Exhibit 10.13

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
January 18, 2008 by and between The Parent Company (the “Company”) and Michael
J. Wagner (the “Employee”).

W I T N E S S E T H :

WHEREAS, the Company desires to employ Employee and Employee desires to be
employed by the Company on the terms and subject to the conditions of this
Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and adequacy
of which is mutually acknowledged, the Company and Employee agree as follows:

Section 1. Definitions.

(a) “Accrued Obligations” shall mean (i) all accrued but unpaid Base Salary
through the date of termination of Employee’s employment, (ii) any unpaid or
unreimbursed expenses incurred in accordance with Section 6 below, (iii) all
accrued but unused vacation time earned by Employee during the fiscal year in
which the termination of Employee’s employment occurs, and (iv) any other
benefits (without duplication) provided under the Company’s employee benefit
plans upon a termination of employment, in accordance with the terms therein.

(b) “Base Salary” shall mean the salary provided for in Section 4(a) below or
any increased salary granted to Employee pursuant to Section 4(a).

(c) “Board” shall mean the Board of Directors of the Company.

(d) “Cause” shall mean a good faith determination by the Board of: (i) gross
negligence or willful misconduct by Employee in connection with Employee’s
duties hereunder; (ii) repeated failure by Employee to perform (other than due
to Disability) in any material respect his duties or responsibilities after
notice and a fifteen (15) day opportunity to cure; (iii) misappropriation by
Employee of the assets or business opportunities of the Company or its
affiliates; (iv) any fraud or any other act or omission involving dishonesty or
bad faith with respect to the Company or its affiliates or any of their
respective customers or suppliers committed by Employee or at his or her
direction, or with his or her knowledge; (v) Employee’s indictment for, charge
with, conviction of, admission to, or entry of pleas of no contest to any felony
or any other crime involving dishonesty, breach of trust, moral turpitude, or
physical harm to any person; (vi) Employee’s use of illegal drugs which, in the
Company’s judgment, interferes with the performance of Employee’s duties;
(vii) conduct which brings the Company or any of its affiliates into public
disgrace or disrepute in any material respect, or (viii) Employee’s breach of
any material provision of this Agreement or of any policy of the Company or its
affiliates established by their boards of directors, which breach, if curable,
is not cured within 15 days after written notice thereof to Employee. A motor
vehicle felony will not constitute Cause, unless associated with a sentence of
incarceration.

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(e) “Commerce” shall mean and refer to the marketing, sale, or distribution of
products or services through retail sales, internet sales, or any other network
or vehicle for the marketing, sale, or distribution of products or services.

(f) “Competitive Activities” shall mean any business activities that are
competitive with any business that the Company and its subsidiaries engage in or
plan to engage in, including but not limited to (A) any business activities
providing or developing either Content or Commerce in the direct to consumer toy
and children’s products business or the pregnancy, baby and toddler areas or
(B) business activities of any kind for WalMart, Toys R Us, Babies R Us, Target,
KB Toys, Sears/Kmart, Amazon.com, or JC Penny either (i) during the Term of
Employment up to and including termination of employment, or (ii) for purposes
of Employee’s obligations under Section 8(c) after the Term of Employment.

(g) “Confidential Information” shall have the meaning set forth in Section 8(a)
below.

(h) “Content” shall mean and refer information or data that is developed,
distributed, assembled, transmitted, or communicated and relates to the needs,
interests, purchases, or networks of customers, potential customers, members, or
participants of any type.

(i) “Developments” shall mean any and all inventions, original works of
authorship, developments, concepts, know-how, improvements or trade secrets,
whether or not patentable or registerable under copyright or similar laws, which
Employee may solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice during the Term of
Employment, whether or not during regular working hours.

(j) “Disability” shall mean any physical or mental disability or infirmity that
prevents the performance of Employee’s duties for a period of (i) ninety
(90) consecutive days or (ii) one hundred twenty (120) non-consecutive days
during any twelve (12) month period. Any question as to the existence, extent or
potentiality of Employee’s Disability upon which Employee and the Company cannot
agree shall be determined by a qualified, independent physician selected by the
Company and approved by Employee (which approval shall not be unreasonably
withheld). The determination of any such physician shall be final and conclusive
for all purposes of this Agreement.

