Exhibit 10.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is executed and delivered to
be effective February 10, 2006, by and among NEW FRONTIER MEDIA, INC., a
Colorado corporation ("Purchaser"), MARC LAURENCE GREENBERG TRUST DATED MAY 11,
2001, GOLDBERG FAMILY TRUST DATED JUNE 15, 2001 (the Marc Laurence Greenberg
Trust and the Goldberg Family Trust are hereinafter referred to collectively as
the "the Trusts"), MARC LAURENCE GREENBERG, an individual ("Greenberg"), RICHARD
B. GOLDBERG, an individual ("Goldberg"), and First Community Bank, N.A. (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Trusts, Greenberg and Goldberg (collectively, the
"Sellers") have entered into a Stock Purchase Agreement with Purchaser dated
February 6, 2006 (the "Purchase Agreement"), pursuant to which Purchaser has
acquired from the Trusts (i) 100% of the capital stock of MRG Entertainment,
Inc., a California corporation, and (ii) 100% of the capital stock of Lifestyles
Entertainment, Inc., a California corporation; and
WHEREAS, the Purchase Agreement provides that Purchaser shall deposit
Two Million Five Hundred and Fifty Thousand Dollars ($2,550,000) of the
Purchase Price with the Escrow Agent to be held in an escrow account (the
"Escrow Account") in accordance with the terms of this Agreement; and
WHEREAS, Purchaser and Sellers desire the Escrow Agent to hold and
dispose of funds in the Escrow Account, and the Escrow Agent is willing to do
so, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Undefined Capitalized Terms. Undefined initially capitalized terms
used in this Agreement shall have the meanings ascribed to them in the Purchase
Agreement.
2. Appointment of Escrow Agent. The Escrow Agent is hereby constituted
and appointed as escrow agent, and hereby accepts its appointment and agrees to
act as escrow agent pursuant to this Agreement.
3. Escrow Fund. In connection with the closing of the transactions
contemplated by the Purchase Agreement, Purchaser shall deliver to and deposit
with the Escrow Agent an escrow amount consisting of Two Million Five Hundred
and Fifty Thousand Dollars ($2,550,000) in immediately available funds (the
"Initial Escrow Fund"). The Initial Escrow Fund, together with any Earned
Interest (as defined below) will be held by the Escrow Agent until utilized to
pay Purchaser or delivered to the Trusts pursuant to the terms hereof and is
referred to herein as the "Escrow Fund". The Escrow Agent shall acknowledge
receipt of the Initial Escrow Fund by written notice to Purchaser and the Trusts
and shall act with respect to the Escrow Fund and otherwise as hereinafter set
forth.
4. Investment of Escrow Fund.
(a) The Escrow Agent shall establish the Escrow Account and shall
invest and reinvest the Escrow Fund in money market funds or, so long
as the Escrow Agent shall not be prohibited from making any such
investment or reinvestment (whether by statute, regulation or
otherwise), upon receipt of joint written investment instructions
received by the Escrow Agent and signed by Purchaser and the Trusts,
the Escrow Agent shall invest the Escrow Fund in other investments in
accordance with such instructions. The Escrow Fund shall be invested at
all times during the term of this Agreement except when such
investments are liquidated and cash is held by the Escrow Agent
immediately pending payment of any amount from the Escrow Fund as
provided in this Agreement. The Escrow Agent shall not be responsible
or liable for any loss suffered in connection with any investment of
the Escrow Fund made by it in accordance with this Section 4 or
realized as a result of the liquidation of any such investment, absent
willful misconduct or gross neglect.
(b) All interest earned on the Escrow Fund, including any interest
earned on such interest (collectively, "Earned Interest") shall be held
by the Escrow Agent as part of the Escrow Fund. Purchaser and the
Trusts acknowledge and agree that Earned Interest shall be disbursed
with the final release of the Escrow Fund on a pro-rata basis as
follows, except for disbursement under Section 6(b)(i). Purchaser shall
be entitled to the percentage of the Earned Interest equal to the
percentage of the amounts disbursed to Purchaser hereunder divided by
the amount of the Initial Escrow Fund. By way of example, if the amount
of the Initial Escrow Fund is $2,500,000 and the amount that is
disbursed to Purchaser hereunder is $1,250,000, Purchaser shall be
entitled to 50% of the Earned Interest and the Trusts collectively
shall be entitled to 50% of the Earned Interest.
