New Frontier Media (NOOF)

NOTE 13 — SUBSEQUENT EVENTS

In July 2007, the Company obtained a $7.5 million line of credit from an outside financial institution. Amounts borrowed under the line of credit will be used to support the Company’s short-term working capital needs. The line of credit is secured by the Company’s trade accounts receivable and will mature in July 2008. The interest rate applied to borrowings under the line of credit is based on the current Prime Rate less 0.13%. The terms of the line of credit include certain defined negative and affirmative covenants customary for facilities of this type. The Company has made no borrowings under the line of credit.

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NOTE 13 — SUBSEQUENT EVENTS

On October 24, 2006, CSB entered into a three-year satellite capacity lease with Transponder Encryption Services Corporation (“TESC”). The agreement provides for the continuing distribution of all three of the 24-hour, per day 7-day per week video channels currently distributed by TESC to customers of DISH Network. These channels are TEN, TENClips and TENXtsy. Under the terms of the agreement, CSB will receive a contractual share of the revenues received by TESC from DISH Network customers who purchase the right to view any of the three video channels’ programming.

On November 6, 2006, the Company entered into employment agreements with Michael Weiner, the Company’s Chief Executive Officer; Karyn L. Miller, the Company’s Chief Financial Officer; and Ken Boenish, the Company’s President (collectively, the “Executives”). The agreements amend certain terms of the Executives’ original employment agreements and extend the term of employment for each of the Executives through March 31, 2009. The agreements include provisions addressing compensaton, early termination, change in control events, and other terms and conditions customary for such employment arrangements. The agreement with Mr. Weiner provides for a base salary of $600,000 for the year ended March 31, 2008 and base salary of no less than $600,000 for the year ended March 31, 2009. The agreement did not adjust Mr. Weiner’s base salary of $500,000 for the year ended March 31, 2007. The agreement with Mr. Boenish provides for a base salary of $350,000, $500,000 and $500,000, for the years ended March 31, 2007, March 31, 2008 and March 31, 2009, respectively, and a signing bonus of $150,000, to be paid in equal installments through March 31, 2007. The agreement with Ms. Miller provides for a base salary of $180,000, $275,000 and $275,000, for the years ended March 31, 2007, March 31, 2008 and March 31, 2009, respectively, and a signing bonus of $95,000, to be paid in equal installments through March 31, 2007.

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NOTE 21 — SUBSEQUENT EVENTS

On April 4, 2006, the Company entered into an Affiliation Agreement with DirecTV, Inc. The agreement grants to DirecTV the non-exclusive right to distribute the national feeds of the 24-hour per day, 7-day per week programming services of TEN and TEN*Clips for a two year period from the date on which DirecTV commences commercial distribution of these services. Under the terms of the agreement, if these services replace services provided by a competitor, DirecTV may, under certain conditions, earn credits related to the performance level of our services. DirecTV began commercial distribution of TEN and TEN*Clips on April 5, 2006.

F-33

NOTE 11 — SUBSEQUENT EVENTS

In January 2006, the Company entered into an employment contract with the Vice President of Marketing and Corporate Strategy. This contract commenced January 20, 2006 and ends July 31, 2008. Yearly compensation is $306,000. A one time signing bonus and relocation assistance of $25,000 was

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NOTE 8 — SUBSEQUENT EVENTS

In July 2005, the Company granted 840,000 stock options to executives and certain employees.

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