Exhibit 10.9

 

AGREEMENT TO CONVERT UNPAID SALARY

 

This Agreement to Convert UNPAID SALARY (the “Agreement”) is made as of the 14th
day of November, 2013 (the “Effective Date”) by and between Jeanene Morgan
(referred to herein as the “Holder”) and Genius Brands International, Inc., a
Nevada corporation (referred to herein as the “Company”).

 

Recitals

 

Whereas, the Holder is due salary pursuant to an Employment Agreement dated May
2, 2012, as amended, and the Company currently owes to the Holder the sum of
$19,327.05, including salary as of September 30, 2013 (the “Amount Owed”).

 

Whereas, the Company wishes to pay the Amount Owed by issuing restricted shares
of its common stock to the Holder and the Holder has agreed to accept the
Company’s securities as full and final payment of the Amount Owed, in accordance
with the terms of this Agreement.

 

Therefore, the Company and the Holder agree as follows:

 

Agreement

 

 

1.           Transfer of Securities and Cancellation of Debt.

 

(a)           Securities to be Issued. The Holder agrees to accept, and the
Company agrees to issue and transfer to the Holder 552,202 shares of the
Company’s Common Stock, par value $0.001, having an assigned value of $0.035 per
share. The Common Stock issued in payment of the Amount Due shall be referred to
in this Agreement as the “Shares”.

 

(b)           Exchange of Documents. The certificates representing the Shares
shall be delivered to the Holder as soon as practicable after Holder delivering
an executed copy of Agreement and Exhibit A to Company. Upon receipt of the
Shares, the Company shall record the payment of the outstanding obligation on
its books and records.

 

2.           Representations by Company.

 

The Company hereby represents and warrants to the Holder as follows:

 

(i)           The Company is duly organized, validly existing and in good
standing under the laws of the State of Nevada.

 

(ii)          The Company has all requisite power and authority (corporate or
otherwise) to execute, deliver and perform this Agreement and the transactions
contemplated thereby, and the execution, delivery and performance by the Company
of this Agreement has been duly authorized by all requisite action by the
Company and this Agreement, when executed and delivered by the Company,
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).

 

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(iii)         The execution, delivery and performance by the Company of this
Agreement have been duly authorized by all requisite corporate action of the
Company; and this Agreement has been duly executed and delivered by the Company.

 

(iv)         The Shares will be duly and validly issued, fully paid and
nonassessable, and free of any liens or encumbrances.

 

3.           Representations by the Holder.

 

The Holder hereby represents and warrants to the Company as follows:

 

(i)           The Holder has all requisite power and authority (corporate or
otherwise) to execute, deliver and perform this Agreement and the transactions
contemplated thereby, and the execution, delivery and performance by the Holder
of this Agreement has been duly authorized by all requisite action by the Holder
and this Agreement, when executed and delivered by the Holder, constitutes a
valid and binding obligation of the Holder, enforceable against the Holder in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).

 

(ii)          The Holder has a pre-existing personal or business relationship
with the Company and its officers and directors.

 

(iii)         The Holder is an “accredited investor,” as that term is defined in
Rule 501 of Regulation D (a copy of which is attached hereto as Exhibit “A”),
and has indicated on Exhibit B its specific qualification thereunder.

 

(iv)         The Holder understands and acknowledges that the Shares have not
been registered with the Securities and Exchange Commission under Section 5 of
the of the Securities Act or registered or qualified with any applicable state
or territorial securities regulatory agency in reliance upon one or more
exemptions afforded from registration or qualification.

 

(v)          The Holder understands and acknowledges that the Shares are deemed
to be “restricted” securities under the Securities Act, and may be re-sold only
pursuant to exemptions provided by the Securities Act. The Holder understands
and acknowledges that the Company is required to place a legend on each
certificate stating that the Shares have not been registered under the
Securities Act.

 

(vi)          The Holder understands and acknowledges that: (i) prior to any
sale, transfer, assignment, pledge, hypothecation or other disposition of the
Shares, it must either: (1) furnish the Company with an opinion of counsel, in
form and substance reasonably satisfactory to the Company and to its legal
counsel, to the effect that such disposition is exempted from the registration
and prospectus delivery requirement under the Securities Act and the securities
laws of the jurisdiction in which the Holder resides, and legal counsel for the
Company shall have concurred in such opinion; or (2) satisfy the Company that a
registration statement on Form S-1 under the Securities Act (or any other form
appropriate under the Securities Act, or any form replacing any such form) with
respect to the securities proposed to be so disposed of shall then be effective;
and that such disposition shall have been appropriately qualified or registered
in accordance with the applicable securities laws of the jurisdiction in which
the Holder resides.

