Document:

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                                 EXHIBIT 10.117

                                CO-SALE AGREEMENT

                  THIS CO-SALE AGREEMENT (this "Agreement") is made as of
January 6, 2000 by and among CinemaNow, Inc., a California corporation (the
"Company"), the persons and entities (each, an "Investor" and collectively, the
"Investors") listed on the Schedule of Investors attached hereto as Exhibit A,
as such Schedule of Investors may be supplemented or amended from time to time
hereafter (the "Schedule of Investors"), and the persons and entities (each, a
"Founder" and collectively, the "Founders") listed on Exhibit B attached hereto.

                  In consideration of the mutual covenants set forth herein, the
parties agree as follows:

         1.       DEFINITIONS.

                  1.1. "Common Stock" shall mean the Common Stock, without
par value, of the Company.

                  1.2. "Series A Preferred Stock" shall mean the Company's
outstanding shares of Series A Convertible Preferred Stock, without par value.

                  1.3. "Stock" shall mean  shares of the Common Stock now owned
or subsequently acquired by a Founder.

         2.       RIGHT TO PARTICIPATE IN SALES BY FOUNDER.

                  2.1. If a Founder proposes to sell or transfer (including a
pledge or the grant of a security interest) shares of Stock in one or more
related transactions, then the Founder shall promptly give written notice (the
"Notice") to the Company and the Investors at least 20 days prior to the closing
of such sale or transfer. The Notice shall describe in reasonable detail the
proposed sale or transfer including, without limitation, the number of shares of
Stock to be sold or transferred, the nature of such sale or transfer, the
consideration to be paid, and the name and address of each prospective purchaser
or transferee. In the event that the sale or transfer is being made pursuant to
the provisions of Sections 4.1 or 4.2 hereof, the Notice shall state under which
section the sale or transfer is being made.

                  2.2. Each Investor shall have the right, exercisable upon
written notice to the Founder within 15 days after receipt of the Notice, to
participate in such sale of Stock on the same terms and conditions. To the
extent one or more of the Investors exercises such right of participation in
accordance with the terms and conditions set forth below, the number of shares
of Stock that the Founder may sell in the transaction shall be correspondingly
reduced.

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EXHIBIT 10.117 (CONTINUED)

                  2.3. Each Investor may sell all or any part of that number of
shares of Common Stock equal to the product obtained by multiplying (i) the
aggregate number of shares of Stock covered by the Notice by (ii) a fraction the
numerator of which is the number of shares of Common Stock owned by such
Investor at the time of the sale or transfer and the denominator of which is the
total number of shares of Common Stock owned by the Founder and all of the
Investors at the time of the sale or transfer. For purposes of this Agreement,
the number of shares of Common Stock owned or held by an Investor shall include
the number of shares of Common Stock issuable to the Investor upon conversion of
the shares of Series A Preferred Stock owned or held by the Investor.

                  2.4. Each Investor who elects to participate in the sale shall
effect its participation in the sale by promptly delivering to the Founder for
transfer to the prospective purchaser one or more certificates, properly
endorsed for transfer, which represent:

                        2.4.1.   the number of shares of Common Stock which such
 Investor elects to sell; or

                        2.4.2.   that  number  of  shares  of  Series  A
Preferred Stock which is at such time convertible into the number of shares of
Common Stock which such Investor elects to sell; provided, however, that such
Investor shall convert such Series A Preferred Stock into Common Stock, and the
Company agrees to make such conversion concurrently with the actual transfer of
such shares to the purchaser; provided further that such Common Stock shall upon
such transfer, cease to constitute Registrable Securities under the terms of the
Investors' Rights Agreement (the "Investors' Rights Agreement") dated as of the
date hereof between the parties.

                  2.5. The stock certificate or certificates that the Investor
delivers to the Founder pursuant to Section 2.4 shall be transferred to the
prospective purchaser upon consummation of the sale of the Stock pursuant to the
terms and conditions specified in the Notice, and the Founder shall concurrently
therewith remit to such Investor that portion of the sale proceeds to which such
Investor is entitled by reason of such Investor's participation in such sale. To
the extent that any prospective purchaser or purchasers prohibits such
assignment or otherwise refuses to purchase shares or other securities from an
Investor exercising its rights of co-sale hereunder, the Founder shall not sell
to such prospective purchaser or purchasers any Stock unless and until,
simultaneously with such sale, the Founder shall purchase the number of such
shares or other securities from such Investor calculated in accordance with
Section 2.3.

                  2.6. The exercise or non-exercise of the rights of the
Investors hereunder to participate in one or more sales of Stock

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EXHIBIT 10.117 (CONTINUED)

made by the Founder shall not adversely affect their rights to participate in
subsequent sales of Stock subject to Section 2.1.

         3.       RIGHT OF FIRST OPPORTUNITY.

                  3.1. Subject to the terms and conditions specified in this
Section 3, each Founder hereby grants to each Investor a right of first
opportunity with respect to future sales of Stock by the Founder.

                  3.2. Each time the Founder proposes to offer any Stock, the
Founder shall first make an offering of such Stock to the Investors in
accordance with the provisions of Section 2 above concerning participation
rights and the Investors shall exercise their right of first opportunity in
accordance with the procedures set forth below:

                       3.2.1. By written notice to the Founder, within fifteen
(15) calendar days after receipt of the Notice, an Investor may elect to
purchase or obtain, at the price and on the terms specified in the Notice, up to
that portion of the offered Stock which equals the proportion that the number of
shares of Common Stock owned by such Investor bears to the total number of
shares of Common Stock owned by all the Investors. The Founder shall promptly,
in writing, inform each Investor which has elected to purchase all the shares
available to it (each, a "Fully-Exercising Investor") of any other Investor's
failure to so elect. During the ten-day period commencing after such information
is given, each Fully-Exercising Investor shall be entitled to obtain that
portion of the offered Stock which Investors were entitled to purchase but which
were not purchased by the Investors which is equal to the proportion of the
unpurchased Stock that the number of shares of Common Stock owned by such
Fully-Exercising Investor bears to the total number of shares of Common Stock
owned by all Fully-Exercising Investors who wish to purchase their pro rata
share of the unpurchased Stock.

