EXHIBIT 10.1
 
EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, dated as of September 15, 2011 (this “Agreement”), by and
between ATRINSIC, INC., a Delaware corporation (the “Company”), and Nathan Fong
(“Executive”).

W I T N E S S E T H:

WHEREAS, the Company desires to employ Executive on the terms and subject to the
conditions hereinafter set forth, and Executive desires so to be employed.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties agree as follows:

1.           Offices and Duties.

(a)           During the Term (as hereinafter defined), Executive shall serve as
the Chief Financial Officer of the Company and shall have such duties and
responsibilities that are commensurate with such position and such other duties
and responsibilities consistent with such position as are from time to time
reasonably assigned to Executive by the Company’s Chief Executive Officer or
Board of Directors (the “Board”).  Such duties and responsibilities shall
include but not be limited to general oversight and management over all
financial operations of the Company and any subsidiaries of the
Company.  Executive shall report to the Company’s Chief Executive
Officer.  Executive hereby agrees that throughout the Term he shall faithfully,
diligently and to the best of his ability, in furtherance of the business of the
Company, perform the duties assigned to his or incidental to the offices assumed
by him pursuant to this Section.  Executive shall devote all of his business
time and attention to the business and affairs of the Company and the
performance of Executive’s duties and responsibilities
hereunder.  Notwithstanding the foregoing, Company acknowledges that Executive
shall be permitted to render the services set forth in Schedule 1 hereto and
such other activities that do not interfere or conflict with, or compromise his
ability to perform, his duties hereunder, and do not create a potential business
conflict, and with respect to which the Board has expressly consented and
approved in advance in writing.  Executive represents and warrants to the
Company that Executive has the legal right to enter into this Agreement and to
perform all of the obligations on Executive’s part to be performed hereunder in
accordance with its terms and that Executive is not a party to any agreement or
understanding, written or oral, which could prevent Executive from entering into
this Agreement or performing all of Executive’s obligations hereunder.  The
Company represents and warrants to Executive that the Company has the legal
right to enter into this Agreement and to perform all of the obligations on the
Company’s part to be performed hereunder in accordance with its terms and that
the Company is not a party to any agreement or understanding, written or oral,
which could prevent the Company from entering into this Agreement or performing
all of the Company’s obligations hereunder.
 
 
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(b)           Executive shall work at Company’s headquarters in New York, New
York.

2.           Term. The employment of Executive hereunder shall commence on the
date hereof (the “Commencement Date”) and continue for a term ending on December
31, 2014, subject to earlier termination upon the terms and conditions provided
elsewhere herein (the “Term”). As used herein, “Termination Date” means the last
day of the Term.  Subject to the provisions of Section 13 (in the event
Executive’s employment is terminated prior to December 31, 2014), Executive
shall be an “at-will” employee of the Company such that either the Company or
Executive may terminate Executive’s employment with the Company and the Term
upon written notice at any time and for any reason (or no reason).

3.           Compensation.

(a)           As compensation for Executive’s services hereunder, the Company
shall pay to Executive during the Term an annual salary (the “Base Salary”),
which shall initially be equal to Two Hundred Fifty Thousand Dollars
($250,000.00), payable in accordance with the ordinary payroll practices of the
Company.  The Base Salary shall be subject to increase at the end of each year
of the Term at the sole and complete discretion of the Company’s board of
directors, provided that Executive’s Base Salary will not be less than $262,500
beginning the first anniversary of the Commencement Date, and not less than
$275,000 beginning the second anniversary of the Commencement Date, and not less
than $287,500 beginning the third anniversary of the Commencement Date.

(b)           Executive may also receive an annual bonus (the “Annual Bonus”)
with a target of $35,000 for the fiscal year ending December 31, 2011, $125,000
for the fiscal year ending December 31, 2012, $130,000 for the fiscal year
ending December 31, 2013, and $135,000 for the fiscal year ending December 31,
2014, if the Company’s business operations meet or exceed certain financial
performance standards to be determined by the Board in accordance with this
Section.  No later than the end of the first calendar quarter of each calendar
year, the Board (or the Compensation Committed thereof), after reasonably
thoroughly consulting with Executive and the Company’s Chief Executive Officer,
shall adopt and approve the bonus targets and other performance standards
(collectively, the “Bonus Matrix”) to be used to determine Executive’s annual
bonus for such calendar year.  The Board shall deliver the Bonus Matrix to
Executive promptly after its adoption and approval by the Board (or the
Compensation Committed thereof).  If the Board does not adopt, approve and
furnish to Executive the Bonus Matrix by the end of the first calendar quarter
for any year, then Executive’s bonus for such year shall be no less than the
targets set forth in the first sentence of this paragraph; provided, however,
such period may be extended by the Board for up to 30 days in the event the
Board and Executive are engaged in good faith discussions concerning the Bonus
Matrix. The Bonus Matrix for the calendar year ending December 31, 2011 is set
forth on the 2011 Bonus/RSU Schedule attached hereto as Exhibit
A.  Notwithstanding the foregoing, if Company does not achieve the goals set
forth on Exhibit A by December 31, 2011, but does achieve such goals by March
31, 2012, Executive will nonetheless be entitled to receive the full $35,000
bonus set forth therein which bonus shall be paid within thirty days of
achieving such goals.  Any amounts payable under this Section shall be
calculated using the results reported in the Company’s audited financial
statements for the applicable fiscal year and shall be payable in the year
following the applicable fiscal year by the later of (A) ninety (90) days after
the end of the applicable fiscal year or (B) completion of the Company’s audited
financial statements for such year, but not more than 120 days after the end of
the applicable fiscal year in any event.
 