(k) “Good Reason” means the occurrence, without Employee’s consent, of any item
referred to in clauses (i) through (iv) below, of any of the following: (i) the
assignment to the Employee of any significant duties materially inconsistent
with the Employee’s previous position, duties, responsibilities or status with
the Company that reflects a substantial diminution in the nature of the
Employee’s position, duties, responsibilities or status; (ii) a significant
adverse change in Employee’s reporting

 

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responsibilities, titles or offices, or any removal of Employee from or any
failure to re-elect Employee to any position with the Company or any subsidiary
that Employee previously held (except in connection with Employee’s promotion or
the termination of Employee’s employment), (iii) a reduction in the Employee’s
annual base salary as in effect on the date of this Agreement (or as
subsequently modified), except for across-the-board salary reductions similarly
affecting all similarly situated employees, (iv) the taking of any action by the
Company or any subsidiary which would adversely affect Employee’s participation
in or materially reduce Employee’s benefits under any employee benefit or
compensation plan except for across-the-board changes similarly affecting all
similarly situated employees, or (v) the Company’s or any subsidiary’s requiring
Employee to be based anywhere other than (aa) a location within 40 miles of
Employee’s previous job location or (bb) Denver, Colorado (reasonably required
travel on Company business shall not be considered to impact where Employee is
required to be based); or requiring Employee to travel on the Company’s or any
subsidiary’s business to an extent substantially more burdensome than Employee’s
previous travel obligations.

(l) “Promissory Note” shall mean, when applicable, that certain Secured Limited
Recourse Promissory Note and Pledge Agreement, dated May 10, 2004, between
Employee, as the maker, and D. E. Shaw Laminar Lending, Inc., as the holder.

(m) “Restricted Period” shall mean one (1) year plus the Severance Period.

(n) “Severance Period” shall mean a period of 12 months commencing on the date
employment terminates.

(o) “Shares” shall mean shares of the Company’s common stock, $0.001 par value
per share.

(p) “Term of Employment” shall mean the period specified in Section 2 below.

Section 2. Acceptance and Term of Employment.

The Company agrees to employ Employee and Employee agrees to serve the Company
on the terms and conditions set forth herein. Unless sooner terminated as
provided in Section 7 hereof, the Term of Employment shall commence on the date
Employee began or will begin employment with the Company or its affiliates, and
shall end at 5:00 p.m. Mountain Time on January 31, 2011.

Section 3. Position, Duties and Responsibilities.

(a) During the Term of Employment, Employee shall be employed and serve as Chief
Executive Officer of the Company (together with such other position or positions
consistent with Employee’s title as the Board shall specify from time to time)
and shall perform such duties typically associated with such title. Employee’s
duties as of the date hereof are set forth on Exhibit A hereto.

 

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(b) Employee shall devote his/her full business time (except for permitted
vacation periods, periods of illness or other Disability), attention, skill and
best efforts to the performance of his/her duties under this Agreement and shall
not engage in any other business or occupation or otherwise take any actions
during the Term of Employment, including, without limitation, any activity that
(i) materially conflicts with the interests of the Company, (ii) materially
interferes with the proper and efficient performance of his/her duties for the
Company, or (iii) materially interferes with the exercise of his/her judgment in
the Company’s best interests.

Section 4. Compensation. During the Term of Employment, Employee shall be
entitled to the following compensation:

(a) Base Salary. Employee shall be paid an annualized Base Salary, payable in
accordance with the regular payroll practices of the Company, Three hundred and
fifty thousand ($350,000), with increases, if any, as may be approved in writing
by the Board, and subject to customary withholding of applicable taxes,
governmental charges, and other withholdings in accordance with federal and
state law.

(b) Annual Bonus. For each fiscal year during the Term of Employment, Employee
shall be eligible to receive an annual bonus pursuant to the annual bonus plan
adopted by the Board for such year, subject to its terms and conditions. For
fiscal year 2007, Employee shall be eligible to receive a Bonus with respect to
that portion of 2007 during which Employee was employed by either the Company or
by eToys Direct, Inc. without duplicating any payments owing or made by the
Company or by eToys Direct, Inc. to Employee under any prior employment
agreement or arrangement with either the Company or eToys Direct, Inc. Any such
bonus, if determined by the Company to be payable, shall be payable within 90
days following the end of each fiscal year during the Term of Employment. If
Employee’s employment terminates before the date of actual payment of Bonuses
then Employee’s right to receive and entitlement to such Bonus for the current
or prior fiscal year shall not have accrued and such Bonus will not be payable
to Employee unless otherwise provided for in this Agreement. If Employee is
party to a Promissory Note, for so long as the Promissory Note remains in
effect, one third (1/3) of the amount of any such bonus, net of income taxes due
on such bonus, shall be allocated as payment of accrued but unpaid interest and
principal on the Promissory Note, as provided in Section 1(c)(ii) of the
Promissory Note.