5. Taxes on Escrow Fund from Investment or Reinvestment.
(a) For income Tax purposes, the Escrow Fund, as well as all income
earned from the investment or reinvestment of the Initial Escrow Fund
and any Earned Interest in any Tax year, shall be treated in the manner
described in proposed Treasury Regulations Section 1.468B-8. The Trusts
or Purchaser, as the case may be, shall pay all income Taxes assessed
with respect to any income earned on the Escrow Fund and paid to the
Trusts or Purchaser and the Escrow Agent shall report such amounts to
the Internal Revenue Service as amounts earned by the Trusts or
Purchaser in accordance with proposed Treasury Regulations Section
1.468B-8 at the end of each calendar year. To the extent income is
earned on the Escrow Fund and not yet disbursed hereunder, the Trusts
shall report and pay all income Taxes assessed with respect thereto;
provided, however, that in the event that amounts under the Escrow Fund
subsequently are disbursed to Purchaser, the parties shall instruct the
Escrow Agent to issue amended form 1099s to the extent possible
reflecting the proper allocation of interest, and if not possible,
Purchaser shall reimburse the Trusts with regard to income Taxes
previously paid by the Trusts such amounts following receipt of
documentation thereof.
(b) Purchaser and each of the Trusts shall provide the Escrow Agent
with their Tax Identification Number (TIN) as assigned by the Internal
Revenue Service. Exhibit B attached hereto sets forth each Trust's tax
identification numbers and the percentage of the Escrow Fund
attributable to each of the Trusts (the "Applicable Percentages"). In
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addition, Purchaser and each of the Trusts shall provide to the Escrow
Agent an appropriate Internal Revenue Service Form W-9 for tax
identification number certification or an appropriate Internal Revenue
Service Form W-8BEN form for non-resident alien certification and such
other documents as the Escrow Agent may reasonably request to permit it
to properly file information returns with the proper parties.
(c) From time to time, Purchaser and each of the Trusts shall
provide the Escrow Agent with a jointly executed notice advising the
Escrow Agent the percentage of the interest that shall be allocated to
each of the Purchaser and the Trusts for each year or so that the
Escrow Agent can issue form 1099s or amended form 1099s as required
hereunder. The Escrow Agent shall be responsible only for income tax
information reporting with respect to interest earned on the Escrow
Fund.
6. Disbursements from Escrow Account.
(a) General.
(i) The Escrow Fund shall be available to pay, in accordance with
the procedures set forth herein, any amounts for which Purchaser is
entitled to indemnification pursuant to Article IX of the Purchase
Agreement. All disbursements from the Escrow Fund hereunder shall be
made by wire transfer or immediately available funds to bank
account(s) designated by Purchaser or the Trusts, as the case may
be, and any written notice delivered to the Escrow Agent, unless the
Escrow Agent receives different disbursement instructions in writing
from Purchaser and the Trusts specifically revoking or amending any
part of disbursement instructions given to the Escrow Agent by such
party. Notwithstanding the provisions herein to the contrary, if the
amount of a Claim to be paid hereunder exceeds the amount of the
Escrow Fund then held by the Escrow Agent, then Escrow Agent shall
pay out the entire balance of the Escrow Fund to Purchaser in
partial satisfaction of such Claim.
(ii) In addition to any Earned Interest which shall be disbursed
as described in Section 4, the Escrow Agent shall make the following
disbursements to Purchaser from the Escrow Account (each a
"Disbursement Event"):
(A) On each occasion on which Purchaser determines in good
faith that it is entitled to payment of a claim for indemnification
under Article IX of the Purchase Agreement, Purchaser shall deliver
to the Escrow Agent and the Trusts a written notice (a "Claim
Notice") which sets forth the amount or the method of computation of
the amount of such claim, and a reference to the provision of the
Purchase Agreement or any agreement, certificate or instrument
executed pursuant hereto or in connection herewith upon which such
claim is based; provided, that a Claim Notice in respect of any
action at law or suit in equity by or against a third Person as to
which indemnification will be sought shall be given promptly after
the action or suit is commenced; and provided further, that failure
to give a Claim Notice shall not relieve Sellers of their
obligations under the Purchase Agreement.
