Document:

Exhibit 4.9

 

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TOWARD RESALE OR DISTRIBUTION. THIS WARRANT MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.

 

WATCHIT MEDIA,
INC.

 

WARRANT TO PURCHASE COMMON
STOCK

 

	
  Warrant No.: 3

  	
   

  	
   

  	
   

  	
  Number of Shares 1,111,111

  
	
  Date of Issuance: April 28, 2006

  	
   

  	
   

  	
   

  	
   

  

 

WATCHIT MEDIA, INC., a Delaware corporation (the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Cliff Melby, the registered
holder hereof or its permitted assigns, is entitled, subject to the terms set
forth below, to purchase from the Company upon surrender of this Warrant, at
any time or times on or after the date hereof, but not after 5:00 P.M. Eastern
Standard Time on the Expiration Date (as defined herein) one million one
hundred eleven thousand one hundred eleven (1,111,111) fully paid nonassessable
shares of Common Stock (as defined herein) of the Company (the “Warrant
Shares”) at the Warrant Exercise Price per share provided in Section l (a)
below;

 

Section 1.               

 

(a)           Definitions. The
following words and terms as used in this Warrant shall have the following
meanings:

 

(i)            “Common Stock”
means (i) Common Stock, par value $0.01 per share, and (ii) any capital stock
into which such Common Stock shall have been changed or any capital stock
resulting from a reclassification of such Common Stock.

 

(ii)           “Expiration Date”
means April 28, 2011, or, if such date falls on a Saturday, Sunday or other day
on which banks are required or authorized to be closed in the City of New York,
the State of New York, the City of San Francisco or the State of California (a “Holiday”),
the next preceding date that is not a Holiday.

 

(iii)          “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.

 

 

(iv)          “Securities Act”
means the Securities Act of 1933, as amended.

 

(v)           “Warrant” shall
mean this Warrant No. 2, dated April 28, 2006, and all warrants issued in
exchange, transfer or replacement of any thereof.

 

(vi)          “Warrant Exercise
Price” shall be equal to $0.27 per share of Common Stock, subject to
adjustment as hereinafter provided.

 

(b)           Other
Definitional Provisions.

 

(i)            Except
as otherwise specified herein, all references herein (A) to the Company shall
be deemed to include the Company’s successors and (B) to any applicable law
defined or referred to herein, shall be deemed references to such applicable
law as the same may have been or may be amended or supplemented from time to
time.

 

(ii)           When
used in this Warrant, the words “herein,” “hereof,” and “hereunder,” and words
of similar import, shall refer to this Warrant as a whole and not to any
provision of this Warrant, and the words “Section,” “Schedule,” and “Exhibit”
shall refer to Sections of, and Schedules and Exhibits to, this Warrant unless
otherwise specified.

 

(iii)          Whenever
the context so requires, the neuter gender includes the masculine or feminine,
and the singular number includes the plural, and vice versa.

 

Section 2.               Exercise
of Warrant.

 

(a)           Subject to the terms
and conditions hereof, this Warrant may be exercised by the holder hereof then
registered on the books of the Company, in whole or in part, at any time on any
business day or after the opening of business on the date hereof and prior to
11:59 P.M. Eastern Standard Time on the Expiration Date by (i) delivery of a
written notice, in the form of the subscription notice attached as Exhibit A
hereto, of such holder’s election to exercise this Warrant, which notice shall
specify the number of Warrant Shares to be purchased, (ii) payment to the
Company of an amount equal to the Warrant Exercise Price multiplied by the
number of Warrant Shares as to which the Warrant is being exercised (plus any
applicable issue or transfer taxes) (the “Aggregate Exercise Price”) in
cash or by check or wire transfer, and (iii) the surrender of this Warrant, to
a common carrier for delivery to the Company as soon as practicable following
such date, this Warrant (or an indemnification undertaking with respect to this
Warrant in the case of its loss, theft, or destruction); provided that if such
Warrant Shares are to be issued in any name other than that of the registered
holder of this Warrant, such issuance shall be deemed a transfer and the
provisions of Section 7 shall be applicable. In the event of any exercise of
the rights represented by this Warrant in compliance with this Section 2, a
certificate or certificates for the Warrant Shares so purchased, in such
denominations as may be requested by the holder hereof and registered in the
name of, or as directed by, the holder, shall be delivered at the Company’s
expense to, or as directed by, such holder as soon as practicable after such
rights shall have been so exercised, and in any event no later than five (5)
business days after the Company’s receipt of the Exercise Notice, the Aggregate
Exercise Price and this 

 

2

 

Warrant (or indemnification undertaking with respect to this Warrant in
the case of its loss, theft or destruction) 
Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (ii) (A) above, the holder of this Warrant shall be
deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date of delivery of this Warrant as required by clause
(iii) above or the certificates evidencing such Warrant Shares.

 

(b)           Unless the rights
represented by this Warrant shall have expired or shall have been fully
exercised, the Company shall, as soon as practicable and in any event no later
than five (5) business days after any exercise and at its own expense, issue a
new Warrant identical in all respects to the Warrant exercised except (i) it
shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under the Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is exercised, and (ii) the
holder thereof shall be deemed for all corporate purposes to have become the
holder of record of such Warrant Shares immediately prior to the close of
business on the date on which the Warrant is surrendered and payment of the
amount due in respect of such exercise and any applicable taxes is made,
irrespective of the date of delivery of certificates evidencing such Warrant
Shares, except that, if the date of such surrender and payment is a date when
the stock transfer books of the Company are properly closed, such person shall
be deemed to have become the holder of such Warrant Shares at the opening of
business on the next succeeding date on which the stock transfer books are open.
Upon presentation of a duly executed Subscription Form in the Form of Exhibit A
to this Warrant, the holder shall be entitled to exercise this Warrant in whole
or in part, if the holder shall have previously exercised and surrendered this
Warrant and the Company shall not have issued a new Warrant representing the
number of shares issuable following such prior exercise.

 

(c)           Upon the issuance of
the Warrant Shares hereunder, and consistent with, pursuant to and subject to
the Company’s existing Rights Agreement, dated as of September 24, 1997, as
amended by Amendment No. 1 to Rights Agreement, dated as of June 13, 2002 (as
the same may be amended from time to time, the “Rights Agreement”), between the
Company and Computershare Trust Company, N.A. (formerly EquiServe Trust
Company, N.A., as successor to BankBoston N.A.), as rights agent, one right
issuable pursuant to the Rights Agreement or any other right issued in
substitution thereof (a “Company Right”) shall be issued together with and
shall attach to each Warrant Share issued pursuant to the terms and conditions
of this Warrant, unless the Company Rights shall have expired or been redeemed
prior to the date on which this Warrant is exercised.

 

(d)           No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the
number of shares of Common Stock issued upon exercise of this Warrant shall be
rounded up or down to the nearest whole number.

 

Section 3.               Covenants
as to Common Stock. The Company hereby covenants and agrees as follows:

 

(a)           This
Warrant is, duly authorized and validly issued.

 

3

 

(b)           All
Warrant Shares which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

 

(c)           During
the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved at least
the number of shares of Common Stock needed to provide for the exercise of the
rights then represented by this Warrant and the par value of said shares will
at all times be less than or equal to the applicable Warrant Exercise Price.

 

(d)           The
Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed by it hereunder, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all
such action as may reasonably be requested by the holder of this Warrant in
order to protect the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (i) will
not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, and (ii) will
take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

 

(e)           This
Warrant will be binding upon any entity succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s assets.

