EXHIBIT 10.04

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of February 10, 2006 (the
“Effective Date”), is entered into by and between Marc Laurence Greenberg, an
individual residing at 4211 Roma Court, Marina del Rey, California 90292
(“Executive”), and MRG Entertainment, Inc., a California corporation, located at
301 Arizona Avenue, Santa Monica, California 90401 (“Company”).

 

WHEREAS, Executive possesses valuable knowledge and skills which are relevant to
the operation of Company’s business; and

 

WHEREAS, Company desires to provide for the employment of Executive, and
Executive is willing to serve as an executive of Company, on the terms and
conditions herein provided; and

 

WHEREAS, New Frontier Media, Inc., a Colorado corporation (“New Frontier”), Marc
Lawrence Greenberg Trust dated May 11, 2001 (“Greenberg Trust”), Goldberg Family
Trust dated June 15, 2001 (“Goldberg Trust”), Richard Bruce Goldberg
(“Goldberg”) and Executive are parties to that certain Stock Purchase Agreement
dated February 6, 2006 (the “Purchase Agreement”); and

 

WHEREAS, the Greenberg Trust and the Goldberg Trust collectively own one hundred
percent (100%) of the issued and outstanding common stock shares of Company and
Lifestyles Entertainment, Inc., a California corporation (collectively, the
“Businesses”); and

 

WHEREAS, New Frontier is acquiring all of the stock and the goodwill of the
Businesses, which will continue to be engaged in (i) the entertainment,
production, marketing and distribution businesses, and (ii) producing, licensing
and selling motion pictures and television programs; and

 

WHEREAS, pursuant to the Purchase Agreement, the Businesses shall become wholly
owned subsidiaries of New Frontier; and

 

WHEREAS, Executive is a beneficiary of the Greenberg Trust and the Co-President
and Secretary of each of the Businesses and is benefiting financially from the
acquisition contemplated by the Purchase Agreement; and

 

WHEREAS, Executive has had and will continue to have access to and possession of
various trade secrets and other proprietary and confidential information of the
Businesses which is material to the continued value of the Businesses; and

 

WHEREAS, the entering into this Agreement by Company and Executive is a
condition to the consummation of the closing contemplated by the Purchase
Agreement and a material inducement of New Frontier to enter into the Purchase
Agreement; and

 

WHEREAS, Company desires to hire Executive, and Executive wishes to accept such
employment, upon the terms and conditions set forth in this Agreement.

 

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NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, Company and Executive agree as follows:

 

1.                                       EMPLOYMENT PERIOD.  Executive shall be
employed by Company, in accordance with the terms and provisions of this
Agreement, commencing on the Effective Date and ending at midnight on
February 9, 2009, unless sooner terminated in accordance with the provisions of
Sections 3 or 4 herein (the “Employment Period”).

 

2.               TERMS OF EMPLOYMENT.

 

A.                                   Position and Duties.  During the Employment
Period, Executive shall be employed by Company as President or a Co-President
(to the extent that Goldberg remains employed by Company as Co-President), and
Executive accepts and agrees to such employment.  During the Employment Period,
Executive shall perform all services and acts necessary and advisable to fulfill
the duties and responsibilities as are commensurate and consistent with
Executive’s position and shall render such services on the terms set forth
herein.  During the Employment Period, Executive shall report to the Chief
Executive Officer (the “CEO”) of New Frontier (or the CEO’s designee, so long as
such designee is of equal or greater rank than the CEO).  Executive shall have
such powers and duties with respect to his position as Co-President as may
reasonably be assigned to Executive by the CEO, to the extent consistent with
Executive’s position and status.  Executive agrees to devote his full-time
attention to the business and affairs of Company.  During the Employment Period,
it shall not be a violation of this Agreement for Executive to: (a) serve on
corporate, civic, charitable, and professional association boards or committees;
(b) deliver lectures or fulfill speaking engagements; and (c) manage personal
investments, so long as such activities do not result in more than de minimus
interference with the performance of Executive’s responsibilities as
Co-President of Company in accordance with this Agreement or do not create any
perceived or actual conflict of interest with Company or New Frontier.  The CEO
reserves the right for legitimate business reasons to require Executive to end
or refrain from participating in any such activities upon reasonable prior
written notice to Executive. Executive’s employment with Company under this
Agreement shall be Executive’s exclusive employment during the Employment
Period.

