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EMPLOYMENT AGREEMENT

This Employment Agreement, dated April 26, 2010 (the “Agreement”), is entered
into by and between Camelot Entertainment Group, Inc., a Delaware Corporation,
it affiliates, subsidiaries, divisions, predecessors and successors (the
“Company”) one the one hand, and Robert P. Atwell (the “Executive”) on the other
hand. The Company and Executive are hereinafter referred to collectively as the
“Parties” and individually referred to as a “Party.”

RECITALS

WHEREAS, Executive founded Camelot Films in 1978 for the purpose of creating,
developing, producing and distributing motion pictures; and

WHEREAS, Executive acquired a majority interest in the Company’s predecessor
prior to becoming the Company’s President and Chief Executive Officer in 2003;
and

WHEREAS, Executive, and entities owned and/or controlled by the Executive and
the Executive’s spouse, and the Company entered into a series of agreements
between 2003 through 2010 whereby the Executive provided executive services and
funding for the Company; and

WHEREAS, Executive has retained the rights to the name “Camelot Films” having
entered into a license agreement with the Company which allowed the Company the
use of the name and subsequent trademarks; and

WHEREAS, Executive and the Company desire to continue their working relationship
by setting forth the following terms and conditions for an employment
relationship between Employee and Company.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Parties to this Agreement hereby agree as follows:

ARTICLE 1
SCOPE OF EMPLOYMENT

1.1           Title and Position.  The Company hereby employs Executive, and
Executive hereby accepts employment by the Company, as its Chairman, Founder,
President and Chief Executive Officer (“Executive”) for the Term of this
Agreement, with the specific duties and authority set out below.

1.2           Conflicts with Board Policies.  The employment relationship
between the Parties shall be governed by the policies and practices established
by the Board, except that when the terms of this Agreement differ from or are in
conflict with the Company’s policies or practices, this Agreement shall control.

1.3           Location.  Unless the Parties otherwise agree in writing, during
the term of this Agreement Executive shall perform the services he is required
to perform pursuant to this Agreement in the Irvine, California area or any
other area of Executive’s convenience which permits regular communication via
telephone, Internet or other popular medium with employees, officers, directors,
customers and network affiliates as needed to effectively carry out duties as
described herein. Executive acknowledges and understands that the Company’s
current headquarters are located in Irvine, California and that officers and
other participants critical to the Company’s business are dispersed nationally
and internationally, and that such dispersion will increase substantially as the
Company grows. The Parties therefore acknowledge and agree that the nature of
Executive’s duties hereunder may require domestic and international travel from
time to time.

1.4           Term.  The term of Executive’s employment under this Agreement
(the “Term”) shall commence on the date first written above (the “Effective
Date”) and shall end on December 30, 2017, unless sooner extended or terminated
in accordance with the provisions of this Agreement. For purposes of this
Agreement, “Employment Year” shall mean each 12-month period during the Term
commencing on January 1, and ending on December 31 of the following year. In the
event the Parties decide to extend this Agreement for one or more terms, any
extension agreed upon must be done so in writing and executed by the Company and
Executive no later than 5 p.m. Eastern Standard Time on December 31, 2017. In
the event this Agreement is not extended or terminated in accordance with the
terms and conditions contained herein, this Agreement shall automatically renew
for one additional Term, and shall continue to do so until extended or
terminated in accordance herewith.

 
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1.5           Duties and Scope of Employment.  During the Term, Executive shall
perform such services as the Company may from time to time reasonably request
consistent with Executive’s position with the Company and Executive’s stature
and experience in the film, television and digital media industry (the
“Services”). The Services and authority of Executive shall include, but are not
limited to, the management, oversight and supervision of Camelot Entertainment
Group, Inc., including, but not limited to, its main subsidiaries, Camelot Film
Group, Inc., Camelot the Company Group, Inc. and Camelot Production Services
Group, Inc., and the general business, affairs, and operations of the Company,
as well as other principal business activities of the Company as directed by the
Company’s Board of Directors from time to time.  Executive shall have final sole
approval on all feature film development, production, distribution and sales
agreements and/or contracts concerning feature motion pictures, television
programming, new media, DVD productions, VOD productions, mobile media,
Internet, commercials, industrials, digital media and/or any other media
acquired, produced, co-produced, developed, created, financed, distributed,
marketed and/or promoted by the Company. Executive shall have full business and
creative control within the Company, and shall fully consult with the Board of
Directors on all major business matters as defined by the operating parameters
established by the Board of Directors, which will be subject as applicable to
final Board of Director’s ratification.

1.5.1   During the Term, all employees, consultants and advisors of the Company
shall report to Executive (directly or through such channels as Executive and
the Board shall designate). During the Term, there shall be no officer,
director, employee, agent and/or consultant of the Company whose title,
position, authority and/or compensation package with the Company is superior to
that of Executive. During the Term, there shall be no President of the Company
other than Executive, except in the event this Agreement is terminated as
provided herein or in the event Executive elects in his sole discretion to waive
this requirement in writing as witnessed and notarized, nor shall there be no
Chairman of the Board other than Executive except in the event Executive is not
elected to the Board of Directors, whereby Executive would remain Executive
Chairman in a non-voting capacity, except for certain specific actions
contemplated by the Board of Directors as described in Exhibit 1.5.1 attached
hereto, until such time as Executive elects to resign as Chairman. The Company
will not, either through Board of Director or stockholder action, take any
action or implement any directive or resolution in any matter or way whatsoever
that would cause Executive to lose his voting control of the Company’s common
and/or preferred stock.

1.5.2   The Company may, from time to time during the Term, appoint Executive to
one or more additional offices of the Company. Executive agrees to accept such
offices if consistent with Executive’s stature and experience and with the type
of offices with the Company held by Executive.  Executive shall oversee the
development and management of Camelot Film Group, Inc., Camelot the Company
Group, Inc., Camelot Production Services Group, Inc. and multiple divisions
and/or subsidiaries of the Company, which may include the following; a) a
division and/or subsidiary which will have as its mandate the development and
production of feature motion pictures whose individual cash budgets on an
allocated basis may be calculated at or less than one million dollars, b) a
division and/or subsidiary which will have as its mandate the development and
production of feature motion pictures whose individual cash budgets on an
allocated basis may be calculated at or more than one million dollars, c) a
division and/or subsidiary which shall have as its mandate the development of a
distribution and marketing operation for both domestic and foreign distribution
of all Company and third party productions, d) a division and/or subsidiary
which shall have as its mandate the development of a major motion picture and
television studio support structure and entertainment complexes both
domestically and internationally, and e) a division and/or subsidiary which
shall have as its mandate the development of a production services division
and/or subsidiary that would in part assist third parties in packaging,
financing, producing, distributing and marketing feature motion pictures, a
physical operations division, a bridge financing operation, a publishing
operation, an event management operation and a consulting services operation. It
is understood by Executive that his duties and obligations with regard to each
of these divisions and/or subsidiaries will depend upon the operating budget and
parameters established by the Board of Directors.

1.5.3           During the Term, Executive shall be nominated to the Board of
Directors of Camelot Entertainment Group, Inc. (the “Board”).  If elected to the
Board by the Company’s stockholders, Executive shall serve as Chairman of the
Board in perpetuity. Executive shall also be named as a member of the Audit and
Executive Committee (or comparable committees) of the Board, as a member of the
Compensation Committee (or comparable committees) of the Board, as a member of
the Internal Controls Committee (or comparable committees) of the Board, and any
and all other executive level committees established by the Board.

 
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1.6           Obligations to the Company.  During the term of his employment,
Executive shall devote substantially his full business efforts and time to the
Company.  Except as otherwise listed in Exhibit 1.6 attached hereto, Executive
may not become, in his individual capacity or otherwise, an employee, officer,
controlling stockholder or partner in other entities engaged in a related
business model during the Term of this Agreement. In the event Employee has the
opportunity to accept or retain a Board of Director’s position at a related
business during the term of this Agreement, Executive shall obtain approval by
the Board of Directors prior to accepting or retaining such position, with Board
approval not to be unreasonably withheld.

1.6.1           Except as listed in Exhibit 1.6.1 attached hereto,
notwithstanding anything to the contrary stated in this Agreement, Executive may
acquire and/or retain, as an investment, and take customary actions (including
the exercise or conversion of any securities or rights) to maintain and preserve
Executive’s ownership of any one or more of the following (provided such
actions, other than passive investment activities, do not unreasonably interfere
with Executive’s services hereunder): (a) securities of any corporation that are
registered under Sections 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and that are publicly traded as long as Executive is not part of any
control group of such corporation and, in the case of public corporations in
competition with Company,  such securities do not constitute more than ten (10)
percent of the voting power of that public company; (b) any securities of a
partnership, trust, corporation or other person so long as Executive remains a
passive investor in that entity and so long as such entity is not, directly or
indirectly, in competition with Company, (c) securities or other interests now
owned or controlled, in whole or in part, directly or indirectly, by Executive
in any corporation or other person and which are identified on Schedule 1.6
hereto; and (d) securities of the Company or any of its Affiliates. Nothing in
this Agreement shall be deemed to prevent or restrict Executive’s ownership
interest in the Company and its Affiliates or Executive’s ability to continue
any business activity in which Executive was engaged prior to joining this
Company, or Executive’s ability to render charitable or community services.

1.7           Loyal and Conscientious Performance of Duties.  Executive agrees
he will at all times loyally and conscientiously perform all of the duties and
obligations required under this Agreement, to the best of his ability and
experience.

ARTICLE 2
COMPENSATION

2.1           Salary.  Executive shall receive a base Salary to be calculated as
follows: At the average rate for an Chief Executive Officer of a medium sized
publicly traded company in the city of Irvine, California, as published by The
Orange County Business Journal, as of the effective date hereof plus ten per
cent (10%) per annum beginning January 1, 2010.  Thereafter, said base Salary
shall increase by a minimum of $50,000 per annum or adjusted to the average rate
for a Chief Executive Officer of a medium sized publicly traded company in the
city of Irvine, California, as published by the Orange County Business Journal,
on the anniversary date of this Agreement, whichever is greater. In no event
shall the Executive’s base salary be below $500,000 during the Term. Salary
payable to Executive hereunder shall be paid beginning January 1 of each year
during the Term and at such times and in such amounts as the Company may
designate in accordance with the Company’s usual salary practices, but in no
event less than twice monthly. In the event that another employee, director,
agent and/or consultant of the Company receives or is contracted for a base
Salary in excess of Executive’s on or after January 1, 2010, Executive’s base
Salary shall be adjusted so that Executive’s base Salary is equal to or greater
than any other employee, director, agent and/or consultant of the Company.

2.1.1           Executive hereby agrees to defer all monies due in excess of
thirty thousand dollars ($30,000) in any given month until such time as the
Corporation is able to pay Executive’s salary out of revenues generated by the
Corporation or from proceeds provided by funding, whichever occurs
first.  Executive further agrees that Company shall pay no form of interest on
said deferment.  In the event the Corporation is unable to generate the funds
necessary to satisfy the Salary described under Section 2.1, Executive has the
option to accept the Company’s Common and/or Preferred Stock as payment for
services rendered.  In the event Executive elects to accept the Company’s Common
Stock as payment, to the extent allowed by law, the Company shall issue to
Executive its Common Stock until such time as the amount stated herein is paid
in full. In the event this Agreement is terminated due to the expiration of the
Term or for any other reason, the terms and conditions of Section 2.1 and this
Section 2.1.1 shall remain in full force and effect until such time as Executive
has been paid in full in accordance herewith.

 
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2.1.2    All such compensation due to Executive of any kind from any source that
Executive fully earns in amounts that exceed his base Salary, shall be fully
earned by the Executive and shall be paid in addition to Executive’s base Salary
with no deductions due to the Company.

2.2           Signing Bonus.  Executive shall receive a signing bonus in the
amount of Five Hundred Thousand Dollars ($500,000) payable upon the execution of
this Agreement; Five Million shares of Class “A” convertible Preferred Stock,
with a voting preference of 50 to 1 and at a share price of $.0001 cents per
share; Ten Million shares of Class “B” convertible Preferred Stock, with a
voting preference of 1,000 to 1 and at a share price of $.0001 cents per share;
Five Million shares of Class “C” convertible Preferred Stock at a share price of
$.0001 cents per share; Five Million shares of Class “D” convertible Preferred
Stock at a share price of $.0001 cents per share; and 1,000,000,000 shares of
the Company’s Common Stock at a share price of $.0001 cents a share.  All shares
received by Executive shall be vested 100% upon issuance of the stock
certificate, with any restrictive language to be printed on the certificate
approved by both Company and Executive.  Should Executive’s employment be
involuntarily terminated for Cause by Company (as defined in Section 3.1.3)
within one year from the date of this Agreement, Executive shall be required to
return to Company a percentage of shares (received under this Section 2.2), pro
rated by the number of months Executive was employed by Company.  Further,
should Executive voluntarily terminate his employment with the Company (as
defined in Section 3.1.5) within one year of the date of this Agreement,
Executive shall return to Company one hundred percent (100%) of all shares
granted under this Section 2.2, less any stock sold by Executive within one year
of the date of this Agreement.  However, upon Executive completing one year of
employment from the date of this Agreement, all shares granted under this
Section 2.2 and elsewhere in this Agreement or acquired by Executive by any
means whatsoever during the Term shall be duly authorized, fully paid,
non-dilutive, fully vested and non-assessable. Further, the Company hereby
acknowledges and agrees that it will not cancel, dilute, rescind or otherwise
inhibit and/or prohibit in any way Executive’s right, title and interest to the
shares.