 

Section 4.               Taxes.
The Company shall not be required to pay any tax or taxes attributable to the
initial issuance of the Warrant Shares or any permitted transfer involved in
the issue or delivery of any certificates for Warrant Shares in a name other
than that of the registered holder hereof or upon any permitted transfer of
this Warrant.

 

Section 5.               Warrant
Holder Not Deemed a Stockholder. Except as otherwise specifically provided
herein, no holder, as such, of this Warrant shall be entitled to vote or
receive dividends or be deemed the holder of shares of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any corporate action
(whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance
to the holder of this Warrant of the Warrant Shares which he or she is then
entitled to receive upon the due exercise of this Warrant.

 

In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors of the Company.

 

4

 

Section 6.               Representations
of Holder. The holder of this Warrant, by the acceptance hereof, represents
(and any assignor shall represent) that it is acquiring this Warrant and the
Warrant Shares for its own account for investment purposes and not with a view
to, or for sale in connection with, any distribution hereof, and not with any
present intention of distributing any of the same. The holder of this Warrant
further represents (and any assignor shall represent), by acceptance hereof,
that, as of this date, such holder is an “accredited investor” as such term is
defined in Rule 501(a)(1) of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act (an “Accredited Investor”).
Upon exercise of this Warrant, the holder shall, if requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the Warrant
Shares so purchased are being acquired solely for the holder’s own account and
not as a nominee for any other party, for investment, and not with a view
toward distribution or resale and that such holder is an Accredited Investor.
If such holder cannot make such representations because they would be factually
incorrect, it shall be a condition to such holder’s exercise of the Warrant
that the Company receive such other representations as the Company considers
reasonably necessary to assure the Company that the issuance of its securities
upon exercise of the Warrant shall not violate any United States Federal or
state securities laws.

 

Section 7.               Ownership
and Transfer.

 

(a)           The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to the holder hereof), a
register for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as
the name and address of each permissible transferee. The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary,
but in all events recognizing any transfers made in accordance with the terms
of this Warrant.

 

(b)           This
Warrant and the rights granted to the holder hereof are transferable, in whole
or in part, upon surrender of this Warrant, together with a properly executed
warrant power in the form of Exhibit B attached hereto; provided, however, that
any transfer or assignment issuance of the Warrant Shares upon shall subject to
the conditions set forth in Section 6 above and Section 7(c) below.

 

(c)           The
holder of this Warrant understands that this Warrant has not been and is not
expected to be, registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (a)
subsequently registered thereunder, or (b) such holder shall have delivered to
the Company an opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, to the effect that the securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an
exemption from such registration. Any sale of such securities made in reliance
on Rule 144 promulgated under the Securities Act may be made only in accordance
with the terms of said Rule and further, if said Rule is not applicable, any
resale of such securities under circumstances in which the seller (or the
person through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the Securities Act) may require compliance with some
other exemption under the Securities Act or the rules and regulations of the
Securities and Exchange Commission 

 

5

 

thereunder; and neither the
Company nor any other person is under any obligation to register the Warrant
Shares under the Securities Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder except as set forth in
Section 7(d) below.

 

(d)           The
Company shall use its commercially reasonable efforts to register the issuance
of the Warrant Shares upon exercise of the Warrants and the resale of the
Warrant Shares under the Securities Act pursuant to, and in accordance with,
the provisions of the Stock and Warrant Purchase Agreement, of even date
herewith, by and among the Company and the purchasers identified therein. Until
the Warrant Shares have been registered under the Securities Act, any Warrant
Shares issued upon exercise of this Warrant shall bear the following legend:

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

(e)           The
certificates representing the Warrant Shares shall also bear a legend
substantially as set forth below:

 

THIS
CERTIFICATE ALSO EVIDENCES A BENEFICIAL INTEREST IN AND ENTITLES THE HOLDER
HEREOF TO CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN WATCHIT
MEDIA, INC. (THE “COMPANY”) AND COMPUTERSHARE TRUST COMPANY, N.A. (FORMERLY
EQUISERVE TRUST COMPANY, N.A., AS SUCCESSOR TO BANKBOSTON, N.A.) (THE “RIGHTS
AGENT”), DATED AS OF SEPTEMBER 24, 1997, AS AMENDED BY AMENDMENT NO. 1 TO
RIGHTS AGREEMENT, DATED AS OF JUNE 13, 2002 (THE “RIGHTS AGREEMENT”), AND AS
THE SAME MAY BE AMENDED FROM TIME TO TIME, THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES
AND BENEFICIAL INTERESTS THEREIN WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF
THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE,
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR 

 

6

 

ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME
NULL AND VOID.

 

Section 8.               Adjustment
of Warrant Exercise Price. In order to prevent dilution of the rights
granted under this Warrant, the Warrant Exercise Price shall be adjusted from
time to time as follows:

 

(a)           Adjustment of
Warrant Exercise Price upon Subdivision or Combination of Common Stock. If
the Company at any time after the date of issuance of this Warrant, subdivides
(by any stock split, stock dividend, re-capitalization or otherwise) one or
more classes of its outstanding shares of Common Stock into a greater number of
shares, the Warrant Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of shares of Common Stock
obtainable upon exercise of this Warrant will be proportionately increased. If
the Company at any time after the date of issuance of this Warrant combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Warrant
Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of shares of Common Stock obtainable
upon exercise of this Warrant will be proportionately decreased.

 

(b)           Reorganization,
Reclassification, Consolidation, Merger or Sale. Any re-capitalization,
reorganization reclassification, consolidation, merger, sale of all or
substantially all of the Company’s assets to another Person or other similar
transaction which is effected in such a way that holders of Common Stock are
entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is
referred to herein as an “Organic Change.” Prior to the consummation of
any Organic Change, the Company will make appropriate provision to insure that,
upon the consummation of such Organic Change, the holder hereof will thereafter
have the right to acquire and receive in lieu of the Common Stock, such shares
of stock, securities or assets as may be issued or payable with respect to or
in exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such Organic Change
not taken place. In any such case, the Company will make appropriate provision
with respect to such holders’ rights and interests to insure that the
provisions of this Section 8(b) will thereafter be applicable to this Warrant.

 

(c)           Notices.

 

(i)         Immediately upon any
adjustment of the Warrant Exercise Price pursuant to this Section 8, the
Company will give written notice thereof to the holder of this Warrant, setting
forth in reasonable detail and certifying the calculation of such adjustment.

 

(ii)        The Company will give
written notice to the holder of this Warrant at least twenty (20) days prior to
the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the Common Stock, (B) with respect
to any pro 

 

7

 

rata subscription offer to
holders of Common Stock or (C) for determining rights to vote with respect to
any Organic Change, dissolution or liquidation, except that in no event shall
such notice be provided to such holder prior to such information being made
known to the public.

 

(iii)       The Company will also give
written notice to the holder of this Warrant at least twenty (20) days prior to
the date on which any Organic Change, dissolution or liquidation will take
place.

 

Section 9.               Lost,
Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen,
mutilated or destroyed, the Company shall, on receipt of an indemnification
undertaking, issue a new Warrant of like denomination and tenor as the Warrant
so lost, stolen, mutilated or destroyed.