Section 5. Employee Benefits.

During the Term of Employment, Employee shall be entitled to participate in all
of the employee benefit plans or programs for which similarly situated employees
of the Company are generally eligible including, without limitation, health
plans, insurance, disability, retirement and other benefits (Exhibit C).
Employee shall also be entitled to the same number of holidays, vacation, sick
days and other benefits as are generally allowed to similarly situated employees
of the Company in accordance with the Company policy in effect from time to
time. Employee’s right to participate in any employee benefit plans or programs
of the Company shall be subject to the right of the Company to amend, modify or
terminate any such plan or program as applied to similarly situated

 

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persons in accordance with its terms and applicable law and subject in each case
to any applicable waiting periods or other restrictions contained in such
benefit plans or programs.

Section 6. Reimbursement of Business Expenses.

Consistent with policies and procedures established by the Company from time to
time as applicable to similarly situated persons, Employee is authorized to
incur reasonable expenses in carrying out his or her duties and responsibilities
under this Agreement and the Company shall promptly reimburse him or her for all
appropriate expenses incurred in connection with carrying out the business of
the Company.

Section 7. Termination of Employment.

(a) General. The Term of Employment shall terminate earlier than as provided in
Section 2 hereof upon the earliest to occur of (i) Employee’s death, (ii) a
termination of employment by reason of a Disability, (iii) a termination of
employment by the Company with or without Cause, or (iv) a voluntary resignation
from employment by Employee either for Good Reason or other than for Good
Reason.

(b) Termination due to Death or Disability. Employee’s employment shall
terminate automatically upon his/her death. To the extent permitted by law, the
Company may terminate Employee’s employment immediately upon the occurrence of a
Disability, such termination to be effective upon Employee’s receipt of written
notice of such termination. In the event Employee’s employment is terminated due
to his/her death or Disability, Employee or his/her estate or his/her
beneficiaries, as the case may be, shall be entitled to the Accrued Obligations.
Following such termination of Employee’s employment by the reason of death or
Disability, except as set forth in this Section 7(b), Employee shall have no
further rights to any compensation or any other benefits under this Agreement or
otherwise from the Company.

(c) Termination by the Company for Cause or Upon Employee’s Voluntary
Resignation other than for Good Reason. In the event the Company terminates
Employee’s employment for Cause or if Employee voluntarily resigns other than
for Good Reason, he/she shall be entitled only to the Accrued Obligations.
Following such termination of Employee’s employment for Cause or upon Employee’s
voluntary resignation other than for Good Reason, except as set forth in this
subsection 7(c), Employee shall have no further rights to any compensation or
any other benefits under this Agreement or otherwise from the Company. Employee
shall give the Company at least fourteen (14) days advance written notice of
his/her voluntary resignation other than for Good Reason. In such event Company
may at its sole discretion and with our without Cause terminate Employee’s
employment and pay the Accrued Obligations for the remainder of the fourteen
(14) day period or require that Employee not work during any part of the
fourteen (14) day notice period and such action will not trigger the payment of
any benefits provided for in subsection 7(d).

 

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(d) Termination by the Company without Cause and Voluntary Termination by
Employee for Good Reason. The Company may terminate Employee’s employment
without Cause effective upon Employee’s receipt of written notice of such
termination, and Employee may voluntarily terminate his/her employment for Good
Reason by providing the Company fourteen (14) days advance written notice of
such termination. In the event of termination of Employee’s employment under any
of the foregoing circumstances as set forth in this subsection 7(d) (excluding
terminations due to death or Disability), Employee shall be entitled to:

(i) The Accrued Obligations.

(ii) Continuation of Base Salary during the applicable Severance Period, payable
in accordance with the Company’s normal payroll practices and subject to
withholding of applicable taxes and governmental charges in accordance with
federal and state law.

