Document:

ex10_2.htm

Exhibit 10.2

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of the 27th day of September, 2010, by and among ALLOY STEEL INTERNATIONAL, INC., a Delaware corporation (the “Company”), and BARRY WOODHOUSE (an “Indemnitee”).  Certain capitalized terms used in this Agreement have the meanings set forth in Section 10 hereof.

RECITALS

A.           The Company and Indemnitee recognize the continued difficulty in obtaining liability insurance for the Company’s directors, officers, employees, Stockholders, controlling persons, agents and fiduciaries, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance.

B.            The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons, Stockholders, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited.

C.            Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee and other directors, officers, employees, Stockholders, controlling persons, agents and fiduciaries of the Company may not be willing to serve in such capacities without additional protection.

D.            The Company (i) desires to attract and retain the involvement of highly qualified individuals and entities, such as Indemnitee, to serve the Company and (ii) wishes to provide for the indemnification and advancing of expenses to Indemnitee to the maximum extent permitted by law.

E.             In view of the considerations set forth above, the Company desires that Indemnitee be indemnified by the Company as set forth herein.

NOW THEREFORE, the Company and Indemnitee hereby agree as follows:

AGREEMENT

1.             D&O INSURANCE.  The Company shall use its commercially reasonable efforts to purchase and maintain a policy or policies of insurance with reputable insurance companies with A.M. Best ratings of “A” or better, providing Indemnitee with coverage for any liability asserted against, or incurred by, Indemnitee or on Indemnitee’s behalf by reason of the fact that Indemnitee is or was or has agreed to serve as a director, officer, employee or agent of the Company, or while serving as a director or officer of the Company, is or was serving or has agreed to serve on behalf of or at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or arising out of Indemnitee’s status as such, whether or not the Company would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. Such insurance policies, to the extent available, shall have coverage terms and policy limits at least as favorable to Indemnitee as the insurance coverage provided to any other director or officer of the Company. If the Company has such insurance in effect at the time the Company receives from Indemnitee any notice of the commencement of an action, suit or proceeding, the Company shall give prompt notice of the commencement of such action, suit or proceeding to the insurers in accordance with the procedures set forth in the policy. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.

  

 

  

2.             INDEMNIFICATION.

(a)           Indemnification of Expenses.  The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law if such Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that such Indemnitee believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (a “Claim”) by reason of (or arising in part out of) any event or occurrence related to the fact that Indemnitee is or was or may be deemed a director, officer, Stockholder, employee, controlling person, agent or fiduciary of the Company, or any subsidiary of the Company, or is or was or may be deemed to be serving at the request of the Company as a director, officer, Stockholder, employee, controlling person, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of such Indemnitee while serving in such capacity (including, without limitation, any and all Claims under the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or other federal or state statutory law or regulation, at common law or otherwise, which relate directly or indirectly to the registration, purchase, sale or ownership of any securities of the Company, or to the merger or sale of assets or Change of Control transaction of the Company, irrespective of the form of such transaction or transactions, or to any fiduciary obligation owed with respect thereto and any Claim made (i) by any Stockholder of the Company against an Indemnitee and arising out of or related to any round of financing of the Company (including but not limited to Claims regarding participation, non-participation, or non-pro rata participation, in such round by such Stockholder or by Indemnitee or any affiliated or related entity), (ii) by a third party against an Indemnitee based on any alleged misstatement or omission of a material fact by the Company in violation of any duty of disclosure imposed on the Company by Federal or state securities or common laws or agreement of the Company or the Indemnitee, or (iii) made by a third party against an Indemnitee based (in whole or in part) on, or arising in any way out of, or relating to (a) the Indemnitee being an investor in the Company, (b) the Indemnitee’s alleged participation in the management or direction of the Company or (c) the Indemnitee’s alleged participation in providing any assistance or advice to the Company (individually an “Indemnification Event” and collectively the “Indemnification Events”)) against any and all losses, damages, expenses and liabilities, joint or several (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including an appeal), or preparing to defend, be a witness in or participate in, any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if, and only if, such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of any such Claim and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (collectively, hereinafter “Expenses”), including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses.  Such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than ten (10) days after written demand by the Indemnitee therefor is presented to the Company.

  

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(b)           Partial Indemnity, Etc.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the amounts indemnifiable hereunder in respect of a claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

(c)           Contribution.  If the indemnification provided for in Section 2(a) above for any reason is held by a court of competent jurisdiction by final unappealable order to be unavailable to an Indemnitee in respect of any losses, claims, damages, expenses or liabilities referred to therein, then the Company, in lieu of indemnifying such Indemnitee hereunder, shall contribute to the amount paid or payable by such Indemnitee as a result of such losses, claims, damages, expenses or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Indemnitee in connection with the action or inaction which resulted in such losses, claims, damages, expenses or liabilities, as well as any other relevant equitable considerations.  In connection with the registration of the Company’s securities, the relative benefits received by the Company and the Indemnitee shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company and the Indemnitee, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the securities so offered.  The relative fault of the Company and the Indemnitee shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 2(c) were determined by pro rata or per capita allocation or by any other method of allocation which does not take account of the equitable considerations referred to above.  In connection with the registration of the Company’s securities, in no event shall Indemnitee be required to contribute any amount under this Section 2(c) in excess of the lesser of (i) that proportion of the total of such losses, claims, damages or liabilities for which contribution is being sought equal to the proportion of the total securities sold under such registration statement which is being sold or were sold by such Indemnitee or (ii) the net proceeds received by such Indemnitee from its sale of securities under such registration statement.  No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.

