      (the
“Purchaser”).
      

     

    IN
      CONSIDERATION of the mutual covenants contained in this Agreement, the Company
      and the Purchaser agree as follows: 

     

    SECTION
      1. Authorization
      of Sale of the Shares.
      Subject
      to the terms and conditions of this Agreement, the Company has authorized the
      issuance and sale in a private placement of up to 17,857,142
      shares
      (the “Shares”)
      of
      common stock, par value $0.0001 per share (the “Common
      Stock”),
      of
      the Company. The Company reserves the right to increase or decrease the number
      of Shares sold in this private placement prior to the Closing Date (as defined
      below) for the purpose of including therein the Other Purchasers (as defined
      below), if any.

     

    SECTION
      2. Agreement
      to Sell and Purchase the Shares.
      At the
      Closing (as defined below), the Company will, subject to the terms and
      conditions of this Agreement, issue and sell to the Purchaser, and the Purchaser
      will buy from the Company, upon the terms and conditions hereinafter set forth,
      the number of Shares set forth on the signature pages hereto, for an aggregate
      purchase price equal to the number of such Shares multiplied
      by a
      per-share purchase price of $1.40.

     

    The
      Company may, in its sole and absolute discretion, enter into the same form
      of
      purchase agreement with certain other investors (the “Other
      Purchasers”)
      and
      may, in its sole and absolute discretion, complete sales of additional Shares
      to
      them. The Purchaser and such Other Purchasers, if any, are hereinafter sometimes
      collectively referred to as the “Purchasers,” and this Agreement and the stock
      purchase agreements executed by such Other Purchasers, if any, are hereinafter
      sometimes collectively referred to as the “Agreements.”

     

    SECTION
      3. Delivery
      of the Shares at the Closing.
      The
      completion of the purchase and sale of the Shares (the “Purchaser
      Shares”)
      referenced in the first paragraph of Section 2 hereof (the “Closing”)
      shall
      occur at the offices of Sullivan & Triggs, LLP, 1230 Montana Avenue, Suite
      201, Santa Monica, California as soon as practicable and as agreed to by the
      parties hereto, on the date of and concurrently with the execution of this
      Agreement, or on such later date or at such different location as the parties
      shall agree in writing, but not prior to the date that the conditions for
      Closing set forth below have been satisfied or waived by the appropriate party
      (the “Closing
      Date”).

     

    At
      the
      Closing, the Company shall deliver to the Purchaser one or more stock
      certificates registered in the name of the Purchaser, or, if so indicated on
      the
      Stock Certificate Questionnaire attached hereto as Appendix II, in such nominee
      name(s) as designated by the Purchaser, representing the number of Shares set
      forth on the signature pages hereto, each bearing an appropriate legend
      referring to the fact that the Purchaser Shares were sold in reliance upon
      the
      exemption from the registration requirements of the Securities Act of 1933,
      as
      amended (the “Securities
      Act”)
      provided by Section 4(2) thereof and Rule 506 thereunder. The name or names
      in
      which the stock certificates are to be registered are set forth in the Stock
      Certificate Questionnaire attached hereto as Appendix II. The Company’s
      obligation to complete the purchase and sale of the Purchaser Shares and deliver
      such stock certificate(s) to the Purchaser at the Closing shall be subject
      to
      the following conditions, any one or more of which may be waived by the Company:
      (a) receipt by the Company of same-day funds in the full amount of the purchase
      price for the Purchaser Shares being purchased hereunder; (b) [omitted]; and
      (c)
      the accuracy in all material respects of the representations and warranties
      made
      by the Purchaser in Section 5.8 hereof, and the accuracy of all other
      representations and warranties made herein by the Purchaser (in each case,
      as if
      such representations and warranties were made on the Closing Date), and the
      fulfillment in all material respects of those undertakings made herein by the
      Purchaser to be fulfilled prior to the Closing. The Purchaser’s obligation to
      accept delivery of such stock certificate(s) and to pay for the Purchaser Shares
      evidenced thereby shall be subject to the following conditions, any one or
      more
      of which may be waived by the Purchaser: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a) each
      of
      the representations and warranties of the Company made herein which is qualified
      by materiality or material adverse effect or words of similar effect shall
      be
      accurate in all respects as of the Closing Date (except to the extent any such
      representations and warranties expressly relate to a specific date, in which
      case such representations and warranties shall be accurate as of such date),
      and
      each of the representations and warranties of the Company made herein which
      is
      not so qualified shall be accurate in all material respects as of the Closing
      Date (except to the extent such representations and warranties expressly relate
      to a specific date, in which case such representations and warranties shall
      be
      accurate in all material respects as of such date);

     

    (b) receipt
      by the Purchaser of a certificate executed by the chief executive officer and
      the chief financial or accounting officer of the Company, dated as of the
      Closing Date, to the effect that (i) each of the representations and warranties
      of the Company made herein which is qualified by materiality or material adverse
      effect or words of similar effect shall be accurate in all respects as of the
      Closing Date (except to the extent such representations and warranties expressly
      relate to a specific date, in which case such representations and warranties
      shall be accurate as of such date), and each of the representations and
      warranties of the Company made herein which is not so qualified shall be
      accurate in all material respects as of the Closing Date (except to the extent
      such representations and warranties expressly relate to a specific date, in
      which case such representations and warranties shall be accurate in all material
      respects as of such date) and (ii) the Company has complied in all material
      respects with all the agreements and satisfied all the conditions herein on
      its
      part to be performed or satisfied on or prior to such Closing Date;
      and

     

    (c) the
      fulfillment in all material respects of those undertakings made herein by the
      Company to be fulfilled prior to the Closing. 

     

    The
      Purchaser’s obligations hereunder are expressly not conditioned on the purchase
      by any or all of the Other Purchasers, if any, of the Shares that they have
      agreed to purchase from the Company.

     

    
      
        
        

      

      
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    SECTION
      4. Representations,
      Warranties and Covenants of the Company.
      The
      Company hereby represents and warrants to, and covenants with, the Purchaser
      as
      follows, subject to the specific exceptions and qualifications set forth in
      the
      Disclosure Schedule delivered to the Purchaser by the Company on or prior to
      entering into this Agreement (the “Disclosure
      Schedule”):
      

     

    4.1 Organization;
      Good Standing.
      The
      Company’s subsidiaries are listed on Schedule 4.1 of the Disclosure Schedule.
      Each of the Company and the Company’s material subsidiaries (as identified on
      Schedule 4.1 of the Disclosure Schedule) (the “Subsidiaries”)
      is
      duly organized, validly existing and in good standing under the laws of their
      respective jurisdictions of incorporation or organization. The Company and
      each
      of the Subsidiaries is duly qualified to do business and is in good standing
      as
      a foreign corporation in each jurisdiction in which the nature of the business
      conducted by it or location of the assets or properties owned, leased or
      licensed by it requires such qualification, except for such jurisdictions where
      the failure to so qualify individually or in the aggregate would not have a
      material adverse effect on the assets, properties, condition, financial or
      otherwise, or in the results of operations, business affairs or business
      prospects of the Company and the Subsidiaries considered as a whole (a
“Material
      Adverse Effect”);
      and
      to the Company’s knowledge, no proceeding has been instituted in any such
      jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit
      or
      curtail, such power and authority or qualification. 

     

    4.2 Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company consists of
      180,000,000 shares of Common Stock and 25,000,000 shares of preferred stock,
      par
      value $0.0001 per share (the “Preferred
      Stock”),
      of
      the Company. As of the date hereof: (i) 72,675,183 shares of Common Stock are
      issued and outstanding (including 3,137,254 shares of restricted stock), and
      1,000,000 shares of Preferred Stock, designated the Company’s 8% Senior
      Cumulative Convertible Preferred Stock, are issued and outstanding, each of
      which is convertible into (subject to adjustment) one share of Common Stock,
      without the payment of any additional consideration; (ii) 6,463,500 shares
      of
      Common Stock are reserved for issuance and issuable upon exercise of outstanding
      options to purchase Common Stock; and (iii) 13,179,370 shares of Common Stock
      are reserved for issuance and issuable upon exercise of outstanding warrants
      to
      purchase Common Stock, and except as set forth in this Section 4.2 there are
      no
      other options, warrants or other rights to purchase from the Company any shares
      of its capital stock other than pursuant to the Agreements. The certificates
      evidencing the Purchaser Shares are in due and proper legal form and have been
      duly authorized for issuance by the Company. All of the issued and outstanding
      shares of Common Stock have been duly and validly issued and are fully paid
      and
      nonassessable. There are no statutory preemptive or other similar rights to
      subscribe for or to purchase or acquire any shares of Common Stock of the
      Company or any equity securities of the Subsidiaries or any such rights pursuant
      to their respective Certificates of Incorporation or Articles of Incorporation
      or bylaws, or equivalent formation and governance documents, or any agreement
      or
      instrument to or by which the Company or any of the Subsidiaries is a party
      or
      bound, except for any such rights under any such agreement or instrument that
      has been waived prior to the date hereof. The Purchaser Shares, when issued
      and
      delivered and paid for as provided herein, will be duly and validly issued
      and
      will be fully paid and nonassessable and will be issued free and clear of any
      security interests, liens, encumbrances, equities, restrictions on transfer
      (other than as arising under applicable securities laws or this Agreement),
      third party rights or claims. All outstanding shares of capital stock of each
      of
      the Subsidiaries have been duly authorized and validly issued, and are fully
      paid and nonassessable and are owned directly by the Company or by another
      wholly owned subsidiary of the Company. Assuming the accuracy of the
      representations and warranties of Purchaser in Section 5 of this Agreement,
      the
      Purchaser Shares will be issued in compliance with all applicable federal and
      state securities laws.

     

    
      
        
        

      

      
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    4.3 Due
      Authorization.
      This
      Agreement has been duly authorized, executed and delivered by the Company and,
      assuming execution and delivery by each of the other parties thereto,
      constitutes the legal, valid and binding obligation of the Company, enforceable
      in accordance with its terms, except as such enforceability may be limited
      by
      applicable bankruptcy, insolvency, reorganization, moratorium or other laws
      of
      general application relating to the enforcement of creditor’s rights and the
      application of equitable principles relating to the availability of remedies,
      and except as rights to indemnity or contribution, including, but not limited
      to, the indemnification provisions contained in Section 7 of this Agreement,
      may
      be limited by federal or state securities laws or the public policy underlying
      such laws. All necessary corporate action has been duly and validly taken by
      the
      Company to authorize the execution, delivery and performance of this Agreement
      and the issuance and sale of the Shares by the Company.

     

    4.4 No
      Default or Consents.
      Neither
      the execution, delivery and performance of this Agreement by the Company nor
      the
      consummation by the Company of any of the transactions contemplated hereby
      (including, without limitation, the issuance and sale by the Company of the
      Shares) will give rise to a right to terminate or accelerate the due date of
      any
      payment due under, or conflict with or result in the breach of any term or
      provision of, or constitute a default (or an event which with notice or lapse
      of
      time or both would constitute a default) under, or require any consent or waiver
      under, or result in the execution or imposition of any lien, charge or
      encumbrance upon any properties or assets of the Company or the Subsidiaries
      pursuant to the terms of, any indenture, mortgage, deed of trust or other
      agreement or instrument to which the Company or any of the Subsidiaries is
      a
      party or by which either the Company or the Subsidiaries or any of their
      properties or businesses is bound, or any franchise, license, permit, judgment,
      decree, order, statute, rule or regulation applicable to the Company or any
      of
      the Subsidiaries or violate any provision of the charter or bylaws, or
      equivalent formation and governance documents, of the Company or any of the
      Subsidiaries, except for such consents or waivers which have already been
      obtained and are in full force and effect.

     

    4.5 Permits.
      Each of
      the Company and the Subsidiaries has all requisite corporate power and
      authority, and all necessary authorizations, approvals, consents, orders,
      licenses, certificates and permits of and from all governmental or regulatory
      bodies or any other person or entity (collectively, the “Permits”),
      to
      own, lease and license its assets and properties and conduct its business,
      all
      of which are valid and in full force and effect, except where the lack of such
      Permits, individually or in the aggregate, would not have a Material Adverse
      Effect. Each of the Company and the Subsidiaries has fulfilled and performed
      in
      all material respects all of its material obligations with respect to such
      Permits and no event has occurred that allows, or after notice or lapse of
      time
      would allow, revocation or termination thereof or results in any other material
      impairment of the rights of the Company thereunder. Except as may be required
      as
      to the Company under the Securities Act and state Blue Sky laws, no other
      Permits are required to enter into, deliver and perform this Agreement and
      to
      issue and sell the Purchaser Shares to the Purchaser.