(iii) An amount equal to a percentage of the Employee’s annual bonus target for
the fiscal year in which employment termination occurs, with such percentage
determined on a pro rata basis based upon the proportion of the year in which
the termination occurs that Employee was employed. Such amount shall be payable
in accordance with the Company’s normal practices and subject to withholding of
applicable taxes, governmental charges, and other withholdings in accordance
with federal and state law.

(iv) Employee benefits equivalent to those provided at the date of employment
termination (and at the same levels of Employee and Company contribution or
payment) during the applicable Severance Period. Provided, however, that if the
Company is not able, under the terms of any of the Company’s benefit plans, to
continue to provide any such employee benefits to Employee following termination
of Employee’s employment, the Company will pay to Employee in cash an amount
equal to the amount of such benefit (if the benefit would have been a Company
contribution or payment to Employee or Employee’s account of a dollar amount) or
an amount equal to Employee’s cost of obtaining such benefit independent of the
Company’s benefit plans (if the benefit would not have been a Company
contribution or payment to Employee or Employee’s account of a dollar amount).

(v) Outplacement services will be made available to Employee at the Company’s
cost, in an amount of up to, for a period not to exceed the applicable Severance
Period.

Notwithstanding the foregoing, in the event that Employee breaches any provision
of Section 8 hereof, the Company shall be entitled to: cancel and refrain from
paying any then-unpaid sums and cancel and cease to provide any other benefits
that remain at such time to be provided as described in subsections (ii),
(iii) and (iv) above; cancel all outstanding and unexercised options to acquire
Shares and unvested Shares then held by Employee to the extent issued under the
Company’s incentive plans and

 

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cause the Company’s transfer agent to cancel all outstanding Shares then held by
Employee that were acquired under the Company’s incentive plans; recover from
the Employee all reasonable attorney’s fees incurred by the Company in
connection with any such breach and with the enforcement of any such agreement;
and thereafter, the Company shall have no further obligations to Employee with
respect to any compensation or benefits under this Agreement or otherwise.

Following termination of Employee’s employment by the Company without Cause or
if Employee voluntarily terminates his/her employment for Good Reason, except as
set forth in this subsection 7(d), Employee shall have no further rights to any
compensation or any other benefits under this Agreement or otherwise from the
Company.

Employee’s employment by a successor of the Company, or a successor of any
subsidiary of the Company, that has assumed this Agreement pursuant to
Section 13 shall be considered to be employment by the Company or one of its
subsidiaries. For purposes of this subsection 7(d), a transfer from the Company
to one of its subsidiaries or a transfer from a subsidiary to the Company or
another subsidiary shall not be treated as a termination of employment.

(e) Expiration of the Term of Employment. Upon the expiration of the Term of
Employment pursuant to Section 2 hereof, the Company may at its sole discretion,
by notice from the Board to Employee of the Company’s exercise of this right,
extended the Term of Employment one (1) time for a period of (1) one year.
Absent such notice from the Board or upon the expiration of Term of Employment
as extended once, Employee’s employment shall then be on an at-will basis such
that Employee or the Company may terminate Employee’s employment at any time and
for any reason, with or without Cause and without any obligation on the part of
the Company to pay sums to Employee post-termination. In the event the Term of
Employment expires and Employee becomes employed on an at-will basis, Employee
shall be entitled to receive salary and benefits as determined by the Company.
During Employee’s employment on an at-will basis and following termination of
that employment, Employee shall also continue to be bound by and obligated to
comply with the provisions of Sections 3 and 8 through 22 and of this Agreement.

(f) Release. Notwithstanding any provision herein to the contrary, the Company
may require that, prior to payment of any amount or provision of any benefit
pursuant to subsections 7(d) and (e) other than the Accrued Obligations,
Employee shall have executed a customary general release in favor of the Company
and its affiliates and related parties, releasing any and all claims against the
Company and its affiliates as of the employment termination date, including
claims of Employee arising under or pursuant to this Agreement or otherwise
relating to his/her employment (other than those payments due under subsection
7(d), substantially in the form attached hereto as Exhibit B, and any waiting
periods identified in such release shall have expired.

 

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Section 8. Restrictive Covenants.

