Document:

Unassociated Document

    TWISTBOX
      ENTERTAINMENT, INC.

    NON-QUALIFIED
      STOCK OPTION AGREEMENT

    PURSUANT
      TO THE

    TWISTBOX
      ENTERTAINMENT, INC. 2006 STOCK INCENTIVE PLAN

    

    

    This
      Non-Qualified Stock Option AGREEMENT (“Agreement”),
      dated
      as of ________ (the “Grant
      Date”)
      by and
      between Twistbox Entertainment, Inc., a California corporation (the
“Company”)
      and
«Name»
      (the
“Participant”).

     

    Preliminary
      Statement

     

    The
      Committee has authorized this grant of a non-qualified stock option (the
“Option”)
      on
      ________ to purchase the number of shares of the Company’s common stock (the
“Common
      Stock”)
      set
      forth below to the Participant, as an Eligible Employee of the Company or a
      Subsidiary (collectively, the Company and all Subsidiaries of the Company shall
      be referred to as the “Employer”).
      Unless otherwise indicated, any capitalized term used but not defined herein
      shall have the meaning ascribed to such term in the Twistbox Entertainment,
      Inc.
      2006 Stock Incentive Plan (the “Plan”).
      A
      copy of the Plan has been delivered to the Participant. By signing and returning
      this Agreement, the Participant acknowledges having received and read a copy
      of
      the Plan and agrees to comply with it, this Agreement and all applicable laws
      and regulations.

     

    Accordingly,
      the parties hereto agree as follows:

     

    1. Tax
      Matters.
      No part
      of the Option granted hereby is intended to qualify as an “incentive stock
      option” under Section 422 of the Internal Revenue Code of 1986, as
      amended.

     

    2. Grant
      of Option.
      Subject
      in all respects to the Plan and the terms and conditions set forth herein and
      therein, the Participant is hereby granted an Option to purchase from the
      Company «shares»
      shares
      of Common Stock, at a price per share of $__ (the “Option
      Price”).

     

    3. Exercise.
      

     

    (a) Except
      as
      set forth in subsection (b) below, the Option shall vest and become exercisable
      as provided below, which shall be cumulative. To the extent that the Option
      has
      become exercisable with respect to a number of shares of Common Stock as
      provided below, the Option may thereafter be exercised by the Participant,
      in
      whole or in part, at any time or from time to time prior to the expiration
      of
      the Option as provided herein and in accordance with Section 6.3(d) of the
      Plan,
      including, without limitation, the filing of such written form of exercise
      notice, if any, as may be required by the Committee and payment in full of
      the
      Option Price multiplied by the number of shares of Common Stock underlying
      the
      portion of the Option exercised. Upon expiration of the Option, the Option
      shall
      be canceled and no longer exercisable. Exhibit A (Vesting Schedule) indicates
      each date upon which the Participant shall be vested and entitled to exercise
      the Option with respect to the percentage indicated beside that date provided
      that the Participant has not suffered a Termination of Employment prior to
      the
      applicable vesting date.
      There
      shall be no proportionate or partial vesting in the periods prior to each
      vesting date and all vesting shall occur only on the appropriate vesting
      date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Upon
      the
      occurrence of an IPO or Change in Control, the Option shall immediately become
      exercisable with respect to all shares of Common Stock subject
      thereto.

    

    (c) Notwithstanding
      the foregoing, the Participant may not exercise the Option unless the shares
      of
      Common Stock issuable upon such exercise are then registered under the
      Securities Act, or, if such shares of Common Stock are not then so registered,
      the Company has determined that such exercise and issuance would be exempt
      from
      the registration requirements of the Securities Act. The exercise of the Option
      must also comply with other applicable laws and regulations governing the
      Option, and the Participant may not exercise the Option if the Company
      determines that such exercise would not be in material compliance with such
      laws
      and regulations. In addition, the Participant may not exercise the Option if
      the
      terms of the Plan do not permit the exercise of Options at such time.

    

    4. Option
      Term.
      The
      term of each Option shall be until the tenth (10th)
      anniversary of the Grant Date, after which time it shall terminate, subject
      to
      earlier termination in the event of the Participant’s Termination of Employment
      as specified in Section 5 below.

     

    5. Termination
      of Employment.

     

    (a)  Subject
      to the terms of the Plan and this Agreement, the Option, to the extent vested
      at
      the time of the Participant’s Termination of Employment, shall remain
      exercisable as provided in Section 9.2(a) of the Plan.

     

    (b) Any
      portion of the Option that is not vested as of the date of the Participant’s
      Termination of Employment for any reason shall terminate and expire as of the
      date of such Termination of Employment.

     

    (c) If
      the
      Participant breaches any agreement with the Company or any of its Subsidiaries
      regarding competition, confidentiality or the solicitation of customers or
      employees, the Option (whether vested or unvested) and shares of Common Stock
      acquired upon exercise of the Option (without compensation other than repayment
      of the Option Price) shall be immediately forfeited to the Company unless the
      Participant cures such breach (if curable) within 15 days of being notified
      of
      such breach.

     

    6. Restriction
      on Transfer of Option.
      No part
      of the Option shall be Transferable other than by will or by the laws of descent
      and distribution and during the lifetime of the Participant, may be exercised
      only by the Participant or the Participant’s guardian or legal representative.
      In addition, the Option shall not be assigned, negotiated, pledged or
      hypothecated in any way (except as provided by law or herein), and the Option
      shall not be subject to execution, attachment or similar process. Upon any
      attempt to Transfer the Option or in the event of any levy upon the Option
      by
      reason of any execution, attachment or similar process contrary to the
      provisions hereof, the Option shall immediately become null and
      void.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    7. Company
      Call Rights; Restrictions on Transfer.
      The
      Option, and any shares of Common Stock that the Participant acquires upon
      exercise of the Option, shall be subject to the Company call rights and
      restrictions on transfer (including the Company’s right of first refusal) set
      forth in Article XIII of the Plan. To ensure that the shares of Common Stock
      issuable upon exercise of the Option are not transferred in contravention of
      the
      terms of the Plan and this Agreement, and to ensure compliance with other
      provisions of the Plan and this Agreement, the Company may deposit the
      certificates evidencing the shares of Common Stock to be issued upon the
      exercise of the Option with an escrow agent designated by the
      Company.

     

    8. Securities
      Representations.
      Upon the
      exercise of the Option prior to the registration of the Common Stock subject
      to
      the Option pursuant to the Securities Act or other applicable securities laws,
      the Participant shall be deemed to acknowledge and make the representations
      and
      warranties as described below and as otherwise may be requested by the Company
      for compliance with applicable laws, and any issuances of Common Stock by the
      Company shall be made in reliance upon the express representations and
      warranties of the Participant.

     

    (a) The
      Participant is acquiring and will hold the shares of Common Stock for investment
      for his account only and not with a view to, or for resale in connection with,
      any “distribution” thereof within the meaning of the Securities Act or other
      applicable securities laws.

     

    (b)  The
      Participant has been advised that the shares of Common Stock have not been
      registered under the Securities Act or other applicable securities laws, on
      the
      ground that no distribution or public offering of the shares of Common Stock
      is
      to be effected (it being understood, however, that the shares of Common Stock
      are being issued and sold in reliance on the exemption provided under Rule
      701
      under the Securities Act), and that the shares of Common Stock must be held
      indefinitely, unless they are subsequently registered under the applicable
      securities laws or the Participant obtains an opinion of counsel (in the form
      and substance satisfactory to the Company and its counsel) that registration
      is
      not required. In connection with the foregoing, the Company is relying in part
      on the Participant’s representations set forth in this Section. The Participant
      further acknowledges and understands that the Company is under no obligation
      hereunder to register the shares of Common Stock. 

     

    (c)  The
      Participant is aware of the adoption of Rule 144 by the Securities and Exchange
      Commission under the Securities Act, which permits limited public resale of
      securities acquired in a non-public offering, subject to the satisfaction of
      certain conditions. The Participant acknowledges that he is familiar with the
      conditions for resale set forth in Rule 144, and acknowledges and understands
      that the conditions for resale set forth in Rule 144 have not been satisfied
      and
      that the Company has no plans to satisfy these conditions in the foreseeable
      future.

     

    (d)  The
      Participant will not sell, transfer or otherwise dispose of the shares of Common
      Stock in violation of the Plan, this Agreement, Securities Act (or the rules
      and
      regulations promulgated thereunder) or under any other applicable securities
      laws. The Participant agrees that he will not dispose of the Common Stock unless
      and until he has complied with all requirements of this Agreement applicable
      to
      the disposition of the shares of Common Stock.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (e)  The
      Participant has been furnished with, and has had access to, such information
      as
      he considers necessary or appropriate for deciding whether to invest in the
      shares of Common Stock, and the Participant has had an opportunity to ask
      questions and receive answers from the Company regarding the terms and
      conditions of the issuance of the Common Stock.

     

    (f)  The
      Participant is aware that his investment in the Company is a speculative
      investment that has limited liquidity and is subject to the risk of complete
      loss. The Participant is able, without impairing his financial condition, to
      hold the Shares for an indefinite period and to suffer a complete loss of his
      investment in the Common Stock. 

     

    9. Rights
      as a Stockholder.
      The
      Participant shall have no rights as a stockholder with respect to any shares
      covered by the Option unless and until the Participant has become the holder
      of
      record of the shares, and no adjustments shall be made for dividends in cash
      or
      other property, distributions or other rights in respect of any such shares,
      except as otherwise specifically provided for in the Plan.

     

    10. Provisions
      of Plan Control.
      This
      Agreement is subject to all the terms, conditions and provisions of the Plan,
      including, without limitation, the amendment provisions thereof, and to such
      rules, regulations and interpretations relating to the Plan as may be adopted
      by
      the Committee and as may be in effect from time to time. The Plan is
      incorporated herein by reference. If and to the extent that this Agreement
      conflicts or is inconsistent with the terms, conditions and provisions of the
      Plan, the Plan shall control, and this Agreement shall be deemed to be modified
      accordingly. This Agreement contains the entire understanding of the parties
      with respect to the subject matter hereof (other than any exercise notice or
      other documents expressly contemplated herein or in the Plan) and supersedes
      any
      prior agreements between the Company and the Participant with respect to the
      subject matter hereof. 

     

    11. Notices.
      Any
      notice or communication given hereunder shall be in writing and shall be deemed
      to have been duly given: (i) when delivered in person; (ii) two (2) days after
      being sent by United States mail; or (iii) on the first business day following
      the date of deposit if delivered by a nationally recognized overnight delivery
      service, to the appropriate party at the address set forth below (or such other
      address as the party shall from time to time specify):

    

    If
      to the
      Company, to:

     

    Twistbox
      Entertainment, Inc.

    14242
      Ventura Boulevard, 3rd
      Floor

    Sherman
      Oaks, California 91423

    Attention:
      Plan Administrator 

    

    If
      to the
      Participant, to the address on file with the Company.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    12. No
      Obligation to Continue Employment.
      This
      Agreement is not an agreement of employment. This Agreement does not guarantee
      that the Employer will employ the Participant for any specific time period,
      nor
      does it modify in any respect the Employer’s right to terminate or modify the
      Participant’s employment or compensation.

     

    13. Agreement.
      As a
      condition to the receipt of shares of Common Stock when the Option is exercised,
      the Participant shall execute and deliver an Assumption Agreement, and to the
      extent required by the Committee, the Participant shall execute and deliver
      a
      stockholder’s agreement or such other documentation which shall set forth
      certain restrictions on transferability of the shares of Common Stock acquired
      and such other terms or restrictions as the Committee shall from time to time
      establish. Such Assumption Agreement, stockholder’s agreement or other
      documentation shall apply to the Common Stock acquired under the Plan and
      covered by such Assumption Agreement, stockholder’s agreement or other
      documentation. The Company may require, as a condition of exercise, the
      Participant to become a party to any other existing stockholder agreement or
      other agreement.

