Document:

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                                                                   EXHIBIT 10.14

                            BAM! ENTERTAINMENT, INC.

                        SERIES C STOCK PURCHASE AGREEMENT

                                  MAY 24, 2001

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                                    EXHIBITS

<TABLE>
<S>             <C>
Exhibit A       -   Second Amended and Restated Certificate of Incorporation
Exhibit B       -   Registration Rights Agreement
Exhibit C       -   Proprietary Information and Inventions Agreement
Exhibit D       -   Bylaws of the Company
Exhibit E       -   Opinion of Counsel to the Company
Exhibit F       -   Co-Sale and Right of First Refusal Agreement
</TABLE>

                                    SCHEDULES

<TABLE>
<S>                  <C>
Schedule 1           -     Schedule of Purchasers
Schedule 2.2(a)      -     Contingent Reserved Common Shares
Schedule 2.2(d)      -     Stockholders and Option Holders List
Schedule 2.3         -     Subsidiaries
Schedule 2.7         -     Litigation
Schedule 2.8(a)      -     Material Intellectual Property
Schedule 2.8(b)      -     Certain IP Agreements
Schedule 2.10        -     Material Agreements
Schedule 2.10(b)     -     Nonbinding Contracts
Schedule 2.11        -     Liabilities
Schedule 2.13        -     Conflicts
Schedule 2.17        -     Employee Benefit Plans
Schedule 2.24        -     Financial Statements
Schedule 2.25(d)     -     Changes; Contracts/Agreements
Schedule 2.25(e)     -     Changes; Compensation/Agreements with employees,
                           representatives, agents, officers, directors or stockholders
Schedule 2.25(i)     -     Changes; Loans/Guarantees
</TABLE>

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                        SERIES C STOCK PURCHASE AGREEMENT

        THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of May 24,
2001, is entered into by and among BAM! Entertainment, Inc., a Delaware
corporation (with its predecessors and successors, the "Company"), and the
parties listed on Schedule 1 hereto (each, individually, a "Purchaser" and,
collectively, the "Purchasers").

                                   WITNESSETH:

        A. The Company, successor in interest to Bay Area Multimedia, Inc., a
California corporation, was formerly known as Bay Area Multimedia, Inc., a
Delaware corporation.

        B. Subject to the terms and conditions set forth herein, the Company
desires to issue and sell to the Purchasers, and the Purchasers severally desire
to purchase from the Company, shares of the Company's Series C Preferred Stock,
par value $0.001 per share, for an aggregate purchase price of up to
$10,000,000, as partially set forth on Schedule 1 attached hereto.

        C. The Purchasers and the Company desire to set forth their mutual
agreements with respect to such purchase and sale and to establish various
rights and obligations in connection therewith.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

        1. Purchase and Sale of Preferred Stock..

                1.1 Sale and Issuance of Series C Preferred Stock.

                        (a) The Company shall adopt and file with the Secretary
of State of the State of Delaware on or before the Closing (as defined below)
the Amended and Restated Certificate of Incorporation of the Company in the form
attached hereto as Exhibit A (the "Restated Certificate").

                        (b) Subject to the terms and conditions of this
Agreement, each Purchaser severally (but not jointly) agrees to purchase at the
Closing, and the Company agrees to sell and issue to such Purchaser at the
Closing, such number of shares of the Company's Series C Preferred Stock, par
value $0.001 per share, as set forth opposite such Purchaser's name on Schedule
1 attached hereto, at a purchase price of $22.553 per share, and for the total
purchase price indicated with respect to such Purchaser on Schedule 1,
representing an aggregate purchase price of up to $10,000,000 for all
Purchasers. The shares of Series C Preferred Stock to be issued to the
Purchasers pursuant to this Agreement shall hereinafter be referred to as the
"Series C Preferred Stock."

                1.2 Closing; Delivery. The closing of the purchase and sale of
the Series C Preferred Stock (the "Closing") shall take place at one or more
closings. All Closings shall be held at the offices of Doty Sundheim & Gilmore,
260 Sheridan Avenue, Suite 200, Palo Alto,

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California. The first Closing shall occur at 9:00 a.m. Pacific Standard Time on
May 4, 2001, or at such other time and place as the Company and the Purchasers
mutually agree upon, orally or in writing (the "Initial Closing" and the
"Closing Date"). The subsequent Closings shall occur at such times as approved
of by the parties to such Closing. At each Closing, the Company shall deliver to
each Purchaser a certificate registered in the name of such Purchaser
representing the Series C Preferred Stock being purchased thereby against
payment of the purchase price therefor, which shall be payable by check or by
wire transfer of immediately available funds to an account designated by the
Company. The Company and each Purchaser shall take such additional actions and
execute and deliver such additional agreements and other instruments and
documents as may be reasonably necessary or appropriate to effect the
transactions contemplated by this Agreement in accordance with its terms.

                1.3 Use of Proceeds. The Company shall apply the proceeds
received hereunder from the sale of the Series C Preferred Stock to pay for the
reasonable expenses of the Company associated with the issuance of the Series C
Preferred Stock, to fund continued product and service development, to fund a
broader market launch of the Company's services, to build corporate
infrastructure and for general working capital purposes.

                1.4 Reservation of Additional Shares of Series C Preferred
Stock. As set forth in the Restated Certificate, the Company has reserved a
total of 443,400 shares of its Series C Preferred Stock, par value $0.001 per
share, for issuance and sale pursuant to this Agreement.

        2. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, each of the Purchasers,
as follows:

                2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and to execute, deliver and
perform this Agreement, the "Co-Sale and Right of First Refusal Agreement" and
the "Registration Rights Agreement" (as defined in Section 2.4 below)
(collectively, the "Transaction Agreements"), and to carry out the transactions
contemplated by each of the Transaction Agreements. The Company is duly
qualified to transact business and is in good standing in the State of
California and in each other jurisdiction in which the failure to be so
qualified would have a material adverse effect on the business (as now
conducted), financial or other condition, operating results, assets or
properties of the Company (each such effect, a "Material Adverse Effect").

                2.2 Capitalization. The authorized capital stock of the Company
consists, or will consist, immediately prior to the Closing, of:

                        (a) 10,000,000 shares of common stock, par value $0.001
per share (the "Common Stock"), of which 327,385 shares are issued and
outstanding. All of the issued and outstanding shares of Common Stock have been
duly authorized, are fully-paid and nonassessable and were issued in compliance
with all applicable federal and state securities laws. The Company has reserved
976,220 shares of Common Stock for issuance upon conversion of the Series A
Preferred Stock (as defined below), 320,000 shares of Common Stock for issuance
upon conversion of the Company's Series B Preferred Stock, par value $0.001 per
share, 443,400

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shares of Common Stock for issuance upon conversion of the Company's Series C
Preferred Stock, par value $0.001 per share, 325,000 shares of Common Stock for
issuance pursuant to the exercise of options issued or reserved for issuance
under stock incentive plans currently effective (the "Stock Plan"), 43,500
shares of Common Stock for issuance upon exercise of warrants to purchase Common
Stock issued to PAR Capital (30,000 shares), K&L 2000 LLC (10,000 shares) and
Morgan Keegan & Company, Inc. (3,500 shares) (the foregoing warrants being
collectively called the "Warrants") and shares issuable upon exercise of the
Warrants being collectively called the "Warrant Shares"). Except as set forth in
Schedule 2.2(a), there are no other Common Shares to be issued (the "Contingent
Reserved Common Shares").

                        (b) 3,000,000 shares of Preferred Stock with a par value
of $0.001 per share (the "Preferred Stock"), of which 976,220 shares have been
designated as Series A Convertible Preferred Stock (the "Series A Preferred
Stock"), all of which are issued and outstanding, 320,000 shares have been
designated as Series B Preferred Stock (the "Series B Preferred Stock"), 294,620
of which are issued and outstanding, and 443,400 shares have been designated as
Series C Preferred Stock (the "Series C Preferred Stock"), all of which may be
issued and outstanding upon the Closing.

                        (c) Except for (A) the conversion privileges of the
Series A Preferred Stock, (B) the conversion privileges of the Series B
Preferred Stock, (C) the conversion privileges of the Series C Preferred Stock,
(D) currently authorized options to purchase 110,750 shares of Common Stock
granted to employees pursuant to the Stock Plan, (E) the Warrants and the (F)
Contingent Reserved Common Shares (collectively, the "Common Stock
Equivalents"): (i) no subscription right, warrant, option, convertible security
or other right or interest (contingent or otherwise) to purchase or acquire any
shares of capital stock, of the Company is authorized, issued or outstanding;
(ii) the Company does not have any obligation (contingent or otherwise) (a) to
issue any subscription right, warrant, option, convertible security or other
such right or interest or (b) to issue or distribute to holders of any shares of
its capital stock any evidences of indebtedness or assets of the Company; and
(iii) the Company does not have any obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.

                        (d) Attached hereto as Schedule 2.2(d) is a true and
complete list of the stockholders of the Company and all holders of any options
or warrants of the Company, showing the number of shares of capital stock,
options or warrants of the Company held by each such person as of the date
hereof. Except as provided in Schedule 2.2(a) and Schedule 2.2(d), there are no
other holders of any subscription right, option, warrant, convertible security
or other right or interest that is convertible into or exercisable for shares of
capital stock of the Company, and there are no statutory or, to the Company's
knowledge, contractual stockholders' preemptive rights, rights of first refusal
or any similar rights relating to the acquisition of the capital stock of the
Company.

                2.3 Subsidiaries. Except as specified in Schedule 2.3, the
Company does not have any subsidiaries or own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, joint venture, association, trust, estate, limited liability
partnership, joint stock company, unincorporated organization or government or

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any agency or political subdivision thereof, or other entity or organization
(each of the foregoing, together with any individual, being sometimes referred
to herein as a "Person"). Schedule 2.3 sets forth, as of the Initial Closing and
giving effect to the transactions contemplated hereby, a complete and current
list of the outstanding equity interests and the stockholders of the Company's
subsidiaries.

                2.4 Authorization. All corporate action on the part of the
Company, its directors, officers and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Registration
Rights Agreement in the form attached hereto as Exhibit B, the performance of
all obligations of the Company hereunder and thereunder and the authorization,
issuance and delivery of shares of the Series C Preferred Stock pursuant to the
terms of this Agreement and the Common Stock issuable upon conversion of the
Series C Preferred Stock has been taken or will be taken prior to the Closing,
and the Transaction Agreements, when executed and delivered by the Company,
shall constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms except: (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and other laws of general application affecting
enforcement of creditors' rights generally; (ii) as limited by laws or equitable
principles relating to the availability of specific performance, injunctive
relief, or other equitable remedies; or (iii) to the extent the indemnification
provisions contained in the Registration Rights Agreement may be limited by
applicable federal or state securities laws.

