0001104659-06-084224.txt : 20061228 0001104659-06-084224.hdr.sgml : 20061228 20061228153642 ACCESSION NUMBER: 0001104659-06-084224 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20061228 DATE AS OF CHANGE: 20061228 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: POINT 360 CENTRAL INDEX KEY: 0001014733 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ALLIED TO MOTION PICTURE PRODUCTION [7819] IRS NUMBER: 954272619 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-52979 FILM NUMBER: 061302828 BUSINESS ADDRESS: STREET 1: 2777 NORTH ONTARIO STREET CITY: BURBANK STATE: CA ZIP: 91504 BUSINESS PHONE: 818-565-1440 MAIL ADDRESS: STREET 1: 2777 NORTH ONTARIO STREET CITY: BURBANK STATE: CA ZIP: 91504 FORMER COMPANY: FORMER CONFORMED NAME: VDI MULTIMEDIA DATE OF NAME CHANGE: 19991115 FORMER COMPANY: FORMER CONFORMED NAME: VDI MEDIA DATE OF NAME CHANGE: 19960516 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DG FastChannel, Inc CENTRAL INDEX KEY: 0000934448 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 943140772 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 750 WEST JOHN CARPENTER FREEWAY STREET 2: SUITE 700 CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 972 581 2000 MAIL ADDRESS: STREET 1: 750 WEST JOHN CARPENTER FREEWAY STREET 2: SUITE 700 CITY: IRVING STATE: TX ZIP: 75039 FORMER COMPANY: FORMER CONFORMED NAME: DIGITAL GENERATION SYSTEMS INC DATE OF NAME CHANGE: 19951214 SC 13D 1 a06-26586_1sc13d.htm BENEFICIAL OWNERSHIP OF 5% OR MORE

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

Point.360

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

730698 10 7

(CUSIP Number)

William P. O’Neill, Esq.

Latham & Watkins LLP

555 Eleventh Street

NW Suite 1000

Washington, DC 20004-1304

(202) 637-2200

Scott K. Ginsburg

DG FastChannel, Inc.

750 West John Carpenter Freeway

Suite 700

Irving, TX 75039

(972) 581-2000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

December 22, 2006

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 730698 10 7

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) DG FastChannel, Inc. 94-3140772

