Adult PPV Co. Settles Suit

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New Frontier Media Inc. said Wednesday that it has reached a settlement
agreement with a former investor who had won an earlier breach-of-contract
lawsuit against the company.

In a press release, adult pay-per-view purveyor New Frontier said the
District Court of Boulder, Colo., issued an order confirming the settlement,
whereby New Frontier agreed to pay former investor and Colorado pig farmer J.P.
Lipson $820,000 in cash.

As a result, the court is expected to vacate an earlier judgment against the
company and two of its officers that Lipson had won last year.

Lipson sued New Frontier in June 2000, claiming that the company had reneged
on a deal that would have had him invest $10 million in return for eventual
control of the adult-entertainment network.

Lipson won that case in August 2000, and he was awarded $11 million.

New Frontier -- holdings of which include The Erotic Network, Pleasure and
several other adult-PPV channels -- appealed the decision, and the award was
whittled down to about $2 million in February 2001.

The company also filed a countersuit against Lipson, claiming that a major
witness for the plaintiff was paid a substantial amount of money in connection
with that witness' testimony in the August trial.

New Frontier said that with the settlement agreement, the counterclaim --
which was scheduled for an evidentiary hearing before the court in January --
will be dropped.

'This settlement essentially is a repayment of the money Mr. Lipson paid
directly to one of our vendors in October 1998, plus interest on that money, as
well as sharing in less than 10 percent of his trial expenses,' New Frontier
chairman Mark Kreloff said in a prepared statement.

'We are ready to put this litigation behind us and move forward with our
plans to grow the business,' he added.

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