Document:

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                                                                   EXHIBIT 10.12

                     [Letterhead of Replay Networks, Inc.]

Mr. Layne Leslie Britton
3677 Boise Ave.
Los Angeles, CA 90066

                             Employment Agreement
                             --------------------

Dear Layne:

     On behalf of the Board of Directors of Replay Networks, Inc. ("Replay"), I
am pleased to offer you the position of Executive Vice President, Replay
Networks on the terms set forth below.

     1.   Position. You will be employed by Replay as its Executive Vice
          --------
President Replay Networks effective on June 1, 1999 (the "Commencement Date").
You will have sole overall responsibility for the management of all of Replay's
network service elements, including but not limited to, Replay's core service
business of media business development, editorial, programming, business
affairs, scheduling, affiliate relations and advertising sales, and you will
report directly and only to the Chief Executive Officer. During your term, you
will be present at all Board of Directors meetings. During your term, you will
be expected to devote your full working time and attention to the business of
Replay. Notwithstanding the foregoing, you may (i) serve on the board of
directors of DEN and on other boards of directors of organizations that are not
competitive with Replay, that do not materially interfere with your duties to
Replay and that are approved by Replay, (ii) serve as a consultant to UPN
through December 31, 1999, so long as such activity does not materially
interfere with your duties to Replay, or (iii) own up to 1% of the outstanding
equity securities of any corporation whose stock is listed on a national stock
exchange. You will also be expected to comply with and be bound by Replay's
operating policies, procedures and practices that are from time to time in
effect during the term of your employment.

     2.   Base Salary. Your initial base monthly salary will be $20,000, or
          -----------
a base annual salary of $240,000, payable in accordance with Replay's normal
payroll practices with such payroll deductions and withholdings as are required
by law. Your base salary will be reviewed on an annual basis by the Compensation
Committee of the Board of Directors and increased from time to time, in the
discretion of the Board of Directors, but in any event such compensation shall
not be reduced below $240,000.

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     3.  Bonus. You will be eligible to receive an annual bonus based on the
         -----
evaluation of your performance by the Board of Directors.

     4.  Equity Compensation.
         -------------------

         On the Commencement Date, the Compensation Committee of the Board of
Directors shall grant you an option to purchase 560,000 shares of Common Stock
at an exercise price equal to $1.25 per share, which options shall be "incentive
stock options" to the maximum extent permitted under the Internal Revenue Code
of 1986, as amended. These shares will vest ratably on a monthly basis over 48
months commencing with your first day of employment. The option will be
immediately exercisable, subject to repurchase of the unvested shares by Replay
on termination of employment at your original purchase price, which repurchase
option will lapse over the 48 month vesting schedule. You will be permitted to
pay for shares with a full recourse promissory note with interest accruing at
the minimum applicable federal rate and with principal and interest deferred for
five years and payable in a balloon payment on the fifth anniversary of the
grant, subject to acceleration 30 days following termination of employment. You
should consult a tax advisor concerning your income tax consequences before
exercising any of the options. Notwithstanding any other provision of this
Section 4 to the contrary, upon "Involuntary Termination," "Termination without
Cause," or "Termination for Death or Disability," unvested shares shall vest as
provided in Section 8 below, and grant of the option to you shall be subject to
your execution of an option agreement in the form approved by the Company.

     5.   Other Benefits. You will be entitled to the following additional
          --------------
benefits:

          (a) You will be eligible for the same vacation, health/dental, vision,
life insurance, 401 (k) and other benefits offered to any other Replay senior
executives of similar rank and status.

          (b) Replay will provide you with up to $50,000 reimbursement for your
expenses incurred in connection with your relocation to Northern California
prior to December 31, 1999.