2.3           Base Bonuses. Executive shall receive a cash bonus on account of
and subject to his working relationship with the Company through the date hereof
in an amount determined by the Compensation Committee of the Board, which amount
shall be no less than  $250,000 and shall be paid shortly thereafter. For the
Company's 2010 fiscal year, Executive shall be eligible to earn a target bonus
equal to 50% of the Base Salary paid to Executive for that time period. In
subsequent fiscal years, Executive shall be eligible to earn a target bonus
equal to 50% of Base Salary (the "Target Bonus"). For each period, Executive
shall be eligible to receive a greater payment, up to 100% of Base Salary, based
on achievement in excess of the target milestones, and with lesser payments if
the target milestones are not achieved. Executive's performance shall be
evaluated by the Compensation Committee of the Board of Directors based upon
performance criteria specified by that committee. The payment of any bonus under
this Section 2(3) shall be subject to Executive's employment with the Company
through the end of the relevant evaluation period (which employment requirement
does not apply with the respect to the Target Bonus component of severance
payments made pursuant to Section 3(2)(e)). Executive's Target Bonus shall be
reviewed annually by the Compensation Committee of the Board for possible
increases in light of Executive's performance and competitive data.

(a)                              Additional Annual Bonus Compensation.  In
addition to Executive’s Salary, Signing Bonus and Base Bonuses provided in
Sections 2.1, 2.2 and 2.3 above, during the Term Executive shall be eligible to
earn an annual bonus for each whole or partial calendar year during the Term,
determined and payable as follows (the “Additional Bonus”):
 
(i)                                   Commencing with Executive’s Bonus for the
2011 calendar year, Executive’s additional target bonus for each calendar year
during the Term shall be $1,000,000, provided that the Compensation Committee
will review Executive’s target bonus at least annually and may increase (but not
decrease, including as it may be increased from time to time) the target bonus. 
The result of any such annual review shall be reported to Executive by the
Compensation Committee promptly after it occurs. Executive’s target bonus, as it
may be so increased from time to time, is referred to herein as the “Additional
Target Bonus.”  As the actual amount payable to Executive as Additional Bonus
will be dependent, among other things, upon the achievement of the performance
goal(s) referred to in Section 3(b)(ii), Executive’s actual Bonus may be less
than, greater than or equal to the Additional Target Bonus.

 
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(ii)                                A portion of Executive’s Bonus (the
“Company-Wide Performance Bonus Portion”) for each calendar year during the
Employment Term, beginning with 2011, will be based upon achievement of one or
more Company-wide performance goals (the “Company-Wide  Performance Goal(s)”)
established in good faith by the Compensation Committee for such calendar year
pursuant to, and determined in accordance with, the Company’s Senior Executive
Short-Term Incentive Plan, as the same may be amended from time to time
(together with any successor plan, the “Senior Executive STIP”); provided,
however, that for the partial calendar year in 2017, the applicable performance
goal(s) shall be adjusted to reflect budgeted Company performance for the
shortened performance period and the performance period shall end coincident
with the end of the original Term.  The Company-Wide Performance Goal(s) shall
satisfy the following requirements (the “Incentive Goal Parameters”):
 
 

a.             The Company-Wide Performance Goal(s) will be the same as the
performance goal(s) used to determine the amount of bonus payable to any other
executive of the Company who participates in the Senior Executive STIP and who
has Company-wide responsibilities;
 
 

b.            The Company-Wide Performance Goal(s) will be challenging, but
reasonably achievable; and
 
 

c.             For each calendar year, the level of difficulty in achieving the
Company-Wide Performance Goal(s) for that calendar year will not be
significantly more difficult (as determined at the time such Company-Wide
Performance Goal(s) are established, taking into account all relevant facts and
circumstances, including the Company’s relative financial and stock performance,
general market conditions and market conditions affecting diversified media and
entertainment companies) than was the level of difficulty of achieving the
Company-Wide Performance Goal(s) applicable to the immediately preceding
calendar year.  For avoidance of doubt, the fact that the target with respect to
Company-Wide Performance Goal(s) increases from one year to the following year
shall not be presumed, in and of itself, to mean that such Company-Wide
Performance Goal(s) for the calendar year are significantly more difficult to
attain than the Company-Wide Performance Goal(s) for the immediately preceding
calendar year.
 
 

Executive shall have meaningful input with the Compensation Committee prior to
the determination of the Company-Wide Performance Goal(s) for each calendar
year, but the Compensation Committee will have final power and authority
concerning the establishment of such goal(s).
 
(iii)                             With respect to the Company-Wide Performance
Bonus Portion:
 
 

 
·                If the Company achieves less than 80% of the Company-Wide
Performance Goal(s) for the calendar year (or portion thereof), Executive shall
not have a right to payment of any Additional Bonus with respect to the
Company-Wide Performance Bonus Portion;

 
 

 
·                If the Company achieves 80% of the Company-Wide Performance
Goal(s) for the calendar year (or portion thereof), the Company-Wide Performance
Bonus Portion shall be an amount in U.S. Dollars of no less than the product of
(i) 0.8 multiplied by (ii) the product of 0.85 multiplied by the Additional
Target Bonus;

 
 

 
·                If the Company achieves 100% of the Company-Wide Performance
Goal(s) for the calendar year (or portion thereof), the Company-Wide Performance
Bonus Portion shall be an amount in U.S. Dollars of no less than the product of
(i) 1.0 multiplied by (ii) the product of 0.85 multiplied by the Additional
Target Bonus; and

 
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·                If the Company achieves 120% or more of the Company-Wide
Performance Goal(s) for the calendar year (or portion thereof), the Company-Wide
Performance Bonus Portion shall be an amount in U.S. Dollars of no less than the
product of (i) 1.2 multiplied by (ii) the product of .85 multiplied by the
Target Bonus;

 
 

 
·                For achievement at an intermediate point between 80% and 100%,
and between 100% and 120%, the Company-Wide Performance Bonus Portion will be
interpolated on a straight-line basis between the respective Company-Wide
Performance Bonus Portion delivered at such percentages.

 
 

Notwithstanding anything herein to the contrary, the Compensation Committee
shall not be precluded from authorizing the payment to Executive of an
Additional Bonus which exceeds the Company-Wide Performance Bonus Portion
determined under the above schedule, including, without limitation, based on the
terms and conditions of the Senior Executive STIP.
 
(iv)                            In addition to the Company-Wide Performance
Bonus Portion, the remainder of Executive’s Additional Bonus shall be determined
in the reasonable discretion of the Compensation Committee taking into account
all relevant factors, including individual and other performance goals.
 
 

(v)                               Executive’s Additional Bonus for the 2011
calendar year shall not be subject to any proration notwithstanding the Start
Date of this Agreement.  For the partial year 2017, Executive’s annual
Additional Target Bonus shall be prorated to reflect the shorter performance
period.
 
 

(vi)                            Executive’s Additional Bonus for any calendar
year, including a Bonus for the last partial year of the Term, shall be payable
during the period January 1st through March 31st of the following calendar
year.  For the avoidance of doubt, it is understood that Executive will receive
the Additional Bonus that is determined by the Compensation Committee for
Executive for each calendar year in which Executive was employed, even if
Executive is not employed on March 31st of the following year or on the actual
date on which bonuses are paid for such year.
 
 

(vii)                         In the event that the Senior Executive STIP is
amended or terminated, Executive will be given an opportunity under the amended
or successor plan to earn bonus compensation equivalent to the amount that
Executive could have earned under this Section 2.3(a), but subject to the same
limitations, and any such bonus and/or bonus plan shall not modify the Incentive
Goal Parameters.
 
 

2.4.                                    Long Term Compensation.  In addition to
the compensation described above in Section 2.1, 2.2 and 2.3 herein, Executive
shall receive the following grants of long-term compensation under the Company’s
2010 Long-Term Incentive Plan (together with any successor plan, the “LTIP”):
 
(a)                               Stock Option Grants.
 
(i)                                   Executive shall receive an option under
the LTIP to purchase Three Million (3,000,000) shares of the Company’s Class B
Convertible Preferred Stock, par value $0.0001 per share (the “Class B
Convertible Preferred Stock”), following the close of trading on the Over the
Counter Bulletin Board or other national exchange on the third trading day
following the Company’s public announcement of the arrangements set forth in
this Agreement (the “2010 Option Grant Date”), provided that Executive is
employed by Company on the 2010 Option Grant Date (the “2010 Option”).  The 2010
Option shall have a term of seven (7) years and shall have an exercise price
equal to the closing price of one share of Common Stock on the 2010 Option Grant
Date.  The 2010 Option shall vest in four (4) equal installments on each of the
first, second, third and fourth anniversaries of the 2010 Option Grant Date,
provided that on each respective vesting date, Executive remains employed with
the Company, and subject to acceleration and all other applicable provisions of
this Agreement. Except as otherwise provided herein, the terms and conditions
set forth in an option agreement evidencing the 2010 Option shall be no less
favorable to Executive than the terms and conditions generally applicable to
other senior executives of the Company.

 
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(ii)                                On the first anniversary of the 2010 Option
Grant Date (or if the first anniversary of the 2010 Option Grant Date is not a
trading day, on the first trading day after such first anniversary) (the “2011
Option Grant Date”), Executive shall receive an option under the LTIP to
purchase an additional Three Million (3,000,000) shares of Class B Convertible
Preferred Stock, provided that Executive are employed by the Company on the 2011
Option Grant Date (the “2011 Option”); provided, however, that the number of
shares of Class B Convertible Preferred Stock subject to the 2011 Option shall
be increased to the extent that a greater number of shares is required to
deliver an Option Grant Date Value (as hereinafter defined) that, when combined
with the Option Grant Date Value of the 2010 Option, is equal to Two Million
Dollars ($2,000,000); provided, further, that (a) in no event shall the number
of shares of Class B Convertible Preferred Stock subject to the 2011 Option
exceed Four Million (4,000,000) shares of Class B Convertible Preferred Stock,
and (b) the Compensation Committee shall retain the discretion to reduce the
number of shares of Class B Convertible Preferred Stock subject to the 2011
Option, but not below 3,000,000 shares, if the Compensation Committee determines
that the Company’s financial and stock performance during calendar year 2010 is
significantly worse than the financial and stock performance relative to its
diversified media and entertainment peer companies.  The minimum and the maximum
number of shares to be granted under the 2011 Option shall be equitably adjusted
in the case of a stock split, spin-off, etc. in accordance with the adjustment
provisions of the LTIP.  The Option Grant Date Values of the 2010 Option and
2011 Option shall be determined as of their respective grant dates.  For
purposes of this Agreement, the “Option Grant Date Value” of a stock option
shall equal the grant date fair value determined in accordance with the
Financial Accounting Standards Board’s Accounting Standards Codification (FASB
ASC) Topic 718, Compensation — Stock Compensation, employing the same
assumptions and methodologies that are applied for purposes of the Company’s
financial accounting statements.  The 2011 Option shall vest in four (4) equal
installments, with the first three installments vesting on each of the first,
second and third anniversaries of the 2011 Option Grant Date and the fourth
installment vesting on the last day of the original Term, provided that on each
respective vesting date, Executive remains employed with the Company, and
subject to acceleration and all other applicable provisions of this Agreement. 
The 2011 Option shall have a term of seven (7) years and shall have an exercise
price equal to the closing price of one share of Common Stock on the 2011 Option
Grant Date.  Except as otherwise provided herein, the terms and conditions set
forth in an option agreement evidencing the 2011 Option shall be no less
favorable to Executive than the terms and conditions generally applicable to
other senior executives of the Company.
 
