Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of September 1, 2017
(the “Effective Date”) by and between LiveXLive Media, Inc., a Delaware
corporation (the “Company”) and Andy Schuon (“Executive”).

 

The Company and Executive sometimes are referred to herein collectively as the
“Parties” and each individually as a “Party”.

 

The Company and Executive, intending to be legally bound, agree as follows:

 

1.           Employment. On the terms and subject to the conditions contained
herein, the Company hereby employs Executive, and Executive accepts such
employment with the Company.

 

2.           Term. This Agreement is effective as of the Effective Date. The
Company agrees to employ Executive in accordance herewith during the period
starting on the Effective Date and ending on and inclusive of the date three (3)
years thereafter, subject to any earlier termination of Executive’s employment
hereunder pursuant to Section 7. The period starting on the Effective Date and
ending on and inclusive of the date three (3) years thereafter, regardless of
any termination of Executive’s employment hereunder, is referred to herein as
the “Term”. The period starting on the Effective Date and ending on and
inclusive of the earlier of (a) the date three (3) years thereafter, and (b) the
Termination Date (as defined in Section 8.1) is referred to herein as the
“Employment Period”.

 

3.           Position and Duties. The Company agrees that during the Employment
Period:

 

3.1          Title; Reporting. The Company will employ Executive as the sole
President of the Company. Other than Robert Ellin (“Ellin”) serving in his
capacity as the Chief Executive Officer of the Company (the “CEO”), Executive
will be the most senior executive officer of the Company and of each and all of
its Affiliates (as defined in Section 9.5(a)) (the Company, together with all of
its Affiliates, are referred to herein collectively as the “Company Group”).
Executive will report solely and directly (a) to Ellin at any time that Ellin is
serving as the CEO, or (b) to Ellin at any time that Ellin is serving as
Chairman of the board of directors of the Company (the “Chairman” and the
“Board,” respectively) but is not serving as the CEO, or (c) to the Board at any
time that Ellin is neither the CEO nor the Chairman. Other than Ellin serving in
his capacity as the CEO, no other employee or officer of the Company Group will
have any authorities, duties, offices, positions, powers, reporting
relationships, responsibilities, or titles equal or superior to those of
Executive. Other than Ellin serving in his capacity as CEO, the Company will not
(x) appoint any other person to a position more senior than, or equivalent in
status to, that held by Executive(whether in terms of any authorities, duties,
offices positions, powers, reporting relationships, responsibilities, titles, or
otherwise) including appointing any person other than Ellin or Executive to
serve as CEO of the Company, (y) appoint any other person to act jointly with
Executive, or (z) require Executive to share with any person any of Executive’s
authorities, duties, powers, reporting relationships, responsibilities, or
titles. Each and all of the employees and officers of the Company Group
(including the most senior executives of each Affiliate of the Company and of
the Company’s and its Affiliates’ respective operating units and divisions) will
report directly to Executive or, at Executive’s election, to any designee(s) of
Executive, except that at any time that Ellin is serving in his capacity as CEO,
Ellin may cause the Chief Financial Officer of the Company to report directly to
Ellin rather than to Executive. Notwithstanding the foregoing, with respect to
any entity (other than Slacker, Inc. and Snap Interactive, Inc.)acquired by the
Company which becomes an Affiliate of the Company after the Effective Date (an
“Acquired Entity”), the failure of the Company to cause all employees of such
Acquired Entity to report directly or indirectly to Executive, in and of itself,
shall not constitute a breach of this Agreement or a basis for the Executive’s
termination for Good Reason pursuant to Section 7.6, if the Company uses good
faith efforts and reasonable diligence, exercising reasonable business judgment,
to cause all employees of such Acquired Entity to report directly or indirectly
to Executive.

 

 

 

 

LiveXLive Media, Inc./Schuon Employment Agreement

 

3.2          Duties. Executive will have general supervision, direction, and
control of the day to day business and affairs of the Company Group, subject to
the budget of the Company then in effect, and, without limiting the provision of
Section 7.6, the direction and control of the person or body to whom Executive
reports to hereunder. Subject to the reasonable direction and control of the
Board and such Written Policies (as defined below) as may be established from
time to time by the Board, the authority and responsibilities of the Executive
shall include: (a) managing the day-to-day business operations of the Company
Group; (b) supervising, coordinating, and managing the Company Group’s business,
operations, activities, operating expenses, and capital allocation; (c) matters
relating to the Company Group’s employees and officers (other than Ellin serving
in his capacity as the CEO), including hiring, terminating, setting compensation
of, the positions or titles (including promotions) of, and allocating
responsibilities of such employees and officers; and (d) such other authorities,
duties, powers, and responsibilities typically exercised by a president, or, in
respect of any period during which Ellin is not serving as the CEO, typically
exercised by the most senior executive. As used herein, “Written Policy(ies)”
shall mean, and include, any policy or procedure of the Company, the Board or
the Compensation Committee of the Board (the “Compensation Committee”), as the
case may be, in each case which has been set forth in writing and (i) delivered
to the Executive or (ii) of which the Executive has been informed in writing.

 

3.3          Location. Executive’s principal place of business will be the
Company’s principal executive offices located in the metropolitan Los Angeles,
California area.

 

3.4          Confidentiality, Non-Interference and Invention Assignment. As a
condition of employment, Executive shall execute and comply with the
Confidentiality, Non-Interference and Invention Assignment Agreement attached
hereto as Exhibit A (“Confidentiality Agreement”).