     6.   At-Will Employment and Termination. Your employment with Replay will
          ----------------------------------
be at-will and may be terminated by you or by Replay at any time for any reason
as follows:

          (a) You may terminate your employment upon written notice to the Board
of Directors at any time for "Good Reason," as defined below (an "Involuntary
Termination");

          (b) You may terminate your employment upon written notice to the Board
of Directors at any time in your discretion without Good Reason ("Voluntary
Termination");

          (c) Replay at the direction of the Board of Directors may terminate
your employment upon written notice to you at any time for "Cause," as defined
below ("Termination for Cause");

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          (d) Replay at the direction of the Board of Directors may terminate
your employment upon written notice to you at any time without a determination
that there is Cause for such termination ("Termination without Cause");

          (e) Your employment will automatically terminate upon your death or
your disability as determined by the Board of Directors provided that
"disability" shall mean your complete inability to perform your job
responsibilities for a period of 180 consecutive days or 180 days in the
aggregate in any 12-month period ("Termination for Death or Disability").

     7.   Definitions. As used in this agreement, the following terms have the
          -----------
following meanings:

          (a) "Good Reason" means (i) a change in your reporting relationship
such that you no longer report only and directly to the Chief Executive Officer
of Replay or, following a Change in Control, the Chief Executive Officer of the
surviving entity or acquiror; (ii) your no longer being Executive Vice
President, Replay Network or, in the case of a Change in Control, an Executive
Vice President of the surviving entity or acquiror that results from any Change
in Control; (iii) a material reduction in your duties or responsibilities,
provided that your continuing as an Executive Vice President of the surviving
entity or acquiror following a Change of Control, shall not constitute a
material reduction in duties or responsibilities; (iv) any reduction in your
base annual salary or material breach by Replay of any of its obligations
hereunder that remains uncured for a period of 30 days following notice thereof;
(v) relocation of your principal office to a facility more than 50 miles from
Replay's current headquarters; or (vi) failure of any successor to assume this
agreement.

          (b) "Cause" means (i) willful misconduct in the performance of your
duties to Replay that has resulted or is likely to result in substantial and
material damage to Replay; (ii) commission of any act of fraud with respect to
Replay; (iii) conviction of a felony or a crime involving moral turpitude
causing material harm to the business and affairs of Replay; (iv) your willful
and repeated failure to follow the directions of the Chief Executive Officer of
Replay or, following a Change in Control, the Chief Executive Officer of the
surviving entity or acquiror; or (v) your material breach of this Agreement or
your Employee Confidentiality and Assignment of Inventions Agreement. No act or
failure to act by you shall be considered "willful" if done or omitted by you in
good faith with reasonable belief that your action or omission was in the best
interests of Replay.

          (c) "Change in Control" means (i) any person or entity becoming the
beneficial owner, directly or indirectly, of securities of Replay representing
fifty (50%) percent of the total voting power of all its then outstanding voting
securities, (ii) a merger or consolidation of Replay in which its voting
securities immediately prior to the merger or consolidation do not represent, or
are not converted into securities that represent, a majority of the voting power
of all voting securities of the surviving entity immediately after the merger or
consolidation, (iii) a sale of substantially all of the assets of Replay or a
liquidation or dissolution of Replay, or (iv) individuals who, as of the
Commencement Date, constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of such Board; provided

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that any individual who becomes a director of Replay subsequent to the
Commencement Date, whose election, or nomination for election by Replay
stockholders, was approved by the vote of at least a majority of the directors
then in office shall be deemed a member of the Incumbent Board.

     8.   Separation and Change in Control Benefits. Upon termination of your
          -----------------------------------------
employment with Replay for any reason, you will receive payment of all salary,
bonus and unpaid vacation accrued to the date of your termination of employment.
In addition, you will be entitled to receive the severance benefits as set forth
below.

          (a) In the event of your Voluntary Termination or Termination for
Cause, you will be entitled to any accrued but unpaid salary and bonus, but you
will not be entitled to any additional cash severance benefits or additional
vesting of shares.

          (b) In the event of your Involuntary Termination or Termination
without Cause, and, subject to your execution of a mutual release of claims
agreement ("Release Agreement") provided to you by the Company and your
resignation from all positions you hold with the Company, you will be entitled
to a lump sum severance payment equal to any accrued but unpaid salary and bonus
and an amount equal to six months of your then current annual base salary and
50% of your prior year's bonus payable within five days after the effective date
of your execution of the Release Agreement and nine (9) months of accelerated
vesting of your unvested shares; provided, however, that if such Involuntary
                         ---------------------------------------------------
Termination or Termination without Cause occurs within one year following a
---------------------------------------------------------------------------
Change in Control, the accelerated vesting shall be as set forth in Section 8(d)
--------------------------------------------------------------------------------
below. All payments hereunder shall be less applicable deductions and
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withholdings. Replay shall reimburse you for all COBRA premiums paid by you for
a period of six months.