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(B) If within thirty (30) days after the delivery of a Claim
Notice pursuant to Section 6(a)(ii)(A), one of the Trusts does not
notify the Escrow Agent in writing (with a copy to Purchaser) that
the Trusts disagree in good faith with the amount or method of
determination set forth in the Claim Notice (a "Dispute Notice"),
which objection shall identify in reasonable detail the reasons for
and include any relevant documentation in support of the objection,
the Escrow Agent promptly shall disburse cash from the Escrow
Account to Purchaser in the amount of set forth in such Claim
Notice. The failure of either of the Trusts to provide a Dispute
Notice as set forth in this Section 6(a)(ii)(B) shall be deemed an
irrevocable acceptance of liability for any amount contained in the
applicable Claim Notice. The Escrow Agent shall send a written
confirmation of such payment to the Trusts within three (3) days
after consummation of such payment. In the event that one of the
Trusts delivers a Dispute Notice it shall be binding in all respects
on the other Trust.
(C) If within thirty (30) days after the delivery of a Claim
Notice pursuant to Section 6(a)(ii)(A) hereof either of the Trusts
deliver to the Escrow Agent a Dispute Notice, the Escrow Agent shall
not disburse, and shall continue to hold in the Escrow Account, the
amount requested in the Claim Notice, or the disputed portion
thereof, as the case may be, pending either (1) joint written
instructions from Purchaser and the Trusts specifying the agreement
of the parties as to the action to be taken with respect to such
Claim Notice ("Payment Instructions") or (2) receipt by the Escrow
Agent of a notice from Purchaser and the Trusts stating that such
dispute has been submitted to a court of competent jurisdiction or
regulatory agency for final judgment, and that a final judgment with
respect to such matters has been rendered (a "Judgment Notice")
which is accompanied by a copy of a final, non-appealable order of
the court or regulatory agency ("Order"), pursuant to which such
court or regulatory agency has determined whether and to what extent
(i) Purchaser is entitled to the amount requested in such Claim
Notice or (ii) in the case of Taxes, the liability of Targets with
regard to such Taxes. Upon receipt of Payment Instructions or a
Judgment Notice and Order, as applicable, the Escrow Agent shall
thereafter act in accordance with Section 6(a)(ii)(E) below.
(D) The Escrow Agent promptly shall disburse cash from the
Escrow Account to Purchaser for any undisputed amounts (i.e., the
amount set forth in such Claim Notice less the amount set forth in
the Dispute Notice).
(E) If the Escrow Agent has received Payment Instructions or a
Judgment Notice and Order, and if such Payment Instructions or Order
indicate that Purchaser is entitled to payment in respect of all or
any portion of a Claim Notice, then the Escrow Agent shall release
from the Escrow Account and pay to Purchaser an amount of cash from
the Escrow Account in an amount equal to the amount due Purchaser,
as indicated in such Payment Instructions or Order. Such payment
will be made on or before the fifth (5th) business day following the
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date on which the Escrow Agent received such Payment Instructions or
Order. If such Payment Instructions or Order indicate that Purchaser
is not entitled to all or any portion of the amount claimed in
Purchaser's notice (a "Discharge Notice"), then the Escrow Agent
shall hold the amount which Purchaser is determined not to be
entitled in accordance with the terms of this Agreement until such
amounts are to be disbursed (1) pursuant to Section 7 below, (2) to
Purchaser in respect of another Claim Notice, or (3) upon the
receipt of joint written instructions from Purchaser and the Trusts.
(b) Disbursements Following IRS Audit. Purchaser, the Trusts and
Escrow Agent acknowledge that the IRS currently is conducting an audit
of the 2003 corporate income tax return of MRG Entertainment, Inc. to
determine whether there is any liability for any Taxes (the "IRS
Audit"). Following notification by the IRS of any potential liability
of the Targets for Taxes, Purchaser may submit a Claim Notice under
Section 6(a)(ii) hereof (each a "Tax Claim Notice") setting forth the
amount of the asserted Tax liability (the "Tax Liability Amount").
(i) in the event Tax Claim Notice(s) are delivered to the Escrow
Agent prior to July 2, 2007 and the amount set forth in the Tax
Claim Notice(s) is less than $100,000 in the aggregate (or the IRS
has acknowledged in writing that the aggregate Tax Liability Amount
is less than $100,000), the Escrow Agent shall disburse (i) the Tax
Liability Amount to Purchaser in accordance with the provisions set
forth above and upon evidence that such Tax Liability Amount has
been paid to the IRS and (ii) to the Trusts the lesser of (x) the
remaining Escrow Funds and (y) $1,000,000, plus the Earned Interest
on such amount.
