Document:

Exhibit
10.2

CONSULTING
AGREEMENT

This Consulting
Agreement (“Agreement”) is made and entered into as of the second (2nd) day of
January, 2007, by and between The Outdoor Channel, Inc. (the “Company”), and
Andrew J. Dale (“Consultant”) (collectively referred to as the “Parties” or
individually referred to as a “Party”).

WHEREAS, the
Company desires to retain Consultant as an independent contractor to perform
consulting services for the Company and Consultant is willing to perform such
services, on terms set forth more fully below;

WHEREAS,
Consultant’s performance of consulting services for the Company will allow
Consultant to continue vesting in the options to purchase shares of the Company’s
common stock, which were granted to Consultant pursuant to the Stock Option
Award Agreements that Consultant and the Company entered into, dated April 25,
2005, and which are subject to the terms and conditions of Outdoor Channel
Holdings, Inc.’s 2004 Long-Term Incentive Plan (collectively referred to herein
as the “Stock Agreements”); and

WHEREAS, even if
Consultant makes a concerted effort to respect his continuing obligations to
protect the confidentiality of the Company’s trade secrets and proprietary
information, it simply will not be possible for him to perform any consulting
or job responsibilities at the Company’s Competitors, as defined herein, and
protect the confidentiality of the Company’s trade secrets and proprietary
information;

NOW THEREFORE, in
consideration of the mutual promises contained herein, the parties agree as
follows:

1.     SERVICES AND COMPENSATION

(a) Consultant agrees to make himself available for up to a maximum of
5 days per month to perform such assignments as may reasonably be assigned by
the Company (the “Services”).  Company
agree to provide Consultant with two (2) business days’ notice for performing
any Services requiring air travel and one (1) business day’s notice for
performing any other Services.

(b) The Company agrees to pay Consultant a
fee of Eight Thousand Dollars ($8,000.00) per month for the Consulting Term, as
defined below.  This monthly payment will
be paid no later than the first business day of the month following each month
in which Consultant either performed or was available to perform, pursuant to
the terms of this Agreement, the Services.

(c) The Company also agrees to pay for
Consultant’s membership in Cable & Telecommunications Association for
Marketing during the Consulting Term. 
The Company further agrees to pay for Consultant’s subscription to the
publications of CableFax, Multichannel New, and CableWorld during the
Consulting Term.

(d) Except for travel between
Consultant’s home and the Company’s Temecula office, the Company further agrees
to reimburse the reasonable travel expenses incurred by Consultant in performing the Services.

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2.     CONFIDENTIALITY

(a) Definition.  “Confidential Information” means any Company
proprietary information, technical data, trade secrets or know-how, including,
but not limited to, research, product plans, products, services, customers, customer
lists, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances, or other business information disclosed by the Company
either directly or indirectly in writing, orally, or by drawings or inspection
of parts or equipment.

(b) Non-Use and Non-Disclosure.  Consultant will not, during or subsequent to
the term of this Agreement, use the Company’s Confidential Information for any
purpose whatsoever other than the performance of the Services on behalf of the
Company or disclose the Company’s Confidential Information to any third
party.  It is understood that said
Confidential Information shall remain the sole property of the Company.  Consultant further agrees to take all
reasonable precautions to prevent any unauthorized disclosure of such
Confidential Information including, but not limited to, having each employee of
Consultant, if any, with access to any Confidential Information, execute a nondisclosure
agreement containing provisions in the Company’s favor identical to
Sections 2, 3, and 4 of this Agreement. 
Confidential Information does not include information which (i) is known
to Consultant at the time of disclosure to Consultant by the Company as
evidenced by written records of Consultant, (ii) has become publicly known and
made generally available through no wrongful act of Consultant, or (iii) has
been rightfully received by Consultant from a third party who is authorized to
make such disclosure.

(c) Former Employer’s Confidential
Information.  Consultant agrees that
Consultant will not, during the term of this Agreement, improperly use or
disclose any proprietary information or trade secrets of any former or current
employer or other person or entity with which Consultant has an agreement or
duty to keep in confidence information acquired by Consultant, if any, and that
Consultant will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to such employer, person, or
entity unless consented to in writing by such employer, person, or entity.  Consultant will indemnify the Company and
hold it harmless from and against all claims, liabilities, damages, and
expenses, including reasonable attorneys’ fees and costs of suit, arising out
of or in connection with any violation or claimed violation of a third party’s
rights resulting in whole or in part from the Company’s use of the work product
of Consultant under this Agreement.