  

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(d)           Survival Regardless of Investigation.  The indemnification and contribution provided for in this Section 2 will remain in full force and effect regardless of any investigation made by or on behalf of the Indemnitee or any officer, director, general partner, limited partner, member, managing member, employee, agent or controlling person of the Indemnitee.

(e)           Change in Control.  The Company agrees that any Change in Control of the Company shall not change or affect the rights of Indemnitee to payments of Expenses under this Agreement or any other agreement or under the Company’s Certificate of Incorporation or Bylaws as now or hereafter in effect.

(f)           Mandatory Payment of Expenses.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in the defense of any action, suit, proceeding, inquiry or investigation referred to in Section 2(a) hereof or in the defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred by such Indemnitee in connection herewith.

3.             EXPENSES; INDEMNIFICATION PROCEDURE.

(a)           Advancement of Expenses.  If so requested by Indemnitee, the Company within five days of such request shall advance, or cause to be advanced, any and all reasonable expenses incurred by Indemnitee (an “Expense Advance”).  The Company shall, in accordance with such request (but without duplication), either (i) pay, or cause to be paid, such expenses on behalf of Indemnitee, or (ii) reimburse, or cause the reimbursement of, Indemnitee for such expenses.  Indemnitee’s right to an Expense Advance is absolute and shall not be subject to any condition that the Board of Directors shall not have determined that Indemnitee is not entitled to be indemnified under applicable law.  However, the obligation of the Company to make an Expense Advance pursuant to this Section 3(a) shall be subject to the condition that, if, when and to the extent that a final judicial determination is made (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee is not entitled to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid (it being understood and agreed that the foregoing agreement by Indemnitee shall be deemed to satisfy any requirement that Indemnitee provide the Company with an undertaking to repay any Expense Advance if it is ultimately determined that Indemnitee is not entitled to indemnification under applicable law). Indemnitee’s undertaking to repay such Expense Advances shall be unsecured and interest-free.

(b)           Notice/Cooperation by Indemnitee.  Indemnitee shall give the Company notice as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement.  Notice to the Company shall be directed to the President or Chairman of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee).

  

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(c)           No Presumptions; Burden of Proof.  In connection with any determination by the Board of Directors, any court or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the Board of Directors or court shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the burden of proof shall be on the Company or its representative to establish, by clear and convincing evidence, that Indemnitee is not so entitled.  For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined-mat indemnification is not permitted by applicable law.

(d)           Selection of Counsel.  In the event the Company shall be obligated hereunder to pay the Expenses of any Claim, the Company shall be entitled to assume the defense of such Claim, with counsel reasonably satisfactory to the applicable Indemnitee, upon the delivery to such Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to such Indemnitee under this Agreement for any fees of counsel subsequently incurred by such Indemnitee with respect to the same Claim; provided that, (i) the Indemnitee shall have the right to employ Indemnitee’s own counsel in any such Claim at the Indemnitee’s expense; (ii) the Indemnitee shall have the right to employ Indemnitee’s own counsel in connection with any such proceeding, at the expense of the Company, if such counsel serves in a review, observer, advising and/or counseling capacity and does not otherwise materially control or participate in the defense of such proceeding; and (iii) if either (A) the employment of counsel by the Indemnitee has been previously authorized by the Company, (B) such Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and such Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of the Indemnitee’s counsel shall be at the expense of the Company.

4.             ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.

(a)           Scope.  The Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, even if such indemnification is not specifically authorized by the other provisions of this Agreement or any other agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or by statute.  In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its Board of Directors or an officer, Stockholder, employee, controlling person, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change.  In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its Board of Directors or an officer, Stockholder, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 8(a) hereof.  The Company and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying its directors, officers, Stockholders, employees, controlling persons, agents or fiduciaries under this Agreement or otherwise.

  

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(b)           Nonexclusivity.  The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of Stockholders or disinterested directors, the laws of the State of Delaware, any insurance policy or otherwise.  The indemnification provided under this Agreement shall continue as to Indemnitee for any action such Indemnitee took or did not take while serving in an indemnified capacity even though the Indemnitee may have ceased to serve in such capacity and such indemnification shall inure to the benefit of Indemnitee from and after Indemnitee’s first day of service as a director, officer, employee, Stockholder, controlling person, agent or fiduciary with the Company or affiliation with such director, officer, employee, Stockholder, controlling person, agent or fiduciary.

5.            NO DUPLICATION OF PAYMENTS.  The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against any Indemnitee to the extent such Indemnitee has otherwise actually received payment (under any insurance policy, the Company’s Certificate of Incorporation, its Bylaws or otherwise) of the amounts otherwise indemnifiable hereunder.

6.            PARTIAL INDEMNIFICATION.  If any Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for any portion of Expenses incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which such Indemnitee is entitled.