 

4.           Services. During the Employment Period, Executive shall devote
substantially all of Executive’s working time, attention, and efforts to the
Company, excluding any periods for illness, incapacity, and vacations, subject
to the policies established by the Compensation Committee, except as otherwise
specifically provided herein. Notwithstanding the immediately preceding sentence
or anything to the contrary contained herein, during the Employment Period
Executive is permitted (a) to serve on the boards of directors, the boards of
trustees, or any similar governing bodies, of any corporations or other business
entities, of any charitable, educational, religious, or public service
organizations, or of any trade associations, (b) to engage in charitable
activities and community affairs, (c) to engage in venture investing, (d) to
manage Executive’s personal investments, and (e) to continue devoting a portion
of his business time, not to exceed the amount devoted by him as of the
Effective Date, to supervising, directing, managing and controlling the
business, operations, and affairs of Elevated Music Services, Inc., in each case
so long as such activities are disclosed to the Board, do not compete with the
business of the Company, and do not interfere with Executive’s performance of
this Agreement and which shall take first priority over all other such
activities as determined in the reasonable discretion of the Board. The Company
hereby acknowledges and agrees that all such activities conducted by Executive
as of the Effective Date (including all boards of directors on which Executive
serves as of the Effective Date) which are listed in Schedule A to the
Agreement, do not interfere with Executive’s performance of this Agreement and
do not compete with the business of the Company.

 

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5.           Compensation

 

5.1          Base Salary

 

(a)          During the Employment Period, the Company shall pay to Executive a
cash base salary at the following applicable rates: (i) during the period
starting on the Effective Date and ending on the date immediately prior to the
date on which the First Underwritten Public Offering (as hereinafter defined) is
consummated: at the rate of not less than Twenty Five Thousand Dollars ($25,000)
per month; and (ii) from and after the date on which the First Underwritten
Public Offering is consummated: at the rate of not less than Five Hundred
Thousand Dollars ($500,000) per annum. During the Employment Period the Board
(or the Compensation Committee) shall review Executive’s annual cash base salary
not less frequently than on an annual basis and may increase (but not decrease,
including as it may be increased from time to time) such base salary.
Executive’s annual cash base salary, as it may be increased from time to time,
is referred to herein as the “Base Salary”. The Company shall pay the Base
Salary to Executive in accordance with the Company’s generally applicable
payroll practices for senior executive officers, but not less frequently than in
equal monthly installments.

 

(b)          For the purposes hereof, the term “First Underwritten Public
Offering” means the first firm commitment underwritten public offering of
securities of the Company pursuant to an effective registration statement under
the Securities Act of 1933, as amended, to occur during the Employment Period.

 

5.2          Public Offering Bonus. In addition to the Base Salary and the
Performance Bonus (as defined in Section 5.3), the Company shall pay to
Executive a cash bonus in an amount equal to Two Hundred Fifty Thousand Dollars
($250,000) (the “Public Offering Bonus”) in a single lump sum payment on or
before the date thirty (30) days after the closing, if any, of the First
Underwritten Public Offering. The Public Offering Bonus shall constitute an
advance against, and prepayment of, any “Performance Bonus” payable to Executive
hereunder, provided that, for avoidance of doubt, if the Public Offering Bonus
exceeds the aggregate Performance Bonuses payable hereunder, Executive is not
obligated to repay such excess.

 

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5.3          Annual Performance Bonus

 

In addition to the Base Salary and the Public Offering Bonus, Executive is
eligible to earn an annual fiscal year cash performance bonus (a “Performance
Bonus”) for each whole or partial fiscal year of the Employment Period in
accordance with the Company’s annual bonus plan applicable to the Company’s
senior executives (the “Annual Plan”). (The fiscal year, as of the Effective
Date, is April 1 to March 31)The Company agrees to establish, or cause the
establishment of the Annual Plan following the closing of the First Underwritten
Public Offering. Executive’s “target” Performance Bonus shall be one hundred
percent (100%) of Executive’s average annualized Base Salary during the fiscal
year for which the Performance Bonus is earned (disregarding any reduction to
the Base Salary in violation of this Agreement). Executive’s “target”
Performance Bonus is referred to herein as the “Target Bonus.” For each whole or
partial fiscal year of the Employment Period occurring subsequent to the
establishment of the Annual Plan, the Compensation Committee shall meaningfully
consult with Executive in connection with establishing the performance
objectives for determining Executive’s Performance Bonus for the succeeding
fiscal year, provided that the final determination shall remain in the complete
and sole discretion of the Compensation Committee and the Board. Such Annual
Plan shall include as performance criteria achievement of the annual budget
established by the Board for the applicable calendar year or, in any loss year,
a minimum stock value established by the Board (e.g. $9 for 2017 and $10 for
2018) that must be achieved to provide a Performance Bonus.