 

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(vii)         The Holder is entering into this transaction for the Holder’s own
account, own risk and own beneficial interest, is not acting as an agent,
representative, intermediary, nominee or in a similar capacity for any other
person or entity, nominee account or beneficial owner, whether a natural person
or entity (each such natural person or entity, an “Underlying Beneficial Owner”)
and no Underlying Beneficial Owner will have a beneficial or economic interest
in the Shares (whether directly or indirectly, including without limitation,
through any option, swap, forward or any other hedging or derivative
transaction) and does not have the intention or obligation to sell, pledge,
distribute, assign or transfer all or a portion of the Shares to any Underlying
Beneficial Owner or any other person.

 

(viii)        The Holder hereby represents and warrants that the proposed
investment in the Company does not directly or indirectly contravene United
States federal, state, local or international laws or regulations applicable to
the Holder, including anti-money laundering laws (a “Prohibited Investment”).

 

(ix)           Federal regulations and Executive Orders administered by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”) prohibit, among
other things, the engagement in transactions with, and the provision of services
to, certain foreign countries, territories, entities and individuals. The lists
of OFAC prohibited countries, territories, persons and entities can be found on
the OFAC website at www.treas.gov/ofac. The Holder hereby represents and
warrants that the Holder is not a country, territory, person or entity named on
an OFAC list, nor is the Holder a natural person or entity with whom dealings
are prohibited under any OFAC regulations.

 

(x)           The Holder represents and warrants that neither the Holder nor any
Underlying Beneficial Owner is a senior foreign political figure, or any
immediate family member or close associate of a senior foreign political figure
within the meaning of, and applicable guidance issued by the Department of the
Treasury concerning, the U.S. Bank Secrecy Act (31 U.S.C. ss.5311 et seq.), as
amended, and any regulations promulgated thereunder.

 

(xi)          The Holder agrees promptly to notify the Company should the Holder
become aware of any change in the information set forth in subparagraphs (vii)
through (x).

 

(xii)         The Holder agrees to indemnify and hold harmless the Company, its
affiliates, their respective directors, officers, shareholders, employees,
agents and representatives from and against any and all losses, liabilities,
damages, penalties, costs, fees and expenses (including legal fees and
disbursements) which may result, directly or indirectly, from the Holder’s
misrepresentations or misstatements contained herein or breaches hereof relating
to paragraphs (vii) through (x).

 

(xiii)        The Holder understands and agrees that, notwithstanding anything
to the contrary contained in any document (including any side letters or similar
agreements), if, following the Holder’s investment in the Company, it is
discovered that the investment is or has become a Prohibited Investment, such
investment may immediately be redeemed by the Company or otherwise be subject to
the remedies required by law, and the Holder shall have no claim against the
Company for any form of damages as a result of such forced redemption or other
action.

 

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(xiv)        Upon the written request from the Company, the Holder agrees to
provide all information to the Company to enable the Company to comply with all
applicable anti-money laundering statutes, rules, regulations and policies,
including any policies applicable to a portfolio investment held or proposed to
be held by the Company. The Holder understands and agrees that the Company may
release confidential information about the Holder and any Underlying Beneficial
Owner(s) to any person if the release of such information is necessary to comply
with applicable statutes, rules, regulations and policies.

 

4.           Miscellaneous.

 

(a)           Amendments and Waivers; Binding Effect. This Agreement, together
with the Employment Agreement, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof;
provided, however, that if there is any contradiction between the terms of the
Employment Agreement and this Agreement, the terms of this Agreement shall
prevail. The provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holder. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns.

 

(b)           Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or international courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon the earlier of
receipt by the addressee or the second business day after dispatch by recognized
international courier.

 

If to the Company:     Genius Brands International, Inc.

3111 Camino del Rio North, Suite 400

San Diego, California 92108

Attn: Jeanene Morgan, Chief Financial Officer

Fax: (619) 281-2507

Tel: (858) 450-2900

 

If to the Holder:          Jeanene Morgan

5011 E. Mountain View Drive

San Diego, CA 92116

Fax: 619-281-2503

Tel: 619-281-2500

 

(c)           Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties. Neither the Holder nor the Company may assign its rights or obligations
hereunder without the prior written consent of the other.

 

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(d)           Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

 

(e)           Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

 

(f)           Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

 

In Witness Whereof, the parties have executed this Agreement to Convert Debt as
of the date first written above.

 

 

GENIUS BRANDS INTERNATIONAL, INC.

 

 

 

By: /s/ Klaus Moeller

Klaus Moeller, Chief Executive Officer

 

 

Jeanene Morgan

 

 

 

By: /s/ Jeanene Morgan

 

 

Jeanene Morgan

Print Name and Title

 

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