                        3.2.2. If all the shares of Stock referred to in the
Notice are not elected to be acquired by Investors as provided in this Section
3.2, the Founder may, during the 90-day period following the expiration of the
final period provided in Section 3.2.1, offer the remaining unpurchased portion
of such Stock to any person or persons at a price not less than, and upon terms
no more favorable to the offeree than, those specified in the Notice. If the
Founder does not enter into an agreement for the sale of the Stock within such
period, or if such agreement is not consummated within ninety (90) days of the
execution thereof, the right provided by this Section 3 shall be deemed to be
revived and such Stock shall not be offered unless first re-offered to the
Investors in accordance herewith. Stock which is sold by a Founder pursuant to
this Section 3.2 (other than Stock sold to an Investor) shall remain "Stock"
hereunder and each of the purchasers of such stock

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EXHIBIT 10.117 (CONTINUED)

(other than Investors) shall be treated as a "Founder" for purposes of this
Agreement.

         4.       EXEMPT TRANSFERS.

                  4.1. Notwithstanding anything herein to the contrary, the
provisions of Sections 2 and 3 shall not apply to any transfer to a "family
member" (as defined in Rule 701(c)(3) promulgated under the Securities Act of
1933, as amended (the "Securities Act") of a Founder and, in the case of Trimark
Holdings, Inc. or Trimark Pictures, Inc., to any of their affiliates; provided
that (A) the Founder shall inform the Investors of such transfer prior to
effecting it and (B) the transferee shall furnish the Investors with a written
agreement to be bound by and comply with all provisions of this Agreement. Such
transferred Stock shall remain "Stock" hereunder, and such transferee shall be
treated as a "Founder" for purposes of this Agreement.

                  4.2. Notwithstanding anything herein to the contrary, the
provisions of Sections 2 and 3 shall not apply (i) to the sale of any Stock to
the Company pursuant to a right granted to the Company prior to the date of this
Agreement, (ii) to a sale or sales by a Founder where the total consideration
received by such Founder does not exceed $50,000 in any twelve-month period, or
(iii) to a sale or transfer pursuant to a tender offer, merger, reorganization
or similar transaction in which all shareholders of the Company are entitled to
participate on an equivalent basis and which is approved by the Board of
Directors.

         5.       PROHIBITED TRANSFERS.

                  5.1. In the event a Founder should sell any Stock in
contravention of the rights of the Investors under this Agreement (a "Prohibited
Transfer"), the Investors, in addition to such other remedies as may be
available at law, in equity or hereunder, shall have the put option provided
below, and the Founder shall be bound by the applicable provisions of such
option.

                  5.2. In the event of a Prohibited Transfer by a Founder, each
Investor shall have the right (but not the obligation) to sell to such Founder,
and such Founder shall be obligated to purchase, the type and number of shares
of Common Stock equal to the number of shares each Investor would have been
entitled to transfer to the purchaser had the Prohibited Transfer been effected
pursuant to and in compliance with the terms of this Agreement. Such sale shall
be made on the following terms and conditions:

                        5.2.1. The price per share at which the shares are to be
sold by the Investor to the Founder shall be equal to the price per share paid
by the purchaser to the Founder in the Prohibited Transfer. The Founder shall
also reimburse each Investor for any and all fees and expenses, including
reasonable legal fees and expenses, incurred pursuant to the exercise or the
attempted exercise of the Investor's rights under this Agreement.

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EXHIBIT 10.117 (CONTINUED)

                        5.2.2. Within 90 days after the later of the dates on
which the Investor (i) received notice of the Prohibited Transfer or (ii)
otherwise actually became aware of the Prohibited Transfer, the Investor shall,
if exercising the option created hereby, deliver to the Founder the certificate
or certificates representing the shares of Common Stock to be sold, each
certificate to be properly endorsed for transfer. Series A Preferred Stock shall
be converted to Common Stock before or concurrently with such transfer. Such
Common Stock shall, upon such transfer, cease to constitute Registrable
Securities under the terms of the Investors' Rights Agreement.

                        5.2.3. The Founder shall, upon receipt of the
certificate or certificates for the shares to be sold by an Investor, pursuant
to this Section 5.2, pay to the Investors the aggregate purchase price therefor
and the amount of reimbursable fees and expense, as specified in Section 5.2.1,
in cash or by other means acceptable to the Investor.

                        5.2.4. Notwithstanding the foregoing, any attempt by a
Founder to transfer Stock in violation of this Agreement shall be void and the
Company agrees it will not effect such a transfer nor will it treat any alleged
transferee as the holder of such shares without the written consent of
two-thirds in interest of the Investors.

         6.       LEGEND.

                  6.1. Each certificate representing shares of Stock now or
hereafter owned by a Founder or issued to any person (other than an Investor) in
connection with a transfer pursuant to this Agreement (including Section 4.1
hereof) shall be endorsed with the following legend:

      "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
      REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
      CONDITIONS OF A CERTAIN CO-SALE AGREEMENT BY AND BETWEEN THE
      ISSUEE OF THIS CERTIFICATE, THE CORPORATION AND CERTAIN
      HOLDERS OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT
      MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
      CORPORATION."

                  6.2 The Founder agrees that the Company may instruct its
transfer agent to impose transfer restrictions on the shares represented by
certificates required to bear the legend referred to in Section 6.1 above to
enforce the provisions of this Agreement, and the Company agrees to promptly do
so. The legend shall be removed upon termination of this Agreement.

         7.       MISCELLANEOUS.

                  7.1. AMENDMENT. Any provision of this Agreement may be
amended, waived, modified, discharged or terminated only with the

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EXHIBIT 10.117 (CONTINUED)

written consent of the Company, the Founders, and Investor's holding two-thirds
(2/3rds) in interest of the Series A Preferred Stock (or Common Stock issuable
upon conversion thereof); provided, however, that with the written consent of
CinemaN Investment Company Ltd., a British Virgin Islands company, any provision
of this Agreement may be amended, waived, modified, discharged or terminated
with the written consent of the Company, the Founders, and Investor's holding a
majority in interest of the Series A Preferred Stock (or Common Stock issuable
upon conversion thereof). Any amendment or waiver effected in accordance with
this Section will be binding upon the Company, the Founders, the Investors and
each Holder of any securities subject to this Agreement (including securities
into which such securities are convertible) and future Holders of all such
securities. Any Founder, Investor or Holder may waive its, his or her rights or
the Company's obligations to such person hereunder without obtaining the consent
of any other person.