(d) Third Party Confidential Information.  Consultant recognizes that the Company has
received and in the future will receive from third parties their confidential
or proprietary information subject to a duty on the Company’s part to maintain
the confidentiality of such information and to use it only for certain limited
purposes.  Consultant agrees that
Consultant owes the Company and such third parties, during the term of this
Agreement and thereafter, a duty to hold all such confidential or proprietary
information in the strictest confidence and not to disclose it to any person,
firm, or corporation or to use it except as necessary in carrying out the
Services for the Company consistent with the Company’s agreement with such
third party.

(e) Return of Materials.  Upon the termination of this Agreement, or
upon Company’s earlier request, Consultant will deliver to the Company all of
the Company’s property or Confidential Information that Consultant may have in
Consultant’s possession or control.

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3.     OWNERSHIP

(a) Assignment.  Consultant agrees that all copyrightable
material, notes, records, drawings, designs, inventions, improvements,
developments, discoveries, and trade secrets conceived, made, or discovered by
Consultant, solely or in collaboration with the Company, during the period of
this Agreement, which relate in any manner to the business of the Company that
Consultant may be directed to undertake, investigate, or experiment with, or
which Consultant may become associated with in work, investigation, or
experimentation in the line of business of Company while performing the
Services hereunder (collectively, “Inventions”), are the sole property of the
Company.  Consultant further agrees to
assign (or cause to be assigned) and does hereby assign fully to the Company
all Inventions and any copyrights, patents, or other intellectual property
rights relating thereto.

(b) Further Assurances.  Consultant agrees to assist Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s
rights in the Inventions and any copyrights, patents, or other intellectual
property rights relating thereto in any and all countries, including the
disclosure to the Company of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths, assignments,
and all other instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and convey to the
Company, its successors, assigns, and nominees the sole and exclusive right,
title, and interest in and to such Inventions, and any copyrights, patents, or
other intellectual property rights relating thereto.  Consultant further agrees that Consultant’s
obligation to execute or cause to be executed, when it is in Consultant’s power
to do so, any such instrument or papers shall continue after the termination of
this Agreement.

(c) Pre-Existing Materials.  Consultant agrees that if in the course of
performing the Services, Consultant incorporates into any Invention developed
hereunder any invention, improvement, development, concept, discovery, or other
proprietary information owned by Consultant or in which Consultant has an
interest, (i) Consultant shall inform Company, in writing before
incorporating such invention, improvement, development, concept, discovery, or
other proprietary information into any Invention; and (ii) the Company is
hereby granted and shall have a nonexclusive, royalty-free, perpetual,
irrevocable, worldwide license to make, have made, modify, use, and sell such
item as part of or in connection with such Invention.  Consultant shall not incorporate any
invention, improvement, development, concept, discovery, or other proprietary
information owned by any third party into any Invention without Company’s prior
written permission.

(d) Attorney in Fact.  Consultant agrees that if the Company is
unable because of Consultant’s unavailability, dissolution, mental or physical
incapacity, or for any other reason, to secure Consultant’s signature to apply
for or to pursue any application for any United States or foreign patents or
copyright registrations covering the Inventions assigned to the Company above,
then Consultant hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents as Consultant’s agent and attorney in fact,
to act for and in Consultant’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents and copyright registrations thereon with
the same legal force and effect as if executed by Consultant.

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4.     CONFLICTING OBLIGATIONS

Consultant certifies that
Consultant has no outstanding agreement or obligation that is in conflict with
any of the provisions of this Agreement, or that would preclude Consultant from
complying with the provisions hereof, and further certifies that Consultant
will not enter into any such conflicting agreement during the term of this
Agreement.  Further, Consultant
acknowledges that he is subject to and will abide by the insider trading policy
of Outdoor Channel Holdings, Inc. regarding blackout periods for trading
securities, including the normal blackout periods and any additional blackout
periods implemented by Outdoor Channel Holdings, Inc.

5.     TERM AND TERMINATION

(a) Term.  This Agreement will commence on the date
first written above and will terminate on January 2, 2008, unless it is
terminated before that time as provided below (the “Consulting Term”).

(b) Termination.  The Consultant may terminate this Agreement
at any time.  The Company may terminate
this Agreement immediately if Consultant breaches Sections 1, 6, or 7 of this
Agreement.  Upon termination of this
Agreement, the Company’s obligation to provide Consultant with any payments or
fees, as set forth in Section 1 above shall cease immediately, and no further
payments will be due to Consultant by the Company.