 

B.                                     Compensation.

 

(i)                                     Base Salary.  During the Employment
Period, Executive shall receive a base salary (“Base Salary”), which shall be
paid in equal installments on a bi-weekly basis, at the rate of Three Hundred
Fifty Thousand Dollars ($350,000) per annum, less standard state and federal
tax-related deductions and withholdings.

 

(ii)                                  Discretionary Bonus.  In addition to
Executive’s Base Salary, the Compensation Committee of the Board of Directors of
New Frontier (the “New Frontier Board”) may, in its sole discretion, award cash
bonuses annually to Executive, if at all, in an aggregate amount of up to one
hundred percent (100%) of Executive’s Base Salary, less standard state and
federal tax-related deductions and withholdings.  Notwithstanding the foregoing,
Executive shall have the right, to be determined in his sole discretion, to
decline and waive any discretionary bonus amount approved by the New Frontier
Board and, in such event, such approved bonus amount shall not count against the
calculation of EBITDA under the Earnout Agreement entered into as of even

 

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date herewith by and among New Frontier, Executive, Goldberg, the Greenberg
Trust and the Goldberg Trust (the “Earnout Agreement”), provided that Executive
notifies the CEO in writing of such waiver by the later of (i) September 30th of
the year during which such bonus is accrued, or (ii) within ten (10) business
days after Executive is advised in writing of the accrued bonus amount.  For
purposes of this Agreement, the term “EBITDA” shall have the meaning ascribed to
it in the Earnout Agreement.

 

(iii)                               Expenses.  During the Employment Period,
Company shall reimburse Executive for all reasonable employment-related expenses
incurred by Executive in accordance with the policies, practices and procedures
of Company as in effect generally from time to time after the Effective Date.

 

(iv)                              Vacation and Sick Leave.  Executive
acknowledges that Company has no policy concerning vacation time or sick leave
applicable to its executive level employees and, by executing this Agreement,
Executive acknowledges and agrees that he shall not accrue any such vacation or
sick leave benefits during the Employment Period.  Executive is authorized to
take paid time off provided he meets his professional and productivity
obligations to Company as determined by the CEO.  Executive is to coordinate
time off with the CEO.

 

(v)                                 Car Allowance.  During the Employment
Period, Executive shall be entitled to a car allowance equal to Eight Hundred
Fifty Dollars ($850) per month (the “Car Allowance”), to be paid in accordance
with and subject to Company’s car allowance policy.  The Car Allowance shall be
paid bi-weekly, and shall be taxable to Executive whether or not Executive has
an actual car payment (including any car lease payment).

 

(vi)                              Savings and Retirement Plans.  During the
Employment Period, Executive shall be entitled to participate in all savings and
retirement plans maintained by New Frontier, including any 401(k) plan, on the
same terms as executives of New Frontier or other subsidiaries of New Frontier
of similar rank to Executive are entitled to participate.

 

(vii)                           Key Man Insurance.  During the Employment
Period, Company may at its election obtain and maintain in full force and effect
term life insurance in such amounts as Company may elect in its sole discretion
on the life of Executive naming Company or New Frontier as beneficiary (the “Key
Man Insurance”).  Executive shall cooperate with Company and New Frontier with
respect to any reasonable underwriting activities as may be required by New
Frontier’s insurer(s) in connection with obtaining the Key Man Insurance,
including, without limitation, undertaking such medical examinations and
providing such documents and information as New Frontier or its insurer(s) may
reasonably request.

