EXECUTIVE CHAIRMAN AGREEMENT
 
This EXECUTIVE CHAIRMAN AGREEMENT (the “Agreement”) is made effective as of
December 28, 2011 (the “Effective Date”), by and among NeuMedia, Inc., a
Delaware corporation (the “Company”) and Robert Ellin (the “Chairman”).  In
consideration of the mutual covenants contained in this Agreement, the Company
and the Chairman agree as follows:
 
1.           Services.  The Company agrees to engage the Chairman to serve as
the Company’s Executive Chairman and to provide the services described in
Section 2 and the Chairman agrees to serve in such capacity and to provide such
services to the Company on the terms and conditions set forth in this Agreement.
 
2.           Scope of Services; Not an Employee.  The Chairman shall serve as
the Executive Chairman of the Company. The Chairman shall perform such duties as
are usual and customary for such position and such other duties as the Board of
Directors of the Company (the “Board of Directors”) shall reasonably assign to
him from time to time. The Chairman shall use his prudent business judgment and
shall devote such time on a first-priority basis consistent with his other
substantial commitments as is reasonably necessary to fulfill his duties
hereunder.  The Chairman’s duties shall include high-level leadership-based (a)
assistance in identifying potential investors in the Company, (b) assistance
with debt and equity financing arrangements, (c) guidance related to the
Company’s public company status and efforts to transition to a major stock
exchange, (d) advice concerning restructuring, merger and acquisition and other
related activities, (e) assistance with stockholder relations, (f) advice
regarding the introduction of new products and services, (g) assistance with
respect to new technologies, (h) assistance with respect to the competitive
environment, (i) assistance with identification of additional and replacement
directors, the creation of an advisory board, and the building of the Company’s
management team, and (j) otherwise advising with respect to business development
opportunities and the Company’s industry. The Chairman shall work in conjunction
with the Company’s Chief Executive Officers and other senior executive officers
or as otherwise directed by the Board of Directors. The Chairman shall not be an
employee of the Company, but shall serve in the capacity of an independent
contractor.
 
3.           Term.  Subject to the provisions of Section 7, the term of this
Agreement shall be one (1) year from the Effective Date, unless extended by
mutual written agreement of the parties (the “Term”).
 
4.           Compensation.  The compensation payable to the Chairman under this
Agreement shall be as follows:

 
 

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(a)           Annual Fees.  For all services rendered by the Chairman under this
Agreement, the Company shall pay the Chairman an aggregate fee (the “Fee”) of
four hundred fifty thousand dollars ($450,000) per annum.  The Fee shall be
payable commencing on the Effective Date in periodic installments in accordance
with the Company’s usual practice for its employees, but in no event less than
twice monthly over the year in which the applicable portion of the Fee is
earned.  Notwithstanding the foregoing, the Chairman agrees that fifty percent
(50%) of his monthly Fee payment (i.e., eighteen thousand seven hundred fifty
dollars ($18,750) per calendar month) shall be deferred and subject to
forfeiture (the “Deferred Fee Portion”) until the Company has consummated one or
more debt or equity financings during the period consisting of the Term and the
twelve (12) months immediately following the Term (the “Measurement Period”) in
which the Company realizes at least five million dollars ($5,000,000) of gross
proceeds, and, provided further, that upon completion of such debt or equity
financings during the Measurement Period, the Chairman shall be paid a single
lump sum (in addition to his Fee payment for the month in which such financing
is consummated) equal to the previously accrued deferred Fees.  The Deferred Fee
Portion shall be an accrued liability of the Company until the earlier to occur
of the consummation of the financing(s) or the expiration of the Measurement
Period, but shall be subject to forfeiture in the event this Agreement is
terminated prior to the expiration of the Term in accordance with Section 7.
 