     

    
      
        
        

      

      
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    4.6 Real
      and Personal Property.
      Each of
      the Company and the Subsidiaries has good and marketable title in fee simple
      to
      all real property, and good and marketable title to all other property, owned
      by
      it, in each case free and clear of all liens, encumbrances, claims, security
      interests and defects, except such as (i) secure the indebtedness (the
“Falcon
      Indebtedness”)
      of
      Digital Domain, Inc. (“DDI”)
      to
      Falcon Mezzanine Partners II, LP (“Falcon”)
      pursuant to the terms of that Amended and Restated Purchase Agreement (the
      “Falcon
      Agreement”)
      dated
      as of May 16, 2007 between, among others, DDI and Falcon, or (ii) do not
      materially affect the value of such property and do not materially interfere
      with the use made or proposed to be made of such property by the Company and
      the
      Subsidiaries. All property held under lease by the Company and the Subsidiaries
      is held by them under valid, existing and enforceable leases, free and clear
      of
      all liens, encumbrances, claims, security interests and defects, except such
      as
      (i) secure the Falcon Indebtedness, or (ii) have arisen in the ordinary course
      of business of the Company and the Subsidiaries and do not materially interfere
      with the use made or proposed to be made of such property by the Company and
      the
      Subsidiaries.

     

    4.7 Material
      Contracts.
      Each
      contract, document or other agreement which is material to the current business
      of the Company and the Subsidiaries, taken as a whole (the “Material
      Contracts”), is in full force and effect and is valid and enforceable by and
      against the Company and the Subsidiaries, as the case may be, in accordance
      with
      its terms. Neither the Company nor any of the Subsidiaries, if a subsidiary
      is a
      party, nor to the Company's knowledge, any other party, is in default in the
      observance or performance of any term or obligation to be performed by it under
      any such Material Contract.

     

    4.8 No
      Violation.
      Neither
      the Company nor the Subsidiaries is in violation of any term of its charter
      or
      bylaws, or equivalent formation and governance documents, or of any franchise,
      license, permit, judgment, decree, order, statute, rule or regulation, where
      the
      consequences of such violation, individually or in the aggregate, would have
      a
      Material Adverse Effect.

     

    4.9 Consents
      and Approvals.
      Each
      approval, consent, order, authorization, designation, declaration or filing
      of,
      by or with any regulatory, administrative or other governmental body necessary
      in connection with the execution and delivery by the Company of this Agreement
      and the consummation of the transactions herein contemplated required to be
      obtained or performed by the Company has been so obtained or
      performed.

     

    4.10 Financial
      Statements.
      The
      financial statements of the Company (including all notes and schedules thereto)
      included as Schedule 4.10 in the Disclosure Schedule (the “Financial
      Statements”)
      present fairly the financial condition of the Company and its consolidated
      subsidiaries at the dates indicated and the results of operations, stockholders’
equity and cash flows of the Company and its consolidated subsidiaries for
      the
      periods specified; and such financial statements and related schedules and
      notes
      thereto have been prepared in conformity with accounting principles generally
      accepted in the United States, consistently applied throughout the periods
      involved, except as may be noted therein. Except as set forth in the Financial
      Statements, the Company and its Subsidiaries have no material liabilities or
      obligations, contingent or otherwise, other than (i) liabilities incurred
      in the ordinary course of business subsequent to the date of the most recent
      balance sheet included in the Financial Statements and (ii) liabilities and
      obligations of a type or nature not required under generally accepted accounting
      principles to be reflected in the Financial Statements, which individually
      and
      in the aggregate would not have a Material Adverse Effect. The Company and
      its
      Subsidiaries maintain and will continue to maintain a standard system of
      accounting established and administered in accordance with generally accepted
      accounting principles.

     

    
      
        
        

      

      
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    4.11 Intellectual
      Property.
      Each of
      the Company and the Subsidiaries owns or possesses legally enforceable rights
      to
      use all patents, patent applications, patent rights, inventions, trademarks,
      trademark applications, trade names, service marks, copyrights, copyright
      applications, trade secrets, domain names, mask works, licenses, know-how and
      other similar rights and proprietary knowledge (collectively, “Intangibles”)
      necessary for the conduct of its current business. Neither the Company nor
      any
      of the Subsidiaries has infringed the rights of others with respect to (a)
      the
      Intangibles, (b) any product or service marketed or sold by the Company or
      any
      of the Subsidiaries, or (c) any software programs present on the computers
      and
      other software-enabled electronic devices that it owns or leases or that it
      has
      otherwise provided to its employees for their use in connection with its
      business, except for any such infringement that would not result in a Material
      Adverse Effect.

     

    4.12 No
      Material Adverse Change.
      Since
      the date of the most recent balance sheet of the Company included in the
      Financial Statements, (i) there has not been any material adverse change in
      the
      business, properties, management, financial position, stockholders’ equity,
      results of operations or prospects of the Company and the Subsidiaries taken
      as
      a whole; (ii) neither the Company nor any of the Subsidiaries has sustained
      any
      material loss or interference with its business from fire, explosion, flood
      or
      other calamity, whether or not covered by insurance, or from any labor
      disturbance or dispute or any action, order or decree of any court or arbitrator
      or governmental or regulatory authority; and (iii) neither the Company nor
      any
      of the Subsidiaries has (A) issued or incurred any liability or obligation,
      direct or contingent, for borrowed money, except such liabilities or obligations
      incurred in the ordinary course of business, (B) entered into any other
      transaction not in the ordinary course of business, (C) made, or agreed to
      make,
      any material change to any Material Contract which would result in a Material
      Adverse Effect, or (D) made, or agreed to make, any declaration, setting aside
      or payment or other distribution in respect of any of its capital stock, or
      any
      direct or indirect redemption, purchase, or other acquisition of any of such
      stock.

     

    4.13 Legal
      Proceedings.
      There
      are no claims, actions, suits, proceedings, arbitrations, complaints, charges,
      judgments, injunctions or governmental investigations pending, or to the
      Company’s knowledge threatened, to which Company or any of the Subsidiaries (or
      any of their respective officers or directors, in such capacity) is a party
      or
      of which any property of the Company or any of the Subsidiaries is the subject
      which the management of the Company believes will have a Material Adverse
      Effect. The scope of the representation and warranty in the immediately
      preceding sentence includes, without limitation, actions, suits, proceedings
      or
      investigations pending or threatened in writing involving the prior employment
      of any of the Company’s or the Subsidiaries’ employees, their services provided
      in connection with the Company’s or such Subsidiary’s business, or any
      information or techniques allegedly proprietary to any of their former
      employers, or their obligations under any agreements with prior
      employers.

     

    
      
        
        

      

      
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    4.14 Employees.
      Neither
      the Company nor any of the Subsidiaries is involved in any labor dispute nor,
      to
      the knowledge of the Company, is any such dispute threatened, which dispute
      would have a Material Adverse Effect. The Company is not aware of any existing
      or imminent labor disturbance by the employees of any of its or any of the
      Subsidiaries’ principal suppliers or contractors which would have a Material
      Adverse Effect. Neither the Company nor any Subsidiary is bound by or subject
      to
      (and none of their respective assets or properties is bound by or subject to)
      any written or oral, express or implied, contract, commitment or arrangement
      with any labor union, and no labor union has requested or, to the knowledge
      of
      the Company, has sought to represent any of the employees, representatives
      or
      agents of the Company or any of its Subsidiaries. The Company is not aware
      of
      any threatened or pending litigation between the Company or the Subsidiaries
      and
      any of its executive officers which, if adversely determined, would have a
      Material Adverse Effect and has no reason to believe that any executive officers
      or other key employees currently serving will not remain in the employment
      of
      the Company and the Subsidiaries. To the Company’s knowledge, none of the
      employees of the Company or any of the Subsidiaries is obligated under any
      contract (including licenses, covenants or commitments of any nature) or other
      agreement, or subject to any judgment, decree or order of any court or
      administrative agency, that would materially interfere with such employee’s
      ability to promote the interests of the Company and the Subsidiaries or that
      would conflict with the Company’s or any Subsidiary’s business. 

     

    4.15 Taxes.
      Each of
      the Company and the Subsidiaries has timely filed all Federal, state, local
      and
      foreign tax returns which are required to be filed through the date hereof,
      which returns are true and correct in all material respects, or has received
      timely extensions thereof, and has paid all taxes shown on such returns and
      all
      assessments received by it to the extent that the same are material and have
      become due. There are no tax audits or investigations pending; nor are there
      any
      material proposed additional tax assessments against the Company or any of
      the
      Subsidiaries.

     

    4.16 Insurance.
      All
      material fire and casualty, general liability, and business interruption
      insurance policies maintained by the Company or any of the Subsidiaries are
      in
      full force and effect, are with reputable insurance carriers, provide full
      and
      adequate coverage for all normal risks incident to the business of the Company
      and the Subsidiaries and their respective properties and assets, and are in
      character and amount at least reasonably equivalent to that carried by persons
      engaged in similar businesses and subject to the same or similar perils or
      hazards, except for any such failures to maintain insurance policies that,
      individually or in the aggregate, are not reasonably likely to have a Material
      Adverse Effect.

     

    4.17 Environmental
      Laws.
      (i)
      Each of the Company and the Subsidiaries is in compliance in all material
      respects with all applicable rules, laws and regulation relating to the use,
      treatment, release, storage or disposal of hazardous or toxic substances or
      pollution or the protection of employee health or safety, public health or
      the
      environment (“Environmental
      Laws”);
      (ii)
      neither the Company nor the Subsidiaries has received any notice from any
      governmental authority or third party of an asserted claim under Environmental
      Laws; (iii) each of the Company and the Subsidiaries has received all permits,
      licenses or other approvals required of it under Environmental Laws to conduct
      its business and is in compliance with all material terms and conditions of
      any
      such permit, license or approval; (iv) to the Company’s knowledge, no facts
      currently exist that will require the Company or any of the Subsidiaries to
      make
      future material capital expenditures to comply with Environmental Laws; and
      (v)
      no property which is or has been owned, leased or occupied by the Company or
      the
      Subsidiaries has been designated as a Superfund site pursuant to the
      Comprehensive Environmental Response, Compensation and Liability Act of 1980,
      as
      amended (42 U.S.C. Section 9601, et. seq.) (“CERCLA”),
      or
      otherwise designated as a contaminated site under applicable state or local
      law.
      Neither the Company nor any of the Subsidiaries has been named as a “potentially
      responsible party” under CERCLA.

     

    
      
        
        

      

      
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    4.18 Foreign
      Transactions Reporting Act.
      The
      operations of the Company and the Subsidiaries are and have been conducted
      at
      all times in compliance with applicable financial recordkeeping and reporting
      requirements of the Currency and Foreign Transactions Reporting Act of 1970,
      as
      amended, the money laundering statutes of all jurisdictions, the rules and
      regulations thereunder and any related or similar rules, regulations or
      guidelines, issued, administered or enforced by any governmental agency
      (collectively, the “Money
      Laundering Laws”),
      and
      no action, suit or proceeding by or before any court or governmental agency,
      authority or body or any arbitrator involving the Company or any of the
      Subsidiaries with respect to the Money Laundering Laws is pending, or to the
      best knowledge of the Company, threatened.

     

    4.19 OFAC.
      Neither
      the Company nor any of its subsidiaries nor, to the knowledge of the Company,
      any director, officer, agent, employee or affiliate of the Company or any of
      its
      subsidiaries, is currently subject to any U.S. sanctions administered by the
      Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
      and
      the Company will not directly or indirectly use the proceeds of the offering
      of
      the Shares, or lend, contribute or otherwise make available such proceeds to
      any
      subsidiary, joint venture partner or other person or entity, for the purpose
      of
      financing the activities of any person currently subject to any U.S. sanctions
      administered by OFAC.

     

    4.20 ERISA.
      The
      Company has fulfilled its obligations, if any, under the minimum funding
      standards of Section 302 of the U.S. Employee Retirement Income Security Act
      of
      1974 (“ERISA”)
      and
      the regulations and published interpretations thereunder with respect to each
      "plan" as defined in Section 3(3) of ERISA (and such regulations and published
      interpretations) in which its employees are eligible to participate and each
      such plan is in compliance in all material respects with the presently
      applicable provisions of ERISA and such regulations and published
      interpretations. No “Reportable Event” (as defined in ERISA) has occurred with
      respect to any “Pension Plan” (as defined in ERISA) for which the Company has
      any liability.

     

    4.21 Use
      of
      Proceeds.
      The
      Company intends to use the net proceeds from the sale of the Shares for general
      working capital and other corporate purposes.

     

    
      
        
        

      

      
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    4.22 Investment
      Company.
      The
      Company is not, and after giving effect to the offering and sale of the Shares
      and the application of the proceeds thereof as described in Section 4.21, will
      not be, an “investment company” or an entity “controlled” by an “investment
      company” within the meaning of the Investment Company Act of 1940, as amended,
      and the rules and regulations of the Securities and Exchange Commission (the
      “SEC”)
      thereunder.

     

    4.23 No
      Restrictions on Subsidiaries.
      Except
      as provided in the Acquisition Documents (as such term is defined in the Falcon
      Agreement), the Subsidiaries are not currently prohibited, directly or
      indirectly, under any agreement or other instrument to which any such Subsidiary
      is a party or is subject, from paying any dividends to the Company, from making
      any other distribution on the Subsidiary’s capital stock, from repaying to the
      Company any loans or advances to the Subsidiary from the Company or from
      transferring any of such Subsidiary’s properties or assets to the
      Company.

