Document:

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EXHIBIT 10.9

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is effective June 9, 2006 (the “Effective Date”), by and
between New Era Studios, Inc., a Nevada corporation (the “Company”), and William W. Lee, an
individual and resident of the State of California (“Executive”).

RECITAL

     WHEREAS, Silvergraph LGT, LLC, a Delaware limited liability company (“Silvergraph”), merged
with and into the Company on June 9, 2006 for purposes of effecting a migration of Silvergraph from
Delaware to Nevada and effecting a reclassification of Silvergraph from a limited liability company
to a corporation; and

     WHEREAS, Executive was the sole member of a limited liability company that served as a manager
of Silvergraph since April 2005, and the parties desire to ensure that the Executive’s expertise,
knowledge and experience will continue to be available to the Company.

AGREEMENT

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

     1. Employment and Term. In consideration of the mutual covenants herein contained,
the Company agrees to employ Executive and Executive hereby agrees to accept such employment by the
Company pursuant to the terms and conditions set forth in this Agreement. Subject to any extension
in accordance with this Section 1, or unless sooner terminated in accordance with Section 6 of this
Agreement, the term of this Agreement (the “Term”) shall begin upon the Effective Date and shall
end at the close of business on the fifth anniversary date of the Effective Date; provided,
however, that on the date of each meeting of the Board of Directors immediately after the Annual
Meeting of Stockholders (the “Annual Meeting Date”) beginning in 2007 and ending in 2011, the Term
shall be extended by one additional year, so that the Term is again five years, provided that the Company has not, prior to that applicable Annual
Meeting Date, given Executive written notice that the Term will no longer be extended.

     2. Duties. Executive is hereby engaged to work in the capacity of President and
Treasurer of the Company, to perform such duties as are determined from time to time by the Board
of Directors of the Company. Executive agrees to use Executive’s best efforts for the Company’s
benefit, and throughout the Term shall devote Executive’s full time and effort to the performance
of these duties. Executive may, without the Company’s prior written consent, engage in other
business activities provided said business activities do not require any material time commitment
or services on the Executive’s part. Executive may invest Executive’s assets in such form or
manner as will not require any material services on Executive’s part in the operation of the
affairs of the enterprise(s) in which such investments are made.

     3. Base Salary. As compensation for the services to be rendered by Executive
pursuant to this Agreement, the Company agrees to pay to Executive an annual base salary of Eighty
Two Thousand

 

 

Dollars ($82,000) per annum, payable on the Company’s regular pay dates for employees
generally. Notwithstanding the foregoing, Executive’s base salary shall increase to One Hundred
Twenty Thousand Dollars ($120,000) per annum, payable on the Company’s regular pay dates for
employees generally, at such time as the Company raises a minimum of One Million Five Hundred
Thousand Dollars ($1,500,000) in new capital from the date hereof. The Company’s Board of
Directors shall review Executive’s performance and base salary upon consummation of the share
exchange by and between Company and Pinecrest Services, Inc., a Nevada corporation (“Pinecrest”),
and shall beginning in the first quarter of 2007 and in the first quarter of each year thereafter,
adjust Executive’s salary and benefits as it determines to be appropriate. Notwithstanding the
foregoing, no decrease in base salary shall be made.

     4. [INTENTIONALLY OMITTED].

     5. Additional Benefits.

          (a) Executive shall be entitled, during the Term of this Agreement, to such (1) vacation
benefits, (2) tax-qualified profit sharing and/or savings benefits, (3) deferred compensation
benefits, and/or (4) disability, life insurance, medical (including dental and vision) and any
other similar benefits, as are consistent with the Company’s approach for the rest of its executive
group and with the terms and practices of the Company’s plans and arrangements.

          (b) Executive may, at his option, elect that a portion of his salary be placed into
tax-sheltered investments and treated as deferred income to the extent permitted under plans or
arrangements in effect from time to time through the Company. Any such election shall not exceed
the maximum amounts permitted pursuant to Sections 403(b) and 457(b) of the Internal Revenue Code
of 1986.