                2.5 Compliance with Securities Laws; Valid Issuance of
Securities. The Series C Preferred Stock being issued to the Purchasers
hereunder, when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, will be duly and validly issued,
fully-paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under this Agreement and applicable federal and state
securities laws. Shares of the Common Stock issuable upon conversion of the
Series C Preferred Stock purchased hereunder have been duly and validly reserved
for issuance, and upon issuance in accordance with the terms of the Restated
Certificate, shall be duly and validly issued, fully-paid and nonassessable and
free of restrictions on transfer other than restrictions on transfer under this
Agreement, the Registration Rights Agreement and applicable federal and state
securities laws.

                2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, foreign, state or local governmental authority on the
part of the Company is required in connection with the consummation of the
transactions contemplated by the Transaction Agreements, except for filings
pursuant to applicable state securities laws and Regulation D of the Securities
Act of 1933, as amended (the "Securities Act").

                2.7 Litigation. Except as set forth on Schedule 2.7, there is no
action, suit, proceeding or investigation pending or, to the best of the
Company's knowledge, currently overtly threatened against the Company or any of
its subsidiaries, nor is the Company aware that there is any basis for the
foregoing. The foregoing includes, without limitations, actions, suits,
proceedings or investigations pending or threatened involving the prior
employment of any of the Company's employees, their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers, or their

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obligations under any agreements with prior employers. The Company is not a
party or expressly subject to the provisions of any order, writ, injunction,
judgment or decree of any court, administrative agency, government agency or
instrumentality. There is no action, suit or proceeding by the Company currently
pending or which the Company intends to initiate.

                2.8 Intellectual Property.

                        (a) To the best knowledge of the Company, the Company
has sufficient title and ownership of, or rights by license or other agreement
to, all patents, patent applications, trademarks, service marks, trade names,
domain names, URLs, copyrights, trade secrets, software, source codes, object
codes and other intellectual property rights used by the Company in its business
or necessary to conduct its business as currently conducted ("Intellectual
Property"). The Company has not received any written communications alleging
that the Company has violated or, by conducting its business as now conducted,
would violate any of the rights in the Intellectual Property of any other
Person. The Company is not aware that any of its employees are obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of the Company or that would conflict with the
Company's business as currently conducted. The Company has not licensed any of
the Intellectual Property to any other Person, nor does any other Person have an
option or any other right to acquire any of the Intellectual Property other than
in the ordinary course of business (except for the Intellectual Property that is
in the public domain). Schedule 2.8(a) sets forth a list of the Company's
material intellectual property.

                        (b) All licenses or agreements listed in Schedule 2.8(b)
(the "Certain IP Agreements") are in full force and effect and to the best
knowledge of the Company there is no default by any party thereto. True and
complete copies of all Certain IP Agreements, and any amendments thereto, have
been made available to the Purchasers, and to the best knowledge of the Company,
the licensors under the Certain IP Agreements to which the Company is granted
rights, to the best of the Company's knowledge, have all requisite power and
authority to grant the rights purported to be conferred thereby. None of the
products manufactured and sold, nor any process or know-how used, by the Company
under the Certain IP Agreements infringes or is alleged to infringe any patent,
trademark, service mark, trade name, copyright or other proprietary right or is
a derivative work based on the work of any other person.

                2.9 Compliance with Other Instruments. The Company is not in
violation or in default of any provisions of (i) its Certificate of
Incorporation, as amended, or Bylaws or (ii) any order, writ, injunction,
judgment, instrument, decree or contract to which it is a party or by which it
is bound or (iii) to the Company's knowledge, any provision of a federal or
state statute, rule or regulation applicable to the Company, which violations or
defaults would in the case of the items described in clauses (ii) and (iii),
either individually or in the aggregate, have a Material Adverse Effect. The
execution, delivery and performance of the Transaction Agreements and the
consummation of the transactions contemplated hereby or thereby do not and will
not, with or without the passage of time and/or the giving of notice: (a) result
in any such violation or conflict with or constitute a default under any such
provision, order, writ, injunction, judgment, instrument, decree or contract or
any such statute, rule or regulation; (b)

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result in the creation of any lien, security interest, charge or encumbrance
upon the capital stock or any assets of the Company; or (c) give any third party
the right to modify, terminate or accelerate any obligation under any such
provision, order, writ, injunction, judgment, instrument, decree or contract.

                2.10 Agreements. Schedule 2.10 sets forth a list of all material
agreements, contracts, understandings or commitments, written or oral
(collectively, "Material Agreements"), to which the Company is a party or by
which it is bound. As used herein, Material Agreements shall mean:

                        (a) Agreements, contracts, understandings or commitments
between the Company and any of its subsidiaries, officers, directors or
affiliates or any of such officers', directors' or affiliates' immediate family
members.

                        (b) Agreements, contracts, understandings or commitments
to which the Company or any of its affiliates is a party or by which it is bound
that involve obligations (contingent or otherwise) of, or payments to, the
Company in excess of, $250,000.

                        All of such agreements, contracts understanding or
commitments are valid, binding and in full force and effect with respect to the
Company or any of its subsidiaries, except as set forth on Schedule 2.10(b), and
there has been no material default by the Company under any of the foregoing nor
to the Company's knowledge has there been any material default by any other
party thereto.

                2.11 Absence of Undisclosed Liabilities. Except as set forth on
Schedule 2.11, since the Statement Date (as hereafter defined), the Company and
any of its subsidiaries has not: (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of the Company's capital stock; (ii) incurred any indebtedness on behalf of the
Company for money borrowed or incurred any other liabilities in excess of
$50,000 individually, or in excess of $100,000 in the aggregate to any one
creditor; (iii) made any loans or advances to any Person in the name of or with
respect to the Company, other than ordinary advances for expenses incurred in
the ordinary course of business consistent with past practices; or (iv) sold,
exchanged or otherwise disposed of any of the Company's assets or rights, other
than in the ordinary course of business consistent with past practices.

                2.12 Disclosure. None of the representations or warranties of
the Company contained in this Agreement, the schedules and exhibits attached
hereto, nor any certificate furnished or to be furnished to the Purchasers at
Closing (when read together) contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made.

                2.13 No Conflict of Interest. The Company is not indebted,
directly or indirectly, to any of its subsidiaries or officers or directors of
the Company or its subsidiaries or, to the knowledge of the Company or its
subsidiaries, such officers' or directors' respective spouses or immediate
family members, for any amount whatsoever. Except as set forth on Schedule 2.13
attached hereto, none of the Company's subsidiaries or officers or directors of
the

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Company or its subsidiaries or, to the knowledge of the Company or its
subsidiaries, no member of such officers' or directors' immediate families (x)
are, directly or indirectly, indebted to the Company or, (y) have any direct or
indirect ownership interest in any Person (A) with which the Company is
affiliated or (B) with which the Company has a material business relationship,
or (C) which competes with the Company; except that for purposes of this clause
(y), officers, directors and/or stockholders of the Company may own stock in
(but not exceeding five percent (5%) of the outstanding capital stock of) any
publicly traded companies that may compete with the Company. To the best of the
Company's knowledge, none of the Company's officers or directors or any members
of their immediate families are, directly or indirectly, interested in any
material contract of the Company. The Company is not a guarantor or indemnitor
of any indebtedness of any other Person.

                2.14 Registration Rights and Voting Rights. Except as
contemplated in the Registration Rights Agreement, there are no agreements,
written or oral, between the Company and any Person relating to the registration
of its capital stock under federal or state securities laws, including piggyback
registration rights. To the knowledge of the Company, no stockholders of the
Company have entered into any agreements with respect to the voting of shares of
the capital stock of the Company.

                2.15 Private Placement. Subject to and in reliance in part on
the truth and accuracy of the Purchasers' representations set forth in this
Agreement, the offer, sale and issuance of the Series C Preferred Stock as
contemplated by this Agreement is exempt from the registration requirements of
the Securities Act and any applicable state securities laws, and neither the
Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.

                2.16 Title to Property and Assets. The Company owns its property
and assets free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens which arise in the ordinary course of
business and which do not materially impair the Company's ownership or use of
such property or assets. With respect to the property and assets it leases, the
Company is in compliance with such leases and holds a valid leasehold interest
free of any liens, claims or encumbrances.

                2.17 Employee Benefit Plans. Except as specified in Schedule
2.17, the Company does not have any employee benefit plan and is not a party to
any multiemployer plan as such terms are defined in the Employee Retirement
Income Security Act of 1974, as amended.

                2.18 Tax Returns and Audits. The Company and, to the Company's
knowledge, any of its subsidiaries has accurately prepared and timely filed all
material federal, state, foreign, local and other tax returns required by law to
be filed by each of them, has paid or made provision for the payment of all
taxes shown to be due and all additional assessments, and adequate provisions
have been made and are reflected in the Company's financial statements in all
material respects to the extent required by generally accepted accounting
principles applied on a consistent basis and as in effect in the United States
("GAAP") for all current taxes and other charges to which the Company or its
subsidiaries is subject and which are not currently due and payable. There are
no additional assessments or adjustments pending or, to the knowledge of the
Company, threatened against the Company or its subsidiaries for any period, and
to the

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Company's knowledge, there is no basis for any such assessment or adjustment
that would be material.

                2.19 Labor Agreements and Actions. The Company is not bound by
or subject to (and none of its assets or properties is bound by or subject to)
any written or oral contract, commitment, agreement or arrangement with any
labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending or, to the knowledge of the Company, threatened, which could have a
Material Adverse Effect, nor is the Company aware of any labor organization
activity involving the employees, representatives or agents of the Company. The
Company has complied in all material respects with all applicable federal and
state equal employment opportunity laws and regulations and with all other laws
and regulations related to employment and labor issues. The Company has not
received any notice of any plan of any key employee to terminate his or her
employment with the Company.

                2.20 Proprietary Information and Inventions Agreements. Each
current employee, consultant and officer of the Company has executed an
agreement with the Company regarding confidentiality and proprietary information
substantially in the form attached as Exhibit C. The Company, after reasonable
investigation, is not aware that any of its current employees or consultants is
in violation thereof, and the Company will use commercially reasonable efforts
to prevent any such violation. To the Company's knowledge, no consultants to or
vendors of the Company have had any access to confidential information of the
Company who are not bound by non-disclosure agreements.

                2.21 Permits. The Company has all franchises, permits, licenses
and any other governmental authorizations necessary for the conduct of its
business as now being conducted, the lack of which could have a Material Adverse
Effect. The Company is not in default in any material respect under any of such
franchises, permits, licenses or other authorizations.