 

(viii)        Welfare Benefit Plans.  During the Employment Period, Executive
shall be eligible to participate in all welfare benefit plans made available by
New Frontier to other executives of similar rank to Executive; provided,
however, nothing in this Section 2(B)(viii) shall operate to reduce or impair
New Frontier’s right to alter, amend, or cancel any such plans, programs or
benefits at any time, upon reasonable advance notice to Executive.

 

(ix)                                Stock Options.  Executive shall be eligible
to participate in such Stock Option Plans of New Frontier that may be made
available from time to time to New Frontier

 

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executives of similar rank to Executive; provided, however, the level, terms and
conditions of such participation shall be determined by and within the sole
discretion of the New Frontier Board.

 

(x)                                   Withholdings.  All payments made to
Executive hereunder shall be subject to all applicable state and federal
tax-related withholding obligations, as required by applicable law.

 

3.                                       EARLY TERMINATION OF EMPLOYMENT.

 

Executive and Company each acknowledge that either party has the right to
terminate Executive’s employment with Company at any time for any lawful reason
whatsoever, with or without Cause (as defined herein) or advance notice,
pursuant to the following:

 

A.                                   For Cause. Company may terminate
Executive’s employment during the Employment Period for Cause.  For purposes of
this Agreement, “Cause” shall mean (i) the conviction of Executive for
committing an act of fraud, embezzlement, theft or other act constituting a
crime or the guilty or nolo contendere plea of Executive to any such crime;
(ii) fraudulent conduct or an act of dishonesty or breach of trust on the part
of Executive in connection with the business of Company or any of its affiliates
or subsidiaries; (iii) violation of any Company policy of which Executive is
aware and is given a period of ten (10) days’ prior written notice and
opportunity to cure during such period; (iv) failure, neglect, or refusal by
Executive to engage in diligent efforts to properly discharge, perform or
observe any or all of Executive’s job duties for any reason other than Company’s
material breach of this Agreement or Executive’s Permanent Disability (as
defined herein), which failure, neglect, or refusal continues after Company
provides ten (10) days’ prior written notice to Executive; provided, however,
Company shall not be required to deliver any such notice under this subpart
(iv) on more than one (1) occasion for each year of the Employment Period;
(v) breach of the Non-Competition, Non-Solicitation and Trade Secret Agreement
attached as Exhibit J to the Purchase Agreement (the “Non-competition
Agreement”); (vi) any uncured breach of the Employee Proprietary Information and
Inventions Agreement which results in damage to the Company, attached as
Exhibit A to this Agreement (the “Proprietary Information Agreement”); and
(vii) any other breach or failure by Executive to comply with any of the
provisions of this Agreement applicable to him and which is not remedied within
ten (10) days after written notice thereof from Company.  The parties
acknowledge that this definition of “Cause” is not intended and does not apply
to any aspect of the relationship between Company and any of its employees,
including Executive, beyond determining Executive’s eligibility for the Without
Cause Severance Payments (as defined herein).

 

B.                                     Without Cause. Company may terminate
Executive’s employment without Cause by providing Executive ten (10) business
days advance notice of such termination.

 

C.                                     Upon Executive’s Death or Permanent
Disability. Subject to applicable state or federal law, Executive’s employment
shall terminate automatically upon Executive’s death or upon Executive’s
permanent disability (“Permanently Disabled” or “Permanent Disability”), meaning
that Executive is unable to perform the essential functions of his job, with or
without reasonable accommodation, for a total of ninety (90) days out of any six
(6) month period.