(b)           Annual Bonus. The Chairman shall be entitled to be paid an annual
incentive bonus in cash in an amount of up to one hundred percent (100%) of the
Chairman’s Fee based upon satisfaction of performance-related milestones. The
performance-related milestones shall be mutually determined by the Board of
Directors and the Chairman within sixty (60) days of the Effective Date.  If the
Board of Directors and the Chairman fail to determine such performance-related
milestones within such period, either party is authorized to request binding
mediation with Andrew Schleimer appointed to serve as mediator to determine such
performance-related milestones consistent with the Chairman’s duties
hereunder.  Any bonus payable under this subsection (b) shall vest upon the
achievement of the performance criteria and shall be paid on or within thirty
(30) days of such vesting date.
 
(c)           Reimbursement of Business Expenses.  The Company shall reimburse
the Chairman for all reasonable expenses incurred by the Chairman in performing
services during the Term, in accordance with the Company’s policies and
procedures for its senior executives, as in effect from time to time, including
but not limited to, business class air travel (or, if unavailable, first class),
meals and entertainment, fuel costs for transportation, wireless mobile
communications, and personal computer equipment.

 
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(d)           Restricted Stock Grant.  On the Effective Date, the Company shall
grant the Chairman three million four hundred thousand (3,400,000) shares of
restricted common stock of the Company, subject to the terms and conditions
specified in the attached Restricted Stock Agreement, which shall vest as
follows: (i) one third (1/3) shall vest immediately upon the completion of one
or more debt or equity financings during the Measurement Period in favor of the
Company of gross proceeds of at least five million dollars ($5,000,000); (ii)
one third (1/3) shall vest immediately if on any date during the Measurement
Period the Company’s total enterprise value (computed by multiplying the number
of outstanding shares of Common Stock on a fully diluted (taking into account
only those stock options that are in-the-money on such date), as-converted basis
by the average daily trading price for Common Stock for the thirty (30) trading
day period immediately preceding the date of determination) equals or exceeds
one hundred million dollars ($100,000,000); and (iii) one third (1/3) shall vest
immediately if on any date during the Measurement Period the Company’s total
enterprise value (calculated as set forth in clause (ii) above) equals or
exceeds two hundred million dollars ($200,000,000); provided, however, that all
unvested shares of restricted common stock shall vest immediately upon the sale
of all or substantially all of the assets of the Company, upon the merger or
reorganization of the Company following which the equityholders of the Company
immediately prior to the consummation of such merger or reorganization
collectively own less than fifty percent (50%) of the voting power of the
resulting entity, upon the sale of equity securities of the Company representing
fifty percent (50%) or more of the voting power of the Company or fifty percent
(50%) or more of the economic interest in the Company in a single transaction or
in a series of related transactions, or at such time, if any, during the Term at
which (A) the composition of a majority of the members of the Board is different
from the composition of the Board on the Effective Date and (B) the Chairman has
reasonably objected in writing to such number of new or replacement members
joining the Board after the Effective Date such that he has reasonably objected
to a majority of the members of the Board (a “Change of Control”).  All shares
shall be subject to a one (1) year lock-up following the vesting of such
shares.  Subject to the approval of the Company’s Board of Directors, in its
sole and exclusive discretion, the Company may extend a non-interest bearing
loan to the Chairman equal to the Chairman’s grossed up aggregate federal and
state income tax liability attributable to the issued shares and bonus subject
to, among other things: (i) a determination of the amount of the tax due; (ii)
approval of the terms of such loan; and (iii) the Company’s financial condition.
For the avoidance of doubt, if the vesting conditions set forth in this Section
4(d) or a Change of Control do not occur prior to the end of the Measurement
Period, all unvested shares shall be forfeited and immediately cancelled without
further action on the part of the Chairman or the Company.
 
(e)           Additional Performance Bonuses.  The Chairman shall be entitled to
payment of (i) a performance bonus equal to one million five hundred thousand
dollars ($1,500,000) in cash or registered and freely tradable stock of the
Company, at the Chairman’s choice, if, on any date during the Measurement Period
the Company’s total enterprise value (computed by multiplying the number of
outstanding shares of the Company’s common stock on a fully diluted (taking into
account only those stock options that are in-the-money on such date),
as-converted basis by the average daily trading price for the Company’s common
stock for the thirty (30) trading day period immediately preceding the date of
determination) equals or exceeds one hundred fifty million dollars
($150,000,000); and (ii) a performance bonus equal to three million three
hundred thousand dollars ($3,300,000) in cash or registered and freely tradable
stock of the Company, at the Chairman’s choice, if, on any date during the
Measurement Period, the Company’s total enterprise value (calculated as set
forth in clause (i) above) equals or exceeds one billion dollars
($1,000,000,000). Any bonus payable under this subsection (e) shall vest upon
the achievement of the specified criteria and shall be paid on or within thirty
(30) days of such vesting date.
 
