Document:

EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of
the  1st  day of  April,  2004  by and  between  ROO  Group,  Inc.,  a  Delaware
corporation  (hereinafter  called the "Company"),  and Robin Smyth  (hereinafter
called the "Executive").

                                    RECITALS

         A. The Board of  Directors  of the  Company  (the  "Board")  desires to
employ the Executive in an executive capacity and to compensate him therefor.

         B. The  Executive  is willing  to make his  services  available  to the
Company on the terms and conditions hereinafter set forth.

                                    AGREEMENT

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:

         1. EMPLOYMENT.

                  1.1  EMPLOYMENT  AND TERM. The Company hereby agrees to employ
the Executive and the Executive hereby agrees to serve the Company, on the terms
and  conditions set forth herein,  for the period  commencing on the date hereof
and expiring on March 31, 2006 (the "Initial Term") unless sooner  terminated as
hereinafter set forth;  provided,  however, that commencing on April 1, 2006 and
each April 1 thereafter,  the Initial Term of this Agreement shall automatically
be extended for two  additional  years unless at least ninety (90) days prior to
such April 1 date,  the Company  shall have  delivered  to the  Executive or the
Executive  shall have  delivered to the Company  written notice that the term of
the Executive's employment hereunder will not be extended.

                  1.2 DUTIES OF  EXECUTIVE.  The  Executive  shall  serve as the
Chief  Financial  Officer of the  Company  and shall have  powers and  authority
superior to any other officer or employee of the Company or of any subsidiary of
the Company  other than the Chief  Executive  Officer and Chairman of the Board.
Subject to the preceding sentence, during the term of employment,  the Executive
shall  diligently  perform all services as may be reasonably  assigned to him by
the Board,  and shall exercise such power and authority as may from time to time
be  delegated  to him by the Board.  The  Executive  shall be required to report
solely to, and shall be subject solely to, the  supervision and direction of the
Board at duly called  meetings  thereof,  and no other  person or group shall be
given  authority  to supervise or direct  Executive  in the  performance  of his
duties  other than the Chief  Executive  Officer.  The  Executive  shall  devote
substantially  all his working time and attention to the business and affairs of
the Company  (excluding  any vacation  and sick leave to which the  Executive is
entitled),  render  such  services  to the  best  of his  ability,  and  use his
reasonable best efforts to promote the interests of the Company. It shall not be
a violation of this Agreement for the Executive to (A) serve on corporate, civic
or charitable boards or committees,  (B) manage Executive's personal investments
or (C) perform other roles as approved in writing by the Board,  so long as such
activities  do  not   significantly   interfere  with  the  performance  of  the
Executive's  responsibilities  as an employee of the Company in accordance  with
this Agreement.

         2. COMPENSATION.

                  2.1 BASE  SALARY.  Commencing  on the  effective  date of this
Agreement,  the Executive  shall receive a base salary at the annual rate of not
less than $120,000 (the "Base Salary") during the term of this  Agreement,  with
such Base Salary payable in installments  consistent  with the Company's  normal
payroll  schedule,  subject to applicable  withholding  and other taxes. On each
anniversary of this agreement (the "Salary  Adjustment  Date"),  the Executive's
then Base Salary shall be  increased  by an

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amount equal to the previous year's Base Salary multiplied by ten percent (10%).
The Executive's then Base Salary shall also be reviewed, at least annually,  for
merit  increases  and may, by action and in the  discretion  of the Board or the
Compensation  Committee thereof,  be increased at any time or from time to time.
The Base  Salary  shall also be  increased  at any time and from time to time as
shall be  substantially  consistent with increases in base salary awarded in the
ordinary  course of  business  to other key  executives  of the  Company and its
subsidiaries.  The Base Salary, if increased,  shall not thereafter be decreased
for any reason.

                  2.2 INCENTIVE COMPENSATION. The Executive shall be entitled to
receive such bonus  payments or incentive  compensation  as may be determined at
any time or from time to time by the Board or the Compensation Committee thereof
in its discretion.  Such potential bonus payments and/or incentive  compensation
shall be considered at least annually by the Board or any Compensation Committee
thereof.

                  2.3 STOCK OPTION.

                           (a) The  Company  hereby  grants to the  Executive  a
two-year  incentive stock option (the "Option") to purchase  3,000,000 shares of
the Company's  common stock,  par value $.0001 per share ("Common  Stock").  The
Option  shall be treated as an  incentive  stock  option  within the  meaning of
Section 422 of the Internal  Revenue Code to the  greatest  extent  permitted by
law. A copy of the Agreement evidencing the Option is attached hereto as EXHIBIT
A.

                           (b) The  Option  shall be  subject  to the  terms and
conditions of the Company's Stock Option Plan (the "Plan");  provided,  however,
that  notwithstanding  anything in the Plan or the form of agreement  evidencing
the Option to the  contrary,  the Option  shall be  exercisable  with respect to
3,000,000 shares of Common Stock within one month of the issue.