          (c) In the event of your Termination for Death or Disability, the
vesting of your unvested shares of restricted stock and the vesting of your
shares shall be immediately accelerated by two years.

          (d) Notwithstanding anything in this agreement to the contrary, the
vesting of all your options or shares will be immediately accelerated upon your
Involuntary Termination or Termination without Cause within one year following a
Change in Control by the greater of twelve (12) months of vesting or fifty (50%)
percent of the shares that remain unvested at the time of such Change in
Control.

          (e) If, due to the benefits provided under this letter agreement, you
are subject to any excise tax due to characterization of any mount payable
hereunder as excess parachute payments pursuant to Sections 280G and 4999 of the
Internal Revenue Code, Replay will pay the excise taxes otherwise payable by you
under Section 4999 (but not any income or excise taxes on such payment of taxes
by Replay on your behalf) with respect to any amounts payable to you under this
Agreement, up to a maximum of $1,000,000. Notwithstanding the foregoing, you
           -----------------------------
will in good faith discuss with the Company whether it is appropriate to request
stockholders of the Company to approve payments to you upon a Change of Control
in order to

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minimize or eliminate any such excise taxes, provided that you shall not be
required to agree with the Company to request such stockholder approval.

          (f) No payments due you hereunder shall be subject to mitigation or
offset.

     9.   Confidential Information and Invention Assignment Agreement. Upon your
          -----------------------------------------------------------
commencement of employment with Replay, you will be required to sign its
standard form of Employee Confidentiality and Assignment of Inventions
Agreement.

     10.  Dispute Resolution. The parties agree that any dispute regarding the
          ------------------
interpretation or enforcement of this agreement shall be decided by
confidential, final and binding arbitration conducted by Judicial Arbitration
and Mediation Services ("JAMS") under the then existing JAMS roles rather than
by litigation in court, trial by jury, administrative proceeding or in any other
forum.

          If a legal action or other proceeding is brought for enforcement of
this agreement because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this agreement,
the successful or prevailing party shall be entitled to recover reasonable
attorney's fees and costs incurred, both before and after judgment, in addition
to any other relief to which they may be entitled.

     11.  Miscellaneous.
          --------------

          (a) Successors. This agreement is binding on and may be enforced by
              ----------
Replay and its successors and assigns and is binding on and may be enforced by
you and your heirs and legal representatives. Any successor to Replay or
substantially all of its business (whether by purchase, merger, consolidation or
otherwise) will in advance assume in writing and be bound by all of Replay's
obligations under this agreement.

          (b) Entire Agreement. This agreement represents the entire agreement
              ----------------
between us concerning the subject matter of your employment by Replay.

          (c) Governing Law. This agreement will be governed by the laws of the
              -------------
State of California without reference to conflict of laws provisions.

     Layne, we are very pleased to extend this offer of employment to you and
look forward to your joining Replay as its Executive Vice President, Replay
Networks. Please indicate your acceptance of the terms of this agreement by
signing in the place indicated below.

Very truly yours,                   Accepted July 29, 1999:

REPLAY NETWORKS, INC.

By:/s/ Anthony Wood                 /s/ Layne Leslie Britton
   ---------------------            -------------------------
   Anthony Wood                      Layne Leslie Britton

                                       5<PAGE>

                                                                   EXHIBIT 10.20

                          PACIFIC DIGITAL MEDIA, INC.

                        COMMON STOCK PURCHASE AGREEMENT
                        -------------------------------

     This Common Stock Purchase Agreement (the "Agreement") is made as of
                                                ---------
September 15, 1997 by and between Pacific Digital Media, Inc., a California
corporation (the "Company"), and Anthony J. Wood ("Purchaser").
                  -------                          ---------

     1.  Sale of Stock.  Subject to the terms and conditions of this Agreement,
         -------------
on the Purchase Date (as defined below) the Company will issue and sell to
Purchaser, and Purchaser agrees to purchase from the Company, 3,000,000 shares
of the Company's Common Stock (the "Shares") at a purchase price of $0.001 per
                                    ------
Share for a total purchase price of $3,000.00.  The term "Shares" refers to the
                                                          ------
purchased Shares and all securities received in replacement of or in connection
with the Shares pursuant to stock dividends or splits, all securities received
in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other
properties to which Purchaser is entitled by reason of Purchaser's ownership of
the Shares.