(f)           Exclusivity of Compensation.  The Chairman shall not be entitled
to any payments or benefits other than those provided under this Agreement.
 
5.           Personal Assistant.  The Company shall reimburse the Chairman for
the salary of an individual employed by the Chairman as a personal assistant for
the Chairman for the Term; provided that such individual’s annualized salary
shall not exceed eighty thousand dollars ($80,000). The Company shall not be
responsible for the payment of any bonus, benefits or other compensation or
payments. The Company shall reimburse the Chairman for the salary payments set
forth in this Section 5 within five (5) business days of the Company’s receipt
of an invoice for the same.

 
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6.           Key Man Insurance. If the Company, in its sole and absolute
discretion and at its sole cost and expense, determines to purchase a “key man”
life and/or disablity insurance policy with the respect to the Chairman, the
Chairman shall reasonably cooperate with the Company’s efforts to obtain such
insurance policy, including, without limitation, by submitting to customary
medical tests and providing customary personal and medical information. The
Chairman shall not be entitled to any benefits under any such insurance policy.
 
7.           Termination.  Notwithstanding the provisions of Section 3, the
Chairman’s engagement under this Agreement shall terminate under the following
circumstances set forth in this Section 7. For purposes of this Agreement, the
date of the Chairman’s termination (the “Termination Date”) shall mean the date
of the Chairman’s “separation from service” as such term is defined under
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).
 
(a)          Termination by the Company for Cause.  The Chairman’s engagement
under this Agreement may be terminated for Cause without further liability on
the part of the Company effective immediately upon a vote of the Board of
Directors in which not less than two-thirds (2/3) of its members vote to
terminate and written notice to the Chairman.  Only the following shall
constitute “Cause” for such termination:
 
(i)           any act committed by the Chairman against the Company or any of
its affiliates which involves fraud, willful misconduct, gross negligence; or
 
(ii)           the commission by the Chairman of, or indictment for (A) a felony
or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud.
 
(b)          Termination by the Company Without Cause.  Subject to the payment
of Termination Benefits pursuant to Section 8(b), the Chairman’s engagement
under this Agreement may be terminated by the Company without Cause upon not
less than fifteen (15) days’ prior written notice to the Chairman.  Termination
by the Company within twelve (12) months of a Change of Control in the absence
of Cause shall be conclusively deemed a Termination by the Company without
Cause.
 
(c)           Death.  The Chairman’s engagement with the Company shall terminate
automatically upon his death.
 
(d)           Disability.  If the Chairman shall become Disabled so as to be
unable to perform the essential functions of the Chairman’s then existing
services under this Agreement with or without reasonable accommodation, the
Board of Directors may terminate this Agreement upon written notice to the
Chairman.  For purposes hereof, the term “Disabled” or “Disability” shall mean a
written determination that the Chairman, as certified by at least two (2) duly
licensed and qualified physicians, one (1) approved by the Board of Directors of
the Company and one (1) physician approved by the Chairman (the “Examining
Physicians”), or, in the event of the Chairman’s total physical or mental
disability, the Chairman’s legal representative, that the Chairman suffers from
a physical or mental impairment that renders the Chairman unable to perform the
Chairman’s services under this Agreement and that such impairment can reasonably
be expected to continue for a period of six (6) consecutive months or for
shorter periods aggregating one hundred and eighty (180) days in any twelve (12)
month period; provided, that the Chairman’s primary care physician may not serve
as one of the Examining Physicians without the consent of the Company and the
Chairman (or the Chairman’s legal representation).  The Chairman shall cooperate
with any reasonable request of a physician to submit to a physical examination
for purposes of such certification.  Nothing in this Section 7(d) shall be
construed to waive the Chairman’s rights, if any, under existing law including,
without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et
seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 
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8.           Compensation Upon Termination.
 