                                    (i)  Notwithstanding  the  preceding  clause
2.3(b), the Option shall become immediately exercisable as to 100% of the shares
of  Common  Stock not  otherwise  vested  upon any  termination  of  Executive's
employment  pursuant  to Section 4.4  hereof,  it being  agreed that the Company
shall  cooperate in good faith to afford the Executive the right to exercise the
Option in full  immediately  prior to any  "Change in Control"  (as  hereinafter
defined);

                                    (ii)  The  Company  shall  take  all  action
reasonably  requested by the Executive to permit any "cashless"  exercise of the
Option that is permitted under the Plan;

                                    (iii) Upon proper exercise of an Option, the
Executive  shall be deemed  for all  purposes  the owner of the shares of Common
Stock that are purchasable upon such exercise;

                                    (iv) The Company  agrees that, no later than
May, 2005, it will file a  Registration  Statement on Form S-8 or take any other
action  necessary to ensure that the  issuance of Common  Stock  pursuant to the
Option is registered under the Securities Act of 1933, as amended; and

                                    (v) The  provisions of the Plan shall not be
adversely  modified as to the Executive  without the  Executive's  prior written
consent.

                  2.4 PAYMENT.  Payment to the Executive of the compensation set
forth in Section 2 and the reimbursement and other benefits set forth in Section
3 may be made through a subsidiary of the Company; PROVIDED,  HOWEVER, that this
Agreement shall remain between the Executive and the Company.

         3. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.

                  3.1  EXPENSE  REIMBURSEMENT.  During  the term of  Executive's
employment hereunder,  the Company, upon the submission of reasonable supporting
documentation by the Executive,

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shall  reimburse  the  Executive for all  reasonable  expenses  actually paid or
incurred by the  Executive  in the course of and pursuant to the business of the
Company, including reasonable expenses for travel and entertainment.

                  3.2  INCENTIVE,  SAVINGS  AND  RETIREMENT  PLANS.  During  the
Initial Term,  the Executive  shall be entitled to participate in all incentive,
savings and retirement  plans,  practices,  policies and programs  applicable to
other  key  executives  of the  Company  and  its  subsidiaries,  in  each  case
comparable to those currently in effect or as subsequently  amended. Such plans,
practices,  policies and programs, in the aggregate, shall provide the Executive
with  compensation,  benefits and reward  opportunities at least as favorable as
the most  favorable  of such  compensation,  benefits  and reward  opportunities
provided at any time hereafter with respect to other key executives.

                  3.3  WELFARE  BENEFIT  PLANS.  During the  Initial  Term,  the
Executive and/or the Executive's  family,  as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices,  policies and programs  provided by the Company and its  subsidiaries
(including, without limitation, any medical,  prescription,  dental, disability,
salary  continuance,  employee  life,  group life,  accidental  death and travel
accident  insurance  plans  and  programs),  at least as  favorable  as the most
favorable of such plans, practices,  policies and programs in effect at any time
hereafter with respect to other key executives.

                  3.4  WORKING  FACILITIES.   During  the  term  of  Executive's
employment hereunder, the Company shall furnish the Executive with an office and
such other facilities and services suitable to his position and adequate for the
performance of his duties hereunder.

                  3.5 VACATION.  During the Initial Term, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its  subsidiaries  as in effect at any
time  hereafter  with  respect to other key  executives  of the  Company and its
subsidiaries; PROVIDED, HOWEVER, that in no event shall Executive be entitled to
fewer than four weeks paid vacation per year.

                  3.6  RELOCATION.  During  the term of this  Agreement,  if the
Executive  is  asked to  relocate  to  another  country  or  region  other  than
Executive's  current  permanent  residence and the Executive elects to make such
move, then Executive  shall be provided with  relocation  assistance as provided
below:

                           (a) The Company will  negotiate an amount  acceptable
to  the  employee  to  cover  the  costs,  for  Executive  and  his  family,  of
house-hunting  trips  and  the  cost  of  transporting  Executive,  his  family,
furniture, household effects, and vehicles, to the country or region;

                           (b)  The  Company  shall  pay   Executive's   travel,
temporary living expenses,  including housing,  whether hotel or apartment,  and
meals,  during the period in which Executive has vacated his prior residence and
before Executive has moved into his new residence; and

                           (c) the Company  shall pay all costs  incurred by the
Executive and his family to obtain visas and as a result of any penalty payments
arising from the relocation.

                           (d)  the  Company  will  pay  all  reasonable   costs
associated  with  relocating the Executive and his Family back to the country of
origin of the executive  when required  during the term of this  agreement or at
the termination of this agreement.

