EMPLOYMENT AGREEMENT





     THIS AGREEMENT (the "Agreement"), made in New York, New York as of May 11,

2006, between Escala Group, Inc., a Delaware corporation (the "Company"), and

Matthew Walsh ("Executive").



     WHEREAS, the Company desires to employ Executive as its Chief Financial

Officer, and Executive desires to accept such employment on the terms and

conditions hereinafter set forth;



     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and agreements

hereinafter set forth, the Company and Executive agree as follows:



     1.   Term.



          Unless earlier terminated in accordance with Section 4 hereof, the

term of this Agreement shall be the period commencing as of the date hereof and

ending on June 30, 2009 (the "Term").



     2.   Employment.



          (a)  Employment by the Company. Executive agrees to be employed by the

Company during the Term upon the terms and subject to the conditions set forth

in this Agreement. Executive shall serve as the Chief Financial Officer and

Executive Vice President of the Company and shall report to the President and

Chief Executive Officer of the Company.



          (b)  Performance of Duties. Throughout the Term, Executive shall

faithfully and diligently perform Executive's duties in conformity with the

directions of the Company and serve the Company to the best of Executive's

ability. Executive shall devote his full business time and best efforts to the

business and affairs of the Company. In his capacity as the Chief Financial

Officer of the Company, Executive shall have such duties and responsibilities as

are customary for Executive's position and any other duties or responsibilities

consistent with his position he may be assigned by the President and Chief

Executive Officer of the Company.



          (c)  Place of Performance. Executive shall be based at the Company's

offices in New York, New York. Executive recognizes that his duties will

require, at the Company's expense, travel to domestic and international

locations.



     3.   Compensation and Benefits.



          (a)  Base Salary. The Company agrees to pay to Executive a base salary

("Base Salary") at the annual rate of $350,000. Payments of the Base Salary

shall be payable in equal installments in accordance with the Company's standard

payroll practices.





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          (b)  Bonus for Fiscal Year 2006. The Company shall pay a bonus to

Executive of $30,493 for fiscal year 2006 (the "2006 Bonus"), payable promptly

following the July Meeting Date, but in no event later than July 31, 2006.



          (c)  Annual Performance Bonus for Fiscal Years 2007-2009. Executive

shall be eligible to receive an annual cash bonus (the "Performance Bonus") for

each of fiscal years 2007, 2008 and 2009. The Performance Bonus, if any, will be

based on the extent to which individual and Company-wide performance goals

established by the Company for each of fiscal years 2007, 2008 and 2009 have

been met. The target Performance Bonus shall be 60% of Base Salary (the "Target

Performance Bonus"). Each Performance Bonus, if any, shall be paid within thirty

days following the issuance of financial statements for the fiscal year in

respect of which such bonus is payable, provided that in no event shall the

Performance Bonus be paid later than the March 14 next occurring following the

end of such fiscal year. Except as provided in Sections 5(c)(iii) and 5(d)(iii),

Executive must be employed by the Company on the last day of the fiscal year to

be eligible for the Performance Bonus.



          (d)  Long-Term Incentive Award. Executive will be eligible to receive

a long-term incentive award pursuant to the Matthew Walsh Incentive Compensation

Program set forth on Annex A hereto.



          (e)  Benefits and Perquisites. Executive shall be entitled to

participate in, to the extent Executive is otherwise eligible under the terms

thereof, the benefit plans and programs, and receive the benefits and

perquisites, generally provided by the Company to executives of the Company,

including without limitation disability insurance and family medical insurance

(subject to applicable employee contributions). Executive shall be entitled to

receive twenty (20) days of annual paid vacation.



          (f)  Business Expenses. The Company agrees to reimburse Executive for

all reasonable and necessary travel, business entertainment and other business

expenses incurred by Executive in connection with the performance of his duties

under this Agreement. Such reimbursements shall be made by the Company on a

timely basis upon submission by Executive of vouchers in accordance with the

Company's standard procedures.

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