(c) Survival.  Upon such termination, all rights and duties
of the parties toward each other shall cease except Sections 2 (Confidentiality),
3 (Ownership), 9 (Independent Contractors), and 10 (Benefits) shall
survive termination of this Agreement.

6.     DUTY OF LOYALTY AND
CONFIDENTIALITY

(a) Given Consultant’s detailed access to and
knowledge of the Company’s Confidential Information, Consultant acknowledges
and agrees that Consultant cannot work as an employee or consultant at any of
the following of the Company’s competitors in the cable television
industry:  the Sportsman Channel, Versus
(formally known as Outdoor Life Network), the Mens Channel, and Men’s Outdoor
and Recreation (the “Company’s Competitors”). 
Consultant acknowledges and agrees that, even if Consultant makes a
concerted effort to respect his continuing obligations to protect the
confidentiality of the Company’s Confidential Information, it simply will not
be possible for him to simultaneously: (i) perform any consulting or job
responsibilities at any of the Company’s Competitors and (ii) protect the
confidentiality of the Company’s Confidential Information.  The Company’s Confidential Information would
inevitably be disclosed in the performance of Consultant’s consulting or job
duties at any of the Company’s Competitors to the severe detriment of the
Company.  Accordingly, as consideration
for the Consulting Agreement, Consultant agrees that during the Consulting
Term, Consultant shall not become an employee or consultant to any of the
Company’s Competitors.

(b) Given
Consultant’s detailed access to and knowledge of the Company’s Confidential
Information, and as further consideration for the Consulting Agreement,
Consultant agrees that, during the Consulting Term, he shall not either
directly or indirectly, solicit, call upon, or encourage any of the Company’s
customers to do business with any of the Company’s Competitors.  Consultant further agrees that, during the
Consulting Term, he shall not either directly or indirectly, solicit, induce,
recruit, or encourage any of the Company’s employees to leave their 

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employment, or take away such employees, or
attempt to solicit, induce, or recruit employees of the Company, either for
himself or for any of the Company’s Competitors.

7.     ASSIGNMENT

Neither this Agreement nor any right hereunder or
interest herein may be assigned or transferred by Consultant without the
express written consent of the Company.

8.     INDEPENDENT CONTRACTOR

It is the express intention of the parties that
Consultant is an independent contractor. 
Nothing in this Agreement shall in any way be construed to constitute
Consultant as an agent, employee, or representative of the Company, but
Consultant shall perform the Services hereunder as an independent
contractor.  Consultant agrees to furnish
(or reimburse the Company for) all tools and materials necessary to accomplish
this contract, and shall incur all expenses associated with performance.  Consultant acknowledges and agrees that
Consultant is obligated to report as income all compensation received by
Consultant pursuant to this Agreement, and Consultant agrees to and acknowledges
the obligation to pay all self-employment and other taxes thereon.  Consultant further agrees to indemnify and
hold harmless the Company and its directors, officers, and employees from and
against all taxes, losses, damages, liabilities, costs, and expenses, including
attorney’s fees and other legal expenses, arising directly or indirectly from
(i) any negligent, reckless, or intentionally wrongful act of Consultant
or Consultant’s assistants, employees, or agents, (ii) a determination by
a court or agency that the Consultant is not an independent contractor, or
(iii) any breach by the Consultant or Consultant’s assistants, employees,
or agents of any of the covenants contained in this Agreement.

9.     BENEFITS

Except for the consideration identified in section 1
of the Separation Agreement entered into between Consultant and the Company,
Consultant acknowledges and agrees and it is the intent of the parties hereto
that Consultant receive no Company-sponsored benefits from the Company either
as a Consultant or employee.  Such
benefits include, but are not limited to, paid vacation, sick leave, medical
insurance, and 401(k) participation.  If
Consultant is reclassified by a state or federal agency or court as an
employee, Consultant will become a reclassified employee and will receive no
benefits except those mandated by state or federal law, even if by the terms of
the Company’s benefit plans in effect at the time of such reclassification
Consultant would otherwise be eligible for such benefits.  Nothing in this Agreement modifies or
supersedes the consideration identified in section 1 of the Separation
Agreement entered into between Consultant and the Company.