                  3.7  COST  OF  LIVING  ADJUSTMENT.  During  the  term  of this
Agreement, the Company shall pay on behalf of the Executive an agreed amount per
month to offset  the  difference  between  (A) the  housing  and  utility  costs
(including,  without limitation,  phone,  electricity,  gas, cable and internet)
that  Executive  and his family paid in  Executive's  prior country or region of
residence and (B) the housing and

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utility costs (including, without limitation, phone, electricity, gas, cable and
internet)  that  Executive and his family shall pay in the relocated  country or
region.

         4. TERMINATION.

                  4.1 TERMINATION FOR CAUSE.  Notwithstanding anything contained
to the contrary in this  Agreement,  this  Agreement  may be  terminated  by the
Company for Cause. As used in this Agreement, "Cause" shall only mean (i) an act
or acts of personal  dishonesty taken by the Executive and intended to result in
substantial  personal enrichment of the Executive at the expense of the Company,
(ii) subject to the following sentences,  repeated violation by the Executive of
the Executive's material obligations under this Agreement which are demonstrably
willful and deliberate on the  Executive's  part and which are not remedied in a
reasonable  period of time after receipt of written notice from the Company,  or
(iii) the  conviction  of the  Executive for any criminal act which is a felony.
Upon any  determination  by the Company's  Board of Directors  that Cause exists
under clause (ii) of the preceding  sentence,  the Company shall cause a special
meeting of the Board to be called and held at a time mutually  convenient to the
Board and  Executive,  but in no event later than ten (10)  business  days after
Executive's receipt of the notice  contemplated by clause (ii).  Executive shall
have the right to appear  before  such  special  meeting of the Board with legal
counsel of his choosing to refute any  determination  of Cause specified in such
notice,  and any  termination of Executive's  employment by reason of such Cause
determination   shall  not  be  effective   until  Executive  is  afforded  such
opportunity to appear. Any termination for Cause pursuant to clause (i) or (iii)
of the first sentence of this Section 4.1 shall be made in writing to Executive,
which  notice  shall set forth in detail  all acts or  omissions  upon which the
Company is relying for such termination.  Upon any termination  pursuant to this
Section 4.1, the  Executive  shall be entitled to be paid his Base Salary to the
date of termination  and the Company shall have no further  liability  hereunder
(other than for reimbursement for reasonable business expenses incurred prior to
the  date of  termination  and  reimbursement  of all  relocation  costs  of the
Executive and his family, as applicable).

                  4.2  DISABILITY.  Notwithstanding  anything  contained in this
Agreement to the  contrary,  the Company,  by written  notice to the  Executive,
shall  at all  times  have  the  right  to  terminate  this  Agreement,  and the
Executive's  employment  hereunder,  if the  Executive  shall,  as the result of
mental or physical incapacity, illness or disability, fail to perform his duties
and  responsibilities  provided for herein for a period of more than one hundred
twenty (120)  consecutive  days in any  12-month  period.  Upon any  termination
pursuant to this  Section 4.2,  the  Executive  shall be entitled to be paid his
Base  Salary to the date of  termination  plus 3 months  salary and the  Company
shall have no further  liability  hereunder  (other than for  reimbursement  for
reasonable  business  expenses  incurred  prior to the date of  termination  and
reimbursement  of all  relocation  costs of the  Executive  and his  family,  as
applicable).

                  4.3 DEATH.  In the event of the death of the Executive  during
the term of his employment hereunder, the Company shall pay to the estate of the
deceased  Executive an amount equal to the sum of (x) any unpaid  amounts of his
Base Salary to the date of his death,  plus (y) six months of Base  Salary,  and
the  Company  shall  have  no  further  liability   hereunder  (other  than  for
reimbursement for reasonable business expenses incurred prior to the date of the
Executive's death and reimbursement of all relocation costs of the Executive and
his family, as applicable).

                  4.4  TERMINATION  WITHOUT CAUSE. At any time the Company shall
have the right to terminate  Executive's  employment hereunder by written notice
to Executive; PROVIDED, HOWEVER, that the Company shall (i) pay to Executive any
unpaid Base Salary accrued  through the effective date of termination  specified
in such notice as well as reimburse  Executive for reasonable  business expenses
incurred  prior to the date of the  Executive's  termination  and all relocation
costs  of the  Executive  and his  family,  as  applicable,  and (ii) pay to the
Executive  in a lump sum,  in cash  within  thirty  (30) days  after the date of
employment  termination,  an amount  equal to the  product of (x) the sum of the
Executive's  then Base  Salary plus the amount of the  highest  annual  bonus or
other  incentive  compensation  payment  theretofore  made by the Company to the
Executive,  and (y) three.  The Company shall be deemed to have  terminated  the
Executive's  employment  pursuant  to this  Section  4.4 if such  employment  is
terminated

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(i) by the Company without Cause, or (ii) by the Executive voluntarily for "Good
Reason." For purposes of this Agreement, "Good Reason" means.