(ii) in the event Tax Claim Notice(s) are delivered to the Escrow
Agent prior to July 2, 2007, and the amount set forth in the Tax
Claim Notice(s) equals or exceeds $100,000 but is less than
$1,000,000 (or the IRS has acknowledged in writing that the
aggregate Tax Liability Amount equals or exceeds $100,000 but is
less than $1,000,000), the Escrow Agent shall disburse (i) the Tax
Liability Amount to Purchaser in accordance with the provisions set
forth above and upon evidence that such Tax Liability Amount has
been paid to the IRS and (ii) to the Trusts the lesser of (x) the
remaining Escrow Funds minus the Tax Liability Amount and (y)
$1,000,000 minus the Tax Liability Amount.
(iii) in the event Tax Claim Notices(s) are delivered to the
Escrow Agent on or after July 2, 2007, the Escrow Agent shall follow
the provisions of Section 6(a)(i) hereof with regard to such Tax
Claim Notices.
(c) Liability for Additional Losses. Notwithstanding anything
contained in this Section 6(b) to the contrary, Sellers shall be liable
to Purchaser in respect of any additional Losses incurred by Purchaser
pertaining to Taxes (and any and all other Losses incurred by
Purchaser) to the maximum extent provided herein and under Article IX
of the Purchase Agreement.
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(d) Prevailing Party Fees. In the event any action is commenced by
either Purchaser or the Trusts in connection with a dispute arising
pursuant to this Section 6, the prevailing party in such action or
arbitration shall be entitled to recover its reasonable attorneys' fees
and costs incurred in connection therewith.
7. Release of Balance of Escrow Fund Fund.
(a) Subject to Section 7(b) below, on July 2, 2007, the Escrow Agent
shall deliver to the Trusts the balance of the Escrow Fund (net of all
Earned Interest, which shall be disbursed in accordance with the
provisions of Section 4) less the amount of any claims for
indemnification which have been set forth in a written claim of
Purchaser and delivered to the Escrow Agent and as to which there has
been no Disbursement Event (such amounts are hereafter referred to as
the "Release Excluded Amounts"). The Release Excluded Amounts shall
remain in the Escrow Fund until the occurrence of a Disbursement Event.
Upon the occurrence of such Disbursement Event, the Escrow Agent shall
immediately disburse the amounts remaining in the Escrow Fund, if any,
to the Trusts based on the Applicable Percentages.
(b) Notwithstanding anything to the contrary contained in this
Agreement, in the event the Tax Liability Amount has not been finalized
for any reason as of July 2, 2007 (e.g., all or a portion of the Tax
Liability Amount is being appealed, disputed or contested, the IRS has
not completed the IRS Audit, or the IRS has not confirmed in writing
the amount of the Tax Liability Amount), in addition to any other
amounts being held in accordance with the terms of this Agreement, the
Escrow Agent shall continue to hold the lesser of (i) the amounts being
appealed, disputed or contested or (ii) $1,000,000, until such time as
the Tax Liability Amount has been finalized and the Escrow Fund
disbursed in accordance with Section 4 and Section 6.
8. Termination. This Escrow Agreement shall terminate upon disbursement
of the entire amount of the Escrow Account (including interest thereon) in
accordance with the terms of this Agreement.
9. Delivery of Escrow Fund. Purchaser and the Trusts will be entitled
to delivery of the Escrow Fund solely in accordance with the terms hereof.
Except as may otherwise be lawfully determined, no creditor of the Trusts
or Purchaser will have any rights in or to the Escrow Fund so long as the
Escrow Fund remains subject to the terms of this Escrow Agreement;
provided, that the Escrow Fund is an asset of the Trusts subject to the
terms of this Escrow Agreement.