                  7.2 ASSIGNMENT AND TRANSFER. This Agreement shall not be
assigned by the Company, by operation of law or otherwise. This Agreement or the
rights held by an Investor under this Agreement may be assigned by such Investor
only in connection with an assignment or transfer by such Investor which is made
in accordance with Sections 4.6 or 8.12 of the Purchase Agreement.

                  7.3 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement,
including the construction, validity and performance hereof and the obligations
arising hereunder and thereunder, and all amendments and supplements hereof and
thereof and all waivers and consents hereunder and thereunder, shall be
construed in accordance with and governed by the laws of the State of California
without giving effect to any choice of law or conflicts of law provision or rule
that would cause the application of the laws of any other jurisdiction. Any
legal action or proceeding with respect to this Agreement or any document
related hereto or thereto shall be brought in the courts of the State of
California sitting in the County of Los Angeles or of the United States of
America for the State of California sitting in the County of Los Angeles, and,
by execution and delivery and/or acceptance of this Agreement, each Party hereto
hereby accepts the exclusive jurisdiction of the aforesaid courts. In addition,
each Party hereto hereby irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement or any document related hereto or thereto brought in any of the
aforesaid courts, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.

                  7.4 TERM. This Agreement shall terminate (i) upon the
Company's first sale of its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement under the Securities Act,
which results in aggregate gross cash proceeds

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EXHIBIT 10.117 (CONTINUED)

to the Company in excess of $15,000,000 and the public offering price of which
is not less than $3.00 per share (adjusted to reflect stock dividends, stock
splits or recapitalizations after the date of this Agreement), or (ii) upon the
sale, conveyance or other disposition of all or substantially all of the
Company's property or business or the merger into or consolidation with any
other entity (other than a wholly owned subsidiary corporation) or the effecting
of any transaction or series of related transactions in which more than 50% of
the voting power of the Company is disposed of and where in connection with such
transaction the holders of shares of Series A Preferred Stock receive
consideration for each share of Series A Preferred Stock on an as-converted
basis having a fair market value equal to (i) $2.03 in the event that such
transaction occurs during the first year after the date hereof, (ii) $2.70 in
the event that such transaction occurs during the second year after the date
hereof, and (iii) $3.38 in the event that such transaction occurs thereafter (in
each case such price to be adjusted to reflect stock dividends, stock splits or
recapitalizations after the date of this Agreement).

                  7.5 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and deemed given on the business day
following delivery to the recipient in person or by overnight courier service,
and addressed (i) if to an Investor or Founder, to such Investor's or Founder's
address set forth in Exhibit A or Exhibit B below, or at such other address as
such Investor or Founder shall have furnished to the Company in writing, or (ii)
if to the Company, to:
                           CinemaNow, Inc.
                           4553 Glencoe Avenue
                           Suite 200
                           Marina del Rey, California  90292
                           Attn:    Bruce David Eisen

                  7.6 SEVERABILITY. In the event one or more of the provisions
of this Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

                  7.7 ATTORNEY FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.

                  7.8 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original,

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EXHIBIT 10.117 (CONTINUED)

but all of which together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first set forth above.

                                     CinemaNow, Inc.

                                     By:________________________

                                     Title:_____________________

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EXHIBIT 10.117 (CONTINUED)

                           [Investors Signature Page]

                                         INVESTORS:

                                          -------------------------------------
                                         (Print Name of Investor)

                                          -------------------------------------
                                         (Signature)

                                          -------------------------------------
                                         (Title, if applicable)

                                         Address
                                                -------------------------------

                                          -------------------------------------

                                          -------------------------------------

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EXHIBIT 10.117 (CONTINUED)

                            [Founders Signature Page]

                                       FOUNDERS:

                                       Trimark Holdings, Inc.

                                       By:
                                          ----------------------------------

                                       Title:
                                              ------------------------------

                                       Trimark Pictures, Inc. (but only with
                                       respect to the Common Stock to be
                                       acquired pursuant to the Trimark
                                       Note (as defined in the Purchase
                                       Agreement)

                                       By:
                                          ----------------------------------

                                       Title:
                                              ------------------------------

                                       -------------------------------------
                                       Curt Marvis

                                       -------------------------------------
                                       Bruce Eisen

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EXHIBIT 10.117 (CONTINUED)

                                CONSENT OF SPOUSE

                  I acknowledge that I have read the foregoing Co-Sale Agreement
and that I know its contents. I am aware that by its provisions if I and/or my
spouse agree to sell all or part of the shares of the Company held of record by
either or both of us, including my community interest in such shares, if any,
co-sale rights (as described in the Agreement) must be granted to the Investors
by the seller. I hereby agree that those shares and my interest in them, if any,
are subject to the provisions of the Co-Sale Agreement and that I will take no
action at any time to hinder operation of, or violate, the Co-Sale Agreement.

                                      -----------------------------------
                                      (Signature)

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EXHIBIT 10.117 (CONTINUED)

                                    EXHIBIT A

                              SCHEDULE OF INVESTORS

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EXHIBIT 10.117 (CONTINUED)

                                    EXHIBIT B

                                    FOUNDERS

         Trimark Holdings, Inc.
         c/o CinemaNow, Inc.
         4553 Glencoe Avenue
         Marina del Rey, California  90292

         Trimark Pictures, Inc.
         c/o CinemaNow, Inc.
         4553 Glencoe Avenue
         Marina del Rey, California  90292

         Curt Marvis
         c/o CinemaNow, Inc.
         4553 Glencoe Avenue
         Marina del Rey, California  90292

         Bruce Eisen
         c/o CinemaNow, Inc.
         4553 Glencoe Avenue
         Marina del Rey, California  90292

                                       13<PAGE>

                                 EXHIBIT 10.118

INVESTORS' RIGHTS AGREEMENT

     THIS INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of January 6, 2000 by and among CinemaNow, Inc., a California
corporation (the "Company"), the persons and entities (each, an "Investor" and
collectively, the "Investors") listed on the Schedule of Investors attached
hereto as Exhibit A, as such Schedule of Investors may be supplemented or
amended from time to time hereafter (the "Schedule of Investors"), and the
persons and entities (each, a "Founder" and collectively, the "Founders") listed
on Exhibit B attached hereto.