                           (a) the  assignment  to the  Executive  of any duties
inconsistent in any respect with the  Executive's  position  (including  status,
offices,   titles   and   reporting   requirements),    authority,   duties   or
responsibilities as contemplated by Section 1.2 of this Agreement,  or any other
action by the Company which results in a diminution in such position, authority,
duties  or   responsibilities,   excluding   for  this   purpose  an   isolated,
insubstantial  and  inadvertent  action  not  taken in bad  faith  and  which is
remedied by the Company  promptly  after receipt of notice  thereof given by the
Executive;

                           (b) any  failure by the Company to comply with any of
the  provisions  of Section 2, Section 3 or Section 7 of this  Agreement,  other
than an isolated,  insubstantial  and  inadvertent  failure not occurring in bad
faith and which is  remedied  by the Company  promptly  after  receipt of notice
thereof given by the Executive;

                           (c) any purported  termination  by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;

                           (d) any  failure by the  Company  to comply  with and
satisfy Section 10(c) of this Agreement; or

                           (e) any  termination  by the Executive for any reason
during the  three-month  period  following the effective  date of any "Change in
Control".

         For purposes of this Section 4.4, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.

         5. CHANGE IN CONTROL.  For  purposes  of this  Agreement,  a "Change in
Control" shall mean:

                  (a) The  acquisition  (other than by or from the Company),  at
any time after the date  hereof,  by any  person,  entity or "group"  within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 1934,
as amended (the "Exchange Act"), of beneficial  ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 15% or more of either the then
outstanding shares of common stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally in the election of
directors; or

                  (b) All or any of the two (2) individuals  who, as of the date
hereof, constitute the Board (as of the date hereof the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board, provided that any
person  becoming a director  subsequent  to the date hereof whose  election,  or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then  comprising the Incumbent Board (other
than an election or  nomination of an  individual  whose  initial  assumption of
office is in connection with an actual or threatened  election  contest relating
to the election of the directors of the Company,  as such terms are used in Rule
14a-11 of  Regulation  14A  promulgated  under the  Exchange  Act) shall be, for
purposes of this  Agreement,  considered  as though such person were a member of
the Incumbent Board; or

                  (c)  Approval  by the  shareholders  of the  Company  of (A) a
reorganization,  merger or consolidation  with respect to which persons who were
the shareholders of the Company immediately prior to such reorganization, merger
or  consolidation  do not,  immediately  thereafter,  own  more  than 75% of the
combined voting power entitled to vote generally in the election of directors of
the  reorganized,  merged or  consolidated  company's  then  outstanding  voting
securities,  (B) a liquidation or dissolution of the Company, or (C) the sale of
all or  substantially  all of the assets of the  Company,  unless  the  approved
reorganization,  merger,  consolidation,  liquidation,  dissolution  or  sale is
subsequently abandoned.

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                  (d) The approval by the Board of the sale, distribution and/or
other  transfer or action (and/or  series of sales,  distributions  and/or other
transfers or actions  from time to time or over a period of time),  that results
in the Company's ownership of less than 50% of the Company's current assets.

         6. RESTRICTIVE COVENANTS.

                  6.1  NONDISCLOSURE.  During his employment and for twelve (12)
months  thereafter,  Executive  shall  not  divulge,  communicate,  use  to  the
detriment of the Company or for the benefit of any other  person or persons,  or
misuse  in any  way,  any  Confidential  Information  (as  hereinafter  defined)
pertaining  to the business of the Company,  unless  required by a court of law.
Any Confidential  Information or data now or hereafter acquired by the Executive
with respect to the business of the Company shall be deemed a valuable,  special
and unique asset of the Company that is received by the  Executive in confidence
and as a fiduciary,  and Executive  shall remain a fiduciary to the Company with
respect  to  all  of  such   information.   For  purposes  of  this   Agreement,
"Confidential  Information"  means all material  information about the Company's
business  disclosed to the  Executive or known by the Executive as a consequence
of or through his employment by the Company  (including  information  conceived,
originated, discovered or developed by the Executive) after the date hereof, and
not generally known.

                  6.2  NONSOLICITATION  OF  EMPLOYEES.  While  employed  by  the
Company  and for a period  of six (6)  months  thereafter,  Executive  shall not
directly or indirectly,  for himself or for any other person, firm, corporation,
partnership,  association  or other entity,  attempt to employ or enter into any
contractual  arrangement  with any  employee or former  employee of the Company,
unless such employee or former employee has not been employed by the Company for
a period in excess of six months.