 
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(c)           The Company shall use its commercially reasonable efforts to
procure medical, hospitalization, dental and disability insurance (in the case
of disability insurance, providing for $25,000 coverage per month) for the
benefit of executive and his children, and the Company shall pay all premiums
and any other costs or expenses incurred to maintain such policies in effect
during the Term, or as provided under Section 13, all consistent with the
Company’s established practices and policies.  As an alternative to procuring
such policies, the Company may authorize Executive to procure such policies, and
the Company shall reimburse Executive for the reasonable costs incurred by him
in connection with the procurement of such policies, plus a gross up for the
taxes Executive is required to pay on such amount.

(d)           In addition to his Base Salary and other compensation provided
herein, during the Term, Executive shall be entitled to participate, to the
extent he is eligible under the terms and conditions thereof, in any stock,
stock option or other equity participation plan and any profit-sharing, pension,
retirement, insurance, medical service or other employee benefit plan available
to any of the executive officers of the Company, and to receive any other
benefits or perquisites generally available to the executive officers of the
Company pursuant to any employment policy or practice, which may be in effect
from time to time during the Term.  The Company shall be under no obligation
hereunder to institute or to continue any such employee benefit plan or
employment policy or practice.

(h)           During the Term, Executive shall not be entitled to additional
compensation for serving in any office of the Company (or any subsidiary
thereof) to which he is elected or appointed.

4.           Restricted Stock Units.

(a)           Within one hundred and twenty (120) days following the
Commencement Date, the Company shall grant to Executive Restricted Stock Units
with respect to One Hundred Seventeen Thousand Five Hundred (117,500) shares of
Common Stock (the “Restricted Stock Units”), pursuant to the terms of a
Restricted Stock Unit Agreement in the form attached as Exhibit B hereto (the
“Restricted Stock Unit Agreement”) and the Company’s 2009 Stock Incentive Plan,
as amended (the “2009 Stock Incentive Plan”).  Executive shall execute and
deliver to the Company the Restricted Stock Unit Agreement as a condition to the
Company’s obligation to issue the Restricted Stock Units.  The Restricted Stock
Units shall be subject to forfeiture under the terms of the Restricted Stock
Unit Agreement.  The Restricted Stock Units shall be subject to vesting as
provided in the Restricted Stock Agreement, in accordance with and subject to
the following vesting schedule:
 
 
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(i)           10,000 Restricted Stock Units shall vest upon the Commencement
Date.

(ii)           10,000 Restricted Stock Units shall vest upon the successful
completion, after the Commencement Date but on or prior to March 31, 2012, of
one or more debt or equity raises by the Company in the aggregate minimum amount
of $10,000,000 (including, without limitation, any amounts raised from or by
current stockholders of the Company).

(iii)           32,500 Restricted Stock Units shall vest in each of calendar
year 2012, 2013 and 2014 if the Company’s business operations meet or exceed
certain financial performance standards to be determined by the Board in
accordance with this Section.  No later than the end of the first calendar
quarter of each calendar year, the Board (or the Compensation Committed
thereof), after consulting reasonably thoroughly with Executive and the
Company’s Chief Executive Officer, shall adopt and approve the bonus targets and
other performance standards (collectively, the “RSU Matrix”) to be used to
determine Executive’s vesting criteria for such calendar year.  The Board shall
deliver the RSU Matrix to Executive promptly after their adoption and approval
by the Board (or the Compensation Committed thereof).  If the Board does not
adopt, approve and furnish to Executive the RSU Matrix by the end of the first
calendar quarter for any year, Executive will be deemed to have achieved the
bonus targets and other performance standards for such year and will vest in
100% of the RSU’s for such year and the Common Stock will be delivered at the
same time that the Common Stock would have been delivered if the bonus targets
and other performance standards had been set and achieved; provided, however,
such period may be extended by the Board for up to 30 days in the event the
Board and Executive are engaged in good faith discussions concerning the RSU
Matrix.  The determination of the vesting under this Section shall be calculated
using the results reported in the Company’s audited financial statements for the
applicable fiscal year and the Common Stock will be delivered by the later of
(A) ninety (90) days after the end of the applicable fiscal year or (B)
completion of the Company’s audited financial statements for such year, but not
more than 120 days after the end of the applicable fiscal year in any event.