7.            LIABILITY INSURANCE.  To the extent the Company maintains liability insurance applicable to directors, officers, Stockholders, employees, control persons, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if such Indemnitee is a director, or of the Company’s officers, if such Indemnitee is not a director of the Company but is an officer, or of the Company’s key employees, controlling persons, agents or fiduciaries, if such Indemnitee is not an officer or director but is a key employee, agent, control person, or fiduciary.

8.             EXCEPTIONS.  Notwithstanding any other provision herein to the contrary, the Company shall not be obligated pursuant to the terms of this Agreement:

(a)           Claims Initiated by Indemnitee.  To indemnify or advance expenses to any Indemnitee with respect to Claims initiated or brought voluntarily by such Indemnitee and not by way of defense, except (i) with respect to actions or proceedings to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnification Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under Delaware statute or law, regardless of whether such Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be; or

  

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(b)           Claims Under Section 16(b).  To indemnify any Indemnitee for expenses and the payment of profits arising from the purchase and sale by such Indemnitee of securities in violation of Section 16(b) of the Exchange Act or any similar successor statute; or

(c)           Unlawful Indemnification.  To indemnify an Indemnitee if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.

9.            PERIOD OF LIMITATIONS.  No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against any Indemnitee, any Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of five (5) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such five (5) year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

10.          CONSTRUCTION OF CERTAIN PHRASES.  For purposes of this Agreement:

(a)           references to the “Company” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, Stockholders, employees, agents or fiduciaries, so that if Indemnitee is or was or may be deemed a director, officer, Stockholder, employee, agent, control person, or fiduciary of such constituent corporation, or is or was or may be deemed to be serving at the request of such constituent corporation as a director, officer, Stockholder, employee, control person, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued;

(b)           references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on any Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, Stockholder, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, Stockholder, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if any Indemnitee acted in good faith and in a manner such Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, such Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement;

(c)           a “Change in Control” shall be deemed to have occurred if (i) any person (as such term is used in Section 13(d)(3) and 14(d)(2) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the Stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, (A) who is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding Voting Securities, increases his, her or its beneficial ownership of such securities by five percent (5%) or more over the percentage so owned by such person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than thirty percent (30%) of the total voting power represented by the Company’s then outstanding Voting Securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s Stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the Stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least a majority of the total voting power represented by the Voting Securities of the Company or such surviving entity (or the parent of such surviving entity) outstanding immediately after such merger or consolidation, or the Stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Company’s assets;

  

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(d)           “Voting Securities” shall mean any securities of the Company that vote generally in the election of directors;

(e)           “Stockholder” shall include any holder of any capital stock of the Company and any affiliate thereof; and

(f)            “affiliate” shall include any limited partner, general partner, or any member or managing member of such general partner.

11.          COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each of which shall constitute an original.  Facsimile signatures shall be as effective as original signatures.

12.          BINDING EFFECT; SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), spouses, heirs, and personal and legal representatives.  The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  This Agreement shall continue in effect with respect to Claims relating to Indemnification Events regardless of whether any Indemnitee continues to serve as a director, officer, employee, agent, controlling person, or fiduciary of the Company or of any other enterprise, including subsidiaries of the Company, at the Company’s request.

  

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13.          ATTORNEYS’ FEES.  In the event that any action is instituted by an Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, such Indemnitee shall be entitled to be paid all Expenses incurred by such Indemnitee with respect to such action, regardless of whether such Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of Expenses with respect to such action in accordance with Section 3(a), unless, as a part of such action, a court of competent jurisdiction over such action determines that each of the material assertions made by such Indemnitee as a basis for such action was not made in good faith or was frivolous.  In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, the Indemnitee shall be entitled to be paid all Expenses incurred by such Indemnitee in defense of such action (including costs and expenses incurred with respect to Indemnitee counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action in accordance with Section 3(a), unless, as part of such action, a court of competent jurisdiction over such action determines that each of the material defenses to such action was not made in good faith or was frivolous.

14.          NOTICES.  All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one day after the business day of delivery by facsimile transmission, if deliverable by facsimile transmission, with copy by first class mail, postage prepaid, and shall be addressed, if to Indemnitee, at Indemnitee’s address as set forth beneath the Indemnitee’s signature to this Agreement, and, if to the Company, at the address of its principal corporate offices (attention: Chairman), or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.

15.          SEVERABILITY.  The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.  Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the extent manifested by the provision held invalid, illegal or unenforceable.

16.          CHOICE OF LAW.  This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware, as applied to contracts between Delaware residents, entered into and to be performed entirely within the State of Delaware, without regard to the conflict of laws principles thereof.

  

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17.          SUBROGATION.  In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

18.          AMENDMENT AND TERMINATION; ENTIRE AGREEMENT.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by the parties to be bound thereby.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.  This Agreement contains the entire agreement between the parties and supersedes any prior understandings or agreement, whether oral or written, concerning the subject matter hereof.

19.          NO CONSTRUCTION AS EMPLOYMENT AGREEMENT.  Nothing contained in this Agreement shall be construed as giving any Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries.