     

    14. 409A. NOTWITHSTANDING
      ANYTHING HEREIN OR IN THE PLAN TO THE CONTRARY, IF THE COMMON STOCK DOES NOT
      CONSTITUTE “SERVICE RECIPIENT STOCK” FOR PURPOSES OF SECTION 409A OF THE CODE OR
      IF THE OPTION OTHERWISE IS DEEMED TO BE DEFERRED COMPENSATION UNDER SECTION
      409A
      OF THE CODE AS A RESULT OF ANY PROPOSED, TEMPORARY OR FINAL REGULATIONS OR
      ANY
      OTHER GUIDANCE ISSUED BY THE SECRETARY OF THE TREASURY AND THE INTERNAL REVENUE
      SERVICE WITH RESPECT TO SECTION 409A OF THE CODE, THE COMPANY SHALL BE PERMITTED
      TO AMEND THE PLAN AND THE OPTION TO COMPLY WITH SECTION 409A WITHOUT THE
      PARTICIPANT’S CONSENT. THE COMPANY SHALL HAVE NO LIABILITY TO THE PARTICIPANT OR
      OTHERWISE IF THE OPTION AND ANY AMOUNTS PAID OR PAYABLE THEREUNDER IS SUBJECT
      TO
      SECTION 409A OF THE CODE.

     

    [Remainder
      of Page Left Intentionally Blank]

    

    

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

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

     

     

     

    
      	
              TWISTBOX
                ENTERTAINMENT, INC.

              
 

              By:
                

              Authorized
                Officer

            

    

    
    

     

     

    «Name»

    Employee
      [ID
      or
      Social Security]
      number:

    

    

    

    I,
      _____________________, the spouse of the Participant, do hereby join with my
      spouse in executing this Agreement and do hereby agree to be bound by all of
      the
      terms and provisions thereof.

     

    _________________________

    Signature

     

     

    
      
        
        

      

      
        6SECURITIES
        PURCHASE AGREEMENT

       

      by
        and
        among

       

      TWISTBOX
        ENTERTAINMENT, INC.,

       

      THE
        SUBSIDIARY GUARANTORS,

       

      AND

       

      VALUEACT
        SMALLCAP MASTER FUND, L.P,

       

      dated
        as
        of

       

      July
        30,
        2007

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	 	
                TABLE
                  OF CONTENTS

              	 	 
	 	 	 	 	 
	 	 	 	 	
                Page

              
	 	 	
                ARTICLE
                  I 

                DEFINITIONS

              	 	 
	
                1.1

              	 	
                Definitions

              	 	
                1

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  II 

                PURCHASE
                  AND SALE

              	 	 
	
                2.1

              	 	
                Closing

              	 	
                4

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  III 

                REPRESENTATIONS
                  AND WARRANTIES

              	 	 
	
                3.1

              	 	
                Representations
                  and Warranties of the Company

              	 	
                5

              
	
                3.2

              	 	
                Representations
                  and Warranties of the Investors

              	 	
                16

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  IV 

                OTHER
                  AGREEMENTS OF THE PARTIES

              	 	 
	
                4.1

              	 	
                Transfer
                  Restrictions

              	 	
                18

              
	
                4.2

              	 	
                Use
                  of Proceeds

              	 	
                20

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  V 

                REGISTRATION
                  RIGHTS

              	 	 
	
                5.1

              	 	
                Warrant
                  Shares

              	 	
                20

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  VI 

                OBSERVER
                  RIGHTS

              	 	 
	
                6.1

              	 	
                Observer

              	 	
                20

              
	
                6.2

              	 	
                Confidentiality

              	 	
                21

              
	
                6.3

              	 	
                Termination
                  of Certain Rights

              	 	
                22

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  VII 

                COVENANTS

              	 	 
	
                7.1

              	 	
                Integration

              	 	
                22

              
	
                7.2

              	 	
                Reservation
                  of Securities

              	 	
                22

              
	 	 	 	 	 
	 	 	
                ARTICLE
                  VIII 

                CONDITIONS

              	 	 
	
                8.1

              	 	
                Conditions
                  Precedent to the Investor’s Obligation to Purchase

              	 	
                22

              
	
                8.2

              	 	
                Conditions
                  Precedent to the Obligations of the Company

              	 	
                24

              

      

      

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

      

      
        	 	
                ARTICLE
                  IX 

                MISCELLANEOUS

              	 
	 	 	 
	
                9.1

              	
                Termination
                  

              	
                25

              
	
                9.2

              	
                Fees
                  and Expenses 

              	
                25

              
	
                9.3

              	
                Entire
                  Agreement 

              	
                25

              
	
                9.4

              	
                Notices
                  

              	
                25

              
	
                9.5

              	
                Amendments;
                  Waivers 

              	
                26

              
	
                9.6

              	
                Construction
                  

              	
                26

              
	
                9.7

              	
                Successors
                  and Assigns

              	
                26

              
	
                9.8
                  

              	
                Governing
                  Law; Venue; Waiver of Jury Trial 

              	
                26

              
	
                9.9

              	
                Survival
                  

              	
                27

              
	
                9.10
                  

              	
                Execution

              	
                27

              
	
                9.11
                  

              	
                Severability

              	
                27

              
	
                9.12
                  

              	
                Rescission
                  and Withdrawal Right

              	
                27

              
	
                9.13
                  

              	
                Replacement
                  of Securities

              	
                27

              
	
                9.14
                  

              	
                No
                  Promotion

              	
                27

              

      

       

      Exhibits

       

      Exhibit
        A Schedule
        of Investors

       

      Exhibit
        B Form
        of
        Senior Secured Note

       

      Exhibit
        C Form
        of
        Warrant

       

      Exhibit
        D Form
        of
        Guarantee and Security Agreement

       

      Exhibit
        E List
        of
        Material Agreements

       

      Exhibit
        F Schedule
        of Exceptions

       

      Exhibit
        G Form
        of
        Opinion of Company Counsel

       

      Exhibit
        H Form
        of
        Amended and Restated Investors’ Rights Agreement

       

      Exhibit
        I Form
        of
        Shareholders Agreement Amendment

      

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      SECURITIES
        PURCHASE AGREEMENT

       

      This
        SECURITIES
        PURCHASE AGREEMENT
        (the
“Agreement”),
        is
        dated as of July 30, 2007, by and among Twistbox Entertainment, Inc., a Delaware
        corporation (the “Company”),
        each
        of the Subsidiary Guarantors (as defined below) and ValueAct SmallCap Master
        Fund, L.P. (the “Investor”).

       

      WHEREAS:

       

      A.
        The
        Company and the Investor are executing and delivering this Agreement in reliance
        upon the exemption from securities registration afforded by Section 4(2)
        of the
        Securities Act of 1933, as amended (the “Securities
        Act”),
        and
        Rule 506 of Regulation D (“Regulation
        D”)
        as
        promulgated by the United States Securities and Exchange Commission (the
        “SEC”)
        under
        the Securities Act.

       

      B.
        The
        Investor wishes to purchase, and the Company wishes to sell, upon the terms
        and
        conditions stated in this Agreement: (i) that aggregate principal amount
        of
        notes (the “Senior
        Secured Notes”)
        in
        substantially the form attached hereto as Exhibit
        B
        set
        forth opposite such Investor’s name in column two (2) on the Schedule of
        Investors attached hereto as Exhibit
        A,
        and (ii)
        that aggregate number of Warrants (the “Warrants”)
        in
        substantially the form attached hereto as Exhibit
        C
        set
        forth opposite such Investor’s name in column four (4) on the Schedule of
        Investors which will be exercisable to purchase shares of Common Stock, par
        value $0.001 per share (the “Common
        Stock”),
        of the
        Company (as exercised, collectively, the “Warrant
        Shares”).

       

      C.
        Each
        of the Subsidiary Guarantors (as defined below) will guarantee (the “Guarantee”)
        the
        Company’s obligations under the Senior Secured Notes on the terms and subject to
        the conditions of the Guarantee and Security Agreement (as defined
        below).

       

      D.
        The
        Senior Secured Notes, Warrants and Warrant Shares are collectively referred
        to
        herein as the “Securities.”

       

      E.
        NOW,
        THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
        and for other good and valuable consideration the receipt and adequacy of
        which
        are hereby acknowledged, the Company and the Investors agree as
        follows:

       

      ARTICLE
        I

      DEFINITIONS

       

      1.1
        Definitions.
        In
        addition to the terms defined elsewhere in this Agreement, the following
        terms
        have the meanings indicated:

       

      “Action”
        has the
        meaning set forth in Section 3.1(m).

       

      “Affiliate”
        means
        any Person that, directly or indirectly through one or more intermediaries,
        controls or is controlled by or is under common control with a Person, as
        such
        terms are used in and construed under Rule 144.

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

       

      “Amended
        and Restated Investors’ Rights Agreement”
        means
        the Amended and Restated Investors’ Rights Agreement in substantially the form
        set forth as Exhibit H hereto.

       

      “Board”
        means
        the Board of Directors of the Company.

       

      “Business
        Day”
        means
        any day other than Saturday, Sunday or other day on which commercial banks
        in
        The City of New York are required by law to remain closed.

       

      “Closing”
        means
        the closing of the purchase and sale of the Securities pursuant to Section
        2.1.

       

      “Closing
        Date”
        means
        the date and time of the Closing and shall be 12:00 p.m., eastern standard
        time,
        on July 30, 2007 (or such other date and time as is mutually agreed to by
        the
        Company and each Investor).

       

      “Collateral”
        has the
        meaning assigned to such term in the Guarantee and Security
        Agreement.

       

      “Collateral
        Agent”
        has the
        meaning assigned to such term in the Guarantee and Security
        Agreement.

       

      “Company
        Counsel”
        means
        Proskauer Rose LLP, special counsel to the Company.

       

      “Common
        Stock”
        has the
        meaning set forth in the Preamble. 

       

      “Environmental
        Laws”
        has the
        meaning set forth in Section 3.1(n). 

       

      “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended. 

       

      “Financial
        Statements”
        has the
        meaning set forth in Section 3.1(h).

       

      “Foreign
        Securities Law”
        means
        the laws and regulations governing the sale of securities of a jurisdiction
        outside the United States of America where the capital stock of the Company
        may
        be listed or traded.

       

      “Fundamental
        Transaction”
        shall be
        (i) a merger or consolidation of the Company with or into another corporation
        in
        which the Company is not the surviving entity unless the holders of the capital
        stock of the Company immediately prior to such transaction are entitled to
        exercise, directly or indirectly, 50% (fifty percent) or more of the voting
        power of all shares of capital stock entitled to vote generally in the election
        of directors of the continuing or surviving corporation, (ii) a reverse
        triangular merger in which the Company is the surviving entity but the shares
        of
        the Company’s capital stock outstanding immediately prior to the merger are
        converted by virtue of the merger into other property, whether in the form
        of
        securities, cash or otherwise, or (iii) a sale of transfer of all or
        substantially all of the Company’s properties and assets to another
        person.

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      “Guarantee
        and Security Agreement”
        by and
        among the Company, the Investor and Subsidiary Guarantors party thereto in
        substantially in the form set forth as Exhibit
        D
        hereto.

       

      “Grantor”
        has the
        meaning assigned to such term in the Guarantee and Security
        Agreement.

       

      “Information”
        has the
        meaning set forth in Section 6.1(b).

       

      “Lien”
        means
        any lien, charge, claim, encumbrance, right of first refusal or other security
        interest.

       

      “Major
        Content Provider”
        means
        each of the top five (5) content providers to the Company ranked by dollar
        volume during the fiscal year ended March 31, 2007.

       

      “Major
        Mobile Telephone Carrier”
        means
        each of the top five (5) mobile telephone carriers of the Company’s content
        ranked by revenue during the fiscal year ended March 31, 2007.

       

      “Material
        Adverse Effect”
        has the
        meaning set forth in Section 3.1(a). 