(b)            As provided in the Restricted Stock Unit Agreement, except (as
provided herein) in the event of a termination of the Executive’s employment by
the Company without “cause” (as such term is used in Section 10 hereof) and
except in the event of a termination of the Executive’s employment by Executive
for “good reason” (as contemplated under Section 11 hereof), any and all of the
Restricted Stock Units that remain unvested at the time of termination of
Executive’s employment (and/or upon termination or expiration of the Term) (the
“Unvested Restricted Stock Portion”) shall be subject to forfeiture and
Executive’s entire ownership interest in the Unvested Restricted Stock Portion
shall be forfeited, extinguished and cancelled and Executive shall have no
rights or interest in the Unvested Restricted Stock Portion.   On and after the
three (3) month anniversary of the Commencement Date, in the event of a Change
of Control (as defined below) or in the event of a termination of the
Executive’s employment by Company without “cause” or by Executive for “good
reason” on or after such anniversary, any and all of the Restricted Stock Units
that remain unvested at the time of termination of Executive’s employment
(and/or upon termination or expiration of the Term) shall vest (except for those
which did not vest pursuant to subparagraph 4(a)(iii) above for calendar years
which ended prior to the Termination Date.)  Subject to the terms of the
Restricted Stock Unit Agreement, the Company may issue stock unit certificates
or otherwise evidence the Executive’s interest in the Restricted Stock Units by
using a book entry account, and may maintain physical possession or custody of
such stock certificates until such time as the Restricted Stock Units are vested
in accordance with this Section, and may place a legend on the stock
certificate(s) restricting the transferability of such certificates and
referring to the terms and conditions (including forfeiture) of this
Agreement.  Executive represents and warrants that he is acquiring the
Restricted Stock Units for investment purposes only, and not with a view to
distribution thereof.  Executive is aware that the Restricted Stock Units may
not be registered under the federal or any state securities laws and that, in
addition to the other restrictions on the Restricted Stock Units, the Restricted
Stock Units will not be able to be transferred unless an exemption from
registration is available or the Restricted Stock Units become registered.

 
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(c)           If there is any conflict between the provisions of this Agreement
and the provisions of the Restricted Stock Agreement or the 2009 Stock Incentive
Plan, the provisions of this Agreement shall control.

5.           Expense Allowance.  The Company shall pay directly, or reimburse
Executive for, all out-of-pocket expenses reasonably incurred by him in
connection with the performance of his duties hereunder and the business of the
Company, in each case subject to and in accordance with the Company’s standard
policies (including, without limitation, expense verification policies)
regarding the reimbursement of business expenses, as in effect from time to
time.   Without limiting the foregoing, the Company shall reimburse Executive
for the reasonable legal costs incurred by him (up to a maximum of Two Thousand
Five Hundred Dollars ($2,500) in connection with the preparation and execution
of this Agreement.

6.           Vacation.  Executive shall be entitled to four (4) weeks paid
vacation during each year of his employment hereunder (as pro rated for partial
years), such vacation to be taken at such time or times as shall be agreed upon
by Executive and the Company with due regard to the needs of the
Company.  Vacation time shall be cumulative from year to year, except that
Executive shall not be entitled to take more than six (6) weeks vacation during
any period of twelve (12) consecutive months during the Term; and provided
further that at no time shall Executive be entitled to accrue more than six (6)
weeks of vacation time under this Agreement; and provided further that the
rights of Executive to vacation shall be otherwise subject to the Company’s
policies on vacation as in effect from time to time.
 
 
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7.           Key-Man Insurance.  The Company shall have the right from time to
time to purchase, increase, modify or terminate insurance policies on the life
of Executive for the benefit of the Company in such amounts as the Company may
determine in its sole discretion.  In connection therewith, Executive shall, at
such time or times and at such place or places as the Company may reasonably
direct, submit himself to such physical examinations and execute and deliver
such documents as the Company may deem necessary or appropriate, provided that
Executive will not be required to submit to more than one physical in any
twelve-month period.  Company shall keep the results of any such physical
confidential, except as may be required to be disclosed by law or legal process.

8.           Ancillary Agreements.   As a material inducement to the Company for
entering into this Agreement and as a condition to the obligations of the
Company hereunder, Executive is hereby executing and delivering a
Non-Competition, Non-Solicitation and Proprietary Information Agreement, dated
of even date herewith, by and between Executive and the Company in the form of
Exhibit C attached hereto (the “Non-Competition Agreement”).  Each of the
Company and Executive hereby agrees and acknowledges that the rights and
obligations of the parties under the Non-Competition Agreement and the terms and
provisions thereof are an integral part of this Agreement and hereby are
incorporated in this Agreement as if fully set forth herein.  Without limiting
any other rights that the Company may have, if Executive materially breaches any
provision of the Non-Competition Agreement and fails to cure such breach within
ten (10) days of notice from Company of such breach, any right that Executive
may have to receive any compensation or payments (other than vested Restricted
Stock Units) from the Company hereunder shall be forfeited by Executive and
extinguished in all respects.

9.           Termination of Employment.  Executive’s employment and the Term
will terminate on the first of the following to occur:

(a)           Automatically upon Executive’s death.