                2.22 Corporate Documents. The Restated Certificate and Bylaws of
the Company are in the form provided to each of the Purchasers. As of the
Closing, the Bylaws of the Company shall be in the form of the Bylaws attached
hereto as Exhibit D. The copy of the minute book of the Company provided to the
Purchasers contains minutes of all meetings of directors and stockholders of the
Company and all actions by written consent without a meeting by the directors
and stockholders of the Company since the date of the incorporation of the
Company, and reflects all actions by the directors (and any committee of
directors) and stockholders of the Company with respect to all transactions
referred to in such minutes accurately in all material respects.

                2.23 Real Property Holding Corporation. Neither the Company nor
any of its subsidiaries is a United States real property holding corporation
within the meaning of Internal Revenue Code Section 897(c)(2) and Section
1.897-2(c) of the Treasury Regulations promulgated thereunder.

                2.24 Financial Statements. The Company has made available to the
Purchasers (i) an audited balance sheet as of June 30, 2000; (ii) an audited
income statement as of June 30,

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2000; (iii) an unaudited balance sheet as of March 31, 2001 (the "Statement
Date"); and (iv) an unaudited income statement for the three months ended March
31, 2001, copies of which are included as Schedule 2.24 (the "Financial
Statements"). The Financial Statements have been prepared from the books and
records of the Company and are complete and correct in all material respects and
fairly present the consolidated financial condition and operating results of the
Company as of the Statement Date and for the period presented. Except as set
forth in the Financial Statements, the Company does not have any material
liabilities, contingent or otherwise, other than (i) liabilities paid or
incurred in the ordinary course of business subsequent to the Statement Date,
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business.

                2.25 Changes. Since the Statement Date and except as
contemplated by this Agreement and the exhibits and schedules hereto, there has
not been:

                        (a) any change in the assets, liabilities, financial
condition or operating results of the Company from that reflected in the
Financial Statements, except for changes in the ordinary course of business or
that have not resulted in a Material Adverse Effect;

                        (b) any damage, destruction or loss to property, whether
or not covered by insurance, resulting in a Material Adverse Effect;

                        (c) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company except in the ordinary
course of business or that has not resulted in a Material Adverse Effect;

                        (d) any material change to a material contract or
agreement by which the Company or any of its assets are bound or subject, except
as specified in Schedule 2.25(d);

                        (e) any material change in any compensation arrangement
or agreement with any employee, representative, agent, officer, director or
stockholder of the Company, except as specified in Schedule 2.25(e);

                        (f) any resignation or termination of employment of any
officer, director or key employee of the Company and, to the best of the
Company's knowledge, the Company does not know of any impending resignation or
termination of employment of any such officer, director or key employee;

                        (g) receipt of notice that there has been a loss of, or
material order cancellation by, any major advertiser or major customer of the
Company other than in the ordinary course of business;

                        (h) any mortgage, pledge, transfer of a security
interest in, lien or encumbrance, created by the Company, with respect to any of
its capital stock, properties or assets, except liens for taxes not yet due or
payable;

                        (i) any loans or guarantees made by the Company to or
for the benefit of its employees, representatives, agents, officers or
directors, or any members of their

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immediate families, other than ordinary advances for expenses incurred in the
ordinary course of business, except as specified in Schedule 2.25(i);

                        (j) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such capital stock
by the Company other than the purchase of capital stock of officers, directors
or employees who have terminated their relationship with the Company; or

                        (k) any arrangement or commitment by the Company to do
anything described in this Section 2.25.

                2.26 Environmental and Safety Laws. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety where such violation is likely to
result in a Material Adverse Effect, and no material expenditures are presently
required by the Company in order to comply with any such applicable statute, law
or regulation.

                2.27 FCPA. The Company has complied in all material respects
with the United States Foreign Corrupt Practices Act of 1977, as amended (the
"FCPA"), in obtaining any consents, licenses, approvals, authorizations, rights,
and privileges in connection with the conduct of its business, and has otherwise
conducted its business in all material respects in compliance with the FCPA. The
Company's internal management and accounting practices and controls are adequate
to ensure compliance in all material respects with the FCPA.

                2.28 Projections. Any projections provided to the Purchasers by
the Company were made in good faith and were based upon reasonable assumptions
when made.

        3. Representations and Warranties of Purchasers. Each Purchaser hereby,
severally and not jointly, represents and warrants to the Company, with respect
to itself only, that:

                3.1 Accredited Investor; Authorization. Such Purchaser is an
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act and has the corporate, partnership or individual, as the case may
be, power and authority to enter into and perform this Agreement and the other
Transaction Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly authorized,
executed and delivered by such Purchaser and constitutes the legal, valid and
binding obligation of such Purchaser, enforceable in accordance with its terms
except: (i) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors' rights generally; or
(ii) as such enforceability may be limited by laws or equitable principles
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

                3.2 No Conflict With Other Agreements. The execution, delivery
and performance of the Transaction Agreements to which such Purchaser is a party
and the consummation of the transactions contemplated hereby or thereby will
not, with or without the passage of time and/or the giving of notice, result in
a violation or default of any provisions of such Purchaser's charter, bylaws,
partnership agreement, certificate of limited partnership,

                                       10
<PAGE>   13

limited liability company agreement, certificate of formation or other
organizational document or of any order, writ, injunction, judgment, instrument,
decree or contract to which it is a party or by which it is bound or, to its
knowledge, of any material provision of a federal or state statute, rule or
regulation applicable to such Purchaser.

                3.3 Investment Experience. Such Purchaser is a regular purchaser
of securities and acknowledges that it is able to fend for itself, can bear the
economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Company.

                3.4 Distribution. The Series C Preferred Stock (and the Common
Stock issuable upon conversion thereof) is being acquired for such Purchaser's
own account, and not as nominee or agent, for the present intention of holding
such securities for purposes of investment and not with a view to or for resale
in connection with any distribution thereof. Such Purchaser further represents,
severally and not jointly, that it understand and agrees that, until registered
under the Securities Act or transferred pursuant to the provisions of Rule 144
as promulgated by the Securities and Exchange Commission, all certificates
evidencing any of the Series C Preferred Stock (and the Common Stock issuable
upon conversion thereof), whether upon initial issuance or upon any transfer
thereof, shall bear legends, prominently stamped or printed thereon, reading
substantially as follows:

        (a) Federal Legend. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
        SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
        PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
        EFFECT WITH RESPECT TO THESE SECURITIES UNDER THE ACT OR APPLICABLE
        STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
        TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD
        PURSUANT TO RULE 144 OF THE ACT.

        (b) any legend required by applicable state securities laws.

        The Company need not register a transfer of legended Series C Preferred
Stock, and may also instruct its transfer agent not to register the transfer of
the Series C Preferred Stock, unless the conditions specified in the foregoing
legends are satisfied.

                3.5 Disclosure of Information. Such Purchaser has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Series C Preferred Stock. Such Purchaser further represents that it
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series C Preferred
Stock and the business, properties, prospects and financial condition of the
Company. The foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement or the right of the
Purchasers to rely thereon.

                                       11
<PAGE>   14

                3.6 Restricted Securities. Such Purchaser understands that the
shares of Series C Preferred Stock it is purchasing are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Act only in certain limited circumstances.
In this connection, such Purchaser represents that it is familiar with SEC Rule
144, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act of 1933, as amended.

                3.7 Further Representations by Foreign Purchasers. If a
Purchaser is not a United States person, such Purchaser hereby represents that
he or she has satisfied himself or herself as to the full observance of the laws
of his or her jurisdiction in connection with any invitation to subscribe for
shares of Series C Preferred Stock or any use of this Agreement, including (i)
the legal requirements within his jurisdiction for the purchase of shares of
Series C Preferred Stock, (ii) any foreign exchange restrictions applicable to
such purchase, (iii) any governmental or other consents that may need to be
obtained, and (iv) the income tax and other tax consequences, if any, that may
be relevant to the purchase, holding, redemption, sale, or transfer of shares of
Series C Preferred Stock. Such Purchaser's subscription and payment for, and his
or her continued beneficial ownership of shares of Series C Preferred Stock,
will not violate any applicable securities or other laws of his or her
jurisdiction.

                3.8 Not Formed for Investment. Such Purchaser was not formed for
the purpose of making an investment in the Company.

        4. Conditions of Purchasers' Obligations at the Closing. The obligations
of each Purchaser to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived in writing by such Purchaser.

                4.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Initial Closing.

                4.2 Performance. The Company shall have performed and complied
in all material respects with all covenants, agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by the Company on or before the Closing.

                4.3 Compliance Certificate. The President of the Company shall
deliver to each Purchaser at the Closing a certificate certifying that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.

                4.4 Qualifications. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Series C Preferred Stock pursuant to this Agreement shall be obtained and
effective as of the Closing.

                                       12
<PAGE>   15

                4.5 Opinion of Company Counsel. The Purchasers shall have
received from Doty Sundheim & Gilmore, counsel for the Company, an opinion,
dated as of the Closing, in substantially the form of Exhibit E attached hereto.

                4.6 Supporting Documents. The Purchasers shall have received the
following:

                        (a) A copy of resolutions of the Board of Directors of
the Company authorizing and approving the Transaction Agreements and copies of
resolutions of the Board of Directors and stockholders of the Company
authorizing and approving the adoption of the Restated Certificate that is
contemplated by this Agreement, all such resolutions to be certified by the
Secretary of the Company;

                        (b) A Certificate of Incumbency executed by the
Secretary of the Company certifying the names, titles and signatures of the
officers authorized to execute the Transaction Agreements and further certifying
that the Restated Certificate and Bylaws of the Company delivered to the
Purchasers at the time of the execution of this Agreement have been validly
adopted and have not been amended or modified except as required by this
Agreement; and

                        (c) Such additional supporting documentation and other
information with respect to the transactions contemplated hereby as any
Purchaser or its legal counsel may reasonably request.

                4.7 Board of Directors. As of the Initial Closing, the Company's
Board of Directors shall consist of no more than 8 members. Effective as of the
time of the Initial Closing, by appropriate action of the Board of Directors
and/or the Stockholders of the Company, one person designated by PAR Capital
Management, Inc. ("PAR" and such designee the "PAR Designee") shall be elected
or appointed to the Company's Board of Directors, if not already on the Board of
Directors. All other members of the Company's Board of Directors (not to exceed
7 in number) shall remain as members of the Board of Directors, subject to the
provisions of the Company's Restated Certificate and Bylaws as from time to time
in effect.

                4.8 Registration Rights Agreement. The Company, each Purchaser
that is a party thereto and the other parties thereto shall have executed and
delivered the Registration Rights Agreement in substantially the form attached
hereto as Exhibit B.