                                    RECITALS:

     A. The Company proposes to sell and issue up to Three Million Five Hundred
Fifty-Five Thousand Five Hundred and Fifty-Six (3,555,556) shares of Series A
Preferred Stock in one or more closings pursuant to that certain Securities
Purchase Agreement (the "Purchase Agreement") dated as of January 6, 2000 among
the Company and the Investors;

     B. As a condition of entering into the Purchase Agreement, the Investors
have requested that the Company extend to them the voting rights, registration
rights and other rights with respect to the Series A Preferred Stock as set
forth below.

                                   AGREEMENT:

     NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:

1.   CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall
have the following respective meanings:

     "Affiliate" means any person or entity controlled by or under common
control with another person or entity.

     "Board" means the Board of Directors of the Company.

     "Common Stock" means the Common Stock, without par value, of the Company
and any other securities of the Company into which such common stock may be
converted or for which it may be exchanged.

     "Commission" means the Securities and Exchange Commission or any successor
agency.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

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EXHIBIT 10.118 (CONTINUED)

     "Holder" means any holder of outstanding Registrable Securities which have
not been sold to the public.

     "Independent Directors" means independent, non-management directors with
significant "industry" experience.

     "Initial Public Offering" means a public offering in which the Company
first becomes a reporting company under the Exchange Act.

     "Parties" means the parties that are signatories to this Agreement. "Party"
shall refer to any one of the Parties.

     "Registrable Securities" means (i) shares of the Common Stock issued or
issuable upon the conversion of the Series A Preferred Stock; and (ii) any other
shares of the Common Stock issued as (or issuable upon conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to or in exchange for or replacement of the Series A
Preferred Stock or the Common Stock issued or issuable upon the conversion of
the Series A Preferred Stock.

     The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

     "Registration Expenses" means all reasonable out-of-pocket expenses
incurred by the Company in complying with Sections 2 and 5 hereof, including,
without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and disbursements of counsel for the Company, blue
sky fees and expenses, and accounting fees of the Company.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Selling Expenses" means all underwriting discounts, selling commissions
and stock transfer taxes applicable to the securities registered by the Holders.

     "Series A Preferred Stock" means the Series A Convertible Preferred Stock,
without par value, of the Company.

     "Series A Directors" means the directors elected solely by the holders of
Series A Preferred Stock.

2.   COMPANY REGISTRATION.

     2.1 NOTICE OF REGISTRATION. If the Company shall determine to register any
of its securities, either for its own account or the account of a security
holder, other than (i) a registration

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EXHIBIT 10.118 (CONTINUED)

relating to employee benefit plans or, (ii) a registration relating to a
Commission Rule 145 or similar transaction, the Company will:

          2.1.1 promptly give to each Holder written notice thereof; and

          2.1.2 include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within fifteen (15) days after receipt of such written notice
from the Company, by any Holder, except as set forth in Section 2.2 below.

     2.2  UNDERWRITING. If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to Section
2.1.1. In such event the right of any Holder to registration pursuant to Section
2 shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 2, if the managing underwriter advises the Company in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the managing underwriter may limit to whatever extent
necessary (including (i) excluding the Registrable Securities and the securities
of other stockholders of the Company exercising registration rights in
connection with the offering from the Company's initial public offering and (ii)
limiting the Registrable Securities and the securities (the "Other Securities")
of other stockholders of the Company exercising piggyback but not demand
registration rights in connection with the offering ("Other Holders") to 20% of
any other such registration), the number of Registrable Securities to be
included in the registration and underwriting by reducing the number of
Registrable Securities and Other Securities included on behalf of the Holders
and Other Holders, respectively, on a pro rata basis based on the total number
of Registrable Securities and Other Securities entitled to registration held by
each Holder and each Other Holder, respectively. The Company shall advise all
Holders of Registrable Securities which would otherwise be registered and
underwritten pursuant hereto of any such limitations. If any Holder disapproves
of the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any Registrable Securities
excluded or withdrawn from such underwriting shall not be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of

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EXHIBIT 10.118 (CONTINUED)

shares allocated to any Holder to the nearest one hundred (100) shares.

3.   EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection
with any registration, qualification or compliance pursuant to Sections 2 and 5
shall be borne by the Company; provided, that the Company shall not be required
to bear such Registration Expenses on more than two registration statements on
Form S-3 in any twelve-month period. All Selling Expenses relating to securities
registered by the Holders shall be borne severally by the Holders of such
securities pro rata on the basis of the number of shares so registered.

4.   REGISTRATION PROCEDURES. In the case of each registration, qualification or
compliance effected by the Company pursuant to this Agreement, the Company will
keep each Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense
the Company will:

     4.1 EFFECTIVENESS. Prepare and file with the Commission a registration
statement with respect to such securities and use its reasonable best efforts to
cause such registration statement to become and remain effective (a) until the
earlier of (i) at least ninety (90) days with respect to a registration
statement on Form S-1 or SB-2 or (ii) until the distribution described in the
registration statement has been completed and (b) until the earlier of (i) at
least one hundred and eighty (180) days with respect to a registration statement
on Form S-3 or (ii) until the distribution described in the registration
statement has been completed; provided, however, that such period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) or the Company.

     4.2 AMENDMENTS. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

     4.3 COPIES OF DOCUMENTS. Furnish to the Holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters or
such Holders may reasonably request in order to facilitate the public offering
of such securities.