 

The Company agrees that the performance objectives established under the Annual
Plan for Executive will be no less favorable in the aggregate to Executive than
the objectives established and used under the Annual Plan to determine the
amount of the annual cash bonus payable to any other executive officer of the
Company Group who participates in the Annual Plan (other than Ellin in his
capacity as CEO or Chairman). Except as otherwise provided herein: (i) depending
on such performance in any particular whole or partial fiscal year, and on the
criteria set forth in the Annual Plan, the actual amount of the Performance
Bonus for that fiscal year may be less than, equal to, or greater than the
Target Bonus; (ii) the Company shall pay each Performance Bonus to Executive at
the same time that annual cash bonuses are paid to the other senior executive
officers of the Company Group, but in no event later than the fifteenth (15th)
day of the third month following the end of the applicable fiscal year for which
the Performance Bonus is earned; and (iii) except as provided in Section 7,
Executive shall not be entitled to receive any Performance Bonus if Executive is
not employed on the date on which annual cash bonuses for the applicable fiscal
year are paid (or are payable in accordance with this Section 5.3), provided
that, if the Executive’s employment shall end at the end of the Term, the
Performance Bonus for the last fiscal year of the Term shall be payable as if
the Executive was employed on the date on which annual cash bonuses for the
applicable fiscal year are paid (or are payable in accordance with this Section
5.3.

 

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5.4          Initial Equity Grant.

 

In addition to any other equity-based compensation or equity awards the Company
or any other member of the Company Group grants to Executive on or after the
Effective Date, the Company shall grant to Executive, as soon as practicable
following the Effective Date, nonqualified options to purchase a total of three
million(3,000,000) shares of the Company’s common stock, par value $0.001
(collectively, the “Shares” and each, individually, a “Share”), at a price of
fifty-five cents ($0.55) per Share which the parties agree reflects the fair
market value of the Shares. Such options shall be granted pursuant to an option
plan and award agreements which shall include the following terms:

 

(a)          Two million, five hundred thousand (2,500,000) Shares (the “Service
Option”) shall vest as follows, subject to Executive’s continued service to the
Company and the other provisions of this Agreement: (i) the Service Option shall
have a term of ten (10) years from the date of grant (the “Service Option
Expiration Date”); and (ii) the Service Option shall vest as to one-twelfth
(1/12) of the Shares three (3) months after the Effective Date, and as to an
additional one-twelfth (1/12) of the Shares on such date every third month
thereafter through the date three (3) years after the Effective Date. Each
tranche of Shares subject to the Service Option shall become exercisable on the
earlier of (i) one (1) year after the date each tranche shall vest, (ii) the
second anniversary of the Effective Date, or (iii) the earliest date vested
equity awards become exercisable or transferable for similarly situated
executives of the Company. Notwithstanding the foregoing, in the event of a
“Change of Control” (as defined in the Company’s 2016 Equity Incentive Plan) any
unvested portion of the Service Option shall vest and become exercisable
effective immediately prior to such event.

 

(b)          Five hundred thousand (500,000) Shares (the “Performance Option”)
shall vest as follows, subject to Executive’s continued service to the Company
and the other provisions of this Agreement: (i) the Performance Option shall
have a term of ten (10) years from the date of grant (the “Performance Option
Expiration Date”); and (ii) the Performance Option shall vest as to one hundred
percent (100%) of the Shares subject thereto if, and only if, prior to the third
anniversary of the Effective Date, the Shares have traded at a price of ten
dollars ($10.00) per Share, or more, for a period of ninety (90) consecutive
trading days during which an average of at least 500,000 shares are traded per
day. The Performance Option shall cease to vest upon Executive’s termination of
employment for any reason other than death, Disability or an involuntary
termination without Cause or for Good Reason (each as defined in Section 7), in
which case the Performance Option shall cease to vest on the first anniversary
of the Executive’s termination of employment unless the performance conditions
in the preceding sentence have been satisfied prior to such date. The
Performance Option shall become exercisable on the earlier of (i) one (1) year
after the vesting date, (ii) the second anniversary of the Effective Date, or
(iii) the earliest date vested equity awards become exercisable or transferable
for similarly situated executives of the Company. Notwithstanding the foregoing,
in the event of a Change of Control, if the Performance Option criteria has been
satisfied prior to such date, or if the Share value achieved in the Change in
Control is at or above ten dollars ($10.00) per Share, the Performance Option
shall be vested and exercisable immediately prior to such Change in Control.

 

5.5          Tax Withholding. The Company may withhold from any amounts payable
hereunder, including any amounts payable pursuant to this Article 5 or pursuant
to Article 8, any applicable federal, state, and local taxes that the Company is
required withhold pursuant to any applicable law.

 

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6.           Benefits; Perquisites; Expenses

 

6.1          Benefits. Except as otherwise agreed to by the Executive or elected
by the Executive in any applicable voluntary election materials, Executive shall
be eligible to participate in and shall receive all or comparable benefits under
all welfare plans, pension plans, fringe benefit plans, other benefit plans, and
all other arrangements, plans, policies, and programs in each case (w) that the
Company makes available generally to the senior executives of the Company or of
any other member of the Company Group, (x) that are sponsored or maintained by
any member of the Company Group or to which any member of the Company Group
contributes, (y) on a basis no less favorable than the basis as such
arrangements, plans, policies, and programs are applicable or made available to
the other senior executives of any member of the Company Group, and (z) whether
now existing or established hereafter, including (a) all accidental death,
business travel insurance, death benefits, dental, disability (including
short-term disability and long-term disability), flexible spending accounts,
health, hospitalization, life insurance, long term care, medical, prescription
drug, salary continuation, sickness, surgical, vacation, vision, welfare,
wellness, and similar arrangements, plans, policies, or programs, and (b) all
change in control, deferred compensation, deferred stock unit, executive
compensation, incentive (or other) bonus (whether short-term, long-term, or
otherwise), other equity-based compensation, pension, profit sharing, restricted
stock, restricted stock unit, retention, retirement, savings, stock appreciation
right, stock option, stock purchase, supplemental retirement, and similar
arrangements, plans, policies, and programs (collectively, the “Benefit Plans”).
The Company agrees that Executive’s eligible dependents shall have the right to
participate in all Benefit Plans as permitted in accordance with the applicable
terms of the respective Benefit Plan and that the Company’s medical and hospital
plan shall provide coverage for Executive’s eligible dependents.