(b)           Upon written notice by the Company to Executive of termination due
to Disability (as defined below).  For the purposes of this Agreement,
“Disability” shall mean a physical or mental disability which, in the reasonable
judgment of the Board (following consultation with Executive’s physician, if so
requested by Executive), is likely to render Executive unable to perform his
duties and obligations under this Agreement for 180 days in any 12-month period.

(c)           Upon written notice by the Company to Executive of a termination
for “cause” under Section 10 of this Agreement.

(d)           Upon termination for “good reason” under Section 11 of this
Agreement.

(e)           Upon written notice by the Company to Executive of an involuntary
termination without “cause”, other than for death or Disability.
 
 
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(f)           Upon “voluntary termination” by Executive under Section 12 of this
Agreement.

10.           Termination for Cause.

(a)           In addition to any other rights or remedies provided by law or in
this Agreement, the Company may terminate Executive’s employment under this
Agreement for “cause” if:

 
(i)
Executive is convicted of, or enters a plea of guilty or nolo contendere to, a
felony offense (unless, in the case of a conviction, the conviction shall have
been reversed on appeal); or

 
(ii)
Executive has:

(A)           committed fraud against, or embezzled or misappropriated funds or
other material assets of, the Company (or any subsidiary thereof);

(B)           violated, or caused the Company (or any subsidiary thereof) to
violate, any material law, regulation or ordinance which causes, or is likely to
cause, a material adverse impact on Company or, repeatedly violated, or caused
the Company (or any subsidiary thereof) to violate, any material rule,
regulation, policy or practice established by the Board of which he has been
given notice;

(C)           willfully, or because of gross or persistent negligence, (A)
failed to perform his duties hereunder or (B) acted in a manner detrimental to,
or adverse to the interests of, the Company, and such failure or action has
caused, or is likely to cause, the Company (or any subsidiary thereof) to suffer
or incur a material casualty, loss, penalty, expense or other material liability
or cost;

(D)           violated, or failed to perform or satisfy any material covenant,
condition or obligation required to be performed or satisfied by Executive; or

(E)           habitually used illegal drugs or consumed alcohol and such
consumption has caused material damage to the Company.

(b)           The Company may effect such termination for cause by giving
Executive written notice to such effect, setting forth in reasonable detail the
factual basis for such termination (the “Cause Notice”); provided, however, that
Executive may avoid such termination if the termination is based on any
occurrence, act or event described in clauses (A) to (E) of paragraph (ii) of
Section 10(a) (each, a “For Cause Event”), if the matters giving rise to such
termination (including without limitation, any breach or violation by Executive)
are remedied or cured, if capable of remedy or cure, within 30 days after
receipt of the Cause Notice (“30-Day Executive Cure Period”).  For the avoidance
of doubt, Executive’s employment hereunder and the Term shall be terminated
immediately upon delivery of the Cause Notice if Executive’s employment is being
terminated due to the occurrence, act or event described in paragraph (i) of
Section 10(a), and Executive’s employment hereunder and the Term shall be
terminated immediately upon expiration of the 30-Day Executive Cure Period if
Executive’s employment is terminated due to the occurrence, act or events
described in clauses (A) to (E) of paragraph (ii) of Section 10(a) (assuming the
matters, violations or conditions giving rise to such termination are capable of
being cured or remedied, provided that if they are incapable of being so cured
or remedied, then such termination shall be immediate upon delivery of the Cause
Notice).
 
 
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(c)           In making any determination pursuant to paragraph (ii) of Section
10(a) based on or due to any For Cause Event, the Board may take into account
each and all of the following:

 
(i)
if Executive is made a party to, or target of, any Proceeding arising under or
relating to any For Cause Event, Executive’s failure to defend against such
Proceeding or to answer any complaint filed against him therein, or to deny any
claim, charge, averment, or allegation thereof asserting or based upon the
occurrence of a For Cause Event;

 
(ii)
any judgment, award, order, decree or other adjudication or ruling in any such
Proceeding finding or based upon the occurrence of a For Cause Event (that is
not reversed or vacated on appeal); or

 
(iii)
any settlement or compromise of, or consent decree issued in, any such
Proceeding in which Executive expressly admits the occurrence of a For Cause
Event; provided that the Board shall not be required to treat any of the
foregoing as dispositive or giving rise to an irrebuttable presumption of the
occurrence of such For Cause Event; and provided further that the Board may rely
on any other factor or event as convincing evidence of the occurrence of a For
Cause Event.

(d)           In determining and assessing the detrimental effect of any For
Cause Event on the Company and whether such For Cause Event warrants the
termination of Executive’s employment hereunder, the Board shall take into
account each and all of the following:

 
(i)
whether the Board directed or authorized Executive to take, or to omit to take,
any action involved in such For Cause Event, or approved, consented to or
acquiesced in him taking or omitting to take such action;

 
(ii)
any award of damages, penalty or other sanction, remedy or relief granted or
imposed in any Proceeding based upon or relating to such For Cause Event, and
whether such sanction, remedy or relief is sufficient to recompense the Company
or any other injured person, or to prevent or to deter the recurrence of such
For Cause Event;

 
 
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(iii)
whether any lesser sanction would be appropriate and effective; and

 
(iv)
any adverse effect that the loss of Executive's services would have, or be
reasonably likely to have, upon the Company.