     

    4.24 Brokers
      or Finders.
      No
      broker, investment banker, financial advisor or other individual, corporation,
      general or limited partnership, limited liability company, firm, joint venture,
      association, enterprise, joint securities company, trust, unincorporated
      organization or other person or entity is entitled to any broker’s, finder’s,
      financial advisor’s or other similar fee or commission in connection with the
      transactions contemplated by this Agreement based upon arrangements made by
      or
      on behalf of the Company. 

     

    4.25 Certain
      Transactions.
      Other
      than agreements or arrangements relating to (i) compensation and standard
      employee benefits generally made available to all employees of the Company
      or
      applicable Subsidiary, (ii) standard director and officer indemnification on
      terms approved by the Board of Directors of the Company or the applicable
      Subsidiary, and (iii) the purchase of shares of the Company’s capital stock and
      the issuance of options to purchase shares of the Company’s Common Stock, in
      each instance, approved in the written minutes of the Board of Directors of
      the
      Company, there are no agreements, understandings or proposed transactions
      between the Company or any Subsidiary and any of its officers, directors,
      consultants or key employees, or any affiliate thereof. 

     

    4.26 Rights
      of Registration and Voting Rights.
      Neither
      the Company nor any of the Subsidiaries is under any obligation to register
      under the Securities Act any of its currently outstanding securities or any
      securities issuable upon exercise or conversion of its currently outstanding
      securities. To the Company’s knowledge, no stockholder of the Company has
      entered into any agreements with respect to the voting of capital shares of
      the
      Company.

     

    SECTION
      5. Representations,
      Warranties and Covenants of the Purchaser.
      The
      Purchaser represents and warrants to, and covenants with, the Company
      that:

     

    5.1 Experience.
      (i) The
      Purchaser is knowledgeable, sophisticated and experienced in financial and
      business matters, and is making, and is qualified to make, decisions with
      respect to investments in shares representing an investment decision like that
      involved in the purchase of the Shares, including investments in securities
      issued by the Company and/or comparable entities, has the ability to bear the
      economic risks of an investment in the Shares and has had the opportunity to
      request, receive, review and consider all information it deems relevant in
      making an informed decision to purchase the Shares; (ii) the Purchaser is
      acquiring the number of Shares set forth on the signature pages hereto in the
      ordinary course of its business and for its own account for investment only
      and
      with no present intention of distributing any of such Shares and subject to
      no
      arrangement or understanding with any other persons regarding the distribution
      of such Shares (this representation and warranty not limiting the Purchaser’s
      right to sell pursuant to a Registration Statement (as defined in Section 7.5)
      or otherwise in compliance with the Securities Act and the rules and regulations
      thereunder (the “Rule
      and Regulations”),
      or,
      other than with respect to any claims arising out of a breach of this
      representation and warranty, the Purchaser’s right to indemnification under
      Section 7.7 hereof); (iii) the Purchaser will not, directly or indirectly,
      offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers
      to
      buy, purchase or otherwise acquire or take a pledge of) any of the Shares,
      except in compliance with the Securities Act and the Rules and Regulations
      and
      any applicable state securities laws; (iv) the Purchaser has, in connection
      with
      its decision to purchase the number of Shares set forth on the signature pages
      hereto, relied solely upon the representations and warranties of the Company
      contained in this Agreement (including Appendix I attached hereto; provided,
      that, it is acknowledged and agreed that Appendix I does not modify or alter
      in
      any manner the representations and warranties of the Company set forth in
      Section 4 hereof); (v) the Purchaser has had an opportunity to discuss this
      investment with representatives of the Company and ask questions of them; and
      (vi) the Purchaser is an “accredited investor” within the meaning of Rule 501(a)
      of Regulation D promulgated under the Securities Act.

     

    
      
        
        

      

      
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    5.2 Reliance
      on Exemptions.
      The
      Purchaser understands that the Shares are being offered and sold to it in
      reliance upon specific exemptions from the registration requirements of the
      Securities Act, the Rules and Regulations and state securities laws and that
      the
      Company is relying upon the truth and accuracy of, and the Purchaser’s
      compliance with, the representations, warranties, covenants, agreements,
      acknowledgments and understandings of the Purchaser set forth herein in order
      to
      determine the availability of such exemptions and the eligibility of the
      Purchaser to acquire the Shares.

     

    5.3 Confidentiality.
      The
      Purchaser understands that the information contained in the materials provided
      to the Purchaser by the Company and its representatives in connection with
      the
      purchase and sale of the Shares is strictly confidential and proprietary to
      the
      Company and is being submitted to the Purchaser solely for such Purchaser’s
      confidential use. The Purchaser agrees to use the information contained in
      such
      materials for the sole purpose of evaluating a possible investment in the Shares
      and the Purchaser acknowledges that it is prohibited from reproducing or
      distributing this Agreement or any other materials or other information provided
      by the Company in connection with the Purchaser’s consideration of its
      investment in the Company, in whole or in part, or divulging or discussing
      any
      of their contents, except to its financial, investment or legal advisors who
      need to know such contents in connection with the Purchaser’s proposed
      investment in the Purchaser Shares and who agree in writing to be bound by
      an
      equivalent obligation of confidentiality and non-use with respect to such
      contents. Further, the Purchaser understands that the existence and nature
      of
      all conversations and presentations, if any, regarding the Company and the
      offering of the Shares must be kept strictly confidential. The foregoing
      agreements shall not apply to any information that is or becomes publicly
      available through no fault of the Purchaser, or that the Purchaser is required
      to disclose pursuant to applicable law, regulation or legal process; provided,
      however, that if the Purchaser is requested or ordered to disclose any such
      information pursuant to any court or other government order or any other
      applicable legal procedure, it shall provide the Company with prompt notice
      of
      any such request or order in time sufficient to enable the Company to seek
      an
      appropriate protective order.

     

    
      
        
        

      

      
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    5.4 Investment
      Decision.
      The
      Purchaser understands that nothing in this Agreement or any other materials
      presented to the Purchaser in connection with the purchase and sale of the
      Shares constitutes legal, tax or investment advice. The Purchaser has consulted
      such legal, tax and investment advisors as it, in its sole discretion, has
      deemed necessary or appropriate in connection with its purchase of the
      Shares.

     

    5.5 Risk
      of Loss.
      The
      Purchaser understands that its investment in the Shares involves a significant
      degree of risk, including a risk of total loss of the Purchaser’s investment,
      and the Purchaser has full cognizance of and understands all of the risk factors
      related to the Purchaser’s purchase of the Shares, including, but not limited
      to, those set forth in Appendix I attached hereto (provided, that, it is
      acknowledged and agreed that Appendix I does not modify or alter in any manner
      the representations and warranties of the Company set forth in Section 4
      hereof). The Purchaser understands that no representation is being made as
      to
      the future value of the Common Stock.

     

    5.6 Legend.
      The
      Purchaser understands that, until such time as a Registration Statement has
      been
      declared effective or the Purchaser Shares may be sold pursuant to Rule 144
      under the Securities Act without any restriction as to the number of securities
      as of a particular date that can then be immediately sold, the Purchaser Shares
      will bear a restrictive legend in substantially the following form:

     

    “THE
      SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
      LAWS OF ANY STATE OR OTHER JURISDICTION. THE SHARES REPRESENTED BY THIS
      CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS IN ACCORDANCE WITH THE TERMS
      OF
      A STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY
      OF
      WHICH IS ON FILE WITH THE COMPANY. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED
      OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION
      UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE
      SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE
      CASE
      OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED
      AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES
      NOT
      REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE
      LAWS.”

     

    
      
        
        

      

      
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    5.7 Residency.
      The
      Purchaser’s principal executive offices are in the jurisdiction set forth
      immediately below the Purchaser’s name on the signature pages hereto.


     

    5.8 Organization;
      Validity; Enforcements.
      The
      Purchaser further represents and warrants to, and covenants with, the Company
      that (i) the Purchaser has full right, power, authority and capacity to enter
      into this Agreement and to consummate the transactions contemplated hereby
      and
      has taken all necessary action to authorize the execution, delivery and
      performance of this Agreement, (ii) the making and performance of this Agreement
      by the Purchaser and the consummation of the transactions herein contemplated
      will not violate any provision of the organizational documents of the Purchaser
      or conflict with, result in the breach or violation of, or constitute, either
      by
      itself or upon notice or the passage of time or both, a default under any
      material agreement, mortgage, deed of trust, lease, franchise, license,
      indenture, permit or other instrument to which the Purchaser is a party, or
      any
      statute or any authorization, judgment, decree, order, rule or regulation of
      any
      court or any regulatory body, administrative agency or other governmental agency
      or body applicable to the Purchaser, (iii) no consent, approval, authorization
      or other order of any court, regulatory body, administrative agency or other
      governmental agency or body is required on the part of the Purchaser for the
      execution and delivery of this Agreement or the consummation of the transactions
      contemplated by this Agreement, (iv) upon the execution and mutual delivery
      of
      this Agreement by the parties hereto, this Agreement shall constitute a legal,
      valid and binding obligation of the Purchaser, enforceable in accordance with
      its terms, except as enforceability may be limited by applicable bankruptcy,
      insolvency, reorganization, moratorium or other laws of general application
      relating to the enforcement of creditor’s rights and the application of
      equitable principles relating to the availability of remedies, and except as
      rights to indemnity or contribution, including, but not limited to, the
      indemnification provisions set forth in Section 7.7 of this Agreement, may
      be
      limited by federal or state securities laws or the public policy underlying
      such
      laws, and (v) there is not in effect any order enjoining or restraining the
      Purchaser from entering into or engaging in any of the transactions contemplated
      by this Agreement.

     

    SECTION
      6. Survival
      of Representations, Warranties and Agreements.
      Notwithstanding any investigation made by either party to this Agreement, all
      covenants and agreements made by the Company and the Purchaser herein and in
      the
      certificates for the Purchaser Shares delivered pursuant hereto shall survive
      the execution of this Agreement, the delivery to the Purchaser of the Purchaser
      Shares and the payment therefor. All representations and warranties made by
      the
      Company and the Purchaser herein and in the certificates for the Purchaser
      Shares delivered pursuant hereto shall survive for a period of one year
      following the later of the execution of this Agreement, the delivery to the
      Purchaser of the Purchaser Shares and the payment therefor. 

     

    
      
        
        

      

      
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    SECTION
      7. Registration
      of the Shares; Compliance with the Securities Act. 

     

    7.1 Certain
      Definitions.

     

    (a) “Holder”
means
      any
      holder of Registrable Securities who is a party to this Agreement.

     

    (b) “IPO”
means
      the initial underwritten registered public offering of the Company’s equity
      securities by the Company.

     

    (c) “Other
      Registrable Securities”
means
      any and all shares of the Common Stock and other securities issued by the
      Company that are covered by piggyback registration rights similar to those
      conferred on the Holders pursuant to the terms of Section 7.2 (but which may
      include rights of priority with respect to inclusion in piggyback registrations
      of the Company’s securities).

     

    (d) “Registrable
      Securities”
means
      any and all of the (i) Shares purchased by the Purchasers pursuant to the
      Agreements; (ii) equity securities issued in respect of such Shares in any
      reorganization; and (iii) equity securities issued in respect of the securities
      referred to in the preceding clauses (i) and (ii) as the result of a stock
      split, stock dividend, recapitalization or combination.

     

    (e) “Registration
      Expenses”
means
      all expenses incident to the Company’s performance of or compliance with Section
      7.5 of this Agreement, including, without limitation, all: (i) registration
      and
      filing fees, (ii) fees and expenses relating to compliance with securities
      or
      blue sky laws (including fees and expenses of counsel in connection with blue
      sky qualifications of the securities registered), (iii) printing, messenger
      and
      delivery expenses, (iv) internal expenses of the Company (including all salaries
      and expenses of its officers and employees performing legal or accounting
      duties), (v) fees and expenses of counsel for the Company and fees and expenses
      for independent certified public accountants retained by the Company (including
      the expenses of any comfort letters or costs associated with the delivery by
      independent certified public accountants of a comfort letter or comfort
      letters), (vi) fees and expenses of any special experts retained by the Company
      in connection with such registration, (vii) reasonable fees and expenses of
      a
      single counsel for the holders of Registrable Securities and Other Registrable
      Securities participating in the subject offering selected by the holders of
      a
      majority of the Registrable Securities and Other Registrable Securities offered
      therein, (viii) fees and expenses in connection with any review of underwriting
      arrangements by the National Association of Securities Dealers, Inc. (the
“NASD”)
      and
      (ix) fees and expenses of underwriters customarily paid by issuers or sellers
      of
      securities (but not including any underwriting discounts or commissions
      attributable to the sale of Registrable Securities).