                  6.3  INJUNCTION.  It is recognized and hereby  acknowledged by
the  parties  hereto  that a breach  by the  Executive  of any of the  covenants
contained in Section 6.1, 6.2 or 6.3 of this  Agreement  will cause  irreparable
harm and damage to the Company,  the  monetary  amount of which may be virtually
impossible  to  ascertain.  As a result,  the  Executive  recognizes  and hereby
acknowledges  that the Company shall be entitled to an injunction from any court
of competent  jurisdiction enjoining and restraining any violation of any or all
of the  covenants  contained  in this  Section 6 by the  Executive or any of his
affiliates,  associates,  partners or agents, either directly or indirectly, and
that such right to injunction  shall be  cumulative  and in addition to whatever
other remedies the Company may possess.

         7. OTHER MATTERS.

                  7.1  ELECTION OF  EXECUTIVE  AS  DIRECTOR.  For so long as the
Executive  continues to serve as the  Company's  Chief  Financial  Officer,  the
Company shall cause the nomination of the Executive as a director of the Company
at each  shareholder  meeting at which  election of directors is considered  and
otherwise  use its best  efforts to cause the  election  of the  Executive  as a
director of the Company.

                  7.2 CONFLICTS WITH CERTAIN EXISTING ARRANGEMENTS.  The Company
acknowledges  that it has  received  and  reviewed  Executive's  non-competition
covenants with his prior employer, a copy of which is attached hereto as EXHIBIT
B. The Company  agrees that (x) it shall not  hereafter  acquire a  "Conflicting
Organization"  or otherwise  expand its present  business  activities  such that
Executive  could  reasonably  be expected to be deemed in breach or violation of
such non-competition covenants, and (y) it shall indemnify and hold harmless the
Executive from any and all damages that Executive may hereafter  suffer or incur
by reason of any such Company  acquisition  or  expansion of business  after the
date hereof.

         8. GOVERNING LAW. This Agreement  shall be governed by and construed in
accordance with the laws of the State of New York.

         9.  NOTICES:  Any notice  required or  permitted to be given under this
Agreement  shall be in  writing  and shall be deemed  to have  been  given  when
delivered by hand or when  deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

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        If to the Company:              ROO Group, Inc.
                                        62 White Street
                                        Third Floor
                                        New York, New York  10013

        WITH A COPY (WHICH SHALL NOT    Gersten, Savage, Kaplowitz, Wolf &
        CONSTITUTE NOTICE) TO:          Marcus, LLP
                                        101 E. 52 Street
                                        9th Floor
                                        New York, New York  10022
                                        Attn:  Arthur S. Marcus, Esq.

        If to the Executive:            Robin Smyth
                                        P.O. Box 42
                                        Camberwell Vic. 3124
                                        Australia

or to such other  addresses  as either  party  hereto may from time to time give
notice of to the other in the aforesaid manner.

         10.      SUCCESSORS.

                  (a) This  Agreement is personal to the  Executive  and without
the  prior  written  consent  of the  Company  shall  not be  assignable  by the
Executive  otherwise than by will or the laws of descent and distribution.  This
Agreement  shall inure to the benefit of and be enforceable  by the  Executive's
legal representatives.

                  (b)  This  Agreement  shall  inure  to the  benefit  of and be
binding upon the Company and its successors and assigns.

                  (c) The Company will require any successor  (whether direct or
indirect,   by  purchase,   merger,   consolidation  or  otherwise)  to  all  or
substantially  all of the  business  and/or  assets of the Company to  expressly
assume and agree to perform  this  Agreement  in the same manner and to the same
extent  that the Company  would be required to perform it if no such  succession
had taken place. As used in this Agreement,  "Company" shall mean the Company as
hereinbefore  defined and any  successor  to its  business  and/or  assets which
assumes and agrees to perform this Agreement by operation of law or otherwise.

         11.  SEVERABILITY.  The  invalidity  of any one or  more of the  words,
phrases,  sentences,  clauses or sections  contained in this Agreement shall not
affect the  enforceability  of the remaining  portions of this  Agreement or any
part thereof,  all of which are inserted  conditionally  on their being valid in
law,  and, in the event that any one or more of the words,  phrases,  sentences,
clauses or sections contained in this Agreement shall be declared invalid,  this
Agreement  shall be  construed  as if such  invalid  word or  words,  phrase  or
phrases,  sentence or sentences,  clause or clauses,  or section or sections had
not been  inserted.  If such  invalidity  is caused by length of time or size of
area, or both, the otherwise  invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.

         12. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.

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         13. DAMAGES. Nothing contained herein shall be construed to prevent the
Company or the  Executive  from seeking and  recovering  from the other  damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement.

         14. NO THIRD PARTY  BENEFICIARY.  Nothing  expressed or implied in this
Agreement is intended, or shall be construed,  to confer upon or give any person
(other  than the  parties  hereto  and,  in the case of  Executive,  his  heirs,
personal  representative(s)  and/or legal representative) any rights or remedies
under or by reason of this Agreement.