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

	  	
COMPANY:

	  	  	  	  
	  	
Alloy Steel International, Inc.,

a Delaware corporation

	  	  	  	  
	  	  	  	  
	  	
By:

	
/s/  Gene Kostecki

	  	  	
Name:

	
Gene Kostecki

	  	  	
Title:

	
Chief Executive Officer

	  	  	  	  
	  	  	  	  
	  	
INDEMNITEE:

	  	  	  	  
	  	  	  	  
	  	
/s/ Barry Woodhouse

	  	
Barry Woodhouse

	  	  	  	  
	  	  	  	  
	  	
Address:

	  	  	  	  
	 	 	 	 
	  	  
	  	  
	  	  
	  	 

[Signature Page to Indemnification Agreement]SETTLEMENT
AGREEMENT

     

    This
Settlement Agreement and mutual release (the “Settlement Agreement”
or “Agreement”), dated as
of September 21, 2010, is by and between (i) Plaintiff and Counterclaim
Defendant DG FastChannel, Inc., a Delaware corporation (“DGFC”) and (ii)
Defendant and Counterclaimant Point.360, a California corporation (“Point.360”).  DGFC
and Point.360 are referred to herein as the “Parties,” or individually as a
“Party.”

     

    RECITALS

     

    A.          On
October 6, 2009, DGFC filed a Complaint in the United States District Court for
the Central District of California, in a matter entitled DG FastChannel, Inc. v.
Point.360, Inc. et al. (Case No. CV 09-7289 CAS (FFMx)) (the “Action”).  The
Action arose from the implementation of various agreements in conjunction with
DGFC’s acquisition of Point.360’s advertising distribution services business
(the “ADS
Business”) on August 13, 2007.  Such agreements included the
Merger Agreement, Noncompetition Agreement, Post Production Services (“PPS”) Agreement,
Working Capital Reconciliation (“WCR”) Agreement, and
Indemnification and Tax Agreement (the “Tax Agreement”)
(collectively, the “Merger-Related
Agreements”).  In its Complaint, DGFC brought claims against
Point.360 for breach of contract, conversion, declaratory relief, and injunctive
relief.  In its Counterclaim, Point.360 brought claims against DGFC
for breach of contract, breach of the implied covenant of good faith and fair
dealing, fraud, and declaratory relief.

     

    B.           Each
of the Parties denies any wrongdoing, and disclaims any and all
liability.

     

    C.           The
Parties agreed to the general terms of settlement of the Action on June 22,
2010, as reflected in e-mail correspondence.

     

    D.           The
Parties now desire to memorialize in this Agreement their settlement of any and
all controversies that have or could have arisen between them in connection with
the Action and the events giving rise to the Action.  This Agreement
expressly supersedes any and all prior correspondence (oral and written)
concerning settlement of the Action.

     

    NOW
THEREFORE, in consideration of the promises, covenants, representations, and
releases contained herein, and for other good and valuable consideration, the
sufficiency and adequacy of which are hereby acknowledged, the Parties hereto
agree as follows:

     

    DEFINITIONS

     

    A           The
term “DGFC” shall refer to DG FastChannel, Inc. and any parent, subsidiary,
division, and/or affiliated entity, past or present, of DG FastChannel,
Inc.

     

    B       
    The term “Point.360” shall refer to Point.360 and any
parent, subsidiary, division, and/or affiliated entity, past or present, of
Point.360.

     

    C.           The
term “Claims” shall be defined as all rights, action or actions, cause or causes
of action, in law or in equity, suits, debts, liens, contracts, promises,
liabilities, obligations, injury to person or property, claims, predicate acts,
demands, damages, losses, costs or expenses, of any nature whatsoever, known or
unknown, fixed or contingent, that arise out of or are related to the
Action.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    D.           The
term “Effective Date” shall be defined as the date of the final
Party’s  execution of this Agreement.

     

    SETTLEMENT AGREEMENT AND
MUTUAL RELEASES

     

    1.           Compromise Only. This
Agreement is entered into for purposes of settlement and compromise only. The
relief provided for in this Agreement is in consideration for the releases and
other covenants contained in this Agreement. This Agreement constitutes a
compromise of disputed claims and is made solely to avoid expensive and
time-consuming litigation, and neither this Agreement nor any consideration
given hereunder, concurrently herewith, or pursuant hereto is to be advocated or
construed as an admission of any liability, express or implied, on the part of
any of the Parties, and each Party specifically disclaims any liability to, or
wrongful acts against, any other Party.

     

    2.           Dismissal of Action /
Court’s Continuing Jurisdiction to Enforce Settlement Agreement and
Injunction.

     

    a.           In
consideration for the payment (through stock transfer), mutual releases and
other covenants contained in this Agreement, the Parties shall dismiss all
claims in this Action with prejudice and shall request that the Court maintain
continuing jurisdiction as set forth below.  The Parties agree to
cooperate and provide best efforts to cause such dismissals and the remaining
terms of this Agreement to be effected as stated herein, including but not
limited to obtaining any required Court approval.  In the event the
Court for any reason declines to approve this Agreement in its present form, the
parties shall be bound to accept such changes to the Settlement Agreement as the
Court may require in order to approve it, provided, however, that a party may
reject such changes only if it can demonstrate in good faith that such changes
will deprive that party of an essential and material benefit conferred upon it
by the Settlement Agreement.

     

    b.           The
Parties agree that the Court shall maintain continuing jurisdiction over the
Parties, the Settlement Agreement (including the Vaulted Content Removal
Agreement incorporated herein), the Permanent ADS Business Injunction, and the
obligations imposed therein (collectively the “Settlement
Terms”).  In conjunction with requesting dismissal of the
Action, the Parties shall request that the Court maintain such continuing
jurisdiction.