 

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4.                                       TERMINATION BY EXECUTIVE FOR GOOD
REASON. Executive may terminate his employment with Company for Good Reason. For
purposes of this Agreement, “Good Reason” shall mean, in the absence of the
advance written consent of Executive, a reasonable determination by Executive
that any of the following has occurred:

 

A.           The assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including titles and reporting
requirements, authority, duties or responsibilities as contemplated by
Section 2(A) of this Agreement), or any other action by Company which results in
a material diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated and insubstantial action not taken in bad
faith and which is remedied by Company within ten (10) days after receipt of
written notice thereof given by Executive; or

 

B.             Any failure by Company to comply with any of the provisions of
this Agreement applicable to it, other than any isolated and insubstantial
failure not occurring in bad faith and which is remedied within ten (10) days
after receipt of written notice thereof given by Executive.

 

C.             Company’s failure to obtain a written agreement from any
successor of Company to assume and perform Company’s obligations under this
Agreement.

 

Upon the occurrence of any of the events described in Sections 4(A), 4(B), or
4(C) above, Executive shall be deemed to have waived any right to receive post
termination benefits if he does not notify Company of his intention to resign
within ninety (90) days after the occurrence of such event.

 

5.                                       OBLIGATIONS OF COMPANY UPON EARLY
TERMINATION.

 

A.           Termination for Cause.  In the event Executive is terminated by
Company for Cause, Company’s obligation to make payments hereunder shall cease
as of the Date of Termination, as defined in Section 6, except Company shall pay
to Executive, on the Date of Termination, any accrued Base Salary and bonuses
that have been earned through the Date of Termination (the sum of these amounts
shall hereinafter be referred to as the “Accrued Obligations”).  Business
expenses reimbursable under Company policy will be paid within thirty (30) days
after the final submittal of outstanding business expenses, provided that
Executive submit any outstanding business expenses within thirty (30) days after
the Date of Termination.  Vesting of any stock option under any applicable Stock
Option Plan shall cease vesting as of the Date of Termination.

 

B.             Termination by Company Without Cause.  In the event Executive is
terminated without Cause and upon the execution of a full general release by
Executive (“Release”), releasing all claims known or unknown that Executive may
have under this Agreement against Company or New Frontier as of the date
Executive signs such Release, and upon the written acknowledgement of his
continuing obligations under the Proprietary Information Agreement and the
Non-competition Agreement, Company shall pay Executive associated termination
payments equal to Base Salary continuation through February 9, 2009, or six
(6) months of Base Salary, whichever is greater (the “Without Cause Severance
Payments”), plus the Accrued Obligations; provided, however, the Without Cause
Severance Payments shall be reduced in accordance with Section 5(G) (Mitigation
of Damages).  The Without Cause Severance Payments will be paid in Company’s
regular payroll cycle; provided, the Accrued Obligations shall be paid to
Executive on the Date of Termination. 

 

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Business expenses reimbursable under Company policy will be paid within ten
(10) days after the final submittal of outstanding business expenses, provided
that Executive submits any outstanding business expenses within ten (10) days
after the Date of Termination.  Vesting of any stock options under any
applicable Stock Option Plan shall cease vesting as of the Date of Termination
without Cause.

 

C.             Termination by Executive for Good Reason.  In the event Executive
resigns his employment with Company for Good Reason and upon the execution of a
Release against Company and New Frontier, releasing all claims known or unknown
that Executive may have under this Agreement against Company or New Frontier as
of the date Executive signs such Release, and upon the written acknowledgement
of his continuing obligations under the Proprietary Information Agreement and
the Non-competition Agreement, Company shall pay Executive associated
termination payments equal to Base Salary continuation through February 9, 2009,
or six (6) months of Base Salary, whichever is greater (“Good Reason Severance
Payments”), plus the Accrued Obligations; provided, however, the Good Reason
Severance Payments shall be reduced in accordance with Section 5(G) (Mitigation
of Damages).  The Good Reason Severance Payments will be paid in Company’s
regular payroll cycle; provided, the Accrued Obligations shall be paid to
Executive on the Date of Termination.  Business expenses reimbursable under
Company policy will be paid within ten (10) days after the final submittal of
outstanding business expenses, provided that Executive submits any outstanding
business expenses within ten (10) days after the Date of Termination.  Vesting
of any stock options under any applicable Stock Option Plan shall cease vesting
as of the Date of Termination for Good Reason.

