ROO Group Inks Deal to Acquire Sweden’s Kamera

NEW
YORK, March 19: ROO Group has entered into negotiations to acquire the mobile
content provider Kamera Content.

The
Stockholm-based Kamera’s corporate clients include Vodafone, MSN, Orange,
Telefonica, O2, Hutchinson and China Mobile. The company’s content library
includes localized, ready-to-publish clips from ABC News, the Associated Press,
SNTV and others. Kamera is privately-held. On an unaudited basis, Kamera
generated approximately $2.9 million of revenue in the 12 months ending
December 31, 2007, and the company’s management projects revenues of $5.6
million in 2008.

As part of the Content
Distribution Agreement (CDA), ROO Group will provide for a collateralized and
callable advance payment of $300,000 to Kamera. The CDA provides ROO with an
exclusive time period during which to fully negotiate the acquisition of
Kamera. Unless otherwise amended, if either Kamera or ROO terminates the CDA
before April 15, Kamera is obligated to pay back the cash advance in full plus
an amount equal to an annual interest rate of 12 percent compounded daily, by
June 30. The cash advance is also collateralized by Kamera’s source code and a
substantial number of Kamera’s shares.

Kaleil Isaza Tuzman, the
chairman and CEO of ROO Group, commented: “Henrik [Eklund, the CEO of Kamera
Content] and I have known each other for some time, and I have great respect
for him and the Kamera team. Our companies have a like-minded approach to
corporate clients. We value Kamera’s European footprint, and the potential
combination of ROO’s interactive marketing and video enablement tools with
Kamera’s mobile distribution capabilities can give us the ability to offer a
full-suite IPTV solution. While Kamera is currently generating a very small
operating loss, we believe the immediate elimination of overlapping overhead
costs will bring this loss to a gain position.”

Tuzman continued: “The
structure of the CDA gives us a great degree of flexibility and ensures ROO’s
exclusivity in the negotiation—as we move from LOI to a Definitive
Agreement. If we decide to proceed with the acquisition of Kamera, we will do
so with an upfront cash amount which can be paid out of treasury and the
previously disclosed KIT Capital investment, without the need for any further
equity financing. The current LOI also contemplates certain equity payments to
Kamera at future dates— based on performance thresholds being met, and
priced at future ROO common stock trading levels.”

—By Irene Lew