(a)           Termination Generally.  If the Chairman’s engagement by the
Company is terminated for any reason during or upon expiration of the Term, the
Company shall pay or provide to the Chairman (or to his authorized
representative or estate) (i) any earned but unpaid portion of the Fee payable
on the Termination Date, (ii) accrued bonuses earned but not yet paid, payable
at the same time such amounts would otherwise have been paid to the Chairman,
and (iii) any unpaid expense reimbursements, payable in accordance with the
Company’s reimbursement policies (collectively, the “Accrued Compensation”).
 
(b)           Termination by the Company Without Cause.  In the event of
termination of the Chairman’s engagement by the Company pursuant to Section 7(b)
above prior to the expiration of the Term, and subject to the Chairman’s
execution and delivery of a release of any and all legal claims in a form
satisfactory to the Company within forty-five (45) days of the Termination Date
(the “Release Period”), the Company shall provide to the Chairman, in addition
to the Accrued Compensation, the following termination benefits (“Termination
Benefits”) effective as of the final day of the Release Period: continuation of
the Chairman’s Fee at the rate and in accordance with the Company’s payroll
practices then in effect pursuant to Section 4(a).
 
The Termination Benefits set forth in subsection 8(b) above shall continue
effective for the remainder of the Term (the “Termination Benefits Period”).
 
The Company acknowledges and agrees that under certain circumstances involving
the termination of the Chairman’s engagement and/or a Change of Control
transaction involving the Company, the Chairman shall be entitled to accelerated
vesting on his shares of capital stock of the Company, all to the extent
provided in Section 2(a) of that certain Restricted Stock Agreement, dated as of
the date hereof, by and between the Company and the Chairman.
 
Any Section 409A payments which are subject to execution of a waiver and release
which may be executed and/or revoked in a calendar year following the calendar
year in which the payment event (such as termination of engagement) occurs shall
commence payment only in the calendar year in which the release revocation
period ends as necessary to comply with Section 409A.
 
(c)           Termination by Reason of Death, Disability or Expiration of
Term.  If the Chairman’s engagement is terminated on account of the Chairman’s
death pursuant to Section 7(c), Disability pursuant to Section 7(d), or the
failure of the parties to extend the Term, the Company shall have no further
obligation to the Chairman other than the payment of his Accrued Compensation
and any amounts payable pursuant to Section 8(e).

 
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(d)           Termination by Reason of Cause or Chairman’s Voluntary
Termination.  If the Chairman’s engagement is terminated for Cause or the
Chairman voluntarily terminates this Agreement prior to the expiration of the
Term, the Company shall have no further obligation to the Chairman other than
payment of his Accrued Compensation.
 
(e)           Payments For Compensation Earned After the Term. In the event
that, following the termination of the Chairman’s engagement for any reason
other than for Cause, there occurs an event after such termination but during
the Measurement Period, that otherwise would entitled the Chairman to receive
compensation, the Company shall, within ten (10) business days following the
occurrence of such event, pay to the Chairman the applicable amount and form of
compensation, as set forth elsewhere in this Agreement, including but not
limited to, the Deferred Fee Portion payable under Section 4(a), the annual
bonus payable under Section 4(b), the vesting of Restricted Shares under
Section 4(d), and the additional performance bonuses under Section 4(e).
 
9.           Confidential Information, Nonsolicitation and Cooperation.
 
(a)           Confidential Information.  As used in this Agreement,
“Confidential Information” means proprietary information of the Company which is
of value to the Company in the course of conducting its business and the
disclosure of which could result in a competitive or other disadvantage to the
Company.  Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other
intellectual property; trade secrets; know-how; designs, processes or formulae;
software; market or sales information or plans; customer lists; and business
plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or
considered by the management of the Company.  Confidential Information includes
information developed by the Chairman in the course of the Chairman’s engagement
by the Company, as well as other information to which the Chairman may have
access in connection with the Chairman’s provision of services.  Confidential
Information also includes the confidential information of others with which the
Company has a business relationship.  Notwithstanding the foregoing,
Confidential Information does not include (i) information in the public domain,
unless due to breach of the Chairman’s duties under Section 9(b), or
(ii) information obtained in good faith by the Chairman from a third party who
was lawfully in possession of such information and not subject to an obligation
of confidentiality owed to the Company.
 