     

    c.           The
Parties shall sign, and DGFC shall file, the Stipulation re Dismissal of Action,
and Proposed Order, within two (2) business days of the transfer of the
Point.360 Shares to DGFC as set forth below.  The Stipulation re
Dismissal of Action (without exhibits), and Proposed Order, are attached hereto
as Exhibits 1 and 2.

     

    d.           Other
than as set forth herein, each Party shall bear its own costs, expenses, and
attorneys’ fees in connection with the Action, its dismissal, and in connection
with the drafting and execution of this Agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    3.           Permanent ADS Business
Injunction.  The Preliminary Injunction re ADS Business
Participation, dated December 23, 2009 (the “Preliminary ADS Business
Injunction”), shall become a permanent injunction in the form as attached
as Exhibit 3 hereto and fully incorporated herein (the “Permanent ADS Business
Injunction”), lasting until August 13, 2012.

     

    4.           Enforcement of the Permanent
ADS Business Injunction.

     

    a.           Post-Settlement Invoice
Production.

     

    Point.360’s
prohibition from participating in advertising distribution, as described in the
Permanent ADS Business Injunction, extends from the execution date of this
Agreement until August 13, 2012 (the “Permanent ADS Business
Injunction Period”).  Point.360 warrants that it shall fully
comply with this Agreement and the Permanent ADS Business Injunction during the
Permanent ADS Business Injunction Period.  To verify its compliance,
Point.360 shall produce all invoices and supporting documentation to DGFC which
reflect services performed by Point.360 during the Permanent ADS Business
Injunction Period (the “Post-Settlement Invoice
Production”).  The production format shall be analogous to
Point.360’s prior production in response to DGFC’s document requests and to
Judge Mumm’s April 9, 2010 order compelling the production of
documents.  The production shall be on an Attorney’s Eyes Only basis,
pursuant to the Protective Order entered by Judge Mumm on February 17, 2010 (the
“Protective
Order”).  The Post-Settlement Invoice Production shall be on
the following schedule:

     

    i.           February
1, 2011 [for all Point.360 services performed between and including the
Execution Date and December 31, 2010];

     

    ii.          August
1, 2011 [for all Point.360 services performed between and including January 1,
2011 and June 30, 2011];

     

    iii.         February
1, 2012 [for all Point.360 services performed between and including July 1, 2011
and December 31, 2011];

     

    iv.         August
1, 2012 [for all Point.360 services performed between and including January 1,
2012 and June 30, 2012]; and

     

    v.          September
13, 2012 [for all Point.360 services performed between and including July 1,
2012 and August 13, 2012] (collectively the “Post-Settlement
Invoices”).

     

    In the
event Point.360 does not produce part or all of the above-described invoices and
supporting documentation on each production date, the terms of the
Noncompetition Agreement, the Permanent ADS Business Injunction, and of the
portions of this Agreement pertaining to compliance with the Noncompetition
Agreement and Permanent ADS Business Injunction, shall be extended by one (1)
calendar day for each calendar day that Point.360 is not in full compliance with
its production obligations.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    b.           Review of Post-Settlement
Invoices.

     

    DGFC,
through its authorized agents, shall have the right to review the
Post-Settlement Invoices, and independently confirm Point.360’s compliance with
this Agreement and the Permanent ADS Business Injunction.  If DGFC
detects advertising distribution in contravention of Point.360’s obligations, it
shall notify Point.360 of such findings in writing.  Point.360 shall
have five (5) business days after the receipt of DGFC’s notice to respond in
writing.  If the Parties do not mutually resolve the issue, DGFC may
approach the Court for relief, pursuant to Section 11 below.

     

    In the
event Point.360 discovers isolated inadvertent advertising distribution in
contravention of Point.360’s obligations under the Permanent ADS Business
Injunction or this Agreement, Point.360 shall immediately disclose the same in
writing to DGFC.  The Parties shall thereafter attempt to mutually
resolve the issue.  If the Parties do not mutually resolve the issue,
DGFC may approach the Court for relief, pursuant to Section 11
below.  The Parties further agree that issues voluntarily disclosed in
a prompt fashion shall be afforded a rebuttal presumption of inadvertence for
purposes of judicial review.

     

    5.           Termination of Post
Production Services Agreement.  Except as provided in the
Vaulted Content Removal Agreement described in Section 6 below, the Post
Production Services (“PPS”) Agreement is
hereby terminated, irrespective of the Parties’ views as to whether the
agreement expired at an earlier date.  Except as provided in the
Vaulted Content Removal Agreement, DGFC does not hereafter hold any obligation
to utilize Point.360’s post production services, or vault elements with
Point.360.  Point.360’s obligations with regard to DGFC’s materials
vaulted at Point.360’s Media Center shall be governed by the Vaulted Content
Removal Agreement.