 

D.            Upon Death.  If Executive’s employment is terminated by reason of
Executive’s death during the Employment Period, this Agreement shall terminate
without further obligation to Executive’s legal representatives under this
Agreement.  Upon notice of Executive’s death, Company shall pay to Executive’s
estate all Accrued Obligations.  Business expenses reimbursable under Company
policy will be paid with thirty (30) days after the final submittal of
outstanding business expenses, provided that Executive’s estate submit any
outstanding business expenses within thirty (30) days after Executive’s death. 
Vesting of any stock options under any applicable Stock Option Plan shall be
governed by the terms of the Stock Option Plan and applicable Stock Option
grant.

 

E.              Upon Permanent Disability.  If Executive’s employment is
terminated by reason of Executive’s Permanent Disability (as determined pursuant
to Section 3(C) of this Agreement) during the Employment Period, this Agreement
shall terminate without further obligation to Company.  Company shall pay to
Executive, on the Date of Termination, all Accrued Obligations.  Business
expenses reimbursable under Company policy will be paid within thirty (30) days
after the final submittal of outstanding business expenses, provided Executive
submit any outstanding business expenses within thirty (30) days after the Date
of Termination.  Vesting of any stock options under any applicable Stock Option
Plan shall be governed by the terms of the Stock Option Plan and applicable
Stock Option grant.

 

F.              Application of Section 409A of Internal Revenue Code. 
Notwithstanding anything contained in Section 5(B) or 5(C) to the contrary, to
the extent that (i) the parties’ agreement regarding the Cause Severance
Payments or Good Reason Severance Payments, as applicable, to be made by Company
in accordance with this Agreement is treated as a “nonqualified deferred
compensation plan” within the meaning of Section 409A(d)(1) of the Internal
Revenue

 

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Code of 1986 (the “Code”), (ii) the Executive is a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, and
(iii) Section 409A(a)(1)(A) of the Code would apply to any Cause Severance
Payments or Good Reason Severance Payments, as applicable, but for the
application of Section 409A(a)(2)(A)(i) of the Code required to avoid the tax
consequences of Section 409A of the Code, the first such severance payment under
either scenario shall cover all payments scheduled to be made to Executive
during the first six (6) months after the Date of Termination and such first
payment shall be delayed until the day after the six (6) month anniversary of
the Date of Termination.

 

G.             Parachute Tax Gross Up.  Executive acknowledges that neither the
Company nor New Frontier presently has, nor shall it have any obligation to
consider or institute, a policy or procedure (a “Gross Up Policy”) that requires
the Company/New Frontier to pay any of its employees (including senior officers)
a “gross-up amount” providing employees entitled to any acceleration payments
with a “net” (or increased) payment amount that takes into account any
associated golden parachute excise tax (“Parachute Tax”) under
Section 4999(a) of the Code. Notwithstanding the foregoing, in the event New
Frontier or the Company during the Employment Period institutes a Gross Up
Policy applicable to one or more executives similarly situated to Executive in
connection with any acceleration payments owing or which could be owing to such
executive(s), Executive shall thereafter be entitled to participate in such
Gross Up Policy.