10. Duties of the Escrow Agent; Fees. The Escrow Agent has agreed to
waive any fees for performing any services rendered by it hereunder. Any
fees incurred by the Escrow Agent in connection with a dispute between
Purchaser and the Trusts shall be borne equally by the parties. Acceptance
by the Escrow Agent of its duties under this Escrow Agreement is subject to
the following terms and conditions, which the parties to this Escrow
Agreement hereby agree will govern and control the rights, duties and
immunities of the Escrow Agent:
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(a) The duties and obligations of the Escrow Agent shall be
determined solely by the provisions of this Escrow Agreement and the
Escrow Agent shall be responsible only for the performance of such
duties and obligations as are specifically set out in this Escrow
Agreement;
(b) The Escrow Agent shall not be a party to, or bound by, any
agreement between or among the Trusts and/or Purchaser other than this
Agreement whether or not a copy and/or original of such agreement is
provided to the Escrow Agent; and the Escrow Agent shall have no duty
to know or inquire as to the performance or nonperformance of any
provision of any such agreement between or among the Trusts and/or
Purchaser;
(c) The Escrow Agent shall be fully protected in acting on and
relying upon any written instruction, certificate or notice or other
paper or document which is received by the Escrow Agent from Purchaser
or the Trusts;
(d) The Escrow Agent shall not and will not rely or act upon any
communication, written or otherwise, from the Trusts, unless such
communication (i) is that of the Trusts; and (ii) has been delivered in
a writing signed by both the Trusts to Escrow Agent in specific accord
with the terms and conditions of this Agreement except with regard to
the Claim Notice as described above;
(e) The Escrow Agent shall not be liable for any mistake in fact or
law or otherwise, absent willful misconduct, bad faith or gross
neglect;
(f) The Escrow Agent may seek the advice of independent legal
counsel in the event of any dispute or question as to the construction
of any of the provisions of this Escrow Agreement or its duties
hereunder, and it shall incur no liability in respect of any reasonable
action taken, omitted or suffered by it in accordance with the opinion
of such counsel;
(g) If the Escrow Agent shall in any instance after seeking the
advice of legal counsel pursuant to the immediately proceeding clause,
in good faith be uncertain as to its duties or rights hereunder, then
the Escrow Agent shall notify Purchaser and the Trusts thereof in
writing. After giving such notice, Escrow Agent shall be entitled to
refrain from taking any action hereunder with respect to the matter as
to which there is any such uncertainty and in such event it shall keep
safely all funds and investments held in the Escrow until it shall be
directed otherwise in a writing signed by Purchaser and the Trusts, or
by final nonappealable order of a court of competent jurisdiction;
provided, however, if the Escrow Agent has not received such written
direction or court order within one hundred eighty (180) calendar days
after requesting the same, then it shall have the right to interplead
the Escrow Fund in any court of competent jurisdiction and request that
such court determine its rights and duties hereunder.
(h) Purchaser and each of the Trusts agrees to (jointly and
severally) indemnify and hold harmless the Escrow Agent and any of its
directors, officers, employees or agents on demand from and against any
and all claims, losses, liabilities, taxes, obligations, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by or
asserted against it in its capacity as the Escrow Agent or in any way
relating to or arising out of this Agreement, and absent willful
misconduct, bad faith or gross neglect of the Escrow Agent; and
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(i) The Escrow Agent shall not be responsible to the other parties
hereto for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement.
11. Resignation of Escrow Agent. The Escrow Agent and any successor
escrow agent, as the case may be, may resign its duties and be discharged
from all further duties and obligations hereunder at any time upon giving
thirty (30) days' written notice to Purchaser and the Trusts. Purchaser and
the Trusts shall thereupon jointly designate a successor escrow agent
hereunder within said 30-day period, to whom the Escrow Agent shall,
deliver the Escrow Fund. In the absence of such a joint designation of a
successor escrow agent, the Escrow Agent shall, without further liability
or responsibility, retain the Escrow Fund as custodian thereof until
otherwise jointly directed by Purchaser and the Trusts.
12. Notices. All notices, communications and deliveries under this
Agreement shall be made in writing signed by the party making the same,
shall specify the section of this Agreement pursuant to which it is given,
and shall be deemed received (i) on the date delivered if delivered in
person (or by a recognized overnight courier with all costs paid), or (ii)
three days after being mailed, if mailed certified mail, return receipt
requested (with postage prepaid), with a copy sent by regular mail or (iii)
if given by facsimile (with the original sent by U.S. mail), on the date
duly transmitted during usual business hours of the recipient on a business
day, otherwise on the next business day. Such notice shall not be effective
unless copies are provided contemporaneously as specified below. The time
of giving notice to those to whom copies are to be given shall not control
the date notice is given or received but the manner of delivery shall be
the same. The addresses and requirements for copies are as follows:
To Purchaser:
New Frontier Media, Inc.
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Attention: Michael Weiner, Karyn Miller and George Sawicki
Fax Number: (303) 444-0848
with a copy to:
E. Lee Reichert, Esq.
Kamlet Shepherd & Reichert, LLP
1515 Arapahoe Street Tower 1, Suite 1600
Denver, Colorado 80202 Fax
Number: (303) 825-1185
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To the Trusts:
Marc Laurence Greenberg Trust dated May 11, 2001
c/o Marc Greenberg
4211 Roma Court
Marina del Rey, California 90292
Email Address: cpv33@aol.com
Goldberg Family Trust dated June 15, 2001
c/o Richard Goldberg
512 11th Street
Santa Monica, California 90402
Email Address: rich@mainlinereleasing.com
with a copy to:
Michael Wolf, Esq.