                4.9 Restated Certificate. The Company shall have filed the
Restated Certificate with the Secretary of State of Delaware on or prior to the
date of the Closing, which shall continue to be in full force and effect as of
the date of the Closing.

                4.10 Employment Agreements. The members of the Company's senior
management shall have entered into a Proprietary Information and Inventions
Agreement in the form attached hereto as Exhibit C.

                4.11 Co-Sale and Right of First Refusal Agreement. The Company,
Raymond C. Musci, Anthony R. Williams and each Purchaser shall have executed and
delivered the Co-Sale and Right of First Refusal Agreement substantially in the
form attached hereto as Exhibit F.

                                       13
<PAGE>   16

        5. Conditions of the Company's Obligations at the Closing. The
obligations of the Company to each Purchaser under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived by the Company in writing; provided, however, that the
non-fulfillment of a condition by a Purchaser will not relieve the Company of
its obligation to each other fulfilling Purchaser.

                5.1 Representations and Warranties. The representations and
warranties of such Purchaser contained in Section 3 shall be true and correct on
and as of the date of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of Closing.

                5.2 Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by such Purchaser on or prior to the
Closing shall have been performed or complied with.

                5.3 Registration Rights Agreement. Such Purchaser shall have
executed and delivered the Registration Rights Agreement in substantially the
form attached hereto as Exhibit B.

                5.4 Payment of Purchase Price. Each Purchaser shall have
delivered the purchase price specified in Section 1.1 of this Agreement.

                5.5 Qualifications. All authorizations, approvals, or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Series C Preferred Stock pursuant to this Agreement shall be obtained and
effective as of the Closing.

        6. Post-Closing Covenants. The Company and Purchasers agree as follows
with respect to the period following the Closing.

                6.1 Financial Reporting. The Company shall provide Purchasers
with the following periodic reports: (a) as soon as available, but in any event
within forty five (45) days after the end of each quarter accounting period in
each fiscal year, unaudited statements of income, operations and cash flows of
the Company for such quarterly period and unaudited balance sheets of the
Company as of the end of such quarter period and all such statements shall be
prepared in accordance with GAAP (provided, however, that such statements need
not comply with the footnote disclosure requirements of GAAP); and (b) as soon
as available, but in any event within ninety (90) days after the end of each
fiscal year, audited statements of income, operations, retained earnings and
cash flows of the Company for such fiscal year and audited balance sheets of the
Company as of the end of such fiscal year, all prepared in accordance with GAAP,
all in reasonable detail and duly certified by the accountants, who shall have
given the Company an opinion, unqualified as to the scope of the audit,
regarding such statements.

                6.2 Participation Rights. Purchasers shall have the right, but
not the obligation, to participate pro rata (on the same terms and at the same
price) in any offering and sale of stock (common or preferred) made by the
Company to any person or entity after the date

                                       14
<PAGE>   17

of this Agreement (the "Purchaser Participation Right"); provided, however, that
this Section 6.2 shall not apply in the case of the grant of options to
officers, directors and employees pursuant to the terms of the Stock Plan, the
purchase of Common Stock upon the exercise of such options or the purchase of
Warrant Shares upon the exercise of the Warrants. The Purchaser Participation
Right shall expire and terminate upon the successful completion by the Company
of a Qualified Public Offering (as defined in Exhibit A) and shall not apply in
the event of a Qualified Public Offering.

                6.3 Compensation Committee. PAR Designee shall be a member of
the Company's Compensation Committee (the "Compensation Committee"). All
compensation arrangements of the Company's key employees, officers and directors
shall be approved by the Compensation Committee; provided, however, that so long
as less than a majority of the Compensation Committee consists of outside
directors such approval shall require an affirmative vote or consent of the PAR
Designee. For the purpose of this Section 6.3, "outside directors" shall not
include any director employed by the Company or who holds (individually or
through an entity or entities) at least 1% of the outstanding capital stock of
the Company.

        7. Miscellaneous.

                7.1 Survival of Warranties. The representations, warranties and
covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
each Closing.

                7.2 Transfer; Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.

                7.3 No Third Party Beneficiaries. Nothing express or implied in
this Agreement is intended to confer, nor shall anything herein confer, upon any
other than the parties hereto and the respective successors or assigns of such
parties, any rights, remedies, obligations or liabilities whatsoever.

                7.4 Governing Law. THE LAWS OF THE STATE OF CALIFORNIA SHALL
GOVERN THE INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS
AGREEMENT REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF
CONFLICTS OF LAW.

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

                7.6 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.

                7.7 Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed given upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S.

                                       15
<PAGE>   18

mail, as certified or registered mail, with postage prepaid, addressed to the
party to be notified at such party's address as set forth below or on Schedule 1
hereto, or as subsequently modified by written notice, and:

                (a)      if to the Company:

                         BAM! Entertainment, Inc.
                         333 West Santa Clara Street
                         Suite 930
                         San Jose, California  95113
                         Attention:  Raymond C. Musci
                         Facsimile:  (408) 298-9600

                         with a copy to:

                         Doty Sundheim & Gilmore
                         260 Sheridan Avenue
                         Suite 200
                         Palo Alto, California  94306
                         Attention:  George M. Sundheim III, Esq.
                         Facsimile:  (650) 327-0101

                (b)      if to PAR:

                         PAR Capital Management, Inc.
                         One Financial Center, Suite 1600
                         Boston, MA  02111
                         Attention:  David Tobin
                         Facsimile:  (617) 556-8875

                         with a copy to:

                         Goodwin, Proctor & Hoar, LLP
                         Exchange Place
                         Boston, MA  02109
                         Attention:  Jeffrey C. Hadden
                         Facsimile:   (617) 523-1231

                (c) To any other Purchaser: The address reflected on the
signature page to this Agreement or at such other address or addresses as shall
have been furnished in writing by such party to the other parties to this
Agreement.

                7.8 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finder's fee(s) or commission in connection with this
transaction for which any other party hereto could become liable. Each Purchaser
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of any finder's fee(s) (and the costs
and expenses of defending against such liability or asserted liability) for
which such Purchaser or any of its officers, partners, employees, or
representatives is

                                       16
<PAGE>   19

responsible. The Company has engaged Morgan Keegan as placement agent for the
shares of Series C Preferred Stock being sold hereunder and shall be responsible
for the payment of all fees and other amounts payable to Morgan Keegan in
connection therewith. The Company agrees to indemnify and hold harmless each
Purchaser from any liability for any commission or compensation in the nature of
a finder's fee(s) (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers,
employees, or representatives is responsible.

                7.9 Expenses. Each party shall bear its own cost and expenses
incurred with respect to this Agreement and the documents referred to herein
including attorney's fees.

                7.10 Amendments and Waivers. Any term of this Agreement may be
amended or waived, and this Agreement may be terminated, with the written
consent of the Company and Purchasers representing at least a majority of the
outstanding Series C Preferred Stock (or the Common Stock issuable upon
conversion thereof) purchased hereunder. Any amendment or waiver effected in
accordance with this Section 7.10 shall be binding upon the Purchasers and each
holder or transferee of the Series C Preferred Stock (or the Common Stock
issuable upon conversion thereof), each future holder of all such securities,
and the Company.

                7.11 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, and
all such remaining provisions hereof shall be enforceable in accordance with
their terms.

                7.12 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any of the Series C Preferred
Stock (or the Common Stock issuable upon conversion thereof) or to the Company,
upon any breach or default of the Company or by any Purchaser under this
Agreement, shall impair any such right, power or remedy of any Purchaser or the
Company, as the case may be, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Purchaser or the Company, as the case may be, of
any breach or default under this Agreement, or any waiver on the part of any
Purchaser or the Company, as the case may be, of any provisions or conditions of
this Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be cumulative and
not alternative.

                                       17
<PAGE>   20
                7.13 Entire Agreement. This Agreement, the Registration Rights
Agreement and the other documents referred to herein to which any Purchaser is a
party constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof, and this Agreement supersedes all prior agreements and
understanding among the parties with respect to the subject matter hereof.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized officers or
representatives as of the date first written above.

                                    COMPANY:

                                    BAM! ENTERTAINMENT, INC.

                                    By: /s/ RAYMOND C. MUSCI
                                        ----------------------------------------
                                        Raymond C. Musci, President

                                    By: /s/ GEORGE M. SUNDHEIM, III
                                        ----------------------------------------
                                        George M. Sundheim, III, Secretary

                                    PURCHASERS:

                                    PAR CAPITAL MANAGEMENT, INC.

                                    By:  /s/ DAVID E. TOBIN
                                        ----------------------------------------
                                        Name:  David E. Tobin
                                        Title: Vice President

                                    MORGAN KEEGAN EARLY STAGE FUND, L.P.

                                    By: MERCHANT BANKERS, INC. as the general
                                        partner of Morgan Keegan Early Stage
                                        Fund, L.P.

                                        By: /s/ MINOR PERKINS
                                            ------------------------------------
                                            Name:  Minor Perkins
                                            Title: Vice President

                                    /s/ RAYMOND C. MUSCI
                                    --------------------------------------------
                                    Raymond C. Musci

                                    /s/ ANTHONY R. WILLIAMS
                                    --------------------------------------------
                                    Anthony R. Williams

                                    /s/ ROBERT HOLMES
                                    --------------------------------------------
                                    Robert Holmes

                                       18

<PAGE>   21
                                    /s/ STEPHEN AMBLER
                                    ----------------------------------------
                                    Stephen Ambler

                                    /s/ JOSEPH MORICI
                                    ----------------------------------------
                                    Joseph Morici

                                    /s/ MARK DYNE
                                    ----------------------------------------
                                    Mark Dyne

                                    /s/ KEVIN BERMEISTER
                                    ----------------------------------------
                                    Kevin Bermeister

                                    /s/ ANTHONY NEUMANN
                                    ----------------------------------------
                                    Anthony Neumann

                                    FIMAS, a Partnership

                                    By:  /s/ GEORGE M. SUNDHEIM, III
                                         -----------------------------------
                                         Name: George M. Sundheim, III
                                         Its:  General Partner

                                    /s/ PAMELA COLBURN
                                    ----------------------------------------
                                    Pamela Colburn

                                    /s/ TERRY PHILLIPS
                                    ----------------------------------------
                                    Terry Phillips

                                    /s/ DAVID P. CLARK
                                    ----------------------------------------
                                    David P. Clark

                                    /s/ STEVEN J. MASSARSKY
                                    ----------------------------------------
                                    Steven J. Massarsky