       

      “Material
        Agreements”
        has the
        meaning set forth in Section 3.1(r). 

       

      “Material
        Permits”
        has the
        meaning set forth in Section 3.1(ff). 

       

      “Measuring
        Date”
        has the
        meaning set forth in Section 3.1(i). 

       

      “Observer”
        has the
        meaning set forth in Section 6.1(a).

       

      “Person”
        means
        any individual or corporation, partnership, trust, incorporated or
        unincorporated association, joint venture, limited liability company, or
        joint
        stock company.

       

      “Plan”
        has the
        meaning set forth in Section 3.1(f)(iii).

       

      “Preferred
        Stock”
        means
        the Company’s preferred stock designated as “Series A Preferred Stock” and
“Series B Preferred Stock”.

       

      “Proceeding”
        means an
        action, claim, suit, investigation or proceeding (including, without limitation,
        an investigation or partial proceeding, such as a deposition), whether commenced
        or threatened in writing.

       

      “Proprietary
        Assets”
        has the
        meaning set forth in Section 3.1(k)(i). 

       

      “Purchase
        Price”
        has the
        meaning set forth in Section 2.1(b).

       

      “Rule
        144”
        means
        Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule
        may
        be amended from time to time, or any similar rule or regulation hereafter
        adopted by the SEC having substantially the same effect as such
        Rule.

       

      “SEC”
        has the
        meaning set forth in the Preamble.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

       

      “Securities”
        has
        the
        meaning set forth in the Preamble.

       

      “Senior
        Secured Notes” has
        the
        meaning set forth in the Preamble.

       

      “Shareholders
        Agreement” means
        the
        Second Amended and Restated Shareholders Agreement, dated as of May 15, 2006,
        as
        amended, or otherwise modified from time to time (including by the Shareholders
        Agreement Amendment).

       

      “Shareholders
        Agreement Amendment” means
        the
        Amendment to the Shareholders Agreement in substantially the form set forth
        as
        Exhibit I hereto.

       

      “Shares”
        means
        shares of the Company’s Common Stock.

       

      “Subsidiary”
        means
        any
        Person in which the Company, directly or indirectly, owns capital stock or
        holds
        an equity or similar interest.

       

      “Subsidiary
        Guarantor” means
        each Subsidiary of the Company that has guaranteed the Senior Secured Notes
        pursuant to the Guarantee and Security Agreement.

       

      “Trading
        Market” means
        any
        foreign or United States securities exchange, market or trading or quotation
        facility on which the Common Stock is then listed or quoted.

       

      “Transactions”
        means
        the
        transactions contemplated by the Transaction Documents.

       

      “Transaction
        Documents” means
        this Agreement, the schedules and exhibits attached hereto, the Senior Secured
        Notes, the Warrants, the Amended and Restated Investors’ Rights Agreement, the
        Shareholders’ Agreement Amendment and the Guarantee and Security
        Agreement.

       

      “Transfer”
        means
        any
        sale, transfer, assignment or other disposition, directly or indirectly,
        and
“Transferred” shall have the correlative meaning.

       

      “VAC”
has
        the
        meaning set forth in Section 6.2(a).

       

      “VAC
        Entity” or
        “VAC
        Entities” has
        the
        meaning set forth in Section 6.2(a).

       

       “Violation”
        has
        the
        meaning set forth in Section 5.8(a). 

       

      “Warrant”
        has
        the
        meaning set forth in the Preamble. 

       

      “Warrant
        Shares” has
        the
        meaning set forth in the Preamble.

      

      
        
          
          

        

        
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      ARTICLE
        II

      PURCHASE
        AND SALE

      

      2.1
        Closing.

       

      (a)
        Subject to the terms and conditions set forth in Sections 8.1 and 8.2 herein,
        at
        the Closing the Company shall issue and sell to the Investor, and the Investor
        shall purchase from the Company, such principal amount of Senior Secured
        Notes
        and number of Warrants set forth opposite the Investor’s name on Exhibit
        A
        hereto
        under the headings “Senior Secured Notes” and “Warrants”. The Closing shall take
        place on the Closing Date at the offices of Company Counsel.

       

      (b)
        At
        the Closing, the Investor shall deliver or cause to be delivered to the Company
        the purchase price set forth opposite such Investor’s name on Exhibit
        A
        hereto
        under the heading “Total Purchase Price” in United States dollars and in
        immediately available funds (the “Purchase
        Price”), by
        wire
        transfer to an account designated in writing to such Investor by the Company
        for
        such purpose; provided, however,
        that an
        amount of the Purchase Price equal to the principal amount together with
        accrued
        interest on the promissory note dated July 16, 2007 between the Company and
        the
        Investor in the principal amount of $250,000 (the “Promissory
        Note”)
        may be
        paid by the Investor by delivering to the Company the Promissory Note for
        cancellation by the Company.

       

      ARTICLE
        III 

      REPRESENTATIONS
        AND WARRANTIES

       

      3.1
        Representations
        and Warranties of the Company.
        The
        Company hereby represents and warrants to the Investor that, except as set
        forth
        in the Schedule of Exceptions attached as Exhibit
        F
        to this
        Agreement, which exceptions shall be deemed to be part of the representations
        and warranties made hereunder, the following representations are true and
        complete as of the date hereof. The Schedule of Exceptions shall be arranged
        in
        sections corresponding to the numbered and lettered sections and subsections
        contained in this Section 3, and the disclosures in any section or subsection
        of
        the Schedule of Exceptions shall qualify other sections and subsections in
        this
        Section 3 if it is reasonably apparent from a reading of the disclosure that
        such disclosure is applicable to such other sections and
        subsections:

       

      (a)
        Organization,
        Good Standing, Corporate Power and Qualification.
        Each of
        the Company and the Subsidiary Guarantors has been duly incorporated and
        organized, and is validly existing in good standing, under the laws of its
        state
        of incorporation and qualified to do business in any state or other jurisdiction
        in which the nature of the business conducted or property owned by it makes
        such
        qualification necessary except where the failure to be so qualified or in
        good
        standing, as the case may be, would not reasonably be expected to individually
        or in the aggregate, (i) materially and adversely affect the legality, validity
        or enforceability of any Transaction Document, (ii) have or result in a material
        adverse effect on the results of operations, assets, business, prospects
        or
        financial condition of the Company and the Subsidiaries, taken as a whole
        on a
        consolidated basis or (iii) materially and adversely impair the Company’s
        ability to perform its obligations under any of the Transaction Documents
        (any
        of (i), (ii) or (iii), a “Material
        Adverse Effect”). Each
        of
        the Company and the Subsidiary Guarantors has the requisite corporate power
        and
        authority to enter into, deliver, and perform the Transaction Documents,
        to sell
        and issue the Securities (including the underlying Warrant Shares) hereunder,
        and to own and operate their properties and assets and to carry on their
        business as currently conducted and as presently proposed to be conducted.
        The
        Company has made available to the Investor copies of its Articles of
        Incorporation, Bylaws and its minute books. Said copies are true, correct
        and
        complete and reflect all amendments now in effect, and with respect to the
        minute books, contain minutes of all meetings and/or actions by written consent
        of directors and stockholders since the time of incorporation.

      

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (b)
        Subsidiaries.
        The
        Company does not presently own or control, directly or indirectly, any interest
        in any other corporation, partnership, trust, joint venture, association,
        or
        other entity other than the Subsidiaries scheduled on Section 3.1(b) of the
        Schedule of Exceptions. The Company owns, directly or indirectly, all of
        the
        capital stock or comparable equity interests of each Subsidiary free and
        clear
        of any Lien and all the issued and outstanding shares of capital stock or
        comparable equity interest of each Subsidiary are, to the extent applicable,
        validly issued and are fully paid, non-assessable and free of preemptive
        and
        similar rights.

       

      (c)
        Authorization;
        Enforcement.
        All
        corporate action on the part of the Company’s and each of the Subsidiary
        Guarantor’s directors and stockholders necessary, as applicable, for: (i) the
        authorization, execution, delivery of, and the performance of all obligations
        of
        the Company and each Subsidiary Guarantor under this Agreement and the other
        Transaction Documents to which it is a party; (ii) the authorization, issuance,
        reservation for issuance, sale and delivery of all of the Securities being
        sold
        under this Agreement and of the Warrant Shares; and (iii) amending the Company’s
        bylaws, has been taken. This Agreement, along with the other Transaction
        Documents, when executed and delivered, will constitute valid and legally
        binding obligations of the Company and each Subsidiary Guarantor, to the
        extent
        party thereto, enforceable against the Company and each Subsidiary Guarantor,
        to
        the extent party thereto, in accordance with their respective terms, except
        as
        may be limited by (i) applicable bankruptcy, insolvency, reorganization or
        others laws of general application relating to or affecting the enforcement
        of
        creditors’ rights generally, (ii) applicable federal or state securities laws
        limits on indemnification; and (iii) the effect of rules of law governing
        the
        availability of equitable remedies.

       

      (d)
        No
        Conflicts.
        The
        execution, delivery and performance of this Agreement and the other Transaction
        Documents to which it is a party, and the consummation of the Transactions
        contemplated hereby or thereby will not result in any violation or default,
        or
        result in a violation or breach of, with or without the passage of time or
        the
        giving of notice or both, the Company’s or any Subsidiary Guarantor’s
        certificate or articles of incorporation, bylaws or other organizational
        or
        charter documents, any judgment, order or decree of any court or arbitrator
        to
        which the Company or any Subsidiary Guarantor is a party or is subject, any
        agreement or contract of the Company or any Subsidiary Guarantor, or, to
        the
        Company’s knowledge, a violation of any statute, law, regulation or order, or an
        event which results in the creation of any Lien upon any asset of the Company
        or
        any Subsidiary Guarantor (other than the Lien granted to the Investor pursuant
        to the Transaction Documents).

       

      (e)
        Valid
        Issuance of Securities.

       

      (i)
        The
        Senior Secured Notes have been duly and validly authorized by the Company
        for
        issuance and sale to the Investor pursuant to this Agreement and, when paid
        for
        and then issued, as provided in this Agreement, will have been validly executed,
        issued and delivered by the Company in accordance with the terms of this
        Agreement and the Senior Secured Note.

      

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

       

      (ii)
        The
        Guarantee and Security Agreement has been duly and validly authorized by
        each
        Subsidiary Guarantor and, on the Closing Date, will have been validly executed
        and delivered by each such Subsidiary Guarantor in accordance with the terms
        of
        the Guarantee and Security Agreement.

       

      (iii)
        The
        Warrants have been duly and validly authorized by the Company and, when paid
        for
        and then issued, as provided in this Agreement, will have been validly executed
        and delivered by the Company. The Warrant Shares have been duly and validly
        authorized and reserved for issuance upon exercise of the Warrants and when
        issued upon such exercise in accordance with the Warrant, will be duly and
        validly issued and outstanding, fully paid and nonassessable.

       

      (iv)
        Assuming the truth and accuracy of the representations made by the Investor
        in
        Section 3.2 hereof, the offer and sale of the Securities solely to the Investor
        in accordance with this Agreement and (assuming no change in currently
        applicable law, no Transfer of Securities by any holder thereof and no
        commission or other remuneration is paid or given, directly or indirectly,
        for
        soliciting the issuance of Warrant Shares upon exercise of the Warrants)
        the
        issuance of the Warrant Shares are exempt from the registration and prospectus
        delivery requirements of the Securities Act and the securities registration
        and
        qualification requirements of the currently effective provisions of the
        securities laws of the State of California and the states in which the Investor
        is a resident based upon its address set forth on the Schedule of Investors
        attached hereto as Exhibit
        A.

       

      (f)
        Capitalization.
        The-capitalization
        of the Company immediately prior to the Closing consists of the
        following:

       

      (i)
        Preferred Stock. A total of 5,204,255 authorized shares of preferred
        stock, $0.01 par value per share, consisting of 2,500,000 shares designated
        as
“Series A Preferred Stock,” of which 825,075 shares will be issued and
        outstanding and 2,704,255 shares designated as “Series B Preferred Stock,” of
        which 2,704,254 will be issued and outstanding.