 

Section 10.             Notice.
Any notices, consents, waivers, or other communications required or permitted
to be given under the terms of this Warrant must be in writing and will be
deemed to have been delivered (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile, provided a copy is mailed by U.S.
certified mail, return receipt requested; (iii) three (3) days after being sent
by U.S. certified mail, return receipt requested; or (iv) one (1) day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

	
  If to the
  Company:

  	
  Watchit
  Media, Inc.

  
	
   

  	
  655
  Montgomery Street, Suite 1000

  
	
   

  	
  San
  Francisco, CA  94111

  
	
   

  	
  Attention:

  	
  James R.
  Lavelle

  
	
   

  	
  Telephone:

  	
  (415)
  477-9900

  
	
   

  	
  Facsimile:

  	
  (415)
  399-0756

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy
  to:

  
	
   

  	
   

  
	
   

  	
  Morgan,
  Lewis & Bockius LLP

  
	
   

  	
  101 Park
  Avenue

  
	
   

  	
  New York, NY  10178

  
	
   

  	
  Attention:

  	
  David W.
  Pollak, Esq.

  
	
   

  	
  Telephone:

  	
  (212)
  309-6000

  
	
   

  	
  Facsimile:

  	
  (212)
  309-6001

  

 

If to a holder
of this Warrant, to him, her or it at the address set forth below such holder’s
signature on the signature page hereof. Each party shall provide five (5) days’
prior written notice to the other party of any change in address or facsimile
number.

 

Section 11.             Date.
The date of this Warrant is April 28, 2006. This Warrant, in all events, shall
be wholly void and of no effect after the close of business on the Expiration
Date, except that notwithstanding any other provisions hereof, the provisions
of Section 7 shall 

 

8

 

continue in full force and effect after such date as to any Warrant
Shares or other securities issued upon the exercise of this Warrant.

 

Section 12.             Amendment
and Waiver. Except as otherwise provided herein, the provisions of this
Warrant may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the holder of this Warrant.

 

Section 13.             Descriptive
Headings; Governing Law. The descriptive headings of the several sections
of this Warrant are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. This Warrant shall be governed by and
interpreted under the laws of the State of California, without giving effect to
any choice of law or conflict of law provision.

 

9

 

This Warrant has been duly executed by the Company as of the date first
set forth above.

 

 

	
   

  	
  WATCHIT
  MEDIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Lavelle

  	
   

  
	
   

  	
   

  	
  Name: James Lavelle

  
	
   

  	
   

  	
  Title: Chairman and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Cliff Melby

  	
   

  	
   

  	
   

  
	
  Cliff Melby

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tel:

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  
						

 

10

 

EXHIBIT A

 

FORM OF SUBSCRIPTION

 

(Complete and sign only exercise of the
Warrant in whole or in part.)

 

	
  TO:

  	
   

  	
   

  

 

The
undersigned, the holder of the attached Warrant to which this Form of
Subscription applies, hereby irrevocably elects to exercise the purchase rights
represented by such warrant for and to purchase thereunder          
shares of Common Stock, par value $0.01 per share (the “Shares”), from Watchit
Media, Inc., (or such other securities issuable pursuant to the terms of the
Warrant) and herewith makes payment of $         
therefor in cash or by certified or official bank check. The undersigned hereby
requests that the certificate(s) representing such securities be issued in the name(s)
and delivered the address(es) as follows:

 

	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
  Social Security Number:

  	
   

  	
   

  
	
  Deliver to:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  

 

If the
foregoing subscription evidences an exercise of the Warrant to purchase fewer
than all of the Shares (or other securities issuable pursuant to the terms of
the Warrant) to which the undersigned is entitled under such warrant, please
issue a new warrant, of like tenor, relating to the remaining portion of the
securities issuable upon exercise of such warrant (or other securities issuable
pursuant to the terms of such warrant) in the name(s), and deliver the same to
the address(es), as follows:

 

	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  
	
  (Name of Holder)

  	
  (Social Security or Taxpayer Identification

  
	
   

  	
  Number of Holder, if applicable)

  

 

	
   

  	
   

  
	
  (Signature of Holder or Authorized

  
	
  Signatory)

  

 

	
  Signature Guaranteed:

  	
   

  	
   

  

 

11

 

EXHIBIT B

 

FORM OF WARRANT POWER

 

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to                                                                      
[Federal Identification No.         ][Social
Security No.     ], a warrant to purchase shares of the
capital stock of Watchit Media, Inc., a Delaware corporation, represented by
warrant certificate No.               ,
standing in the name of the undersigned on the books of said corporation. The
undersigned does hereby irrevocably constitute and appoint                                            ,
attorney to transfer the warrants of said corporation, with full power of
substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  

 

12Exhibit 10.19

 

EXECUTION COPY

 

STOCK AND WARRANT
PURCHASE AGREEMENT

 

by and among

 

WATCHIT MEDIA, INC.

 

and

 

THE PURCHASERS

IDENTIFIED HEREIN

 

Dated as of March 16,
2006

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  SALE AND PURCHASE OF COMMON STOCK AND WARRANTS

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  Sale and Purchase of Common Stock and Warrants

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  CLOSING

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  Closing

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
  Deliveries by the Company at the Closing

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
  Deliveries by the Purchasers at the Closing

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
  Form of Documents and Instruments

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
  Additional Closings

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Organization of the Company

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
  Capitalization

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
  Authority Relative to this Agreement

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.4

  	
  No Conflicts

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.5

  	
  Exemption from Registration

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.6

  	
  Litigation

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.7

  	
  SEC Reports and Financial Statements

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.8

  	
  Governmental and Other Approvals

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  4.9

  	
  No Brokers

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
  PURCHASERS

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Purchase for Investment

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
  No Brokers

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
  COVENANTS

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  Legend

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
  Shares Issuable Upon Exercise

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
  Purchase of Additional Shares and Warrants

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  REGISTRATION RIGHTS

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  Registration

  	
  11

  

 

i

 

	
  7.2

  	
  Temporary Suspension of Use of Registration
  Statement

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
  Registration Procedures

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
  Expenses of Registration

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
  Indemnification by Company

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
  Indemnification by Offering Holders

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
  Notification of Certain Events

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
  Indemnification Procedures

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  7.9

  	
  Rule 144

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  MISCELLANEOUS

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  Assignment

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.2

  	
  Notices

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.3

  	
  Choice of Law

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  8.4

  	
  Attorney Fees of Purchasers in Connection with
  Agreement

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  8.5

  	
  Prevailing Party Attorney Fees

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  8.6

  	
  Counterparts

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  8.7

  	
  Invalidity

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  8.8

  	
  Headings

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  8.9

  	
  Severability

  	
  17

  

 

ii

 

SCHEDULES AND
EXHIBITS

 

	
  Schedule 1

  	
  –

  	
  List of
  Purchasers

  
	
  Exhibit A

  	
  –

  	
  Form of Warrant

  

 

iii

 

STOCK AND WARRANT
PURCHASE AGREEMENT

 

This
Stock and Warrant Purchase Agreement, dated as of March 16, 2006, is made by
and among Watchit Media, Inc., a Delaware corporation (the “Company”),
and each of the persons or entities set forth on Schedule 1 hereto
(each, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

WHEREAS,
the Company desires to sell to the Purchasers, and the Purchasers desire to
purchase from the Company, an aggregate of 3,333,334 shares (the “Shares”)
of the Company’s common stock, par value $0.01 per share (the “Common Stock”),
and warrants to purchase an additional 3,333,334 shares of Common Stock (the “Warrant
Shares”).