 

(iii)                             During each of the calendar years 2012, 2013,
2014, 2015, 2016 and 2017, the Compensation Committee will consider granting to
Executive additional stock options  to purchase shares of the Company’s Class B
Convertible Preferred Stock under the LTIP as and when other senior members of
the Company’s management team reporting to Executive are considered for annual
equity grants by the Compensation Committee (any such discretionary option
grant, a  “Discretionary Option Grant”); provided, however, that such
consideration by the Compensation Committee does not guarantee (and should not
be construed as a guarantee) that Executive will receive a Discretionary Option
Grant in any such calendar year.  The amount of any such grant(s) will be
determined by the Compensation Committee, in its sole and reasonable discretion,
with the objective and intent of creating shareholder value by maintaining the
long-term incentive for Executive with regard to Executive’s existing and future
equity holdings and equity-based awards that is consistent with the projected
level of incentive and value for Executive from such equity holdings and
equity-based awards that the Compensation Committee (with input from its
independent compensation consultant) originally intended to establish,
throughout the Term. The Compensation Committee, when considering whether it
believes any such Discretionary Option Grant may be appropriate, will take into
account the Company’s financial and stock performance relative to its
diversified media and entertainment peer companies, and, in particular whether
the Company’s financial and stock performance is due, at least in part, to
operating factors that have generally affected companies in the industry in a
similar fashion.  Any Discretionary Option Grant shall be subject to the terms
and conditions set forth in the agreement evidencing such grant, which, except
as otherwise provided herein, shall be no less favorable to Executive than the
terms and conditions generally applicable to other senior executives of the
Company, provided that any such Discretionary Option Grant will provide for
vesting in full not later than the last day of the Original Employment Term
(provided Executive remain employed on such date), and subject to acceleration
and all other applicable provisions of this Agreement.

 
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(b)                              Restricted Stock Units.
 
(i)                                   Beginning with the date of execution of
this Agreement by both parties and automatically on each of the first, second,
third, fourth, fifth, sixth and seventh anniversaries thereafter during the Term
(each an “RSU Grant Date”), Executive shall receive an award of restricted stock
units (the “RSUs”) under the LTIP, provided that Executive is employed by the
Company on the applicable RSU Grant Date.  One-half of the RSUs underlying each
grant shall be subject to performance- and time-based vesting conditions
(“PRSUs”), and the other half shall be subject only to time-based vesting
conditions (the “TRSUs”), in each case determined as of the RSU Grant Date.  The
initial grant of RSUs shall have a grant date value equal to One Million Dollars
($1,000,000), and each subsequent RSU grant thereafter shall have a grant date
value that is Five Hundred Thousand Dollars ($500,000) more than the grant date
value of the preceding grant (each, an “RSU Grant Date Value”).  The number of
RSUs granted on any RSU Grant Date (rounded down to a whole unit for any
fractional unit) shall be determined by dividing the RSU Grant Date Value by the
closing price of one share of Common Stock on the RSU Grant Date.  The number of
PRSUs granted on each RSU Grant Date shall be referred to herein as the “Target
PRSU Award.”  Each RSU shall correspond to one share of Common Stock.
 
 

(ii)                                TRSUs granted pursuant to Section
2.4(b)(i) shall vest in three (3) equal installments on each of the first,
second and third anniversaries of the applicable RSU Grant Date (or, if earlier,
on the last day of the Original Employment Term), provided that Executive is
employed on each such vesting date and subject to acceleration and all other
applicable provisions of this Agreement.
 
 

(iii)                             The Compensation Committee shall establish a
performance goal requirement with respect to each grant of PRSUs made pursuant
to Section 2.4(b)(i), which requirement shall be consistent with the Incentive
Goal Parameters described in paragraphs 3(b)(ii)b and 3(b)(ii)c, that shall
apply in respect of a performance period that shall end no later than
December 31st of the calendar year during which the RSU Grant Date occurs.  The
performance goal established by the Compensation Committee for each grant of
PRSUs shall be based on a level of achievement against the Company’s budgeted
Free Cash Flow (as defined in the LTIP), as approved by the Board for each
relevant calendar year, provided that such goal shall be adjusted for any
performance period that is less than a full calendar year to reflect budgeted
Company performance for the shortened performance period.  Executive shall have
meaningful input with the Compensation Committee prior to the determination of
the performance goal relating to the PRSUs for each performance period, but the
Compensation Committee will have final power and authority concerning the
establishment of such goal; provided, however, that if the Compensation
Committee establishes a performance goal for PRSUs granted to other senior
executives of the Company, which is based on the Company’s budgeted Free Cash
Flow, the same performance goal shall be applicable to Executive’s PRSU grant
for such calendar year.
 
(iv)                            As of the last day of each performance period,
the Company’s actual Free Cash Flow shall be measured against the performance
goal established for such performance period, after taking into account any
permissible adjustments to such goal, and the degree of achievement (expressed
as a percentage) will be used to calculate the number of shares that Executive
will receive, in accordance with the following schedule:
 
 

 
·                If the Company achieves less than 80% of the performance goal
for the performance period, the Target PRSU Award will be forfeited;

 
 

 
·                If the Company achieves 80% of the performance goal for the
performance period, the number of shares to be delivered under the award will be
80% of the Target PRSU Award;

 
 

 
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·                If the Company achieves 100% of the performance goal for the
performance period, the number of shares to be delivered under the award will be
100% of the Target PRSU Award; and

 
 

 
·                If the Company achieves 120% or more of the performance goal
for the performance period, the number of shares to be delivered under the award
will be 120% of the Target PRSU Award.

 
 

For achievement at an intermediate point between 80% and 100%, and between 100%
and 120%, the number of shares of Common Stock to be delivered will be
interpolated on a straight-line basis between the respective numbers of shares
to be delivered at such percentages.  Fractional shares will be aggregated and
rounded to the next higher whole share.
 
(v)                               The number of PRSUs, determined pursuant to
clause (iv) above, shall vest on the later of (A) the first anniversary of the
RSU Grant Date (or, in the case of the 2017 grant of PRSUs, on the last day of
the original Term) or (B) the date the Compensation Committee certifies that at
least minimum threshold performance has been achieved for the relevant calendar
year, which certification shall take place no later than seventy-four (74) days
following the end of the relevant calendar year (the “PRSU Vest Date”), provided
that Executive is employed on the applicable PRSU Vest Date (other than with
respect to a certification by the Compensation Committee after the original
Term, in which case Executive is not required to be employed) and subject to
acceleration and all other applicable provisions of this Agreement.
 
 

(vi)                          RSUs (both PRSUs and TRSUs) shall be payable only
in shares of Common Stock.  The PRSUs and the TRSUs shall also accrue dividend
equivalents in accordance with the LTIP, provided that in the case of PRSUs,
dividend equivalents shall be accrued and paid only with respect to the Target
PRSU Award, unless actual performance results in payment of a lesser number of
shares of Common Stock than under the Target PRSU Award, in which case dividend
equivalents shall be paid only with respect to such lesser number.  Subject to
the terms and conditions set forth in this Section 4(b) or as otherwise provided
herein, the RSUs shall be subject to the terms and conditions set forth in the
agreement evidencing the grant of such RSUs.
 
 

(vii)                      Prior to the end of each calendar year during the
Term, Executive will have an option to defer the settlement of the RSUs that
will be awarded during the following year.  Executive may elect to defer the
settlement of such RSUs as follows: for up to ten (10) years after the RSUs vest
for in-service distributions, and for up to three (3) years after Executive’s
Separation from Service with the Company for post-termination distributions.  If
a timely election to defer is not made for any RSUs, shares delivered in
settlement of TRSUs shall be delivered within ten (10) business days following
the applicable vesting date, and shares delivered in settlement of PRSUs shall
be delivered during the period January 1st through March 31st of the calendar
year after the calendar year in which they are granted promptly following the
PRSU Vest Date.  Notwithstanding any of the foregoing, to the extent required to
comply with Section 409A (as defined in Section 10), the settlement of each
deferred RSU will be deferred to the date determined in accordance with Section
10(d)(v) if such date is later than the date on which settlement would otherwise
occur.
 
 

In the event of a conflict between the terms and conditions set forth in this
Section 2.4 and the terms and conditions set forth in an agreement(s) or
plan(s) evidencing the grant of the awards contemplated by paragraphs 2.4(a) and
(b), the terms of this Agreement shall control.

2.4           Additional Performance Bonus.  Executive shall receive an
additional performance bonus equal to five percent (5%) of the total investment
value raised by Company, to be paid upon closing directly with the investment
source, and/or from any escrow established for the transaction, where
applicable.

Any compensation due Executive from the bonuses referred to in Sections 2.2, 2.3
and 2.4 shall not be calculated as part of Executive’s base Salary.  All monies
and stock to be received in accordance with Sections 2.2, 2.3 and 2.4 shall be
included in all contracts with distributors, financiers and all other related
parties where applicable.

 
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2.5           Profit Sharing.  Executive shall receive ten percent (10%) of all
net profits before tax (as defined by the Company auditors) generated by the
Company on an annual basis. Executive shall also receive five percent (5%) of
all gross profits on each film produced during the Term.  Any profit sharing due
to Executive shall be paid to him at the same time and in the same manner as all
other profit sharing points are paid to any other profit participant on a film.

2.6           Stock Options.  Concurrent with the execution of this Agreement,
and in consideration for the execution thereof, Executive and the Company shall
develop, implement and enter into a 2010, 2011, 2012, 2013, 2014, 2015, 2016 and
2017 Stock Issuance and Option Plan and Agreement, which represents a material
inducement to Executive’s willingness to enter into this Agreement. The Company
shall grant to Executive an option to purchase shares of the Company’s Common
Stock equal to ten percent (10%) of the outstanding shares of the Company on an
annualized basis.  Said options will vest equally by quarter over a period of
four quarters during each year of the Term. All options granted prior to the
Term are fully vested. Options shall be cashless, with all grants and benefits
as established in the Company’s stock option plan(s), including, but not limited
to, piggyback registration rights. Option shall be priced based on the average
bid price of the shares for the three month period immediately preceding the
effective date of this Agreement.

2.7           Purchase of Preferred Stock.  Executive shall be entitled to
purchase One Million (1,000,000) shares of the Company’s Class A Preferred Stock
at $.0001 per share and One Million (1,000,000) shares of the Company’s Class B
Preferred Stock at $.0001 per share subsequent to the Effective Date. The Class
A Preferred shares shall be convertible to the Company’s Common Stock on a two
for one basis; the Class B Preferred shares shall be convertible to the
Company’s Common Stock on a ten for one basis; and all preferred shares shall
contain all customary right, title and privileges, including, but not limited
to, piggyback registration rights. The stock will be duly authorized, fully
paid, and non-assessable.

2.8           Purchase of Warrants. Executive shall be entitled to an additional
ten million (10,000,000) Warrants priced at ten per cent (10%) above the average
bid trading price of the shares for the three month period immediately preceding
the effective date of this Agreement. The Warrants shall expire 120 months
following their date of issue. The Warrants will also contain other customary
terms and conditions, including registration of the underlying common shares.
All Warrants issued will be done so on a fully diluted basis, if applicable, all
of which will be duly authorized, fully paid and non-assessable. The Warrants
will also contain other customary terms and conditions, including piggyback
registration rights. The Warrants and the pricing connected therewith shall not
be affected by any restructuring of the stock, including forward and/or reverse
stock splits.
 
 
2.9           Benefits.  Executive shall be entitled to certain benefits
outlined below:

2.9.1  Health Insurance. Executive and Executive’s immediate family shall be
entitled to participate in such medical, dental, eye and life insurance, long
term care, 401(k), pension and other plans as the Company may have or establish
from time to time and in which any other Company senior executives are eligible
to participate. All insurance costs shall be borne by the Company, including all
deductibles.

2.9.2           Vacation. During Executive’s first year of employment, Executive
shall be entitled to four weeks of paid vacation. Executive shall be entitled to
accrue vacation (beginning with any vacation after January 1, 2010) and/or be
paid therefore in accordance with the Company's policies with respect thereto
applicable to the Company’s general employees. In each subsequent year during
the Term, Executive shall be entitled to one (1) additional week of vacation. As
a result, beginning with Executive’s second year of employment, Executive shall
be entitled to five weeks of paid vacation.

2.9.3           Executive Transportation.  Executive shall be entitled to an
automobile of Executive’s choice, as well as reimbursement of all expenses
incurred in connection with said automobile, including, without limitation,
lease or purchase payments (which at Executive’s election shall be made directly
by the Company), taxes, fees, registration, insurance, gas, car phone,
maintenance and repairs. The aggregate amount of the automobile lease or
purchase payments hereunder shall not exceed $48,000 in any year of the Term.
Executive shall retain title to such automobile upon expiration or earlier
termination of the Term. Executive shall also be entitled to first-class air
travel for all trips (domestic and foreign) made by Executive in connection with
Executive’s services to Company. The Company shall provide Executive with a car
and driver to transport Executive to any of the Company’s offices outside of
Orange County, California, including, but not limited to, the Company’s offices
in Universal City, California. In the event Executive elects to travel by other
transport, including travel by train, Executive shall also be entitled to
first-class train travel for all trips (domestic and foreign) made by Executive
in connection with Executive’s services to Company.

 
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2.9.4           Directors and Officers Liability Insurance. Executive shall be
entitled to the protection of any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers against all
costs, charges and expenses whatsoever incurred or sustained by Executive or his
legal representatives in connection with any action, suit or proceeding to which
Executive (or his legal representatives or other successors) may be made a party
by reason of Executive being or having been a director or officer of the
Company, or Executive serving or having served any other enterprises as a
director, officer or employee at the request of the Company. The Company shall
provide and maintain at all times during the Term and for a period of six years
thereafter such directors and officers insurance policy covering Executive and
his legal representatives, issued by a reputable and financially-sound insurance
carrier of national standing which is acceptable to Executive, and providing
coverage in the amount of at least $3,000,000.