                                    K&L 2000 LLC

                                    By:  /s/ PAUL W. SWEENEY, JR.
                                         -----------------------------------
                                         Name:  Paul W. Sweeney, Jr.
                                         Title: Admin. Partner -- LA

                                       19
<PAGE>   22

                                    EXHIBIT A

        Form of Second Amended and Restated Certificate of Incorporation

                                       i
<PAGE>   23

                                    EXHIBIT B

                          Registration Rights Agreement

                                       ii
<PAGE>   24

                                    EXHIBIT C

            Form of Proprietary Information and Inventions Agreement

                                      iii
<PAGE>   25

                                    EXHIBIT D

                              Bylaws of the Company

                                       iv
<PAGE>   26

                                    EXHIBIT E

                    Form of Opinion of Counsel to the Company

                                       v
<PAGE>   27

                                    EXHIBIT F

                  Co-Sale and Right of First Refusal Agreement

                                       vi
<PAGE>   28

                                   SCHEDULE 1

                             Schedule of Purchasers

<TABLE>
<CAPTION>
                                                   NUMBER OF SHARES OF               PURCHASE
           PURCHASER                             SERIES C PREFERRED STOCK             PRICE
           ---------                             ------------------------           ----------
<S>                                              <C>                                <C>
PAR Capital Management, Inc.                              88,680                    $2,000,000

Raymond C. Musci                                          13,302                    $  300,000

Anthony R. Williams                                       13,302                    $  300,000

Morgan Keegan Early Stage Fund, L.P.                      88,680                    $2,000,000

Robert Holmes                                              6,651                    $  150,000

Stephen Ambler                                             1,109                    $   25,000

Joseph Morici                                                887                    $   20,000

Mark Dyne                                                  4,434                    $  100,000

Kevin Bermeister                                           4,434                    $  100,000

K & L 2000 LLC                                             1,109                    $   25,000

Pam Colburn                                                1,109                    $   25,000

Anthony Neumann                                            1,109                    $   25,000

Terry Phillips                                            13,302                    $  300,000

Steve Massarsky                                            2,217                    $   50,000

David Clark                                                4,434                    $  100,000

FIMAS, L.P., a Partnership                                   900                    $   20,297.70

TOTAL                                                    245,659                    $5,540,297.70
</TABLE>

                                      vii
<PAGE>   29

                                 SCHEDULE 2.2(a)

                        Contingent Reserved Common Shares

<TABLE>
<S>                                           <C>
Franchise Films, Inc.                         131,625
Spyglass Entertainment Group, L.P.            100,000
</TABLE>

                                      viii
<PAGE>   30

                                 SCHEDULE 2.2(d)

                      Stockholders and Option Holders List

<TABLE>
<S>                                                               <C>
COMMON STOCKHOLDERS

Raymond C. Musci                                                  123,609
Robert E. Lloyd                                                     9,750
Tracy Ann Sebastian                                                 9,750
Philip L. Rosenberg                                                 9,750
Robert Holmes                                                      32,224
Gary Nemetz                                                         9,750
D&S Partners, a California General Partnership                      9,750
Anthony R. Williams                                                89,897
Kevin Bermeister                                                    3,656
Mark Dyne                                                           3,656
Elie Samaha                                                         7,312
FIMAS, L.P., a Partnership                                          3,656
Franchise Films, Inc.                                              14,625

PREFERRED SERIES A STOCKHOLDERS

Raymond C. Musci                                                  482,625
Anthony R. Williams                                               351,000
Robert Holmes                                                      87,750
Kevin Bermeister                                                   10,969
Mark Dyne                                                          10,969
Elie Samaha                                                        21,938
FIMAS, L.P., a Partnership                                         10,969

PREFERRED SERIES B STOCKHOLDERS

PAR Capital Management, Inc                                       198,301
Raymond C. Musci                                                   28,329
Anthony R. Williams                                                28,329
Morgan Keegan Early Stage Fund, L.P.                               22,092
Robert Holmes, Jr                                                  11,332
Morgan Keegan Employee Investment Fund, L.P.                        6,237

OPTION HOLDERS

Robin Cairns                                                        2,500
Aaron Endo                                                          7,500
Lynnie Nojadera                                                     3,500
Joe Morici                                                          5,000
Hideo Oishi                                                         5,000
</TABLE>

                                       ix
<PAGE>   31

<TABLE>
<S>                                        <C>
Mark Dyne                                   4,000
Robert Holmes                               4,000
Robert Lloyd                                4,000
Scott Smith                                 1,250
George M. Sundheim, III                     4,000
Sherri Zook                                 2,500
Joe Booth                                   6,000
Lisa Cheney Bolcato                         4,500
Pierson Lippard                             4,000
Matt Wilkinson                              4,000
Samuel Allen                                2,500
Pete Johnson                                2,500
Kevin Watts                                 2,500
Richard Coles                               1,250
Paul Hodge                                  1,250
Karl D'Costa                                1,250
Mark Harris                                 1,250
Mikel Barron Bilbao                         1,250
Rachel Segens                               1,250
Charlie Hasdell                             1,250
Jake Noakes                                 1,250
Thomas Woodley                              1,250
Doug Day                                    1,250
Michael Jacobsen                            1,250
Jeff Pena                                   2,500
Stephen Ambler                             12,750
Susan Kramer                                2,500
David Blundell                              1,250
Matthew Cooling                             1,250
Marcus Fielding                             1,250
Anne-Christine Gasc                         1,250
James Hawkins                               1,250
Ciaran Rooney                               1,250
Magnolia Tsele                              1,250
Andrew Williams                             1,250

WARRANT HOLDERS

PAR Capital                                30,000
K & L 2000                                 10,000
</TABLE>

                                       x
<PAGE>   32

                                  SCHEDULE 2.3

                                  Subsidiaries

BAM Studios (Europe) Ltd.

        2 shares issued to BAM! Entertainment Limited (1 Pound Sterling) per
share

BAM Entertainment Ltd.

        2 shares issued to BAM! Entertainment, Inc. (1 Pound Sterling) per share

                                       xi
<PAGE>   33

                                  SCHEDULE 2.7

                                   Litigation

In a letter dated May 21, 2001, Nintendo of North America and Spike Co., Ltd.
received a letter from counsel to World Wrestling Federation Entertainment, Inc.
("WWFE") claiming a yet to be released game "Fire ProWrestling" (the "Game")
violated certain WWFE intellectual property rights and demanding that each of
them cease the US distribution of the Game. The Company, which holds the rights
to the US version of the Game, believes that the Game slated for sale in North
America does not violate WWFE's rights as the US version does not contain
references to the characters, moves or wrestling organizations mentioned in the
letter.

                                      xii
<PAGE>   34

                                 SCHEDULE 2.8(a)

                         Material Intellectual Property

Trademark application attached.
List of attached agreements.

                                      xiii
<PAGE>   35

                                 SCHEDULE 2.8(b)

                              Certain IP Agreements

PowerPuff Girls license with Warner Brothers (8/16/00 -- 8/16/03)
Sports Illustrated, Inc. for Kids with Time (7/12/00)
Franchise Films Output Agreement (4/7/00 -- 4/7/03)
Spyglass Entertainment Group, L.P. Output Agreement (10/1/00 -- 10/1/05)

                                      xiv
<PAGE>   36

                                  SCHEDULE 2.10

                                   Agreements

List of agreements attached.

                                       xv
<PAGE>   37

                                SCHEDULE 2.10(b)

                             Non-binding Agreements

See attached list.

                                      xvi
<PAGE>   38

                                  SCHEDULE 2.11

                                   Liabilities

None.

                                      xvii
<PAGE>   39

                                  SCHEDULE 2.13

                                    Conflicts

Directors:

        Mark Dynes: Chairman & CEO of Brilliant Digital Entertainment (BDE -
AMEX), beneficial owner of roughly 8% of the common stock outstanding, owns
and/or controls roughly 40% of Infogrames/OziSoft, a video game distributor in
Australia; also holds approximately 2% of Titus.

        Robert Holmes: GBA, LLC - managing member of investment venture into
Ripcord, some Southpeak; PCH, LLC - managing member investment venture;
Entertainment Brands, Inc. - Director, shareholder; Ripcord Games Director,
shareholder (1/3); Northport Ventures - venture company; Acclaim Entertainment -
contractual representatives and stock; Take Two - stock remaining from early
private placement; Business Incubation Group no current conflict, (some emulator
proposals that involve Raymond C. Musci); iBuyline, Inc. - ESD company sold to
aggregator; NTN communications - shareholder - mini games and wireless.

        Raymond C. Musci: Director of Brilliant Digital Entertainment.

                                     xviii
<PAGE>   40

                                  SCHEDULE 2.17

                             Employee Benefit Plans

BAM! 401(k) Plan Summary Plan Description attached.

U.K. Employees are not entitled to participate in the BAM! 401(K) Plan, but an
equivalent European pension plan is planned.

                                      xix
<PAGE>   41

                                  SCHEDULE 2.24

                              Financial Statements

Financial Statements attached.

                                       xx
<PAGE>   42

                                SCHEDULE 2.25(d)

                          Changes; Contracts/Agreements

First Amendment to Master Purchase Order Assignment Agreement (attached).

Second Amendment to Master Purchase Order Assignment Agreement (attached).

Third Amendment to Master Purchase Order Assignment Agreement (attached).

Warner Bros. License Agreement #12177-PPG (Powerpuff Girls)-Amendment #1
(attached).

                                      xxi
<PAGE>   43

                                SCHEDULE 2.25(e)

                Changes; Compensation/Agreements with employees,
          representatives, agents, officers, directors or stockholders

Changes to compensation arrangement or agreement with any employee,
representative, agents, officer, director or stockholder attached.

                                      xxii
<PAGE>   44

                                SCHEDULE 2.25(i)

                            Changes; Loans/Guarantee

Comerica loan documents attached.

                                     xxiii<PAGE>   1
                                                                   EXHIBIT 10.15

                         REGISTRATION RIGHTS AGREEMENT

        THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of May 24, 2001, by and among BAM! Entertainment, Inc., a Delaware corporation
(the "Company"), the persons and entities (the "Holders") identified in the
Holder Schedule attached hereto as Schedule 1 (the "Holder Schedule").

