Document:

NON-COMPETITION
AGREEMENT

     

    DATE

     

    21
JUNE 2010

     

    PARTIES

     

    
      	
              (1)

            	
              NEUMEDIA INC (formerly
      known as Mandalay Media), Inc. incorporated under the laws of Delaware
      with company number 4423588 whose registered office is at 2000 Avenue of
      the Stars, Suite 410, Los Angeles, California (NeuMedia).

            

    

     

    
      	
              (2)

            	
              ANTIPHONY (MANAGEMENT HOLDINGS)
      LIMITED a company incorporated and registered in England and Wales
      with company number 7283155 whose registered office
      is at 3 More London Riverside, London SE1 2AQ (Newco).

            

    

     

    
      	
              (3)

            	
              JACK CRESSWELL of 86
      Osborne Road,
      Windsor, Berkshire SL4 3EN (Cresswell) and NATE MACLEITCH of 101
      Dudley Gardens, Ealing, London W13 9LU (MacLeitch and together
      with Cresswell the AMV
      Executives).

            

    

     

    BACKGROUND

     

    
      	
              (A)

            	
              By
      an agreement of even date with this agreement (“the Main Agreement”)
      between VAC (as defined in the Main Agreement),  NeuMedia, each
      of AMV Executives (including in the case of MacLeitch in his capacity as
      Trustee for the AMV Founders under the AMV Note (each as defined in the
      Main Agreement)), and the Participating Investors with regard to the (i)
      partial satisfaction of the VAC Note, and (ii) satisfaction of the AMV
      Note ( as defined in the Main
Agreement)).

            

    

     

    
      	
              (B)

            	
              In
      consideration of entering into the Main Agreement and further in
      consideration of their mutual undertakings as to the matters described
      herein, the AMV Executives and Newco (together “the Covenantors”) agree
      to give to NeuMedia the covenants and undertakings herein contained and
      that upon execution by the parties hereto of this agreement, this
      agreement shall constitute the legally binding and enforceable agreement
      of the parties hereto.

            

    

     

    
      	
              (C)

            	
              Each
      Covenantor acknowledges that businesses which will continue to be
      conducted by NeuMedia and its subsidiaries following the consummation of
      the transactions contemplated under the Main Agreement include, but are
      not limited to, those of operating adult websites which business is
      intensely competitive.

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              (D)

            	
              NeuMedia
      and its subsidiaries has made significant efforts and incurred significant
      costs and expenditures in developing goodwill and relationships with
      customers, potential customers, suppliers, employees and others in
      business with the Midstream Parties, which each Covenantor acknowledges
      would be irreparably damaged by his or its competition with NeuMedia’s
      business with any Midstream Party.

            

    

     

    
      	
              (E)

            	
              Each
      Covenantor acknowledges that NeuMedia has been induced to enter into the
      Main Agreement by ensuring that this agreement will be delivered to
      NeuMedia upon the consummation of the transactions contemplated by the
      Main Agreement.

            

    

     

    
      	
              (F)

            	
              As
      an inducement to NeuMedia to consummate the transactions contemplated by
      the Main Agreement, in consideration of the mutual promises contained
      herein, and for other good and valuable consideration, the receipt and
      sufficiency of which is hereby mutually acknowledged, each Covenantor
      covenants and agrees with NeuMedia as
follows:

            

    

     

    AGREED
TERMS

     

    
      	
              1.

            	
              Interpretation

            

    

     

    The
following definitions and rules of interpretation in this clause apply in this
agreement.

     

    
      	
              1.1

            	
              Definitions:

            

    

     

    affiliate: shall have the
meaning ascribed to such term in Rule 405 under the Securities Act of 1933 of
the United States of America, as amended.

     

    Business Day: a day other than
a Saturday, Sunday or public holiday in England when banks in London are open
for business.

     

    Group: in relation to a
company, that company, any subsidiary or holding company from time to time of
that company, and any subsidiary from time to time of a holding company of that
company.

     

    holding company and subsidiary: mean a "holding
company" and "subsidiary" as defined in section 1159 of the Companies Act
2006.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Insolvency Event: an event
referred to in Clause 2.3.

     

    Midstream Party (Parties):
Midstream Media International, N.V., its holding company or any of its
subsidiaries, including, but not limited to, you porn.com and any other domain
name used by a Midstream Party.

     

    Termination Date: the date
determined in clause 2.2.