2.9.5           Life Insurance Policy. The Company shall provide Executive with
a whole-life insurance policy (from a reputable and financially-sound insurance
carrier of national standing, acceptable to Executive) for his benefit in the
amount of not less than $10,000,000. The Company agrees to make all premium
payments under said life insurance policy; provided, however, that Executive
reserves the right (either before or after the Company obtains said life
insurance policy) to require the Company to pay directly to Executive the
premiums for such policy (and to assign the policy to Executive if Company has
already obtained such policy) so that Executive owns the policy and Executive
makes the premium payments. Executive shall be entitled to name the beneficiary
or beneficiaries of such policy and, upon expiration (or earlier termination) of
the Term, Executive shall have the right to require the Company to assign any
rights it may have in such policy to Executive. Executive agrees that the
Company may secure additional insurance on Executive’s life for the benefit of
the Company.

2.9.6           Disability Insurance. In addition to any disability benefits or
insurance coverage provided to Executive through any group disability plan of
Company, as well as in addition to any social security or workers’ compensation
benefits provided to Executive, Company shall provide Executive with disability
insurance with one or more substantial carriers providing the maximum amount of
disability benefits to Executive that are available under a disability policy
with an annual premium not to exceed $150,000. Company shall pay said annual
premium directly to the insurance company; provided, however, that Executive
reserves the right (either before or after Company obtains such disability
insurance policy) to require Company to pay directly to Executive the premiums
for such policy (and to assign the policy to Executive if Company has already
obtained such policy) so that Executive owns the policy and Executive makes the
premium payments. Executive may supplement or increase such insurance coverage
by paying additional premiums in excess of said $150,000 maximum annual premium
to be paid by Company. Upon expiration (or earlier termination) of the Term,
Executive shall have the right to require Company to assign any rights it may
have in such disability insurance policy to Executive.

2.9.7  Personal Guarantees. In the event Executive is required to provide a
Personal Guarantee in connection with any business and/or financial transaction
of the Company, Executive shall receive in cash and/or stock at the sole option
of the Executive an amount equal to One Hundred and Twenty Per Cent (120%) of
the Personal Guarantee provided.

2.9.8 Funding. In the event Executive is required to provide funding to the
Company, which shall include expenses incurred or paid on behalf of Company, in
addition to the agreement between the Company and The Atwell Group and its
affiliated companies whereby the Atwell Group receives twenty per cent (20%) of
the Common Stock on a non-dilutive basis for providing Company with funding,
Executive shall be reimbursed as soon as possible for all funding, including
interest on funding provided calculated at eight per cent (8%),  provided either
in cash and/or stock at the sole option of Executive.

 
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2.9.9 Phones. Executive shall be entitled to have all phone expenses reimbursed
and/or provided by the Company, including, but not limited to, cell phones,
satellite phones and land lines utilized by Executive in carrying out his duties
in connection herewith.

2.9.10 House Allowance. Executive shall be entitled to a House of Executive’s
choice (“House” or “Home”), as well as reimbursement of all expenses incurred in
connection with said Home, including, without limitation, lease or purchase
payments (which at Executive’s election shall be made directly by the Company),
taxes, fees, insurance, utilities, maintenance, moving costs, installations and
repairs. The aggregate amount of the House lease or purchase payments hereunder
shall not exceed $120,000 in any year of the Term. Executive shall retain title
to such Home upon expiration or earlier termination of the Term. In the event
Company elects to purchase a Home on behalf of the Executive, Company shall be
entitled to receive fifty per cent (50%) of any profits generated by the sale of
the Home should Executive decide to sell the Home. Notwithstanding the
foregoing, Executive shall have the option to buy back this interest from the
Company by paying the Company an amount equal to one hundred and ten per cent
(110%) of the profits that would have been generated by the sale of the home
based upon an appraised market value of the Home at the time Executive exercises
this option.

2.9.11 Monies Received by Company. Executive shall receive two per cent (2%) of
all Monies generated by the Company. For the purpose of this Section 2.9.10,
Monies shall be defined as all Monies received by Company and deposited in the
Company bank accounts from any source whatsoever. Payments under this Section
2.9.10 shall be made no later than monthly during the Term.

2.9.12 Taxes. The Company shall pay all federal, state and local taxes of any
type incurred by Executive during the Term, including taxes incurred during
fiscal year 2009.

2.9.13 Estate Planning. The Company shall reimburse Executive for all Estate
Planning expenses incurred by Executive during the Term at an annual cost to the
Company not to exceed $25,000 per annum, rising 10% per annum during the Term.

2.9.14 Wardrobe Allowance.  Executive shall be entitled to a wardrobe expense at
a monthly cost to the Company not to exceed $10,000 per month, rising 10% per
annum during the Term.

2.9.15 Excise Taxes.  Notwithstanding anything herein to the contrary, in the
event that it is determined by the Company, or by the Internal Revenue Service
(the “IRS”) pursuant to an IRS audit (an “Audit”) of Executive’s federal income
tax return(s), that any payment or benefit provided to Executive hereunder or
otherwise, would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties with respect to such excise tax (such excise
tax, together with any interest or penalties thereon, is herein referred to as
the “Excise Tax”), then the Company shall pay (either directly to the IRS as tax
withholdings or to Executive as a reimbursement of any amount of taxes, interest
and penalties paid by Executive to the IRS) both the Excise Tax and an
additional cash payment (a “Tax Neutralization Payment”) in an amount that will
place Executive in the same after-tax economic position that Executive would
have enjoyed if the payment or benefit had not been subject to the Excise Tax. 
The Company will consult with its outside tax counsel at its expense, to the
extent it reasonably deems appropriate, in making determinations pursuant to the
preceding sentence.  The amount of the Tax Neutralization Payment shall be
calculated by the Company’s regular independent auditors based on the amount of
the Excise Tax paid by the Company as determined by the Company or the IRS.  If
the amount of the Excise Tax determined by the IRS is greater than an amount
previously determined by the Company, the Company’s auditors shall recalculate
the amount of the Tax Neutralization Payment.  The Company’s auditors shall
provide Executive with detailed support for its calculations.  The Company shall
be responsible for the fees and expenses incurred by its auditors in making
these calculations.  Executive shall promptly notify the Company of any IRS
assertion during an Audit that an Excise Tax is due with respect to any payment
or benefit, but Executive shall be under no obligation to defend against such
claim by the IRS unless the Company requests, in writing, that Executive
undertake the defense of such IRS claim on behalf of the Company and at the
Company’s sole expense.  In such event, the Company may elect to control the
conduct to a final determination through counsel of its own choosing and at its
sole expense, of any audit, administrative or judicial proceeding involving an
asserted liability relating to the Excise Tax, and Executive shall not settle,
compromise or concede such asserted Excise Tax and shall cooperate with the
Company in each phase of any contest.

 
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2.9.16 Education. The Company shall provide the Executive with the opportunity
to continue his education at a college and/or university as chosen by the
Executive. The Company shall pay all expenses related to this Section 2.9.15,
including tuition, books, tutor expenses, travel and all other related expenses.

2.9.17 Retirement Benefits. Executive shall be entitled to participate in such
401(k), pension and other plans as the Company may have or establish from time
to time and in which any other Company executives are eligible to participate.

2.9.18 IPO or Secondary Offerings. In the event the Company undertakes and
completes a public offering of its debt and/or equity securities, Executive
shall be entitled to receive three per cent (3%) of all monies raised by the
Company through such offering. This entitlement shall be in addition to all
other awards, bonuses, consideration, entitlements, overrides, receipt and/or
revenue sharing due Executive in accordance with this Agreement.

2.9.19 Screening Equipment. The Company shall pay or reimburse Executive
(promptly following Executive’s submission of reasonably documented expenses)
for the cost of constructing a dedicated work area in Executive’s home for
Executive to be able to screen and evaluate television and film programming
material and perform other work activities, subject to a maximum contribution of
Three Hundred Thousand Dollars ($300,000).  Additionally, Company agrees to
equip such work area to Executive’s specifications, provided that the equipment
to be supplied by Company shall have a maximum value equal to Four Hundred
Thousand Dollars ($400,000).  Given the expected depreciation and the associated
cost of removal, Executive shall be entitled to keep any such equipment
following the end of the Employment Term.

2.9.20           Miscellaneous Benefits. In addition to the foregoing, Executive
shall receive additional benefits as specified in this Section 2.9.6, and such
benefits as he now enjoys. During the Term, said benefits shall include without
limitation (a) memberships (including initiation fees, annual dues and other
recurring expenses) for fraternal and business organizations, country clubs, and
any other clubs in an amount not to exceed $100,000 per year during the Term,
including, but not limited to, Scholarship Club level membership or above at the
University of Southern California (b) reimbursement of Executive’s personal
legal and accounting expenses, directly related to his duties as President and
Chief Executive Officer and upon approval of the Board of Directors, in an
amount not to exceed $100,000 per year, (c) customary health, medical, eye,
preventive, elective and dental insurance for Executive, (d) first quality
desktop and laptop computers containing maximum speed, memory and hard drive
space currently available with standard company programs, including, but not
limited to “Microsoft Office Professional 2010” or higher, “the Company
Systems”, “Final Draft”, IMDB Professional, Quick Books Professional, “Final Cut
Professional”, “Avid Professional” and “Movie Magic Budgeting and Scheduling”;
(e) a fully equipped office in Irvine, California, including the cost of phones,
parking and a minimum of one executive secretary; (f) a fully equipped office at
Executive’s home in Laguna Niguel, California, including the cost of phones,
parking and a minimum of one executive secretary (g) first class travel,
lodging, hospitality booth and/or suite, ground transportation, meal and
entertainment allowance and all other related expenses for Executive and one (1)
guest to the Cannes Film Festival, Sundance Film Festival, American Film Market,
Berlin Film Festival, Toronto Film Festival, Dubai Film Festival and one other
additional film festival per year during the Term, in addition to CES, NATPE,
Show West and NAB in Las Vegas and other locations; and (h) a fully furnished
Company apartment within ten miles of any Los Angeles office established by the
Company at a monthly cost to the Company not to exceed $5,000 per month, rising
10% per annum during the Term.

2.9.21           Board Compensation. Executive, should he be elected by the
Stockholders to the Board of Directors, shall receive compensation on the same
basis paid to all other members of the Board, in accordance with the Company's
policies with respect thereto.

2.9.22           Auxiliary Staff.  The Company shall provide Executive with the
necessary funding for consultants to work in connection with Executive at a rate
commiserate with film and television industry standards. The Company and
Executive shall mutually approve the exact terms and conditions of the
Consultant’s contracts.

2.9.23           Credits. Executive shall receive an on-screen Main Title credit
as either “Executive Producer” or “Producer” on any motion picture, television,
DVD, Internet, Mobile or New Media project associated with the Company.
Executive shall determine which credit to accept on each picture and/or product
at his sole discretion. All credits to be received in accordance with this
Section 2.9.9 shall be included in all contracts with distributors, financiers
and all other related parties as applicable and shall appear on screen and in
all paid ads respective to each picture, subject only to customary exhibitor
restrictions. Executive and Company shall approve the exact type, size and style
of the credit.

 
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2.9.24           Loan Out. After January 1, 2010, Executive shall have the right
to accept outside employment as a film director. However, said acceptance will
be only upon the prior approval of the Board of Directors, whose approval shall
not be unreasonably withheld, but with the understanding that the Executive’s
availability shall not be in conflict with Executive’s on-going responsibilities
with Company.  In the event Executive accepts such employment, the Company will
collect a fee equal to fifteen (15%) per cent of the gross monies paid Executive
as a result of the outside employment as consideration for “loaning out”
Executive for the purpose stated herein. Should this Agreement be in default but
not yet terminated, Company shall not be entitled to any fee until such time as
this Agreement is no longer in default.

In addition, after January 1, 2010, Executive shall have the right, at
Executive’s sole discretion, to appoint a loan-out entity to receive any fees
from any and all sources of income due Executive, whether they are fees,
bonuses, stock options, warrants, profit sharing agreements, loan-out fees for
services or any other royalties, service fees, or any other sources of income
provided for herein.

2.9.25           General. Executive shall be entitled to participate in any
pension, health, sick leave, holidays, personal days, insurance or other plans,
benefits or policies (not duplicative of the benefits provided hereunder)
available to the employees of Company on the terms generally applicable to such
employees.