 

6.2          Perquisites. Executive is entitled to receive such perquisites that
the Company generally provides to its other senior executive officers in
accordance with the then-current policies and practices of the Company.

 

6.3          Vacation. Executive is entitled to not less than four (4) weeks of
paid vacation during each calendar year, taken in accordance with the generally
applicable policies and procedures of the Company.

 

6.4          Business Expenses. The Company shall promptly pay or reimburse
Executive for all reasonable expenses incurred or paid by Executive during the
Term in the performance of the Executive’s duties hereunder, upon presentation
of expense statements or vouchers and such other information as the Company may
reasonably require and in accordance with the generally applicable policies and
procedures of the Company.

 

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6.5          Indemnification.

 

(a)          The Company shall indemnify and hold harmless Executive to the
fullest extent permitted by law from and against any and all expenses
(including: attorneys’ fees, fees of experts, witness fees, fees of other
professional advisors, other disbursements incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating,
appealing, or participating in a Proceeding (as hereinafter defined); bonds; all
interest, assessments, and other charges paid or payable in connection with or
in respect of the foregoing; and any federal, state, local, or foreign taxes
imposed on Executive as a result of the actual or deemed receipt of any payments
pursuant to this Section 6.5) (“Expenses”), demands, claims, damages, judgments,
penalties, fines, settlements, and all other liabilities incurred or paid by
him, or on his behalf, in connection with the investigation, defense,
prosecution, settlement or appeal(s) of any threatened, pending or completed
action, suit, proceeding, alternative dispute resolution mechanism,
investigation, inquiry, or hearing (including any administrative hearing),
whether civil, criminal, administrative or investigative and to which Executive
was or is a party or other participant or is threatened to be made a party or
other participant (a “Proceeding”), or any claim, issue, or matter therein
(including any Proceeding brought by or in the right of any member of the
Company Group), by reason of or arising from the fact that Executive is or was a
director, officer, employee, agent, or fiduciary of the Company or of any other
member of the Company Group or, at the request of the Company, of any other
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, or by reason of or arising from anything done or not done by
Executive in any such capacity or capacities, (including any Proceeding, or any
claim, issue, or matter therein, by reason of or arising from: any actual or
alleged breach by Executive of his fiduciary duty as a director or officer of
any member of the Company Group; the registration, purchase, sale, or ownership
of any securities of the Company or any fiduciary obligation owed with respect
thereto; or any misstatement or omission of material fact by the Company in
violation of any duty of disclosure imposed on the Company by any federal,
state, or foreign securities or common laws), provided that Executive acted in
good faith and in a manner that was not grossly negligent and Executive
reasonably believed to be in or not opposed to the best interests of the Company
or such other member of the Company Group, and, with respect to any criminal
Proceeding, had no reasonable cause to believe Executive’s conduct was unlawful.
Notwithstanding the foregoing, solely with respect to any Proceeding brought by
or in the right of the Company, the Company is not obligated to so indemnify
Executive in respect of any claim, issue, or matter in such Proceeding as to
which Executive shall have been adjudged to be liable to the Company, unless and
only to the extent that the Court of Chancery of the State of Delaware or the
court in which such Proceeding was brought shall determine upon application
that, despite such adjudication but in view of all the circumstances in the
Proceeding, Executive is fairly and reasonably entitled to indemnity for
Expenses and such other amounts which the Court of Chancery or such other court
shall deem proper. The Company also shall pay any and all Expenses incurred by
Executive as a result of Executive being called as a witness in connection with
any matter involving the Company, any other member of the Company Group, or any
of its or their respective officers or directors, provided that the Company
shall not be obligated to pay for any such attorney’s fees if there is no
appreciable risk of liability to Executive as a result of serving as such a
witness, provided further that, in such event, the Company (at its expense) will
provide Executive with reasonable access to the Company’s legal counsel for the
sole purpose of advising Executive in connection Executive’s serving as such a
witness. Without limiting the generality of the foregoing, the Company’s
covenants and obligations under this Section 6.5 include indemnifying and
holding harmless Executive against all Expenses incurred by or on behalf of
Executive in connection with, relating to, or arising from any Proceeding
initiated by Executive or by any member of the Company Group to enforce or
interpret this Section 6.5 or any rights of Executive to indemnification or
advancement of Expenses (whether hereunder, under any other agreement, under the
Company’s certificate of incorporation or bylaws (as now or hereafter in
effect), under any applicable laws, or otherwise), or for recovery under any
directors’ and officers’ liability insurance policies maintained by any member
of the Company Group, in each case if, and only if Executive prevails with
respect to any substantial issue or set of issues presented in such Proceeding.

 

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(b)          The termination of any Proceeding or of any claim, issue, or matter
therein, by judgment, order, or settlement, shall not create a presumption that
Executive did not meet any particular standard of conduct or have any particular
belief or that a court has determined that indemnification is not permitted by
applicable law.