     4.4 BLUE SKY LAWS. Use its reasonable best efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided that the Company shall not be required in
connection

                                       4

<PAGE>

therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions,
unless the Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act.

     4.5 UNDERWRITING AGREEMENT. In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering; provided that each Holder participating in such underwriting shall
also enter into and perform its obligations under such underwriting agreement.

     4.6 NOTIFICATION. Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

     4.7 LISTING. Cause such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.

     4.8 TRANSFER AGENT AND REGISTRAR. Provide a transfer agent and registrar
for all Registrable Securities registered pursuant to such registration
statement and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration.

5.   REGISTRATION ON FORM S-1, SB-2 OR S-3. If, following the earlier of (i) six
(6) months following the Company's Initial Public Offering or (ii) three (3)
years from the date hereof or (iii) upon the holder of any other registration
rights granted by the Company giving notice to the Company of the exercise of
such rights, (A) the Holders holding at least fifty percent (50%) of the total
Registrable Securities request in writing that the Company file a registration
statement on Form S-1 or Form SB-2 (or any successor form(s) thereto) for a
public offering of shares of Registrable Securities the reasonably anticipated
aggregate price to the public of which would exceed ten million dollars
($10,000,000), or (B) the Holders holding at least twenty percent (20%) of the
total Registrable Securities request in writing that the Company file a
registration statement on Form S-3 (or any successor form(s) thereto) for a
public offering of shares of Registrable Securities the reasonably anticipated
aggregate price to the public of which would exceed five hundred thousand
dollars ($500,000), the Company shall use its reasonable best efforts to cause
such shares to be registered for the offering on such form (or any successor
thereto). Notwithstanding the foregoing, the

                                       5

<PAGE>

EXHIBIT 10.118 (CONTINUED)

Holders may only request the Company to file a registration statement on Form
S-1 or SB-2, if the Company is not entitled to register securities using Form
S-3. The Company will promptly give written notice of a request for the proposed
registration to all other Holders and include all Registrable Securities of any
Holder or Holders joining in such request as are specified in a written request
received by the Company within thirty (30) days after the date of such written
notice from the Company. The Company shall be required under this Agreement to
file and to cause to become effective (i) no more than two (2) registration
statements in the aggregate on Form S-1 or SB-2, and (ii) no more than two
registration statements in any twelve-month period on Form S-3. The Company
shall have the right to delay filing any registration statement for a period of
up to ninety (90) days based on a reasonable good faith determination by the
Board that the filing of the registration statement at the time requested is not
in the best interests of the Company.

6.   TERMINATION OF REGISTRATION RIGHTS. Except as provided elsewhere in this
Agreement, the registration rights granted pursuant to this Agreement shall
terminate on December 31, 2005. Notwithstanding the foregoing, the right of any
Holder to request registration or inclusion in any registration pursuant to
Sections 2 and 5 shall terminate ninety (90) days after the satisfaction of all
the following conditions with respect to such Holder: (i) the Company has
completed its Initial Public Offering; and (ii) all shares of Registrable
Securities held or entitled to be held upon conversion by such Holder (and any
Affiliates of such Holder) may immediately be sold under Rule 144 during any
90-day period.

7.   INDEMNIFICATION.

     7.1 COMPANY INDEMNIFICATION. The Company will indemnify each Holder, each
of such Holder's officers, members, shareholders, directors and partners, such
Holder's legal counsel and independent accountants, and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, in
connection with any offering of securities of the Company with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such Holder,
each of such

                                       6

<PAGE>

EXHIBIT 10.118 (CONTINUED)

Holder's officers, directors, members, shareholders and partners and such
Holder's legal counsel and independent accountants, and each person controlling
such Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter and stated to be specifically for use therein; provided,
that the agreement of the Company to indemnify any underwriter and any person
who controls such underwriter contained herein with respect to any such
preliminary prospectus shall not inure to the benefit of any underwriter from
whom the person asserting any such claim, loss, damage, liability or action
purchased the stock which is the subject thereof, if at or prior to the written
confirmation of the sale of such stock, a copy of the prospectus (or the
prospectus as amended or supplemented) was not sent or delivered to such person,
excluding the documents incorporated therein by reference, and the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the prospectus (or the prospectus as amended or
supplemented); and provided, further, that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any offers to sell or sales made by such Holder during any
period when a Holder is notified by the Company to suspend or discontinue sales
pursuant to Sections 8.1 or 8.2.

     7.2 HOLDER INDEMNIFICATION. Each Holder will, if Registrable Securities
held by such Holder are included in the securities as to which registration,
qualification or compliance is being effected pursuant to this Agreement,
indemnify the Company, each of its directors and officers, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of such other
Holder's officers and directors and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to

                                       7

<PAGE>

EXHIBIT 10.118 (CONTINUED)

the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein or
for sales in violation of Sections 8.1 or 8.2; provided, however, that the
obligations of any such Holder hereunder shall be limited to an amount equal to
the net proceeds after expenses and commissions to such Holder of Registrable
Securities sold as contemplated herein.

     7.3 NOTIFICATION OF CLAIM. Each party entitled to indemnification under
this Section 7 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnified Party
(together with all other Indemnified Parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnified Party and any other party represented by such
counsel in such proceeding; and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, except to the
extent, but only to the extent, that the Indemnifying Party's ability to defend
against such claim or litigation is impaired as a result of such failure to give
notice. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

     7.4 CONTRIBUTION. If the indemnification provided for in Sections 7.1 and
7.2 of this Section 7 is unavailable or insufficient to hold harmless an
Indemnified Party thereunder, then each Indemnifying Party thereunder shall
contribute to the account paid or payable by such Indemnified Party as a result
of the losses, claims, damages, costs, expenses, liabilities or actions referred
to in Sections 7.1 and 7.2 in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other in