2.9.26 Deferred Compensation.  In addition to Executive’s Base Salary, Executive
shall earn, with respect to each payroll period during his employment with the
Company, additional amounts (“Deferred Compensation”), the payment of which
(together with the return thereon as provided in this Section 2.9.26), shall be
deferred until January of the second calendar year following the year in which
Deferred Compensation was earned and payable at that time or at such later date
as shall be determined pursuant to the  terms and conditions of this Agreement.
The Deferred Compensation shall be based on an annualized rate equal to one
hundred and twenty per cent (120%) of the Base Salary for the year the Deferred
Compensation is earned.  Deferred Compensation shall be credited to a
bookkeeping account maintained by the Company on the Executive’s behalf, the
balance of which account shall periodically be credited (or debited) with deemed
positive (or negative) return calculated in the same manner, and at the same
times, as the deemed return on Executive’s account under the Company’s Excess
401(k) Plan for Designated Senior Executives (as such plan may be amended from
time to time, the “Excess 401(k) Plan”) is determined (it being understood and
agreed that, if at any time during which the Deferred Compensation remains
payable, the Executive’s account balance in the Excess 401(k) Plan is
distributed in full to the Executive, the Executive’s  Deferred Compensation
account shall continue to be credited or debited with a deemed return based on
the investment portfolio in which the Executive’s Excess 401(k) Plan account was
notionally invested immediately prior to its distribution).  The Company’s
obligation to pay the Deferred Compensation (including the return thereon
provided for in this Section 2.9.25 shall be an unfunded obligation to be
satisfied from the general funds of the Company.

2.9.27           No Reduction of Payment or Benefit. No payment or benefit made
or provided under this Agreement shall be deemed to constitute payment to
Executive or his legal representative in lieu of, or in reduction of, any
payment or benefit under an insurance, pension or other benefit plan; and no
payment under any such plan shall reduce any payment or benefit due under this
Agreement except as set forth in Sections 2.9.5 and 3.2.3.

                                                                            2.9.28
Competitive Assessment.  Notwithstanding the foregoing Section 2.1, 2.2, 2.3,
2.4, 2.5, 2.6, 2.7, 2.8 and 2.9, if, in connection with the annual review of all
compensation and consideration contained therein, it is determined that
Executive’s annualized target compensation package (consisting of Base Salary,
Target Bonus, Additional Bonuses and target long-term incentives, without regard
to any deferrals) is, in the aggregate, less than that of other chief executive
officer(s) of comparably-sized diversified media and entertainment companies (to
be determined by the Compensation Committee with input from its independent
compensation consultant), the Compensation Committee will consider an increase
to Executive’s annual target compensation package, taking into account the
financial and stock performance of the Company relative to other diversified
media and entertainment peer companies and, in particular, to the
comparably-sized diversified media and entertainment companies that have chief
executive officers whose annualized target compensation exceeds Executive’s.

 
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2.10           Expenses.  Company shall reimburse executive for all reasonable
and customary expenses incurred by him in the furtherance of the business of
Company, in accordance with the then-existing reimbursement policies of Company,
as they may be amended from time to time.  Executive shall keep complete and
accurate records, including but not limited to, proof of payment of all
expenditures. The determination of the adequacy of the accounting of the
foregoing expenses shall be within the reasonable discretion of the Company’s
independent certified accountants taking into consideration the substantiation
requirements of the Internal Revenue Code of 1986, as amended.  Executive shall
be entitled to cash reimbursement for all authorized expenses such as long
distance travel/per diem/meals, executive entertainment, local and long distance
phone use, postage, courier service, computer service, and local travel, office
supplies and special labor (i.e., typing charges).

ARTICLE 3
TERMINATION AND TERMINATION PAYMENTS

3.1           Termination.  Executive’s employment with the Company may be
terminated under the following conditions:

3.1.1           Death.  Executive’s employment with the Company shall terminate
effective upon the date of Executive’s death.

3.1.2           Disability.  The Company may terminate the Executive’s
employment for “Complete Disability” by giving the Executive thirty (30) days
advanced notice in writing. For purposes of this Agreement, the term “Complete
Disability” shall mean: (a) Executive shall have been adjudged incompetent by a
court having jurisdiction over the matter; (b) Executive shall have become
physically or mentally incapable of performing, with or without reasonable
accommodation, the essential functions of his job for a period of more than one
hundred eighty (180) days, in the opinion of a licensed medical doctor selected
jointly by the Executive and Company; or  (c) Executive shall have been
certified as permanently disabled under the provisions of the Social Security
Act, as amended from time to time.

3.1.3           Termination by Company.  Company may terminate Executive’s
employment under this Agreement at any time for Cause upon 30 days written
notice (hereinafter “Notice of Termination”). For all purposes under this
Agreement, “Cause” shall mean: (a) conviction of a felony by a court of
competent jurisdiction which would preclude Executive from carrying out his
duties hereunder; (b) material breach of any provision of this Agreement; (c)
breach of Executive’s fiduciary duties of loyalty and care to Company; and (d)
an act by Executive which constitutes gross misconduct. Notwithstanding the
foregoing, Executive shall not be terminated for Cause unless and until the
Executive has received notice of the proposed termination for Cause, which
states with reasonable detail the bases for the termination, and Executive has
had the opportunity to be heard before at least a majority of the Board and the
Executive has been given a minimum period of 30 days to cure the cause for
termination, if such cause is capable of being cured. Executive shall have the
right to be represented by counsel at any such hearing before the Board
regarding his termination.  In the event Company terminates Executive for Cause,
Executive shall only be entitled to the compensation under Section 3.2.1(a), (b)
(c) and (d).

3.1.4           Termination by Company Without Cause. Following the expiration
of the Term, the Company may terminate Executive without Cause upon issuing
Executive a Notice of Termination.  In the event such termination is effected,
Executive shall be entitled to all payments detailed in Section 3.2.1
below.  Company may also terminate Executive without Cause prior to the
expiration of the Term.  In such an event, Executive shall also be entitled to
all compensation listed under Section 3.2.1 below.

3.1.5           Termination by Executive.  Executive shall be entitled to
terminate his employment for good reason. For purposes of this Agreement, “Good
Reason” shall mean the commission or omission of any of the following actions:

 
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(a) Failure of Company to comply with or perform a material term, condition or
covenant of, or other material breach by Company, or default by the Company
under this Agreement or any other transaction document.

(b) Assignment of Executive to duties inconsistent in any material respect with
his status set forth in Sections 1.1 and 1.5 hereof.

(c) Reduction by Company in the base Salary set forth in Section 2.1, or a
reduction in the Bonus set forth in Section 2.2.

(d) Failure of Company to continue to provide Executive with benefits
substantially similar to those enjoyed by him under any of the pension,
retirement, dental, medical, health and accident plans in which Executive is
presently entitled to participate (provided that the failure to provide any such
benefits which individually and in the aggregate are immaterial shall not
constitute Good Reason), or the taking of any action by the Company that would,
directly or indirectly, materially reduce any of such benefits or deprive
Executive of any benefit presently enjoyed by Executive immediately prior to the
Effective Date or to which Executive is entitled at any time after the Effective
Date.

(e) Change in control of the Company, meaning (1) Executive is no longer
Chairman; (2) Executive no longer has voting control; (3) a change in control
(except changes in control effected with the express consent of Executive) of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or
not the Company is then subject to such reporting requirement, including, but
not limited to (i) a transaction or series of related transactions resulting in
a change in beneficial ownership of more than 30% of the outstanding equity
securities of the Company; (ii) or a sale of all or substantially all of the
assets of the Company. Further, any provision of this Agreement to the contrary
notwithstanding, in the event the Company experiences either a “change in
control” transaction as defined herein, including, but not limited to, a merger,
acquisition or sale of a controlling interest in the Corporation as stated
above, the terms and conditions of this Agreement shall remain in effect and in
full force, and all cash, stock, bonuses, profit sharing, options, warrants and
any other consideration due Executive for the remainder of the Term and one
additional Term thereafter shall become fully due, vested and immediately
payable and such action by the Company shall not in any way diminish, dilute,
affect or compromise Executive’s rights, including but not limited to, all
compensation as described in Sections 2 and 3 herein, and as may be further
specified in this Agreement.

(f)  Further, more specifically, in the event of a “change of control”, all
equity-based compensation held by Executive shall accelerate vesting (on the
basis that any mid-range or “target” goals rather than premium goals are deemed
to have been achieved) and remain exercisable for the remainder of the term of
the grant. All outstanding restricted stock units (whether subject to time-based
or performance-based vesting criteria) will be settled not later than the tenth
(10th) day following the date of such change of control.

                  (g) The stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.

(h) Any fundamental change to the business of Company effectuated without
Executive’s consent, so that Company is no longer principally involved in the
film and television industry.

(i)           Abandonment by the Company of the Camelot Production Model (“CPM”)
as the Company’s core business model, without the written consent of the
Executive.

Any purported termination of employment by Executive pursuant to Section 3.1.5
shall be made, in addition to any other requirements that may be set forth
herein, by giving written notice within six months of Executive receiving actual
knowledge of the action set forth above giving rise to the right to terminate
for Good Reason. The failure of Executive to give written notice within such
period shall not be construed to prevent the giving of written notice upon the
next occurrence of such action or upon the occurrence of another action set
forth in Section 3.1.5. The Company shall have 30 days after receipt of written
notice to cure the event giving rise to Executive’s right to terminate for Good
Reason (if any such cure is available), or any other cure period expressly
provided for in other Agreement between Company and Executive.  Executive’s
right to terminate his employment pursuant to this Section 3.1.5 shall not be
affected by his incapacity due to physical or mental illness.

 
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3.2           Termination Payments.

3.2.1           Termination by Company.  In the event Company terminates
Executive’s employment without Cause prior to or after the expiration of the
Term (or any subsequent extension or amendment thereof), Company shall pay
Executive or other duly authorized person, within 30 days of termination:

(a)           the base Salary and Base Bonuses due Executive through the
remainder of the Term following the month in which such termination occurs plus
an amount equal to an extension of the Term for one additional Term, but in no
event shall the payment be less than the base Salary due Executive for a period
of ten (10) years;

(b)           any pay in lieu of vacation accrued or carried forward to, but not
taken as of the date of termination;

(c)           all other amounts due and owing Executive at the time of
termination, including, but not limited to, accrued stock, option and warrant
vesting consideration, and expense reimbursements;

(d)           the benefits described in Sections 2.9 shall be extended at the
Company's sole cost through the remainder of the Term following the month in
which such termination occurs plus an amount equal to an extension of the Term
for one additional Term following the date of termination, but in no event shall
the insurance benefits be extended for a period of less than ten (10) years; and

(e)           an amount equal to the Bonus for such employment year, prorated
through the remainder of the Term following the month in which such termination
occurs plus an amount equal to an extension of the Term for one additional Term.

In the event Company terminates Executive’s employment with Cause during the
Term, Executive shall only be entitled to payments under (a), (b) (c) and (d)
above.

3.2.2           Termination Due to Death of Executive.  Upon the death of
Executive, Company shall pay to Executive’s estate (a) the base Salary that
would otherwise be payable to Executive hereunder to the end of the month in
which said death occurs and through the remainder of the Term following the
month in which said death occurs plus an amount equal to an extension of the
Term for one additional Term; (b) any Bonus, Additional Bonus and/or contingent
compensation due and earned throughout said time period; and (c) any amounts
earned pursuant to the terms of this Agreement but unpaid at the time of Death.
The payments specified in this Section 3.2.2 shall be paid as soon as
practicable, but in any event no later than 30 days after the date of death. The
payments shall be made in cash, in US Dollars and inside the United States of
America. Upon such payments, Company shall have no further liability or
obligation hereunder to the deceased Executive’s estate, his executors or
administrators, his heirs or assigns or any other person claiming under or
through him.

3.2.3 Termination Due to Disability of Executive.  Upon the termination of
Executive’s employment as a result of his disability, Executive shall be
entitled to receive through the remainder of the Term following the month in
which such termination occurs plus an an extension of the Term for one
additional Term (a) the base Salary that would otherwise be payable to Executive
hereunder to the end of the month in which such termination occurs and; (b) any
Bonus and Additional Bonuses due and earned throughout said time period; (c) any
amounts earned pursuant to the terms of this Agreement but unpaid at the time of
termination; and (d) all benefits in accordance with Section 2.9 herein. The
payments specified in this Section 3.2.3 shall be paid as soon as practicable
but in any event no later than 30 days after the date of termination. The
payments shall be made in cash in US Dollars and in the United States of
America. Whenever compensation is payable to Executive hereunder during a time
when Executive is partially or totally disabled and such disability (except for
the provisions hereof) would entitle Executive to disability income or to salary
continuation payments from Company according to the terms of any plan now or
hereafter provided by Company or according to any policy of Company in effect at
the time of such disability, the compensation payable to Executive hereunder
shall be inclusive of any such disability income or salary continuation and
shall not be in addition thereto. If disability income is payable directly to
Executive by an insurance company under an insurance policy paid for by Company,
then any such disability income paid during the 30 months following date of
termination shall be considered to be part of the payments to be made by the
Company pursuant to this Section 3.2.3, and not in addition thereto, and shall
be paid to Company, up to but not to exceed the amount of payments actually made
by Company pursuant to this Section 3.2.3. All disability income paid to
Executive by said insurance company (i) during the 30 months following date of
termination in excess of the payments actually made by Company pursuant to this
Section 3.2.3, and (ii) after 30 months following date of termination shall be
the sole property of Executive as governed by said insurance policy and shall
not be required to be paid to Company.