10.   ARBITRATION AND EQUITABLE
RELIEF

THE PARTIES AGREE
THAT ANY AND ALL DISPUTES ARISING OUT OF, RELATING TO, OR RESULTING FROM THE
TERMS OF THIS AGREEMENT AND THEIR INTERPRETATION SHALL BE SUBJECT TO BINDING
ARBITRATION IN SAN DIEGO COUNTY, CALIFORNIA BEFORE JAMS, PURSUANT TO ITS
EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”).  THE ARBITRATOR SHALL ADMINISTER AND CONDUCT
ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA
CODE OF CIVIL PROCEDURE, AND 

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THE ARBITRATOR SHALL
APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM,
WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION.  TO THE EXTENT THAT THE JAMS RULES CONFLICT
WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE.  THE ARBITRATOR MAY GRANT INJUNCTIONS AND
OTHER RELIEF IN SUCH DISPUTES.  THE
DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE
PARTIES TO THE ARBITRATION.  THE PARTIES
AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO
INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE
ARBITRATION AWARD.  THE ARBITRATOR SHALL
AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED
BY LAW.  THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW
BY A JUDGE OR JURY.

11.   GOVERNING LAW

This Agreement shall be governed by the internal
substantive laws, but not the choice-of-law rules, of the State of California.

12.   ENTIRE AGREEMENT

This Agreement
represents the entire agreement and understanding between the Company and
Consultant concerning Consultant’s relationship with the Company and the
termination of that relationship and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements and
understandings concerning Consultant’s relationship with the Company, with the
exception of the Separation Agreement and Release and the Company’s Stock
Agreements, which shall remain in full force and effect.

13.   MODIFICATION

This Agreement may only be amended in a writing signed
by Consultant and the Company’s President.

14.   ATTORNEYS’ FEES

In the event that either Party bring an action to
enforce or effect its rights under this Agreement, the prevailing Party shall
be entitled to recover its costs and expenses, including the costs of
mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees
incurred in connection with such an action.

15.   SEVERABILITY

The invalidity or unenforceability of any provision of
this Agreement, or any terms thereof, shall not affect the validity of this
Agreement as a whole, which shall at all times remain in full force and effect.

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

	
  

  	
  CONSULTANT

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  /s/        Andrew
  J. Dale

  	
   

  	 

	
   

  	
  Andrew J. Dale

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  THE OUTDOOR CHANNEL,
  INC.

  	
   

  	 

	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Perry T.
  Massie

  	
   

  
	
   

  	
  Title: 

  	
  Co-President

  	
   

  
						

 

 7Exhibit 10.1

 

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

Between

DG FastChannel, Inc.

And

Midwood Capital
Management LLC,

Midwood Capital Partners, L.P.,

Midwood Capital Partners QP, L.P.

 

 

 

December 22, 2006

 

 

THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into
effective as of December 22, 2006 between DG FastChannel, Inc., a Delaware
corporation (the “Purchaser”), Midwood Capital LLC, a Delaware limited
liability company (“Seller”), Midwood Capital Partners, L.P., a Delaware
limited partnership (“LP”) and Midwood Capital Partners QP, L.P., a Delaware
limited partnership (“QP” and together with LP, the “Funds”)’

WHEREAS, Seller
and the Funds beneficially own 1,108,674 shares (the “Shares”) of common stock,
no par value, of POINT.360 (“Point 360”), a California corporation;

WHEREAS, Seller is
the sole general partner of, and manages and provides investment advice to,
each of the Funds;

WHEREAS, Purchaser
desires to acquire the Shares, free from all liens, pledges, encumbrances,
proxies, voting agreements or arrangements of any kind with respect to the
Shares, on the terms, representations warranties, and covenants hereinafter set
forth.

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

1.     Purchase.  Seller shall deliver, convey and transfer, or
cause the Funds to deliver, convey and transfer, the Shares against delivery in
same day funds by wire transfer of $3.25 per Share, for a total purchase price
(“Purchase Price”) of $3,603,191, to a brokerage account designated in writing
by Purchaser, by irrevocable written instructions (the “Transfer Instructions”)
to the broker(s) engaged by Seller on behalf of the Funds which presently hold
or otherwise have custody of the Shares. 
Seller shall provide Purchaser with written wire instructions for
delivery of the Purchase Price to an account(s) at a U.S. financial institution
or broker (the “Wire Instructions”), upon which Purchaser can rely in full
payment for the Shares.  Against
confirmation of delivery of the Transfer Instructions to such broker(s) which
presently hold or have custody of the Shares, Purchaser shall deliver or cause
to be delivered the Purchaser Price in accordance with the Wire Instructions.

2.     Representations, Warranties and
Covenants of the Purchaser. 
Purchaser hereby represents, warrants and covenants to each of the
Seller and the Funds as follows.