       

      (ii)
        Common Stock. A total of 20,000,000 authorized shares of Common Stock, of
        which 7,785,716 shares will be issued and outstanding.

       

      (iii)
        Options, Warrants, Reserved Shares. Except for (i) any conversion
        privileges of the Preferred Stock, (ii) the 3,700,000 shares of Common Stock
        reserved for issuance under the Company’s 2006 Stock Incentive Plan (the
“Plan”) under which (y) options to purchase 2,223,689 shares
        will be outstanding, and (z) 1,476,311 shares remain available for future
        issuance under the
        Plan,
        there are no outstanding options, warrants, rights (including conversion
        or
        preemptive rights) or agreement for the purchase or acquisition from the
        Company
        of any shares of its capital stock or any securities convertible into or
        ultimately exchangeable or exercisable for any shares of the Company’s capital
        stock. Apart from the exceptions noted herein or in the Schedule of Exceptions,
        no shares of the Company’s outstanding capital stock, or stock issuable upon
        exercise or exchange of any outstanding options, warrants or rights, or other
        stock issuable by the Company, are subject to any preemptive rights, rights
        of
        first refusal or other rights to purchase such stock (whether in favor of
        the
        Company or any other person), pursuant to any agreement or commitment of
        the
        Company. The Company has not made any representations regarding equity
        incentives to any officer, employee, director or consultant that are
        inconsistent with the share amounts and terms set forth in the Board minutes
        and/or actions by written consent of the Board.

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

       

      (iv)
        The
        outstanding shares of the capital stock of the Company (i) are duly authorized
        and validly issued, fully paid and nonassessable, and have been approved
        by all
        requisite stockholder action, and (ii) assuming the accuracy of the
        representations and warranties and the compliance with the covenants made
        by the
        original purchasers of such shares, were issued in compliance with all
        applicable state and federal laws concerning the issuance of
        securities.

       

      (v)
        All
        options granted vest as follows: twenty-five percent (25%) of the shares
        vest
        one (1) year following the vesting commencement date, with the remaining
        seventy-five percent (75%) vesting in equal quarterly installments over the
        next
        three (3) years. No stock plan, stock purchase, stock option or other agreement
        or understanding between the Company and any holder of any equity securities
        or
        rights to purchase equity securities provides for acceleration or other changes
        in the vesting provisions or other terms of such agreement or understanding
        as
        the result of (i) termination of employment or consulting services (whether
        actual or constructive); (ii) any merger, consolidated sale of stock or assets,
        change in control or any other transaction(s) by the Company; or (iii) the
        occurrence of any other event or combination of events.

       

      (g)
        Consents.
        No
        consent, approval, order or authorization of, or registration, qualification,
        designation, declaration or filing with, (i) any federal, state or local
        governmental authority having jurisdiction over the Company or any Subsidiary
        Guarantor, or (ii) any other Person, is required on the part of the Company
        or
        any Subsidiary Guarantor in order to enable the Company or the Subsidiary
        Guarantors to execute, deliver and perform its obligations under this Agreement
        and the other Transaction Documents to which it is a party except (A) where
        the
        failure to obtain the same would not have a material and adverse impact on
        the
        Company’s business, (B) for such qualifications or filings under applicable
        securities laws as may be required in connection with the Transactions
        contemplated by this Agreement and (C) for such board of director and
        stockholder consents that have been obtained prior to Closing. All such
        qualifications and filings will, in the case of qualifications, be effective
        on
        the Closing and will, in the case of filings, be made within the time prescribed
        by law.

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      (h)
        Financial
        Statements.
        The
        Company has delivered to each Investor its unaudited balance sheet and
        statements of operations and cash flows as of and for the period ended March
        31,
        2007 (collectively the “Financial
        Statements”). The
        Financial Statements are complete and correct in all material respects and
        have
        been prepared substantially in accordance with generally accepted accounting
        principles applied on a consistent basis throughout the periods indicated,
        except as set forth in Section 3.1(h) of the Schedule of Exceptions. The
        Financial Statements accurately set out and describe the financial condition
        and
        operating results of the Company as of the dates, and for the periods, indicated
        therein.

       

      (i)
        Certain
        Actions.
        Since
        March 31, 2007 (the “Measuring
        Date”), the
        Company has not: (i) declared or paid any dividends, or authorized or made
        any
        distribution upon or with respect to any class or series of its capital stock;
        (ii) incurred any indebtedness for money borrowed individually in excess
        of Ten
        Thousand Dollars ($10,000) or in excess of Twenty Five Thousand Dollars
        ($25,000) in the aggregate; (iii) made any loans or advances to any person,
        other than advances (e.g.,
        travel
        expenses) made in the ordinary course of business in excess of Ten Thousand
        Dollars ($10,000) in the aggregate; (iv) sold, exchanged or otherwise disposed
        of any material assets or rights other than the sale of inventory in the
        ordinary course of its business; or (v) entered into any material transactions
        with any of its officers, directors or employees or any entity controlled
        by any
        of such individuals.

       

      (j)
        Activities
        Since Measuring Date.
        Since
        the Measuring Date, there has not been:

       

      (i)
        any
        damage, destruction or loss, whether or not covered by insurance, materially
        and
        adversely affecting the assets, properties, financial condition, operating
        results, prospects or business of the Company (as presently conducted and
        as
        presently proposed to be conducted), taken as a whole;

       

      (ii)
        any
        waiver by the Company or any Subsidiary Guarantor of any material right or
        of a
        material debt owed to it;

       

      (iii)
        any
        change or amendment to a material contract or arrangement by which the Company,
        any Subsidiary Guarantor or any of their assets or properties is bound or
        subject, except for changes or amendments which are expressly provided for
        or
        disclosed in this Agreement;

       

      (iv)
        any
        satisfaction or discharge of any lien, claim or encumbrance or payment of
        any
        obligation by the Company or any Subsidiary Guarantor, except in the ordinary
        course of business and that is not material to the assets, properties, financial
        condition, operating results or business of the Company (as such business
        is
        presently conducted and as it is proposed to be conducted);

       

      (v)
        any
        material change in any compensation arrangement or agreement with any
        employee;

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

       

      (vi)
        any
        sale, assignment or Transfer of any material patents, trademarks, copyrights,
        trade secrets or other material intangible assets;

       

      (vii)
        any
        resignation or termination of employment of any key officer of the Company;
        and
        the chief executive officer of the Company, to his knowledge, does not know
        of
        the impending resignation or termination of employment of any such
        officer;

       

      (viii)
        any receipt of notice that there has been a loss of, or material order
        cancellation by, any Major Mobile Telephone Carrier or Major Content Provider
        of
        the Company;

       

      (ix)
        any
        mortgage, pledge, Transfer of a security interest in, or lien, created by
        the
        Company or any Subsidiary Guarantor, with respect to any of its material
        intellectual property rights or any other material properties or assets,
        except
        liens for taxes not yet due or payable;

       

      (x)
        any
        loans or guarantees made by the Company to or for the benefit of its employees,
        officers or directors, or any members of their immediate families, other
        than
        travel advances and other advances made in the ordinary course of its
        business;

       

      (xi)
        any
        declaration, setting aside or payment or other distribution in respect of
        any of
        the Company’s capital stock, or any direct; or indirect redemption, purchase or
        other acquisition of any of such stock by the Company; or

       

      (xii)
        any
        agreement or commitment by the Company or any Subsidiary Guarantor to do
        any of
        the things described in this Section 3.1(j).

       

      (k)
        Status
        of Proprietary Assets.

       

      (i)
        Status.
        The
        Company and the Subsidiary Guarantors have full title and ownership of, or
        are
        duly licensed under or otherwise authorized to use, all inventions, patents,
        patent applications, trademarks, service marks, trade names, trade secrets,
        information, proprietary rights, processes and copyrights (all of the foregoing
        collectively hereinafter referred to as the “Proprietary
        Assets”)
        necessary to enable it to carry on its business as now conducted and as
        presently proposed to be conducted without any conflict with or, to its
        knowledge, infringement upon the rights of others. Neither the Company nor
        the
        Subsidiary Guarantors has received any written communications alleging that
        the
        Company or the Subsidiary Guarantor has violated or, by conducting its business
        as currently conducted, would violate any of the patents, trademarks, service
        marks, trade names, copyrights or trade proprietary rights of any other person
        or entity, nor is the Company or any Subsidiary Guarantor aware of any basis
        therefore.

      

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      (ii)
        Licenses;
        Other Agreements.
        Neither
        the Company nor any Subsidiary Guarantor has granted any options, licenses
        or
        agreements of any kind relating to any Proprietary Asset of the Company or
        any
        Subsidiary Guarantor, nor is the Company or any Subsidiary Guarantor bound
        by or
        a party to any option, license or agreement of any kind with respect to any
        of
        its respective Proprietary Assets. Neither the Company nor the Subsidiary
        Guarantor is obligated to pay any royalties or other payments to third parties
        with respect to the marketing, sale, distribution, manufacture, license or
        use
        of any Proprietary Asset or any other property or rights.

       

      (iii)
        Employee
        Obligations.
        The
        Company is not aware that any of its employees 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 interfere with their duties to the Company or that would
        conflict with the Company’s business as presently proposed to the
        conducted.

       

      (iv)
        Assignment
        of Inventions.
        Each
        current or former partner, director, officer, employee or consultant of the
        Company who has, in each case, been involved in the development or modification
        of any Proprietary Assets owned or purported to be owned by the Company,
        has
        executed a written agreement expressly assigning to the Company all right,
        title
        and interest in any inventions and works of authorship and all intellectual
        property rights therein.

       

      (1)
        Tax
        Matters.
        The
        Company and each Subsidiary (i) has timely prepared and filed all material
        foreign, federal and state income and all other tax returns, reports and
        declarations required by any jurisdiction to which it is subject, (ii) has
        paid
        all material taxes and other governmental assessments and charges that are
        material in amount, shown or determined to be due on such returns, reports
        and
        declarations, except those being contested in good faith, with respect to
        which
        adequate reserves have been set aside on the books of the Company and (iii)
        has
        set aside on its books provision reasonably adequate for the payment of all
        taxes for periods subsequent to the periods to which such returns, reports
        or
        declarations apply. To the Company’s knowledge, there are no unpaid taxes in any
        material amount claimed to be past due by the taxing authority of any
        jurisdiction, and the Company knows of no basis for such claim. The Company
        has
        not waived or extended any statute of limitations at the request of any taxing
        authority. There are no outstanding tax sharing agreements or other such
        arrangements between the Company and any other corporation or entity and
        the
        Company is not presently undergoing any audit by a taxing
        authority.

       

      (m)
        Absence
        of Litigation.
        There
        is no action, suit, proceeding, claim, arbitration or investigation
        (“Action”)
        pending
        (or, to the Company’s knowledge, currently threatened) against the Company or
        any Subsidiary Guarantor, its respective activities or its respective properties
        before any court or governmental agency. There is no action, suit, proceeding
        or
        investigation by the Company or any Subsidiary Guarantor currently pending
        or
        which the Company or any Subsidiary Guarantor intends to initiate.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

       

      (n)
        Environmental
        Matters.
        The
        Company and each Subsidiary (i) is not in violation of any statute, rule,
        regulation, decision or order of any governmental agency or body or any court,
        domestic or foreign, relating to the use, disposal or release of hazardous
        or
        toxic substances or relating to the protection or restoration of the environment
        or human exposure to hazardous or toxic substances (collectively, “Environmental
        Laws”),
        (ii)
        does not own or operate any real property contaminated with any substance
        in
        violation of any Environmental Laws, (iii) is not liable for any off-site
        disposal or contamination pursuant to any Environmental Laws and (iv) is
        not
        subject to any claim relating to any Environmental Laws; which violation,
        contamination, liability or claim has affected or would reasonably be expected
        to affect, individually or in the aggregate, materially and adversely the
        assets, properties, financial condition, operating results or business of
        the
        Company; and there is no pending or, to the Company’s knowledge, threatened
        investigation that might lead to such a claim.