     6. Termination. Executive’s employment and this Agreement shall terminate upon (1)
Executive’s voluntary resignation; (2) Executive’s death; (3) Executive’s inability to perform his
duties for the Company for one hundred twenty (120) consecutive days due to a physical or mental
condition; or (4) termination of Executive’s employment by Company with written notice, for any
reason or for no reason. In addition, Executive has the right to terminate his employment and this
Agreement by written notice at any time after a Change in Control. For purposes of this Section 6,
Change in Control shall be deemed to have occurred if at any time (a) the person(s) owning and
having the power to vote either the Company’s capital stock or the
capital stock of any company owning all or at least fifty-one percent (51%) of the Company’s
capital stock (hereinafter, a “Parent”) immediately following the execution and delivery of this
Agreement do not hold and retain the power to vote at least fifty-one percent (51%) of the capital
stock of Company or Parent, as applicable, (b) the Company or a Parent sells all or any substantial
portion of its assets or business outside of the regular course of business or (c) individuals who
constituted the Board of Directors of the Company, as of the Effective Date, or a Parent, as of the
closing of the share exchange by and between the Company and Pinecrest Services, Inc., cease for
any reason to constitute at least a majority of its Board of Directors then in office. Upon
Executive’s termination of employment for any reason, all rights, duties and obligations of the
Company and Executive shall cease, including Executive’s right to base salary and other
compensation and benefits, except as provided in Section 7 below, and except for any continuation
of benefits under the terms of benefit plans and arrangements in effect at the time of termination.

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     7. Severance Pay. If the Company terminates Executive’s employment without cause as
determined by the Company’s Board of Directors or an authorized committee thereof, or if Executive
resigns due to (i) assignment to Executive of significant duties inconsistent with Executive’s
position, responsibilities and status with the Company, (ii) the relocation of the Company’s
principal executive offices to a location outside the Los Angeles, California area or a one hundred
fifty (150) mile radius therefrom, or the Company requiring Executive to be based anywhere other
than the Company’s principal executive offices, or (iii) the failure of the Company to obtain the
assumption of all obligations under this Agreement by any successor, then Executive shall be
entitled to severance pay. Such severance pay shall be continuation of Executive’s then monthly
base salary for twenty-four (24) months after the month of termination and payment thirty (30) days
after termination of any incentive bonus for measurement periods already ended at the date of
termination. Such payment of base salary shall be reduced by fifty percent (50%) of any base
compensation earned from another employer during the period of base salary continuation. For
eighteen (18) months following such termination, the Company shall also continue to pay, at its
expense, premiums on Executive’s health and dental policies then in effect, all or a portion of
which payments may be taxable to Executive as determined under tax laws in effect when such
payments are made. All payments under this Section 7 are conditioned upon Executive’s written
agreement with the Company that Executive will not file any administrative charge or lawsuit
relating to Executive’s prior employment with the Company and agreement to release the Company and
all of its then current and former directors, trustees, officers, employees, agents, members, and
affiliated companies from any and all claims, in an agreement in such form as is determined by the
Company.

     Termination by the Company of Executive’s employment for “cause” shall mean termination upon
(A) the willful and continued failure by Executive substantially to perform his duties with the
Company after written demand for substantial performance has been delivered to Executive by the
Company’s Board of Directors or authorized committee thereof and Executive has failed to cure such
failure within thirty (30) days or such longer period set by the Board; or (B) the willful engaging
by Executive in gross misconduct materially and demonstrably injurious to Company; (C) breach of
fiduciary duty involving personal profit; or (D) violation of any law, rule or regulation other
than traffic violations or similar offenses. For purposes of this definition, no act, or failure
to act, on Executive’s part shall be considered “willful” unless done, or admitted to be done, by
Executive not in good faith and without reasonably belief that Executive’s action or omission was
in the best interest of the Company.

     8. Restrictive Covenant.

          (a) Executive agrees that, (1) for a period of two years following (w) the Company’s
termination of Executive’s employment for cause (as defined in Section 7 above) or (x) Executive’s
termination of his own employment for any reason whatsoever, or (2) for the earlier of (y) a period
of two years following the Company’s termination of Executive’s employment without cause, or (z) so
long as the Company shall pay the Severance Pay as set forth in Section 7 above, if any, following
the Company’s termination of Executive’s employment without cause (each such period shall
hereinafter be referred to as, the “Covenant Period”), he will not,

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                         (i) directly or indirectly own, manage, operate, control, be employed by, participate in, or
be connected in any manner whatsoever with the ownership, management, operation or control of any
business engaged in the same or similar business as the Company;

                         (ii) approach or solicit any person who is employed by the Company or any affiliate with a
view to hiring such employee, persuading such employee to leave such employment, or actually hire
an employee of the Company or an affiliate for any other entity.