 

(c)          The Company shall pay any Expenses, judgments, penalties, fines,
settlements, and other liabilities incurred by Executive in investigating,
defending, settling or appealing any Proceeding described in this Section 6.5 in
advance of the final disposition of such Proceeding, as such Expenses,
judgments, penalties, fines, settlements, and other liabilities come due. The
Company shall promptly pay the amount of such Expenses, judgments, penalties,
fines, settlements, and other liabilities to Executive, but, in respect of
advances of Expenses, in no event later than ten (10) days following Executive’s
delivery to the Company of a written request for an advance pursuant hereto,
together with a reasonable accounting of such Expenses, and in respect of all
other indemnification payments, in no event later than thirty (30) days
following Executive’s delivery to Company of a written request therefor,
together with such reasonable accounting or other applicable supporting
information. Executive hereby undertakes and agrees to repay to the Company any
advances made pursuant to this Section 6.5(c) within ten (10) days after an
ultimate finding that Executive is not entitled to be indemnified by the Company
for such amounts. The Company shall make the advances contemplated by this
Section 6.5(c) regardless of Executive’s financial ability to make repayment,
and regardless whether indemnification of Executive by the Company will
ultimately be required. Any advances and undertakings to repay pursuant to this
Section 6.5(c) shall be unsecured and interest-free.

 

(d)          The Company agrees that (i) during the Employment Period the
Company will (A) maintain in full force and effect directors’ and officers’
liability insurance that has a liability limit of not less than Five Million
Dollars ($5,000,000) (which shall be in place no later than sixty (60) days
following the Effective Date, provided that, such failure to obtain coverage
within this period shall not be a basis for resignation for Good Reason),and (B)
use its reasonable best efforts to obtain and maintain in full force and effect
directors’ and officers’ liability insurance that has a liability limit of not
less than Ten Million Dollars ($10,000,000); (ii) in such insurance policy or
policies maintained by the Company, Executive shall be named as an insured in
such a manner as to provide the same rights and benefits as are accorded to the
most favorably insured of the Company’s officers or directors, and (iii) such
policy or policies shall include a “tail” for coverage for claims made within a
minimum of three (3) years following the end of the Employment Period.

 

(e)          The rights of Executive pursuant to this Section 6.5 shall be in
addition to any other rights Executive may now or hereafter have under the
Company’s certificate of incorporation or bylaws (as now or hereafter in
effect), any agreement, any vote of stockholders or directors, applicable law,
or otherwise. To the extent that a change in applicable law (whether by statute,
judicial decision, or otherwise) permits greater indemnification that would be
afforded currently under the Company’s certificate of incorporation or bylaws,
applicable law, any other agreement, or this Section 6.5, it is the intent of
the Parties that Executive enjoy by this Section 6.5 the greater benefits so
afforded by such change.

 

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(f)          No breach of this Agreement by Executive, in and of itself, shall
relieve the Company from any of its obligations or covenants pursuant to this
Section 6.5.

 

7.           Termination of Employment

 

7.1          Termination Notice. For the purposes hereof, the term “Termination
Notice” means a written notice provided in accordance with Section 9.2 (x) by
the Company, with respect to any termination of Executive’s employment pursuant
to Section 7.3, 7.4, or 7.5 or (y) by Executive with respect to any termination
of Executive’s employment pursuant to Section 7.6 or 7.7, as the case may be,
that (a) indicates the specific provision of this Agreement relied upon for such
termination, (b) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for the termination of
Executive’s employment under the provision so indicated, and (c) other than for
a termination pursuant to Section 7.3, specifies the effective date of the
termination, if such effective date is subsequent to the date of receipt of the
notice. The failure by the Company or Executive, as the case may be, to set
forth in a Termination Notice any fact or circumstance which contributes to a
showing of Cause (as defined in Section 7.4(a)) or Good Reason (as defined in
Section 7.6) does not waive any right of the Company or Executive, respectively,
hereunder, or preclude the Company or Executive, respectively, from asserting
such fact or circumstance in enforcing its or his rights hereunder.

 

7.2          Termination Due to Death. The Executive’s employment with the
Company hereunder terminates automatically upon the death of Executive during
the Term.

 

7.3          Termination by Company Due to Disability

 

(a)          The Company may terminate Executive’s employment hereunder due to
Disability only if (i) a majority of the Board determine in good faith that a
Disability of Executive has occurred (pursuant to the definition of Disability
set forth in Section 7.3(b)), and (ii) subsequent (but not prior) to such
determination the Company provides a Termination Notice to Executive. In such
event, Executive’s employment with the Company terminates on the date (the
“Disability Effective Date”) thirty (30) days after the date on which Executive
(or Executive’s legal representative, if applicable) receives the Termination
Notice, except that if Executive resumes the full-time performance of
Executive’s duties on or before the Disability Effective Date, then the
Termination Notice is of no force or effect, the Executive’s employment with the
Company does not terminate on the Disability Effective Date, and the Company may
not terminate Executive’s employment for Disability in that particular instance.