       

      (o)
        Compliance.
        None of
        the Company or any Subsidiary Guarantor is in violation of (i) any term of
        its
        certificate or articles of incorporation, bylaws or other organizational
        or
        charter documents, (ii) any material term or provision of any indebtedness,
        instrument, judgment or decree or Material Agreement and (iii) to its knowledge,
        is not in violation of any order, statute, rule or regulation applicable
        to the
        Company where such violation would have a Material Adverse Effect.

       

      (p)
        Title
        to Assets.
        The
        Company and the Subsidiary Guarantors own and have good and marketable title
        to
        its respective tangible properties and assets, free and clear of all mortgages,
        deeds of trust, liens, encumbrances and security interests except for statutory
        liens for the payment of current taxes that are not yet delinquent and liens,
        encumbrances and security interests which arise in the ordinary course of
        business and which do not affect material properties and assets of the Company.
        All facilities, machinery, equipment, fixtures, vehicles and other properties
        owned, leased or used by the Company or the Subsidiary Guarantors are in
        good
        operating condition and repair, ordinary wear and tear excepted.

       

      (q)
        Real
        Property.
        No
        condemnation, eminent domain, or similar proceeding exists, is pending or,
        to
        the knowledge of the Company, is threatened with respect to or that could
        affect
        any real property leased by the Company or any of the Subsidiary Guarantors,
        which proceedings has affected or would reasonably be expected to affect,
        individually or in the aggregate, materially and adversely the assets,
        properties, financial condition, operating results or business of the Company.
        No real property leased by the Company or any of the Subsidiary Guarantors
        is
        subject to any sales contract, option, right of first refusal or similar
        agreement or arrangement with any third party. The Company owns no real
        property.

       

      (r)
        Material
        Agreements and Obligations.
        All of
        the indentures, contracts and agreements, with expected receipts or expenditures
        in excess of $25,000 or involving a license or grant of material rights to
        or
        from the Company involving, patents, copyrights, trademarks, or other
        proprietary information applicable to the current business of the Company
        or
        relating to compensation plans or arrangements with employees (other than
        with
        respect to such employees’ salaries or grants of options pursuant to the
        Company’s Plan), to which the Company is a party and which are in effect as of
        the Closing are listed on Exhibit
        E
        (the
“Material
        Agreements”). The
        Material Agreements are valid, binding, and in full force and effect in all
        material respects, subject to laws of general application relating to
        bankruptcy, insolvency and the relief of debtors and rules of law governing
        specific performance, injunctive relief or other equitable remedies, and
        the
        Company has not received any written notice of termination with respect to
        any
        such contract or agreement by any of the parties to any such contract or
        agreement.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

       

      (s)
        Material
        Liabilities.
        The
        Company has no material liabilities or obligations, absolute or contingent
        (individually or in the aggregate), except (i) the liabilities and obligations
        set forth in the Financial Statements, (ii) liabilities and obligations which
        have been incurred subsequent to March 31, 2007 in the ordinary course of
        business which have not been, in the aggregate, materially adverse to the
        assets, properties, financial condition, operating results or business of
        the
        Company, (iii) liabilities and obligations under leases for its principal
        offices and for equipment, and (iv) liabilities and obligations under sales,
        procurement and other contracts and arrangements entered into in the normal
        course of business.

       

      (t)
        No
        General Solicitation; Brokers or Finders.
        Neither
        the Company, nor any of its Affiliates, nor any Person acting on its or their
        behalf, has engaged in any form of general solicitation or general advertising
        (within the meaning of Regulation D) in connection with the offer or sale
        of the
        Securities. Other than as set forth on Section 3.1(t) of the Schedule of
        Exceptions, neither the Company nor the Investor, as a result of any action
        taken by the Company, have incurred or will incur, directly or indirectly,
        any
        liability for brokerage of finders’ fees or agents’ commissions or any similar
        charges in connection with this Agreement or the Transactions contemplated
        hereby.

       

      (u)
        Private
        Placement.
        None of
        the Company, its Subsidiaries, any of their Affiliates, or any Person acting
        on
        their behalf has, directly or indirectly, at any time within the past six
        (6)
        months, made any offer or sale of any security or solicitation of any offer
        to
        buy any security under circumstances that would (i) eliminate the availability
        of the exemption from registration under Regulation D under the Securities
        Act
        in connection with the offer and sale by the Company of the Securities as
        contemplated hereby or (ii) cause the offering of the Securities pursuant
        to the
        Transaction Documents to be integrated with prior offerings by the Company
        for
        purposes of any applicable law, regulation or stockholder approval provisions,
        including, without limitation, under the rules and regulations of any Trading
        Market.

       

      (v)
        Real
        Property Holding Corporation.
        The
        Company is not a real property holding corporation within the meaning of
        Code
        Section 897(c)(2) and any regulations promulgated thereunder.

       

      (w)
        Off-Balance
        Sheet Arrangements.
        Neither
        the Company nor any of its Subsidiaries is a party to, or has any commitment
        to
        become a party to, any “off-balance sheet arrangements” (as defined in Item
        303(a) of Regulation S-K of the SEC).

       

      (x)
        Registration
        Rights.
        Except
        as contemplated by the Transaction Documents and the Registration Rights
        Agreement, dated May 16, 2006 by and among the Company and certain holders
        of
        the Company’s Series A Preferred Stock, the Company is not under any obligation
        to register under the Securities Act or Foreign Securities Law any of its
        currently outstanding securities or any securities issuable upon exercise
        or
        conversion of its currently outstanding securities nor is the Company obligated
        to register or qualify any such securities under any state securities or
        blue
        sky laws.

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

       

      (y)
        Disclosure.
        This
        Agreement, the Exhibits hereto, the other Transaction Documents and any
        certificate expressly delivered by the Company or any Subsidiary Guarantor
        to
        the Investor or their attorneys or agents in connection herewith or therewith
        or
        with the Transactions contemplated hereby or thereby, taken as a whole, neither
        contain any untrue statement of a material fact nor, to the Company’s knowledge,
        omit to state a material fact necessary in order to make the statements
        contained herein or therein not misleading except that, with respect to the
        Company’s business plan or investment presentations and any financial
        projections submitted to the Investor in connection with this Agreement and
        the
        Transactions contemplated hereby, the Company represents and warrants only
        that
        such business plan, investment presentations and financial projections were
        prepared in good faith based on reasonable assumptions and are not materially
        inconsistent with any internal Company plans, budgets or forecasts.

       

      (z)
        Insurance.
        The
        Company and the Subsidiaries are insured by insurers of recognized financial
        responsibility against such losses and risks and in such amounts as are prudent
        and customary in the businesses and location in which the Company and the
        Subsidiaries are engaged, including directors’ and officers’ liability
        insurance. Neither the Company nor any Subsidiary has any knowledge that
        it will
        not be able to renew its existing insurance coverage as and when such coverage
        expires or to obtain similar coverage from similar insurers as may be necessary
        to continue its business without a significant increase in cost.

       

      (aa)
        ERISA.
        The
        Company does not have any Employee Pension Benefit Plan as defined in Section
        3
        of the Employee Retirement Income Security Act of 1974, as amended.

       

      (bb)
        Labor
        Agreements and Actions; Employee Compensation.
        The
        Company is not bound by or subject to any contract, commitment or arrangement
        with any labor union, and no labor union has requested or, to the best of
        the
        Company’s knowledge, has sought to represent any of the employees of the
        Company. There is no strike or other labor dispute involving the Company
        pending, or to the best of the Company’s knowledge, threatened, that could have
        a Material Adverse Effect, nor is the Company aware of any labor organization
        activity involving its employees. Other than the Company’s Plan and any grants
        of options thereunder, the Company is not a party to any employment contract,
        deferred compensation agreement, bonus plan, incentive plan, profit sharing
        plan, retirement agreement, or other employee compensation
        agreement.

       

      (cc)
        Employees.
        To the
        Company’s knowledge, no employee of the Company nor any consultant with whom the
        Company has contracted, is in violation of any material term of any employment
        contract, proprietary information agreement, non-disclosure agreement or
        any
        other similar contract or agreement relating to the relationship of such
        employee or consultant with the Company, any former employer or any other
        party;
        and to the Company’s knowledge the continued employment by the Company of its
        present employees, and the performance of the Company’s contracts with its
        independent contractors, will not result in any such violation. The Company
        has
        not received any written notice alleging that any such violation
        has occurred. The Company does not have any collective bargaining agreement
        covering any of its employees. The Company does not believe it is or will
        be
        necessary to utilize any inventions of any of its employees made prior to
        or
        outside the scope of their employment by the Company. No employee of the
        Company
        has been granted the right to continued employment by the Company or to any
        material compensation following termination of employment with the Company.
        The
        chief executive officer of the Company is not aware that any officer, key
        employee or group of employees intends to terminate his, her or their employment
        with the Company, nor does the Company have a present intention to terminate
        the
        employment of any officer, key employee or group of
        employees.

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      (dd)
        Transactions
        With Affiliates and Employees.
        There
        are no obligations of the Company to officers, directors, stockholders, or
        employees of the Company other than (a) for payment of salary for services
        rendered, (b) reimbursement for reasonable expenses incurred on behalf of
        the
        Company and (c) for other standard employee benefits made generally available
        to
        all employees (including stock option agreements outstanding under any stock
        option plan approved by the Board). No officer, director, key employee or
        stockholder of the Company is indebted to the Company (excluding advances
        to
        employees made in the ordinary course of business not exceeding $10,000 in
        the
        aggregate). To the Company’s knowledge, none of the officers, directors, key
        employees or stockholders of the Company or any members of their immediate
        families, has any direct or indirect ownership interest in any firm or
        corporation with which the Company is affiliated or with which the Company
        has a
        business relationship, or any firm or corporation that competes with the
        Company, other than (i) passive investments in publicly traded companies
        (representing less than 1 % of
        such
        company) which may compete with the Company and (ii) investments by venture
        capital funds or similar institutional investors with which directors of
        the
        Company may be affiliated and serve as a board member of a company in connection
        therewith due to a person’s affiliation with a venture capital fund or similar
        institutional investor in such company. No officer, director or stockholder,
        or
        any member of their immediate families, is, directly or indirectly, personally
        interested in any material contract with the Company (other than such contracts
        as relate to any such person’s (i) ownership of capital stock or other
        securities of the Company, (ii) indemnification by the Company or (iii) salary
        and other employment benefits provided by the Company to such
        person).

       

      (ee)
        Questionable
        Payments.
        Neither
        the Company nor any Subsidiary, nor, to the Company’s knowledge, directors,
        officers, employees, agents or other Persons acting on behalf of the Company
        or
        any Subsidiary has, in the course of its actions for, or on behalf of, the
        Company: (i) used any corporate funds for unlawful contributions, gifts,
        entertainment or other unlawful expenses relating to foreign or domestic
        political activity; (ii) made any direct or indirect unlawful payments to
        any
        foreign or domestic governmental officials or employees from corporate funds;
        (iii) violated in any respect any provision of the Foreign Corrupt Practices
        Act
        of 1977, as amended or (iv) made any other unlawful bribe, rebate, payoff,
        influence payment, kickback or other unlawful payment to any foreign or domestic
        government official or employee which, in the aggregate of clauses (i) through
        (iv) would materially and adversely affect the assets, properties, financial
        condition, operating results or business of the Company.

       

      (ff)
        Regulatory
        Permits.
        The
        Company and the Subsidiaries possess all certificates, authorizations and
        permits issued by the appropriate federal, state, local or foreign 
regulatory
        authorities necessary to conduct their respective businesses, except where
        the
        failure to possess such permits does not, individually or in the aggregate,
        materially and adversely affect the assets, properties, financial condition,
        operating results, prospects or business of the Company (“Material
        Permits”),
        and
        neither the Company nor any Subsidiary has received any written notice of
        proceedings relating to the revocation or modification of any Material
        Permit.

