Amp'd Mobile Affidavit

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In addition, the Debtor's subscribers are downloading more over-the-air music downloads than ringtones.

7. The Debtor operates nationwide and has successfully expanded to Japanese and Canadian markets (through non-debtor affiliates) with the deployment of Amp'd Live, which reaches nearly 30 million mobile users in North America and Asia and creates a cross-cultural creative exchange for youth worldwide.

B. The Events Leading to the Bankruptcy Filing

8. Initially, in 2004, the Debtor's founder financed the Debtor personally. Later, in 2005, a group of investors including Highland Capital Partners, Columbia Capital Equity Partners and Redpoint Ventures invested in the Company. The Company continued development activities throughout 2005, including the design of the proposed customer experience through a unique user interface allowing access to entertainment content, licensing of content from licensors such as MTV Networks, the Ultimate Fighting Championship, a professional motocross racing association, Playboy Enterprises, major record labels, video game companies and others, and explored distribution strategies that would ultimately see the Debtor's service sold through retail outlets such as Best Buy, Circuit City, and a host of independent cellular dealers.

9. The Debtor was also successful in attracting investment from major strategic partners such as MTV Networks, Vivendi/Universal Music Group (the largest single investor), Intel, Qualcomm and Best Buy. Through the date of filing of its Chapter 11 petition, the Debtor raised approximately $350 million in equity investment and approximately $31 million of secured and unsecured debt investments.

10. The Debtor launched its services to consumers in December 2005. Throughout the first half the 2006, customer acquisition remained extremely low. In the second half of 2006, the Debtor aggressively advertised its service through television advertisements on MTV Networks and other promotional avenues.

11. By the end of 2006, the Debtor had approximately 100,000 subscribers to its service. From November 2006 through February 2007, the Debtor experienced an unprecedented growth of subscribers.

12. Unfortunately, in early 2007, the Debtor also began to experience customer collection problems at rates that were higher than industry norms. Approximately 90% of the Debtor's customers were on 18 month service contracts, meaning the Company essentially extended customers credit and billed customers for monthly service charges. The Debtor began to find a host of credit and collections problems and contributed ultimately to a liquidity crisis.

13. The Debtor moved quickly to remedy each of the issues it identified but its business model could not sustain such revenue collections problems, but by May 2007, the Debtor came to the realization that the number of its customers who were likely to be non-paying customers approached 80,000.

14. The Debtor attempted to raise additional investment funds from its existing equity and debt holders throughout May 2007. Those efforts appeared to be successful even as late as the day of the Debtor's filing on June 1, 2007. Unfortunately, the Debtor's existing investors ultimately declined to further fund the business.

15. Further compounding the liquidity crisis at the Debtor was the fact that Verizon, which provides the network carrier services that are integral to the delivery of the Debtor's services to its customers, had declared a default of the Wholesale Agreement and provided the Debtor with ten (10) days to make a $4.5 million cure payment. Faced with no other viable alternative, the Debtor's board of directors resolved to seek bankruptcy protection on an emergency basis on the evening of June 1, 2007.

16. On the evening of June 1, 2007, and in direct contravention of the Wholesale Agreement and the Default Notice sent on May 22, 2007, Verizon prematurely sent a letter to the Debtor purporting to terminate the Wholesale Agreement "effective immediately" and asserting its right to disconnect the network carrier services to the Debtor's customers.