 

(b)          For the purposes hereof, the term “Disability” means Executive’s
absence from his duties with the Company on a full-time basis for one hundred
eighty (180) days during any period of twelve (12) consecutive months, or one
hundred and twenty (120) consecutive days, in each case solely as a result of
incapacity due to mental or physical illness and, at the end of such applicable
period, the determination in good faith by a Qualifying Doctor that such
incapacity will result in Executive’s continued inability to perform his
services hereunder for an additional period of not less than three (3) months
from the date of such determination. As used herein, “Qualifying Doctor” means
an independent medical doctor then-licensed to practice medicine in the State of
California specializing in the area to which Executive’s incapacity relates and
who is selected by the Company and approved by Executive (or Executive’s legal
representative, if applicable) (such approval not to be unreasonably withheld or
delayed by the Executive, or Executive’s legal representative, if applicable).
In connection with such determination, Executive or his legal representative or
any member of his family has the right to present to such medical doctor any
information or arguments as to Executive’s incapacity as he, she, or they deem
appropriate, including the opinion of Executive’s personal physician(s).

 

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7.4          Termination by Company for Cause

 

(a)          The Company may terminate Executive’s employment with the Company
for Cause at any time by providing a Termination Notice and Board resolution
described below to Executive, if the Company and the Board comply with all of
the provisions of this Section 7.4:

 

(b)          For the purposes hereof, “Cause” means:

 

(i)       Executive’s conviction of a felony requiring intent under the laws of
the United States or any State thereof, after the exhaustion of all possible
appeals, or Executive entering a plea of nolo contendere to any charge of a
felony requiring intent under the laws of the United States or any State
thereof, in each case excluding any Limited Vicarious Liability (as hereinafter
defined). For the purposes hereof, “Limited Vicarious Liability” means any
liability that (x) is based on acts or omissions of the Company for which
Executive is responsible solely as a result of his offices with the Company,
where Executive was not directly involved in such acts or omissions and either
had no prior knowledge of such intended acts or omissions or upon obtaining any
such knowledge promptly acted reasonably and in good faith to attempt to prevent
the acts or omissions causing such liability, or (y) Executive did not have a
reasonable basis to believe that any applicable law was being violated by such
acts or omissions; or

 

(ii)       a willful and substantial refusal by Executive to perform Executive’s
duties or responsibilities assigned to Executive in accordance with the terms of
this Agreement, but only if such duties or responsibilities so assigned to
Executive are not inconsistent with (x) Executive’s position as President of the
Company, or (y) any of Executive’s duties or responsibilities hereunder
(including any such duties or responsibilities as set forth in, or as
contemplated by, Section 3.1 or 3.2), and, in each case, excluding any such
failure by reason of death, Disability, or incapacity; or

 

(iii)       any material and willful violation of any Written Policy of the
Company that is generally applicable to all employees or officers of the Company
and that results in a material negative effect on the business of the Company;
or

 

(iv)       Executive’s willful malfeasance in the performance of his duties
hereunder that has a material negative effect on the business of the Company; or

 

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(v)       Executive engaging in intentional acts of material fraud against the
Company.

 

(c)          For the purposes hereof: (i) any act or omission (including any
refusal or violation) by Executive is “willful” only if the same is not in good
faith and is without the reasonable belief by Executive that such act or
omission is in the best interests of the Company; and (ii) any act or omission
by Executive based upon any authority granted pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company in each
case is presumed to be in good faith and in the best interests of the Company.

 

(d)          For avoidance of doubt, “Cause” does not include (i) differences of
opinion with respect to strategy or implementation of business plans, (ii) the
success or lack of success of any such strategy or implementation, or (iii) any
failure to achieve any performance objectives, whether relating to Executive,
the Company, or otherwise.

 

(e)          With respect to clauses (ii), (iii), and (iv) of Section 7.4(b),
“Cause” shall not exist unless (i) the Company, on or before the date ninety
(90) days after the first date on which any member of the Board has knowledge of
the act or omission alleged to constitute Cause, provides written notice to
Executive informing Executive of the Company’s intention to consider terminating
Executive’s employment hereunder for Cause and identifying the act or omission
alleged to constitute Cause, and (ii) Executive fails to cure such act or
omission (if capable of being cured) on or before the date thirty (30) days
after the date on which Executive receives such notice from the Company (such
thirty (30) day period, the “Cause Cure Period”).

 

(f)          Notwithstanding anything to the contrary contained herein, no
cessation of Executive’s employment with the Company shall be deemed to be for
Cause unless, on or before the one year anniversary of the first date the Board
has knowledge of the act or omission alleged to constitute Cause, or if later,
the last day of the applicable Cause Cure Period: (i) the Company delivers to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds (2/3) of the entire Board (excluding Executive if he is a
member thereof) at a meeting called and held for such purpose (A) finding that,
in the good faith opinion of the Board, Executive is guilty of conduct
constituting Cause hereunder, and (B) authorizing the termination of Executive’s
employment for Cause; and (ii) Executive, upon not less than ten (10) days’
prior written notice, is given the opportunity, prior to such vote, to be heard
before the entire Board, with or without legal counsel, at Executive’s election.

 

7.5          Termination by Company Without Cause. The Company may terminate
Executive’s employment with the Company Without Cause (as hereinafter defined)
only by the Company providing a Termination Notice to Executive. For the
purposes hereof, the term “Without Cause” means (a) without Cause, and (b) other
than by reason of the Executive’s death or Disability.

 

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7.6          Termination by Executive for Good Reason

 

(a)          Executive may terminate his employment with the Company for Good
Reason only by providing a Termination Notice to the Company on or before the
date ninety (90) days after the date on which Executive becomes aware of the act
or omission constituting Good Reason, which shall take effect only if the
Company shall not cure such basis for Good Reason within thirty (30) days
following receipt of such Termination Notice and, unless otherwise agreed to by
the parties, termination shall be effective upon the expiration of such cure
period.