                                   WITNESSETH:

        WHEREAS, the Company has entered into that certain Stock Purchase
Agreement, dated as of the date hereof (the "Stock Purchase Agreement"), with
certain entities (the "Investors") pursuant to which the Company has agreed to
issue and sell to such Investors shares of the Company's Series C Preferred
Stock, par value $0.001 per share (the "Series C Preferred Stock"); and

        WHEREAS, the Company has agreed to grant certain registration rights
with respect to the shares of the Company's Common Stock (the "Primary Shares")
issuable upon conversion of the Series C Preferred Stock issued to the Investors
pursuant to the Stock Purchase Agreement and upon conversion of the Company's
Series A Convertible Preferred Stock and the Series B Convertible Preferred
Stock issued and outstanding as of the date of this Agreement (the "Series A
Preferred Stock" and the "Series B Preferred Stock" respectively);

        WHEREAS, the Company has issued a warrant to purchase 30,000 shares of
Common Stock to Par Capital Management, Inc. (the "Par Warrant") dated December
27, 2000;

        NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

        As used herein, the following terms shall have the following respective
meanings:

        1.1 "Commission" shall mean the Securities and Exchange Commission, or
any other successor federal agency at the time administering the Securities Act.

        1.2 "Common Stock" shall mean the Company's common stock, par value
$0.001 per share.

        1.3 "Exchange Act" shall mean the Securities and Exchange Act of 1934,
as amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

                                       1
<PAGE>   2

        1.4 "Holders" shall mean the persons and entities listed on Schedule 1
and any transferee thereof who holds Registrable Securities, and any other
person or entity that shall have executed this Agreement in accordance with
Article 10 hereof and whose name appears on the Holder Schedule attached hereto
as Schedule 1.

        1.5 "Initial Public Offering" means the closing of a firm commitment
underwritten initial public offering, pursuant to an effective registration
statement under the Securities Act, covering the offer and sale by the Company
of Common Stock to the public.

        1.6 "Preferred Stock Initiating Holders" shall mean (a) the Holders of
Series C and Series B Preferred Stock representing greater than 50% of the
shares of the Series C and Series B Registrable Securities underlying such
Preferred Stock who comply with the applicable requirements of Article 2 or
Article 4 ("Series B and C Initiating Holders"), or (b) the Holders of Series A
Preferred Stock representing greater than 50% of the shares of the Series A
Registrable Securities underlying such Preferred Stock who comply with the
applicable requirements of Article 2 or Article 4 ("Series A Initiating
Holders").

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

        1.8 "Registrable Securities" means any and all shares of Common Stock:
(i) issued or issuable upon conversion of the Series C Preferred Stock, the
Series B Preferred Stock or the Series A Preferred Stock; (ii) issued or
issuable with respect to the Series C Preferred Stock, the Series B Preferred
Stock or the Series A Preferred Stock upon any stock split, stock dividend,
recapitalization, reclassification, merger, consolidation or other similar
event; (iii) issued or issuable upon exercise of the PAR Warrant; and (iv)
otherwise held or acquired by any of the Holders, excluding in all cases,
however, Registrable Securities sold by a Holder to the public pursuant to a
registered offering or pursuant to Rule 144 promulgated under the Securities
Act.

        1.9 "Registration Expenses" shall mean all expenses incurred by the
Company in complying with Articles 2, 3 and 4 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of legal counsel for the Company, fees and
disbursements of one special legal counsel for the selling Holders, exchange
listing fees, NASD fees, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company).

        1.10 "Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

        1.11 "Selling Expenses" shall mean all underwriting fees, discounts,
selling commissions and stock transfer taxes applicable to the Registrable
Securities registered by the Holders.

                                       2
<PAGE>   3

        1.12 "Series A Preferred Stockholder" shall mean any Holder or Holders
of the Company's Series A Convertible Preferred Stock, par value $0.001 per
share.

        1.13 "Series A Registrable Securities" means any and all shares of
Common Stock: (i) issued or issuable upon conversion of the Series A Preferred
Stock; or (ii) issued or issuable with respect to the Series A Preferred Stock
upon any stock split, stock dividend, recapitalization, reclassification,
merger, consolidation or other similar event.

        1.14 "Series B Preferred Stockholder" shall mean any Holder or Holders
of the Company's Series B Preferred Stock, par value $0.001 per share.

        1.15 "Series B Registrable Securities" means any and all shares of
Common Stock: (i) issued or issuable upon conversion of the Series B Preferred
Stock; or (ii) issued or issuable with respect to the Series B Preferred Stock
upon any stock split, stock dividend, recapitalization, reclassification,
merger, consolidation or other similar event.

        1.16 "Series C Preferred Stockholder" shall mean any Holder or Holders
of the Company's Series C Preferred Stock, par value $0.001 per share.

        1.17 "Series C Registrable Securities" means any and all shares of
Common Stock: (i) issued or issuable upon conversion of the Series C Preferred
Stock; or (ii) issued or issuable with respect to the Series C Preferred Stock
upon any stock split, stock dividend, recapitalization, reclassification,
merger, consolidation or other similar event.

                                    ARTICLE 2
                             REQUESTED REGISTRATION

        2.1 Request for Registration. Beginning on the date which is 180 days
following the consummation of an Initial Public Offering, Preferred Stock
Initiating Holders may, subject to Sections 2.1(b) and 2.2, request registration
in accordance with this Article 2. In the event the Company shall receive from
the Preferred Stock Initiating Holders a written request that the Company effect
any registration, qualification or compliance with respect to Registrable
Securities, the Company will:

                (a) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and

                (b) use its best efforts to effect such registration,
qualification or compliance as soon as practicable (including, without
limitation, undertaking to file post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws, and
appropriate compliance with applicable regulations issued under the Securities
Act, and any other governmental requirements or regulations) as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the

                                       3
<PAGE>   4

Company within 15 days after the receipt of the written notice from the Company
described in Section 2.1(a).

                (c) The Company shall file a registration statement covering the
Registrable Securities so requested to be registered as soon as practicable
after receipt of the request of the Preferred Stock Initiating Holders;
provided, however, that if the Company shall furnish to such Holders a
certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be detrimental to the Company and its stockholders for such
registration statement to be filed, the Company shall have the right to defer
such filing for a period of not more than 120 days after receipt of the request
of the Initiating Holders; provided, further, that the Company shall not be
permitted to exercise such deferral right under this Section 2.1(c) or Section
4.1(b) hereof more than twice in any 365-day period.

        2.2 Maximum Number of Demand Registrations. The Company is obligated to
effect two (2) demand registrations initiated by the Series B and C Initiating
Holders, and one (1) demand registration initiated by the Series A Initiating
Holders pursuant to Section 2.

        2.3 Underwriting.

                (a) The distribution of the Registrable Securities covered by
the request of the Preferred Initiating Holders shall be effected by means of
the method of distribution selected by the Holders holding a majority of the
Registrable Securities covered by such registration. If such distribution is
effected by means of an underwriting, the right of any Holder to registration
pursuant to this Article 2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting (unless otherwise agreed by the Preferred Stock Initiating
Holders) to the extent provided herein.

                (b) If such distribution is effected by means of an
underwriting, the Company (together with all Holders proposing to distribute
their securities through such underwriting) shall enter into an underwriting
agreement in customary form with a managing underwriter of nationally recognized
standing selected for such underwriting by the Holders holding a majority of the
Registrable Securities covered by such registration and approved by the Company,
which approval shall not be unreasonably withheld. Notwithstanding any other
provision of this Article 2, if the managing underwriter advises the Preferred
Stock Initiating Holders in writing that market factors require a limitation of
the number of shares to be underwritten, then the underwriters may exclude
shares requested to be included in such registration. The number of shares of
Registrable Securities to be included in the registration and underwriting shall
be allocated first amongst (i) the Holders who have requested registration of
Registrable Securities plus (ii) those joining the request pursuant to Section
2.1(b) in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders at the time of filing the
registration statement and then amongst any Holders exercising their rights
under Article 3 hereof with respect thereto in proportion, as nearly as
practicable, to the respective amount of Registrable Securities held by such
holders at the time of the filing of the registration statement. No Registrable
Securities excluded from the underwriting by reason of the managing
underwriter's market limitation shall be included in such registration.

                                       4
<PAGE>   5

                (c) If any Holder disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
the managing underwriter and the Preferred Stock Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration; provided, however, that if by the withdrawal of
such Registrable Securities a greater number of Registrable Securities held by
other Holders may be included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company shall offer to all
Holders who have included Registrable Securities in the registration the right
to include additional Registrable Securities in the same proportion used in
determining the underwriter limitation in this Section 2.3.

        2.4 Inclusion of Shares by Company. If the distribution of Registrable
Securities is being effected by means of an underwriting and if the managing
underwriter has not limited the number of Registrable Securities to be
underwritten, the Company may include securities for its own account or for the
account of others in such registration if the managing underwriter so agrees.
The inclusion of such shares shall be on the same terms as the registration of
shares held by the Preferred Stock Initiating Holders. In the event that the
underwriters exclude some of the securities to be registered, the securities to
be sold for the account of the Company and any other holders shall be excluded
in their entirety prior to the exclusion of any Registrable Securities.

                                    ARTICLE 3
                              COMPANY REGISTRATION

        3.1 Notice of Registration to Holders. If at any time or from time to
time the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders, including,
without limitation, pursuant to Article 2 or Article 4 hereof, other than (i) a
registration relating solely to employee benefit plans on Form S-8 (or any
successor form) or (ii) a registration relating solely to a Commission Rule 145
transaction on Form S-4 (or any successor form), the Company will:

                (a) promptly give to each Holder written notice thereof, and

                (b) 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 30 days after receipt of such written notice from the
Company described in Section 3.1(a), by any Holder or Holders.

        3.2 Underwriting.

                (a) 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
3.1(a). In such event, the right of any Holder to registration pursuant to this
Article 3 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

                                       5
<PAGE>   6

underwriting shall (together with the Company) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Company.

                (b) Notwithstanding any other provision of this Article 3, if
the managing underwriter determines that market factors require a limitation of
the number of shares to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders of Registrable Securities, and the number of shares
of Common Stock to be included in such registration shall be allocated as
follows: first, for the account of the Company, all shares of Common Stock
proposed to be sold by the Company; second, for the account of the Holders
participating in such registration, in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by all such Holders of
Registrable Securities; third, for the account of any other stockholders of the
Company not holding Registrable Securities participating in such registration,
the number of shares of Common Stock requested to be included in the
registration. No Registrable Securities excluded from the underwriting by reason
of the underwriters' market limitation shall be included in such registration.

                (c) The Company shall so advise all Holders and the other
holders distributing their securities through such underwriting of any such
limitation, and the number of shares of Registrable Securities held by Holders
that may be included in the registration. If any Holder disapproves of the terms
of any such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

                (d) The Company shall have the right to terminate or withdraw
any registration initiated by it under this Article 3 prior to the effectiveness
of such registration, whether or not a Holder has elected to include Registrable
Securities in such registration.