                                       8

<PAGE>

EXHIBIT 10.118 (CONTINUED)

connection with statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations.
The relative fault 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 Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 7.4
were to be 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 in the first sentence of this Section 7.4. The amount paid by an
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 7.4 shall be deemed to include
any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any action or claim which is the
subject of this Section 7.4. Promptly after receipt by an Indemnified Party of
notice of the commencement of any action against such party in respect of which
a claim for contribution may be made against an Indemnifying Party under Section
7.4, such Indemnified Party shall notify the Indemnifying Party in writing of
the commencement thereof if the notice specified in Section 7.3 has not been
given with respect to such action; provided that the omission so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which it may have to any Indemnified Party otherwise under Section 7.4, except
to the extent that the Indemnifying Party is actually prejudiced by such failure
to give notice. The parties hereto agree with each other and shall agree with
the underwriters of the Common Stock of the Company pursuant to the terms
hereof, if requested by such underwriters, that (i) the underwriters' portion of
such contribution shall not exceed the underwriting discount, commission and
other compensation and (ii) except for the Company, the amount of such
contribution shall not exceed an amount equal to the net proceeds received by
such Indemnifying Party from the sale of securities in the offering to which the
losses, claims, damages or liabilities of the indemnified parties relate. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

8.   OBLIGATIONS OF THE HOLDERS.

     8.1 SUSPEND SALES. For a reasonable period not to exceed 90 days in any
twelve-month period, Holder will not (until further notice) effect sales of
Registrable Securities involved in any Registration Statement thereof after
receipt of telegraphic or written notice from the Company to suspend sales to
permit the Company to correct or update such Registration Statement or
Prospectus; but the obligations of the Company with respect to maintaining any
Registration Statement current and effective shall

                                       9

<PAGE>

EXHIBIT 10.118 (CONTINUED)

be extended by a period of days equal to the period such suspension is in
effect.

     8.2 DISCONTINUE SALES. At the end of any period during which the Company is
obligated to keep any Registration Statement current and effective as provided
by Section 5 hereof (and any extensions thereof required by Section 8.2), Holder
shall discontinue sales of shares pursuant to such Registration Statement on
receipt of notice from the Company of its intention to remove from registration
the shares covered by such Registration Statement which remain unsold, and
Holder shall notify the Company of the number of shares registered which remain
unsold promptly after receipt of such notice from the Company.

9.   LOCK-UP AGREEMENT. In consideration for the Company agreeing to its
obligations under this Agreement, each Holder of Registrable Securities agrees,
in connection with a registered public offering by the Company on Form S-1 or
Form SB-2 (or any successor form(s) thereto), upon request of the Company or the
underwriters managing such offering, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any Registrable
Securities or other securities of the Company (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 one
hundred eighty (180) days) from the effective date of such registration as the
Company or the underwriters may specify. Each Holder agrees that the Company may
instruct its transfer agent to place stop transfer notations in its records to
enforce the provisions of this Section 9.

10.  INFORMATION BY HOLDER. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.

11.  RULE 144 REPORTING. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of
the Registrable Securities to the public without registration, after such time
as a public market exists for the Common Stock of the Company, the Company
agrees to:

     11.1 PUBLIC INFORMATION. Make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;

     11.2 FILINGS WITH SEC. Use its best efforts to then file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange

                                       10

<PAGE>

EXHIBIT 10.118 (CONTINUED)

Act (at any time after it has become subject to such reporting requirements);
and

     11.3 COMPLIANCE STATEMENT. Furnish to Holders of Registrable Securities
forthwith upon request, a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 (at any time after ninety (90) days
after the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as a
Holder of Registrable Securities may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Holder to sell any such
securities without registration.

12.  INFORMATION RIGHTS. The Company shall furnish to each Investor and
permitted assignees for as long as they continue to hold shares of Series A
Preferred Stock, (i) within 100 days after the end of each fiscal year, an
audited, consolidated balance sheet of the Company and its subsidiaries, if
any, as of the end of such fiscal year, and an audited, consolidated
statement of income and cash flows of the Company and its subsidiaries, if
any, for such year and (ii) within 50 days after the end of each fiscal
quarter, an unaudited, consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of such fiscal quarter, and an unaudited,
consolidated statement of income and cash flows of the Company and its
subsidiaries, if any, for such quarter. In addition during 2000, upon the
written request of an Investor who holds at least ten percent (10% of the
outstanding shares of Series A Preferred Stock, the Company will furnish to
such Investor within 45 days after the end of each calendar month an
unaudited, consolidated balance sheet of the Company and its subsidiaries, if
any, as of the end of such month, and an unaudited, consolidated statement of
income and cash flows of the Company and its subsidiaries, if any, for such
month; provided, however, that the Company shall not be required to provide
such monthly financial information to a requesting Investor on more than one
occasion during each calendar quarter. The information rights set forth in
this Section 12 shall expire upon conversion of all of the outstanding Series
A Preferred Stock into Common Stock. The Investors acknowledge that
information furnished pursuant hereto is subject to the confidentiality
provisions in Section 8.9 of the Purchase Agreement.

13.  BOARD REPRESENTATION; BOARD EXPENSES.

     13.1 BOARD REPRESENTATION. For as long as shares of Series A Preferred
Stock are outstanding, the Board shall consist of seven members. As long as more
than fifty percent (50%) of the total number of shares of Series A Preferred
Stock issued by the Company are outstanding, at each election of directors of
the Company the holders of Series A Preferred Stock shall be entitled, voting as
a separate class, to elect two (2) directors of the Company. As long

                                       11

<PAGE>

EXHIBIT 10.118 (CONTINUED)

as fifty percent (50%) or less but more than twenty percent (20%) of the total
number of shares of Series A Preferred Stock issued by the Company are
outstanding, at each election of directors of the Company the holders of Series
A Preferred Stock shall be entitled, voting as a separate class, to elect one
(1) director of the Company. Thereafter, as long as any shares of Series A
Preferred Stock are outstanding an individual designated by the holders of a
majority of the outstanding shares of Series A Preferred Stock (the "Series A
Representative") shall have the right to receive notice of and to attend and
participate (but not to vote on any matters) at any and all meetings of the
Board of Directors. Information furnished to the Series A Representative shall
be subject to the confidentiality provisions in Section 8.9 of the Purchase
Agreement or to equivalent confidentiality provisions. Each of the Investors
does hereby irrevocably authorize and appoint Hunter Capital Group, LLC, a
Delaware limited liability company ("Hunter Capital"), as its agent and
attorney, with full power of substitution, to designate the Series A
Representative (which authorization and appointment of Hunter Capital is coupled
with an interest and shall be irrevocable during the term of this Agreement).
The remainder of the directors (at least one of whom must be an Independent
Director) shall be elected by the holders of the Series A Preferred Stock and
the holders of the Common Stock voting together as a class. By executing this
Agreement, each Investor agrees that Hunter Capital is designated as its
respective proxy for purposes of designating or selecting one of the directors
to be elected by the holders of the Series A Preferred Stock.