     

    
      	
              1.2

            	
              Clause
      and paragraph headings are inserted for convenience only and shall not
      affect the interpretation of this
agreement.

            

    

     

    
      	
              1.3

            	
              A
      person includes a
      natural person, corporate or unincorporated body (whether or not having
      separate legal personality) and that person's personal representatives,
      successors or permitted assigns.

            

    

     

    
      	
              1.4

            	
              A
      reference to a company shall include
      any company, corporation or other body corporate, wherever and however
      incorporated or established.

            

    

     

    
      	
              1.5

            	
              Unless
      the context otherwise requires, words in the singular shall include the
      plural and in the plural include the
singular.

            

    

     

    
      	
              1.6

            	
              Unless
      the context otherwise requires, a reference to one gender shall include a
      reference to the other genders.

            

    

     

    
      	
              1.7

            	
              A
      reference to any party shall include that party's personal
      representatives, successors and permitted
  assigns.

            

    

     

    
      	
              1.8

            	
              A
      reference to a statute or statutory provision is a reference to it as
      amended, extended or re-enacted from time to time provided that, as
      between the parties, no such amendment, extension or re-enactment shall
      apply for the purposes of this agreement to the extent that it would
      impose any new or extended obligation, liability or restriction on, or
      otherwise adversely affect the rights of, any
  party.

            

    

     

    
      	
              1.9

            	
              A
      reference to a statute or statutory provision shall include all
      subordinate legislation made from time to time under that statute or
      statutory provision.

            

    

     

    
      	
              1.10

            	
              Any
      reference to an English legal term for any action, remedy, method of
      judicial proceeding, legal document, legal status, court, official or any
      legal concept or thing shall, in respect of any jurisdiction other than
      England, be deemed to include a reference to what most nearly approximates
      to the English legal term in that
jurisdiction.

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              1.11

            	
              A
      reference to "this agreement" or to any other agreement or document
      referred to in this agreement is a reference to this agreement or such
      other document or agreement as varied or novated (in each case, other than
      in breach of the provisions of this agreement) from time to
      time.

            

    

     

    
      	
              1.12

            	
              References
      to clauses are to the clauses of this
agreement;

            

    

     

    
      	
              1.13

            	
              Any
      words following the terms including, include, in particular or any
      similar expression shall be construed as illustrative and shall not limit
      the sense of the words, description, definition, phrase or term preceding
      those terms.

            

    

     

    
      	
              1.14

            	
              All
      words and phrases defined in the Main Agreement shall bear the same
      meaning where used in this
agreement.

            

    

     

    
      	
              2.

            	
              Covenant

            

    

     

    
      	
              2.1

            	
              Covenant
      Against Competition

            

    

     

    During
the period commencing the date hereof and terminating on the Termination
Date:

     

    
      	
            	
              2.1.1

            	
              each
      Covenantor shall not, directly or indirectly, either alone or in
      association with others, anywhere within the world, other than in the
      performance of his or her duties as an employee or consultant of NeuMedia
      or its affiliates knowingly, directly or indirectly, engage in
      any  business with a Midstream Party;
  and

            

    

     

    
      	
            	
              2.1.2

            	
              Cresswell
      and MacLeitch will not knowingly, directly or indirectly, consult with or
      do business with, advise, be a partner service provider, purchase goods
      of, joint venturer with, be a director or managing member of, or otherwise
      assist or provide services to, any Midstream
  Party

            

    

     

    PROVIDED
THAT

     

    this
agreement shall not in any way limit or restrict Cresswell, MacLeitch or Newco
from engaging in an adult mobile advertising network or otherwise competing with
any Midstream Party or from indirectly buying advertising from any Midstream
Party without prejudice to NeuMedia's right to refuse to carry on business with
a Midstream Party selling advertising to any Covenantor.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              2.2

            	
              Duration
      of Covenant

            

    

     

    The
covenant set out in Clause 2.1 shall cease and terminate on the earlier to occur
of:

     

    
      	
            	
              2.2.1

            	
              the
      date that is 3 years following the Closing (as defined in the Main
      Agreement),

            

    

     

    
      	
            	
              2.2.2

            	
              such
      time as NeuMedia and its subsidiaries shall cease to do business with all
      Midstream Parties (provided that none of Newco, Cresswell or MacLeitch
      will entice, encourage or influence, or attempt to entice, encourage or
      influence any Midstream Party to terminate or fail to renew any business
      relationship with NeuMedia or any of its subsidiaries)
  and

            

    

     

    
      	
            	
              2.2.3

            	
              if
      NeuMedia or any of its subsidiaries shall be involved in financial
      difficulties as evidenced by an Insolvency
  Event.