 
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3.2.4 Reversion of Rights Upon Termination. Upon termination of Executive with
or without cause, including, but not limited to, expiration of the Term, all
rights, including trademarks, to the name “Camelot Films” shall revert to the
Executive and all license and/or use agreements and/or permissions connected
therewith shall be terminated.

3.2.5           Continuation as Advisor/Producer;

(a)           A/P Term.  Upon the earlier of (i) the end of the Term as a result
of the termination of Executive’s employment pursuant to Section 3 hereunder, or
(ii) the expiration of the original Term (provided Executive remained employed
and are being paid on the Company’s payroll through the end of the original Term
and there has not occurred a renewal of the Term), unless Executive elect
otherwise by providing written notice to the Company, Executive’s employment
shall continue in a different capacity as a Senior Advisor/Producer (an
“Advisor/Producer”) to the Company for a period of five (5) years (the
“Advisor/Producer Period” or A/P Term”), subject to earlier termination of the
Advisor/Producer Period in accordance with this Section 3.2.5. The
Advisor/Producer Period may be terminated by (i) Executive at any time upon
fourteen (14) days’ prior written notice to the Company, (ii) The Company for
Cause, as determined in accordance with Section 3, or (iii) by the Company for
any other reason.  The termination of the Advisor/Producer Period pursuant to
clauses (i) or (ii) in the preceding sentence is hereinafter referred to as a
“Non-Qualifying Termination.”  The date on which the Advisor/Producer Period
commences is hereinafter referred to as the “Commencement Date.”
 
(b)                              Advisory Services to be Provided During
Advisor/Producer Period.  During the Advisor/Producer Period, Executive shall
provide such advisory services concerning the business, affairs and management
of the Company and its subsidiaries as may be reasonably requested by the
Chairman or the Chief Executive Officer of the Company (the “Advisory
Services”), but Executive shall not be required to devote more than five
(5) days (up to eight (8) hours per day) each month to such services which shall
be performed at a time and place mutually convenient to Executive and the
Company.  Executive may accept other employment during the Advisor/Producer
Period with any charitable, religious or entertainment industry trade, public
interest or public service organization and Executive may provide services to
third parties (including serving as a member of the board of directors of any
such party and any entity on which Executive has already been elected to serve
during the Term), provided that such services or the entity to whom Executive is
providing such services is not in competition with the Company or any of its
subsidiaries (“Permitted Services”).  Any compensation or fees earned by
Executive from Permitted Services shall not reduce the compensation payable by
the Company under this Agreement.
 
(c)                               Producer Services to be Performed during the
Advisor/Producer Period.  During the Advisor/Producer Period, Executive shall
not be required to provide any services as a Producer unless and until Executive
notifies the Company that Executive desires to provide services as a Producer
and Executive and the Company (or an appropriate subsidiary of the Company)
reach agreement on the terms of a production agreement (the “Producer
Services”).  Any such production agreement shall be negotiated in good faith,
shall contain provisions relating to television and film production, and shall
contain substantive provisions similar to comparable agreements entered into by
the Company or any of its subsidiaries with a producer during the 36-month
period commencing prior to the Start Date and shall recognize Executive’s
experience in the industry, Executive’s skills and understanding of the Company;
therefore, a production agreement shall include, without limitation, comparable
guarantees, producer fees, contingent compensation, license fees, overhead and
commitments.
 

 
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Whether or not a production agreement has been entered into, Executive
acknowledges and agrees that, during the period in which Executive serves in the
capacity as an Advisor/Producer to the Company and for a one-year period
thereafter, but in no event beyond the Advisor/Producer Period, Executive shall
be required to submit to the Company (or an appropriate subsidiary of the
Company), on an exclusive First Look (as defined herein) basis, all Projects (as
defined herein) for the Company’s consideration for potential acquisition,
development, production and/or distribution by the Company.  As used herein,
“First Look” means that a Project shall be submitted in writing solely and
exclusively to an individual specifically designated by the Company for such
purpose (Executive’s “Project Contact”) before it is submitted by Executive or
on Executive’s behalf to any other person or entity; and “Project” means any
idea, concept, story or other literary work intended by Executive or on
Executive’s  behalf for initial exploitation via any means of audio-visual
exhibition, including, without limitation, television, motion-picture or
theatrical exhibition.  The Company shall notify Executive of the name and
contact information of Executive’s Project Contact as promptly as practicable
following the Commencement Date, provided, however, that the Company shall have
the right to change Executive’s Project Contact from time to time with
reasonable prior written notice to Executive. 

The Company shall have thirty (30) days following Executive’s submission of a
Project in which to notify Executive of its acceptance or rejection of the
Project (reducible to fifteen (15) days if Executive notifies the Company at the
time of submission that such Project is a “hot property”).  In the event the
Company rejects the Project (or fails to notify Executive of its acceptance of
such Project in writing during the foregoing consideration period), Executive
shall be free to submit the Project to any other person or entity and enter into
any agreement or arrangement with respect thereto, with no further obligation to
the Company whatsoever with respect thereto (whether legal, financial or
otherwise), except as otherwise provided below, and without such submission to
another person or entity being a violation of the First Look obligation,
provided, however, that in the event of a material change in a material element
of the Project (e.g., a material change in the development and/or production
budget or a change in any key performer, producer, director or writer attached
to the Project) prior to Executive entering into an agreement or arrangement
with a third party with respect to such Project or such Project otherwise being
set up with a third party, the Company shall be entitled to an additional First
Look at the Project on the terms and conditions set forth herein and Executive
shall re-submit the Project to the Company.  

In the event the Company accepts the Project by notifying Executive in writing
during the consideration period, Executive shall negotiate exclusively and in
good faith with the Company with respect thereto for a period of thirty (30)
days (the “Negotiation Period”).  If no agreement is reached by the end of the
Negotiation Period or if the Company is otherwise unable to acquire any
necessary third party rights with respect to such Project during the Negotiation
Period, Executive may negotiate with third parties and/or enter into any
agreement with third parties with respect to the Project, but Executive may not
enter into any agreement with any third party on terms equally or less favorable
to Executive than those last offered by Executive to the Company without first
offering to the Company, by written notice specifying the name of such third
party (if Executive is not otherwise prohibited from disclosing), the same terms
and conditions of such agreement (the “Third Party Agreement”).  The Company
will have ten (10) days after the Company’s receipt of said offer to accept or
reject all of the terms and conditions of the Third Party Agreement by notifying
Executive in writing within such ten day period (with failure to so notify
Executive within such period being deemed a rejection by the Company). 
Notwithstanding anything to the contrary contained herein, the non-competition
provisions set forth herein shall not apply with respect to any agreement,
arrangement, or services provided by Executive (or any of Executive’s
affiliates) with respect to any Project which the Company has rejected or not
accepted pursuant to the foregoing.
 
(d)                             Level of Services.  Notwithstanding paragraphs
3.2.5 (a), (b) and (c), it is the intent of the parties, and the parties hereby
acknowledge, that for so long as the Advisor/Producer Period remains in effect,
the level of bona fide services reasonably anticipated to be performed by
Executive shall remain 45% or less of the average level of bona fide services
performed by Executive during the 36-month period ending on the last day of the
Term and, therefore, that Executive’s continuing to provide services as an
Advisor/Producer following the expiration of the Term shall not prevent
Executive from being considered to have incurred a Separation from Service as of
Executive’s Termination Date.
 
(e)                               Compensation and Benefits.  During the
Advisor/Producer Period Executive shall receive a salary at the rate of Four
Million Dollars ($4,000,000) per annum (the “Advisory Fees”), which, for the
avoidance of doubt, is in addition to any compensation and/or fees payable to
Executive with respect to any Producer Services.  In addition, during the
Advisor/Producer Period, subject to the provisions of the applicable plans or
programs, including provisions relating to eligibility to participate:

 
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(i)                                 All provisions of the Agreement and
consistent with the Company policies during the Advisor/Producer Period shall
continue to apply.  In the event the Company is unable to provide Executive with
the Benefits due to Executive’s ineligibility to participate in the applicable
Company plans or programs during the Advisor/Producer Period, the Company shall
obtain, during the Advisor/Producer Period, comparable coverage for Executive
and Executive’s dependants with the same contribution, if any, that would be
required if Executive were an active employee covered under the Company’s
Benefit Plans; and
 
 

(ii)                              Executive’s equity awards, including without
limitation stock options, restricted stock, restricted stock units or any other
form of equity awards Executive may have been granted prior to the date
Executive became an Advisor/Producer, to the extent not already vested or paid
out, shall continue to vest or be paid out or exercisable, as the case may be,
on their original schedule.
 
 

Additionally, during the Advisor/Producer Period, Executive shall be provided
with: (x) in either Orange County, California or Los Angeles at Executive’s
election, suitable and appropriate office facilities (at a location within such
city to be determined by the Company), (y) a personal secretary (who may be
Executive’s choice of one of Executive’s personal secretaries providing services
to Executive during the Term, to be compensated at the same compensation and
benefits cost to the Company in effect immediately prior to commencement of the
Advisor/Producer Period) and (z) use of aircraft owned or leased by the Company,
if applicable, as determined appropriate by the Company taking into account
Executive’s travel plans, number of passengers and similar considerations, for
up to a total of 100 hours per year (collectively, the “Additional Benefits”).
 
In no event shall the reimbursements or in-kind benefits to be provided by the
Company in one taxable year affect the amount of reimbursements or in-kind
benefits to be provided in any other taxable year, nor shall Executive’s right
to reimbursement or in-kind benefits be subject to liquidation or exchange for
another benefit.  In addition, in no event shall any such reimbursements be paid
later than the last day of the calendar year following the calendar year in
which the related expense was incurred.
 
(f)                                Equity Awards.  In consideration of
Executive’s covenants set forth herein and in order to retain Executive’s
exclusive services (other than in connection with Permitted Services) during the
periods described herein, the Company agrees that upon the Commencement
Date  (or if the Commencement Date is not a trading day, on the first trading
day after the Commencement Date) (the “Additional RSU Grant Date”), Executive
will automatically be granted restricted stock units having a value equal to Ten
Million Dollars ($10,000,000) (the “Additional RSUs”).  The number of Additional
RSUs granted on the Additional RSU Grant Date (rounded down to a whole unit for
any fractional unit) shall be determined by dividing the value specified in the
preceding sentence by the closing price of one share of Common Stock on the
Additional RSU Grant Date.  Each Additional RSU shall correspond to one share of
Common Stock.  The Additional RSUs shall vest in three (3) equal installments,
with the first two installments vesting on first and second anniversaries of the
Commencement Date, respectively, and the third installment vesting on the
calendar day immediately preceding the third anniversary of the Commencement
Date, subject to earlier acceleration or cancellations as provided herein.
 
(g)                              Consequences of Termination.  Subject to any
compensation and benefits to which Executive are entitled pursuant to the terms
of a production agreement with the Company:
 
(i)                                  Upon Termination, the Company shall have no
further obligations to Executive under the terms of this Agreement other than to
promptly pay and provide Executive with Accrued Advisory Compensation and
Benefits.  For purposes of this Agreement, “Accrued Advisory Compensation and
Benefits” shall consist of: (A) reimbursement of any unpaid business expenses to
which Executive are entitled to reimbursements that were incurred prior to the
effective date of the termination of the Advisor/Producer Period (such date, the
“Advisory Termination Date”), (B) Executive’s Advisory Fees through the Advisory
Termination Date, and (C) all other vested compensation and benefits to which
Executive are entitled to as of the Advisory Termination Date under the terms
and conditions applicable to such compensation and benefits.  All of Executive’s
then unvested Additional RSUs shall be cancelled upon the occurrence of a
Termination.
 
 

 
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 (ii)                              Upon a termination of the Advisor/Producer
Period due to death or disability (as determined in accordance with Executive’s
long-term disability plan coverage in effect during the Advisor/Producer
Period), (A) the Additional RSUs shall become fully vested; (B) in the case of
Executive’s termination due to disability, the provisions of this
Agreement shall continue to apply for the duration of the original
Advisor/Producer Period; and (C) Executive shall be entitled to the Accrued
Advisory Compensation and Benefits.
 
 

(iii)                          Upon a termination of the Advisor/Producer Period
for any reason other than set forth in clauses 3.2.5 (g)(i) and (ii) above,
(A) the Additional RSUs shall become fully vested; (B) the Company shall
continue to provide Executive with the Additional Compensation and Benefits, the
Advisory Fees and the Additional Benefits, in each case, for the duration of the
original Advisor/Producer Period; and (C) Executive shall be entitled to the
Accrued Advisory Compensation and Benefits.
 