Wolf, Rifkin, Shapiro & Schulman, LLP
11400 W. Olympic Boulevard, 9th Floor
Los Angeles, California 90064-1582
Fax Number: 310-479-1422
To Escrow Agent:
First Community Bank, N.A.
220 Josephine Street
Ste. 100
Denver CO 80206
Attention: ________________
Fax Number: ____-____-____
or to such representative or to such other address as the parties
hereto may furnish to the other parties in writing. If notice is given
pursuant to this Section of a permitted successor or assign of a party to
this Agreement, then notice shall be given as set forth above to such
successor or assign of such party.
13. Entire Agreement; Assignment. This Agreement (together with the
other agreements and documents referred to herein) constitutes the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings,
whether oral or written, relating to the subject matter hereof. In the
event of any inconsistency or conflict between any provision of this
Agreement and one or more provisions of the Purchase Agreement, this
Agreement shall prevail and control. No amendment of modification of the
terms of this Agreement shall be binding or effective unless expressed in
writing and signed by each party. Neither of the Trusts may assign this
Agreement unless it obtains the prior written consent of Purchaser, which
consent may be withheld in Purchaser's sole discretion.
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14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without regard to
conflicts of laws principles. The parties to this Agreement agree that any
legal suit, action or proceeding arising out of or relating in any way to
this Agreement, including but not limited to issues of specific performance
and indemnity, may be instituted exclusively in a court in Colorado, and
each party waives any objection whatsoever which it may have now or
hereafter to the laying of the venue of any such suit, action or proceeding
exclusively in a court in Colorado, and irrevocably submits to the
exclusive jurisdiction of a court in Colorado, in any such suit, action or
proceeding. In the event any legal suit, action or proceeding of any kind
is commenced in or brought in any court other than in a court in Colorado,
both parties agree to, and shall cause their respective subsidiaries and
affiliates to, transfer and/or remove any such legal suit, action or
proceeding to a court in Colorado, or to dismiss such legal suit, action or
proceeding immediately.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by facsimile shall be equally as effective as
delivery of the original counterpart of this Agreement.
16. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
17. Captions; Definitions. The titles or captions of sections contained
in this Agreement are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof. The parties agree to all
definitions in the statement of parties to this Agreement and in the other
introductory language to this Agreement.
18. Miscellaneous. Any provision of this Agreement that is held by any
court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
19. Waiver of Personal Service. EACH OF THE PARTIES HERETO WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO IT AT THEIR
RESPECTIVE ADDRESSES SET FORTH IN SECTION 11 ABOVE OR AS OTHERWISE PROVIDED
UNDER THE LAWS OF THE STATE OF COLORADO. EACH OF THE PARTIES HERETO WAIVES
ANY OBJECTION BASED ON FORUM NONCONVENIENS, AND ANY OBJECTION TO VENUE OF
ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
[Signature Page Following]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
PURCHASER:
NEW FRONTIER MEDIA, INC.
By: /s/ Michael Weiner
------------------------------
Name: Michael Weiner
Title: CEO
SELLERS:
MARC LAURENCE GREENBERG TRUST DATED MAY 11, 2001
By: /s/ Marc Greenberg
------------------------------
Marc Greenberg, Trustee
GOLDBERG FAMILY TRUST
DATED JUNE 15, 2001
By: /s/ Richard Goldberg
------------------------------
Richard Goldberg, Trustee
ESCROW AGENT:
FIRST COMMUNITY BANK, N.A.
By: /s/ Gregory P. Bosshelle
------------------------------
Name: Gregory P. Bosshelle
------------------------------
Title: Vice-President
------------------------------
ACKNOWLEDGED AND AGREED TO:
/s/ Marc Laurence Greenberg
- --------------------------------------
Marc Laurence Greenberg, individually
/s/ Richard B. Goldberg
- --------------------------------------
Richard B. Goldberg, individually
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EXHIBIT A
NAME TIN %
- ------------------------------------------------------------------------------
MARC LAURENCE GREENBERG 50%
TRUST DATED MAY 11, 2001
GOLDBERG FAMILY TRUST 50%
DATED JUNE 15, 2001