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 1,108,674

			8.	Shared Voting Power 0

			9.	Sole Dispositive Power 1,108,674

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,108,674

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 11.4%

	14.	Type of Reporting Person (See Instructions) CO

Item 1.	Security and Issuer
The class of equity security to which this Statement relates is the common stock, no par value (the “Common Stock”) of Point.360, a California corporation (the “Company” or the “Issuer”). The name and address of the principal executive offices of the Company is Point.360, 2777 North Ontario Street, Suite 200, Burbank, CA 91504.
Item 2.	Identity and Background
The person filing this statement is DG FastChannel, Inc. (“DG FastChannel” or the “Reporting Person”), a Delaware corporation. DG FastChannel is a leading provider of digital technology services that enable the electronic delivery of advertisements from advertising agencies to traditional broadcasters and other media outlets. DG FastChannel operates a nationwide digital network out of our Network Operation Center, or NOC, located in Irving, Texas, which links more than 5,000 advertisers and advertising agencies with more than 21,000 radio, television, cable, network and print publishing destinations electronically throughout the United States and Canada. Through our NOC, we deliver video, audio, image and data content that comprise transactions among advertisers and various media outlets, including those in the broadcast industries. The address of DG FastChannel, Inc.’s principal business and its principal office is 750 West John Carpenter Freeway, Suite 700, Irving, TX 75039. The name and present principal occupation or employment of each director and executive officer of DG FastChannel are as follows: Scott K. Ginsburg, Chief Executive Officer and Chairman of the Board, Omar A. Choucair, Chief Financial Officer and Director, David M. Kantor, Director, Lisa Gallagher, Director, Kevin C. Howe, Director, William Donner, Director and Anthony J. LeVecchio, Director. The business address for each of these officers and directors is c/o DG FastChannel, Inc., 750 West John Carpenter Freeway Suite 700, Irving, TX 75039. No other person other than the foregoing persons might be deemed to control DG FastChannel. Each of the directors and executive officers of DG FastChannel is a United States citizen. During the last five years, neither DG FastChannel, nor to the best of DG FastChannel’s knowledge, any of its directors or officers, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) nor have any of such persons been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws, except as described on Appendix 1, which is incorporated by reference herein.
Item 3.	Source and Amount of Funds or Other Consideration
The Reporting Person used funds, in the aggregate amount of $3,603,191, from its general working capital to acquire the 1,108,674 shares of Common Stock (“Shares”) at a price per Share of $3.25 from another stockholder.
Item 4.	Purpose of Transaction
The Shares purchased by the Reporting Person have been acquired for investment purposes. The Reporting Person intends to continuously evaluate the Company’s business, financial condition, operating results, capital structure, management, stock market performance, competitive outlook and other relevant factors. As part of such evaluations, the Reporting Person may in the future seek the views of, hold active discussions with and respond to inquiries from members of the board of directors, officers or representatives of the Company and other persons regarding the Company’s affairs and strategic alternatives, and the interests of other stockholders in participating in such alternatives. Depending on such evaluations, the Reporting Person may, at any time and from time to time, purchase additional Shares or may dispose of any and all Shares held by it. The Reporting Person may from time to time develop plans respecting, or propose changes in, the management, composition of the board of directors, policies, operations, capital structure or business of the Company, including a possible recapitalization or sale of the Company. In connection with plans or proposals that the Reporting Person may develop, the Reporting Person may conduct investigations and, if warranted by such review, make and negotiate proposals to and with the Company concerning the matters addressed in the preceding sentence, and may enter into agreements with the Company in connection with those negotiations and proposals, including confidentiality and/or other arrangements. From time to time, the Reporting Person may identify and seek to nominate one or more persons for election to the Company’s board of directors and solicit consents or proxies to remove one or more members of the Company’s board of directors and elect such nominees, which may constitute a majority of the board or greater, to the Company’s board of directors. Except as set forth herein, the Reporting Person does not have any present plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of the instructions to Item 4 of Schedule 13D. The Reporting Person reserves the right to formulate plans or make proposals, and take such action with respect to its investment in the Company, including any or all of the items set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D and any other actions, as it may determine.
Item 5.	Interest in Securities of the Issuer
As of the date hereof, the Reporting Person beneficially owns in the aggregate 1,108,674 Shares. These Shares represent approximately 11.4% of the 9,748,332 Shares that the Reporting Person believes to be outstanding. The Reporting Person has the sole power to vote, direct the vote, dispose and direct the disposition of all of the Shares it beneficially owns.
Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
The Reporting Person entered into a Nondisclosure Agreement with the Company on August 16, 2006 for purposes of evaluating a possible business relationship.
Item 7.	Material to Be Filed as Exhibits
Securities Purchase Agreement dated December 22, 2006, between the Reporting Person and Midwood Capital Management, LLC, Midwood Capital Partners, L.P., and Midwood Capital Partners QP, L.P.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	December 22, 2006
	Date
	/s/ OMAR A. CHOUCAIR
	Signature
	Omar A. Choucair Chief Financial Officer
	Name/Title

Appendix 1

In September 1999, a civil lawsuit was filed by the SEC in the United States District Court for the Southern District of Florida against Scott Ginsburg, the Chairman of the Board of the Company, his brother and his father. The lawsuit alleged that Mr. Ginsburg had violated the insider trading provisions of the federal securities laws by communicating material, non-public information to his brother in 1996 regarding the securities of EZ Communications, Inc. (“EZ”) and in 1997 regarding the securities of Katz Media, Inc. (“Katz”). The lawsuit further alleged that Mr. Ginsburg’s father and brother, relying upon the information allegedly furnished by Mr. Ginsburg, purchased securities in EZ and Katz, and subsequently profited from the sale of such securities.

In April 2002, a jury found that Mr. Ginsburg did make these communications, known as “tipping,” and therefore concluded that he had violated Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder. In July 2002, the United States District Court imposed a $1,000,000 civil penalty against Mr. Ginsburg.

Mr. Ginsburg filed a motion asking the Court to set aside its ruling and the verdict of the jury. On December 19, 2002, the United States District Court granted Mr. Ginsburg’s motion for judgment notwithstanding the verdict. The Court overturned the jury verdict in its entirety and set aside the civil penalty.

On February 13, 2003, the SEC filed a Notice of Appeal, seeking to reverse the Court’s decision and challenging the Court’s earlier refusal to impose an injunction against Mr. Ginsburg. On March 19, 2004 a decision of a three-judge panel of the Eleventh Circuit U.S. Court of Appeals reversed the decision by the U.S. District Court for the Southern District of Florida on December 19, 2002. The Court of Appeals (i) reinstated the jury verdict that Mr. Ginsburg had, in matters unrelated to the Company, violated Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder, (i) reinstated a $1 million civil penalty against Mr. Ginsburg and (iii) remanded the case to the District Court with instructions to enjoin Mr. Ginsburg from violations of the federal securities laws and regulations. The Court of Appeals did not bar Mr. Ginsburg from serving as an officer or director of a public company and the Company’s Board immediately and unanimously moved to affirm Mr. Ginsburg in his capacity as Chairman of the Board of Directors.

EX-99.1 2 a06-26586_1ex99d1.htm EX-99.1

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,

(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).

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.

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

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.]

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

Under the Securities Exchange Act of 1934 (Amendment No. )*

Signature

Under the Securities Exchange Act of 1934
(Amendment No. )*