            

    

     

    
      	
              2.3

            	
              Insolvency
      Events

            

    

     

    For the
purposes of Clause 2.2, Insolvency Event shall mean any of the following
events:

     

    
      	
            	
              2.3.1

            	
              by
      its commencement of a voluntary case under Title 11 of the United States
      Code as from time to time in effect, or by its authorizing, by appropriate
      proceedings of its Board of Directors or other governing body, the
      commencement of such a voluntary
case;

            

    

     

    
      	
            	
              2.3.2

            	
              by
      its filing an answer or other pleading admitting or failing to deny the
      material allegations of a petition filed against it commencing an
      involuntary case under said Title 11, or seeking, consenting to or
      acquiescing in the relief therein provided, or by its failing to
      controvert timely the material allegations of any such
      petition;

            

    

     

    
      	
            	
              2.3.3

            	
              by
      the entry of an order for relief in any involuntary case commenced under
      said Title 11;

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
            	
              2.3.4

            	
              by
      its seeking relief as a debtor under any applicable law, other than said
      Title 11, of any jurisdiction relating to the liquidation or
      reorganization of debtors or to the modification or alteration of the
      rights of creditors, or by its consenting to or acquiescing in such
      relief;

            

    

     

    
      	
            	
              2.3.5

            	
              by
      the entry of an order by a court of competent jurisdiction (i) by finding
      it to be bankrupt or insolvent, (ii) ordering or approving its
      liquidation, reorganization or any modification or alteration of the
      rights of its creditors, or (iii) assuming custody of, or appointing a
      receiver or other custodian for all or a substantial part of its property
      and such order shall not be vacated or stayed on appeal or otherwise
      stayed within 60 days; or

            

    

     

    
      	
            	
              2.3.6

            	
              by
      its making an assignment for the benefit of, or entering into a
      composition with, its creditors, or appointing or consenting to the
      appointment of a receiver or other custodian for all or a substantial part
      of its property.

            

    

     

    
      	
              3.

            	
              Injunctive
      Relief

            

    

     

    
      	
              3.1

            	
              NeuMedia
      and its subsidiaries shall be entitled to immediate, preliminary and
      permanent injunctive relief for any breaches of this
      agreement.

            

    

     

    
      	
              3.2

            	
              NeuMedia
      and its subsidiaries shall be entitled to such relief without the
      necessity of proving actual damages or posting a bond.in addition to, and
      not in lieu of, any other rights and remedies available to NeuMedia under
      law or in equity have the right and remedy to have the provisions of this
      agreement enforced by injunctive relief in any court of competent
      jurisdiction, it being agreed that any breach or threatened breach of this
      agreement would cause irreparable injury to NeuMedia and that damages
      would not provide an adequate remedy to
  NeuMedia.

            

    

     

    
      	
              4.

            	
              Judicial
      Modification

            

    

     

    
      	
              4.1

            	
              The
      parties acknowledge and agree that the provisions of this agreement are
      reasonable and valid in duration and scope and in all other respects. Each
      Covenantor recognizes that the provisions of this agreement are necessary
      in order to protect the legitimate business interests of
      NeuMedia.

            

    

     

    
      	
              4.2

            	
              If
      any court of competent jurisdiction determines that any of the provisions
      of this agreement, or any part thereof, is invalid or unenforceable, such
      court shall have the power to reduce the duration or scope of such
      provision, as the case may be, and, in its reduced form, such provision
      shall then be enforceable.

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              Severability

            

    

     

    The
parties acknowledge and agree that, in the event that any of the provisions of
this agreement are determined, notwithstanding Section 3 herein, to be invalid
or unenforceable, the remainder of this agreement shall not thereby be affected
and shall be given full effect, without regard to the invalid
portions.

     

    
      	
              6.

            	
              Waiver

            

    

     

    The
waiver or consent by NeuMedia of any breach by each Covenantor of any provision
of this agreement shall not operate as or be construed as a waiver or consent of
any subsequent breach thereof.

     

    
      	
              7.

            	
              Amendment

            

    

     

    This
agreement may be amended, modified, or terminated only by a written instrument
executed by the parties hereto.

     

    
      	
              8.