                                    ARTICLE 4
                            REGISTRATION ON FORM S-3

        4.1 Request for Registration.

                (a) In addition to the rights set forth in Articles 2 and 3
hereof, if Preferred Stock Initiating Holders (as defined for this Article
below) request that the Company file a registration statement on Form S-3 (or
any successor to Form S-3) for a public offering of shares of Registrable
Securities having an aggregate offering price of at least $3,000,000 (based on
the then current market price) and the Company is a registrant entitled to use
Form S-3 (or any successor form to Form S-3) to register such shares for such an
offering, the Company shall use its best efforts to cause such shares to be
registered for the offering as soon as practicable on Form S-3 (or any such
successor form to Form S-3). For purposes of this Article only, the term
"Preferred Stock Initiating Holders" shall mean (a) the Holders of Series C
Preferred Stock representing greater than 50% of the shares of the Series C
Registrable Securities underlying such Preferred Stock who comply with the
applicable requirements of this Article ("Series C Initiating Holders"), (b) the
Holders of Series B Preferred Stock representing greater than 50% of

                                       6
<PAGE>   7

the Shares of the Series B Preferred Stock who comply with the applicable
requirements of this Article ("Series B Initiating Holders") or (c) the Holders
of Series A Preferred Stock representing greater than 50% of the shares of the
Series A Registrable Securities underlying such Preferred Stock who comply with
the applicable requirements of this Article ("Series A Initiating Holders").

                (b) The Company shall file a registration statement on Form S-3
covering the Registrable Securities so requested to be registered as soon as
practicable after receipt of the request of the Holders; provided, however, that
if the Company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be detrimental
to the Company and its stockholders for such registration statement to be filed
on or before the date filing would be required, and it is therefore essential to
defer the filing of such registration statement, the Company shall have the
right to defer such filing for a period of not more than 120 days after receipt
of the request of the Holders; provided, further, that the Company shall not be
permitted to exercise such deferral right under this Section 4.1(b) or Section
2.1(c) hereof more than twice in any 365 day period.

                (c) The Company is obligated to effect one (1) registration
initiated by the Series C Initiating Holders, one (1) registration initiated by
the Series B Initiating Holders, and one (1) registration initiated by the
Series A Initiating Holders during any twelve-month period pursuant to this
Section 4.1.

        4.2 Underwriting.

                (a) The distribution of the Registrable Securities covered by
the registration on Form S-3 shall be effected by means of the method of
distribution selected by the Holders holding a majority of the Registrable
Securities covered by such registration. If such distribution is effected by
means of an underwriting, the right of any Holder to registration pursuant to
this Article 4 shall be conditioned upon such Holder's participation in such
underwriting, if any, and the inclusion of such Holder's Registrable Securities
in such underwriting.

                (b) If the distribution of the Registrable Securities pursuant
to this Section 4.2 is effected by means of an underwriting, the Company
(together with all Holders proposing to distribute their securities through such
underwriting) shall enter into an underwriting agreement in customary form with
a managing underwriter of nationally recognized standing selected for such
underwriting by a majority in interest of the Holders requesting registration on
Form S-3 and approved by the Company, which approval shall not be unreasonably
withheld. Notwithstanding any other provision of this Article 4, if the managing
underwriter advises the Holders in writing that market factors require a
limitation of the number of shares to be underwritten, then the underwriters may
exclude some or all of the shares requested to be included in such registration,
and the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders at the time of filing the registration
statement. No Registrable Securities excluded

                                       7
<PAGE>   8

from the underwriting by reason of the managing underwriter's marketing
limitation shall be included in such registration.

                (c) If the distribution of the Registrable Securities pursuant
to this Section 4.2 is effected by means of an underwriting and if any Holder of
Registrable Securities disapproves of the terms of the underwriting, such person
may elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Holders. The Registrable Securities and/or other securities
so withdrawn shall also be withdrawn from registration; provided, however, that
if by the withdrawal of such Registrable Securities a greater number of
Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities in the same proportion used in determining the underwriter limitation
in this Section 4.2.

        4.3 Inclusion of Shares by Company. If the distribution of the
Registrable Securities pursuant to this Article 4 is effected by means of an
underwriting and if the managing underwriter has not limited the number of
Registrable Securities to be underwritten, the Company may include securities
for its own account or for the account of others in such registration if the
managing underwriter so agrees and if the number of Registrable Securities held
by Holders requesting registration on Form S-3 which would otherwise have been
included in such registration and underwriting will not thereby be limited. The
inclusion of such shares shall be on the same terms as the registration of
shares held by the Holders requesting such registration. In the event that the
underwriters exclude some of the securities to be registered on Form S-3, the
securities to be sold for the account of the Company and any other holders shall
be excluded in their entirety prior to the exclusion of any Registrable
Securities.

                                    ARTICLE 5
                            EXPENSES OF REGISTRATION

        All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Article 2, Article 3 and Article 4
hereof shall be borne by the Company. All Selling Expenses relating to
Registrable Securities registered pursuant to Article 2, Article 3 and Article 4
hereof shall be borne by the Holders of such Registrable Securities pro rata on
the basis of the number of shares so registered.

                                    ARTICLE 6
                             REGISTRATION PROCEDURE

        6.1 Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to promptly effect the
registration of any of its securities under the Securities Act, the Company
will:

                (a) use its best efforts diligently to prepare and file with the
Commission a registration statement on the appropriate form under the Securities
Act with respect to such

                                       8
<PAGE>   9

securities, which form shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith, and use its best efforts to
cause such registration statement to become and remain effective until
completion of the proposed offering;

                (b) use its best efforts to diligently prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective until the Holder or Holders have completed the
distribution described in such registration statement and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all securities covered by such registration statement whenever the seller or
sellers of such securities shall desire to sell or otherwise dispose of the
same, but only to the extent provided in this Agreement;

                (c) furnish to each selling holder and the underwriters, if any,
such number of copies of such registration statement, any amendments thereto,
any documents incorporated by reference therein, the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such selling holder may reasonably request in
order to facilitate the public sale or other disposition of the securities owned
by such selling holder;

                (d) use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or state blue
sky laws of such jurisdictions as each selling holder shall request, and do any
and all other acts and things which may be necessary under such securities or
blue sky laws to enable such selling holder to consummate the public sale or
other disposition in such jurisdictions of the securities owned by such selling
holder, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified;

                (e) within a reasonable time before each filing of the
registration statement or prospectus or amendments or supplements thereto with
the Commission, furnish to counsel selected by the holders of Registrable
Securities copies of such documents proposed to be filed, which documents shall
be subject to the approval of such counsel;

                (f) immediately notify each selling holder of Registrable
Securities, such selling holder's counsel and any underwriter and (if requested
by any such Person) confirm such notice in writing, of the happening of any
event which makes any statement made in the registration statement or related
prospectus untrue or which requires the making of any changes in such
registration statement or prospectus so that they will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading; and, as promptly as
practicable thereafter, prepare and file with the Commission and furnish a
supplement or amendment to such prospectus so that, as thereafter deliverable to
the purchasers of such Registrable Securities, such prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

                                       9
<PAGE>   10

                (g) use its best efforts to prevent the issuance of any order
suspending the effectiveness of a registration statement, and if one is issued
use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of a registration statement at the earliest possible moment;

                (h) if requested by the managing underwriter or underwriters (if
any), any selling holder, or such selling holder's counsel, promptly incorporate
in a prospectus supplement or post-effective amendment such information as such
Person requests to be included therein, including, without limitation, with
respect to the securities being sold by such selling holder to such underwriter
or underwriters, the purchase price being paid therefor by such underwriter or
underwriters and with respect to any other terms of an underwritten offering of
the securities to be sold in such offering, and promptly make all required
filings of such prospectus supplement or post-effective amendment;

                (i) make available to each selling holder, any underwriter
participating in any disposition pursuant to a registration statement, and any
attorney, accountant or other agent or representative retained by any such
selling holder or underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information requested by any
such Inspector in connection with such registration statement;

                (j) enter into any reasonable underwriting agreement required by
the proposed underwriter(s) for the selling holders, if any, and use its best
efforts to facilitate the public offering of the securities;

                (k) furnish to each prospective selling holder a signed
counterpart, addressed to the prospective selling holder, of (A) an opinion of
counsel for the Company, dated the effective date of the registration statement,
and (B) a "comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in the registration
statement, covering substantially the same matters with respect to the
registration statement (and the prospectus included therein) and (in the case of
the accountants' letter) with respect to events subsequent to the date of the
financial statements, as are customarily covered (at the time of such
registration) in opinions of the Company's counsel and in accountants' letters
delivered to the underwriters in underwritten public offerings of securities;

                (l) cause the securities covered by such registration statement
to be listed on the securities exchange or quoted on the quotation system on
which the Common Stock of the Company is then listed or quoted (or if the Common
Stock is not yet listed or quoted, then on such exchange or quotation system as
the selling holders of Registrable Securities and the Company shall determine);

                (m) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make generally available to its
security holders, in each case

                                       10
<PAGE>   11

as soon as practicable, but not later than 30 days after the close of the period
covered thereby, an earnings statement of the Company which will satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any comparable successor provisions);

                (n) otherwise cooperate with the underwriter(s), the Commission
and other regulatory agencies and take all actions and execute and deliver or
cause to be executed and delivered all documents necessary to effect the
registration of any securities under this Agreement; and

                (o) during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act.

                                    ARTICLE 7
                                 INDEMNIFICATION

        7.1 The Company will indemnify each Holder, each of its officers and
directors and partners, and each person controlling any such persons within the
meaning of Section 15 of the Securities Act, 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, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, or any amendment or supplement thereof, 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 or
any state securities laws applicable to the Company and relating to action or
inaction by the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Holder, each of its officers and
directors and partners and each person controlling any such persons, 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, however, 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 such Holder or underwriter and expressly intended
for use in such registration statement, prospectus, or any amendment or
supplement thereof.

        7.2 Each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, 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

                                       11
<PAGE>   12

Holder, each of its officers, directors, partners, and each person controlling
such Holder 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, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, 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, and
will reimburse the Company, such Holders, such directors, officers, partners,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, in each case to 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, or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Holder and expressly
intended for use in such registration statement, prospectus, or any amendment or
supplement thereof; provided, however, that the obligations of each Holder
hereunder shall be limited to an amount equal to the proceeds to such Holder of
Registrable Securities sold as contemplated herein.

        7.3 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 unreasonably be
withheld). The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Indemnifying Party shall bear the expense
of such defense of the Indemnified Party if representation of both parties by
the same counsel would be inappropriate due to actual or potential conflicts of
interest. The failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, unless such failure is prejudicial to the ability of the Indemnifying
Party to defend the action. 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 of such
claim or litigation, and no Indemnified Party shall, except with the consent of
each Indemnifying Party, consent to any judgement or enter into any settlement
with respect to any claim for which it is seeking indemnification hereunder.