 

(h)                              Exclusive Services, Etc.  The parties hereby
agree that (i) provisions of Section 3.2.5 are hereby incorporated by reference
into this Section 3.2.5 (h) and shall continue to apply during the
Advisor/Producer Period (other than with respect to any Project which the
Company has rejected or not accepted pursuant to the First Look), and any period
set forth in the provisions of Section 8 that survives any termination of
employment or the Employment Term shall survive for the same duration following
termination of the Advisor/Producer Period, and (ii) the provisions of Section
3.2.5(a), 3.2.5(b) and 3.2.5(f) that would otherwise terminate upon the
expiration of the Original Employment Term shall continue to apply following the
expiration of the Original Employment Term during the Advisor/Producer Period,
and shall remain in effect as follows: (x) with respect to Section 3.2.5 (a) and
3.2.5 (b), until the first anniversary of the termination of the
Advisor/Producer Period, unless such Advisor/Producer Period terminates as a
result of the expiration of the original Advisor/Producer Period (in which case
the provisions of Section 3.2.5 (a) and 3.2.5 (b) shall end on the last day of
the original Advisor/Producer Period), and (y) with respect to Section 3.2.5
(f), until the second anniversary of the termination of the Advisor/Producer
Period, unless such Advisor/Producer Period terminates as a result of the
expiration of the original Advisor/Producer Period (in which case the provisions
of Section 3.2.5 (f) shall end on the last day of the original Advisor/Producer
Period).
 
(i)                                  Notwithstanding anything in Section 3.2.5
(g)(iii) to the contrary, the Company’s obligation to make the payments and
provide the benefits set forth in Section 3.2.5 (g)(iii), other than the Accrued
Advisory Compensation and Benefits, shall be conditioned on Executive’s
execution of a release (the “Advisor Release”) (with all periods for revocation
set forth therein having expired) in form and substance substantially identical
to that set forth in Schedule A within 60 days following the termination of the
Advisor/Producer Period (the “Advisor Release Condition”).  The Advisor Release
shall not be effective unless and until the Company executes the Advisor
Release.  If the maximum period in which the Advisor Release may be revoked ends
in the year following the year in which the Advisor/Producer Period ends, then
the Advisor Release Condition shall be deemed not to have been satisfied until
the later of (i) the first business day in the year following the year in which
the Advisor/Producer Period ends, or (ii) the date on which the Advisor Release
Condition is satisfied (without regard to this sentence).  For the avoidance of
doubt, the execution or non-execution by the Company of the Advisor Release
shall not affect whether or not the Advisor Release Condition has been
satisfied.
 
(j)                                  Nothing in this Section 3.2.5 shall create
any rights that are duplicative with any rights set forth in any other Section
of this Agreement.

3.2.6. Section 409A.  To the extent applicable, it is intended that the
compensation arrangements under this Agreement be in full compliance with
Section 409A.  This Agreement shall be construed in a manner to give effect to
such intention.  The Company and all of its subsidiaries or affiliates are
liable for any tax, interest or penalties that may be imposed on Executive under
Section 409A.  The Company and all of its subsidiaries or affiliates has the
obligation to indemnify or otherwise hold Executive harmless from any or all
such taxes, interest or penalties, or liability for any damages related
thereto.  Notwithstanding the foregoing, Executive acknowledge that Executive
have been advised to obtain independent legal, tax or other counsel in
connection with Section 409A. Each payment under this Agreement shall be
considered a “separate payment” and not of a series of payments for purposes of
Section 409A.

 
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ARTICLE 4
CONFIDENTIAL INFORMATION

4.1           Definition.  “Confidential Information” includes, but is not
limited to, information regarding costs, profits, sales, operational methods,
materials and other information not readily available to the public.

4.2           General Restrictions on Use.  Executive acknowledges that in
rendering his services under this Agreement, he will, during the Term, come into
possession of Confidential Information of the Company.  In recognition of the
foregoing, Executive covenants and agrees that during the Term, Executive will
not disclose any Confidential Information to anyone outside the Company, except
in the course of rendering his services as an Executive of the Company without
the Company’s written consent. For purposes of this Agreement, Confidential
Information does not include information that at the time of disclosure has
previously been made generally available to the public by any means other than
the wrongful act of Executive in violation of this Section 4.2, or information
that was known to Executive prior to the signing of this Agreement. Executive
may use and disclose Confidential Information to the extent necessary to assert
any right or defend against any claim arising under this Agreement; the
Company’s Stock Option Plan and Agreement to be entered into by and among the
Company and Executive; and any other agreements entered into pursuant to or
contemplated by the foregoing. Executive may also use and disclose Confidential
Information to the extent necessary to assert any right or defend against any
claim pertaining to Confidential Information or their use, to the extent
necessary to comply with any applicable statute, constitution, treaty, rule,
regulation, ordinance or order, whether of the United States, any state thereof,
or any other jurisdiction applicable to Executive after giving prior notice to
Company (time permitting), or if Executive receives a request to disclose all or
any part of the information contained in the Confidential Information under the
terms of a subpoena, order, civil investigative demand/or similar process issued
by a court of competent jurisdiction or by a governmental body or agency,
whether of the United States or any state thereof, or any other jurisdiction
applicable to Executive after giving prior notice to Company (time permitting).

4.3           Third-Party Information.  Executive acknowledges that Company has
received and in the future will receive from third parties their confidential
information subject to a duty on Company’s part to maintain the confidentiality
of this information and to use it only for certain limited purposes. Executive
agrees that he owes Company and these third parties, during the term of his
employment and thereafter, a duty to hold all such confidential information in
the strictest confidence and not to disclose or use it, except as necessary to
perform his obligation hereunder, as may be required by law, or a tribunal or
court of competent jurisdiction, and as is consistent with any agreement between
Company and such third party that Executive has notice of.

4.4           Trademark.  Company acknowledges that the trademark “Camelot
Films” is the property of Executive and that the parties have entered into a
separate agreement whereby the Company has the rights to utilize the Camelot
Trademark.

ARTICLE 5
RIGHTS AND REMEDIES

5.1           Disputes.  Any dispute or controversy between the Parties arising
out of this Agreement, including disputes as to the validity and enforceability
of this Agreement (each dispute or controversy being referred to as a
“Dispute”), shall be handled exclusively by mediation and arbitration as
provided in this Article 5.  A Dispute shall be handled pursuant to the
provisions of this Article 5 whether it arises during the Term of this Agreement
or thereafter.

5.1.1           Mediation.  In the event a Dispute is not voluntarily resolved
by the Parties on their own, upon the demand of either party, the matter shall
be submitted to mediation in Orange County, California, under the mediation
rules of the American Arbitration Association.  Each party shall bear its own
costs in connection with such mediation and shall bear one-half of the costs
incurred with the American Arbitration Association and the mediator in
connection therewith.  Mediation in accordance with the provisions of this
Section 5.1.1 shall be a condition precedent to a demand to arbitrate in
accordance with the following Section 5.1.2.
 
5.1.2           Arbitration.  Any Dispute which is not resolved pursuant to
mediation shall, upon the demand of either Party, be determined and settled by
arbitration in Orange County, California, under California substantive law and
the Commercial Arbitration Rules of the American Arbitration Association;
provided however, the arbitrator shall follow the same rules of substantive law
and the rules as to the application of such law to the facts as a California
Trial Court Judge hearing the same matter would be bound to follow.  The parties
further agree that:
 

 
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(a)           Attorney Fees.  The arbitrator shall include attorney fees and
costs in the award to the prevailing party.
 
(b)           Discovery.  The Parties shall be entitled to reasonable and
necessary discovery, in accordance with the provisions of California Code of
Civil Procedure Section 1283.05.
 
(c)           Findings and Conclusions.  The award shall include findings of
fact and conclusions of law showing the legal and factual basis for the
arbitrator's decision.
 
(d)           Errors of Law.  The award may be entered by any court of competent
jurisdiction but in connection with entry by the court shall be subject to
review by such court with respect to errors of law (but not with respect to
errors of fact).  In the event such court shall find that there was a material
error of law in the arbitration award, the court in the exercise of its
discretion shall correct the award and enter it or return it to the arbitrator
for reconsideration in accordance with the determinations of the court.

5.2           Injunctive Relief.  Both Parties shall be entitled to obtain an
injunction in the event of the breach of this Agreement by the other Party. The
availability of injunctive relief shall not preclude availability of any other
remedy at law or equity that would otherwise be available to either Party.

ARTICLE 6
NONCOMPETITION

6.1           Covenant Not to Compete.  During his employment, Executive shall
not compete with Company by engaging in any outside business activity that is
competitive with the business of Company or directly or indirectly manage,
participate in, consult with, render services for, or in any manner engage in
any business directly competing with Company within any state, possession,
territory or jurisdiction of the United States of America. This provision will
survive the termination of Executive by the Company for Cause as it is defined
in this Agreement or the resignation of Executive for other than Good Reason and
shall be effective for a period of one (1) year following such termination or
resignation.

 
6.2           Confidential Information. Executive agrees that Executive shall
not, during the Employment Term or at any time thereafter, use for Executive’s
own purposes, or disclose to or for any benefit of any third party, any trade
secret or other confidential information of the Company or any of its affiliates
(except as may required by law or in the performance of Executive’s duties
hereunder consistent with the Company’s policies) and that Executive will comply
with any confidentiality obligations of the Company known by Executive to a
third party, whether under agreement or otherwise. Notwithstanding the
foregoing, confidential information shall be deemed not to include information
which (i) is or becomes generally available to the public other than as a result
of a disclosure by Executive or any other person who directly or indirectly
receives such information from Executive or at Executive’s direction or (ii) is
or becomes available to Executive on a non-confidential basis from a source
which Executive reasonably believe is entitled to disclose it to Executive.
 
6.3            Company Ownership. Except for the Camelot Films® trademark, the
results and proceeds of Executive’s services hereunder, including, without
limitation, any works of authorship resulting from Executive’s services during
Executive’s employment and any works in progress, shall be works-made-for-hire
and the Company shall be deemed the sole owner throughout the universe of any
and all rights of whatsoever nature therein, whether or not now or hereafter
known, existing, contemplated, recognized or developed, with the right to use
the same in perpetuity in any manner the Company determines in its sole
discretion without any further payment to Executive whatsoever. If, for any
reason, any of such results and proceeds shall not legally be a work-for-hire
and/or there are any rights which do not accrue to the Company under the
preceding sentence, then Executive hereby irrevocably assign and agree to assign
any and all of Executive’s right, title and interest thereto, including, without
limitation, any and all copyrights, patents, trade secrets, trademarks and/or
other rights of whatsoever nature therein, whether or not now or hereafter
known, existing, contemplated, recognized or developed by the Company, and the
Company shall have the right to use the same in perpetuity throughout the
universe in any manner the Company may deem useful or desirable to establish or
document the Company’s exclusive ownership of any and all rights in any such
results and proceeds, including, without limitation, the execution of
appropriate copyright and/or patent applications or assignments. To the extent
Executive have any rights in the results and proceeds of Executive’s services
that cannot be assigned in the manner described above, Executive unconditionally
and irrevocably waive the enforcement of such rights. This Section is subject
to, and shall not be deemed to limit, restrict, or constitute any waiver by the
Company of any rights of ownership to which the Company may be entitled by
operation of law by virtue of the Company or any of its affiliates being
Executive’s employer.

 
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6.4            Return of Property. All documents, data, recordings, or other
property, whether tangible or intangible, including all information stored in
electronic form, obtained or prepared by or for Executive and utilized by
Executive in the course of Executive’s employment with the Company or any of its
affiliates shall remain the exclusive property of the Company. In the event of
the termination of Executive’s employment for any reason, and subject to any
other provisions hereof, the Company reserves the right, to the extent permitted
by law and in addition to any other remedy the Company may have, to deduct from
any monies otherwise payable to Executive the following: (i) the full amount of
any specifically determined debt Executive owe to the Company or any of its
affiliates at the time of or subsequent to the termination of Executive’s
employment with the Company, and (ii) the value of the Company property which
Executive retain in Executive’s possession after the termination of Executive’s
employment with the Company following the Company’s written request for such
item(s) return and Executive’s failure to return such items within thirty
(30) days of receiving such notice. In the event that the law of any state or
other jurisdiction requires the consent of an employee for such deductions, this
Agreement shall serve as such consent.
 

6.5.           Promise Not To Solicit. Executive will not during the period of
the Employment Term or for the period ending one (1) year after the earlier of
expiration of the Employment Term or Executive’s termination hereunder, induce
or attempt to induce any employees, exclusive consultants, exclusive contractors
or exclusive representatives of the Company (or those of any of its affiliates)
to stop working for, contracting with or representing the Company or any of its
affiliates or to work for, contract with or represent any of the Company’s (or
its affiliates’) competitors.