(b)           Duty of Confidentiality.  The Chairman understands and agrees that
the Chairman’s engagement creates a relationship of confidence and trust between
the Chairman and the Company with respect to all Confidential Information.  At
all times, both during the Chairman’s engagement by the Company and after
termination, the Chairman will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such Confidential
Information without the written consent of the Company, except (i) as may be
necessary in the ordinary course of performing the Chairman’s services to the
Company or (ii) as may be required in response to a valid order by a court or
other governmental body or as otherwise required by law (provided that if the
Chairman is so required to disclose the Confidential Information, the Chairman
shall (i) immediately notify the Company of such required disclosure
sufficiently in advance of the intended disclosure to permit the Company to seek
a protective order or take other appropriate action, (ii) cooperate in any
effort by the Company to obtain a protective order or other reasonable assurance
that confidential treatment will be afforded the Confidential Information).

 
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(c)           Documents, Records, etc.  All documents, records, data, apparatus,
equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Chairman by the Company or are produced
by the Chairman in connection with the Chairman’s engagement will be and remain
the sole property of the Company.  The Chairman will return to the Company all
such materials and property as and when requested by the Company.  In any event,
the Chairman will return all such materials and property immediately upon
termination of the Chairman’s engagement for any reason.  The Chairman will not
retain with the Chairman any such material or property or any copies thereof
after such termination.
 
(d)           Nonsolicitation.  During the Term and for one (1) year thereafter,
the Chairman (i) will refrain from directly or indirectly employing, attempting
to employ, recruiting or otherwise soliciting, inducing or influencing any
person to leave employment with the Company (other than subordinate employees
whose employment was terminated in the course of the Chairman’s engagement with
the Company); and (ii) will refrain from soliciting or encouraging any customer
or supplier to terminate or otherwise modify adversely its business relationship
with the Company.  The Chairman understands that the restrictions set forth in
this Section 9(d) are intended to protect the Company’s interest in its
Confidential Information and established employee, customer and supplier
relationships and goodwill, and agrees that such restrictions are reasonable and
appropriate for this purpose.
 
(e)           Third-Party Agreements and Rights.  The Chairman hereby confirms
that the Chairman is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way the Chairman’s use or
disclosure of information or the Chairman’s engagement in any business.  The
Chairman represents to the Company that the Chairman’s execution of this
Agreement, the Chairman’s engagement with the Company and the performance of the
Chairman’s proposed services for the Company will not violate any obligations
the Chairman may have to any such previous employer or other party.  In the
Chairman’s work for the Company, the Chairman will not disclose or make use of
any information in violation of any agreements with or rights of any such
previous employer or other party, and the Chairman will not bring to the
premises of the Company any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous employment or other
party.

 
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(f)           Litigation and Regulatory Cooperation.  During and after the
Chairman’s engagement with the Company, the Chairman shall cooperate reasonably
with requests from the Company, or the Company’s legal counsel, in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while the Chairman was engaged by the Company.  The
Chairman’s cooperation in connection with such claims or actions shall include,
but not be limited to, being available to meet with counsel to prepare for
discovery or trial and to act as a witness on behalf of the Company at mutually
convenient times.  During and after the Chairman’s engagement, the Chairman also
shall cooperate fully with the Company in connection with any investigation or
review of any federal, state or local regulatory authority as any such
investigation or review relates to events or occurrences that transpired while
the Chairman was engaged by the Company.  The Company shall reimburse the
Chairman for any reasonable out-of-pocket expenses incurred in connection with
the Chairman’s performance of obligations pursuant to this Section 9(f), and if
the Chairman spends more than ten (10) hours in any calendar month in
performance of these obligations, the Company shall pay the Chairman $500 per
hour for each part of an hour over ten (10) hours in such calendar month.
 