          (b) Executive further agrees that he shall not, during the applicable Covenant Period,
disparage or act in any manner, directly or indirectly, which may damage the Company or any
affiliate.

          (c) Executive recognizes that certain information of and about the Company is confidential,
including but not limited to trade secrets, know-how, and marketing plans. Executive agrees that
he will not, at any time, either while employed by Company or after the termination of his
employment, reveal such confidential information to any other person, firm or corporation except as
required by law.

     Executive has carefully considered the nature and extent of the restrictions upon him and the
rights and remedies conferred upon the Company and its affiliates under the provisions of this
Section 8, and Executive hereby acknowledges and agrees that the same are reasonable in time and
territory, do not stifle the inherent skill and experience of Executive, would not operate as a bar
to Executive’s sole means of support, are fully required to protect the legitimate interests of the
Company, and do not confer a benefit upon the Company disproportionate to the detriment to
Executive which is caused by the provisions of this Section 8.

     In the event of a breach or a threatened breach by Executive of this Section 8, the Company
and its affiliates shall be entitled to an injunction restraining Executive from the commission of
such breach. Nothing herein contained shall be construed as prohibiting the Company and any
affiliate from pursuing any other remedies available to it for such breach or threatened breach,
including the recovery of money damages. These covenants and disclosures shall each be construed
as independent of any other provisions in this Agreement, and the existence of any claim or cause
of action by Executive against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company and affiliates of such covenants
and agreements.

     9. Severability. The provisions of this Agreement are severable, and, if any one or
more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions of this Agreement and any partially unenforceable provision of this Agreement,
to the extent enforceable in any jurisdiction, shall nevertheless be binding and
enforceable hereunder. If any provision of this Agreement is invalid in part or in whole, it will
be deemed to have been amended, whether as to time, area covered or otherwise, as and to the extent
required for its validity under applicable law and, as so amended, will be enforceable.

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     10. Construction. This Agreement shall be construed and interpreted under and be
governed by and enforced according to the laws of the State of California. The captions and
headings set forth in this Agreement are for convenience and reference only and shall not be deemed
to construe or interpret any term or provision set forth in this Agreement.

     11. Benefit. This Agreement shall inure to the benefit of and be enforceable by the
parties hereto and their respective heirs, executors, administrators, successors and assigns.

     12. Entire Agreement. This instrument contains the entire agreement of the parties.
It may not be changed orally but only by an agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is sought.

     IN TESTIMONY WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ William W. Lee	 	 
	 	 	 	 	 
	 

	 	 	 	William W. Lee	 	 
	 
	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	NEW ERA STUDIOS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	          /s/ James R. Simpson	 	 
	 

	 	 	 	 

              James R. Simpson, CEO
	 	 

5exv10w10

 

EXHIBIT
10.10

	 	 	 	 
	BBLC

	 	 	Bandari Beach Lim & Cleland LLP

 CERTIFIED PUBLIC ACCOUNTANTS & MANAGEMENT CONSULTANTS

January 27, 2006

Silvergraph LGT

11919 Burke Street

Santa Fe Springs, CA 90670

Dear Silvergraph:

This letter is to confirm our understanding (“LOU”) of the terms and objectives of our engagement
with Silvergraph (the “Company”) and the nature and limitations of the services we will provide.

Gary Freeman will act as Chief Financial Officer of the Company to assist it during its acquisition
by, and subsequent operation as, a public company. The Company and Mr. Freeman agree and
acknowledge that this is a part-time position with the amount of time devoted to the Company by Mr.
Freeman to be mutually agreed upon by the parties, which is assumed to be approximately 40-50 hours
per month. Either Party may terminate this LOU upon 30 days written notice.

Fees and Retainer

You will be billed on this engagement as follows:

	 	 	 	 	 
	Months during which the Company is preparing/undergoing the audit of
its financial statements (assumed 2 months)
	 	$7,000/month
	 
	Months after the Company’s audited financial statements have been issued
and prior to the completion of its reverse merger transaction
	 	$3,500/month
	 
	Months after the Company has completed its reverse merger transaction
	 	$8,500/month