     13.2 EXPENSES OF DIRECTORS. The Company shall reimburse the Series A
Directors and the Independent Director(s) for their reasonable out-of-pocket
expenses related to attending meetings of the Board, which expenses shall be
pre-approved, in writing, by the Company.

14.  SERIES A PREFERRED STOCK VOTING RIGHTS. The Parties agree that so long as
any shares of Series A Preferred Stock remain outstanding, the Company shall
not, without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of a majority of the outstanding shares of
Series A Preferred Stock voting together as a single class:

     14.1 Create or issue any class or series of capital stock which is senior
to or pari passu with the Series A Preferred Stock unless the consideration per
share for which such class or series of capital stock is issued exceeds by
twenty percent (20%) or more the Conversion Price which is in effect at such
time.

     14.2 Authorize the payment of dividends on Common Stock, other than in
shares of Common Stock.

     14.3 Authorize the redemption or repurchase of Common Stock; provided,
however, that this restriction shall not apply (i) to the repurchase of shares
of Common Stock from employees,

                                       12

<PAGE>

EXHIBIT 10.118 (CONTINUED)

officers, directors, consultants or other persons performing services for the
Company or any subsidiary pursuant to agreements (A) outstanding on the date of
issuance of the first share of Series A Preferred Stock or (B) under which the
Company has the option to repurchase such shares upon the occurrence of certain
events, such as the termination of employment, or (ii) if fewer than ten percent
(10%) of the number of shares of Series A Preferred Stock issued on the Purchase
Date are outstanding; each holder of shares of Series A Preferred Stock shall be
deemed to have consented, for purposes of Sections 502, 503 and 506 of the
General Corporation Law of the State of California, to any such repurchase by
the Company.

     14.4 Increase or decrease (other than by conversion) the authorized number
of shares of Series A Preferred Stock.

     14.5 Amend, waive or repeal any provision of, or add any provision to, the
Company's Articles of Incorporation if such action would adversely alter or
change the rights, preferences or privileges of, or the restrictions provided
for the benefit of, the Series A Preferred Stock.

     14.6 Change the authorized number of directors of the Company unless
approved by a majority of the directors of the Company.

     14.7 Sell, convey, or otherwise dispose of or encumber all or substantially
all of its property or business or merge into or consolidate with any other
entity (other than a wholly owned subsidiary corporation) or effect any
transaction or series of related transactions in which more than 50% of the
voting power of the Company is disposed of unless in connection with such
transaction the holders of shares of Series A Preferred Stock receive
consideration for each share of Series A Preferred Stock on an as-converted
basis equal to (i) three (3) times the Series A Issue Price in the event that
said transaction occurs during the first year after the Purchase Date, (ii) four
(4) times the Series A Issue Price in the event that said transaction occurs
during the second year after the Purchase Date, and (iii) five (5) times the
Series A Issue Price in the event that said transaction occurs thereafter (in
each case such price to be adjusted to reflect stock dividends, stock splits or
recapitalizations after the Purchase Date).

14.  OTHER REGISTRATION RIGHTS. The Company may not grant registration rights
senior to the rights granted hereunder except with the approval of the holders
of a majority of the shares of Series A Preferred Stock.

15.  RIGHT OF FIRST OPPORTUNITY.

     15.1 NOTICE OF SALE. For as long as shares of Series A Preferred Stock are
outstanding, if the Company desires to issue and sell shares of its capital
stock or rights, options or other securities exercisable for or convertible into
shares of its

                                       13

<PAGE>

EXHIBIT 10.118 (CONTINUED)

capital stock, then the Company shall first notify each Holder of the material
terms of such proposed sale (such notice, a "Company Issuance Notice").

     15.2 RIGHT OF FIRST OPPORTUNITY. The Company shall then permit each Holder
to acquire, at the time of the closing of such sale, such number of the shares
of capital stock or other securities as would enable such Holder to maintain its
percentage of equity ownership (calculated on an as-converted basis, assuming
the conversion of all series of the Company's Preferred Stock) in the Company
following such issuance at a level held by it immediately prior to such issuance
(the "Proportionate Percentage"). The Holders shall each have twenty (20) days
after the delivery of any Company Issuance Notice to elect by notice to the
Company to purchase such shares or securities at the price and upon the terms
and conditions stated in such notice at the time of the closing of such sale. If
any Holder shall subscribe for less than his Proportionate Percentage, the
Holders that subscribe for their full Proportionate Percentage (the "Subscribing
Holders") shall be entitled to purchase the balance of that non-subscribing
Holder's Proportionate Percentage in the same proportion in which the
Subscribing Holder was entitled to purchase the offered securities in the first
place (excluding for such purposes such non-subscribing Holders). The Company
shall notify each Subscribing Holder five (5) days following the expiration of
the 20-day period described above of the additional amount of the offered
securities which each Subscribing Holder may purchase pursuant to the foregoing
sentence, and each Subscribing Holder shall then have five (5) days from the
delivery of such notice to indicate such additional amount, if any, that such
Subscribing Holder wishes to purchase.