(g)           Injunction.  The Chairman agrees that it would be difficult to
measure any damages caused to the Company which might result from any breach by
the Chairman of the promises set forth in this Section 9, and that in any event
money damages may be an inadequate remedy for any such breach.  Accordingly,
subject to Section 10 of this Agreement, the Chairman agrees that if the
Chairman breaches, or proposes to breach, any portion of this Agreement, the
Company shall be entitled, in addition to all other remedies that it may have,
to an injunction or other appropriate equitable relief to restrain any such
breach without showing or proving any actual damage to the Company and without
the need to post a bond or other security.
 
10.         Arbitration of Disputes.  In the event of any dispute or controversy
arising out of, or relating to, this Agreement, the parties hereto agree to
submit such dispute or controversy to binding arbitration pursuant to either the
JAMS Streamlined (for claims under $250,000.00) or the JAMS Comprehensive (for
claims over $250,000.00) Arbitration Rules and Procedures, except as modified
herein, including the Optional Appeal Procedure.  A sole neutral arbitrator
shall be selected from the list (the “List”) of arbitrators supplied by J.A.M.S.
(“JAMS”) Los Angeles County, California office, or any successor entity, or if
it no longer exists, from a List supplied by the ADR Services, Inc., in Los
Angeles, California (“ADR”) following written request by any party hereto.  If
the parties hereto after notification of the other party(-ies) to such dispute
cannot agree upon an arbitrator within thirty (30) days following receipt of the
List by all parties to such arbitration, then either party may request, in
writing, that JAMS or ADR, as appropriate, appoint an arbitrator within ten (10)
days following receipt of such request (the “Arbitrator”).  The arbitration
shall take place in Los Angeles County, California, at a place and time mutually
agreeable to the parties or if no such agreement is reached within ten (10) days
following notice from the Arbitrator, at a place and time determined by the
Arbitrator.  Such arbitration shall be conducted in accordance with the
Streamlined Arbitration Rules and Procedures of JAMS then in effect, and Section
1280 et seq. of the California Code of Civil Procedure, or if applicable, the
Commercial Arbitration Rules of ADR then in effect.  The preceding choice of
venue is intended by the parties to be mandatory and not permissive in nature,
thereby precluding the possibility of litigation between the parties with
respect to or arising out of this Agreement in any jurisdiction other than that
specified in this Section.  Each party hereby waives any right it may have to
assert the doctrine of forum non conveniens or similar doctrine or to object to
venue with respect to any proceeding brought in accordance with this Section,
and stipulates that the Arbitrator shall have in personam jurisdiction and venue
over each of them for the purpose of litigating any dispute, controversy, or
proceeding arising out of or related to this Agreement.  Each party hereby
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this Section by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices as set forth in this Agreement.  The decision of the
Arbitrator shall be final and binding on all the parties to the arbitration,
shall be non-appealable and may be enforced by a court of competent
jurisdiction.  The prevailing party shall be entitled to recover from the
non-prevailing party reasonable attorney’s fees, as well as its costs and
expenses.  The Arbitrator may grant any remedy appropriate including, without
limitation, injunctive relief or specific performance.  Notwithstanding any of
the foregoing, the Company may seek a temporary restraining order or a
preliminary injunction as contemplated in Section 9(g) herein.

 
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11.           Integration.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements between the parties with respect to any related subject matter.
 
12.           Assignment; Successors and Assigns, etc.  Neither the Company nor
the Chairman may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the other
party; but the Company may assign its rights under this Agreement without the
consent of the Chairman, in the event that the Company shall effect a
reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity, in which event the Company will obtain a written confirmation
of the assumption of the Company’s obligation hereunder for the benefit of the
Chairman.  This Agreement shall inure to the benefit of and be binding upon the
Company and the Chairman, their respective successors, executors,
administrators, heirs and permitted assigns.
 