2.1           Due Authorization.  Purchaser has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
and has taken all necessary corporate action to enter and perform this
Agreement.  This Agreement has been duly
authorized and validly executed and delivered by Purchaser and constitutes a
legal, valid and binding agreement of Purchaser enforceable against Purchaser
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

2.2           Non-Contravention.  The execution and delivery of this Agreement,
the purchase of the Shares under this Agreement, the fulfillment of the terms
of this Agreement and the consummation of the transactions contemplated hereby
will not (A) conflict with or constitute a violation of, or default (with or
without the giving of notice or the passage of time or both) under, 

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(i) any
material bond, debenture, note or other evidence of indebtedness, or under any
material lease, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which Purchaser is a party,
(ii) the charter, by-laws or other organizational documents of Purchaser,
as applicable, or (iii) any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to Purchaser or its property, or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of Purchaser or an
acceleration of indebtedness pursuant to any obligation, agreement or condition
contained in any material bond, debenture, note or any other evidence of
indebtedness or any material indenture, mortgage, deed of trust or any other
agreement or instrument to which Purchaser is a party or by which any of them
is bound or to which any of the property or assets of Purchaser is
subject.  No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, self-regulatory organization, stock
exchange or market, or other governmental body in the United States is required
for the execution and delivery of this Agreement and the acquisition of the
Shares by Purchaser, other than with respect to such filings as may be required
by Purchaser under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).

2.3           Status. Purchaser acknowledges
that may be entering into this Agreement and acquiring the Shares on the basis
of incomplete or inaccurate information available to it, and that neither
Seller nor the Funds, nor any of their respective affiliates or
representatives, have made any statement or representations with respect to the
financial condition, results of operations or prospects of Point 360.  Purchaser hereby waives any claims or causes
of action it may have against Seller, the Funds or any of their respective
affiliates or representatives with respect to the offer to sell and the sale of
the Shares under the securities laws of the Untied States, applicable state
securities or other laws or judicial doctrines, upon delivery of the Shares as
provided under this Agreement.

3.     Representations, Warranties and
Covenants of Seller and the Funds. 
Each of Seller and the Funds, severally and not joint, hereby
represents, warrants and covenants to Purchaser as follows:

3.1           Title.  The Funds are the beneficial owner of the
Shares and hold good and marketable title to the Shares without restriction on
sale or transfer, and upon consummation of the transaction contemplated by this
Agreement, Purchaser will acquire title to the Shares, free and clear of any
and all liens, claims, pledges or encumbrances, proxies or voting agreements or
arrangements of any kind.

3.2           Due Authorization.  Each of the Seller and the Funds has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement, and has taken all necessary company or partnership
action, as applicable, to enter and perform this Agreement.  This Agreement has been duly authorized and
validly executed and delivered by each of Seller and the Funds and constitutes
a legal, valid and binding agreement of each of Seller and the Funds
enforceable against Seller and the Funds in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

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3.3             Non-Contravention.  The execution and delivery of this Agreement,
the sale of the Shares under this Agreement, the fulfillment of the terms of
this Agreement and the consummation of the transactions contemplated hereby
will not (A) conflict with or constitute a violation of, or default (with or
without the giving of notice or the passage of time or both) under,
(i) any material bond, debenture, note or other evidence of indebtedness,
or under any material lease, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which Seller or
either of the Funds is a party, (ii) the organizational documents of
Seller or the Funds, or (iii) any law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration panel or
authority applicable to Seller or either of the Funds or their respective property,
other than with respect to a potential obligation arising under the Exchange
Act, or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of Seller or either of the Funds or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in
any material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or
instrument to which Seller or either of the Funds is a party or by which any of
them is bound or to which any of the property or assets of Seller or either of
the Funds is subject.  No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, self -regulatory
organization, stock exchange or market, or other governmental body in the
United States is required for the execution and delivery of this Agreement and
the sale of the Shares by Seller and the Funds.

3.4           Share Ownership.  Upon fulfillment of their obligations
hereunder, neither Seller nor either of the Funds, will own (beneficially or
otherwise) any equity securities of the Point 360, or any securities
convertible into or exchangeable or exercisable for any equity securities of
the Point 360, or which, upon redemption thereof could result in Seller or
either of the funds receiving any equity securities of Point 360, or options,
warrants, contractual rights or other rights of any kind to acquire or vote any
equity securities of the Point 360.