 

(b)          For the purposes hereof, “Good Reason” means:

 

(i)       a material reduction in Executive’s then-current Base Salary, or
then-current Target Bonus;

 

(ii)       the material diminution, removal, or withdrawal of, or any other
material adverse change in, any of Executive’s authorities, duties, offices,
positions, powers, reporting relationships, responsibilities, or titles (as set
forth in, or as contemplated by, Section 3.1or 3.2) including, a reorganization
or other corporate transaction resulting in any entity directly or indirectly
controlling (as such concept is defined in Section 9.5(a)) the Company and
either (A) Executive is not the President of the ultimate parent entity, or (B)
Executive does not report solely and directly to the chief executive officer or
the board of directors of the ultimate parent entity;

 

(iii)       the assignment to Executive of any authorities, duties, functions,
offices, positions, or responsibilities, that materially impair Executive’s
ability to function as President of the Company (or any other position in which
Executive is then serving) or the assignment to Executive of any duties that are
materially inconsistent with Section 3.1or 3.2;

 

(iv)       the Company relocating Executive’s principal place of business more
than twenty-five (25) miles outside of the City of Los Angeles, California;

 

(v)       any purported termination of Executive’s employment for Cause that is
not effected in compliance with Section 7.4, other than by reason of Executive’s
timely cure of such basis for Cause;

 

(vi)       the Company failing to comply with Section 9.3; or any other breach
of this Agreement by the Company, including any other breach of Section 3.1 or
3.2.

 

7.7          Termination by Executive Without Good Reason. Executive may
terminate Executive’s employment with the Company without Good Reason by
providing a Termination Notice to the Company that specifies an effective date
that is not less than thirty (30) days after the date on which Executive
provides the Termination Notice to the Company. The Company, after its receipt
of the Termination Notice, may elect to accelerate such effective date by
providing Executive with written notice of such acceleration, and in such event
the Termination Notice shall be effective as of the date specified in the
Company’s acceleration notice, and such acceleration, in and of itself, shall
not constitute a termination of Executive’s employment hereunder by the Company
with or without Cause.

 

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8.           Consequences of Termination or Non-Renewal

 

8.1          Certain Defined Terms. As used herein:

 

“Accrued Obligations” means the aggregate of: (a) Executive’s accrued Base
Salary through and inclusive of the Termination Date (disregarding any reduction
thereto in violation of this Agreement); (b) Executive’s accrued vacation pay
through and inclusive of the Termination Date; (c) Executive’s business expenses
incurred through and inclusive of the Termination Date that have not been
reimbursed by the Company as of the Termination Date, and (d) the Public
Offering Bonus, if the First Underwritten Offering closes on or prior to the
Termination Date and the Public Offering Bonus has not been paid as of the
Termination Date.

 

“eligible dependent” includes Executive’s spouse (or widow).

 

“Medical Plan” means each of the Benefit Plans that provides dental, health,
hospitalization, life, medical, prescription, surgical, or vision benefits,
care, coverage, or insurance, or any similar benefits, care, coverage, or
insurance.

 

“Other Benefits” means all benefits, compensation, and rights, whether accrued,
earned, or vested, to which Executive is entitled as of the Termination Date
under the terms and conditions applicable to such benefits, compensation, and
rights, including death benefits, disability benefits, and all other benefits,
compensation, and rights pursuant to any of the Benefit Plans (including vested
stock options, restricted shares, restricted stock units).

 

“Other Equity Awards” means all equity compensation or other equity awards
granted by any member of the Company Group to Executive on or after the
Effective Date (including restricted stock, restricted stock units, stock
appreciation rights, and stock options), excluding the Service Option and
Performance Option.

 

“Prior Year Bonus” means Executive’s Performance Bonus earned for the fiscal
year immediately preceding the fiscal year in which the Termination Date occurs,
if such Performance Bonus has not been paid as of the Termination Date
(disregarding any reduction to the Target Bonus in violation of this Agreement);

 

“Pro Rata Bonus” means an amount equal to the product of (a)(i) if the
Termination Date occurs during the first fiscal year of the Term, one hundred
percent (100%) of the Performance Bonus determined in good faith by the Company
pursuant to Section 5.3, and (ii) if the Termination Date occurs after the end
of the first fiscal year of the Term, one hundred percent (100%) of the
Performance Bonus earned by Executive for the immediately preceding completed
fiscal year prior to the fiscal year in which the Termination Date occurs, in
each case, multiplied by (b) a fraction, the numerator of which is the number of
days elapsed through and inclusive of the Termination Date in the fiscal year in
which Executive’s employment is terminated, and the denominator of which is 365.

 

“Termination Date” means (a) if Executive’s employment is terminated by reason
of death: the date of the Executive’s death; (b) if Executive’s employment is
terminated for Disability: the Disability Effective Date; (c) if Executive’s
employment is terminated for any other reason, the date of Executive’s
“separation from service” as such term is defined under Section 409A (“Section
409A” is defined in Section 8.8).

 

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“Unvested Equity” means the portion of the Service Option, the Performance
Option and the Other Equity Awards that is unvested as of the Termination Date,
after taking into account any acceleration of vesting based on the prior
occurrence of any acceleration events specified hereunder.