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

       

      (gg)
        Internal
        Accounting Controls.
        The
        Company and the Subsidiaries maintain a system of internal accounting controls
        sufficient to provide reasonable assurance that (i) transactions are executed
        in
        accordance with management’s general or specific authorizations, (ii)
        transactions are recorded as necessary to permit preparation of financial
        statements substantially in conformity with generally accepted accounting
        principles and to maintain asset accountability, (iii) access to assets is
        permitted only in accordance with management’s general or specific authorization
        and (iv) the recorded accountability for assets is compared with the existing
        assets at reasonable intervals and appropriate action is taken with respect
        to
        any differences.

       

      (hh)
        Investment
        Company.
        Neither
        the Company nor any of its Subsidiaries is (i) an “investment company” as
        defined in, or subject to regulation under, the Investment Company Act of
        1940
        or (ii) a “holding company” as defined in, or subject to regulation under, the
        Public Utility Holding Company Act of 1935.

       

      (ii)
        Margin
        Stock.
        Neither
        the Company nor any of the Subsidiaries is engaged principally, or as one
        of
        their important activities, in the business of extending credit for the purpose
        of buying or carrying Margin Stock (as such term is defined in Regulation
        U).
        Immediately before and after giving effect to the sale of the Senior Secured
        Note, Margin Stock will constitute less than 25% of the Company’s assets as
        determined in accordance with Regulation U. No part of the proceeds of the
        Senior Secured Note will be used, whether directly or indirectly, and whether
        immediately, incidentally or ultimately, to purchase, acquire or carry any
        Margin Stock or for any purpose that entails a violation of, or that is
        inconsistent with, the provisions of the regulations of the Board of Governors
        of the Federal Reserve System of the United States of America, including
        Regulation T, U or X.

       

      (jj)
        Application
        of Takeover Protections.
        There is
        no control share acquisition, business combination, poison pill (including
        any
        distribution under a rights agreement) or other similar anti-takeover provision
        under the Company’s charter documents or the laws of its state of incorporation
        that is or would become applicable to any of the Investors as a result of
        the
        Investors and the Company fulfilling their obligations or exercising their
        rights under the Transaction Documents, including, without limitation, as
        a
        result of the Company’s issuance of the Securities and the Investors’ ownership
        of the Securities.

       

      3.2
        Representations
        and Warranties of the Investors.
        The
        Investor hereby represents and warrants to the Company as follows:

       

      (a)
        Authorization.
        This
        Agreement constitutes the Investor’s valid and legally binding obligation,
        enforceable against the Investor in accordance with its terms except as may
        be
        limited by (i) applicable bankruptcy, insolvency, reorganization or other
        laws
        of general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect
        of
        rules of law governing the availability of equitable remedies. The Investor
        represents that it has full power and authority to enter into the Transaction
        Documents to which it is a party.

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

       

      (b)
        Purchase
        for Own Account.
        The
        Securities to be purchased by the Investor hereunder will be acquired for
        investment for the Investor’s own account, not as a nominee or agent, and not
        with a view to the public resale or distribution thereof with the meaning
        of the
        Securities Act, and the Investor has no present intention of selling, granting
        any participation in, or otherwise distributing the same. If not an individual,
        the Investor also represents that the Investor has not been formed for the
        specific purpose of acquiring Securities.

       

      (c)
        Disclosure
        of Information.
        At no
        time was the Investor presented with or solicited by any publicly issued
        or
        circulated newspaper, mail, radio, television or other form of general
        advertising or solicitation in connection with the offer, sale and purchase
        of
        the Securities. To the knowledge of such Investor, such Investor has received
        or
        has had full access to all the information it requested in connection with
        its
        investment decision with respect to the Securities to be purchased by such
        Investor under this Agreement. Such Investor further has had an opportunity
        to
        discuss the Company’s business, management and financial affairs with directors,
        officers and management of the Company and has had the opportunity to review
        the
        Company’s operations and facilities. Investor has also had the opportunity to
        ask questions of and receive answers from, the Company and its management
        regarding the terms and conditions of this investment.

       

      (d)
        Investment
        Experience.
        The
        Investor understands that the purchase of the Securities involves substantial
        risk. The Investor: (i) has experience as an investor in securities of companies
        in the development stage and acknowledges that the Investor is able to fend
        for
        itself, can bear the economic risk of the Investor’s investment in the
        Securities and has such knowledge and experience in financial or business
        matters that the Investor is capable of evaluating the merits and risks of
        this
        investment in the Securities and protecting its own interests in connection
        with
        this investment and/or (ii) has a preexisting personal or business relationship
        with the Company and certain of its officers, directors or controlling persons
        of a nature and duration that enables such Investor to be aware of the
        character, business acumen and financial circumstances of such persons. The
        Investor represents that the office in which its investment decision was
        made is
        located at the address on the Schedule of Investors attached hereto as
Exhibit
        A.

       

      (e)
        Accredited
        Investor Status.
        The
        Investor is an “accredited investor” within the meaning of Regulation D
        promulgated under the Securities Act.

       

      (f)
        Restricted
        Securities.
        Such
        Investor understands that the Securities are characterized as “restricted
        securities” under the Securities Act inasmuch as they are being acquired from
        the Company in a transaction not involving a public offering and that under
        the
        Securities Act and applicable regulations thereunder such securities may
        be
        resold without registration under the Securities Act only in certain limited
        circumstances as set forth in Article IV. In this connection, such Investor
        represents that the Investor is familiar with Rule 144, as presently in effect,
        and understands the resale limitations imposed thereby and by the Securities
        Act. The Investor understands that the Company is under no obligation to
        register any of the Securities sold hereunder except as provided herein.
        The
        Investor understands that no public market
        now exists for any of the Securities and that it is uncertain whether a public
        market will ever exist for the Securities.

       

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        IV 

       

      OTHER
        AGREEMENTS OF THE PARTIES

       

      4.1
        Transfer
        Restrictions.

       

      (a)
        The
        Investor covenants that the Securities will only be Transferred pursuant
        to an
        effective registration statement under, and in compliance with the requirements
        of, the Securities Act or Foreign Securities Law or, if so requested by the
        Company, upon delivery to the Company of an opinion of counsel reasonably
        satisfactory to the Company that such Transfer is being made pursuant to
        an
        available exemption from the registration requirements of the Securities
        Act or
        Foreign Securities Law, and in compliance with any applicable state securities
        laws. The Investor may not Transfer any Securities to any person that the
        Board,
        in its reasonable judgment, deems to be a direct competitor of the Company
        or an
        affiliate thereof. In connection with any Transfer of Securities other than
        pursuant to an effective registration statement or to the Company, the Company
        may require the transferor to provide to the Company an opinion of counsel
        selected by the transferor, the form and substance of which opinion shall
        be
        reasonably satisfactory to the Company, to the effect that such Transfer
        does
        not require registration under the Securities Act or Foreign Securities Law.
        Notwithstanding anything contained herein to the contrary, any transferee
        of any
        Securities shall, as a condition precedent to such Transfer, agree in writing
        to
        be subject to the terms of the Transaction Documents to the same extent as
        if
        the transferee were an original Investor hereunder.

       

      (b)
        Such
        Investor understands that the instruments representing the Senior Secured
        Notes
        and the Warrants and, when issued, the stock certificates representing the
        Warrant Shares, until such time as the resale of the Secrities have been
        registered and sold under the Securities Act and Foreign Securities Law,
        shall
        bear any legend as required by the “blue sky” laws of any state and a
        restrictive legend in substantially the following form (and a stop-transfer
        order may be placed against transfer of such stock certificates):

       

      [NEITHER
        THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH
        THESE SECURITIES ARE EXERCISABLE HAVE BEEN] [THIS NOTE HAS NOT BEEN] REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
        AND
        BLUE SKY LAWS. [THESE SECURITIES] [THIS NOTE] MAY NOT BE OFFERED FOR SALE,
        SOLD,
        TRANSFERRED OR ASSIGNED (1) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
        STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
“SECURITIES ACT”) OR FOREIGN SECURITIES LAWS, OR (B) IF REASONABLY REQUESTED BY
        THE COMPANY, AN
        OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION
        IS NOT
        REQUIRED UNDER SAID ACT OR FOREIGN SECURITIES LAWS AND (2) IF SUCH SALE,
        TRANSFER OR ASSIGNMENT VIOLATES APPLICABLE STATE SECURITIES AND BLUE SKY
        LAWS.
        [THESE SECURITIES] ARE SUBJECT TO THE PROVISIONS OF A CERTAIN SECURITIES
        PURCHASE AGREEMENT, DATED AS OF JULY 30, 2007, INCLUDING CERTAIN RESTRICTIONS
        ON
        TRANSFER SET FORTH THEREIN, AND AN AMENDED
        AND RESTATED INVESTORS’ RIGHTS AGREEMENT, DATED AS OF JULY 30, 2007. COMPLETE
        AND CORRECT COPIES OF SUCH AGREEMENTS ARE AVAILABLE FOR INSPECTION AT THE
        PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED TO ANY HOLDER OF [THESE
        SECURITIES] UPON WRITTEN REQUEST WITHOUT CHARGE.

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

       

      The
        legend set forth above shall be removed and the Company shall issue a
        certificate without such legend to the holder of the Securities upon which
        it is
        stamped, if, unless otherwise required by state securities laws, (i) such
        Securities have been registered and sold pursuant to an effective registration
        statement under the Securities Act or Foreign Securities Law or (ii) in
        connection with a sale, assignment or other Transfer, the Company reasonably
        requests that such holder provide the Company with opinion of counsel reasonably
        acceptable to the Company that the legend may be removed without registration
        under the applicable requirements of the Securities Act or Foreign Securities
        Law.

       

      (c)
        Drag-Along.
        In the
        event that the Board and holders of a majority of the outstanding shares
        of
        Common Stock issued or issuable upon conversion of the shares of Series A
        Preferred Stock and Series B Preferred Stock approve (i) a sale of all or
        substantially all of the assets of the Company to an unrelated third party,
        (ii)
        a sale of more than 50% of the outstanding capital stock of the Company (on
        an
        as-converted basis) to one or more unrelated third parties or (iii) a merger
        or
        consolidation of the Company with an unrelated third party as a result of
        which
        either (x) the Company does not survive or (y) such unrelated third parties
        (or
        equity owners thereof) hold, directly or indirectly, at least a majority
        of the
        Common Stock (on an as-converted basis), (such events, a “Sale
        of the Company”),
        then
        each holder of Warrant Shares hereby agrees with respect to all shares of
        capital stock of the Company (including Common Stock) that he, she or it
        holds
        and any other Company securities over which he, she or it otherwise exercises
        dispositive power:

       

      (i)
        in
        the event such transaction requires the approval of stockholders, (a) if
        the
        matter is to be brought to a vote at a stockholder meeting, after receiving
        proper notice of any meeting of stockholders of the Company to vote on the
        approval of a Sale of the Company, to be present, in person or by proxy,
        as a
        holder of the Company’s capital stock, at all such meetings and be counted for
        the purposes of determining the presence of a quorum at such meetings; and
        (b)
        to vote (in person, by proxy or by action by written consent, as applicable)
        all
        shares of the Company’s capital stock in favor of such Sale of the Company and
        in opposition of any and all other proposals that could reasonably be expected
        to delay or impair the ability of the Company to consummate such Sale of
        the
        Company;

       

      (ii)
        in
        the event that the Sale of the Company is to be effected by the sale of shares
        of the Company’s capital stock held by the holders of the Company’s Series B
        Preferred Stock (the “Selling
        Stockholders”)
        without the need for stockholder approval, each holder of Warrant Shares
        agrees
        to sell all shares of capital stock of the Company beneficially held thereby
        (or
        in the event that the Selling Stockholders are selling fewer than all of
        their
        shares of Company’s capital stock, shares in the same proportion as the Selling
Stockholders
        are selling) to the person to whom the Selling Stockholders propose to sell
        their shares, for the same per-share consideration (on an as-converted basis)
        and on the same terms and conditions as the Selling Stockholders, except
        that
        the holders of Warrant Shares will not be required to sell their shares unless
        the liability for indemnification of such holders of Warrant Shares in such
        Sale
        of the Company is several, not joint, and is pro rata in accordance with
        such
        holder’s respective relative stock ownership of the Company, and will not exceed
        the consideration payable thereto, if any, in such transaction (except in
        the
        case of potential liability for fraud or willful misconduct
        thereby);

       

      
        
          
          

        

        
          -19-

          
            

          

        

        
          
          

        

      

       

      (iii)
        to
        refrain from exercising any dissenters’ rights or rights of appraisal under
        applicable law at any time with respect to such Sale of the Company;
        and

       

      (iv)
        to
        execute and deliver all related documentation and take such other action
        in
        support of the Sale of the Company as shall reasonably be requested by the
        Company.