3.5           Status.  Seller is the sole general partner of the
Funds and has sole investment and voting power with respect to the Shares.  Each of Seller and the Funds acknowledge that
they are sophisticated investors in equity securities and that they trade and
invest regularly in equity securities of United States issuers such as Point
360, that they may be entering into this Agreement and selling the Shares on the
basis of incomplete or inaccurate information available to them, that neither
Purchaser nor any of Purchaser’s affiliates or representatives have disclosed
to them any intent to acquire additional shares of common stock of Point 360
but if Purchaser or any affiliate thereof should acquire more shares of common
stock of Point 360 through any means including open market, privately
negotiated or business combination transactions, Purchaser or its affiliates
may do so at any time at a price or fair market value greater than $3.25 per
share.  Each of Seller and the Funds
hereby waive any claims or causes of actions they may have against Purchaser,
its affiliates or representatives with respect to the offer to purchase and the
sale of the Shares under the securities laws of the United States, applicable
state securities or other laws or judicial doctrines, upon payment in full of
the Purchase Price of the Shares as provided under this Agreement.

3.6           U.S. Taxpayer.  Each of Seller and the Funds have executed
and delivered to Purchase a Substitute Form W-9, substantially in the form
attached hereto, and represent and warrant to Purchaser that they are not a “foreign
person” within the meaning of Section 1445(b)(2) of the Internal Revenue Code.

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4.     Survival
of Representations, Warranties and Agreements.  Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by Purchaser and Seller and each of the Funds herein shall
survive the execution and delivery of this Agreement, the delivery to Purchaser
of the Shares and the payment of the Purchase Price as provided herein.

5.     Notices.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed (A) if
within domestic United States by first-class registered or certified airmail,
or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by
International Federal Express or facsimile, and shall be deemed given
(i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed,
and (iv) if delivered by facsimile, upon electric confirmation of receipt
and shall be delivered as addressed as follows:

(a)             if to the Purchaser, to:

DG FastChannel,
Inc.

750 W. John Carpenter Freeway

Suite 700

Irving, Texas 7503

Attn: Omar A. Choucair 

Chief Financial Officer

Phone: (972) 581-2000

Fax:  (972) 581-2001

with a copy to:

Latham & Watkins LLP

555 Eleventh Street, N.W.

Suite 1000

Washington, DC  20004

Attn:  William P. O’Neill

Phone:  (202) 637-2200

Fax:  (202) 637-2201

(b)             if to Seller or the Funds, to:

Midwood Capital
Management LLC

575 Boylston

4th Floor

Boston, MA 02116

Attn:  David Cohen

Managing Director

Phone:  (617) 224-1751

Fax:  (617) 224-1769

 4
 

 

 

with a copy to:

Foley Hoag LLP

155 Seaport Boulevard

Boston, MA  02210

Attn:  Peter M. Rosenblum

Phone:  (617) 832-1151

Fax:  (617) 832-7000

Copies delivered to
counsel shall not constitute notice.

6.             Changes. 
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Purchaser and Seller and the Funds.

7.             Headings. 
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part
of this Agreement.

8.             Severability. 
In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.

9.             Governing Law. 
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York, without giving effect to the
principles of conflicts of law.

10.           Entire Agreement.  This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and any and
all other written or oral agreements relating to such subject matter are
expressly cancelled.

11.           Finders Fees.  Neither Purchaser, nor Seller, nor the Funds
nor any affiliate thereof has incurred any obligation which will result in the
obligation of the other party to pay any finder’s fee or commission in
connection with this transaction.

12.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.

13.           Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of Purchaser and
Seller and the Funds.

14.           Expenses.  Each of the Purchaser and Seller and the
Funds shall bear its own expenses in connection with the preparation and
negotiation of the Agreement and any brokerage fees or commissions in respect
of the sale and delivery of the Shares.

[Signature pages follow.]

 5
 

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the date first above written.

	
  

  	
  DG FastChannel, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Scott Ginsburg

  
	
   

  	
   

  	
   

  	
  Scott Ginsburg

  
	
   

  	
   

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Midwood Capital Management LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David Cohen

  
	
   

  	
   

  	
   

  	
  David Cohen

  
	
   

  	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Midwood Capital Partners, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Midwood Capital Management LLC

  
	
   

  	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David Cohen

  
	
   

  	
   

  	
   

  	
  David Cohen

  
	
   

  	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Midwood Capital Partners QP, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Midwood Capital Management LLC

  
	
   

  	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David Cohen

  
	
   

  	
   

  	
   

  	
  David Cohen

  
	
   

  	
   

  	
   

  	
  Managing Director

  

 

 6

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