Nothing contained in this Section 10 shall be construed in any way to limit or
restrict the right and ability of the Board to consider or base its
determination on any other factors that the Board deems to be relevant in
connection with any determination or assessment under this Section 10.

11.           Termination by Executive for Good Reason.
 
(a)           In addition to any other rights or remedies provided by law or in
this Agreement, Executive may terminate his employment hereunder for “good
reason” if (A) the Company violates, or fails to perform or satisfy any material
covenant, condition or obligation required to be performed or satisfied by it
hereunder, (B) as a result of any action or failure to act by the Company, there
is a material adverse change in the nature or scope of the duties, obligations,
rights or powers of Executive’s employment, (C) the Company moves its
headquarters more than forty (40) miles from its location in New York, New York,
(D) there is a diminution of Executive’s title, or (E) Executive is required to
report to someone other than the Chief Executive Officer, in each case subject
to the cure period and other terms set forth in this Section 11.

(b)           Executive may effect such termination for good reason by giving
the Company written notice to such effect, setting forth in reasonable detail
the factual basis for such termination (the “Good Reason Notice”); provided,
however, that the Company may avoid such termination, if the matters giving rise
to such termination (including without limitation, any breach or violation by
the Company) are remedied or cured, within 30 days after receipt of the Good
Reason Notice (“30-Day Company Cure Period”).  If the Company does not remedy or
cure such matters, Executive’s employment hereunder and the Term shall be
terminated immediately upon expiration of the 30-Day Company Cure Period in the
case of a termination for “good reason” under this Section 11.

12.              Voluntary Termination by Executive.  In addition to any other
rights or remedies provided by law or in this Agreement, Executive may terminate
his employment hereunder at any time by giving the Company written notice to
such effect at least ninety (90) days prior to the date of termination set forth
therein, such termination to be irrevocable upon receipt of such notice by the
Company.
 
 
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For the avoidance of doubt, the termination by Executive of his employment
hereunder for “good reason” pursuant to Section 11 of this Agreement shall not
constitute or be deemed to constitute for any purpose a “voluntary termination”
of his employment under this Section 12.

13.           Compensation and Benefits upon Termination.

(a)           If Executive’s employment is terminated as a result of his death
or Disability, the Company will pay or provide to Executive any Accrued Benefits
(as hereinafter defined).  For the purposes of this Agreement, “Accrued
Benefits” means: (1) any unpaid Base Salary through the date of termination; (2)
reimbursement for any unreimbursed expenses incurred through the date of
termination; (3) any unused vacation time accrued (through the date of
termination) in accordance with Company policy or as otherwise required by law;
and (4) any other payments, benefits or fringe benefits to which the Executive
may be entitled under the terms of any applicable compensation arrangement or
benefit plan or program or this Agreement, in all cases only through the date of
termination, and (5) any unpaid Annual Bonus for a calendar year that ended
prior to the Termination Date (collectively items (1) through (5) shall be
hereafter referred to as “Accrued Benefits”).

(b)           If Executive’s employment is terminated for cause under Section
10, or if Executive’s employment is terminated by Executive voluntarily under
Section 12 or voluntarily other than for good reason pursuant to Section 11
hereof, the Company will pay or provide to Executive any Accrued Benefits.  In
addition, if Executive’s employment is terminated on a date prior to the
three-month anniversary of the Commencement Date by Executive for good reason
pursuant to Section 11 or by the Company other than for cause under Section 10,
the Company will pay or provide the Executive any Accrued Benefits.

(c)           If Executive’s employment is terminated on a date that is on or
after the three-month anniversary of the Commencement Date by Executive for good
reason pursuant to Section 11 or by the Company other than for cause under
Section 10, the Company will pay or provide the Executive with (i) any Accrued
Benefits and (ii) conditioned upon Executive's execution of a severance
agreement and general release of all claims that is reasonably acceptable to the
Company and Executive within 30 days of such termination, a payment equal to six
months of his Base Salary. Any amount due to Executive under clause (i) and (ii)
of this Section shall be payable as follows:  fifty percent (50%) of such amount
shall be payable in a lump sum within thirty (30) days of termination of
employment, and the balance shall be payable in twelve (12) equal monthly
installments over the period of twelve (12) months following such termination;
provided, however, that if such amounts due to Executive become payable under
this Section as a result of a termination of Executive’s employment occurring at
any time before the first (1st) anniversary of the date of any Change of
Control, such amounts shall be paid in a single lump sum payment within thirty
(30) days of termination of employment, except as provided in Section 14
hereof.  Amounts payable to Executive under this Section 13(c), if any, are
hereinafter referred to as the “Parachute Amount.”
 
 
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(d)           Except as expressly set forth herein, any amount payable to
Executive upon termination of his employment hereunder shall be paid promptly,
and in any event within thirty (30) days, after the Termination Date.