Employee acknowledges and agrees that (A) the agreements and covenants contained
in this Section 8 are (i) reasonable and valid in geographical and temporal
scope and in all other respects, and (ii) essential to protect the value of the
Company’s business and assets, including Company Confidential Information, and
(B) by his/her employment with the Company, Employee will obtain knowledge,
contacts, know-how, training and experience, including Company Confidential
Information, and there is a substantial probability that such knowledge,
know-how, contacts, training and experience, including Company Confidential
Information, could be used to the substantial advantage of a competitor of the
Company and that the ability of the Company to continue in business could be
seriously jeopardized if such information were to be used by the Employee or by
other persons or companies that compete with the Company. For purposes of this
Section 8, references to the Company shall be deemed to include its parent,
subsidiaries, and affiliates.

(a) Confidential Information. At any time during and after the end of the Term
of Employment, without the prior written consent of the Board, except to the
extent required by an order of a court having jurisdiction or under subpoena or
written request from an appropriate government agency, in which event, Employee
shall notify the Company of receipt of such order, request, or subpoena within
twenty four (24) hours of receipt thereof and prior to any disclosure being made
and use his/her best efforts to consult with the Board on the advisability of
taking steps to resist or narrow such request prior to responding to any such
order or subpoena, and except as required in the performance of his/her duties
hereunder, Employee agrees to keep in strict confidence and shall not, directly
or indirectly disclose, make known, furnish, make available or use any
information of a confidential or proprietary nature (whether or not specifically
labeled or identified as “confidential”), trade secrets, know-how, customer
lists, customer agreements, drawings, designs, information regarding product
development, marketing plans, sales plans, manufacturing plans, management
organization information, operating policies or manuals, business plans,
business strategies, financial records, cost, rate and pricing structures,
accounting and business methods, packaging design, techniques, systems,
formulae, research, records, reports, documentation, models, data and databases,
inventions, innovations, improvements, developments, methods, analyses and all
similar or related information (whether or not patentable), or other financial,
commercial, business or technical information, in any form or medium that is or
was disclosed to, or developed or learned by Employee (i) relating to the
Company, or (ii) that the Company may receive belonging to suppliers, customers
or others who do business with the Company (the foregoing, collectively,
“Confidential Information”). Employee’s obligation under this subsection 8(a)
shall not apply to any information which (i) is in the public domain or
hereafter enters the public domain by some means other than as a result of
unauthorized or unlawful actions of any individual, including Employee, (ii) was
rightfully received by Employee from a third party without either an obligation
to maintain the confidentiality of such information or a breach of any
obligation of confidentiality by such third party, (iii) was known to Employee
prior to his/her employment with the Company, or (iv) was independently
developed by Employee without use of any Confidential Information. Employee
acknowledges that all documents

 

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and other property including or reflecting Confidential Information furnished to
Employee by the Company or otherwise acquired or developed by the Company or
Employee or known by Employee shall at all times be the property of the Company.
Employee shall take all necessary and appropriate steps to safeguard
Confidential Information and protect it against disclosure, misappropriation,
misuse, loss and theft. Nothing contained in this Agreement shall be deemed to
weaken or waive any rights related to the protection of trade secrets that the
Company may have under common law or any applicable statutes.

(b) Ownership of Intellectual Property. All right, title and interest of every
kind and nature whatsoever, whether now known or unknown, in and to any
intellectual property, including, without limitation, any inventions, trade
secrets, patents, trademarks, service marks, trade dress, trade names,
copyrights, films, video, media, scripts, tests, software, applications,
creations and properties invested, created, written, developed, taped, filmed,
furnished, produced or disclosed by or to Employee in the course Employee’s
relationship with the Company under this Agreement (the “Intellectual Property”)
shall, as between the parties hereto, be and remain the sole and exclusive
property of the Company for any and all purposes and uses whatsoever, and
Employee shall have no right, title or interest of any kind or nature therein or
thereto, or in or to any results and proceeds therefrom. Employee hereby makes
and agrees to make, any assignment necessary to effectuate this Section and
agrees to perform any act reasonably requested by the Company in furtherance of
such assignment.