         15. FULL  SETTLEMENT.  The  Company's  obligation  to make the payments
provided  for in  this  Agreement  and  otherwise  to  perform  its  obligations
hereunder  shall  not be  affected  by any  set-off,  counterclaim,  recoupment,
defense or other  claim,  right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts  payable
to the Executive under any of the provisions of this Agreement.

         16. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY. In the event that any
payment or benefit  received or to be received by Executive in connection with a
termination  of his  employment  with  Employer  would  constitute  a "parachute
payment"  within the meaning of Code  Section  280G or any similar or  successor
provision  to 280G  and/or  would be subject  to any excise tax  imposed by Code
Section 4999 or any similar or successor  provision,  then Employer shall assume
all  liability  for the payment of any such tax and Employer  shall  immediately
reimburse Executive on a "grossed-up" basis for any income taxes attributable to
Executive by reason of such Employer payment and reimbursements.

         17.  REIMBURSEMENT  OF  LEGAL  EXPENSES.  The  Company  shall  promptly
reimburse  Executive  for all  reasonable  legal fees  incurred by  Executive in
connection with the preparation, negotiation and execution of this Agreement and
ancillary documents.

         18.  DIRECTOR  & OFFICER  INSURANCE.  Until  such  time as the  Company
obtains director and officer insurance ("D&O Insurance") for the Executive,  the
Company shall immediately pay to the Executive any losses, damages, liabilities,
costs  and  expenses  of  any  kind  or  nature  whatsoever  (including  without
limitation reasonable  attorneys' fees, costs and expenses,  which shall be paid
by the Company in advance)  incurred by or asserted  against the Executive  from
and after the date  hereof,  whether  direct,  indirect or  consequential,  as a
result of or arising  from or in any way  relating to any claim,  demand,  suit,
action or proceeding  (including  any inquiry or  investigation)  by any person,
including without limitation any shareholder or third party,  whether threatened
or  initiated,  asserting a claim for any legal or  equitable  remedy  under any
statute or  regulation,  including,  but not  limited  to, any  federal or state
securities  laws,  or under any  common  law or  equitable  cause or  otherwise,
arising from or in connection with Executive's  duties and obligations  pursuant
to this  Agreement or the actions or omissions of Executive in his role as Chief
Financial Officer or Director of the Company or any Director or Officer position
in any subsidiary or associated company of the Company.

                                       8
<PAGE>

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the date first above written.

                                        COMPANY:

                                        ROO GROUP, INC.

                                        By:  ___________________________________
                                             Name:
                                             Title:

                                        EXECUTIVE:

                                        ________________________________________
                                        Robin Smyth

                                       9
<PAGE>

                                    EXHIBIT A

                             STOCK OPTION AGREEMENT

<PAGE>

                                    EXHIBIT B

          EXECUTIVE'S NON-COMPETITION COVENANTS WITH PRIOR EMPLOYER(S)NEITHER THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE NOR THE SHARES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE.  NEITHER THE
SECURITIES  REPRESENTED  HEREBY MAY BE SOLD,  TRANSFERRED,  PLEDGED OR OTHERWISE
DISPOSED NOR MAY THE SHARES BE ISSUED UPON EXERCISE  UNLESS SUCH  SECURITIES AND
SHARES ARE REGISTERED  UNDER THE SECURITIES ACT AND APPLICABLE  STATE SECURITIES
LAWS OR THE  COMPANY  RECEIVES AN OPINION OF COUNSEL  ACCEPTABLE  TO THE COMPANY
THAT SUCH SALE, TRANSFER, PLEDGE OR ISSUANCE IS EXEMPT FROM REGISTRATION.

                                 ROO GROUP, INC.

                        INCENTIVE STOCK OPTION AGREEMENT

         THIS INCENTIVE STOCK OPTION  AGREEMENT (the  "Agreement") is made as of
this  12th day of  April,  2004 by and  between  ROO  Group,  Inc.,  a  Delaware
corporation (the "Company"), and Robert Petty ("Optionee").

                                  R E C I T A L

         Pursuant to the 2004 Stock Option Plan (the "Plan") of the Company, the
Board of Directors of the Company or a committee to which  administration of the
Plan  is   delegated  by  the  Board  of   Directors   (in  either   case,   the
"Administrator")  has authorized the granting to Optionee of an incentive  stock
option to purchase the number of Shares of the Company  specified in Paragraph 1
hereof, at the price specified therein,  such option to be for the term and upon
the terms and conditions hereinafter stated.