     

    6.           Removal of Vaulted Content
from Media Center.  Point.360 shall surrender possession of all
physical asset media (“elements”) vaulted by
DGFC at Point.360’s Media Center (the “Vaulted Content”) in
accordance with the “Vaulted Content Removal Agreement,” attached hereto as
Exhibit 4 and fully incorporated herein.  DGFC is obligated to pay
vaulting-related fees to Point.360 for services performed until June 22,
2010, at rates under the “DG FastChannel Media Storage and Service Rate Card,”
dated August 8, 2007, attached to the PPS Agreement (the “Original Vaulting Rate
Card”).  DGFC is not obligated to pay vaulting-related fees to
Point.360 for services performed during the “Transition Period”
thereafter.

     

    7.           Final Adjustment Amount
Under the WCR Agreement.  On June 11, 2010, the District Court
granted Point.360’s Motion for Partial Summary Judgment as to breach of the
Working Capital Reconciliation (“WCR”)
Agreement.  The Court concluded that a “Lipuma Event” had occurred
under the WCR Agreement, and that as a result DGFC owes Point.360
$412,500.  Under this Settlement Agreement, Point.360 hereby foregoes
any amounts due or purportedly due by DGFC under the WCR Agreement, including
but not limited to the $412,500 under the Court’s summary judgment
order.

     

    8.           Issuance of Point.360 Shares
to DGFC.

     

    a.           Within
one business day after the execution and delivery of this Agreement, Point.360
shall deliver to its transfer agent irrevocable written instructions to issue
250,000 shares of its common stock (the “Point.360 Shares”),
to DGFC in certificated form which certificate shall contain a single legend as
follows:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    The
common shares of Point.360 evidenced by this certificate were issued in a
private placement exempt from the registration requirements of the Securities
Act of 1933, as amended (the “Securities Act”), and may not be offered for sale,
sold or otherwise transferred unless an exemption from the registration
requirements of the Securities Act would apply to such transaction, including
without limitation the exemption available to the holder of the shares under
Rule 144 of the Securities Act.  Pursuant to a Put and Call Agreement
dated as of September 21, 2010, among Mr. Haig Bagerdjian and DG Fast Channel,
Inc., these shares are subject to a call right to purchase that may be exercised
by Mr. Haig Bagerdjian, which call right to purchase shall automatically expire
unless exercised by Mr. Bagerdjian no later than March 21, 2011.

     

    b.           The
certificate evidencing the Point.360 Shares shall be delivered by overnight
courier to: DGFC, Attention: Omar Choucair, Chief Financial Officer, 750 West
John Carpenter Freeway, Suite 700, Irving, TX 75039.

     

    9.           DGFC’s Representations and
Warranties Regarding Point.360 Shares.  DGFC represents and
warrants as follows:

     

    a.           DGFC
has been advised and understands that none of the Point.360 Shares have been
registered or qualified under the United States Securities Act of 1933, as
amended (the “Securities Act”), or under the laws of any applicable state
jurisdiction, on the basis that the Point.360 Shares are being offered and
issued to DGFC pursuant to the Settlement Agreement in accordance with
exemptions from registration and qualification provided by applicable laws,
rules, and regulations and that, in this connection, Point.360 and Mr.
Bagerdjian are relying on the representations and warranties of DGFC set forth
in this Section 9.

     

    b.           DGFC
is acquiring the Point.360 Shares for investment purposes, for its own account
and not with a view to, or for sale in connection with, any distribution thereof
in violation of federal or state securities laws, rules, or
regulations.

     

    c.           DGFC
is an “accredited investor” within the meaning of Rule 501(a) under the
Securities Act and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks associated with
its acquisition of the Point.360 Shares.

     

    d.           DGFC
is able to bear the economic risk associated with its acquisition of the
Point.360 Shares.

     

    e.           DGFC
understands that the Point.360 Shares are “restricted securities” as defined in
Rule 144(a)(3) under the Securities Act, and that the Point.360 Shares cannot be
resold without registration under the Securities Act or an exemption from such
registration; DGFC is familiar with the provisions of Rule 144, which sets
forth the terms and conditions upon which restricted securities may be publicly
resold; DGFC understands that, among other requirements, Rule 144 imposes a
six-month holding period as a condition to the public resale of restricted
securities under Rule 144.

     

    f.           DGFC
understands that the stock certificate evidencing the Point.360 Shares will bear
the restrictive legend that is set forth in the Settlement
Agreement.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    g.           DGFC
has independently evaluated the merits of its decision to acquire the Point.360
Shares, and DGFC confirms that it has relied solely upon its own independent
investigation made by it and its legal counsel and advisors in making its
decision to acquire the Point.360 Shares.  Neither Haig Bagerdjian nor
Point.360 has made any express or implied representations or warranties (written
or oral) to DGFC regarding the future value or performance of the Point.360
Shares, the advisability of acquiring the Point.360 Shares, or the financial
condition, results of operations, business, or prospects of
Point.360).