6.6.           Litigation.  Executive agrees that during the Employment Term and
for a one-year period thereafter and, if longer, during the pendency of any
litigation or other proceeding, (i) Executive shall not communicate with anyone
(other than Executive’s attorneys and tax advisors and except to the extent
required by law or necessary in the performance of Executive’s duties hereunder)
with respect to the facts or subject matter of any pending or potential
litigation, or regulatory or administrative proceeding involving the Company or
any of its affiliates or predecessors, other than any litigation or other
proceeding in which Executive are a party-in-opposition, without giving prior
notice to the Company or the Company’s counsel, and (ii) in the event that any
other party attempts to obtain information or documents from Executive with
respect to matters possibly related to such litigation or other proceeding,
Executive shall promptly so notify the Company’s counsel unless Executive are
prohibited from doing so under applicable law.  Executive agree to cooperate, in
a reasonable and appropriate manner, with the Company and its attorneys, both
during and after the termination of Executive’s employment or services, in
connection with any litigation or other proceeding arising out of or relating to
matters in which Executive were involved prior to the termination of Executive’s
employment or services to the extent the Company pays all reasonable expenses
Executive incur in connection with such cooperation (including, without
limitation, the fees and expenses of Executive’s counsel) and to the extent such
cooperation does not unreasonably interfere with Executive’s personal or
professional schedule.
 
6.7.           No Right to Write Books, Articles, Etc.  During the Employment
Term and for two (2) years thereafter but not beyond the end of the original
Term, except in the course of the performance of Executive’s duties and
responsibilities or otherwise as authorized by the Board, Executive shall not
prepare (other than personal notes and/or a diary) or assist any person or
entity in the preparation of any books, articles, radio broadcasts, electronic
communications, television or motion picture productions or other creations,
concerning the Company or any of its affiliates or predecessors or any of their
officers, directors, agents, employees, suppliers or customers.

 
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6.8.           Non-Disparagement.  Executive and, to the extent set forth in the
next sentence, the Company agree that each party shall not, during the
Employment Term and for one (1) year thereafter, criticize, ridicule or make any
statement which disparages or is derogatory of the other party in any non-public
communication with any customer, client or member of the investment community or
media or in any public communication.  the Company’s obligations under the
preceding sentence shall be limited to communications by its senior corporate
executives having the rank of Senior Vice President or above (“Specified
Executives”), and it is agreed and understood that any such communication by any
Specified Executive (or by any executive at the behest of a Specified Executive)
shall be deemed to be a breach of this Section 6.8 by the Company. 
Notwithstanding the foregoing, neither Executive nor the Company shall be
prohibited from making statements in response to statements by the other party
(or in Executive’s case, with respect to any Specified Executives) that
criticize or ridicule or are disparaging or derogatory, provided that the
responsive statements do not criticize or ridicule and are not disparaging or
derogatory.
 
6.9.          Injunctive Relief, Etc.  The Company has entered into this
Agreement in order to obtain the benefit of Executive’s unique skills, talent
and experience.  Executive acknowledge and agree that any violation of Sections
6.1 through 6.8 will result in irreparable damage to the Company, and,
accordingly, the Company may obtain injunctive and other equitable relief for
any breach or threatened breach of such paragraphs, in addition to any other
remedies available to the Company.  Executive and the Company agree that the
restrictions and remedies contained in Sections 6.1 through 6.8 are reasonable
and that it is Executive’s intention and the intention of the Company that such
restrictions and remedies shall be enforceable to the fullest extent permissible
by law.  If it is found by a court of competent jurisdiction that any such
restriction or remedy is unenforceable but would be enforceable if some part
thereof were deleted or the period or area of application reduced, then such
restriction or remedy shall apply with such modification as shall be necessary
to make it enforceable.
 
6.10          Survival.  Executive’s obligations under Sections 6.1 through
6.8 and the Company’s obligations under Section 6.8 shall remain in full force
and effect for the entire period provided therein, notwithstanding the
termination of Executive’s employment pursuant to this Agreement or otherwise,
or the expiration of the original Term.
 

ARTICLE 7
MISCELLANEOUS PROVISIONS

 
7.1           Name and Likeness. During the Term, the Company shall have the
right to use Executive’s name, biography and likeness in connection with its
business as follows: Executive shall promptly submit to Company a biography of
Executive. Provided that Executive timely submit such biography, the Company
shall not use any other biographical information other than contained in such
biography so furnished, other than references to Executive’s prior professional
services and Executive’s services hereunder, without Executive’s prior approval
(which approval shall not be unreasonably withheld). If Executive fails to
promptly submit a biography, then Executive shall not have the right to approve
any biographical material used by the Company. Executive shall have the right to
approve all likenesses of Executive used by the Company hereunder. Nothing
herein contained shall be construed to authorize the use of Executive’s name,
biography or likeness to endorse any product or service or to use the same for
similar commercial purposes.
 
7.2           Unique Services. Notwithstanding anything to the contrary in this
Agreement, Executive acknowledges that the services to be rendered by Executive
under the terms of this Agreement, and the rights and privileges granted to the
Company by Executive under its terms, are of a special, unique, extraordinary
and intellectual character, which gives them a peculiar value, the loss of which
cannot reasonably or adequately be compensated in damages in any action at law,
and that a breach by Executive of any of the provisions contained in this
Agreement may cause the Company great and irreparable injury and damage.
Notwithstanding anything to the contrary in this Agreement, Executive
acknowledges that the Company shall be entitled, in addition to any other
remedies it may have at law, to seek the remedies of injunction, and other
equitable relief for a breach of this Agreement by Executive. This provision
shall not, however, be construed as a waiver of any of the rights which the
Company and/or Executive may have for damages or otherwise.

 
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7.3           Equal Opportunity the Company. Executive acknowledges that the
Company is an equal opportunity employer. Executive agrees that Executive will
comply with the Company policies regarding employment practices and with
applicable federal, state and local laws prohibiting discrimination or
harassment.
 
7.4           Section 317 and 508 of the Federal Communications Act. Executive
represents that Executive has not accepted or given nor will Executive accept or
give, directly or indirectly, any money, services other valuable consideration
from or to anyone other than the Company for the inclusion of any matter as part
of any film, television program or other production produced, distributed and/or
developed by the Company and/or any of its affiliates.

7.5            Indemnification.
 
(a)                               If Executive is made a party, are threatened
to be made a party to, or otherwise receive any other legal process in, any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact that Executive is or was a
director, officer or employee of the Company or are or were serving at the
request of the Company as a director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is Executive’s alleged action in an official capacity
while serving as director, officer, member, employee or agent, the Company shall
indemnify Executive and hold Executive harmless to the fullest extent permitted
or authorized by the Company’s certificate of incorporation and bylaws or, if
greater, by the laws of the State of Delaware, against all cost, expense,
liability and loss (including without limitation, attorney’s fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement and any cost and fees incurred in enforcing Executive’s rights to
indemnification or contribution) reasonably incurred or suffered by Executive in
connection therewith, and such indemnification shall continue even though
Executive has ceased to be a director, member, employee or agent of the Company
or other entity and shall inure to the benefit of Executive’s heirs, executors
and administrators. The Company shall advance to Executive all reasonable costs
and expenses that Executive incurs in connection with a Proceeding within twenty
(20) days after its receipt of a written request for such advance.  Any tax
gross-up payments that Executive becomes entitled to receive pursuant to this
Section 7.5 will be paid to Executive (or to the applicable taxing authority on
Executive’s behalf) as promptly as practicable and in any event not later than
the last day of the calendar year after the calendar year in which Executive
remits the related taxes. Such request shall include an undertaking by Executive
to repay the amount of such advance if it shall ultimately be determined that
Executive is not entitled to be indemnified against such costs and expenses.
 
(b)                              Neither the failure of the Company (including
its board of directors, independent legal counsel or stockholders) to have made
a determination that indemnification of Executive is proper because Executive
has met the applicable standard of conduct, nor a determination by the Company
(including its board of directors, independent legal counsel or stockholders)
that Executive has not met such applicable standard of conduct, shall create a
presumption or inference that Executive has not met the applicable standard of
conduct.
 
(c)                               To the extent that the Company maintains
officers’ and directors’ liability insurance, Executive will be covered under
such policy subject to the exclusions and limitations set forth therein.
 
(d)                             The provisions of this Section 16 shall survive
the expiration or termination of Executive’s employment and/or this Agreement.
 

 

7.6           Consideration is Non-Dilutive. All consideration of any type
whatsoever granted to Executive in connection with this Agreement, including but
not limited to, consideration earned, purchased or granted Executive by Company
prior to this Agreement, shall not be subject to any dilutive event taken by
Company other than a dilutive event caused by the issuance of additional shares.
Specifically, the Executive shall be exempt from a dilutive action taken by the
Company as a result of a stock reversal or other dilutive mechanism.

7.7           Entire Agreement.  This Agreement, together with those documents
relating to the same transaction that are referred to in this Agreement, is
intended to be the final, complete, and exclusive statement of the terms of the
Agreement between Company and Executive with regard to the subject matter of
this Agreement.  This Agreement supersedes all other prior agreements,
communications, and statements, whether written or oral, express or implied,
pertaining to that subject matter.  This Agreement may not be contradicted by
evidence of any prior or contemporaneous statements or agreements, oral or
written, and this Agreement may not be explained or supplemented by evidence of
consistent additional terms.

 
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7.8           Amendment; Waiver.  This Agreement may not be amended or modified
except in writing and signed by both parties.  No waiver of any provision of
this Agreement shall be deemed to, or shall, operate as a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.  Except as expressly provided in this Agreement, no waiver shall be
binding unless executed in writing by the party making the waiver.

7.9           Successors and Assigns.  This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation, change of name or otherwise) to all or substantially
all of Company’s assets or shares of stock. For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s
business, assets or stock that becomes bound by this Agreement.

7.10           Severability.  If any provision of this Agreement, or its
application to any person, place, or circumstance, is held by an arbitrator or a
court of competent jurisdiction to be invalid, unenforceable, or void, that
provision shall be enforced to the greatest extent permitted by law, and the
remainder of this Agreement and of that provision shall remain in full force and
effect as applied to other persons, places, and circumstances.

7.11           Interpretation.  This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party.  By way
of example and not in limitation, this Agreement shall not be construed in favor
of the party receiving a benefit nor against the party responsible for any
particular language in this Agreement.

 
7.12           Void Provisions. If any provision of this Agreement, as applied
to either party or to any circumstances, shall be adjudged by a court to be void
or unenforceable, the same shall be deemed stricken from this Agreement and
shall in no way affect any other provision of this Agreement or the validity or
enforceability of this Agreement. In the event any such provision (the
“Applicable Provision”) is so adjudged void or unenforceable, Executive and the
Company shall take the following actions in the following order: (i) seek
judicial reformation of the Applicable Provision; (ii) negotiate in good faith
with each other to replace the Applicable Provision with a lawful provision; and
(iii) have an arbitration as provided in Section 24 hereof determine a lawful
replacement provision for the Applicable Provision; provided, however, that no
such action pursuant to either of clauses (i) or (iii) above shall increase in
any respect Executive’s obligations pursuant to the Applicable Provision.

7.13           Section Headings.  Section headings and captions are used for
reference purposes only and should be ignored in the interpretation of the
Agreement.  Unless the context requires otherwise, all references in this
Agreement to Articles or Sections are to the sections of this Agreement.

7.14           Counterparts.  This Agreement may be executed in one or more
counterparts all of which together shall constitute one and the same instrument.

7.15           Notices.  For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, postage prepaid,
return receipt requested, addressed as follows:
 
 

If to Executive:                                                           
  Robert P. Atwell
8001 Irvine Center Drive, Suite 400
Irvine, CA 92618

If to Company:                                                         
   Camelot Entertainment Group, Inc.
Attn: George Jackson, CFO
8001 Irvine Center Drive, Suite 400
Irvine, CA 92618

With a copy
to:                                                           Christopher
Flannery
Law Office of Christopher Flannery
555 City Avenue
Bala Cynwyd, PA 1900
 
 
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7.16           Governing Law.  The laws of the State of California shall govern
disputes, claims and controversies relating to and arising under this Agreement
and be used to construe the terms of this Agreement.

7.17           Venue.  Unless agreed in writing by both parties, Orange County,
California shall serve as venue for any arbitration or legal action arising out
of or relating to this Agreement.

7.18           Confidentiality.  The Parties acknowledge that this Agreement and
all its provisions and terms shall be held in strict confidence by the Parties
and that neither Party shall have the right to publish this Agreement in any
form unless granted prior written consent by the other Party, for the purpose of
enforcing the mutual obligations under this Agreement in a court of law or
before an arbitrator, or to meet the requirements of federal and state
securities laws.
 
 
The parties have duly executed this Agreement as of the date first written
above.

“EXECUTIVE”                                                                           “COMPANY”

/s/Robert P.
Atwell                                                                      /s/Robert
P. Atwell
Robert P.
Atwell                                                                           Robert
P. Atwell, CEO

/s/George Jackson
George Jackson, CFO, Secretary

Board of Director Approval:

/s/Robert P. Atwell
Robert P. Atwell
4/26/2010
 
 
/s/George Jackson
George Jackson
4/26/2010
 
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