(c) Non-Competition. Employee covenants and agrees that during the applicable
Severance Period, with respect to any State of the United States of America or
any other jurisdiction outside of the United States of America in which the
Company has engaged in business or is engaged in business at the time of
termination of Employee’s employment, Employee shall not, directly or
indirectly, individually or jointly, own any interest in, operate, manage, join,
control or participate, whether as a partner, director, principal, officer,
representative or agent of, enter into the employment of, act as a consultant
to, or perform any services for any entity or in any other manner engage in any
business (i) that derives 5% or more of its revenues (including the revenues of
all affiliates of such business) from Competitive Activities, or (ii) in which
any such relationship with Employee would result in the inevitable use or
disclosure of Confidential Information. Notwithstanding anything herein to the
contrary, this subsection 8(c) shall not prevent Employee from being a passive
owner of securities representing not more than three percent (3%) of the
outstanding securities of any class of any publicly-held corporation, so long as
Employee has no active participation in the business of any such corporation.

(d) Non-Solicitation; Non-Interference. During the Restricted Period, Employee
shall not, directly or indirectly, for his/her own account or for the account of
any other individual or entity, (i) encourage, solicit, hire or induce, or in
any manner attempt to solicit, hire or induce, any person employed by, as agent
of, or a service provider to, the Company to terminate such person’s employment,
agency or service, as the case may be, with the Company or in any way interfere
with the relationship between the Company and such person; (ii) solicit, service
or accept business from any individual

 

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or entity (including any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company) for whom the Company provides or from
whom the Company receives products or services within the one-year period before
the date of Employee’s termination of employment in order to induce or attempt
to induce such person to cease or reduce doing business with the Company, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company (including, without limitation,
making any negative statements or communications about the Company); or
(iii) solicit or accept business from any prospective client of the Company who,
within the one-year period prior to the date of Employee’s termination of
employment, Employee had directly solicited or where, directly or indirectly, in
whole or in part, Employee supervised or participated in the Company’s
solicitation activities related to such prospective client, nor shall he/she
assist any person or entity to engage in any activity prohibited by this
subsection 8(d).

(e) Return of Documents. In the event of the termination of Employee’s
employment for any reason, or at any other time the Company may request,
Employee shall deliver to the Company all (i) property of the Company, and
(ii) memoranda, notes, plans, records, reports, computer media, printouts and
software and other documents and data of any nature and in whatever medium (and
copies thereof) of the Company including, without limitation all Confidential
Information and Intellectual Property, which Employee may then possess or have
under Employee’s control, and he/she shall not retain any such property,
documents or data or any reproduction thereof.

(f) Works for Hire. Employee agrees that the Company shall solely and
exclusively own all right, title and interest throughout the world in and to any
Developments. Employee hereby assigns all right, title and interest in and to
any and all of these Developments to the Company. Employee shall promptly and
fully disclose all Developments to the Company and shall cooperate and perform
all actions reasonably requested by the Company (whether during or after the
Term of Employment) to establish, confirm and protect the Company’s right, title
and interest in such Developments. Without limiting the generality of the
foregoing, Employee agrees to assist the Company, at the Company’s expense, to
secure the Company’s rights in the Developments in any and all countries,
including the execution by Employee or Employee’s affiliates of all applications
and all other instruments and documents which the Company shall deem necessary
in order to apply for and obtain rights in such Developments and in order to
further evidence, record and perfect such assignments, and to perfect, obtain,
maintain, enforce, and defend any rights specified to be so owned or assigned.
If the Company is unable because of Employee’s mental or physical incapacity or
for any other reason (including Employee’s refusal to do so after request
therefor is made by the Company) to secure Employee’s signature to apply for or
to pursue any application for any United States or foreign patents or copyright
registrations covering Developments belonging to or assigned to the Company
pursuant to this Agreement, then Employee hereby irrevocably designates and
appoints the Company and its agents as Employee’s agent and attorney-in-fact to
act for and on Employee’s behalf to execute and file any document and to do all
other lawfully permitted acts to further the purposes of the prosecution and
issuance of patents or copyright registrations thereon with the same legal force
and effect as if executed by Employee. Employee agrees not to apply for or

 

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pursue any application for any United States or foreign patents or copyright
registrations covering any Developments other than pursuant to this paragraph in
circumstances where such patents or copyright registrations are or have been or
are required to be assigned to the Company. In addition, and not in
contravention of any of the foregoing, Employee acknowledges that all original
works of authorship which are made by him/her (solely or jointly with others)
within the scope of employment and which are protectable by copyright are “works
made for hire,” as that term is defined in Section 201(b) of the 1976 Copyright
Act (17 USC Sec. 101) to the maximum extent permitted by law and the Company
shall own all of the rights comprised in the copyright therein; provided,
however, that to the extent such works may not, by operation of law, constitute
“works made for hire,” Employee by this Agreement assigns to the Company all
right, title and interest therein. To the extent allowed by law, this includes
all rights of paternity, integrity, disclosure and withdrawal and any other
rights that may be known as or referred to as “moral rights.” To the extent
Employee retains any such moral rights under applicable law, Employee hereby
waives such moral rights and consents to any action consistent with the terms of
this Agreement with respect to such moral rights, in each case, to the full
extent of such applicable law. Employee will confirm any such waivers and
consents from time to time as requested by the Company.