13.           Enforceability. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
 
14.           Waiver.  No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party.  The failure of any
party to require the performance of any term or obligation of this Agreement, or
the waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
 
15.           Notices.  Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Chairman at the Chairman’s last residential address the Chairman has filed in
writing with the Company or, in the case of the Company, at its main offices,
attention of the Chairman of the Board, and shall be effective on the date of
delivery in person or by courier or three (3) days after the date mailed.

 
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16.           Third Party Beneficiary; Amendment.  The Chairman and the Company
acknowledge and agree that no third party shall have any rights or benefits
under this Agreement.  This Agreement may be amended or modified only by a
written instrument signed by the Chairman and the Company.
 
17.           Governing Law.  This contract has been entered into in the State
of California and shall be construed under and be governed in all respects by
the laws of the State of California, without giving effect to the conflict of
laws principles of such state; provided that Section 20 shall be governed by the
laws of the State of Delaware.
 
18.           Counterparts.  This Agreement may be executed in any number of
original, facsimile or other electronic counterparts, each of which when so
executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
 
19.           No Prior Agreements.  The Chairman hereby represents and warrants
to the Company and that the execution of this Agreement by the Chairman, the
Chairman’s engagement by the Company, and the performance of the Chairman’s
services hereunder will not violate or constitute a breach of any agreement,
including any non-competition agreement, invention or confidentiality agreement,
with a former employer, client or any other person or entity.  Further, the
Chairman agrees to indemnify the Company for any loss, including, but not
limited to, reasonable attorneys’ fees and expenses, that the Company may incur
based upon or arising out of the Chairman’s breach of this Section.
 
20.           Indemnification.  The Company shall indemnify the Chairman against
and hold the Chairman harmless from any costs, liabilities, losses and exposures
for the Chairman’s services as the Executive Chairman of the Company (or any
successor in interest thereof), whether before or after the Effective Date, to
the maximum extent permitted under the Delaware General Corporate Law.  If the
Chairman is made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by the Company against the Chairman), by reason of the fact that the
Chairman is or was performing services to the Company under this Agreement or
while acting as an executive officer of the Company, the Company shall indemnify
the Chairman against all expenses (including reasonable attorneys’ fees),
judgments, fines and amounts paid in settlement, as actually and reasonably
incurred by the Chairman in connection therewith, to the maximum extent
permitted under the Delaware General Corporation Law.  If the Chairman is made a
party to any third-party action, complaint, suit or proceeding, the Chairman
shall give prompt notice thereof to the Company, and the Company shall have the
right to assume and control the defense of such action, complaint, suit or
proceeding; provided that if legal counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing the Chairman,
the Chairman may engage separate counsel and the Company shall reimburse all
reasonable attorneys’ fees and reasonable expenses of such separate
counsel.  Notwithstanding the foregoing, the Company shall not have, and the
Chairman acknowledges and agrees that the Company does not have, any obligation
to indemnify the Chairman under this Section or under its certificate of
incorporation or bylaws, with respect to (a) any breach of representation,
warranty or covenant committed by the Chairman under this Agreement, or (b) any
action or inaction by the Chairman where the Chairman failed to act in good
faith and in a manner the Chairman reasonably believed to be in, or not opposed
to, the best interests of the Company, or with respect to any criminal action or
proceeding, the Chairman had reasonable cause to believe that his conduct was
unlawful.