     2.  Purchase.  The purchase and sale of the Shares under this Agreement
         --------
shall occur at the principal office of the Company simultaneously with the
execution of this Agreement or at such other time and place as the Company and
Purchaser shall agree (the "Purchase Date").  On the Purchase Date, the Company
                            -------------
will deliver to Purchaser a certificate representing the Shares to be purchased
by Purchaser (which shall be issued in Purchaser's name) against payment of the
purchase price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser, or (c) by a
combination of the foregoing.

     3.  Limitations on Transfer.  In addition to any other limitation on
         -----------------------
transfer created by applicable securities laws, Purchaser shall not assign,
encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below), except as provided below.
After any Shares have been released from the Repurchase Option, Purchaser shall
not assign, encumber or dispose of any interest in such Shares except in
compliance with the provisions below and applicable securities laws.

          (a)  Repurchase Option.
               -----------------

          (i)  In the event of the voluntary or involuntary termination of
Purchaser's employment or consulting relationship with the Company for any
reason (including death or disability), with or without cause, the Company shall
upon the date of such termination (the "Termination Date") have an irrevocable,
                                        ----------------
exclusive option (the "Repurchase Option") for a period of sixty (60) days from
                       -----------------
such date to repurchase all or any portion of the Shares held by Purchaser as of
the Termination Date which have not yet been released from the Company's
Repurchase Option at the original purchase price per Share specified in Section
1 (adjusted for any stock splits, stock dividends and the like); provided,
                                                                 --------
however, that the Repurchase Option shall continue for a period of up to one
-------
year from the Termination Date to the extent that the Company reasonably
determines that such an extension of time is necessary to prevent the
<PAGE>

repurchase of Purchaser's Shares from causing other capital stock of the Company
to not qualify as "small business stock" under Section 1202 of the Internal
Revenue Code of 1986, as amended.

                (ii)  The Repurchase Option shall be exercised by the Company by
written notice to Purchaser or Purchaser's executor and, at the Company's
option, (A) by delivery to Purchaser or Purchaser's executor with such notice of
a check in the amount of the purchase price for the Shares being purchased, or
(B) in the event Purchaser is indebted to the Company, by cancellation by the
Company of an amount of such indebtedness equal to the purchase price for the
Shares being repurchased, or (C) by a combination of (A) and (B) so that the
combined payment and cancellation of indebtedness equals such purchase price.
Upon delivery of such notice and payment of the purchase price in any of the
ways described above, the Company shall become the legal and beneficial owner of
the Shares being repurchased and all rights and interest therein or related
thereto, and the Company shall have the right to transfer to its own name the
number of Shares being repurchased by the Company, without further action by
Purchaser.

                (iii) One hundred percent (100%) of the Shares shall initially
be subject to the Repurchase Option. 1/36th of the Shares shall be released from
the Repurchase Option at the end of each month following the Vesting
Commencement Date (as set forth on the signature page of this Agreement), until
all Shares are released from the Repurchase Option (provided in each case that
Purchaser's employment or consulting relationship with the Company has not been
terminated prior to the date of any such release).  Fractional shares shall be
rounded to the nearest whole share.

          (b)   Right of First Refusal.  Before any Shares held by Purchaser or
                ----------------------
any transferee of Purchaser (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
 ------
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(b) (the "Right of First Refusal").
                   ----------------------

                (i)   Notice of Proposed Transfer. The Holder of the Shares
                      ---------------------------
shall deliver to the Company a written notice (the "Notice") stating: (A) the
                                                    ------
Holder's bona fide intention to sell or otherwise transfer such Shares; (B) the
name of each proposed purchaser or other transferee ("Proposed Transferee"); (C)
                                                      -------------------
the number of Shares to be transferred to each Proposed Transferee; and (D) the
terms and conditions of each proposed sale or transfer.  The Holder shall offer
the Shares at the same price (the "Offered Price") and upon the same terms (or
                                   -------------
terms as similar as reasonably possible) to the Company or its assignee(s).