       

      If
        the
        drag-along provisions set forth in the Shareholders Agreement are amended
        or
        modified, or are replaced with a similar provision applicable to the
        shareholders of a successor to the Company in connection with a Fundamental
        Transaction, then the provisions of Section 4.1(c) above shall be deemed
        to have
        been similarly amended, modified or replaced, mutatis
        mutandis.

       

      4.2
        Use
        of
        Proceeds.
        The
        Company intends to use the net proceeds from the sale of the Securities for
        working capital and general corporate purposes and not for the (i) repayment
        of
        any of the Senior Secured Notes or (ii) redemption or repurchase of any of
        its
        equity securities. Pending these uses, the Company intends to invest the
        net
        proceeds from this offering in short-term, interest-bearing, investment-grade
        securities, or as otherwise pursuant to the Company’s customary investment
        policies.

       

      ARTICLE
        V

      REGISTRATION
        RIGHTS

       

      5.1
        Warrant
        Shares.
        The
        Warrant Shares have certain rights to registration as set forth in the Amended
        and Restated Investors’ Rights Agreement, dated as of July 30, 2007 and are
        subject to certain restrictions as set forth therein.

       

      ARTICLE
        VI

      OBSERVER
        RIGHTS

       

      6.1
        Observer.

       

      (a)
        If
        ValueAct SmallCap Master Fund, L.P. (“VAC”)
        no
        longer has the right to elect one director pursuant to the Shareholders
        Agreement, then, so long as VAC owns at least $5,500,000 of the principal
        amount
        of the Senior Secured Notes or at least 800,582 shares of Common Stock issued
        or
        issuable upon exercise of the Warrants (as adjusted pursuant to the terms
        and
        conditions set forth therein), then VAC shall be granted the right to appoint,
        and the Company will permit, one representative appointed by VAC (the
“Observer”) to
        attend
        all meetings
        of the Board and all committees thereof (whether in person, telephonic or
        other)
        in a non-voting, observer capacity and shall provide to the Observer,
        concurrently with the members of the Board, and in the same manner, notice
        of
        such meeting and a copy of all materials provided to such members. VAC may
        transfer its rights to appoint the Observer to one transferee of the Warrants
        or
        Warrant Shares in connection with a Transfer permitted by the terms of this
        Agreement, provided, however, that such Transfer to such transferee shall
        include at least $5,500,000 in principal amount of the Senior Secured Notes
        or
        800,582 shares of Common Stock (as adjusted pursuant to the terms and conditions
        set forth therein) issued or issuable upon exercise of the Warrants.
        Notwithstanding anything contained herein to the contrary, the Company may
        withhold portions of information from the Observer and exclude the Observer
        from
        portions of any meeting if, upon advice of the Company’s legal counsel, access
        to such information or attendance at a portion of a meeting by the Observer
        would adversely affect the attorney-client privilege between the Company
        and its
        legal counsel. The Observer shall execute a customary confidentiality agreement
        reasonably acceptable to the Company.

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

      (b)
        The
        Company acknowledges that the Investor will likely have, from time to time,
        information that may be of interest to the Company (“Information”) regarding
        a wide variety of matters including, by way of example only, (i) current
        and
        future investments VAC has made, may make, may consider or may become aware
        of
        with respect to other companies and other technologies, products and services,
        including, without limitation, technologies, products and services that may
        be
        competitive with the Company’s, and (ii) developments with respect to the
        technologies, products and services, and plans and strategies relating thereto,
        of other companies, including, without limitation, companies that may be
        competitive with the Company. The Company recognizes that a portion of such
        Information may be of interest to the Company. Such Information may or may
        not
        be known by the Observer. The Company, as a material part of the consideration
        for this Agreement, agrees that VAC and its Observer shall have no duty to
        disclose any Information to the Company or permit the Company to participate
        in
        any projects or investments based on any Information, or to otherwise take
        advantage of any opportunity that may be of interest to the Company if it
        were
        aware of such Information, and hereby waives, to the extent permitted by
        law,
        any claim based on the corporate opportunity doctrine or otherwise that could
        limit VAC’s ability to pursue opportunities based on such Information or that
        would require VAC or Observer to disclose any such Information to the Company
        or
        offer any opportunity relating thereto to the Company.

       

      6.2
        Confidentiality.
        The
        Investor agrees to hold all information received pursuant to this Article
        VI, or
        otherwise in connection with its rights under the Transaction Documents,
        in
        confidence, and not to use or disclose any of such information to any third
        party, except to the extent such information was made publicly available
        by the
        Company; provided,
        however, that
        the
        Investor may disclose such information (i) as may be required by law, (ii)
        to
        its attorneys, accountants, consultants, and other professionals to the extent
        necessary to obtain their bona fide services in connection with monitoring
        its
        investment in the Company, (iii) to any potential purchaser of the Securities
        so
        long as such purchaser is advised of the confidentiality provisions of this
        Section 6.2 and is bound by confidentiality obligations at least as restrictive
        as this Section 6.2 and (iv) to any partner or affiliate of the Investor
        so long
        as such partner or affiliate is advised of the confidentiality provisions
        of
        this Section 6.2 and is bound by confidentiality obligations at least as
        restrictive as this Section 6.2.

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

       

      6.3
        Termination
        of Certain Rights.
        The
        Company’s obligations under Sections 6.1 above will terminate (a) upon the
        closing of the first sale of the Company’s Common Stock to the general public
        pursuant to an effective registration statement filed under the Securities
        Act
        or Foreign Securities Law in which the gross proceeds of the Company (without
        reduction for underwriter’s discounts and commissions or expenses of the sale),
        equals or exceeds $25,000,000; (b) upon a Fundamental Transaction; or (c)
        at
        such time as VAC or any permitted transferee of the rights under Section
        6.1, as
        the case may be, no longer own, beneficially or of record, at least (i)
        $5,500,000 in principal amount of the Senior Secured Notes or (ii) 800,582
        of
        shares of Common Stock issued or issuable upon exercise of the Warrants as
        adjusted pursuant to the terms and conditions set forth therein.

       

      ARTICLE
        VII

      COVENANTS

       

      7.1
        Integration.
        The
        Company shall not, and shall use its best efforts to ensure that no Affiliate
        thereof shall, sell, offer for sale or solicit offers to buy or otherwise
        negotiate in respect of any security (as defined in Section 2 of the Securities
        Act) that would be integrated with the offer or sale of the Securities in
        a
        manner that would require the registration under the Securities Act of the
        sale
        of the Securities to the Investor or that would be integrated with the offer
        or
        sale of the Securities for purposes of the rules and regulations of any Trading
        Market.

       

      7.2
        Reservation
        of Securities.
        The
        Company shall maintain a reserve from its duly authorized shares of Common
        Stock
        for issuance pursuant to the Transaction Documents in such amount as may
        be
        required to fulfill its obligations in full under the Transaction Documents.
        In
        the event that at any time the then authorized shares of Common Stock are
        insufficient for the Company to satisfy its obligations in full under the
        Transaction Documents, the Company shall promptly take such actions as may
        be
        required to increase the number of authorized shares.

       

      ARTICLE
        VIII

      CONDITIONS

       

      8.1
        Conditions
        Precedent to the Investor’s Obligation to Purchase.
        The
        obligation of the Investor to purchase the Securities at the Closing is subject
        to the satisfaction or waiver by the Investor, at or before the Closing,
        of each
        of the following conditions:

       

      (a)
        The
        Company shall have duly executed and delivered to each Investor:

       

      (i)
        one
        or more Senior Secured Notes with an aggregate principal amount as is set
        forth
        opposite the Investor’s name in column two (2) on the Schedule of
        Investors;

       

      (ii)
        that
        number of Warrants as is set forth opposite the Investor’s name in column three
        (3) on the Schedule of Investors;

       

      (iii)
        copies of the Amended and Restated Investors’ Rights Agreement and the
        Shareholders Agreement Amendment fully executed by all parties thereto (other
        than the Investor);

       

      
        
          
          

        

        
          -22-

          
            

          

        

        
          
          

        

      

       

      (iv)
        the
        Guarantee and Security Agreement signed on behalf of the Company, and each
        Subsidiary Guarantor party thereto, together with the following:

       

      (1)
        any
        certificated securities representing shares of capital stock or other similar
        interests owned by or on behalf of any Grantor (as defined in the Guarantee
        and
        Security Agreement) constituting Collateral (as defined in the Guarantee
        and
        Security Agreement) as of the Closing Date after giving effect to the
        Transactions;

       

      (2)
        any
        promissory notes and other instruments evidencing all loans, advances and
        other
        debt owed or owing to any Grantor constituting Collateral as of the Closing
        Date
        after giving effect to the Transactions;

       

      (3)
        stock
        powers and instruments of transfer, endorsed in blank, with respect to such
        certificated securities, promissory notes and other instruments;

       

      (4)
        descriptions of all intellectual property, including all patents, trademarks
        and
        copyrights, owned by the Company and its Subsidiaries in detail reasonably
        satisfactory to the Investor;

       

      (5)
        the
        Control Agreements executed by the relevant Grantors and the Collateral Agent
        and acknowledged and agreed to by the relevant Control Account Bank pursuant
        to
        the Guarantee and Security Agreement (“Control Agreement”, “Collateral Agent”
and “Control Account Bank” shall have the meanings set forth in the Guarantee
        and Security Agreement);

       

      (6)
        all
        instruments and other documents, including UCC financing statements, required
        by
        law or reasonably requested by the Collateral Agent to be filed, registered
        or
        recorded to create or perfect the Liens intended to be created under the
        Guarantee and Security Agreement; and

       

      (7)
        results of a search of the UCC (or equivalent) filings made and tax and judgment
        lien searches with respect to the Grantors in the jurisdictions contemplated
        by
        the Guarantee and Security Agreement and copies of the financing statements
        (or
        similar documents) disclosed by such search and evidence reasonably satisfactory
        to the Collateral Agent that the Liens indicated by such financing statements
        (or similar documents) are acceptable to the Collateral Agent or have been
        released.

       

      (b)
        Such
        Investor shall have received the opinion of Company Counsel, dated as of
        the
        Closing Date, in substantially the form of Exhibit
        G
        attached
        hereto.

       

      (c)
        The
        Company shall have delivered a certificate, executed on behalf of the Company
        by
        its Secretary, dated as of the Closing Date, certifying the resolutions
        adopted by
        the
        Board approving the Transactions contemplated by the Transaction Documents
        and
        the issuance of the Securities, certifying the current versions of the
        Certificate of Incorporation and Bylaws of the Company and certifying as
        to the
        signatures and authority of persons signing this Agreement and related documents
        on behalf of the Company.