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1           Defined
Terms. As used herein, the terms below shall have the following meanings:

 

“Additional
Purchase Period” has the meaning set forth in Section 6.3 of this
Agreement.

 

“Additional
Shares and Warrants” has the meaning set forth in Section 6.3 of
this Agreement.

 

“Affiliate”
shall mean with respect to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person shall be deemed to
be “controlled by” another Person if such latter Person possesses, directly or
indirectly, power either to direct or cause the direction of management or policies
of a Person, whether through the ability to exercise voting power, by contract
or otherwise.

 

“Agreement”
means this Purchase Agreement, together with all schedules attached hereto.

 

“Board
of Directors” means the Board of Directors of the Company as of the date of
this Agreement.

 

“Business
Day” shall mean any day other than a Saturday, Sunday or other day on which
banks are required or permitted to close in the State of New York or the State
of California.

 

 

“Closing”
has the meaning set forth in Section 3.1 of this Agreement.

 

“Closing
Date” has the meaning set forth in Section 3.1 of this Agreement.

 

“Commission”
means the Securities and Exchange Commission.

 

“Common
Stock” has the meaning set forth in the Recitals.

 

“Company”
has the meaning set forth in the Introductory Paragraph.

 

“DGCL”
means the Delaware General Corporation Law, as amended from time to time.

 

“Encumbrance”
means any claim, lien, pledge, option, charge, easement, security interest,
right-of-way, encumbrance or other rights of third parties, and, with respect
to any securities, any agreements, understandings or restrictions affecting the
voting rights or other incidents of record or beneficial ownership pertaining
to such securities.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, including
the rules and regulations promulgated thereunder.

 

“Filing
Period” has the meaning set forth in Section 7.1 of this Agreement.

 

“Governmental
Authority” shall mean any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, or any court,
in each case whether of the United States or any foreign jurisdiction.

 

“Material
Adverse Effect” shall mean any event or condition that has had, or could
reasonably be expected to have, a material adverse change or effect on the
business, assets, properties, performance, operations or financial condition of
the Company and its subsidiaries, taken as a whole; provided, however,
that in no event shall any of the following, alone or in combination, be deemed
to constitute, nor shall any of the following be taken into account in
determining whether there has been or will be, a Material Adverse Effect:  (i) any change or effect that results or
arises from changes affecting any of the industries in which the Company
operates generally or the United States economy generally; or (ii) any change
or effect that results or arises from changes affecting general worldwide
economic or capital market conditions.

 

“Person”
shall mean any natural person, corporation, division of a corporation,
partnership, limited liability partnership, limited liability company, trust,
joint venture, association, company, estate, unincorporated organization or
government or any agency or political subdivision thereof.

 

“Private
Placement Legend” has the meaning set forth in Section 6.1 of this
Agreement.

 

“Purchase
Price” has the meaning set forth in Section 2.1 of this
Agreement.

 

2

 

“Purchaser”
or “Purchasers” has the meaning set forth in the Introductory Paragraph.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended, including the rules
and regulations promulgated thereunder.

 

“SEC
Reports” has the meaning set forth in Section 4.7 of this Agreement.

 

“Shares”
has the meaning set forth in the Recitals.

 

“Ten
Percent Threshold” has the meaning set forth in Section 6.3 of this
Agreement.

 

“Transaction”
means, taken together, the transactions contemplated under this Agreement.

 

“Transfer
Agent” means the Computershare Trust Company NA.

 

“Warrant”
has the meaning set forth in Section 2.1 of this Agreement.

 

“Warrant
Shares” has the meaning set forth in the Recitals.

 

ARTICLE II.

SALE AND PURCHASE OF COMMON STOCK AND WARRANTS

 

2.1           Sale
and Purchase of Common Stock and Warrants.

 

(a)           Subject to the terms and conditions hereof and in
reliance upon the representations and warranties of the Purchasers and the
Company contained herein or made pursuant hereto, the Company agrees to sell to
each of the Purchasers, and each Purchaser severally agrees to purchase from
the Company on the Closing Date, the number of shares of Common Stock set forth
opposite such Purchaser’s name on Schedule 1 hereto at a purchase price of $0.06
per share (the “Purchase Price”). In connection with the sale by the
Company to Purchaser of the shares of Common Stock set forth opposite such
Purchaser’s name on Schedule 1 hereto, the Company shall issue to each
Purchaser a warrant (the “Warrant”) in the form of Exhibit A
hereto to purchase the number of Warrant Shares set forth opposite such
Purchaser’s name on Schedule 1 hereto, it being agreed and understood that
each Purchaser shall receive a Warrant representing the right to purchase one
Warrant Share for every Share purchased hereunder.

 

(b)           Upon the issuance of the Shares hereunder, and
consistent with, pursuant to and subject to the Company’s existing Rights
Agreement, dated as of September 24, 1997, as amended by Amendment No. 1 to
Rights Agreement, dated as of June 13, 2002 (as the same may be amended from
time to time, the “Rights Agreement”), between the Company and Computershare
Trust Company NA (formerly EquiServe Trust Company, N.A., as successor to
BankBoston N.A.), as rights agent, one right issuable pursuant to the Rights Agreement
or any other right issued in substitution thereof (a “Company Right”)
shall be issued together with and

 

3

 

shall
attach to each Share issued pursuant to the terms and conditions of this
Agreement, unless the Company Rights shall have expired or been redeemed prior
to the Closing Date.

 

ARTICLE III.

CLOSING

 

3.1           Closing.
The closing of the transactions contemplated herein (the “Closing”)
shall occur concurrently with the execution of this Agreement (the date on
which the Closing occurs is referred to herein as the “Closing Date”) at
the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New
York 10178, unless the parties hereto otherwise agree.

 

3.2           Deliveries
by the Company at the Closing. At the Closing, the Company shall issue and
deliver to the Purchasers:

 

(a)           certificates evidencing the Shares and Warrants in the
name of the Purchasers in the respective amounts set forth on Schedule 1
hereto, provided,  that,
if a certificate for the Shares is not delivered to any Purchaser at the
Closing, the Company will deliver to such Purchaser evidence of a written
direction to the Transfer Agent instructing the Transfer Agent to deliver such
certificate to such Purchaser within five (5) Business Days of the Closing Date
and such written direction shall satisfy the Company’s obligation under this
Section 3.2(a) with respect to such Purchaser; and

 

(b)           all such other documents and instruments as
contemplated by this Agreement as the Purchasers or their counsel shall
reasonably request to consummate or evidence the Transaction.

 

3.3           Deliveries
by the Purchasers at the Closing. At the Closing, each Purchaser shall
deliver to the Company:

 

(a)           the Purchase Price for the Shares and Warrants being
purchased by such Purchaser, with such payment to be made by check made payable
to the Company or by wire transfer of immediately available funds to the
account designated in writing by the Company to such Purchaser at least one
Business Day prior to Closing; and

 

(b)           all such other documents and instruments as
contemplated by this Agreement as the Company or its counsel shall reasonably
request to consummate or evidence the Transaction.

 

3.4           Form of
Documents and Instruments. All of the documents and instruments delivered
at the Closing shall be in form and substance, and shall be executed and
delivered, in a manner reasonably satisfactory to the parties’ respective
counsel.