 

H.            Mitigation of Damages.  Executive shall not be obligated to seek
other employment to mitigate the amount of Without Cause Severance Payments or
the Good Reason Severance Payments payable to Executive hereunder; provided,
however, the amount of any Without Cause Severance Payments or Good Reason
Severance Payments shall be reduced, dollar for dollar, by an amount equal to
the gross amount that Executive earns (whether as an employee, contractor, or
director of any other business, trade, profession or occupation, and
irrespective of whether such form of compensation constitutes salary, bonus or
compensation) following (i) the termination of Executive without Cause, or
(ii) Executive’s resignation for Good Reason, as applicable.  Executive shall
for so long as any severance payments are due and owing to Executive, provide
the Company with contact information of any new employer of Executive (or such
other person or entity to whom Executive acts as a consultant or contractor)
(each referred to as a “Third Party Employer”) following termination; Executive
hereby further authorizes Company to provide a copy of this Agreement to such
Third Party Employer and to obtain from such Third Party Employer, without
Executive’s consent, all such information as may be reasonably requested by the
Company to ascertain the amount of compensation received by Executive from such
Third Party Employer, including without limitation, pay stubs, W-2’s and/or
Form 1099’s issued to Executive but only to the extent Executive does not first
provide such information to the Company within ten (10) days of written request.

 

6.                                       NOTICE AND DATE OF TERMINATION.  Any
termination (whether based on Permanent Disability, Good Reason, with Cause or
without Cause) shall be communicated by a written “Notice of Termination” to the
other party, and may be sent via registered or certified mail, return receipt
requested, postage prepaid or by facsimile transmission, or by electronic mail
or by hand delivery. “Date of Termination” shall mean: (i) the date of
transmission of the Notice of Termination by facsimile, e-mail or personal
delivery; (ii) three (3) calendar days after the date of mailing by first class
mail; or (iii) if Executive’s employment is terminated by reason of Executive’s
death, the Date of Termination shall be the date of Executive’s death.

 

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7.                                       PROPRIETARY AND OTHER OBLIGATIONS.

 

A.                                   Proprietary Information Agreement. 
Executive acknowledges that signing and complying with the Proprietary
Information Agreement is a condition of his employment by Company.  Executive
therefore agrees to sign and comply with the Proprietary Information Agreement
and acknowledges that by beginning employment with Company, he will be deemed to
have signed and agreed to the provision of the Proprietary Information
Agreement.

 

B.                                     Exceptions.  Notwithstanding any contrary
provisions in the Proprietary Information Agreement to the contrary the parties
agree as follows:  (i) the term “Proprietary Information”, as defined in
Section 1.2 of the Proprietary Information Agreement, shall not include
Executive’s personal address book; (ii) to the extent of any conflict between
Section 2(A) of this Agreement and the first sentence of paragraph 4 of the
Proprietary Information Agreement, Section 2(A) of this Agreement shall govern
and control; (iii) the last sentence of paragraph 7 of the Proprietary
Information Agreement shall not apply to Executive; (iv) a copy of all notices
to be provided to Executive under paragraph 9 of the Proprietary Information
Agreement shall be delivered to Michael Wolf, Esq., Wolf, Rifkin, Shapiro &
Schulman, LLP, 11400 W. Olympic Blvd., Ninth Floor, Los Angeles, California
90064; (v) promptly after providing a notification described in paragraph 10 of
the Proprietary Information Agreement to any new employer of Executive, the
Company will provide Executive with a copy of the notice given to such new
employer; and (vi) to the extent of any conflict between any Section(s) of this
Agreement and paragraph 11.5 of the Proprietary Information Agreement, the
Section(s) of this Agreement shall govern and control.

 

8.                                       NON-COMPETITION; NON-SOLICITATION. 
This Agreement shall not alter or amend any of the non-competition or
non-solicitation terms (nor any other terms) set forth in the Non-competition
Agreement or the Proprietary Information Agreement.