(g) Blue Pencil. If any court of competent jurisdiction shall at any time deem
the duration or the geographic scope of any of the provisions of this Section 8
unenforceable, the other provisions of this Section 8 shall nevertheless stand
and the duration and/or geographic scope set forth herein shall be deemed to be
the longest period and/or greatest size permissible by law under the
circumstances, and the parties hereto agree that such court shall reduce the
time period and/or geographic scope to permissible duration or size.

Section 9. Injunctive Relief.

Without intending to limit the remedies available to the Company, Employee
acknowledges that a breach of any of the covenants contained in Section 8 hereof
likely will result in material irreparable injury to the Company or its parent,
subsidiaries, or affiliates for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries precisely and that,
in the event of such a breach or threat thereof, the Company shall be entitled
to obtain a temporary restraining order and/or a preliminary or permanent
injunction, without the necessity of proving irreparable harm or injury as a
result of such breach or threatened breach of Section 8 hereof, restraining
Employee from engaging in activities prohibited by Section 8 hereof or such
other relief as may be required specifically to enforce any of the covenants in
Section 8 hereof. Notwithstanding any other provision to the contrary, the
Severance Period and the Restricted Period shall be tolled during any period of
violation of any of the covenants in subsection 8(b) or (c) hereof and during
any other period required for litigation during which the Company seeks to
enforce this covenant against Employee if it is ultimately determined that such
person was in breach of such covenants.

 

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Section 10. Representations and Warranties of Employee.

Employee represents and warrants that:

(a) Employee is entering into this Agreement voluntarily and that his/her
employment hereunder and compliance with the terms and conditions hereof will
not conflict with or result in the breach by him/her of any agreement to which
he/she is a party or by which he/she may be bound;

(b) He/she has not, and in connection with his/her employment with the Company
will not, violate any non-competition, non-solicitation or other similar
covenant or agreement by which he/she is or may be bound; and

(c) In connection with his/her employment with the Company he/she will not use
any confidential or proprietary information he/she may have obtained in
connection with employment with any prior employer.

Section 11. Taxes.

The Company may withhold from any payments made under this Agreement all
applicable taxes, including but not limited to income, employment and social
insurance taxes, as shall be required by law.

Section 12. Set Off; Mitigation.

The Company’s obligation to pay Employee the amounts provided and to make the
arrangements provided hereunder shall be subject to set-off, counterclaim or
recoupment of amounts owed by Employee to the Company or its affiliates, it
being understood that, where applicable, because of the limited recourse of the
Promissory Note, no such right of set-off, counterclaim or recoupment shall
apply to the Promissory Note except to the extent specifically provided in the
Promissory Note. Employee specifically authorizes Company to withhold from any
payments to be made by Company to Employee any amounts owed by Employee to the
Company.

Section 13. Successors and Assigns; No Third-Party Beneficiaries.

(a) The Company. This Agreement shall inure to the benefit of and be enforceable
by, and may be assigned by the Company to, any purchaser of all or substantially
all of the Company’s business or assets, any successor to the Company or any
assignee thereof (whether direct or indirect, by purchase, merger, consolidation
or otherwise). The Company will require any such purchaser, successor or
assignee to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such purchase, succession or assignment had taken place.

(b) Employee. Employee’s rights and obligations under this Agreement shall not
be transferable by Employee by assignment or otherwise, without the prior
written consent of the Company; provided, however, that if Employee shall die,

 

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all amounts then payable to Employee hereunder shall be paid in accordance with
the terms of this Agreement to Employee’s devisee, legatee or other designee or,
if there be no such designee, to Employee’s estate.

Section 14. Waiver and Amendments.