(e)           In addition to the foregoing, Executive’s rights to Restricted
Stock Units upon termination of his employment hereunder will be determined in
accordance with Section 4 above.

14.           Change of Control.

 
(a)
For the purposes of this Section 14:

(i)           The “Act” is the Securities Exchange Act of 1934, as amended.

(ii)           A “person” includes a “group” within the meaning of Section
13(d)(3) of the Act.

(iii)           “Control” is used herein as defined in Rule 12b-2 under the Act.

(iv)           “Beneficially owns” and “acquisition” are used herein as defined
in Rules 13d-3 and 13d-5, respectively, under the Act.

(v)           “Non-Affiliated Person” means any person, other than Executive, an
employee stock ownership trust of the Company (or any trustee thereof for the
benefit of such trust), or any person controlled by Executive, the Company or
such a trust.

(vi)           “Voting Securities” includes Common Stock and any other
securities of the Company that ordinarily entitle the holders thereof to vote,
together with the holders of Common Stock or as a separate class, with respect
to matters submitted to a vote of the holders of Common Stock; provided,
however, that securities of the Company as to which the consent of the holders
thereof is required by applicable law or the terms of such securities only with
respect to certain specified transactions or other matters, or the holders of
which are entitled to vote only upon the occurrence of certain specified events
(such as default in the payment of a mandatory dividend on preferred stock or a
scheduled installment of principal or interest of any debt security), shall not
be Voting Securities.

(vii)           “Right” means any option, warrant or other right to acquire any
Voting Security (other than such a right of conversion or exchange included in a
Voting Security).

(viii)           The “Code” is the Internal Revenue Code of 1986, as amended.
 
 
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(ix)           “Base amount,” “present value” and “parachute payment” are used
herein as defined in Section 280G of the Code.

(b)           A “Change of Control” occurs when:

(i)           a Non-Affiliated Person acquires control of the Company; or

(ii)           upon an acquisition of Voting Securities or Rights by a
Non-Affiliated Person or any change in the number or voting power of outstanding
Voting Securities, such Non-Affiliated Person beneficially owns Voting
Securities or Rights entitling such person to cast a number of votes (determined
in accordance with Section 14(d)) equal to or greater than thrity five percent
(35%) of the sum of (A) the number of votes that may be cast by all other
holders of outstanding Voting Securities and (B) the number of votes that may be
cast by such Non-Affiliated Person (determined in accordance with Section
14(f)).

(c)           Notwithstanding anything to the contrary contained herein, to the
extent that any of the payments and benefits provided for herein or any other
agreement or arrangement between Executive and the Company (collectively, the
“Payments”) (i) constitute a “parachute payment” within the meaning of Section
280G of the Code and (ii) but for this provision, would be subject to the excise
tax imposed by Section 4999 of the Code, then the Payments shall be payable
either (i) in full or (ii) as to such lesser amount which would result in no
portion of such Payments being subject to excise tax under Section
4999;  whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section
4999, results in Executive's receipt on an after-tax basis, of the greatest
amount of benefits under this letter, notwithstanding that all or some portion
of such benefits may be taxable under Section 4999.  Unless Executive and the
Company otherwise agree in writing, any determination required under this
provision shall be made in writing by the Company's independent public
accountants (the “Accountants”), whose determination shall be conclusive and
binding upon Executive and the Company for all purposes. For purposes of making
the calculations required by this provision, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely in
reasonable, good faith interpretations concerning the application of Sections
280G and 4999.  Executive and the Company shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this provision. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this provision. The reduction of Company payments, if
applicable, shall be effected in the following order (unless Executive, to the
extent permitted by Section 409A of the Code, elects another method of reduction
by written notice to the Company prior to the Section 280G event): (i) any cash
severance payments (starting with the last payments due), (ii) any other cash
amounts payable to Executive (starting with the last payments due), (iii) any
benefits valued as parachute payments, (iv) acceleration of vesting of any stock
options for which the exercise price exceeds the then fair market value of the
underlying stock (starting with the last vesting tranches), (v) acceleration of
vesting of any equity award that is not a stock option (starting with the last
vesting tranches) and (vi) acceleration of vesting of any stock options for
which the exercise price is less then the fair market value of the underlying
stock (starting with the last vesting tranches).
 
 
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(d)           The number of votes that may be cast by holders of Voting
Securities or Rights upon the issuance or grant thereof shall be deemed to be
the largest number of votes that may be cast by the holders of such securities
or the holders of any other Voting Securities into which such Voting Securities
or Rights are convertible or for which they are exchangeable or exercisable,
determined as though such Voting Securities or Rights were immediately
convertible, exchangeable or exercisable and without regard to any anti-dilution
or other adjustments provided for therein.

15.              Other Termination Provisions.  The Company shall defend,
indemnify and hold Executive harmless from any and all liabilities, obligations,
claims or expenses which arise in connection with or as a result of Executive's
service as an officer or director of the Company to the greatest extent now
provided in the Company's Certificate of Incorporation and Bylaws and as
otherwise allowed by law. During the Term and for a period of at least seven (7)
years from the Termination Date, Executive shall be entitled to the same
directors and officers' liability insurance coverage that the Company provides
generally to its other directors and officers, as may be amended from time to
time for such directors and officers.