     

    7.2 Piggyback
      Registration Rights.

     

    (a) Whenever
      the Company proposes to register the offer and sale of any of its Common Stock
      under the Securities Act other than pursuant to a registration statement on
      Form
      S-8 or S-4 or any similar form or in connection with a registration the primary
      purpose of which is to register debt securities and the registration form to
      be
      used may be used for the registration of Registrable Securities, the Company
      will give prompt written notice to all Holders of its intention to effect such
      a
      registration and will include (subject to the priority provisions described
      hereinbelow) in such registration all Registrable Securities of such Holders
      with respect to which the Company has received written requests for inclusion
      therein (a “Piggyback
      Registration”)
      within
      20 days after the delivery of the Company’s notice; provided, that (x) if such
      registration involves an underwritten public offering, all Holders must sell
      their Registrable Securities included therein to the underwriters on the same
      terms and conditions as applicable to the Company and the other holders of
      the
      Company’s securities included therein and (y) if, at any time after giving
      written notice of its intention to register any Common Stock pursuant to this
      Section 7.2(a) and prior to the effective date of the registration statement
      filed in connection with such registration, the Company shall determine for
      any
      reason not to register such Common Stock, the Company shall give written notice
      thereof to all such Holders and, thereupon, shall be relieved of its obligation
      to register any Registrable Securities in connection with such
      registration.

     

    
      
        
        

      

      
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    (b) The
      Registration Expenses of the Holders will be paid by the Company in all
      Piggyback Registrations (including, without limitation, the expenses of any
      withdrawn registration pursuant to Section 7.2(a)(y) above).

     

    (c) If
      a
      Piggyback Registration is an underwritten primary registration on behalf of
      the
      Company, the Company will include in such registration all Registrable
      Securities timely requested to be included in such registration; provided,
      that
      if the managing underwriters advise the Company in writing that in their good
      faith opinion the inclusion of any Registrable Securities in such offering
      would
      adversely affect the marketability of the offering, then such Registrable
      Securities shall not be permitted to be included; and provided further, that
      if
      in connection with such offering, the managing underwriters advise the Company
      in writing that in their opinion the total number of securities requested to
      be
      included in such registration exceeds the number which can be sold in such
      offering without adversely affecting the marketability of the offering, the
      Company will include in such registration (i) first, the securities the Company
      proposes to sell, (ii) second, Other Registrable Securities, if any, subject
      to
      contractually agreed rights of priority with respect to piggyback registrations
      of the Company, conformably with the terms of the applicable contractual
      agreement between the Company and the holder thereof, and (iii) third, the
      Registrable Securities and Other Registrable Securities (other than those
      adverted to in the foregoing clause (ii)) requested to be included in such
      registration reduced pro rata among the holders of such Registrable Securities
      and Other Registrable Securities on the basis of the respective number of shares
      of such Registrable Securities and Other Registrable Securities so requested
      to
      be included therein.

     

    (d) If
      a
      Piggyback Registration is an underwritten secondary registration on behalf
      of
      holders of the Company's securities other than Registrable Securities, and
      the
      managing underwriters advise the Company in writing that in their good faith
      opinion the inclusion of any Registrable Securities in the offering would
      adversely affect the marketability of the offering, then such Registrable
      Securities shall not be permitted to be included. Additionally, if in connection
      with such an offering, the managing underwriters advise the Company in writing
      that in their opinion the number of securities requested to be included in
      such
      registration exceeds the number which can be sold in such offering without
      adversely affecting the marketability of the offering, the Company will include
      in such registration (i) first, the securities requested to be included therein
      by the holders requesting such registration, (ii) second, Other Registrable
      Securities, if any, subject to contractually agreed rights of priority with
      respect to piggyback registrations of the Company, conformably with the terms
      of
      the applicable contractual agreement between the Company and the holder thereof,
      and (iii) third, the Registrable Securities and Other Registrable Securities
      (other than those adverted to in the foregoing clause (ii)) requested to be
      included in such registration reduced pro rata among the holders of such
      Registrable Securities and Other Registrable Securities on the basis of the
      number of shares of such Registrable Securities and Other Registrable Securities
      so requested to be included therein.

     

    
      
        
        

      

      
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    7.3 Form
      S-3 Registration.
      

     

    (a) If
      Purchaser, together with any and all of its Affiliates (as defined below),
      invests $5,000,000 or more to purchase Common Stock pursuant to this Agreement
      and any Other Agreements, then at any time following six (6) months after the
      effective date of the registration statement filed by the Company relating
      to
      the IPO, the Purchaser (together with its Affiliates) will be entitled to
      request one (1) registration (in total), whether underwritten or otherwise,
      under the Securities Act of all or part of its Registrable Securities (on a
      continuous or delayed basis as permitted pursuant to Rule 415 of the Rules
      and
      Regulations, or any successor rule, of the SEC under the Securities Act) on
      Form
      S-1 or any similar long-form registration (“Long-Form
      Registration”)
      or on
      Form S-3 or any similar short-form registration (“Short-Form
      Registration”),
      if
      available. Such request shall specify the approximate number of Registrable
      Securities requested to be registered. The registration requested pursuant
      to
      this Section 2(a) is referred to herein as the "Demand
      Registration".
      The
      Demand Registration will be a Short-Form Registration whenever the Company
      is
      permitted to use any applicable short form. Notwithstanding anything to the
      contrary in this Agreement, the Company shall not be obligated to file any
      such
      registration statement within such time period:

     

    (i) if
      the
      Purchaser (together with its Affiliates) proposes to sell Registrable Securities
      at an estimated aggregate price to the public of less than $2,000,000;
      or

     

    (ii) if
      the
      Company has, within such 6-month period following the IPO, already effected
      a
      registration under the Securities Act, other than a registration from which
      the
      Purchaser’s Registrable Securities have been excluded (with respect to all or
      any portion of such Registrable Securities requested be included in such
      registration) pursuant to the provisions of Section 7.2.

     

    (b) At
      least
      20 days prior to the date that the Company intends to file a registration
      statement effecting a demand registration requested by an Other Purchaser
      pursuant to rights conferred on such Other Purchaser in an Other Agreement
      identical, mutatis mutandis,
      to
      those conferred in this Section 7.3 on the Purchaser, the Company will give
      written notice to the Purchaser of its intention to effect such a registration
      and will include in such registration all Registrable Securities of the
      Purchaser with respect to which the Company has received written requests for
      inclusion therein within 20 days after the receipt by the Purchaser of the
      Company’s notice. Notwithstanding anything to the contrary herein, Purchaser
      acknowledges that the Purchaser, together with certain Other Purchasers, shall
      together hold the right to request such a demand registration and, upon notice
      from the Company that such a demand registration has been requested by any
      Other
      Purchaser, Purchaser’s right with respect to the Demand Registration under this
      Section 7.3 shall be to include its Registrable Securities in such registration
      statement on the terms provided above. 

     

    
      
        
        

      

      
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    (c) Notwithstanding
      the foregoing, if the Company shall furnish to the Purchaser a certificate
      signed by the President, Chief Executive Officer or Chief Financial Officer
      of
      the Company stating that in the good faith judgment of the Board of Directors
      of
      the Company, it would be materially detrimental to the Company and its
      stockholders for such registration statement to be filed within the time period
      specified in Section 7.3(a) hereof, then the Company shall have the right to
      defer such filing for a period of not more than 180 days after the expiration
      of
      such time period.

     

    (d) Subject
      to the terms of Section 7.5, a Demand Registration shall not be deemed
“effected” for purposes of this Section 7.3 until such time as a registration
      statement covering all of the Registrable Securities requested by the Purchaser
      to be included therein has been declared effective by the SEC.

     

    (e) The
      Registration Expenses of the Purchaser will be paid by the Company in a Demand
      Registration.

     

    7.4 Lock-Up
      Agreement.
      The
      Purchaser (for itself and each assignee Holder) hereby agrees not to effect
      any
      public sale or distribution (including sales pursuant to Rule 144 promulgated
      under the Securities Act) of equity securities of the Company, or any securities
      convertible or exercisable into or exchangeable for such securities, during
      (x)
      the 180-day period beginning on the effective date of the IPO, and (y) the
      90-day period beginning on the effective date of the registration pursuant
      to
      Section 7.3 or any Piggyback Registration that is an underwritten offering
      in
      which Registrable Securities are included; provided, that the foregoing
      provisions of this Section 7.4 (i) shall not apply to the sale of any shares
      to
      an underwriter pursuant to an underwriting agreement, (ii) shall not apply
      to
      transactions (including any sales of Common Stock or other securities) relating
      to shares of Common Stock or other securities acquired in open market
      transactions after the completion of the IPO, and (iii) shall only be applicable
      to the Holder if each executive officer and director of the Company and each
      stockholder of the Company holding more than 5% of the Company’s outstanding
      Common Stock agrees to similar restrictions. If the underwriters managing the
      registered public offering waive any such restriction for the benefit of any
      stockholder of the Company, they will also grant an equivalent waiver to the
      Holder, whether or not participating in such offering.

     

    7.5 Registration
      Procedure.
      Whenever the Holders have requested that any Registrable Securities be included
      in a Piggyback Registration pursuant to Section 7.2 hereof or the Company
      undertakes a registration of securities pursuant to its obligations under
      Section 7.3 hereof, the Company will, subject to the provisions hereof, use
      its
      reasonable best efforts to effect the registration and the sale of such
      Registrable Securities in accordance with the intended method of disposition
      thereof, and pursuant thereto the Company will:

     

    
      
        
        

      

      
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    (a) prepare
      and file with the SEC a registration statement (a “Registration
      Statement”)
      with
      respect to such Registrable Securities and use its reasonable best efforts
      to
      cause such Registration Statement to become effective (provided that before
      filing a registration statement or prospectus or any amendments or supplements
      thereto, the Company will furnish to the counsel selected by the holders of
      a
      majority of the Registrable Securities and Other Registrable Securities covered
      by such Registration Statement copies of all such documents proposed to be
      filed);

     

    (b) prepare
      and file with the SEC such amendments and supplements to such Registration
      Statement and the prospectus used in connection therewith as may be necessary
      to
      keep such Registration Statement effective for a period of not less than 180
      days; provided, however, that (i) such 180 day period shall be extended for
      a
      period of time equal to the period that the Holders refrain from selling any
      securities included in any underwritten registration at the request of the
      managing underwriters; and (ii) in the case of any registration of Registrable
      Securities which are intended to be offered on a continuous or delayed basis,
      such 180 day period shall be extended, if necessary, to keep the Registration
      Statement effective until all such Registrable Securities are sold, provided
      that Rule 415, or any successor rule, under the Securities Act, then permits
      such an offering on a continuous or delayed basis, and provided further that
      applicable rules under the Securities Act governing the obligation to file
      a
      post-effective amendment then permit, in lieu of filing a post-effective
      amendment which (I) includes any prospectus required by Section 10(a)(3) of
      the
      Securities Act or (II) reflects facts or events representing a material or
      fundamental change in the information set forth in the Registration Statement,
      the incorporation by reference in the Registration Statement of information
      otherwise required to be included in such a post-effective amendment that is
      contained in periodic reports filed pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”); and comply
      with the provisions of the Securities Act with respect to the disposition of
      all
      securities covered by such Registration Statement during such period in
      accordance with the intended methods of disposition by the sellers thereof
      set
      forth in such Registration Statement;

     

    (c) furnish
      to each Holder included therein such number of copies of such Registration
      Statement, each amendment and supplement thereto, the prospectus included in
      such Registration Statement (including each preliminary prospectus) and such
      other documents as such holder may reasonably request in order to facilitate
      the
      disposition of the Registrable Securities owned by such Holder;

     

    (d) use
      its
      reasonable best efforts to register or qualify such Registrable Securities
      under
      such other securities or blue sky laws of such U.S. state jurisdictions as
      any
      Holder thereof reasonably requests and do any and all other acts and things
      which may be reasonably necessary or advisable to enable such Holder to
      consummate the disposition in such jurisdictions of the Registrable Securities
      owned by such Holder (provided that the Company will not be required to (i)
      qualify generally to do business in any jurisdiction where it would not
      otherwise be required to qualify but for this subsection, (ii) subject itself
      to
      taxation in any such jurisdiction or (iii) consent to general service of process
      (i.e., service of process which is not limited solely to securities law
      violations) in any such jurisdiction);

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    (e) notify
      each Holder of such Registrable Securities, at any time when a prospectus
      relating thereto is required to be delivered under the Securities Act, of the
      happening of any event as a result of which the prospectus included in such
      Registration Statement contains an untrue statement of a material fact or omits
      any fact necessary to make the statements therein, in the context in which
      they
      were made, not misleading, and, at the request of any such Holder, promptly
      prepare a supplement or amendment to such prospectus so that, as thereafter
      delivered to the purchasers of such Registrable Securities, such prospectus
      will
      not contain an untrue statement of a material fact or omit to state any fact
      necessary to make the statements therein, in the context in which they were
      made, not misleading;

     

    (f) cause
      all
      such Registrable Securities to be listed on each securities exchange on which
      similar securities issued by the Company are then listed;

     

    (g) provide
      a
      transfer agent, registrar and CUSIP number for all such Registrable Securities
      not later than the effective date of such Registration Statement;

     

    (h) enter
      into such customary agreements (including, in the case of underwritten
      offerings, underwriting agreements in customary form with the managing
      underwriter(s) approved by the Company) and take all such other actions as
      the
      Holders of a majority of the Registrable Securities and Other Registrable
      Securities being sold or the underwriters, if any, reasonably request in order
      to expedite or facilitate the disposition of such Registrable Securities and
      Other Registrable Securities (including, without limitation, effecting a stock
      split or a combination of shares);

     