                (ii)  Exercise of Right of First Refusal. At any time within
                      ----------------------------------
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

                (iii) Purchase Price. The purchase price ("Purchase Price") for
                      --------------                       --------------
the Shares purchased by the Company or its assignee(s) under this Section 3(b)
shall be the Offered

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<PAGE>

Price. If the Offered Price includes consideration other than cash, the cash
equivalent value of the non-cash consideration shall be determined by the Board
of Directors of the Company in good faith.

                (iv) Payment.  Payment of the Purchase Price shall be made, at
                     -------
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within thirty (30) days after receipt of the
Notice or in the manner and at the times set forth in the Notice.

               (v)  Holder's Right to Transfer.  If all of the Shares proposed
                    --------------------------
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section 3(b), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within sixty (60) days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section 3 shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more
favorable to the Proposed Transferee, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right
of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

               (vi) Exception for Certain Family Transfers.  Anything to the
                    --------------------------------------
contrary contained in this Section 3(b) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of
Purchaser's Immediate Family shall be exempt from the provisions of this Section
3(b). "Immediate Family" as used herein shall mean spouse, lineal descendant or
       ----------------
antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section 3, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section 3.

          (c)  Involuntary Transfer.
               --------------------

               (i)  Company's Right to Purchase upon Involuntary Transfer.  In
                    -----------------------------------------------------
the event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(b)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the fair
market value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such

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<PAGE>

Shares shall be provided to the Company for a period of thirty (30) days
following receipt by the Company of written notice by the person acquiring the
Shares.

               (ii) Price for Involuntary Transfer.  With respect to any stock
                    ------------------------------
to be transferred pursuant to Section 3(c)(i), the price per Share shall be a
price set by the Board of Directors of the Company that will reflect the current
value of the stock in terms of present earnings and future prospects of the
Company. The Company shall notify Purchaser or his or her executor of the price
so determined within thirty (30) days after receipt by it of written notice of
the transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.

           (d) Assignment.  The right of the Company to purchase any part of the
               ----------
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations; provided, however, that an
assignee, other than a corporation that is the parent or a 100% owned subsidiary
of the Company, must pay the Company, upon assignment of such right, cash equal
to the difference between the original purchase price and fair market value, if
the original purchase price is less than the fair market value of the Shares
subject to the assignment.

           (e) Restrictions Binding on Transferees.  All transferees of Shares
               -----------------------------------
or any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Repurchase Option. Any sale or transfer of the Company's Shares shall be void
unless the provisions of this Agreement are met.

           (f) Termination of Rights.  The right of first refusal granted the
               ---------------------
Company by Section 3(b) above and the option to repurchase the Shares in the
event of an involuntary transfer granted the Company by Section 3(c) above shall
terminate upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act").  Upon termination of the right of first refusal
              --------------
described in Section 3(b) and the expiration or exercise of the Repurchase
Option, a new certificate or certificates representing the Shares not
repurchased shall be issued, on request, without the legend referred to in
Section 6(a)(ii) below and delivered to Purchaser.

       4.  Escrow of Unvested Shares.  For purposes of facilitating the
           -------------------------
enforcement of the provisions of Section 3 above, Purchaser agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the Repurchase
Option, to deliver such certificate(s), together with an Assignment Separate
from Certificate in the form attached to this Agreement as Exhibit A executed by
                                                           ---------
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement.  Purchaser

                                                                             -4-
<PAGE>

hereby acknowledges that the Secretary of the Company, or the Secretary's
designee, is so appointed as the escrow holder with the foregoing authorities as
a material inducement to make this Agreement and that said appointment is
coupled with an interest and is accordingly irrevocable. Purchaser agrees that
said escrow holder shall not be liable to any party hereof (or to any other
party). The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
Purchaser agrees that if the Secretary of the Company, or the Secretary's
designee, resigns as escrow holder for any or no reason, the Board of Directors
of the Company shall have the power to appoint a successor to serve as escrow
holder pursuant to the terms of this Agreement.