            	
              Successors
      and Assigns

            

    

     

    Neither
party’s rights and obligations under this agreement may be assigned without the
consent of the other parties. This agreement shall be binding upon and inure to
the benefit of NeuMedia, its successors and permitted assigns. This agreement
shall be binding upon each Covenantor and each Covenantor's successors and
permitted assigns.

     

    
      	
              9.

            	
              Applicable
      Law; Forum

            

    

     

    This
agreement shall be governed by the Laws of England and Wales and shall be
subject to the exclusive jurisdiction of the English Courts.

     

    
      	
              10.

            	
              Headings

            

    

     

    Section
and other headings contained in this agreement are for reference purposes only
and are in no way intended to define, interpret, describe or otherwise limit the
scope, extent or intent of this agreement or any of its provisions.

     

    
      	
              11.

            	
              Costs

            

    

     

    Each
party shall bear its own fees, cost and expenses in any action at law or in
equity (including arbitration) brought to enforce or interpret the terms of this
agreement. Nothing contained herein, however, shall prevent a party from seeking
reimbursement for reasonable legal fees, costs and disbursements in any such
action.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      	
              12.

            	
              Notices

            

    

     

    All
notices, requests, demands or other communications which are required or may be
given pursuant to the terms of this agreement will be in writing and will be
deemed to have been duly given (a) on the date established by the sender as
having been delivered personally, (b) on the date delivered by a private courier
as established by the sender by evidence obtained from the courier, (c) on the
date sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the next business day, or (d)
on the fifth day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid. Such communications, to be valid, must be
addressed as follows:

     

    If to
NeuMedia:                 
NeuMedia, Inc.

    2000
Avenue of the Stars, Suite 410, Los Angeles, California 90067

    Attention:  Chief
Executive Officer

    Telephone:  (310)
601 2500

    Fax:
(310) 277 2741

    With a
copy
to:           General
Counsel.

     

    If to
each Covenantor:       Antiphony (Management Holdings)
Limited

    Liston
Exchange

    Liston
Court

    Marlow

    SL7
1BG

    Telephone:  01628
405 660

    Fax:  01628
405 661

    With
copies to:

    Jack
Cresswell 86 Osborne Road, Windsor, Berkshire SL4 3EN and Nate MacLeitch 101
Dudley Gardens, Ealing, London W13 9LU and

    Allison
Bennington

    Partner
And General Counsel

    Valueact
Capital

    435
Pacific Ave., 4th Floor

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    San
Francisco, Ca 94133

    Telephone.
(415) 362-3700

    Fax.
(415) 362-5727

    abennington@valueact.com

     

    Such
contact details may be changed, from time to time, by means of a notice given in
the manner provided in this Clause 12.

     

    
      	
              13.

            	
              Counterparts

            

    

     

    This
agreement may be executed in one or more counterparts, and by different parties
hereto on separate counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

     

    [The
remainder of this page has been intentionally left blank.]

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS of which the
parties have executed and delivered this document as a deed on the date first
above written.

     

    
      	
              EXECUTED
      and DELIVERED as a DEED

            	
              )

            	 
      
	
              By
      NEUMEDIA,
      Inc

            	
              )

            	 
      
	
              Acting
      by
      [                                         ]

            	
              )

            	
                 

            
	
              In
      the presence of:

            	
              )

            	
              Director

            

    

    

    
      	
              witness
      signature

            	
                 

            	 
      
	 
      	 
      	 
      
	
              witness
      name printed 

            	
                 

            	 
      
	 
      	 
      	 
      
	
              witness
      address

            	
                 

            	 
      
	 
      	 
      	 
      
	 
      	
                 

            	 
      
	 
      	 
      	 
      
	 
      	
                 

            	 
      
	 
      	 
      	 
      
	
              witness
      occupation

            	
                 

            	 
      

    

    

     

    
      	
              EXECUTED
      and DELIVERED as a DEED

            	
              )

            	 
      
	
              By

            	
              )

            	 
      
	
              ANTIPHONY (MANAGEMENT
      HOLDINGS) LIMITED

            	
              )

            	
                 

            
	
              In
      the presence of:

            	
              )

            	
              Director

            

    

    

    
      	
              witness
      signature

            	
                 

            	 
      
	 
      	 
      	 
      
	
              witness
      name printed

            	
                 

            	 
      
	 
      	 
      	 
      
	
              witness
      address

            	
                 

            	 
      
	 
      	 
      	 
      
	 
      	
                 

            	 
      
	 
      	 
      	 
      
	 
      	
                 

            	 
      
	 
      	 