    (i) make
      available for inspection by any Holder, any underwriter participating in any
      disposition pursuant to such registration statement and any attorney, accountant
      or other agent retained by any such holder or underwriter, all financial and
      other records, pertinent corporate documents and properties of the Company,
      and
      cause the Company’s officers, directors, employees and independent accountants
      to supply all information reasonably requested by any such Holder, underwriter,
      attorney, accountant or agent in connection with such registration
      statement;

     

    (j) otherwise
      use its reasonable best efforts to comply with all applicable rules and
      regulations of the SEC in connection with such registration, and make available
      to its security holders, as soon as reasonably practicable, an earnings
      statement covering the period of at least twelve months beginning with the
      first
      day of the Company’s first full calendar quarter after the effective date of the
      Registration Statement, which earnings statement shall satisfy the provisions
      of
      Section 11(a) of the Securities Act and Rule 158 promulgated
      thereunder;

     

    (k) permit
      any Holder of Registrable Securities, that is or might reasonably be deemed
      to
      be an underwriter or a controlling person of the Company, to participate in
      the
      preparation of such Registration Statement and to require the insertion therein
      of material, furnished to the Company in writing, which in the reasonable
      judgment of such Holder and its counsel should be included therein;

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    (l) in
      the
      event of the issuance of any stop order suspending the effectiveness of the
      Registration Statement, or of any order suspending or preventing the use of
      any
      related prospectus or suspending the qualification of any securities included
      in
      such Registration Statement for sale in any U.S. jurisdiction, use its
      reasonable best efforts promptly to obtain the withdrawal of such
      order;

     

    (m) use
      its
      reasonable best efforts to cause such Registrable Securities covered by such
      Registration Statement to be registered with or approved by such other U.S.
      federal or state governmental agencies or authorities as may be necessary to
      enable the holders thereof to consummate the disposition of such Registrable
      Securities; and

     

    (n) obtain
      a
“cold comfort” letter from the Company’s independent public accountants in
      customary form and covering such matters of the type customarily covered by
      “cold comfort” letters as the holders of a majority of the Registrable
      Securities and Other Registrable Securities being sold reasonably
      request.

     

    If
      any
      such Registration Statement refers to any Holder by name or otherwise as the
      holder of any securities of the Company and if such Holder is a controlling
      person of the Company, such Holder shall have the right to require (i) the
      insertion therein of language, in form and substance reasonably satisfactory
      to
      such Holder and presented to the Company in writing, to the effect that the
      holding by such Holder of such securities is not to be construed as a
      recommendation by such holder of the investment quality of the Company’s
      securities covered thereby and that such holding does not imply that such Holder
      will assist in meeting any future financial requirements of the Company, or
      (ii)
      in the event that such reference to such Holder by name or otherwise is not
      required by the Securities Act or any similar federal statute then in force,
      the
      deletion of the reference to such Holder; provided, that with respect to this
      clause (ii) such Holder shall furnish to the Company an opinion of counsel
      to
      such effect, which opinion and counsel shall be reasonably satisfactory to
      the
      Company.

     

    7.6 Transfer
      of Shares.
      The
      Purchaser agrees that it will not effect any disposition of the Shares or its
      right to purchase the Shares that would constitute a sale within the meaning
      of
      the Securities Act or any applicable state securities laws, except as
      contemplated in a Registration Statement referred to in Section 7.5 or as
      otherwise permitted by law. 

     

    7.7 Indemnification.
      For the
      purpose of this Section 7.7, the term “Holder/Affiliate” shall mean any
      affiliate (as defined in Rule 405 promulgated under the Securities Act) (an
      “Affiliate”)
      of the
      Holder, and any person who controls the Holder or any such Affiliate of the
      Holder within the meaning of Section 15 of the Securities Act or Section 20
      of
      the Exchange Act.

     

    (a) The
      Company agrees to indemnify and hold harmless the Holder and each
      Holder/Affiliate against any losses, claims, damages, liabilities or expenses,
      joint or several, to which the Holder or Holder/Affiliate may become subject,
      under the Securities Act, the Exchange Act, or any other federal or state
      statutory law or regulation, or at common law or otherwise (including in
      settlement of any litigation, if such settlement is effected with the prior
      written consent of the Company (which consent shall not be unreasonably withheld
      or delayed)), insofar as such losses, claims, damages, liabilities or expenses
      (or actions in respect thereof as contemplated below) arise out of or are based
      upon any untrue statement or alleged untrue statement of any material fact
      contained in a Registration Statement, including the prospectus (the
“Prospectus”),
      financial statements and schedules, and all other documents filed as a part
      thereof, as amended at the time of effectiveness of a Registration Statement,
      including any information deemed to be a part thereof as of the time of
      effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rules
      430B,
      430C or 434, of the Rules and Regulations, or the Prospectus, in the form first
      filed with the SEC pursuant to Rule 424(b) of the Rules and Regulations, or
      filed as part of a Registration Statement at the time of effectiveness if no
      Rule 424(b) filing is required, or any amendment or supplement thereto, or
      arise
      out of or are based upon the omission or alleged omission to state in any of
      them a material fact required to be stated therein or necessary to make the
      statements in any of them, in light of the circumstances under which they were
      made, not misleading, or arise out of or are based in whole or in part on any
      breach by the Company of its representations or warranties contained in this
      Agreement, or any failure of the Company to perform its obligations hereunder,
      and will promptly reimburse each such Holder and each such Holder/Affiliate
      for
      any legal and other expenses as such expenses are reasonably incurred by such
      Holder or such Holder/Affiliate in connection with investigating, defending
      or
      preparing to defend, settling, compromising or paying any such loss, claim,
      damage, liability, expense or action; provided,
      however,
      that
      the Company will not be liable for amounts paid in settlement of any such loss,
      claim, damage, liability or action if such settlement is effected without the
      consent of the Company, which consent shall not be unreasonably withheld, and,
      provided,
      further,
      that
      the Company will not be liable in any such case to the extent, that any such
      loss, claim, damage, liability, action or expense arises out of or is based
      upon
      (i) an untrue statement or alleged untrue statement or omission or alleged
      omission made in a Registration Statement, the Prospectus or any amendment
      or
      supplement thereto in reliance upon and in conformity with written information
      furnished to the Company by or on behalf of the Holder expressly for use
      therein, or (ii) any statement or omission in any Prospectus that is corrected
      in any subsequent Prospectus that was delivered to the Holder prior to the
      pertinent sale or sales by the Holder, or a violation by the Holder of any
      provision of federal or state securities law applicable to the
      Holder.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    (b) Each
      Holder will severally, but not jointly, or jointly and severally, with the
      Other
      Purchasers, indemnify and hold harmless the Company, each of its directors,
      each
      of its officers, including such officers who signed a Registration Statement,
      and each person, if any, who controls the Company within the meaning of Section
      15 of the Securities Act or Section 20 of the Exchange Act, against any losses,
      claims, damages, liabilities or expenses to which the Company, each of its
      directors, each of its officers and each such controlling person may become
      subject, under the Securities Act, the Exchange Act, or any other federal or
      state statutory law or regulation, or at common law or otherwise (including
      in
      settlement of any litigation, but only if such settlement is effected with
      the
      written consent of such Holder (which consent shall not be unreasonably withheld
      or delayed)), insofar as such losses, claims, damages, liabilities or expenses
      (or actions in respect thereof as contemplated below) arise out of or are based
      upon any untrue or alleged untrue statement of any material fact contained
      in a
      Registration Statement, the Prospectus, or any amendment or supplement thereto,
      or any omission or alleged omission to state therein a material fact required
      to
      be stated therein or necessary to make the statements in a Registration
      Statement, the Prospectus or any amendment or supplement thereto not misleading
      in the light of the circumstances under which they were made, in each case
      to
      the extent, but only to the extent, that such untrue statement or alleged untrue
      statement or omission or alleged omission was made in a Registration Statement,
      the Prospectus, or any amendment or supplement thereto, in reliance upon and
      in
      conformity with written information furnished to the Company by or on behalf
      of
      the Holder expressly for use therein, and will promptly reimburse the Company,
      each of its directors, each of its officers and each such controlling person
      for
      any legal and other expense reasonably incurred by the Company, each of its
      directors, each of its officers and each such controlling person in connection
      with investigating, defending, settling, compromising or paying any such loss,
      claim, damage, liability, expense or action; provided, however, that any
      individual Holder’s aggregate liability under this Section 7.7 shall not
      exceed the amount of proceeds received by such Holder on the sale of the Shares
      pursuant to a Registration Statement.

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

       

    

    (c) Promptly
      after receipt by an indemnified party under this Section 7.7 of notice of the
      threat or commencement of any action indemnifiable hereunder, such indemnified
      party will, if a claim in respect thereof is to be made against an indemnifying
      party under this Section 7.7, promptly notify the indemnifying party in writing
      thereof; but the omission so to notify the indemnifying party will not relieve
      it from any liability which it may have to any indemnified party for
      contribution or otherwise under the indemnity agreement contained in this
      Section 7.7 to the extent it is not prejudiced as a result of such failure.
      In
      case any such action is brought against any indemnified party and such
      indemnified party seeks or intends to seek indemnity from an indemnifying party,
      the indemnifying party will be entitled to participate in, and, to the extent
      that it may wish, jointly with all other indemnifying parties similarly
      notified, to assume the defense thereof with counsel reasonably satisfactory
      to
      such indemnified party; provided,
      however,
      if the
      defendants in any such action include both the indemnified party and the
      indemnifying party and the indemnified party shall have reasonably concluded,
      based on an opinion of counsel reasonably satisfactory to the indemnifying
      party, that there may be a conflict of interest between the positions of the
      indemnifying party and the indemnified party in conducting the defense of any
      such action or that there may be legal defenses available to it and/or other
      indemnified parties which are different from or additional to those available
      to
      the indemnifying party, the indemnified party or parties shall have the right
      to
      select separate counsel to assume such legal defenses and to otherwise
      participate in the defense of such action on behalf of such indemnified party
      or
      parties. Upon receipt of notice from the indemnifying party to such indemnified
      party of its election to assume the defense of such action and approval by
      the
      indemnified party of counsel, the indemnifying party will not be liable to
      such
      indemnified party under this Section 7.7 for any legal or other expenses
      subsequently incurred by such indemnified party in connection with the defense
      thereof unless (i) the indemnified party shall have employed separate counsel
      in
      connection with the assumption of legal defenses in accordance with the proviso
      to the preceding sentence (it being understood, however, that the indemnifying
      party shall not be liable for the expenses of more than one separate counsel,
      reasonably satisfactory to such indemnifying party, representing all of the
      indemnified parties who are parties to such action) or (ii) the indemnifying
      party shall not have employed counsel reasonably satisfactory to the indemnified
      party to represent the indemnified party within a reasonable time after notice
      of commencement of action, in each of which cases the reasonable fees and
      expenses of counsel shall be at the expense of the indemnifying party. In no
      event shall any indemnifying party be liable in respect of any amounts paid
      in
      settlement of any action unless the indemnifying party shall have approved
      in
      writing the terms of such settlement; provided
      that
      such consent shall not be unreasonably withheld. No indemnifying party shall,
      without the prior written consent of the indemnified party, effect any
      settlement of any pending or threatened proceeding in respect of which any
      indemnified party is or could have been a party and indemnification could have
      been sought hereunder by such indemnified party from all liability on claims
      that are the subject matter of such proceeding.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    (d) If
      the
      indemnification provided for in this Section 7.7 is required by its terms but
      is
      for any reason held by a court of competent jurisdiction to be unavailable
      to or
      otherwise insufficient to hold harmless an indemnified party under paragraphs
      (a), (b) or (c) of this Section 7.7 in respect to any losses, claims, damages,
      liabilities or expenses referred to herein, then each applicable indemnifying
      party shall contribute to the amount paid or payable by such indemnified party
      as a result of any losses, claims, damages, liabilities or expenses referred
      to
      herein (i) in such proportion as is appropriate to reflect the relative benefits
      received by the Company and the Holder from the private placement of Common
      Stock hereunder and the resale of the Purchaser Shares of such Holder pursuant
      to a Registration Statement or (ii) if the allocation provided by clause (i)
      above is not permitted by applicable law, in such proportion as is appropriate
      to reflect not only the relative benefits referred to in clause (i) above but
      the relative fault of the Company and the Holder in connection with the
      statements or omissions or inaccuracies in the representations and warranties
      in
      this Agreement and/or a Registration Statement which resulted in such losses,
      claims, damages, liabilities or expenses, as well as any other relevant
      equitable considerations. The respective relative benefits received by the
      Company on the one hand and each Holder on the other shall be deemed to be
      in
      the same proportion as the amount paid by such Holder to the Company pursuant
      to
      this Agreement for the Purchaser Shares purchased by the Purchaser that were
      sold pursuant to a Registration Statement bears to the difference between the
      amount the Purchaser paid for such Shares that were sold pursuant to a
      Registration Statement and the amount received by such Holder from such sale.
      The relative fault of the Company, on the one hand, and each Holder on the
      other
      shall be determined by reference to, among other things, whether the untrue
      or
      alleged statement of a material fact or the omission or alleged omission to
      state a material fact or the inaccurate or the alleged inaccurate representation
      and/or warranty relates to information supplied by the Company or by such Holder
      and the parties’ relative intent, knowledge, access to information and
      opportunity to correct or prevent such statement or omission. The amount paid
      or
      payable by a party as a result of the losses, claims, damages, liabilities
      and
      expenses referred to above shall be deemed to include, subject to the
      limitations set forth in paragraph (c) of this Section 7.7, any legal or other
      fees or expenses reasonably incurred by such party in connection with
      investigating or defending any action or claim. The provisions set forth in
      paragraph (c) of this Section 7.7 with respect to the notice of the threat
      or
      commencement of any threat or action shall apply if a claim for contribution
      is
      to be made under this paragraph (d); provided,
      however,
      that no
      additional notice shall be required with respect to any threat or action for
      which notice has been given under paragraph (c) for purposes of indemnification.
      The Company and each Holder agree that it would not be just and equitable if
      contribution pursuant to this Section 7.7 were determined solely by pro rata
      allocation (even if the Holders were treated as one entity for such purpose)
      or
      by any other method of allocation which does not take account of the equitable
      considerations referred to in this paragraph. No person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution from any person who was not guilty of such
      fraudulent misrepresentation. Each Holder’s obligations to contribute pursuant
      to this Section 7.7 is several, and not joint, or joint and several, with that
      of the Other Purchasers and other Holders. 