 

3.5           Additional
Closings. Each Purchaser acknowledges that the Company may, but is not obligated,
to sell from time to time additional shares of Common Stock and warrants to
purchase additional shares of Common Stock pursuant to stock and warrant
purchase agreements substantially the form of this Agreement. The closings
under any such stock and warrant purchase agreements shall occur from time to
time at the discretion of the Company.

 

4

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The
Company represents and warrants to the Purchasers as follows:

 

4.1           Organization
of the Company. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business and is in good standing in all jurisdictions where either
(i) the nature of its properties or business so requires or (ii) the
failure to be in good standing could reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to (a) own,
lease, and operate its properties and to carry on its business as presently
being, or as now intended to be, or as now intended to be, conducted and (b) to
execute, deliver and perform its obligations under this Agreement and any other
documents contemplated hereby to which it is or will be a party.

 

4.2           Capitalization.
The authorized capital stock of the Company consists of (i) 100,000,000 shares
of Common Stock and (ii) 500,000 shares of preferred stock, par value $0.01 per
share (“Preferred Stock”). As of September 30, 2005, 28,868,229 shares
of the Common Stock were issued and outstanding. As of the date hereof,
33,668,896 shares of the Common Stock are issued and outstanding. As of
September 30, 2005, no shares of Preferred Stock were issued or outstanding. As
of September 30, 2005, a total of 12,691,591
shares of Common Stock was issuable upon exercise of options outstanding
pursuant to the Company’s 1995 Long-Term Incentive Plan, the Company’s 1998
Long-Term Incentive Plan and the Company’s 2000 Long-Term Incentive Plan (collectively,
the “Incentive Plans”) and exercise of warrants outstanding. Except as
set forth in the immediately preceding sentence, no shares of capital stock,
options, warrants, convertible securities or any other equity securities of the
Company are issued or outstanding except as set forth in the SEC Reports and
except for the Company Rights. Under the Rights Agreement, until the
distribution date, (a) the Company Rights will be evidenced (subject to the
provisions of Sections 3(b) and 3(c) thereof) by the certificates for Common
Stock registered in the names of the holders of thereof (which certificates
shall also be deemed to be Rights Certificates, as such term is defined in the
Rights Agreement) and not by separate Rights Certificates and (b) the right to
receive Rights Certificates will be transferable only in connection with the
transfer of Common Stock. All of the outstanding shares of the Company’s
respective capital stock have been duly authorized and validly issued and are
fully paid and nonassessable. All shares of Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall, and the shares of
Common Stock to be issued pursuant to this Agreement will be, duly authorized,
and upon payment of the Purchase Price with respect to the Shares and upon
payment of the exercise price with respect to the Warrant Shares, will be
validly issued, fully paid and nonassessable. All of the outstanding shares of
capital stock of each of the Company’s subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and all such shares are owned by the
Company or another subsidiary free and clear of all security interests, liens,
claims, pledges, agreements, limitations in the Company’s voting rights,
charges or other encumbrances of any nature whatsoever. As of the date hereof,
other than as set forth above, the Company has no other securities authorized,
reserved for issuance, issued or outstanding.

 

5

 

4.3           Authority
Relative to this Agreement. The Company has all necessary corporate power
and authority to execute and deliver this Agreement, and to perform its
obligations hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby has been duly and validly
authorized by all necessary corporate action on the part of the Company, and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by the Purchasers,
constitutes a legal and binding obligation of the Company, enforceable against
the Company in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting creditors’ rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies.

 

4.4           No
Conflicts. The execution and delivery by the Company of this Agreement the
performance by the Company of its obligations under this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i)
conflict with, or constitute a default under, any material Contract to which
the Company is a party, (ii) result in a violation of the Company’s
organizational documents, or any order, judgment or decree of any court or
Governmental Authority having jurisdiction over the Company or any of its
assets or properties or (iii) result in, or require, the creation or imposition
of any Encumbrance upon any of the assets or properties of the Company.

 

4.5           Exemption
from Registration. Assuming the accuracy on the date hereof and on the
Closing Date of the representations and warranties of each Purchaser set forth
in Article V below, the issuance and the sale of the Shares and the Warrants to
the Purchasers hereunder are exempt from the registration requirements of the
Securities Act.

 

4.6           Litigation.
There are no actions, suits, proceedings or investigations pending, or to the
knowledge of the Company, threatened, against or affecting the Company, except
for those that could not reasonably be expected to have either individually or
in the aggregate a Material Adverse Effect on the Company. The Company is not
in default with respect to any order, writ, injunction, judgment, decree or
rule of any Governmental Authority, except for such defaults that could not
reasonably be expected to have either individually or in the aggregate a
Material Adverse Effect on the Company.

 

4.7           SEC
Reports and Financial Statements.

 

(a)           The Company has filed all forms, reports and documents
required to be filed by it pursuant to Section 13 or Section 15(d) of the
Exchange Act within the last 12 months on a timely basis or has received a
valid extension of time for filing. The Company has made available to the
Purchasers the Company’s (i) Annual Report on Form 10-K for the fiscal year
ended December 31, 2004, (ii) Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2005, (iii) Quarterly Report on Form 10-Q for the
quarter ended June 30, 2005 and (iv) Quarterly Report on Form 10-Q for the
quarter ended September 30, 2005 (collectively the “SEC Reports”). The
SEC Reports complied as to form in all material respects with the rules and
regulations of the Commission under the Exchange Act on the date of filing and
as of such

 

6

 

date (or
if amended or superseded by a filing prior to the date of this Agreement, on
the date of such filing) did not contain any untrue statement of a 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.

 

(b)           Each of the consolidated financial statements
(including, in each case, any related notes thereto) (the “Financial
Statements”) contained in the SEC Reports (i) was prepared in accordance
with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved (except as may be expressly
described in the notes thereto) and (ii) fairly presents in all material
respects the consolidated financial position of the Company as at the
respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated.

 

4.8           Governmental
and Other Approvals. All authorizations, approvals, orders, consents,
licenses, registrations or filings from or with any Governmental Authority
required for the execution, delivery and performance by the Company of this
Agreement has been duly obtained or made, and are in full force and effect, and
if any further authorizations, approvals, orders, consents, licenses,
registrations or filings should hereafter become necessary, the Company shall
obtain or make all such authorizations, approvals, orders, consents, licenses,
registrations or filings.

 

4.9           No
Brokers. The Company has not employed, and is not subject to the valid
claim of, any broker, finder, consultant or other intermediary in connection
with the transactions contemplated by this Agreement who might be entitled to a
fee or commission from the Company in connection with the transactions
contemplated by this Agreement. However, the Company may pay commissions and
finders fees to those who have assisted it in finding investors for the
transactions contemplated by this Agreement.

 

ARTICLE V.

REPRESENTATIONS, WARRANTIES AND AGREEMENTS

OF PURCHASERS

 

Each
Purchaser, severally and not jointly, hereby represents and warrants, solely as
to such Purchaser and not as to any other Purchaser, to the Company as follows:

 

5.1           Purchase
for Investment.

 

(a)           Such Purchaser is acquiring the Shares and Warrants
and will acquire the Warrant Shares solely by and for his, her or its own
account, for investment purposes only and not for the purpose of resale or
distribution; and such Purchaser has no contract, undertaking, agreement or
arrangement with any Person to sell, transfer, distribute, fractionalize,
pledge, or otherwise dispose of to such Person or anyone else any Shares,
Warrants or Warrant Shares; and such Purchaser has no present plans or
intentions to enter into any such contract, undertaking or arrangement.