16.           Limitation of Authority.  Except as expressly provided herein, no
provision hereof shall be deemed to authorize or empower either party hereto to
act on behalf of, obligate or bind the other party hereto.

17.           IRC 409A.  This Agreement is intended to satisfy the requirements
of Section 409A(a)(2), (3) and (4) of the Code, including current and future
guidance and regulations interpreting such provisions.  To the extent that any
provision of this Agreement fails to satisfy those requirements, the provision
shall automatically be modified in a manner that, in the good-faith opinion of
the Company, brings the provisions into compliance with those requirements while
preserving as closely as possible the original intent of the
provision.  Notwithstanding anything to the contrary in this Agreement, no
severance payments or benefits shall be paid to Executive during the six (6)
month period following Executive's separation from service to the extent that
the Company and Executive mutually determine in good faith that paying such
amounts at the time or times indicated in this Agreement would cause Executive
to incur an additional tax under Section 409A of the Code, in which case such
amounts shall be paid at the time or times indicated in this Section. If the
payment of any such amounts are delayed as a result of the previous sentence,
then on the first day following the end of such six (6) month period, the
Company will pay Executive a lump-sum amount equal to the cumulative amount that
would have otherwise been payable to Executive during such six (6) month period.

With respect to any reimbursements under this Agreement, such reimbursement
shall be made on or before the last day of the Employees taxable year following
the taxable year in which the expense was incurred by the Employee. The amount
of any expenses eligible for reimbursement or the amount of any in-kind benefits
provided, as the case may be, under this Agreement during any calendar year
shall not affect the amount of expenses eligible for reimbursement or the amount
of any in-kind benefits provided during any other calendar year.  The right to
reimbursement or to any in-kind benefit pursuant to this Agreement shall not be
subject to liquidation or exchange for any other benefit. Each payment made
under this Agreement shall be designated as a “separate payment” within the
meaning of Section 409A. In addition, in no event shall any payment under this
Agreement that constitutes “deferred compensation” for purposes of Section 409A
be subject to offset by any other amount unless otherwise permitted by Section
409A.
 
 
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18.           Notices.  All notices which are required by or may be given
pursuant to the terms of this Agreement must be in writing and must be delivered
personally; sent by certified mail, return receipt requested, postage prepaid;
sent by facsimile (with written confirmation of transmission), provided that
notice is also sent via first class mail, postage prepaid; or sent for next
business day delivery by a nationally recognized overnight delivery service as
follows:

If to the Company at:

469 7th Ave, 10th Floor
New York, NY 10018
Attn:  Chairman of the Board
Fax: (___) ___-____

with copies to:

Stubbs Alderton & Markiles LLP
15260 Ventura Blvd., 20th Floor
Sherman Oaks, California 91403
Attn: Scott Galer, Esq.
Fax: (818) 444-4520

If to Executive at:

[                            ]

Any of the addresses and other contact information set forth above may be
changed from time to time by written notice (delivered in accordance with this
Section) from the party requesting the change.
 
 
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Such notices and other communications will be treated for all purposes of this
Agreement as being effective immediately if delivered personally or by facsimile
(with written confirmation of transmission) during normal business hours, or
five (5) days after mailing by certified mail, return receipt requested, first
class postage prepaid, or one business day after deposit for next business day
delivery by a nationally recognized overnight delivery service.
 
19.           Amendment.  Except as otherwise provided herein, no amendment of
this Agreement shall be valid or effective, unless in writing and signed by or
on behalf of the parties hereto.

20.           Waiver.  No course of dealing or omission or delay on the part of
either party hereto in asserting or exercising any right hereunder shall
constitute or operate as a waiver of any such right.  No waiver of any provision
hereof shall be effective, unless in writing and signed by or on behalf of the
party to be charged therewith.  No waiver shall be deemed a continuing waiver or
waiver in respect of any other or subsequent breach or default, unless expressly
so stated in writing.

21.           Governing Law.  This Agreement shall be governed by, and
interpreted and enforced in accordance with, the laws of the State of New York
without regard to principles of choice of law or conflict of laws.