 

9.                                       ARBITRATION.  To the fullest extent
permitted by law, any controversy or claim past, present, or future, arising out
of or relating to the hiring of Executive, Executive’s employment, the
termination of Executive’s employment, this Agreement and/or the breach or
termination of this Agreement that Company may have against Executive or that
Executive may have against Company or against its officers, directors, employees
or agents in their capacity as such or the breach hereof, shall be settled by a
single arbitrator in arbitration conducted in Los Angeles County, California, in
accordance with the National Employment Arbitration Rules of the American
Arbitration Association (“AAA”).  These rules are posted on the AAA’s website,
www.adr.org. The arbitrators shall prepare a written award and judgment upon the
award may be entered in any court having jurisdiction thereof.  The arbitrator’s
decision shall be final and binding. The arbitrator shall have the authority to
settle such controversy or claim by finding that a party should be enjoined from
certain actions or be compelled to undertake certain actions, and in such event
such court may enter an order enjoining and/or compelling such actions as found
by that arbitrator.  Each party shall pay its own legal and other professional
fees and costs in connection with the arbitration and Company shall pay the
arbitrator’s fees; however, to the extent permitted by law, the arbitrator may
require the other party to pay the costs of the arbitration and/or the legal and
other professional fees and costs incurred by the prevailing party in connection
with such arbitration proceeding and any necessary court action.

 

The claims covered by this arbitration provision include, but are not limited
to, claims arising out of contract law, tort law, common law, defamation law,
fraud law (including, without

 

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limitation, fraud in the inducement of contract), wrongful discharge law,
privacy rights, statutory protections, constitutional protections, wage and hour
law, California Labor Code protections, the California Fair Employment and
Housing Act (which includes claims for discrimination or harassment on the basis
of age, race, color, ancestry, national origin, disability, medical condition,
marital status, religious creed, sexual orientation, pregnancy, and sex), any
similar state discrimination law, the Federal Civil Rights Act of 1964 and 1991,
as amended, the Age Discrimination in Employment Act, the Older Workers’ Benefit
Protection Act, the Americans With Disabilities Act; claims for benefits (except
claims under an employee benefit plan that either (1) specifies that its claims
procedure shall culminate in an arbitration procedure different from this one,
or (2) is underwritten by a commercial insurer which decides claims); and claims
for violation of any federal, state, or other governmental law, statute,
regulation, or ordinance, except claims excluded in the following section.

 

Notwithstanding the foregoing, the parties expressly agree that claims Executive
may have for workers’ compensation, state unemployment compensation benefits,
and state disability insurance are not covered by this Agreement.  The parties
also agree that a court of competent jurisdiction may enter a temporary
restraining order or an order enjoining a breach of this Agreement, including
Exhibit A (Confidentiality Agreement) hereto, pending a final award or further
order by the arbitrator.  Such remedy, however, shall be cumulative and
nonexclusive, and shall be in addition to any other remedy to which the parties
may be entitled.  The parties further expressly agree that this provision does
not apply to any matter in which the amount in controversy falls within the
jurisdiction of the Small Claims Division of the Municipal Courts of the State
of California.  Should such matter fall within the jurisdiction of the Small
Claims Division of the Municipal Court of the State of California, then such
matter shall be, and may only be, submitted to a Small Claims Division of the
Courts of the State of California for Los Angeles County for determination.

 

This Section 9 shall apply notwithstanding any provision to the contrary which
is set forth in the Purchase Agreement; provided however, Company shall, in the
event of any arbitration under this Section 9, continue to have (and the
arbitrator shall take into account in rendering any award hereunder) all of its
offset rights contained in applicable provisions of the Purchase Agreement.

 

10.                                 NO CONFLICTING OBLIGATIONS OF EXECUTIVE. 
Executive represents and warrants that he is not subject to any duties or
restrictions under any prior agreement with any previous employer or other
person or entity other than Company, and that he has no rights or obligations
which may conflict with the interests of Company or with the performance of
Executive’s duties and obligations under this Agreement.  Executive agrees to
notify Company immediately if any such conflicts occur in the future.

 

11.                                 DIRECTOR AND OFFICER INSURANCE AND
INDEMNITY.  To the extent that New Frontier maintains Director and Office
Insurance on similarly situated executives of other subsidiaries, New Frontier
shall obtain and pay the premiums upon director and officer insurance and shall
name Executive as an insured under such policies.  Company shall further
indemnify and hold harmless Executive as required under Company’s articles of
incorporation or bylaws and, without limiting the generality of the foregoing,
Company shall indemnify and hold harmless Executive to the maximum extent
required by California law.