     

    10.         Releases.

     

    a.           Except
for (i) any obligations, covenants, representations and warranties provided for
in this Agreement, and (ii) any future obligations, covenants, representations
and warranties provided for in the Merger-Related Agreements (except as limited
herein), each Party hereby irrevocably and unconditionally releases and forever
discharges the other Party, as well as its past and present officers, directors,
employees, agents, representatives, affiliates, partners, insurers, reinsurers,
excess insurers, respective attorneys, advisors, accountants, shareholders,
affiliates, related companies, parent companies, subsidiaries, successors,
predecessors, licensors, licensees, assignees, and all persons or entities
acting by and through, under, or in concert with any of them (collectively, the
“Releasees,”) of and from any and all manner of action or actions, or cause or
causes of action, in law or in equity, raised in any judicial or non-judicial
forum, including, without limitation, state and federal courts, government
agencies, and any and all other complaints, suits, liens, contracts,
controversies, agreements, promises, liabilities, claims, demands, damages,
losses, debts, costs or expenses, of any nature whatsoever, whether known or
unknown, fixed or contingent, which the Parties now own, hold, have, claim to
have, or may ever have against the Releases, or any of them, by reason of any
matter, cause or thing whatsoever, that happened or did not happen prior to
execution of this Agreement, including but not limited to any and all claims
within the definition of Claims as set forth in paragraph C, above, any claim
that any Party has violated any of the Merger-Related Agreements described in
paragraph A, above, and any claim that Point.360 has violated the Preliminary
ADS Business Injunction prior to execution of this
Agreement.  Notwithstanding the foregoing, Point.360 does not release
the firm of Holthouse Carlin & Van Trigt, or any of its past or present
partners, employees or agents from any actual or potential claims that Point.360
may hold.

     

    b.           EACH
PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR
WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS
FOLLOWS:

     

    “A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

     

    EACH
PARTY, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS THAT
IT MAY HAVE THEREUNDER AS WELL AS UNDER OTHER STATUTES OR COMMON LAW PRINCIPLES
OF SIMILAR EFFECT IN CALIFORNIA OR ANY OTHER STATE OR FEDERAL JURISDICTION, TO
THE FULL EXTENT THAT SUCH RIGHTS AND BENEFITS MAY BE WAIVED.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    11.         Disputes Regarding
Settlement Agreement.

     

    a.           Forum
Selection.

     

    The Parties agree
that the United States District Court for the Central District of California
shall maintain continuing jurisdiction for a period of five (5) years to resolve
any dispute regarding the validity, interpretation, effect, or alleged violation
or breach of, the obligations set forth in this Agreement, including the
agreements and injunction referenced herein which constitute part of the
obligations of this Agreement.

     

    b.           Relief.

     

    When
enforcing this Agreement, the Court shall award appropriate equitable and/or
legal relief.  In addition, if the Court determines that Point.360
violated the Noncompetition Agreement, the Permanent ADS Business Injunction,
and/or the terms of this Agreement relevant to compliance with the
Noncompetition Agreement and/or Permanent ADS Business Injunction, the terms of
the Noncompetition Agreement, the Permanent ADS Business Injunction, and of the
relevant portions of this Agreement shall be extended by the amount of time
between the execution of this Agreement and the date of the last instance of
Point.360’s violation of its applicable obligations.

     

    12.         Ownership of
Claims.  Each Party hereby represents and warrants that it now
holds all right, title to and interest in any Claim released hereunder (the
“Released
Claims”), and that it has not assigned, encumbered or otherwise
transferred any right, title or interest in any Released Claims.

     

    13.         Discovery
Materials.  The Parties agree to destroy all “Confidential”
and/or “Attorney’s Eyes Only” documents pursuant to the terms of their
stipulated Protective Order (entered by Judge Mumm on February 17, 2010) within
60 days after the later of August 13, 2012 or the resolution of any action
to enforce this Agreement, and to certify in writing and under oath to the other
Parties that such documents have been destroyed.

     

    14.         Injunctive
Relief.  The Parties agree that a breach of this Agreement will
cause irreparable damage to the other Parties for which no adequate remedy at
law exists and hereby agree that a Party shall be entitled to seek preliminary
and permanent injunctive relief and/or to seek any other remedies which a Party
may have at law or in equity in response to any such breach.

     

    15.         Authorization.  The
Parties each represent and warrant that each of them has the requisite power and
authority and has taken all actions necessary to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations hereunder, and no other proceedings on its part is necessary to
authorize this Agreement.  If any additional acts are required to
consummate the transactions contemplated hereby and/or to perform any Party’s
obligations hereunder, each Party covenants in good faith to perform such
additional acts and execute any necessary documents as may be reasonably
necessary to give effect to the terms of this Agreement.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    16.         Waiver.  No
waiver of any term, provision or condition of this Agreement, whether by conduct
or otherwise, shall be deemed, or be construed, as a further or continuing
waiver of any such term, provision or condition or as a waiver of any other
term, provision or condition of this Agreement.

     

    17.         No Representations;
Independent Judgment.

     

    a.           Each
Party acknowledges that at no time has any individual or entity made any
representations, promises or statements (whether oral or written) except as set
forth in this Agreement.  Each Party warrants and represents that it
has not been induced to enter into this Agreement on the basis of any other
representations, promises or statements (whether oral or written) made by any
Party at any time.

     

    b.           Each
Party represents that in executing this Agreement it is relying solely on its
own judgment, belief and knowledge, and upon the advice and recommendation of
its counsel concerning the nature, extent and duration of its rights and
obligations deriving from this Agreement.

     

    18.         Interpretation.  This
Agreement shall be interpreted simply and fairly and not strictly in favor of or
against any Party.  To this end, the Parties agree that the terms of
this Agreement are the product of an arm’s length negotiation.  The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance.  If any Party has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) that the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty or
covenant.