 
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21.           Section 409A Compliance.  Unless otherwise expressly provided, any
payment of compensation by the Company to the Chairman, whether pursuant to this
Agreement or otherwise, shall be made no later than the fifteenth (15th) day of
the third (3rd) month (i.e., 2½ months) after the later of the end of the
calendar year or the Company’s fiscal year in which the Chairman’s right to such
payment vests (i.e., is not subject to a “substantial risk of forfeiture” for
purposes of Section 409A).  Each payment and each installment of any bonus or
severance payments provided for under this Agreement shall be treated as a
separate payment for purposes of application of Section 409A. To the extent any
amounts payable by the Company to the Chairman constitute “nonqualified deferred
compensation” (within the meaning of Section 409A) such payments are intended to
comply with the requirements of Section 409A, and shall be interpreted in
accordance therewith. Neither party individually or in combination may
accelerate, offset or assign any such deferred payment, except in compliance
with Section 409A. No amount shall be paid prior to the earliest date on which
it is permitted to be paid under Section 409A and the Chairman shall have no
discretion with respect to the timing of payments except as permitted under
Section 409A. In the event that the Chairman is determined to be a “key
employee” (as defined and determined under Section 409A) of the Company at a
time when its stock is deemed to be publicly traded on an established securities
market, payments determined to be “nonqualified deferred compensation” payable
upon separation from service shall be made no earlier than (a) the first (1st)
day of the seventh (7th) complete calendar month following such termination of
employment, or (b) the Chairman’s death, consistent with the provisions of
Section 409A.  Any payment delayed by reason of the prior sentence shall be paid
out in a single lump sum at the end of such required delay period in order to
catch up to the original payment schedule.  All expense reimbursement or in-kind
benefits subject to Section 409A provided under this Agreement or, unless
otherwise specified in writing, under any Company program or policy, shall be
subject to the following rules: (i) the amount of expenses eligible for
reimbursement or in-kind benefits provided during one calendar year may not
affect the benefits provided during any other year; (ii) reimbursements shall be
paid no later than the end of the calendar year following the year in which the
Chairman incurs such expenses, and the Chairman shall take all actions necessary
to claim all such reimbursements on a timely basis to permit the Company to make
all such reimbursement payments prior to the end of said period, and (iii) the
right to reimbursement or in-kind benefits shall not be subject to liquidation
or exchange for another benefit.  The Chairman shall be responsible for the
payment of all taxes applicable to payments or benefits received from the
Company.  It is the intent of the Company that the provisions of this Agreement
and all other plans and programs sponsored by the Company be interpreted to
comply in all respects with Section 409A; however, the Company shall have no
liability to the Chairman, or any successor or beneficiary thereof, in the event
taxes, penalties or excise taxes may ultimately be determined to be applicable
to any payment or benefit received by the Chairman or any successor or
beneficiary thereof.
 
22.           Director’s and Officers’ Insurance.  The Company shall use
commercially reasonable efforts to maintain during the Term directors’ and
officers’ insurance from a reputable insurance company with such coverage
amounts and policy terms as is customary for public companies with market
valuations similar to the Company, as determined by the Company in its sole
discretion.

 
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23.           No Relationship. This Agreement does not make the Chairman the
partner, joint-venturer, employee, agent or legal representative of the Company
for any purpose whatsoever. The Chairman is not granted any right or authority
to assume or to create any obligation or responsibility, express or implied, on
behalf of or in the name of the Company. In fulfilling his obligations pursuant
to this Agreement, the Chairman will be acting as an independent contractor. In
furtherance of the foregoing, the parties expressly acknowledge that (a) the
Chairman shall establish his own working hours and appointment schedule, (b) the
sole source of the Chairman’s compensation from the Company shall be the
compensation as provided herein, and the Chairman shall not be entitled to sick
or vacation days or any other benefits, (c) the Chairman shall be entitled to
engage in other businesses, (d) no state or federal unemployment insurance or
disability insurance shall be paid by the Company on account of the Chairman and
no state or federal tax shall be withheld from the payments to the Chairman
hereunder and (e) except as expressly provided herein, the Chairman shall be
required to pay his own expenses, including, without limitation, insurance
premiums, healthcare expenses, social security payroll taxes and other
employment taxes.
 
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IN WITNESS WHEREOF, this Agreement has been executed by the Company and by the
Chairman as of the Effective Date.

 
COMPANY
      NeuMedia, Inc., a Delaware corp.        
By: 
/s/ David Mandell
   
Name: David Mandell
   
Title:   Corporate Secretary
       
CHAIRMAN
       
Name: 
/s/ Robert Ellin
   
Robert Ellin

Executive Chairman Agreement

 
 

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Exhibit A

Form of Restricted Stock Agreement

Exhibit A
 
 
 

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