 

(b)           Such Purchaser has all necessary power and authority
to acquire the Shares and Warrants and will have all necessary power and
authority to acquire the Warrant

 

7

 

Shares
and such acquisitions will not contravene any law, rule or regulation binding
on him, her or it or any investment guideline or restriction applicable to him,
her or it.

 

(c)           No consent, approval, order or authorization of, or
declaration, filing or registration with, any Government Authority or third
party is required to be obtained or made by such Purchaser in connection with
the execution and delivery by such Purchaser of this Agreement or the
consummation of the transactions contemplated hereby (including, without
limitation such Purchaser’s acquisition of Shares, Warrants or Warrant Shares).

 

(d)           Such Purchaser acknowledges that (i) he, she or it is
an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act; (ii) he, she or it has such knowledge and experience
in financial and business matters in general that it has the capacity to
evaluate the merits and risks of an investment in the Shares, Warrants and
Warrant Shares and to protect his, her or its own interest in connection with
an investment in the Shares, Warrants and Warrant Shares; (iii) he, she or it
is able to bear the economic risk of his, her or its investment in the Shares,
Warrants and Warrant Shares for an indefinite period of time; (iv) the Company
has made available to him, her or it the opportunity to evaluate the merits and
risks of his, her or its investment in the Company; (v) he, she or it has been
afforded access to information about the Company and the opportunity to ask
questions of, and to receive answers from, officers and directors of the
Company concerning the Company, its business and financial condition and any
other matters relating to the operation of the Company and the offering of the
Shares, Warrants and Warrant Shares; (vi) he, she or it has not purchased the
Shares or Warrants as a result of any general solicitation or advertising (as
those terms are used in Regulation D of the Securities Act), including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television, or
seminar or meeting who’s attendees have been invited by general solicitation or
general advertising and (vii) he, she or it is not relying on any communication
(written or oral) of the Company, other than those written representations in
this Agreement, as investment advice or as a recommendation to purchase the
Shares and Warrants.

 

(e)           Such Purchaser understands that the Shares, the
Warrants and the Warrant Shares have not been registered under the Securities
Act or the securities laws of any State. Such Purchaser agrees and represents
that he, she or it will not voluntarily sell, assign, pledge or otherwise
dispose of any Shares, Warrants, Warrant Shares or any portion thereof unless,
there is delivered to the Company evidence, satisfactory to the Company, which
may include an opinion of counsel reasonably acceptable to the Company, to
confirm that such Shares, Warrants or Warrant Shares may be legally sold or
disposed of without registration or qualification under the applicable state or
federal statutes, or the Shares, Warrants or Warrant Shares, as the case may
be, shall have been so registered or qualified and an appropriate registration
statement shall then be in effect; the Purchaser understands that the
certificates representing the Shares, Warrants and Warrant Shares will bear a
Private Placement Legend (as defined below) containing the foregoing
restriction.

 

(f)            Such Purchaser is fully aware that the Shares,
Warrants and Warrant Shares are being issued and sold to the Purchaser in
reliance upon the exemption provided for in Section 4(2) of the Act and Rule
506 promulgated thereunder and similar exemptions provided under state
securities laws on the grounds that no public offering is involved and that the

 

8

 

representations,
warranties and agreements set forth in this Agreement are essential to the
claiming of such exemptions.

 

(g)           Nothing in this Article V shall limit or
modify the representations and warranties of the Company in Article IV
of this Agreement or the right of the Purchasers to rely thereon.

 

5.2           No
Brokers. Such Purchaser has not employed, and is not subject to the valid
claim of, any broker, finder, consultant or other intermediary in connection
with the transactions contemplated by this Agreement who is entitled to a fee
or commission in connection with the transactions contemplated by this
Agreement.

 

ARTICLE VI.

COVENANTS

 

6.1           Legend.
Each Purchaser agrees to the placement on certificates representing Shares,
Warrants and Warrant Shares of a legend (the “Private Placement Legend”)
substantially as set forth below:

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

(a)           The Private Placement Legend shall be removed from any
such certificate if (i) the securities represented thereby are sold pursuant to
an effective registration statement under the Securities Act, (ii) there is
delivered to the Company such satisfactory evidence, which may include an
opinion of counsel, as reasonably may be requested by the Company, to confirm
that neither such legend nor the restrictions on transfer set forth therein are
required to ensure that transfers of such securities will not violate the
registration and prospectus delivery requirements of the Securities Act, or
(iii) the securities represented thereby may be resold pursuant to Rule 144(k)
promulgated under the Securities Act.

 

(b)           The certificates representing the Shares shall also
bear a legend substantially as set forth below:

 

THIS CERTIFICATE ALSO
EVIDENCES A BENEFICIAL INTEREST IN AND ENTITLES THE HOLDER HEREOF TO CERTAIN
RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN WATCHIT MEDIA, INC. (THE “COMPANY”)
AND COMPUTERSHARE TRUST COMPANY NA (FORMERLY EQUISERVE TRUST COMPANY, N.A., AS
SUCCESSOR TO

 

9

 

BANKBOSTON, N.A.) (THE “RIGHTS
AGENT”), DATED AS OF SEPTEMBER 24, 1997, AS AMENDED BY AMENDMENT NO. 1 TO
RIGHTS AGREEMENT, DATED AS OF JUNE 13, 2002 (THE “RIGHTS AGREEMENT”), AND AS
THE SAME MAY BE AMENDED FROM TIME TO TIME, THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES
AND BENEFICIAL INTERESTS THEREIN WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF
THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE,
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.

 

(c)           No other legends shall be placed on such certificates
without the consent of the Purchasers.

 

6.2           Shares
Issuable Upon Exercise. The Company shall reserve and keep available, out
of its authorized and unissued capital stock, solely for the purpose of
effecting the exercise of the Warrants, the full number of shares of Common
Stock as shall from time to time be sufficient to effect the exercise of
Warrants from time to time outstanding.

 

6.3           Purchase
of Additional Shares and Warrants. The Purchasers shall purchase from the
Company, and the Company shall sell to the Purchasers, an additional 1,666,666 shares
of Common Stock and warrants to purchase an additional 1,666,666 shares of
Common Stock (the “Additional Shares and Warrants”) on or prior to the
date that is four months from the Closing Date (the “Additional Purchase
Period”) on terms identical to those contained in this Stock and Warrant
Purchase Agreement; provided  however that no Purchaser shall be
required to purchase any Additional Shares and Warrants that would cause the
aggregate beneficial ownership of the Company’s Common Stock (calculated
pursuant to Rule 13d-3 of the Exchange Act) of such Purchaser and its
Affiliates to equal 10% or higher (the “Ten Percent Threshold”). If the
Purchasers are unable to purchase the total amount of Additional Shares and
Warrants within the Additional Purchase Period as a result of the Ten Percent
Threshold, then the Purchasers shall purchase from the Company, and the Company
shall sell to the Purchasers, the maximum number of Additional Shares and
Warrants, if any, permitted under the Ten Percent Threshold on the date that is
four months from the Closing Date on terms identical to those contained in this
Stock and Warrant Purchase Agreement. The total amount of Additional Shares and
Warrants

 

10

 

shall be included in the registration statement filed by the Company
pursuant to Article VII of this Stock and Warrant Purchase Agreement.

 

ARTICLE VII.