Concurrent with the signing of this agreement, the Company will also issue to Mr. Freeman a warrant
to purchase 3.375 Units (as defined in the Company’s Operating Agreement), at an exercise price of
$20,080.32 per Unit (the “Warrant”). The Warrant shall vest immediately and shall have a term of
five (5) years. The Company will either cause the Warrant to be assumed by the surviving public
company in the proposed reverse merger or otherwise cause the public company to issue a new warrant
whereby, in either case, the Units underlying the Warrant will represent a number of shares of
common stock or other equity securities of the public company and the corresponding exercise price
will be adjusted, in each case on terms consistent with the terms applicable to all other Units of
the Company issued and outstanding (or reversed for issuance pursuant to warrants or options) in
the proposed reverse merger. The Company will

12424 Wilshire Blvd. • Suite 750 • Los Angeles, CA 90025

T: 310.447.1234 • www.bblc.com • F: 310.447.0287

 

 

cause the resale of the Units underlying the Warrant, or any common stock or other equity
securities represented thereby after the consummation of the proposed reverse merger, to be
registered on the public company’s first registration statement filed concurrent with or following
the consummation of the merger, without cutback or other limitation and will provide customary
piggy-back rights with respect to follow on registration statements, if any. Notwithstanding the
above, the Company shall retain the right to cancel Mr. Freeman’s right to exercise up to 50% of
the Units (or other securities represented thereby) underlying the Warrant only in the event that
BBLC or Mr. Freeman unilaterally terminate this agreement for reasons not involving (1) nonpayment
of fees or (2) for Good Reason. For purposes hereof, “Good Reason” means (i) any material adverse
alteration in the nature or status of Mr. Freeman’s responsibilities or the assignment to Mr.
Freeman of any duties inconsistent with his status as Company’s Chief Financial Officer; (ii) the
direction or insistence, direct or indirect, by the Board of Directors (of the Company or the
proposed public company following the reverse merger) or any executive officer to which Mr. Freeman
reports to take any action that, in Mr. Freeman’s reasonable belief, is in violation of any U.S. or
state law, rule or regulation, or of U.S. GAAP; (iii) the breach of this agreement or any
obligation hereunder by Company; (iv) the commission of any act of dishonesty, fraud or other
misconduct by the Company, its Board of Directors (or the Board of Directors of the proposed public
company following the reverse merger); or (v) if the Company or the proposed public company
following the reverse merger becomes insolvent or seeks protection under any bankruptcy,
receivership, trust, deed, creditor’s arrangement, or comparable proceeding. You will also be
billed for out-of-pocket costs such as parking, postage, etc. Our invoices for these fees will be
rendered each month as work progresses and are payable on presentation. In accordance with our
firm policies, work may be suspended if your account becomes ninety days or more over due and will
not be resumed until your account is paid in full. Invoices outstanding over forty-five days will
be subject to service charges of 18% per annum. If we elect to terminate our services for
nonpayment, our engagement will be deemed to have been completed even if we have not completed our
report. You will be obligated to compensate us for all time expended and to reimburse us for all
out-of-pocket expenditures through the date of termination.

Indemnification Clause

The Company will indemnify Bandari Beach Lim & Cleland, LLP (“BBLC”), its partners and employees
and hold them harmless from any claims, liabilities, losses and costs arising in circumstances
where there has been a knowing misrepresentation by a member of the Company’s management,
regardless of whether such person was acting in the Company’s interest.

Alternative Dispute Resolution/Binding Arbitration

The Company and BBLC both agree that any dispute over fees charged by BBLC to the Company will be
submitted for resolution by arbitration in accordance with the rules of the American Arbitration
Association. Such arbitration shall be binding and final. IN AGREEING TO BINDING ARBITRATION, WE
BOTH ACKNOWLEDGE THAT IN THE EVENT OF A DISPUTE OVER FEES, EACH OF US IS GIVING UP THE RIGHT TO
HAVE THE

 

 

DISPUTE DECIDED IN A COURT OF LAW BEFORE A JUDGE OR JURY AND INSTEAD ARE ACCEPTING THE USE OF
BINDING ARBITRATION FOR RESOLUTION.

We appreciate the opportunity to be of service to you and believe this letter accurately summarizes
the significant terms of our engagement. If you have any questions, please let us know. If you
agree with the terms of our engagement as described in this letter, please sign the enclosed copy
and return it to us.

Sincerely,

BANDARI BEACH LIM & CLELAND, LLP

/s/ Gary Freeman

Gary Freeman, CPA

Partner

ACKNOWLEDGED & AGREED TO BY:

SILVERGRAPH

	 	 	 
	/s/ James R. Simpson

	 	 
	 	 	 

Authorized Signatory

1/27/06

Date

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