     15.3 EXCEPTIONS. The rights set forth in Section 16.2 shall not apply to
the issuance of (i) shares or grant of options or warrants (including shares
issuable upon exercise of such options or warrants) to any employee, consultant,
or director of the Company, Hunter Capital or its designees, banks, commercial
lenders, strategic lenders, equipment lessors or other lenders, under any
Company stock purchase and/or stock option plans or arrangements approved by the
Board, (ii) shares of Common Stock issued upon conversion of any series of
preferred stock of the Company, (iii) shares of the Company's capital stock or
rights, options or other securities issued pursuant to a stock split of the
Common Stock or Company declared dividend, (iv) an underwritten public offering
of securities by the Company where the underwriter reasonably and in good faith
objects to the exercise of such rights, (v) shares issued in an acquisition (by
merger or otherwise) of another entity or of some or all of its assets, or (vi)
shares issued upon conversion of the Convertible Subordinated Debenture issued
to Trimark Pictures, Inc. on or about the date of this Agreement. The rights set
forth in Section 16.2 shall terminate upon completion of the Company's initial
public offering.

                                       14

<PAGE>

EXHIBIT 10.118 (CONTINUED)

16.  ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement among the Parties regarding the transactions
contemplated herein. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties hereto.

17.  NOTICES, ETC. All notices and other communications required or permitted
hereunder shall be in writing and deemed given on the business day following
delivery to the recipient in person or by overnight courier service, and
addressed (i) if to an Investor or Founder, to such Investor's or Founder's
address set forth on Exhibit A and B below, or at such other address as such
Investor or Founder shall have furnished to the Company in writing, (ii) if to a
Holder other than an Investor or Founder, at such address as such Holder shall
have furnished to the Company in writing or until any such Holder so furnishes
an address to the Company, then to the address of the last Holder of such
securities who has so furnished an address to the Company, or (iii) if to the
Company, to:

                      CinemaNow, Inc.
                      4553 Glencoe Avenue
                      Suite 200
                      Marina del Rey, California 90292
                      Attn:    Bruce David Eisen

18.  COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which may be executed by less than all of the Parties hereto, each of
which shall be enforceable against the Parties actually executing such
counterparts, and all of which together shall constitute one and the same
instrument.

19.  AMENDMENT. Any provision of this Agreement may be amended, waived,
modified, discharged or terminated only with the written consent of the Company,
the Founders, and Investor's holding two-thirds (2/3rds) in interest of the
Series A Preferred Stock (or Common Stock issuable upon conversion thereof);
provided, however, that with the written consent of CinemaN Investment Company
Ltd., a British Virgin Islands company, any provision of this Agreement may be
amended, waived, modified, discharged or terminated with the written consent of
the Company, the Founders, and Investors holding a majority in interest of the
Series A Preferred Stock (or Common Stock issuable upon conversion thereof). Any
amendment or waiver effected in accordance with this Section will be binding
upon the Company, the Founders, the Investors and each Holder of any securities
subject to this Agreement (including securities into which such securities are
convertible) and future Holders of all such securities. Any Founder, Investor or
Holder may waive its, his or her rights or the Company's obligations to such
person hereunder without obtaining the consent of any other person.

20.  ASSIGNMENT AND TRANSFER. This Agreement shall not be assigned by the
Company, by operation of law or otherwise. This Agreement or the rights held by
an Investor under this Agreement may be assigned by such Investor only in
connection with an

                                       15

<PAGE>

EXHIBIT 10.118 (CONTINUED)

assignment or transfer by such Investor which is made in accordance with
Sections 4.6 or 8.12 of the Purchase Agreement.

21.  GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement, including the
construction, validity and performance hereof and the obligations arising
hereunder and thereunder, and all amendments and supplements hereof and thereof
and all waivers and consents hereunder and thereunder, shall be construed in
accordance with and governed by the laws of the State of California without
giving effect to any choice of law or conflicts of law provision or rule that
would cause the application of the laws of any other jurisdiction. Any legal
action or proceeding with respect to this Agreement or any document related
hereto or thereto shall be brought in the courts of the State of California
sitting in the County of Los Angeles or of the United States of America for the
State of California sitting in the County of Los Angeles, and, by execution and
delivery and/or acceptance of this Agreement, each Party hereto hereby accepts
the exclusive jurisdiction of the aforesaid courts. In addition, each Party
hereto hereby irrevocably and unconditionally waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions,
suits or proceedings arising out of or in connection with this Agreement or any
document related hereto or thereto brought in any of the aforesaid courts, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.

22.  SEVERABILITY. In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any Party.

23.  TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the day and year first set forth above.

                               CinemaNow, Inc.

                               By:__________________________
                               Title:_______________________

                                       16

<PAGE>

EXHIBIT 10.118 (CONTINUED)

                           [Investors Signature Page]

                                   INVESTORS:

                                   -----------------------------------
                                   (Print Name of Investor)

                                   -----------------------------------
                                   (Signature)

                                   -----------------------------------
                                   (Title, if applicable)
                                   Address

                                       17

<PAGE>

EXHIBIT 10.118 (CONTINUED)

                           [Founders Signature Page]

                                   FOUNDERS:

                                   Trimark Holdings, Inc.

                                   By:
                                       -------------------------------
                                   Title:
                                          ----------------------------

                                   Trimark Pictures, Inc. (but only
                                   with respect to the Common Stock
                                   to be acquired pursuant to the
                                   Trimark Note (as defined in the
                                   Purchase Agreement))

                                   By:
                                       -------------------------------
                                   Title:
                                          ----------------------------

                                   -----------------------------------
                                   Curt Marvis

                                   -----------------------------------
                                   Bruce Eisen

                                       18

<PAGE>

EXHIBIT 10.118 (CONTINUED)

                                    EXHIBIT A

                              SCHEDULE OF INVESTORS

                                       19

<PAGE>

EXHIBIT 10.118 (CONTINUED)

                                    EXHIBIT B

                                    FOUNDERS

                  Trimark Holdings, Inc.
                  c/o CinemaNow, Inc.
                  4553 Glencoe Avenue
                  Marina del Rey, California  90292

                  Trimark Pictures, Inc.
                  c/o CinemaNow, Inc.
                  4553 Glencoe Avenue
                  Marina del Rey, California  90292

                  Curt Marvis
                  c/o CinemaNow, Inc.
                  4553 Glencoe Avenue
                  Marina del Rey, California  90292

                  Bruce Eisen
                  c/o CinemaNow, Inc.
                  4553 Glencoe Avenue
                  Marina del Rey, California  90292

                                       20

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