REGISTRATION RIGHTS

 

7.1           Registration.
On or prior to the 45th day following the Closing Date (the “Filing Period”),
the Company shall use its commercially reasonable efforts to prepare and file
with the Commission on one occasion, a registration statement and such other
documents as may be necessary in the advice of counsel for the Company, and use
its commercially reasonable efforts to have such registration statement
declared effective within 90 days of filing with the Commission in order to
comply with the provisions of the Securities Act so as to permit (i) the
registered resale of the Warrants and the exercise of the Warrants for Warrant
Shares by any person to whom the Warrants are resold pursuant to such resale
registration and (ii) the registered resale of the Shares and the Warrant Shares
by each and every holder of Shares and Warrants sold in the Offering (the “Offering
Securities”) who desires to register the resale of their shares. Prior to
filing such registration statement with the Commission, the Company shall give
each holder of Offering Securities notice at the address of such holder
appearing on the register and transfer records of Company of the Company’s
intention to register the resale of such Offering Securities. The obligations
of the Company to give such notice shall be limited to the Purchasers and their
permitted assigns. Purchasers who desire to register the resale of their shares
are referred to herein as “Offering Holders.”  If the Company fails to file such
registration statement within the Filing Period, the Company shall pay to the
Purchasers $500 per day, as liquidated damages, for each day after the Filing
Period up to and including the day the registration statement is filed. Once
effective, the Company shall maintain the effectiveness of the registration
statement until the earlier of (a) the date that all of the Offering Securities
have been sold, or (b) the date that the Company receives an opinion of counsel
to the Company that all of the Offering Securities may be freely traded without
registration rights under the Securities Act, under Rule 144 promulgated under
the Securities Act or otherwise.

 

7.2           Temporary
Suspension of Use of Registration Statement. Notwithstanding the foregoing
provisions of this Article VII, the Company may voluntarily suspend
the effectiveness of any such registration statement for a limited time, which
in no event shall be longer than 60 consecutive or non-consecutive days in any
12-month period, if the Company has been advised by counsel or underwriters to
the Company that the offering of any Offering Securities pursuant to the
registration statement would materially adversely affect, or would be improper
in view of (or improper without disclosure in a prospectus), a proposed
financing, a reorganization, recapitalization, merger, consolidation, or
similar transaction involving the Company. If any event occurs that would cause
the registration statement to contain a material misstatement or omission or
not to be effective and usable during the period that such registration
statement is required to be effective and usable, the Company shall promptly
file an amendment to the registration statement and use its commercially
reasonable efforts to cause such amendment to be declared effective as soon as
practicable thereafter. Upon request during the Filing Period, the Offering
Holders shall furnish promptly to the Company such information regarding their
holdings and the proposed manner of distribution thereof as shall be required
in connection with any such registration statement and shall continue to
furnish promptly to the Company any

 

11

 

subsequent information required to be disclosed in order to make any
previously furnished information not materially misleading. Notwithstanding any
provision contained herein to the contrary, the Company’s obligation to
include, or continue to include, Offering Securities in any such registration
statement under this Article VII shall terminate to the extent such
shares may be freely sold under Rule 144(k) promulgated under the Securities
Act.

 

7.3           Registration
Procedures. If and whenever the Company is required by the provisions of
this Agreement to use its commercially reasonable efforts to effect the
registration of the Offering Securities under the Securities Act for the
account of an Offering Holder, the Company will, as promptly as possible:

 

(a)           prepare and file with the SEC a registration statement
with respect to such securities and use its commercially reasonable efforts to
cause such registration statement to become and remain effective;

 

(b)           prepare and file with the SEC 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 and to comply with the requirements of the Securities Act and the
rules and regulations promulgated by the SEC thereunder relating to the sale or
other disposition of the securities covered by such registration statement;

 

(c)           furnish to each Offering Holder such numbers of copies
of a prospectus complying with the requirements of the Securities Act, and such
other documents as such Offering Holder may reasonably request in order to
facilitate the public sale or other disposition of the Offering Securities
owned by such Offering Holder, but such Offering Holder shall not be entitled
to use any selling materials other than a prospectus;

 

(d)           use its commercially reasonable efforts to register or
qualify the securities covered by such registration statement under the state
securities laws as any Offering Holder shall reasonably request, and do any and
all such other acts and things as may be necessary or advisable to enable such
Offering Holder to consummate the public sale or other disposition of the
Offering Securities owned by such Offering Holder in such states; provided,
however, that the Company shall not be obligated to register or qualify such
securities in any jurisdiction in which such registration or qualification
would require the Company to qualify as a foreign corporation or file any
general consent to service of process where it is not then so qualified or has
not theretofore so consented; and

 

(e)           provide a transfer agent for the Common Stock not
later than the effective date of the applicable registration statement.

 

7.4           Expenses
of Registration. Except as provided below in this Article VII,
the expenses incurred by the Company in connection with action taken by the
Company to comply with this Article VII, including, without
limitation, all registration and filing fees, printing and delivery expenses,
accounting fees, fees and disbursements of counsel to the Company, consultant
and expert fees, premiums for liability insurance, if applicable, obtained in
connection with a registration statement filed to effect such compliance, if
applicable, and all expenses, including counsel fees, for complying with state
securities laws, shall be paid by the Company.

 

12

 

All fees and disbursements of any counsel, experts, or consultants
employed by any Offering Holder shall be borne by such Offering Holder. The
Company shall not be obligated in any way in connection with any registration
pursuant to this Article VII, for any selling commissions or
discounts payable to any underwriter or broker for securities to be sold by
such Offering Holder. It shall be a condition precedent to the obligation of
the Company to take any action pursuant to this Article VII that
the Company shall have received an undertaking satisfactory to it from each
Offering Holder to pay all expenses required to be borne by such Offering
Holder and to furnish or cause to be furnished to the Company, specifically for
use in the preparation of the registration statement and prospectus, written
information concerning (i) the securities held by such Offering Holder and any
underwriter of such securities, (ii) the intended method of disposition thereof
and (iii) any additional information or documentation as the Company shall
reasonably request and as may be required by administrators of the Securities
Act or state securities laws in connection with the action to be taken by the
Company hereunder pursuant to such registration.

 

7.5           Indemnification
by Company. To the extent permitted by law, the Company will indemnify and
hold harmless each Offering Holder, its officers, directors and each
underwriter of such securities, and any person who controls such Offering
Holder or underwriter within the meaning of Section 15 of the Securities Act,
against all claims, actions, losses, damages, liabilities and expenses, joint
or several, to which any of such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement of
any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and will promptly reimburse such
Offering Holder, its officers, directors and each underwriter of such
securities, and each such controlling person or entity for any legal and any
other expenses reasonably incurred by such Offering Holder, such underwriter,
or such controlling person or entity in connection with investigating or
defending any such loss, action, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or omission made in such registration statement,
preliminary prospectus or prospectus, or such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Offering Holder or such underwriter specifically for use in the
preparation thereof, and provided further, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability or action arises out of or is based upon an untrue statement or
omission made in any preliminary prospectus or final prospectus if (i) such
Offering Holder failed to send or deliver a copy of the final prospectus or
prospectus supplement with or prior to the delivery of written confirmation of
the sale of the Offering Securities and (ii) the final prospectus or prospectus
supplement would have corrected such untrue statement or omission.