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    7.8 Participation
      in Underwritten Registrations.
      A
      Holder may not participate in any Piggyback Registration hereunder or, if the
      Purchaser, a registration pursuant to Section 7.3 hereof which is underwritten
      unless the Holder (a) agrees to sell its Registrable Securities on the basis
      provided in any underwriting arrangements approved by the Company in connection
      therewith, and (b) completes and executes all customary questionnaires, powers
      of attorney, indemnities, underwriting agreements and other documents reasonably
      required under the terms of such underwriting arrangements; provided, that
      the
      Holder as a holder of Registrable Securities included in any underwritten
      registration shall not be required to make any representations or warranties
      to
      the Company or the underwriters other than representations and warranties
      regarding such Holder and such Holder’s intended method of distribution.


     

    7.9 Information
      Available.
      The
      Company, upon the reasonable request of a Holder and with prior notice, will
      be
      available to such Holder or a representative thereof at the Company’s
      headquarters to discuss information relevant for disclosure in the Registration
      Statement covering the Registrable Securities owned by such Holder and will
      otherwise cooperate with the Holder conducting an investigation for the purpose
      of reducing or eliminating the Holder’s exposure to liability under the
      Securities Act, including the reasonable production of information at the
      Company’s headquarters, subject to appropriate confidentiality limitations.


     

    7.10 Reports
      Under Exchange Act.
      With a
      view to making available to the Holders the benefits of Rule 144 under the
      Securities Act and any other rule or regulation of the SEC that may at any
      time
      permit a Holder to sell securities of the
      Company to the public without registration or pursuant to a registration on
      Form
      S-3, the Company shall:

     

    (a) make
      and
      keep available
      adequate current public
      information,
      as
      those terms are understood and defined in Rule 144, at all times after the
      effective date of the registration statement relating to the IPO;

     

    (b) use
      commercially reasonable efforts to file with the SEC in a timely manner all
      reports and other documents required to be filed by the Company under the
      Securities Act and the Exchange Act (at any time after the Company has become
      subject to such reporting requirements); and

     

    (c) furnish
      to any Holder, so long as the Holder owns any Registrable Securities, forthwith
      upon request (i) to
      the extent accurate, a
      written
      statement by the Company that it has complied with the reporting requirements
      of
      Rule 144 (at any time after ninety (90) days after the effective date of the
      registration statement relating to the IPO), the Securities Act, and the
      Exchange Act (at any time after the Company has become subject to such reporting
      requirements), or that it qualifies as a registrant whose securities may be
      resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii)
      a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents filed by the Company in compliance with such reporting
      requirements; and (iii) such other information as may be reasonably requested
      in
      availing any Holder of any rule or regulation of the SEC that permits the
      selling of any such securities without registration (at any time after the
      Company has become subject to the reporting requirements under the Exchange
      Act)
      or pursuant to Form
      S-3
      (at any time after the Company so qualifies to use such form).

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

      
         

        SECTION
          8. Independent
          Nature of Purchasers’ Obligations and Rights.
          The
          obligations of the Purchaser under this Agreement are several and not joint
          (or
          joint and several) with the obligations of any Other Purchaser, and the
          Purchaser shall not be responsible in any way for the performance of the
          obligations of any Other Purchaser under the Agreements. The decision of
          the
          Purchaser to purchase the Purchaser Shares pursuant to this Agreement has
          been
          made by such Purchaser independently of any Other Purchaser. Nothing contained
          in the Agreements, and no action taken by any Purchaser pursuant thereto,
          shall
          be deemed to constitute the Purchasers as a partnership, an association,
          a joint
          venture or any other kind of entity, or create a presumption that the Purchasers
          are in any way acting in concert or as a group with respect to such obligations
          or the transactions contemplated by the Agreements. The Purchaser acknowledges
          that no Other Purchaser has acted as agent for such Purchaser in connection
          with
          making its investment hereunder and that no Other Purchaser will be acting
          as
          agent of such Purchaser in connection with monitoring its investment in
          the
          Purchaser Shares or enforcing its rights under this Agreement. The Purchaser
          shall be entitled to independently protect and enforce its rights, including
          without limitation the rights arising out of this Agreement, and it shall
          not be
          necessary for any Other Purchaser to be joined as an additional party in
          any
          proceeding for such purpose.

         

        SECTION
          9. Notices.
          All
          notices required or permitted hereunder shall be in writing and shall be
          deemed
          effectively given: (i) upon delivery to the party to be notified; (ii)
          when
          received by confirmed facsimile or (iii) one (1) business day after deposit
          with
          a nationally recognized overnight carrier, specifying next business day
          delivery, with written verification of receipt. All communications shall
          be sent
          to the Company and the Purchaser as follows or at such other addresses
          as the
          Company or the Purchaser may designate upon ten (10) days’ advance written
          notice to the other party: 

         

        (a) if
          to the
          Company, to:

         

        Wyndcrest
          DD Holdings, Inc.

        150
          U.S.
          Highway One, Suite 500

        Jupiter,
          FL 33477

        Attn.:
          John C. Textor 

        Facsimile:
          (561) 277-6446

         

        
          with
            a
            copy to (which shall not constitute notice):

        

         

        
          	
                
	
                  Joseph
                    P. Gabriel, Esq., General Counsel

                  Facsimile:
                    (310) 314-2943

                
	
                   

                  with
                    a copy to (which shall not constitute notice):

                   

                
	
                  Sullivan
                    & Triggs, LLP

                  1230
                    Montana Avenue, Suite 201

                  Santa
                    Monica, California 90403

                  Attn.:
                    D. Thomas Triggs

                  Facsimile:
                    (310) 451-8303

                


        

        


        
          
            
            

          

          
            -24-

            
              

            

          

          
            
            

          

        

         

        (b) if
          to the
          Purchaser, at its address as set forth on the signature pages to this
          Agreement.

         

        SECTION
          10. Changes.
          This
          Agreement may not be modified or amended except pursuant to an instrument
          in
          writing signed by the Company and the Purchaser. Any amendment or modification
          effected in accordance with this Section 10 shall be binding upon each
          holder of
          any securities purchased under this Agreement at the time outstanding,
          each
          future holder of all such securities, and the Company.

         

        SECTION
          11. Headings.
          The
          headings of the various sections of this Agreement have been inserted for
          convenience of reference only and shall not be deemed to be part of this
          Agreement. 

         

        SECTION
          12. Severability.
          In case
          any provision contained in this Agreement should be invalid, illegal or
          unenforceable in any respect, the validity, legality and enforceability
          of the
          remaining provisions contained herein shall not in any way be affected
          or
          impaired thereby. 

         

        SECTION
          13. Governing
          Law; Venue.
          This
          Agreement and any disputes or claims arising out of or in connection with
          its
          subject matter shall be governed by and construed in accordance with the
          law of
          the State of California without regard to the conflicts of laws principles
          of
          that or any other jurisdiction. The parties irrevocably agree that the
          state and
          Federal courts of Los Angeles County, California shall have exclusive
          jurisdiction to settle any dispute or claim that arises out of or in connection
          with this Agreement. Each of the parties agrees to waive to the fullest
          extent
          permitted by applicable law any objection that it now has or may hereafter
          have
          to the venue of any litigation, proceeding or action arising out of, or
          in
          connection with, this Agreement being laid in any such court, or that any
          such
          litigation, proceeding or action was brought in an inconvenient
          forum.

         

        SECTION
          14. Counterparts.
          This
          Agreement may be executed in one or more counterparts, each of which shall
          constitute an original, but all of which, when taken together, shall constitute
          but one instrument, and shall become effective when one or more counterparts
          have been signed by each party hereto and delivered (including by facsimile)
          to
          the other parties.

         

        SECTION
          15. Entire
          Agreement.
          This
          Agreement (including the Appendices attached hereto) and the instruments
          referenced herein contain the entire understanding of the parties with
          respect
          to the matters covered herein and therein and, except as specifically set
          forth
          herein or therein, neither the Company nor the Purchaser makes any
          representation, warranty, covenant or undertaking with respect to such
          matters.

         

        
          
            
            

          

          
            -25-

            
              

            

          

          
            
            

          

           

        

        SECTION
          16. Fees
          and Expenses.
          Except
          as expressly set forth herein, each of the Company and the Purchaser shall
          pay
          its respective fees and expenses related to the transactions contemplated
          by
          this Agreement.

         

        SECTION
          17. Parties.
          This
          Agreement is made solely for the benefit of and is binding upon the Purchaser
          and the Company and, to the extent expressly provided in Section 7.7, each
          Holder and Holder/Affiliate, any person controlling the Company or such
          Holder,
          the officers and directors of the Company and, subject to the provisions
          of
          Section 7.7, no other person, shall acquire or have any right under or
          by virtue
          of this Agreement. 

         

        SECTION
          18. Assignment.
          Except
          as otherwise expressly provided herein, the provisions hereof shall inure
          to the
          benefit of, and be binding upon, the parties hereto and their respective
          successors and assigns. This Agreement and the rights of the Purchaser
          hereunder
          may be assigned by the Purchaser only with the prior written consent of
          the
          Company, except such consent shall not be required in cases of (i) assignments
          by an investment adviser to a fund for which it is the adviser or by or
          among
          funds that are under common control or (ii) any assignment by the Purchaser,
          or
          any other Holder, only of its rights to participate in piggyback registrations
          under Section 7 of this Agreement, to a transferee from the Purchaser or
          such
          other Holder of all or a portion of the Purchased Shares, provided that
          such
          transfer of securities shall not have been consummated in violation of
          the
          provisions of this Agreement and, provided further that, in each such case,
          such
          transferee agrees in writing to be bound by the terms of this Agreement
          as a
          Holder hereunder. Notwithstanding anything to the contrary contained herein,
          the
          rights to cause the Company to register Registrable Securities in piggyback
          registrations pursuant to this Agreement may be assigned (but only with
          all
          related obligations) by the Purchaser or any other Holder only to a transferee
          from it of Purchased Shares who, after such transfer, holds at least 20%
          of the
          total number of Purchased Shares purchased by the Purchaser pursuant to
          this
          Agreement (subject to appropriate adjustment for stock splits, stock dividends,
          combinations, recapitalizations and similar fundamental corporate events)
          (the
“Minimum
          Holding Condition”);
          provided that the foregoing restriction shall not apply to assignments
          by an
          investment adviser, which itself then satisfies the Minimum Holding Condition,
          to a fund for which it is the adviser or by or among funds that are under
          common
          control. 

         

        SECTION
          19. Use
          of
          Purchaser’s Name.
          Notwithstanding anything to the contrary set forth herein, the Company
          shall not
          publicly disclose the name of the Purchaser for marketing purposes or otherwise,
          or include the name of the Purchaser in any filing with the SEC or any
          other
          regulatory agency or securities exchange, without the prior written consent
          of
          the Purchaser, except to the extent such disclosure is required by applicable
          laws, rules or regulations, in which case the Company shall provide the
          Purchaser with prior notice of such disclosure; provided,
          further,
          that
          notwithstanding the foregoing, the Company shall have the right to disclose
          the
          name of the Purchaser in oral communications between the Company and its
          representatives and potential Other Purchasers; provided, that, in connection
          with any disclosure pursuant to the foregoing proviso, the Company shall
          only be
          permitted to disclose that the Purchaser has invested in the Common Stock
          and
          shall not state or suggest that the Purchaser endorses, sponsors, promotes
          or
          encourages an investment in the Company by any potential Other
          Purchaser.

         

        
          
            
            

          

          
            -26-

            
              

            

          

          
            
            

          

           

        

        SECTION
          20. Further
          Assurances.
          Each
          party agrees to cooperate fully with the other party and to execute such
          further
          instruments, documents and agreements and to give such further written
          assurance
          as may be reasonably requested by the other party to evidence and reflect
          the
          transactions described herein and contemplated hereby and to carry into
          effect
          the intents and purposes of this Agreement.