       5.  Investment and Taxation Representations.  In connection with the
           ---------------------------------------
purchase of the Shares, Purchaser represents to the Company the following:

           (a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for his or her own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.

           (b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

           (c) Purchaser understands that the Shares are "restricted securities"
under applicable U.S. federal and state securities laws and that, pursuant to
these laws, Purchaser must hold the Shares indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available.  Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale.  Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares and
requirements relating to the Company which are outside of the Purchaser's
control, and which the Company is under no obligation and may not be able to
satisfy.

           (d) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection the purchase or disposition of the Shares and that
Purchaser is not relying on the Company for any tax advice.

       6.  Restrictive Legends and Stop-Transfer Orders.
           --------------------------------------------

           (a) Legends.  The certificate or certificates representing the Shares
               -------
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):

                                                                             -5-
<PAGE>

               (i)   THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                     REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
                     ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
                     CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
                     SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
                     REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
                     COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
                     REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
                     1933.

               (ii)  THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
                     TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
                     AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY
                     OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

               (iii) Any legend required to be placed thereon by the California
                     Commissioner of Corporations.

           (b) Stop-Transfer Notices.  Purchaser agrees that, in order to ensure
               ---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

           (c) Refusal to Transfer.  The Company shall not be required (i) to
               -------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

       7.  No Employment Rights.  Nothing in this Agreement shall affect in any
           --------------------
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment, for any reason, with or
without cause.

       8.  Section 83(b) Election.  Purchaser understands that Section 83(a) of
           ----------------------
the Internal Revenue Code of 1986, as amended (the "Code"), taxes as ordinary
                                                    ----
income the difference between the amount paid for the Shares and the fair market
value of the Shares as of the date any restrictions on the Shares lapse.  In
this context, "restriction" means the right of the Company to buy back the
               -----------
Shares pursuant to the Repurchase Option set forth in Section 3(a) of this
Agreement.  Purchaser understands that Purchaser may elect to be taxed at the
time the Shares are purchased, rather than when and as the Repurchase Option
expires, by filing an election under Section 83(b) (an "83(b) Election") of the
                                                        --------------
Code with the Internal Revenue Service within

                                                                             -6-
<PAGE>

thirty (30) days from the date of purchase. Even if the fair market value of the
Shares at the time of the execution of this Agreement equals the amount paid for
the Shares, the election must be made to avoid income under Section 83(a) in the
future. Purchaser understands that failure to file such an election in a timely
manner may result in adverse tax consequences for Purchaser. Purchaser further
understands that an additional copy of such election form should be filed with
his or her federal income tax return for the calendar year in which the date of
this Agreement falls. Purchaser acknowledges that the foregoing is only a
summary of the effect of United States federal income taxation with respect to
purchase of the Shares hereunder, and does not purport to be complete. Purchaser
further acknowledges that the Company has directed Purchaser to seek independent
advice regarding the applicable provisions of the Code, the income tax laws of
any municipality, state or foreign country in which Purchaser may reside, and
the tax consequences of Purchaser's death.

          Purchaser agrees that he or she will execute and deliver to the
Company with this executed Agreement a copy of the Acknowledgment and Statement
of Decision Regarding Section 83(b) Election (the "Acknowledgment"), attached
                                                   --------------
hereto as Exhibit B.  Purchaser further agrees that Purchaser will execute and
          ---------
submit with the Acknowledgment a copy of the 83(b) Election, attached hereto as
Exhibit C, if Purchaser has indicated in the Acknowledgment his or her decision
---------
to make such an election.

      9.  Market Standoff Agreement.  In connection with the initial public
          -------------------------
offering of the Company's securities and upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities,
Purchaser agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Shares (other than those included
in the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the public
offering.

     10.  Miscellaneous.
          -------------

          (a) Governing Law.  This Agreement and all acts and transactions
              -------------
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

          (b) Entire Agreement; Enforcement of Rights.  This Agreement sets
              ---------------------------------------
forth the entire agreement and understanding of the parties relating to the
subject matter herein and merges all prior discussions between them.  No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the parties
to this Agreement.  The failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of any rights of such party.