 

7.6           Indemnification
by Offering Holders. In the event of any registration of any securities
under the Securities Act pursuant to this Article VII, each
Offering Holder will, or will furnish the written undertaking of such other
person or entity as shall be acceptable to the Company to, indemnify and hold
harmless the Company, its officers, directors and any person who controls the
Company within the meaning of Section 15 of the Securities Act, its agents,

 

13

 

counsel and accountants, against any losses, claims, damages,
liabilities, or actions, joint or several, to which the Company, its officers,
directors, such controlling person or entity or its agents, counsel and
accountants, may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages, liabilities, or actions arise out of or are
based upon any untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent and only to the extent that any
such loss, claim, damage, liability, or action arises out of or is based upon
an untrue statement or omission made in such registration statement,
preliminary prospectus or prospectus or such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Offering Holder or any underwriter of such Offering Holder’s
securities specifically for use in the preparation thereof, and will promptly
reimburse the Company, its officers, directors and any person who controls the
Company within the meaning of Section 15 of the Securities Act and its agents,
counsel and accountants in connection with investigating or defending any such
loss, action, claim, damage, liability or action; provided, however, that the aggregate
amount which any such Offering Holder shall be required to pay pursuant to this
Section 7.6 shall be limited to the dollar amount of the gross
proceeds received by such Offering Holder upon the sale of the Shares or
Warrant Shares pursuant to the registration statement giving rise to such claim.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, its officers, directors and
any person who controls the Company within the meaning of Section 15 of the
Securities Act, and shall survive the transfer of the Shares by such Offering
Holder.

 

7.7           Notification
of Certain Events. At any time when a prospectus relating to the Offering
is required to be delivered under the Securities Act, the Company will promptly
notify the Offering Holder of the happening of any event, upon the notification
or awareness of such event by an executive officer of the Company, as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading.

 

7.8           Indemnification
Procedures. Any party entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (which consent may not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim.

 

7.9           Rule 144.
With a view to making available to the Offering Holder the benefits of Rule 144
promulgated under the Securities Act, the Company agrees that it will use its

 

14

 

commercially reasonable efforts to maintain registration of its shares
represented by Common Stock under Section 12 or 15 of the Exchange Act and to
file with the SEC in a timely manner all reports and other documents required
to be filed by an issuer of securities registered under the Exchange Act so as
to maintain the availability of Rule 144 promulgated under the Securities Act. Upon
the request of any record owner, the Company will deliver to such owner a
written statement as to whether it has complied with the reporting requirements
of Rule 144 promulgated under the Securities Act.

 

7.10         Transfer
of Securities. The Purchasers may assign their rights under this Article
VII to any party to whom the Purchasers transfer Shares, Warrants or
Warrant Shares in a private sale. If the Purchasers transfer any restricted securities
purchased under this Agreement following the effectiveness of the registration
statement required by this Article VII, the Company shall, upon the
request of any such transferee, file a prospectus supplement or post-effective
amendment, as applicable, to permit the registered resale of such securities by
such transferee(s).

 

ARTICLE VIII.

MISCELLANEOUS

 

8.1           Assignment.
Other than as set forth in Section 7.10, neither this Agreement nor any
of the rights or obligations hereunder may be assigned by (i) the Company
without the prior written consent of each of the Purchasers and (ii) any
Purchaser without the prior written consent of the Company. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their permitted respective successors and assigns, and no
other Person shall have any right, benefit or obligation hereunder.

 

8.2           Notices.
Unless otherwise provided herein, any notice, request, instruction or other
document to be given hereunder by any party to the other shall be in writing
and delivered by hand-delivery, registered first-class mail, telex, telecopier,
or air courier guaranteeing overnight delivery, as follows:

 

If to
the Company:

 

Watchit
Media, Inc.

655
Montgomery Street, Suite 1000

San
Francisco, California  94111

Attention:  James R. Lavelle

Telephone:  (415) 477-9900

Facsimile:   (415) 399-0756

 

With a
copy to:

 

Morgan,
Lewis & Bockius LLP

101
Park Avenue

New
York, New York  10178

Attention:  David W. Pollak, Esq.

Telephone:  (212) 309-6000

Facsimile:  (212) 309-6001

 

15

 

If to
any Purchaser:

 

At the
address set forth below such Purchaser’s name on Schedule 1 hereto.

 

or to such other place and with such other copies as
either party may designate as to itself by written notice to the other.

 

All
such notices, requests, instructions or other documents shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
receipt is acknowledged by addressee, if by telecopier transmission; and on the
next Business Day if timely delivered to a nationally recognized courier
guaranteeing overnight delivery.

 

8.3           Choice
of Law. This Agreement shall be construed, interpreted and the rights of
the parties determined in accordance with the internal laws of the State of
California. Each of the parties to this Agreement hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of California and the United States of America located in the
County of Los Angeles for any action or proceeding arising out of or relating
to this Agreement (and agrees not to commence any action or proceeding relating
thereto except in such courts), and further agrees that service of any process,
summons, notice or document by U.S. registered mail to its respective address
set forth in Section 8.2 hereof shall be effective service of process for any
action or proceeding brought against it in any such court. Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to the
laying of venue of any action or proceeding arising out of this Agreement in
the courts of the State of California or the United States of America located
in the County of Los Angeles, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action or proceeding brought in any such court has been brought in an
inconvenient forum.

 

8.4           Attorney
Fees of Purchasers in Connection with Agreement. The Company shall pay 50%
of the actual attorney fees incurred by the Purchasers in connection with this
Agreement and the transactions contemplated hereby, up to a maximum of $5,000. The
Company shall have the right, upon request, to inspect the actual time entries
of the attorneys corresponding to such incurred fees.

 

8.5           Prevailing
Party Attorney Fees. In any litigation, arbitration or other proceeding by
which one party either seeks to enforce its rights under this Agreement
(whether in contract, tort or both) or seeks a declaration of rights or
obligations under this Agreement, the prevailing party shall be awarded its
reasonable attorney fees and reasonable expenses incurred.

 

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

 

8.7           Invalidity.
In the event that any one or more of the provisions contained in this Agreement
or in any other instrument referred to herein, shall, for any reason, be held
to be

 

16

 

invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.

 

8.8           Headings.
The headings of the Articles and Sections herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.

 

8.9           Severability.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall not invalidate the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable the remainder of such provision in any other jurisdiction.

 

[Signature Pages
to Follow]

 

17

 

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

 

 

	
   

  	
  WATCHIT
  MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Dong

  	
   

  
	
   

  	
   

  	
  Name:
  John Dong

  
	
   

  	
   

  	
  Title:
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STIASSNI
  CAPITAL PARTNERS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  Stiassni Capital, LLC,

  
	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nicholas C. Stiassni

  	
   

  
	
   

  	
   

  	
  Name:
  Nicholas C. Stiassni

  
	
   

  	
   

  	
  Title:
  Manager

  
						

 

Signature Page to Stock
and Warrant Purchase Agreement

 

 

Schedule
1

 

LIST OF PURCHASERS

 

	
  Purchaser

  	
   

  	
  Common
  Stock

  	
   

  	
  Warrants

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stiassni Capital
  Partners, LP

  Attn: Nick Stiassni

  3400 Palos Verdes Drive, West

  Rancho Palos Verdes, CA 90275

  Tel: 310-377-4500

  Fax: 310-544-6349

  E-mail: ns@stiassnicapital.com

  	
   

  	
  3,333,334

  	
   

  	
  3,333,334

  

 

 

Exhibit A

 

Form of
Warrant

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