         

        


         

        [Remainder
          of Page Intentionally Left Blank]

         

        
          
            
            

          

          
            -27-

            
              

            

          

          
            
            

          

        


        IN
          WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement
          to
          be executed by their duly authorized representatives as of the day and
          year
          first above written.

         

        
          	
                  WYNDCREST
                    DD HOLDINGS, INC.

                
	 
	 
	 
	
                  By: _________________________________

                  Name: 

                  Title: 

                


        

        


        
          
            
            

          

          
            -28-

            
              

            

          

          
            
            

          

        

        


        [INVESTOR
          SIGNATURE PAGE]

         

        Print
          or
          Type:

         

        
          	
                  Name
                    of Purchaser

                  (Individual
                    or Institution):

                
	 
	
                  _________________________________

                
	 
	 
	
                  Name
                    of Individual representing

                  Purchaser
                    (if an Institution):

                
	 
	
                  _________________________________

                
	 
	 
	
                  Title
                    of Individual representing

                  Purchaser
                    (if an Institution):

                
	 
	
                  _________________________________

                


        

        


        Signature
          by:

         

        
          	
                  Individual
                    Purchaser or Individual

                  representing
                    Purchaser:

                
	 
	
                  _________________________________

                
	 
	
                  Address: ___________________________

                
	 
	
                  Telephone: ___________________________

                
	 
	
                  Facsimile: ___________________________

                


        

         

        
          	
                  Number
                    of Shares 

                  to
                    Be Purchased

                	 	
                  Price
                    Per Share

                  In
                    Dollars

                	 	
                  Aggregate
                    

                  Price

                
	 	 	
                  $1.40

                	 	
                  $

                
	 	 	 	 	 


        

         

        
          
            
            

            
            

          

          
            -29-

            
              

            

          

          
            
            

            
              


            

          

        


        SUMMARY
          INSTRUCTION SHEET FOR PURCHASER

         

        (to
          be
          read in conjunction with the entire

        Stock
          Purchase Agreement which this follows)

         

        A. Complete
          the following items on BOTH
          Stock
          Purchase Agreements (Please sign two
          originals):

         

        
          	
                	1.	
                  Page
                    __ - Signature:

                


        

         

        
          	 	
                  (i)

                	
                  Name
                    of Purchaser (Individual or
                    Institution)

                


        

         

        
          	 	
                  (ii)

                	
                  Name
                    of Individual representing Purchaser (if an
                    Institution)

                


        

         

        
          	 	
                  (iii)

                	
                  Title
                    of Individual representing Purchaser (if an
                    Institution)

                


        

         

        
          	 	
                  (iv)

                	
                  Signature
                    of Individual Purchaser or Individual representing
                    Purchaser

                


        

         

        
          	 	
                  2.

                	
                  Appendix
                    II - Stock Certificate
                    Questionnaire:

                


        

         

        Provide
          the information requested by the Stock Certificate Questionnaire.

         

        
          	 	
                  3.

                	
                  Return
                    BOTH
                    properly completed and signed Stock Purchase Agreements including
                    the
                    properly completed Appendix II to (initially by facsimile with
                    original
                    copy by overnight delivery):

                


        

         

        
          	
                  Wyndcrest
                    DD Holdings, Inc.

                  150
                    U.S. Highway One, Suite 500

                  Jupiter,
                    FL 33477

                  Attn.:
                    Jonathan Teaford 

                  Facsimile:
                    (561) 277-6446

                


        

        


        B. Instructions
          regarding the transfer of funds for the purchase of Shares will be sent
          by
          facsimile to the Purchaser at a later date.

         

         

        
          
             

             

            
            

          

          
            -30-

            
              

            

          

          
            
            

          

        


        Appendix
          I

        


        RISK
          FACTORS

         

        References
          to “we”, “us”, and “our” in the risk factors discussed herein are to Wyndcrest
          DD Holdings, Inc, and, as the context may require, its
          subsidiaries.

         

        An
          investment in our common stock involves a high degree of risk. You should
          carefully consider the risks described below before making a decision to
          invest
          in our common stock. The risks and uncertainties described below are not
          the
          only ones we face. Additional risks and uncertainties not presently known
          to us,
          or that we currently deem immaterial, could negatively impact our business,
          results of operations or financial condition in the future. If any of the
          following risks and uncertainties develops into actual events, our business,
          results of operations and financial condition could be adversely affected.
          In
          those cases, the value of our common stock could decline and you may lose
          all or
          part of your investment.

         

        Risks
          Related to Our Business and Industry

         

        The
          entertainment industry is highly competitive.

         

        The
          entertainment industry is highly competitive. We may not be able to compete
          successfully against either current or future competitors. Increased competition
          could result in reduced revenues, lower margins, and/or loss of market
          share,
          any of which could significantly harm our business. 

         

        Our
          operating results may fluctuate significantly. 

         

        Our
          operating results may fluctuate as a result of a number of factors, many
          of
          which are outside of our control. For these reasons, comparing our operating
          results on a period-to-period basis may not be meaningful, and you should
          not
          rely on our past results as an indication of our future performance. Each
          of the
          risk factors listed herein under the caption “Risks Related to Our Business and
          Industry”, and the following factors, may affect our operating results:


         

        
          	
                  ·

                	
                  our
                    ability to continue to attract clients for our services and products;
                    

                


        

         

        
          	
                  ·

                	
                  the
                    amount and timing of operating costs and capital expenditures
                    related to
                    the maintenance and expansion of our businesses, operations and
                    infrastructure; 

                


        

         

        
          	
                  ·

                	
                  our
                    focus on long term goals over short term results;
                    

                


        

         

        
          	
                  ·

                	
                  the
                    results of our investments in high risk
                    projects;

                


        

         

        
          	
                  ·

                	
                  general
                    economic conditions and those economic conditions specific to
                    our business
                    lines; and

                


        

         

        
          	
                  ·

                	
                  geopolitical
                    events such as war, threat of war or terrorist actions.
                    

                


        

         

        
          
            
            

          

          
            -31-

            
              

            

          

          
            
            

          

        

         

        In
          addition, our business has historically been cyclical and seasonal in nature,
          reflecting overall economic conditions as well as client budgeting and
          buying
          patterns in the advertising and entertainment industries generally. The
          cyclicality and seasonality in our business could become more pronounced
          and may
          cause our operating results to fluctuate more widely.

         

        Changes
          in the United States, global or regional economic conditions could adversely
          affect our profitability. 

         

        Our
          services, and the products we plan to offer, are luxuries that are dependent
          on
          the amount of disposable income available to consumers. A decrease in economic
          activity in the United States or in other regions of the world in which
          we do
          business could adversely affect demand for our products and services. In
          addition, an increase in price levels generally, or in price levels in
          a
          particular sector such as the energy sector, could result in a shift in
          consumer
          demand away from entertainment products. Such events could cause a decrease
          in
          the demand for the services we offer which would have an adverse effect
          on our
          business and results of operations. 

         

        We
          intend to undertake acquisitions to expand our business, which may pose
          risks to
          our business and dilute the ownership of our existing
          stockholders.

         

        A
          key
          component of our business strategy includes strengthening our competitive
          position through internal development and growth. However, we intend to
          selectively pursue strategic acquisitions of companies in our industry
          and
          contiguous industries. To finance any acquisition, it may be necessary
          for us to
          raise additional funds through public or private financings. Additional
          funds
          may not be available on terms that are favorable to us, and, in the case
          of
          equity financings, would result in dilution to our stockholders. We cannot
          assure you that we will be able to consummate any acquisitions or, if
          consummated, successfully integrate the operations and management of future
          acquired companies. If we are unable to attract and consummate acquisitions,
          our
          growth could be adversely impacted. Furthermore, any acquisition that is
          consummated presents several financial and operational risks that could
          have an
          adverse effect on our operating results. These risks include:

         

        
          	
                  ·

                	
                  costs
                    associated with integrating the acquired
                    businesses;

                


        

         

        
          	
                  ·

                	
                  potential
                    liabilities of the acquired
                    businesses;

                


        

         

        
          	
                  ·

                	
                  possible
                    adverse tax and accounting effects of the
                    acquisition;

                


        

         

        
          	
                  ·

                	
                  diversion
                    of our management’s attention from the day-to-day operation of our
                    business to the integration of the acquired
                    business;

                


        

         

        
          	
                  ·

                	
                  key
                    employees of the acquired business leaving after the acquisition;
                    and

                


        

         

        
          	
                  ·

                	
                  the
                    acquired business not performing at the level we projected when
                    we
                    determined the purchase price.

                


        

         

        
          
            
            

          

          
            -32-

            
              

            

          

          
            
            

          

        

         

        Interruption
          or failure of our information technology systems could impair our ability
          to
          effectively provide our services and products, which could damage our
          reputation. 

         

        Our
          continued success will depend on our ability to meet our clients’ tight
          schedules, and our provision of our services and products depends on the
          continuing operation of our information technology and communications systems.
          Our systems are vulnerable to damage or interruption from earthquakes,
          terrorist
          attacks, floods, fires, power loss, telecommunications failures, computer
          viruses or other attempts to harm our systems, and similar events. Our
          facility
          is located in an area with a high risk of major earthquakes and is also
          subject
          to break-ins, sabotage and intentional acts of vandalism. Some of our systems
          are not fully redundant, and our disaster recovery planning cannot account
          for
          all eventualities. The occurrence of a natural disaster or other unanticipated
          problems at our facility could result in lengthy interruptions in our projects
          and our ability to deliver services. Interruptions in our projects could
          hinder
          our ability to retain and attract clients and our brand could be damaged
          if
          clients believe we are unreliable, either of which, could adversely affect
          our
          business and operating results. 

         

        Our
          future success depends on certain key personnel.

         

        Our
          future success depends on the continued service and performance of our
          senior
          management and key technical personnel, including John C. Textor, Carl
          Stork, Mark Miller, Cliff Plumer, Kim Libreri and Ed Ulbrich, whom we rely
          on
          for management of our company, development of our business strategy and
          management of our strategic relationships. Certain of our executive officers
          are
          bound by employment and noncompetition agreements. However, while it is
          standard
          in the entertainment industry to rely on employment agreements as a method
          of
          retaining the services of key personnel, these agreements cannot assure
          us of
          the continued services of such employees. Furthermore, many of our other
          management and key technical personnel are not bound by employment or
          noncompetition agreements, and, as a result, these employees can leave
          with
          little or no prior notice. The loss of any such key personnel, particularly
          with
          no notice, could cause delays on the projects such key personnel were
          responsible for. Such losses may also have and adverse impact on our
          relationship with those clients with whom such key personnel had strategic
          relationships.

         

        To
          be successful, we must continue to attract and retain qualified personnel.
          

         

        Our
          future success depends to a significant extent on our ability to identify,
          attract, hire, train and retain qualified creative, technology and managerial
          personnel. Competition for the caliber of talent required to make our products
          and provide our services, particularly for creative and technology personnel,
          will continue to intensify as film studios build their in-house animation
          and
          visual special effects capabilities, and as the markets for video games
          and
          visual special effects software continue to develop. There can be no assurance
          that we will be successful in identifying, attracting, hiring, training
          and
          retaining such qualified personnel in the future and our failure to do
          so could
          have an adverse effect on our business. 

         

        
          
            
            

          

          
            -33-

            
              

            

          

          
            
            

          

        

         

        We
          depend on cutting-edge technology and computer systems and we cannot predict
          the
          effect that rapid technological change or alternative forms of entertainment
          may
          have on us or our industry.

         

        The
          entertainment industry in general, and the sectors thereof in which we
          operate
          in particular, continue to undergo significant changes, primarily due to
          technological developments. The rapid growth of technology and shifting
          consumer
          tastes prevent us from being able to accurately predict the overall effect
          that
          technological growth or the availability of alternative forms of entertainment
          may have on the potential revenue from and profitability of our operating
          units’
services and products. Furthermore, because we are required to provide
          cutting
          edge products to continue to win business we must ensure that our production
          environment integrates the latest tools and techniques developed in the
          industry. This requires us to either develop these capabilities by upgrading
          our
          own proprietary software, which can result in substantial research and
          development costs, or to purchase third-party licenses, which can result
          in
          significant expenditures. In the event we seek to obtain third-party licenses,
          we cannot guarantee that they will be available or, once obtained, will
          continue
          to be available on commercially reasonable terms, or at all. Furthermore,
          any
          error or defect in our software, a failure of our hardware or a failure
          of our
          backup facilities may result in a delay in delivery of products and services
          that could result in significantly increased production costs and may affect
          our
          ability to complete the work in a timely fashion. Such delays could have
          an
          adverse effect on our brand name and our relationship with our clients.
          

         

        Our
          revenue may be adversely affected if we fail to protect our proprietary
          technology or enhance or develop new technology.