          (c) Severability.  If one or more provisions of this Agreement are
              ------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith.

                                                                             -7-
<PAGE>

In the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded from
this Agreement, (ii) the balance of this Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of this Agreement shall be
enforceable in accordance with its terms.

          (d) Construction.  This Agreement is the result of negotiations
              ------------
between and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (e) Notices.  Any notice required or permitted by this Agreement shall
              -------
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.

          (f) Counterparts.  This Agreement may be executed in two or more
              ------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (g) Successors and Assigns.  The rights and benefits of this Agreement
              ----------------------
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns.  The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.

          (h) California Corporate Securities Law.  THE SALE OF THE SECURITIES
              -----------------------------------
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE.  THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

                            [Signature Page Follows]

                                                                             -8-
<PAGE>

     The parties have executed this Agreement as of the date first set forth
above.

                                   PACIFIC DIGITAL MEDIA, INC.

                                   By: /s/ Anthony Wood
                                       --------------------------------

                                   Title:  Chairman of Board
                                          -----------------------------

                                   Address:
                                   555 Clyde Avenue
                                   Mountain View, CA 94043

     PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
SECTION 3 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR
CONSULTANT AT THE WILL OF THE COMPANY.  PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON PURCHASER ANY RIGHT WITH
RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTING RELATIONSHIP WITH THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH PURCHASER'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING RELATIONSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.

                                   PURCHASER:

                                   ANTHONY J. WOOD

                                   /s/ Anthony Wood
                                   -------------------------------
                                   (Signature)

                                   Address:
                                   11 Somerset Place
                                   Palo Alto, CA  94301

Vesting Commencement
Date: August 1, 1997

I, Susan P. Wood, spouse of Anthony J. Wood, have read and hereby approve
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall be similarly bound by the Agreement. I
hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

                                   /s/ Susan P. Wood
                                   -------------------------------
                                   Spouse of Anthony J. Wood

                                                                             -9-
<PAGE>

                                   EXHIBIT A
                                   ---------

                     ASSIGNMENT SEPARATE FROM CERTIFICATE
                     ------------------------------------

     FOR VALUE RECEIVED and pursuant to that certain Common Stock Purchase
Agreement between the undersigned ("Purchaser") and Pacific Digital Media, Inc.
                                    ---------
(the "Company") dated _______________ (the "Agreement"), Purchaser hereby sells,
      -------                               ---------
assigns and transfers unto the Company _________________________________
(________) shares of the Common Stock of the Company standing in Purchaser's
name on the Company's books and represented by Certificate No. _____,  and does
hereby irrevocably constitute and appoint ______________________ to transfer
said stock on the books of the Company with full power of substitution in the
premises.  THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND
THE EXHIBITS THERETO.

Dated: ______________________

                                     Signature:

                                     /s/ Anthony J. Wood
                                     ------------------------------
                                     Anthony J. Wood

                                     /s/ Susan P. Wood
                                     ------------------------------
                                     Spouse of Anthony J. Wood (if applicable)

Instruction:  Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
repurchase option set forth in the Agreement without requiring additional
signatures on the part of Purchaser.
<PAGE>

                                   EXHIBIT B
                                   ---------

                   ACKNOWLEDGMENT AND STATEMENT OF DECISION
                   ----------------------------------------
                       REGARDING SECTION 83(b) ELECTION
                       --------------------------------

     The undersigned has entered into a stock purchase agreement with Pacific
Digital Media, Inc., a California corporation (the "Company"), pursuant to which
                                                    -------
the undersigned is purchasing 3,000,000 shares of Common Stock of the Company
(the "Shares").  In connection with the purchase of the Shares, the undersigned
      ------
hereby represents as follows:

     1.  The undersigned has carefully reviewed the stock purchase agreement
pursuant to which the undersigned is purchasing the Shares.

     2.  The undersigned either [check and complete as applicable]:

     (a)   X  has consulted, and has been fully advised by, the undersigned's
         ----
          own tax advisor, Laurie Crawford, whose business address is San Jose,
          California, regarding the federal, state and local tax consequences of
          purchasing the Shares, and particularly regarding the advisability of
          making elections pursuant to Section 83(b) of the Internal Revenue
          Code of 1986, as amended (the "Code") and pursuant to the
                                         ----
          corresponding provisions, if any, of applicable state law; or

     (b) ____ has knowingly chosen not to consult such a tax advisor.