                                A G R E E M E N T

         NOW,   THEREFORE,   in   consideration  of  the  promises  and  of  the
undertakings of the parties hereto contained herein, it is hereby agreed:

         1.  NUMBER OF SHARES;  OPTION  PRICE.  Pursuant  to said  action of the
Administrator,  the Company  hereby grants to Optionee the option  ("Option") to
purchase,  upon and  subject  to the terms  and  conditions  of the Plan,  up to
6,000,000  shares of common  stock (the  "Shares")  of the Company at a price of
$.1265 per share.

         2.  TERM.  This  Option  shall  expire on May 8, 2006 (the  "Expiration
Date"),  unless such  Option  shall have been  terminated  prior to that date in
accordance  with  the  provisions  of the  Plan  or  this  Agreement.  The  term
"Affiliate" as used herein shall have the meaning as set forth in the Plan.

         3. SHARES SUBJECT TO EXERCISE. Shares subject to exercise shall be 100%
of such Shares on and after May 8, 2004.

         4.  CONDITIONS  TO EXERCISE.  In order for the Optionee to exercise the
Option,  in whole or in part,  the Optionee shall not have ceased to be employed
as a senior executive officer of the Company,  prior to May 8, 2006, unless such
termination  of  employment  shall  be by  reason  of  the  death  or  permanent
disability of the Optionee,  or shall  otherwise have been approved by the Board
of Directors of the Company (the Optionee abstaining in any such vote).

         5. METHOD AND TIME OF EXERCISE.  The Option may be exercised by written
notice  delivered to the Company at its principal  executive  office stating the
number of Shares with respect to which the Option is being  exercised,  together
with:

                  (A) a check or money order made  payable to the Company in the
amount  of the  exercise  price  and any  withholding  tax,  as  provided  under
Paragraph 5 hereof; or

<PAGE>

                  (B) if expressly  authorized in writing by the  Administrator,
in its sole discretion,  at the time of the Option  exercise,  the tender to the
Company of Shares owned by Optionee having a fair market value, as determined by
the  Administrator,  not less  than the  exercise  price,  plus  the  amount  of
applicable federal, state and local withholding taxes.

         Not less than 100 shares may be  purchased  at any one time  unless the
number purchased is the total number  purchasable under such Option at the time.
Only whole shares may be purchased.

         6. TAX  WITHHOLDING.  In the event  that  this  Option  shall  lose its
qualification  as an incentive stock option,  as a condition to exercise of this
Option,  the  Company  may  require  Optionee  to pay  over to the  Company  all
applicable  federal,  state and local  taxes  which the  Company is  required to
withhold with respect to the exercise of this Option.  At the  discretion of the
Administrator   and  upon  the  request  of  Optionee,   the  minimum  statutory
withholding  tax  requirements  may be satisfied by the withholding of Shares of
the Company otherwise issuable to Optionee upon the exercise of this Option.

         7. EXERCISE ON TERMINATION OF EMPLOYMENT.  If for any reason other than
death or permanent and total  disability,  Optionee ceases to be employed by the
Company or any of its Affiliates (such event being called a "Termination"), this
Option (to the extent then  exercisable) may be exercised in whole or in part at
any time within  three months of the date of such  Termination,  but in no event
after the  Expiration  Date;  provided,  however,  that if such exercise of this
Option  would  result in  liability  for  Optionee  under  Section  16(b) of the
Securities  Exchange Act of 1934,  then such  three-month  period  automatically
shall be  extended  until  the  tenth day  following  the last  date upon  which
Optionee  has any  liability  under  Section  16(b),  but in no event  after the
Expiration  Date. If Optionee dies or becomes  permanently and totally  disabled
(as defined in the Plan) while employed by the Company or an Affiliate or within
the period that this Option remains  exercisable after Termination,  this Option
(to the extent  then  exercisable)  may be  exercised,  in whole or in part,  by
Optionee,  by Optionee's  personal  representative or by the person to whom this
Option is transferred by devise or the laws of descent and distribution,  at any
time within  twelve  months after the death or twelve months after the permanent
and total disability of Optionee,  but in no event after the Expiration Date. In
the event this Option is treated as a  non-qualified  stock option,  then and to
that  extent,  "employment"  would  include  service  as  a  director  or  as  a
consultant. For purposes of this Paragraph 6, Optionee's employment shall not be
deemed to  terminate by reason of sick leave,  military  leave or other leave of
absence approved by the Administrator,  if the period of any such leave does not
exceed 90 days or, if longer, if Optionee's right to reemployment by the Company
or any Affiliate is guaranteed either contractually or by statute.

         8.  NONTRANSFERABILITY.  This Option may not be assigned or transferred
except by will, qualified domestic relations order or by the laws of descent and
distribution,  and may be  exercised  only by Optionee  during his  lifetime and
after his  death,  by his  personal  representative  or by the  person  entitled
thereto under his will or the laws of intestate succession.