         

        We
          depend
          on our proprietary technology to develop and produce our products and provide
          our services. We own no patents. We rely on a combination of copyright
          and trade
          secret protection and nondisclosure agreements to establish and protect
          our
          proprietary rights. In addition, we also rely on third-party software which
          is
          readily available to others. Failure of our copyrights and trade secret
          protection, non-disclosure agreements or other measures to provide protection
          of
          our technology, and the availability of third-party software, may make
          it easier
          for our competitors to obtain technology equivalent to or superior to our
          technology. Such failures may cause us to seek patents on our proprietary
          technology. We cannot provide any assurances that patents will issue from
          any
          patent applications we may file or that, if patents do issue, any claims
          allowed
          will be sufficiently broad to protect our technology or that they will
          not be
          challenged, invalidated or circumvented. Furthermore, if such competitors
          develop or license technology that is superior to ours or that makes our
          technology obsolete, we may be required to incur significant costs to enhance
          or
          acquire new technology so that it remains competitive. We cannot assure
          you that
          such costs would not have an adverse effect on our operating results.


         

        In
          addition, we may be required to litigate in the future to enforce our
          intellectual property rights, to protect our trade secrets, to determine
          the
          validity and scope of the proprietary rights of others or to defend against
          claims of infringement or invalidity. Any such litigation could result
          in
          substantial costs and diversion of resources and could have an adverse
          effect on
          our business and/or our operating results.

         

        
          
            
            

          

          
            -34-

            
              

            

          

          
            
            

          

        

         

        Others
          may assert intellectual property infringement claims against us.


         

        Companies
          in the visual special effects and related segments of the entertainment
          industry
          are constantly subject to the possibility of claims that their products,
          services or techniques misappropriate or infringe the intellectual property
          rights of third-parties with respect to their technology and software,
          previously developed works or other entertainment or intellectual property.
          There can be no assurance that infringement or misappropriation claims
          (or
          claims for indemnification resulting from such claims) will not be asserted
          or
          prosecuted against us, or that any assertions or prosecutions will not
          adversely
          affect our business and/or our operating results. Irrespective of the validity
          or the successful assertion of such claims, we would incur significant
          costs and
          diversion of resources with respect to the defense thereof, which could
          have an
          adverse effect on our business and/or our operating results. If any claims
          or
          actions are asserted against us, we may seek to obtain a license of a
          third-party’s intellectual property rights. We cannot provide any assurances,
          however, that under such circumstances a license would be available on
          reasonable terms or at all. 

         

        We
          depend on revenues from a few significant relationships and any loss,
          cancellation, reduction, or delay in these relationships could harm our
          business.

         

        In
          general, we have historically derived a material portion of our revenue
          from one
          or a limited number of customers. We expect that in future periods we may
          also
          enter into contracts with customers which represent a significant concentration
          of our revenues. If such contracts were terminated, our revenues and net
          income
          could significantly decline. Our future success will depend on our continued
          ability to develop and manage relationships with our significant customers.
          Any
          adverse change in our relationship with any of the major motion picture
          studios
          or other principal customers could have an adverse effect on our business.
          Although we are attempting to expand our customer base, we expect that
          our
          customer concentration will not change significantly in the near future.
          The
          markets in which we sell our services and products are dominated by a relatively
          small number of customers. We cannot be sure that we will be able to retain
          our
          largest customers, that we will be able to attract additional customers,
          or that
          our customers will continue to buy our products and services in the same
          amounts
          as in prior years. The loss of one or more of our largest customers, any
          reduction in revenues from these customers or our inability to successfully
          develop relationships with additional customers each could significantly
          harm
          our business.

         

        Management
          will be subject to certain conflicts of interest arising from their management
          of our business.

         

        Certain
          members of our management will devote time, which may be substantial, to
          their
          other business activities (which may include management of other companies),
          and
          will have certain other conflicts of interest.

         

        The
          inability to successfully manage the growth of our business may have an
          adverse
          effect on our operating results.

         

        Since
          our
          acquisition of Digital Domain, Inc. in April 2006, we have begun to implement
          improvements to its financial, inventory, management and reporting controls
          and
          to hire additional technical, administrative and management personnel.
          While
          necessary, these improvements require incurring expenses that limit our
          management’s ability to pursue potential market opportunities. If our management
          is unable to successful manage expenses in a manner that allows us to both
          improve operations and at the same time pursue potential market opportunities,
          the growth of our business could be adversely impacted.

         

        
          
            
            

          

          
            -35-

            
              

            

          

          
            
            

          

        

         

        We
          may not be able to implement our strategies of entering into the film production
          and video game development businesses effectively or at
          all.

         

        Our
          business strategy contemplates the potential expansion of our business
          into two
          new business lines: film production and video game production. Entry into
          either
          of these business lines presents significant challenges and subjects our
          business to significant risks, and the inability to successfully manage
          these
          challenges could adversely affect our successful entry into one or both
          of these
          markets. Such failures would significantly limit our ability to grow our
          business while at the same time diverting significant resources from our
          historical core businesses.

         

        Our
          reported financial results could be adversely affected by changes in financial
          accounting standards or by the application of existing or future accounting
          standards to our business as it evolves.

         

        As
          a
          result of the enactment of the Sarbanes-Oxley Act of 2002 and the review
          of
          accounting policies by the SEC and national and international accounting
          standard bodies, the frequency of accounting policy changes may accelerate.
          For
          example, accounting policies affecting software revenue recognition have
          been
          the subject of frequent interpretations, which could significantly affect
          the
          way we account for revenue related to our products. In addition, the rules
          for
          tax accounting are in the process of being changed. As we enhance, expand
          and
          diversify our business and product offerings, the application of existing
          or
          future financial accounting standards, particularly those relating to the
          way we
          account for revenue and taxes, could have a significant adverse effect
          on our
          reported results although not necessarily on our cash flows. 

         

        Risks
          Related to the Purchase and Ownership of Our Common Stock

        


        There
          is no public market for our securities and transferability of any shares
          of
          common stock purchased by you will be limited.

         

        There
          is
          no public market for our securities and there can be no assurance that
          an active
          trading market will ever develop, or, if developed, that it will be sustained.
          Our common stock has not been registered under the Securities Act or the
          Exchange Act. There can be no assurance as to if or when we will register
          any of
          our securities. Investors must therefore be prepared to bear the economic
          risk
          of an investment in shares of common stock for an indefinite period of
          time.

         

        
          
            
            

          

          
            -36-

            
              

            

          

          
            
            

          

        

         

        The
          terms of the sale of shares of our common stock and the purchase price
          of the
          shares offered hereby were arbitrarily determined.

         

        The
          purchase price of the shares, and other terms of the sale of shares of
          our
          common stock, were determined arbitrarily by us and do not bear any direct
          relationship to our and our subsidiaries’ assets, book value or any other
          generally accepted criteria of valuation.

         

        Future
          sales of common stock may have an adverse effect on its market
          price.

         

        In
          the
          event that a public market does eventuate for the trading of the common
          stock,
          future sales of such stock by stockholders under Rule 144 promulgated under
          the
          Securities Act or through outstanding registration rights granted to the
          holders
          of our securities could have an adverse effect on the market prices of
          the
          common stock. Sales of substantial amounts of common stock or the perception
          that such sales could occur could adversely affect the prevailing market
          price
          for the common stock. In addition, sales of common stock pursuant to the
          exercise of “piggyback” registration rights may further adversely affect the
          market price of the common stock.

         

        The
          common stock offered is subject to substantial restrictions on
          transfer.

         

        The
          shares of common stock offered hereby will be restricted, and you will
          not be
          able to sell or otherwise transfer such shares unless the sale or other
          transfer
          of such shares has been registered, qualified or deemed to be exempt from
          such
          registration or qualification under the Securities Act and applicable state
          securities or “blue sky” laws. 

         

        We
          may issue additional preferred stock, which may impair the value of the
          common
          stock and may have rights superior to your common stock rights.


         

        In
          addition to the above-referenced shares of common stock that we may issue
          without stockholder approval, we have the right to authorize and issue
          preferred
          stock. At present there are outstanding 1,000,000 shares of our preferred
          stock,
          designated our 8% Senior Cumulative Convertible Preferred Stock, the holders
          of
          which have rights superior to the rights of the holders of our Common Stock.
          While we have no present plans to issue any additional shares of preferred
          stock, our Board of Directors has the authority, without stockholder approval,
          to create and issue one or more series or classes of such preferred stock
          and to
          determine the voting, liquidation, dividend and other rights of holders
          of such
          preferred stock. The holders of shares of any such series or class of preferred
          stock may have rights superior to the holders of common stock.

         

        Our
          principal stockholders, directors and management will continue to own a
          large
          percentage of our voting stock after this offering, which will allow them
          to
          exercise significant influence over matters subject to stockholder
          approval.

         

        Our
          executive officers, directors and stockholders holding 5% or more of our
          outstanding common stock will beneficially own or control approximately __%
          of the outstanding shares of our common stock following the closing of
          this
          offering, if fully subscribed. Accordingly, these executive officers, directors
          and principal stockholders, acting as a group, will have substantial influence
          over the outcome of corporate actions requiring stockholder approval, including
          the election of directors, any merger, consolidation or sale of all or
          substantially all of our assets or any other significant corporate transaction.
          These stockholders may also delay or prevent a change of control or otherwise
          discourage a potential acquirer from attempting to obtain control of us,
          even if
          such a change of control would benefit our other stockholders. This significant
          concentration of stock ownership may adversely affect the value of our
          common
          stock due to investors’ perception that conflicts of interest may exist or
          arise.

         

        
          
            
            

          

          
            -37-

            
              

            

          

          
            
            

          

        

         

        We
          do not intend to pay dividends on our common stock.

         

        We
          do not
          anticipate paying any cash dividends on our common stock in the foreseeable
          future. We currently anticipate that we will retain all of our available
          cash,
          if any, for use as working capital and for other general corporate purposes.
          Any
          payment of future dividends will be at the discretion of our Board of Directors
          and will depend upon, among other things, our earnings, financial condition,
          capital requirements, level of indebtedness, statutory and contractual
          restrictions applying to the payment of dividends and other considerations
          that
          the Board of Directors deems relevant. Investors must rely on sales of
          their
          common stock after price appreciation, which may never occur, as the only
          way to
          realize a return on their investment. Investors seeking cash dividends
          should
          not purchase our common stock.

         

        Some
          provisions of our charter documents and Delaware law may have anti-takeover
          effects that could discourage an acquisition of us by others, even if an
          acquisition would be beneficial to our stockholders.

         

        Provisions
          in our charter documents, as well as provisions of Delaware law, could
          make it
          more difficult for a third-party to acquire us, even if doing so would
          benefit
          our stockholders. In addition, we are subject to Section 203 of the
          Delaware General Corporation Law, which generally prohibits a Delaware
          corporation from engaging in any broad range of business combinations with
          any
          stockholder (an “interested stockholder”) who owns, or at any time in the last
          three years owned, 15% or more of its outstanding voting stock for a period
          of
          three years following the date on which the stockholder became an interested
          stockholder. This provision could have the effect of delaying or preventing
          a
          change of control, whether or not it is desired by or beneficial to our
          stockholders.

         

        You
          will experience immediate and substantial dilution as a result of this
          offering
          and may experience additional dilution in the future.

         

        If
          you
          purchase shares of our common stock, you will pay more for your shares
          than the
          amounts paid by existing stockholders for their shares, and, as a result,
          you
          will incur an immediate and substantial dilution in your investment. If
          we raise
          additional funding by issuing equity securities or convertible debt, or
          if we
          acquire other companies or technologies or finance strategic alliances
          by
          issuing equity, the newly issued or issuable shares will further dilute
          your
          percentage ownership and may also reduce the value of your
          investment.

        
          
             

          

          
            -38-

            
              

            

          

          
             

          

        

         

        We
          have broad discretion in the use of the net proceeds from this offering,
          and we
          may not use these proceeds effectively.

         

        We
          have
          not determined the specific allocation of the net proceeds of the sale
          of shares
          of our common stock. Our management will have broad discretion in the
          application of the net proceeds therefrom and could spend the proceeds
          in ways
          that do not necessarily improve our results of operations or enhance the
          value
          of our common stock. The failure by our management to apply these funds
          effectively could result in financial losses that could have a material
          adverse
          effect on our business or financial condition, cause the value of our common
          stock to decline and/or delay product development.

         

         

         

         

         

         

        
          
            
            

          

          
            -39-

            
              

            

          

          
            
            

          

        

        Appendix
          II

         

        STOCK
          CERTIFICATE QUESTIONNAIRE

         

        Pursuant
          to Section 3 of the Agreement, please provide us with the following information:
          

         

        
          	
                  1.

                	
                  The
                    exact name that your Shares are to be registered in (this is
                    the name that
                    will appear on your stock certificate(s)). You may use a nominee
                    name if
                    appropriate:

                	 	
                   

                   

                   

                  _____________________________

                
	
                  2.

                	
                  The
                    relationship between the Purchaser of the Shares and the Registered
                    Holder
                    listed in response to item 1 above:

                	 	
                   

                   

                  _____________________________

                
	
                  3.

                	
                  The
                    mailing address of the Registered Holder listed in response to
                    item 1
                    above:

                	 	
                   

                  _____________________________

                  _____________________________

                  _____________________________

                  _____________________________

                
	
                  4.

                	
                  The
                    Social Security Number or Tax Identification Number of the Registered
                    Holder listed in response to item 1 above:

                	 	
                   

                   

                  _____________________________

                


        

        


         

      

       

      
        
          
          

        

        
          -40-