      	 
      
	
              witness
      occupation

            	
                 

            	 
      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	
              EXECUTED
      and DELIVERED as a DEED

            	
              )

            	 
      
	
              By
      JACK
      CRESSWELL

            	
              )

            	
                

            
	
              In
      the presence of:

            	
              )

            	 
      

    

    

    
      
        
          
            
              
                	
                        witness
      signature

                      	
                          

                      	 
	 
      	 
      	 
	
                        witness
      name printed

                      	
                          

                      	 
	 
      	 
      	 
	
                        witness
      address

                      	
                          

                      	 
	 
      	 
      	 
	 
      	
                          

                      	 

              

            

          

        

      

    

     

    
      	
              EXECUTED
      and DELIVERED as a DEED

            	
              )

            	 
      
	
              By
      NATE
      MACLEITCH

            	
              )

            	
                

            
	
              In
      the presence of:

            	
              )

            	 
      

    

    

    
      
        
          
            
              
                	
                        witness
      signature

                      	
                          

                      	 
	 
      	 
      	 
	
                        witness
      name printed

                      	
                          

                      	 
	 
      	 
      	 
	
                        witness
      address21 June,
2010

     

    NeuMedia,
Inc.

    2000
Avenue of the Stars

    Suite
410

    Los
Angeles, CA  90067

    

    Antiphony
(Management Holdings) Limited

    3 More
London Riverside

    London
SE1 2AQ

     

    Re:        Transfer
of Earn Out Payments

     

    Gentlemen:

     

    This
letter is delivered pursuant to Section 5 of that certain Letter Agreement dated
June 13, 2010 (“Letter
Agreement”) among ValueAct SmallCap Master Fund, L.P., NeuMedia, Inc.,
formerly known as Mandalay Media, Inc. (“NeuMedia”), Jonathan
Cresswell, Nathaniel MacLeitch (including in his capacity as Trustee for the AMV
Founders under the AMV Note) and certain lead purchasers of the New Senior
Notes.  Capitalized terms used in this letter and not defined herein
shall have the meanings given to them in the Letter Agreement.

     

    Reference
is made to Section 2.4 and related provisions of that certain Stock Purchase
Agreement, dated as of October 8, 2008, as amended (“Stock Purchase Agreement”),
between NeuMedia and the Sellers party to the Stock Purchase Agreement (“Sellers”), providing for
certain Earn Out Payments.

     

    In
accordance with the Letter Agreement, effective as of the Closing Date, the
undersigned, in his capacity as Sellers’ Representative, as defined and
specified in the Stock Purchase Agreement, hereby irrevocably terminates and
cancels any and all obligations of NeuMedia, or any of its affiliates, with
respect to the Earn Out Payments, whether arising before or after the Closing
Date; provided, however, the obligations with respect to the Earn Out Payments,
including the Sellers’ claim
for  Earn Out Payments for the period ended 31 March 2010, will
be transferred to and assumed by Newco in a manner that is intended to retain
the capital gains tax treatment of such payments and, for the avoidance of
doubt, all obligations of NeuMedia or any of its affiliates with respect to such
payments shall be discharged in full and NeuMedia makes no admission regarding
such obligations.  Newco (now known as Antiphony (Management Holdings)
Limited) hereby agrees with the Sellers’ Representative that the Earn Out
Payments amount to
£1,711,000  and are due and payable today.
Notwithstanding the foregoing, the Sellers are entitled to keep and shall have
no obligation to reimburse any Earn-Out Payments paid to the Sellers on or prior
to the date hereof.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    The undersigned represents and warrants
that he is the duly appointed and acting Sellers’ Representative, and has the
requisite power and authority on behalf of the Sellers under the Stock Purchase
Agreement to execute this letter on behalf of, and bind the Sellers hereto as if
they were parties hereof.  This letter shall be governed by and
construed in accordance with the internal, substantive laws of the State of
Delaware.

     

    [Remainder
of page intentionally left blank.]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        
          	 
      	
                  Very
      truly yours,

                
	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  Nathaniel
      MacLeitch, Sellers’
Representative

                

        

      

    

     

    Agreed
and accepted as of the date first written above:

     

    NEUMEDIA,
INC.

    

    
      
        
          
            
              	
                      By:

                    	 
      	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    Agreed
and accepted as of the date first written above:

    ANTIPHONY
(MANAGEMENT HOLDINGS) LIMITED.

    

    
      
        
          	
                  By:

                	 
      	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

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