        7.4 THE INDEMNIFICATION PROVISIONS PROVIDED FOR IN THIS AGREEMENT HAVE
BEEN EXPRESSLY NEGOTIATED IN EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND
LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES,
OBLIGATIONS, CLAIMS, JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION
ARISE OR AROSE SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR

                                       12
<PAGE>   13

CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANY INDEMNIFIED
PARTY. THE PARTIES HERETO ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE
"EXPRESS NEGLIGENCE RULE" AND CONSTITUTES CONSPICUOUS NOTICE. NOTHING IN THIS
CONSPICUOUS NOTICE IS INTENDED TO PROVIDE OR ALTER THE RIGHTS AND OBLIGATIONS OF
THE PARTIES, ALL OF WHICH ARE SPECIFIED ELSEWHERE IN THIS AGREEMENT.

                                    ARTICLE 8
                               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
securities of the Company to the public without registration, after such time as
a public market exists for the Common Stock of the Company, the Company agrees
to:

        8.1 Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
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; and

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

        8.3 So long as a Holder owns any Registrable Securities, furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
ninety (90) days following 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 may reasonably request in availing itself of any rule
or regulation of the Commission allowing a Holder to sell any such securities
without registration.

                                    ARTICLE 9
                         TRANSFER OF REGISTRATION RIGHTS

        The rights to cause the Company to register Registrable Securities
granted Holders under Articles 2, 3 and 4 hereof may be assigned in connection
with any transfer or assignment of at least 50,000 shares of the Holder's
Registrable Securities. All transferees and assignees of the rights to cause the
Company to register Registrable Securities granted Holders under Articles 2, 3
and 4 hereof, as a condition to the transfer of such rights, shall agree in
writing to be bound by the agreements set forth herein.

                                       13
<PAGE>   14

                                   ARTICLE 10
                       LIMITATIONS ON REGISTRATION RIGHTS
                           GRANTED TO OTHER SECURITIES

        The parties hereto agree that additional holders may, with the consent
of the Company, the holders of a majority of the Registrable Securities then
outstanding, the holders of a majority of the Series C Preferred Stock then
outstanding, the holders of a majority of the Series B Preferred Stock then
outstanding and the holders of a majority of the Series A Preferred Stock then
outstanding, be added as parties to this Agreement with respect to any or all
securities of the Company held by them; provided, however, that from and after
the date of this Agreement, the Company shall not without the prior written
consent of the holders of a majority of the Registrable Securities then
outstanding and the holders of a majority of the Series C Preferred Stock then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company providing for the grant to such holder of
registration rights superior to, or pari passu with, those granted herein. Any
additional parties shall execute a counterpart of this Agreement, and upon
execution by such additional parties and by the Company, shall be considered
Holders for purposes of this Agreement, and shall be added to the Schedule of
Registration Rights Holders.

                                   ARTICLE 11
                                 PRIOR AGREEMENT

        The Investor Rights Agreement entered into by the Company and the
persons and entities listed therein dated December 28, 2000 is hereby
terminated.

                                   ARTICLE 12
                                  MISCELLANEOUS

        12.1 Governing Law. THE LAWS OF THE STATE OF CALIFORNIA SHALL GOVERN THE
INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT,
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF
LAW.

        12.2 Successors and Assigns. 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.

        12.3 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.

                                       14
<PAGE>   15

        12.4 Termination. In addition, the right of any Holder to request
registration or inclusion in any registration shall not be exercisable by a
Holder during any period in which after the closing of the Initial Public
Offering of Common Stock of the Company, all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may be sold under
Rule 144 under the Securities Act within any 90-day period.

        12.5 Notices. All notices, requests, consents, and other communications
hereunder shall be in writing and shall be deemed effectively given and received
when delivered in person or by national overnight courier service or by
certified or registered mail, return receipt requested, or by telecopier,
addressed as follows:

                (a)      if to the Company:

                         BAM! Entertainment, Inc.
                         333 West Santa Clara Avenue
                         Suite 95113
                         San Jose, CA
                         Attention: Ray Musci
                         Facsimile: (408) 298-9600

                         with a copy to:

                         Doty Sundheim and Gilmore
                         Attention: George M. Sundheim, III
                         Facsimile:  (650) 327-0100

                (b) To any Holder: The address reflected in Schedule 1 hereto,
as applicable, or such other address or addresses as shall have been furnished
in writing by such party to the Company and to the other parties to this
Agreement.

        12.6 Severability. The invalidity, illegality or unenforceability of one
or more of the provisions of this Agreement in any jurisdiction shall not affect
the validity, legality or enforceability of the remainder of this Agreement in
such jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.

        12.7 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

        12.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
constitute one instrument.

        12.9 "Market Stand-Off" Agreement. Each Holder agrees, if requested by
the Company and underwriter of Common Stock of the Company in connection with
the Company's Initial Public Offering, not to sell or otherwise transfer or
dispose of any Common Stock of the Company held by such Holder (other than to
donees, partners or affiliates of the Holder who agree to be similarly bound)
during the one hundred eighty (180) day period following the

                                       15
<PAGE>   16
effective date of a registration statement of the Company filed under the
Securities Act without the prior consent of such underwriter; provided, however,
that this Section 12.9 shall only apply to the Holders if all executive officers
and directors of the Company then holding Common Stock of the Company (or
options to acquire Common Stock) and all persons owning more than one percent
(1%) of Common Stock of the Company shall also have agreed to enter into similar
agreements. Such agreement shall be in writing in a form reasonably satisfactory
to the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of such one hundred eighty (180) day period.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized officers or
representatives as of the date first written above.

                                    COMPANY:

                                    BAM! ENTERTAINMENT, INC.

                                    By: /s/ RAYMOND C. MUSCI
                                        ----------------------------------------
                                        Raymond C. Musci, President

                                    By: /s/ GEORGE M. SUNDHEIM, III
                                        ----------------------------------------
                                        George M. Sundheim, III, Secretary

                                    PURCHASERS:

                                    PAR CAPITAL MANAGEMENT, INC.

                                    By: /s/ DAVID E. TOBIN
                                        ----------------------------------------
                                        Name:  David E. Tobin
                                        Title: Vice President

                                    MORGAN KEEGAN EARLY STAGE FUND, L.P.

                                    By: MERCHANT BANKERS, INC. as the general
                                        partner of Morgan Keegan Early Stage
                                        Fund, L.P.

                                        By: /s/ Minor Perkins
                                            ------------------------------------
                                            Name:  Minor Perkins
                                            Title: Vice President

                                       16
<PAGE>   17
                                    /s/ RAYMOND C. MUSCI
                                    ------------------------------------
                                    Raymond C. Musci

                                    /s/ ANTHONY R. WILLIAMS
                                    ------------------------------------
                                    Anthony R. Williams

                                    /s/ ROBERT HOLMES, JR.
                                    ------------------------------------
                                    Robert Holmes, Jr.

                                    /s/ STEPHEN AMBLER
                                    ------------------------------------
                                    Stephen Ambler

                                    /s/ JOSEPH MORICI
                                    ------------------------------------
                                    Joseph Morici

                                    /s/ MARK DYNE
                                    ------------------------------------
                                    Mark Dyne

                                    /s/ KEVIN BERMEISTER
                                    ------------------------------------
                                    Kevin Bermeister

                                    FIMAS, a Partnership

                                    By: /s/ GEORGE M. SUNDHEIM, III
                                       ---------------------------------
                                       Name:  George M. Sundheim, III
                                       Title: General Partner

                                    /s/ ANTHONY NEUMANN
                                    ------------------------------------
                                    Anthony Neumann

                                    /s/ PAMELA COLBURN
                                    ------------------------------------
                                    Pamela Colburn

                                    /s/ TERRY PHILLIPS
                                    ------------------------------------
                                    Terry Phillips

                                    /s/ STEVEN J. MASSARSKY
                                    ------------------------------------
                                    Steven J. Massarsky

                                    /s/ DAVID P. CLARK
                                    ------------------------------------
                                    David P. Clark

                                    K&L 2000 LLC

                                    By: /s/ PAUL W. SWEENEY, JR.
                                       ---------------------------------
                                       Name:  Paul W. Sweeney, Jr.
                                       Title: Admin. Partner -- LA

                                    OTHER PREFERRED HOLDERS:

                                    /s/ ELIE SAMAHA
                                    ------------------------------------
                                    Elie Samaha

                                    FIMAS, L.P.

                                    By: /s/ GEORGE M. SUNDHEIM, III
                                       ---------------------------------
                                       Name:  George M. Sundheim, III
                                       Title: General Partner

                                       17

<PAGE>   18

                                   Schedule 1

Series A Preferred Stockholders:

<TABLE>
<CAPTION>
                           Name                                        Number of Shares
                           ----                                        ----------------
                  <S>                                                  <C>
                  Raymond C. Musci                                             482,625
                  Anthony R. Williams                                          351,000
                  Robert Holmes                                                 87,750
                  Kevin Bermeister                                              10,969
                  Mark Dyne                                                     10,969
                  Elie Samaha                                                   21,938
                  FIMAS, L.P., a Partnership                                    10,969
</TABLE>

Series B Preferred Stockholders:

<TABLE>
<CAPTION>
                           Name                                        Number of Shares
                           ----                                        ----------------
                  <S>                                                  <C>
                  PAR Capital Management, Inc.                                198, 301
                  Raymond C. Musci                                              28,329
                  Anthony R. Williams                                           28,329
                  Morgan Keegan Early Stage Fund, L.P.                          22,092
                  Robert Holmes                                                 11,332
                  Morgan Keegan Employee Investment Fund, L.P.                   6,237
</TABLE>

Series C Preferred Stockholders:

<TABLE>
<CAPTION>
                           Name                                        Number of Shares
                           ----                                        ----------------
                  <S>                                                  <C>
                  PAR Capital Management, Inc.                                  88,680
                  Raymond C. Musci                                              13,302
                  Anthony R. Williams                                           13,302
                  Morgan Keegan Early Stage Fund, L.P.                          88,680
                  Robert Holmes                                                  6,651
                  Stephen Ambler                                                 1,109
                  Joseph Morici                                                    887
                  Mark Dyne                                                      4,434
                  Kevin Bermeister                                               4,434
                  K&L 2000 LLC                                                   1,109
                  Pam Colburn                                                    1,109
                  Anthony Neumann                                                1,109
                  Terry Phillips                                                13,302
                  Steve Massarasky                                               2,217
                  David Clark                                                    4,434
                  FIMAS, L.P., a Partnership                                       900
</TABLE>

                                       i

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