     

    19.         Consultation with
Counsel.  All Parties acknowledge that they have had the
opportunity to consult with counsel of their choice during the arm’s length
negotiation of this Agreement and prior to executing this
Agreement.

     

    20.         Governing
Law.  This Agreement shall be construed and governed in
accordance with the laws of the State of California without giving effect to
such State’s Conflict-of-Law principles.

     

    21.         Cumulative
Remedies.  The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

     

    22.         Successors and
Assigns.  The obligations and duties of this Agreement shall be
binding upon the Parties, their successors and permitted assigns, and the rights
of this Agreement shall inure to the benefit of permitted successors and
assigns.

     

    23.         Territory.  This
Agreement shall have effect and be binding worldwide.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    24.         Severability.  If
any clause or provision of this Agreement is declared illegal, invalid or
unenforceable under present or future laws effective during the term hereof, it
is the intention of the Parties hereto to reach agreement to terms that will
lawfully carry out the intended purpose of any such clause or provision, and to
take such action as may be necessary to do so.  The Parties further
intend that the remainder of this Agreement shall not be affected thereby, and
shall remain in full force and effect.

     

    25.         Final
Agreement.  This Agreement is the complete, final and exclusive
statement of the Agreement between the Parties with respect to the subject
matter hereof.  This Agreement supersedes all prior or contemporaneous
agreements, negotiations, representations, understandings, and discussions
between the Parties, and/or their respective counsel, with respect to the
subject matter covered hereby.  Any modification, alteration or
amendment of this Agreement shall be void and have no force or effect unless it
is in writing and signed by the party sought to be bound.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original and all of which taken together shall constitute but one and the
same Agreement.  Signature pages transmitted by facsimile transmission
or electronically shall be the equivalent of originals.

     

    26.         Notices.  Notices
to any party under this Agreement shall be in writing and may be delivered by
hand, by overnight courier or by facsimile to the address(es)
below.  Any notice delivered by hand or facsimile shall be deemed
delivered when sent on a business day or if not on a business day, the next
business day after sending, and if delivered by overnight courier on the next
business day.

     

    If
to DGFC:

    

    DG Fast
Channel, Inc.

    Attention:  Chief
Financial Officer

    750 West
Carpenter Freeway

    Suite
700

    Irving,
TX  75039

    Fax:
(972) 581-2001

    Contact:
(972) 581-2000

    

    With
a copy to:

    

    Latham
and Watkins LLP

    Attention:  Susan
S. Azad

    355 South
Grand Avenue

    Los
Angeles, CA  90071

    Fax:
(213) 891-8763

    Contact:
(213) 485-1234

    

    If
to Point.360:

    

    Point.360

    Attention:
Chief Financial Officer

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    2777
North Ontario Street

    Burbank,
CA 91504

    Fax:
(818) 847-2503

    Contact:
(818) 565-1444

    

    With
a copy to:

    

    TroyGould
PC

    Attention:
William D. Gould

    1801
Century Park East, Ste. 1600

    Los
Angeles, CA 90067

    Fax:
(310) 201-4746

    Contact:
(310) 789-1338

    

    The
foregoing is agreed and accepted:

     

    
      
        
          
            
              
                
                  
                    
                      	
                              DG
      FASTCHANNEL, INC., a Delaware corporation

                            	 
      	
                              POINT.360,
      a California corporation

                            
	 
      	 
      	 
      
	 	 	 
	
                              DG
      FastChannel, Inc.

                            	 
      	
                              Point.360

                            
	
                              By:

                            	
                              /s/ Scott Ginsberg

                            	 
      	
                              By:

                            	
                              /s/ Haig Bagerdjian

                            
	
                              Its:

                            	
                              CEO

                            	 
      	
                              Its:

                            	
                              President

                            
	
                              Dated:  

                            	
                              September
      22, 2010

                            	 
      	
                              Dated:  

                            	
                              September
      21,
2010

                            

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    APPROVED
      AS TO FORM:

                                  	 	 
      	 
      
	 	 	 	 
	
                                    Dated:  September
      __, 2010

                                  	 	
                                    LATHAM
      & WATKINS

                                  
	 
      	 	 
      	
                                    Susan
      S. Azad

                                  
	 
      	 	 
      	
                                    Colin
      B. Vandell

                                  
	 
      	 	 
      	
                                    Patricia
      A. Eberwine

                                  
	 
      	 	 
      	 
      
	 
      	 	
                                    By

                                  	 
      
	 
      	 	 
      	
                                    Susan
      S. Azad

                                  
	 
      	 	
                                    Attorneys
      for Plaintiff and Counterclaim

                                    Defendant
      DG FastChannel, Inc.

                                  
	 
      	 	 
      	 
      
	
                                    Dated:
      September __, 2010

                                  	 	
                                    TROYGOULD
      PC

                                  
	 
      	 	 
      	
                                    Russell
      I. Glazer

                                  
	 
      	 	 
      	
                                    Arvin
      Tseng

                                  
	 
      	 	 
      	 
      
	 
      	 	
                                    By

                                  	 
      
	 
      	 	 
      	
                                    Russell
      I. Glazer

                                  
	 
      	 	
                                    Attorneys
      for Defendant and Counterclaimant
Point.360

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        11

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