Any waiver, alteration, amendment or modification of any of the terms of this
Agreement shall be valid only if made in writing and signed by the party against
whom the waiver, alteration, amendment or modification is sought to be enforced;
provided, however, that any such waiver, alteration, amendment or modification
shall have been consented to on the Company’s behalf by the Board. No waiver by
either of the parties hereto of their rights or the other party’s breaches
hereunder shall be deemed to constitute a waiver with respect to any subsequent
occurrences or transactions of a similar nature hereunder unless such waiver
specifically states that it is to be construed as a continuing waiver.

Section 15. Severability and Governing Law.

If any covenants or such other provisions of this Agreement are found to be
invalid or unenforceable by a final determination of a court of competent
jurisdiction: (a) the remaining terms and provisions hereof shall be unimpaired,
and (b) the invalid or unenforceable term or provision hereof shall be deemed
replaced by a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision hereof. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF COLORADO (WITHOUT REFERENCE TO
THE CONFLICT OF LAWS PROVISIONS THEREOF).

Section 16. Notices.

(a) Every notice or other communication relating to this Agreement shall be in
writing, and shall be mailed or delivered to the party for whom it is intended
at such address as may from time to time be designated by it in a notice mailed
or delivered to the other party as herein provided, provided that, unless and
until some other address be so designated, all notices or communications by
Employee to the Company shall be mailed or delivered to the Company at its
principal executive office, and all notices or communications by the Company to
Employee may be given to Employee personally or may be mailed to Employee at
Employee’s last known address, as reflected in the Company’s records.

(b) Any notice so addressed shall be deemed to be given: (i) if delivered by
hand, on the business day of such delivery (or if the delivery is not made on a
business day, on the next succeeding business day); (ii) if mailed by courier or
by overnight mail, on the first business day following the date of such mailing;
and (iii) if mailed by registered or certified mail, on the third business day
after the date of such mailing.

 

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Section 17. Section Headings.

The headings of the sections and subsections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part thereof, affect
the meaning or interpretation of this Agreement or of any term or provision
hereof.

Section 18. Entire Agreement.

This Agreement, together with any exhibits attached hereto, constitutes the
entire understanding and agreement of the parties hereto regarding the
employment of Employee. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements
between the parties relating to the subject matter of this Agreement.

Section 19. Survival of Operative Sections.

Upon any termination of Employee’s employment, the provisions of Section 7
through Section 20 of this Agreement shall survive to the extent necessary to
give effect to the provisions thereof.

Section 20. Counterparts.

This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original but all of which together shall constitute one and
the same instrument. The execution of this Agreement may be by actual or
facsimile signature.

Section 21. American Jobs Creation Act Of 2004.

All amounts paid under this Agreement (including without limitation Base Salary)
shall be paid less all applicable state and federal tax withholdings and any
other withholdings required by any applicable jurisdiction or authorized by
Employee. Notwithstanding any other provision of this Agreement whatsoever, the
Company, in its sole discretion, shall have the right to provide for the
application and effects of Section 280G and Section 409A of the Internal Revenue
Code (relating to deferred compensation arrangements) and any related
administrative guidance issued by the Internal Revenue Service. In particular,
the Company shall have the authority to delay the payment of any amounts under
this Agreement to the extent it deems necessary or appropriate to comply with
Section 409A(a)(2)(B)(i) of the Internal Revenue Code (relating to payments made
to certain “key employees" of publicly-traded companies); in such event, the
payment(s) at issue may not be made before the date which is six (6) months
after the date of Executive ’s separation from service, or, if earlier, the date
of death.

Section 22. Dispute Resolution, Jurisdiction and Venue

The parties consent to jurisdiction and venue in the federal and state courts
located in the State of Colorado for resolution of all disputes between them,
including without limitation any and all disputes relating in any way to this
Agreement, Employee’s

 

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employment or the termination of that employment. As sophisticated parties with
the ability to consult with legal counsel of their own choosing, the parties
also hereby explicitly waive any right to jury in any such disputes, as well as
any right or claim to exemplary or punitive damages. Also, in any litigation
between the parties, in addition to any other recovery, the prevailing party
shall be entitled to recover from the other party all of its costs and attorneys
fees reasonably expended in defense or prosecution of such action.

*        *        *

[Signatures to appear on the following page.]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

 

THE PARENT COMPANY

 

/s/ Gigi Healy

By:   Gigi Healy Title:   Vice President   Human Resources and Administration

 

Employee

 

/s/ Michael J. Wagner

Michael J. Wagner

 

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