      

      
        
          
          

        

        
          -23-

          
            

          

        

        
          
          

        

      

       

      (d)
        The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except for those representations and warranties that are
        qualified by materiality or Material Adverse Effect, which shall be true
        and
        correct in all respects) as of the date when made and as of the Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date) and the Company shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by the Transaction Documents to be performed, satisfied or complied
        with by the Company at or prior to the Closing Date. The Investor shall have
        received a certificate, executed on behalf of the Company by the Chief Executive
        Officer of the Company, dated as of the Closing Date, to the foregoing effect
        and as to such other matters as may be reasonably requested by the
        Investor.

       

      (e)
        The
        Company shall have obtained all governmental, regulatory or third party consents
        and approvals, if any, necessary for the sale of the Securities, except for
        those consents and approvals set forth in Sections 3.1(d) and 3.1(g) to the
        Schedule of Exceptions.

       

      (f)
        The
        Investors shall have received all fees and other amounts due and payable
        on or
        prior to the Closing Date pursuant to Section 9.2 hereof.

       

      (g)
        The
        Company shall have delivered to such Investor such other documents relating
        to
        the Transactions contemplated by this Agreement as such Investor or its counsel
        may reasonably request.

       

      8.2
        Conditions
        Precedent to the Obligations of the Company.
        The
        Company’s obligation to sell and issue the Securities at the Closing is, at the
        option of the Company, subject to the fulfillment or waiver of the following
        conditions:

       

      (a)
        Receipt
        of Payment.
        The
        Investor shall have delivered payment of the Purchase Price to the Company
        for
        the Securities.

       

      (b)
        Representations
        and Warranties.
        The
        representations and warranties of the Investor shall be true and correct
        in all
        material respects (except for those representations and warranties that are
        qualified by materiality or Material Adverse Effect, which shall be true
        and
        correct in all respects) as of the date when made and as of the Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date, which shall be true and correct as of such date) and
        the
        Investor shall have performed, satisfied and complied in all material respects
        with the covenants, agreements and conditions required by the Transaction
        Documents to be performed, satisfied or complied with by the Investor at
        or
        prior to the Closing Date.

      

      
        
          
          

        

        
          -24-

          
            

          

        

        
          
          

        

      

       

      (c)
        Covenants.
        All
        covenants, agreements and conditions contained in this Agreement to be
        performed, satisfied or complied with by the Investor on or prior to the
        Closing
        Date shall have been performed, satisfied or complied with in all material
        respects.

       

      (d)
        Transaction
        Documents.
        The
        Company shall have received copies of all Transaction Documents fully executed
        by all parties thereto (other than the Company and its
        Subsidiaries).

       

      ARTICLE
        IX

      MISCELLANEOUS

       

      9.1
        Termination.
        This
        Agreement may be terminated by the Company or the Investor, by written notice
        to
        the other parties, if the Closing has not been consummated by the third Business
        Day following the date of this Agreement; provided that no such termination
        will
        affect the right of any party to sue for any breach by the other party (or
        parties).

       

      9.2
        Fees
        and Expenses.
        The
        Company shall reimburse the Investor for all of its reasonable costs and
        expenses incurred in connection with the Transactions contemplated by this
        Agreement, including, but not limited to, fees of outside counsel (in an
        amount
        not to exceed $150,000) and other out-of-pocket expenses. The Company shall
        pay
        all transfer agent fees, stamp taxes and other taxes and duties levied in
        connection with the initial sale and issuance of the applicable Securities
        (other than the Warrant Shares) to the Investor.

       

      9.3
        Entire
        Agreement.
        The
        Transaction Documents, together with the Exhibits and Schedules thereto,
        contain
        the entire understanding of the parties with respect to the subject matter
        hereof and supersede all prior agreements and understandings, oral or written,
        with respect to such matters, which the parties acknowledge have been merged
        into such documents, exhibits and schedules. At or after the Closing, and
        without further consideration, the Company and the Investor will execute
        and
        deliver such further documents as may be reasonably requested in order to
        give
        effect to the intention of the parties under the Transaction
        Documents.

       

      9.4
        Notices.
        Any and
        all notices or other communications or deliveries required or permitted to
        be
        provided hereunder shall be in writing and shall be deemed given and effective
        on the earliest of (a) the date of transmission, if such notice or communication
        is delivered via facsimile at the facsimile number specified in this Section
        prior to 6:30 p.m. (New York City time) on a Business Day, (b) the next Business
        Day after the date of transmission, if such notice or communication is delivered
        via facsimile at the facsimile number specified in this Section on a day
        that is
        not a Business Day or later than 6:30 p.m. (New York City time) on any Business
        Day, (c) the Business Day following the date of deposit with a nationally
        recognized overnight courier service, or (d) upon actual receipt by the party
        to
        whom such notice is required to be given. The addresses and facsimile numbers
        for such notices and communications are those set forth on the signature
        pages
        hereof, or such other address or facsimile number as may be designated in
        writing hereafter, in the same manner, by any such Person.

       

      
        
          
          

        

        
          -25-

          
            

          

        

        
          
          

        

      

       

      9.5
        Amendments;
        Waivers.
        Any term
        of this Agreement may be amended and the observance of any term of this
        Agreement may be waived (either generally or in a particular instance and
        either
        retroactively or prospectively), with the written consent of the Company
        and the
        Investor(s) holding a majority in interest on an as converted basis of the
        Warrant Shares. Subject to the preceding sentence, any amendment or waiver
        effected in accordance with this Section shall be binding upon all parties
        to
        this Agreement, including, without limitation, any Investor who may not have
        executed such amendment or waiver.

       

      9.6
        Construction.
        The
        headings herein are for convenience only, do not constitute a part of this
        Agreement and shall not be deemed to limit or affect any of the provisions
        hereof. The language used in this Agreement will be deemed to be the language
        chosen by the parties to express their mutual intent, and no rules of strict
        construction will be applied against any party.

       

      9.7
        Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their successors and permitted assigns. The Company may not assign this
        Agreement or any rights or obligations hereunder without the prior written
        consent of the Investors. Any Investor may assign its rights under this
        Agreement to any Person to whom such Investor assigns or Transfers any
        Securities, provided such transferee agrees in writing to be bound, with
        respect
        to the Transferred Securities, by the provisions hereof that apply to the
        “Investors.”

       

      9.8
        Governing
        Law; Venue; Waiver of Jury Trial.
        ALL
        QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
        OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
        WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS
        5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL
        PRACTICE LAWS AND RULES 327(b). EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
        THE
        EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
        OF
        NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
        OR
        IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
        HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
        DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
        SUIT,
        ACTION OR PROCEEDING, ANY
        CLAIM
        THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT,
        THAT
        SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
        WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN
        ANY
        SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED
        OR
        CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH
        PARTY
        AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES
        THAT
        SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND
        NOTICE
        THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY
        RIGHT
        TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES
        ALL
        RIGHTS TO A TRIAL BY JURY.

       

      
        
          
          

        

        
          -26-

          
            

          

        

        
          
          

        

      

       

      9.9
        Survival.
        The
        representations and warranties, agreements and covenants contained herein
        shall
        survive the Closing.

       

      9.10
        Execution.
        This
        Agreement may be executed in two or more counterparts, all of which when
        taken
        together shall be considered one and the same agreement and shall become
        effective when counterparts have been signed by each party and delivered
        to the
        other party, it being understood that both parties need not sign the same
        counterpart. In the event that any signature is delivered by facsimile
        transmission, such signature shall create a valid and binding obligation
        of the
        party executing (or on whose behalf such signature is executed) with the
        same
        force and effect as if such facsimile signature page were an original
        thereof.

       

      9.11
        Severability.
        If any
        provision of this Agreement is held to be invalid or unenforceable in any
        respect, the validity and enforceability of the remaining terms and provisions
        of this Agreement shall not in any way be affected or impaired thereby and
        the
        parties will attempt to agree upon a valid and enforceable provision that
        is a
        reasonable substitute therefor, and upon so agreeing, shall incorporate such
        substitute provision in this Agreement.

       

      9.12
        Rescission
        and Withdrawal Right.
        Notwithstanding anything to the contrary contained in (and without limiting
        any
        similar provisions of) the Transaction Documents, whenever the Investor
        exercises a right, election, demand or option owed to the Investor by the
        Company under a Transaction Document and the Company does not timely perform
        its
        related obligations within the periods therein provided, then, prior to the
        performance by the Company of the Company’s related obligation, such Investor
        may rescind or withdraw, in its sole discretion from time to time upon written
        notice to the Company, any relevant notice, demand or election in whole or
        in
        part without prejudice to its future actions and rights.

       

      9.13
        Replacement
        of Securities.
        If any
        certificate or instrument evidencing any Securities is mutilated, lost, stolen
        or destroyed, the Company shall issue or cause to be issued in exchange and
        substitution for and upon cancellation thereof, or in lieu of and substitution
        therefor, a new certificate or instrument, but only upon receipt of evidence
        reasonably satisfactory to the Company of such loss, theft or destruction
        and
        the execution by the holder thereof of a customary lost certificate affidavit
        of
        that fact and an agreement to indemnify and hold harmless the Company for
        any
        losses in connection therewith. The applicants for a new certificate or
        instrument under such circumstances shall also pay any reasonable third-party
        costs associated with the issuance of such replacement Securities.

       

      9.14
        No
        Promotion.
        Except
        as otherwise required by law and as provided in Section 4.5 herein, the Company
        agrees that it will not, without the prior written consent of VAC in each
        instance, (i) use in advertising, publicity, press release or otherwise the
        name
        of any VAC Entity, or any partner or employee of any VAC Entity, nor any
        trade
        name, trademark, trade device, service mark, symbol or any abbreviation,
        contraction or simulation thereof owned by any VAC Entity or (ii) represent,
        directly or indirectly, that any product or any service provided by the Company
        has been approved or endorsed by any VAC Entity. This provision shall survive
        termination of the Transaction Documents.

       

      
        
          
          

        

        
          -27-

          
            

          

        

        
          
          

        

      

       

      [SIGNATURE
        PAGES TO FOLLOW]

       

      
        
          
          

        

        
          -28-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
        Agreement to be duly executed by their respective authorized signatories
        as of
        the date first indicated above.

       

      
        	 	 	
                TWISTBOX
                  ENTERTAINMENT, INC.

              
	 	 	
                By:

              	
                 

                /s/
                  Ian
                  Aaron

              
	 	 	
                Name: 

              	
                IAN
                  AARON

              
	 	 	
                Title:

              	
                PRES./CEO

              

      

      

       

      
        	 	 	
                WAAT
                  MEDIA CORP.

              
	 	 	
                By:

              	
                 

                
                  /s/
                    Ian
                    Aaron

                

              
	 	 	
                Name: 

              	
                IAN
                  AARON

              
	 	 	
                Title:

              	
                PRES./CEO

              

      

      

       

      
        	 	 	
                TWISTBOX
                  GAMES LTD. & CO. KG

              
	 	 	
                By:

              	
                 

                
                  /s/
                    Ian
                    Aaron

                

              
	 	 	
                Name: 

              	
                IAN
                  AARON

              
	 	 	
                Title:

              	
                PRES./CEO

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Investor
        Signature Page

       

      By
        its
        execution and delivery of this signature page, the undersigned Investor hereby
        joins in and agrees to be bound by the terms and conditions of the Securities
        Purchase Agreement dated as of July 30, 2007 (the “Purchase Agreement”) by and
        among Twistbox Entertainment, Inc., the Subsidiary Guarantors (as defined
        therein) and the Investor (as defined therein) and authorizes this signature
        page to be attached to the Purchase Agreement or counterparts
        thereof.

       

      
        	 	 	
                VALUEACT
                  SMALLCAP MASTER FUND, L.P.

              
	 	 	
                By
                  its General Partner, VA SmallCap Partners, LLC

              
	 	 	 
	 	 	
                By:

              	
                /s/
                  David Lockwood

              
	 	 	
                Name: 

              	
                DAVID
                  LOCKWOOD

              
	 	 	
                Title:

              	
                MANAGING
                  MEMBER

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