         9.  OPTIONEE  NOT A  SHAREHOLDER.  Optionee  shall  have no rights as a
shareholder  with  respect to the Shares of the  Company  covered by this Option
until the date of issuance of a stock  certificate or stock  certificates to him
upon exercise of this Option.  No adjustment will be made for dividends or other
rights for which the record date is prior to the date such stock  certificate or
certificates are issued.

         10. NO RIGHT TO EMPLOYMENT.  Nothing in the Option granted hereby shall
interfere  with or limit in any way the  right of the  Company  or of any of its
Affiliates to terminate  Optionee's  employment  or consulting at any time,  nor
confer upon  Optionee  any right to continue in the employ of, or consult  with,
the Company or any of its Affiliates.

         11. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification  and  termination in certain events as provided in Sections 6.1 and
6.3 of the Plan.

         12.  RESTRICTIONS  ON SALE OF SHARES.  Optionee  represents  and agrees
that, upon his exercise of this Option,  in whole or in part, unless there is in
effect at that time under the Securities Act a registration  statement  relating
to the Shares  issued to him, he will acquire the Shares  issuable upon exercise
of this Option for the purpose of investment and not with a view to their resale
or further

<PAGE>

distribution,  and that upon  each  exercise  thereof  he shall  furnish  to the
Company a written statement to such effect,  satisfactory to the Company in form
and substance.  Optionee  agrees that any  certificates  issued upon exercise of
this  Option  may  bear  a  legend  indicating  that  their  transferability  is
restricted in accordance  with applicable  state or federal  securities law. Any
person or persons  entitled to  exercise  this Option  under the  provisions  of
Paragraphs  5 and 6 hereof  shall,  upon  each  exercise  of this  Option  under
circumstances  in which  Optionee  would be required  to furnish  such a written
statement,  also furnish to the Company a written  statement to the same effect,
satisfactory to the Company in form and substance.

         13. PLAN GOVERNS.  This Agreement and the Option  evidenced  hereby are
made and  granted  pursuant to the Plan and are in all  respects  limited by and
subject to the express terms and  provisions of the Plan, as it may be construed
by the  Administrator.  It is  intended  that this  Option  shall  qualify as an
incentive stock option as defined by Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and this Agreement shall be construed in a manner
which will enable this Option to be so qualified.  Optionee hereby  acknowledges
receipt of a copy of the Plan.

         14. NOTICES. All notices to the Company shall be addressed to the Chief
Financial  Officer at the  principal  executive  office of the Company,  and all
notices to Optionee shall be addressed to Optionee at the address of Optionee on
file with the Company or its subsidiary,  or to such other address as either may
designate to the other in writing.  A notice shall be deemed to be duly given if
and when enclosed in a properly  addressed  sealed envelope  deposited,  postage
prepaid, with the United States Postal Service. In lieu of giving notice by mail
as  aforesaid,  written  notices  under this  Agreement may be given by personal
delivery to Optionee or to the Chief Financial Officer (as the case may be).

         15. SALE OR OTHER DISPOSITION. Optionee understands that, under current
law, beneficial tax treatment resulting from the exercise of this Option will be
available  only if certain  requirements  of the Code are  satisfied,  including
without  limitation,  the  requirement  that no disposition  of Shares  acquired
pursuant to exercise of this Option be made within two years from the grant date
or within one year after the  transfer  of Shares to him or her.  If Optionee at
any time contemplates the disposition (whether by sale, gift, exchange, or other
form of transfer) of any such Shares, he or she will first notify the Company in
writing of such proposed disposition and cooperate with the Company in complying
with all applicable  requirements of law, which, in the judgment of the Company,
must be  satisfied  prior to such  disposition.  In addition  to the  foregoing,
Optionee hereby agrees that before Optionee disposes (whether by sale, exchange,
gift, or otherwise) of any Shares acquired by exercise of this Option within two
years of the grant date or within one year after the  transfer of such Shares to
Optionee  upon  exercise of this  Option,  Optionee  shall  promptly  notify the
Company in writing of the date and terms of the proposed  disposition  and shall
provide  such  other  information  regarding  the  Option  as  the  Company  may
reasonably  require  immediately  before such  disposition.  Said written notice
shall state the date of such  proposed  disposition,  and the type and amount of
the  consideration  to be received  for such  Shares by  Optionee in  connection
therewith.  In the event of any such  disposition,  the  Company  shall have the
right to require Optionee to immediately pay the Company the amount of taxes (if
any) which the Company is required to withhold under federal and/or state law as
a result of the  granting or exercise of the Option and the  disposition  of the
Shares.

<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have executed this Agreement as of the
date and year first above written.

                                     ROO GROUP, INC.

                                     By:   _______________________________
                                     Name:
                                     Title:

OPTIONEE

By:   Robert Petty
Name:

Address:  _______________________

          _______________________

          _______________________

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