 

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12.                                 SUCCESSORS.  This Agreement is personal to
Executive and shall not be assignable by Executive.  This Agreement shall inure
to the benefit of Company and its successors and assigns.  Upon written approval
by Executive, Company may assign this Agreement to any successor or affiliated
entity, subsidiary or parent company, but no such assignment shall relieve
Company of its obligations under this Agreement.

 

13.                                 MISCELLANEOUS.

 

A.                                   Modification/Waiver.  This Agreement may
not be amended, modified, superseded, canceled, renewed or expanded, or any
terms or covenants hereof waived, except by a writing executed by each of the
parties hereto or, in the case of a waiver, by the party waiving compliance. 
Failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect his or its right at a later time to
enforce the same.  No waiver by a party of a breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed to be or construed as a further or continuing waiver
of agreement contained in the Agreement.

 

B.                                     Taxes.  Executive agrees to be
responsible for the payment of any taxes due on any and all compensation, stock
option, or benefit provided by Company pursuant to this Agreement.  Executive
agrees to indemnify Company and hold Company harmless from any and all claims or
penalties asserted against Company for any failure by Executive to pay taxes due
on any compensation, stock option, or benefit provided by Company pursuant to
this Agreement. Executive expressly acknowledges that Company has not made, nor
herein makes, any representation about the tax consequences of any consideration
provided by Company to Executive pursuant to this Agreement.

 

C.                                     Governing Law; Personal Jurisdiction. 
This Agreement and all disputes relating to this Agreement shall be governed in
all respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and performed entirely in
California. The parties acknowledge that this Agreement constitutes the minimum
contacts to establish personal jurisdiction in California. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect.

 

D.                                    Notices.  All notices and other
communications hereunder (including any notices pursuant to Section 6) shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid, or by
facsimile, or by email, or by hand delivery to such address as either party
shall have furnished to the other in writing in accordance herewith.  Copies of
all notices sent hereunder shall be forwarded to Michael Wolf, Esq., Wolf,
Rifkin, Shapiro & Schulman, LLP, 11400 West Olympic Boulevard, Ninth Floor, Los
Angeles, California 90064 and to E. Lee Reichert, Esq., Kamlet Shepherd &
Reichert, LLP, 1515 Arapahoe Street, Ste. 1600, Denver, Colorado 80202.

 

E.                                      Severability.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

 

F.                                      Withholdings.  Company may withhold from
any amounts payable under this Agreement such federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or regulation.

 

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G.                                     Entire Agreement.  This Agreement,
together with Exhibit A attached hereto, set forth the entire agreement and
understanding of the parties hereto with regard to the employment of the
Executive by Company and supersede any and all prior agreements, arrangements
and understandings, written or oral, pertaining to the subject matter hereof. 
No representation, promise or inducement relating to the subject matter hereof
has been made to a party that is not embodied in these Agreements, and no party
shall be bound by or liable for any alleged representation, promise or
inducement not so set forth.  Notwithstanding this Section 13(G), nothing
contained in this Agreement shall alter, amend or effect in any way the terms
and conditions of the Purchase Agreement or the Non-competition Agreement.

 

H.                                    Waiver.  The failure of either party to
insist upon strict compliance with any provision of this Agreement, or the
failure to assert any right either party may have hereunder, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.

 

IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand, and Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

 

 

COMPANY:

 

 

 

 

EXECUTIVE:

 

 

 

MRG Entertainment, Inc.,

 

 

a California corporation

 

 

 

 

 

By:

/s/ Rich Goldberg

 

/s/ Marc Greenberg

Name:

 

 

Marc Laurence Greenberg

Its:

 

 

 

 

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