22.           Arbitration.  Except as set forth in Section 23, any dispute or
controversy arising out of or related to this Agreement or any breach hereof
shall be settled by binding arbitration by the American Arbitration Association
(or any organization successor thereto) in New York, New York in accordance with
its Employment Arbitration Rules then prevailing.  Judgment and the award
rendered by the arbitration panel may be entered in any court or tribunal of
competent jurisdiction.  This provision encompasses all disputes relating to
Executive’s employment, this Agreement, the termination of Executive’s
employment, and the amounts paid to the Executive upon termination, regardless
of whether such dispute arises during or after the Executive’s employment.  In
any arbitration proceeding conducted pursuant to this Section 22, both parties
shall have the right to discovery, to call witnesses and to cross-examine the
other party’s witnesses (through legal counsel, expert witnesses, or both).  All
decisions of the arbitration panel shall be final, conclusive and binding upon
the parties, and not subject to judicial review.  The arbitration panel shall
have no power to change any of the provisions hereof in any respect or make an
award of reformation, and the jurisdiction of the arbitrators is expressly
limited accordingly.  All statutes of limitations that would otherwise be
applicable shall apply to any arbitration proceeding hereunder.  Any arbitration
shall be conducted by an arbitration plan consisting of one or more arbitrators
jointly selected by the parties hereto; provided, however, that if the parties
are unable to agree on an arbitrator or arbitrators, the arbitrator or
arbitrators shall be selected in accordance with the aforementioned Employment
Arbitration Rules then prevailing.  Each of the parties hereto shall pay the
fees and expenses of its counsel, accountants and other experts incident to any
such arbitration, provided, however, that if Executive shall prevail in such
arbitration, Company shall pay the reasonable fees and expenses of Executive’s
counsel, accountants and other experts incident to any such arbitration.  The
fees and expenses of the arbitrator shall be paid by the Company.  Any notice or
other process relating to any such arbitration may be effected in the manner
provided by Section 18.
 
 
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23.           Remedies.  In the event of any actual or prospective breach or
default by either party hereto, the other party shall be entitled to seek
equitable relief, including remedies in the nature of rescission, injunction and
specific performance.  All remedies hereunder are cumulative and not exclusive,
and nothing herein shall be deemed to prohibit or limit either party hereto from
pursuing any other remedy or relief available at law or in equity for such
actual or prospective breach or default, including the recovery of damages.

24.           Severability.  The provisions hereof are severable and in the
event that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.

25.           Counterparts.  This Agreement may be executed in counterparts,
including, without limitation, by facsimile, each of which shall be deemed an
original and which together shall constitute one and the same agreement.

26.           Assignment.  This Agreement, and each right, interest and
obligation hereunder, may not be assigned by either party hereto without the
prior written consent of the other party hereto, and any purported assignment
without such consent shall be void and without effect, except that, subject to
Section 14 above, this Agreement shall be assigned to, and assumed by, any
person with or into which the Company merges or consolidates, or which acquires
all or substantially all of its assets, or which otherwise succeeds to and
continues the Company’s business substantially as an entirety, provided that no
such assignment shall relieve Company of its obligations hereunder.  Except as
otherwise expressly provided herein or required by law, Executive shall not have
any power of anticipation, assignment or alienation of any payments required to
be made to him hereunder, and no other person may acquire any right or interest
in any thereof by reason of any purported sale, assignment or other disposition
thereof, whether voluntary or involuntary, any claim in a bankruptcy or other
insolvency proceeding against Executive, or any other ruling, judgment, order,
writ or decree.

27.           Withholding.   The Company may withhold from any and all amounts
payable under this Agreement such federal, state and local taxes, as may be
required to be withheld pursuant to any applicable law or regulation, and all
other applicable withholdings.

28.           Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.  This Agreement is not intended, and shall not be deemed, to create or
confer any right or interest for the benefit of any person not a party hereto.
 
 
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29.           Titles and Captions.  The titles and captions of the Articles and
Sections of this Agreement are for convenience of reference only and do not in
any way define or interpret the intent of the parties hereto or modify or
otherwise affect any of the provisions hereof.

30.           Grammatical Conventions.  Whenever the context so requires, each
pronoun or verb used herein shall be construed in the singular or the plural
sense and each capitalized term defined herein and each pronoun used herein
shall be construed in the masculine, feminine or neuter sense.

31.           References.  The terms “herein,” “hereto,” “hereof,” “hereby,” and
“hereunder,” and other terms of similar import, refer to this Agreement as a
whole, and not to any Article, Section or other part hereof.

32.           No Presumptions.  Each party hereto acknowledges that it has had
an opportunity to consult with counsel and has participated in the preparation
of this Agreement.  No party hereto is entitled to any presumption with respect
to the interpretation of any provision hereof or the resolution of any alleged
ambiguity herein based on any claim that the other party hereto drafted or
controlled the drafting of this Agreement.

33.              Certain Definitions.  As used herein:

(a)           “Person” includes, without limitation, a natural person,
corporation, joint stock company, limited liability company, partnership, joint
venture, association, trust, government or governmental authority, agency or
instrumentality, or any group of the foregoing acting in concert.

(b)           A “Proceeding” is any suit, action, arbitration, audit,
investigation or other proceeding before or by any court, magistrate,
arbitration panel or other tribunal, or any governmental agency, authority or
instrumentality of competent jurisdiction.

34.           Entire Agreement.  This Agreement embodies the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes any
prior or contemporaneous agreement, commitment or arrangement relating thereto,
written or oral, if any, which shall terminate immediately upon the commencement
of the Term.
 
 
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the
day and year first above written.
 
ATRINSIC, INC.
   
BY:
/s/ Stuart Goldfarb
 
Stuart Goldfarb
Chief Executive Officer and Director
(Principal Executive Officer)
     
/s/ Nathan Fong
 
Nathan Fong

 
 
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