     3.  The undersigned hereby states that the undersigned has decided [check
as applicable]:

     (a)   X  to make an election pursuant to Section 83(b) of the Code, and is
         ----
             submitting to the Company, together with the undersigned's executed
             Common Stock Purchase Agreement, an executed form entitled
             "Election Under Section 83(b) of the Internal Revenue Code of
             1986"; or

     (b) ____ not to make an election pursuant to Section 83(b) of the Code.
<PAGE>

     4.  Neither the Company nor any subsidiary or representative of the Company
has made any warranty or representation to the undersigned with respect to the
tax consequences of the undersigned's purchase of the Shares or of the making or
failure to make an election pursuant to Section 83(b) of the Code or the
corresponding provisions, if any, of applicable state law.

Date:    9/26/97                                  /s/ Anthony J. Wood
      -----------------------                     ---------------------------
                                                  Anthony J. Wood

Date:    9/26/97                                  /s/ Susan P. Wood
      -----------------------                     ---------------------------
                                                  Spouse of Anthony J. Wood

                                                                             -2-
<PAGE>

                                   EXHIBIT C
                                   ---------

                         ELECTION UNDER SECTION 83(b)
                         ----------------------------
                     OF THE INTERNAL REVENUE CODE OF 1986
                     ------------------------------------

     The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in taxpayer's gross income for the current
taxable year, the amount of any compensation taxable to taxpayer in connection
with taxpayer's receipt of the property described below:

1.   The name, address, taxpayer identification number and taxable year of the
     undersigned are as follows:

     NAME OF TAXPAYER:  Anthony J. Wood

     NAME OF SPOUSE:  Susan D. Wood

     ADDRESS:  (omitted)

     IDENTIFICATION NO. OF TAXPAYER:  (omitted)

     IDENTIFICATION NO. OF SPOUSE:  (omitted)

     TAXABLE YEAR:  1997

2.   The property with respect to which the election is made is described as
     follows:

     3,000,000 shares of the Common Stock, $0.001 par value, of Pacific Digital
     Media, Inc., a California corporation (the "Company").

3.   The date on which the property was transferred is:  9/15/97

4.   The property is subject to the following restrictions:

     Repurchase option at cost in favor of the Company upon termination of
     taxpayer's employment or consulting relationship.

5.   The fair market value at the time of transfer, determined without regard to
     any restriction other than a restriction which by its terms will never
     lapse, of such property is:  $3,000.

6.   The amount (if any) paid for such property:  $3,000

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property.  The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
--------------------------------------------------------------------------
except with the consent of the Commissioner.
-------------------------------------------

Dated:   9/26/97                             /s/ Anthony J. Wood
       ----------------------                -----------------------------
                                             Taxpayer

Dated:   9/26/97                             /s/ Susan P. Wood
       ----------------------                -----------------------------
                                             Spouse of Taxpayer
<PAGE>

                                    RECEIPT
                                    -------

     Pacific Digital Media, Inc. hereby acknowledges receipt of a check in the
amount of $3,000 given by Anthony J. Wood as consideration for Certificate No.
____ for 3,000,000 shares of Common Stock of Pacific Digital Media, Inc.

Dated:      9/26/97
        ----------------

                                        PACIFIC DIGITAL MEDIA, INC.

                                        By: /s/ Edward M. Kessler
                                            ----------------------------

                                        Title:   President
                                               -------------------------
<PAGE>

                              RECEIPT AND CONSENT
                              -------------------

     The undersigned hereby acknowledges receipt of a photocopy of Certificate
No. _____ for 3,000,000 shares of Common Stock of Pacific Digital Media, Inc.
(the "Company").
      -------

     The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as escrow holder pursuant to the Common Stock
Purchase Agreement Purchaser has previously entered into with the Company.  As
escrow holder, the Secretary of the Company, or his or her designee, holds the
original of the aforementioned certificate issued in the undersigned's name.

Dated:  _________________________

                                          ______________________________
                                          Anthony J. Wood

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