 

8.2          Death or Disability. If Executive’s employment is terminated by
reason of Executive’s death or due to Executive’s Disability, then:

 

(a)          Executive (or Executive’s beneficiary or estate) is entitled to
receive or otherwise to be provided, and the Company shall pay or provide to
Executive (or to Executive’s beneficiary or estate):

 

(i)       The aggregate of the following, in a single lump sum, on or before the
date thirty (30) days after the Termination Date: (A) the Accrued Obligations,
(B) the Prior Year Bonus, and (C) the Pro Rata Bonus; and

 

(ii)       The timely payment or timely provision of the Other Benefits in
accordance with the terms and conditions of the applicable Benefit Plan.

 

(b)          Subject to timely execution of a Release pursuant to Section 8.6
and compliance with Exhibit A, (i) the portion of the Service Option and of the
Other Equity Awards (other than the Performance Option), in each case, that
would have vested in the twelve (12) month period following the Termination Date
had Executive’s employment with the Company continued, shall automatically and
immediately vest and become exercisable; (ii) the Performance Option shall
continue to vest and become immediately exercisable if, and only if, the
performance criteria specified in Section 5.4(c) are satisfied during the twelve
(12) month period following the Termination Date, (iii) any such accelerated
Service Option, Performance Option and Other Equity Awards shall remain
outstanding and be exercisable, to the extent applicable, for a period of twelve
(12) months from the later of the Termination Date or the date the award first
becomes vested and exercisable, but in all events no later than the applicable
term for each such award, and (iv) all restrictions on the portion of the Other
Equity Awards that is vested as of the Termination Date (or during the twelve
(12) month period following the Termination Date) shall automatically and
immediately lapse.

 

(c)          All Unvested Equity shall be forfeited as of the Termination Date.

 

8.3       Termination by the Company for Cause; Termination by Executive without
Good Reason. If Executive’s employment is terminated by the Company for Cause or
by Executive without Good Reason, then:

 

(a)          Executive is entitled to receive or otherwise to be provided, and
the Company shall pay or provide to Executive:

 

(i)       The Accrued Obligations, in a single lump sum, on or before the date
thirty (30) days after the Termination Date, and

 

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(ii)       The timely payment or timely provision of the Other Benefits in
accordance with the terms and conditions of the applicable Benefit Plan; and

 

(b)          all vested and Unvested Equity shall be forfeited effective as of
the Termination Date.

 

8.4          Termination by the Company Without Cause; Termination by Executive
for Good Reason. If Executive’s employment is terminated by the Company Without
Cause or by Executive for Good Reason, then:

 

(a)          Executive is entitled to receive or otherwise to be provided, and
the Company shall pay or provide to Executive:

 

(i)       The aggregate of the following, in a single lump sum, on or before the
date thirty (30) days after the Termination Date: (A) the Accrued Obligations;
and (B) Prior Year Bonus;

 

(ii)       Subject to timely execution of a Release pursuant to Section 8.6 and
compliance with Exhibit A, continued payment of Executive’s annual Base Salary
(disregarding any reduction thereto in violation of this Agreement) and Pro Rata
Bonus for the period from the Termination Date through the lesser of twelve (12)
months or the period through and inclusive of the last day of the Term as if
Executive’s employment had not terminated (the “Continuation Period”), payable
to Executive in accordance with the Company’s generally applicable payroll
practices for senior executive officers, but not less frequently than in equal
monthly installments (with the Pro-Rata Bonus being paid at the same time Annual
Bonuses are paid to other senior executives); and

 

(iii)       The timely payment or timely provision of the Other Benefits in
accordance with the terms and conditions of the applicable Benefit Plan; and

 

(b)          Subject to timely execution of a Release pursuant to Section 8.6
and compliance with Exhibit A, (i) all Unvested Equity (other than the
Performance Option) shall automatically and immediately become vested and
exercisable in full on the Termination Date, (ii) the Performance Option shall
continue to vest and become immediately exercisable if, and only if, the
performance criteria specified in Section 5.4(c) are satisfied during the twelve
(12) month period following the Termination Date, (iii) any such accelerated
Service Option, Performance Option and Other Equity Awards shall remain
outstanding and be exercisable, to the extent applicable, for a period of twelve
(12) months from the later of the Termination Date or the date the award first
becomes vested and exercisable, but in all events no later than the applicable
term for each such award; and (iv) all restrictions on the Other Equity Awards
shall automatically and immediately lapse.

 

(c)          Subject to timely execution of a Release pursuant to Section 8.6
and compliance with Exhibit A, during the period starting on the Termination
Date and ending on and inclusive of the earlier of (i) the date, if any, on
which Executive is eligible under an employee welfare plan of another employer
to receive benefits substantially equivalent to the benefits provided under the
Medical Plans, and (ii) the end of the Continuation Period, Executive and his
eligible dependents shall be entitled, at the Company’s sole cost and expense,
to continue participation in all Medical Plans in which such Executive and his
eligible dependents were participating as of the Termination Date, at the same
levels as existed as of the Termination Date, except that if Company is unable
to provide coverage under the Medical Plans, then the Company shall notify
Executive on a timely basis to allow Executive to obtain COBRA benefits and
shall reimburse Executive, on a monthly basis for the Continuation Period, an
amount equal to the applicable COBRA premium for the Executive and his eligible
dependents, on a “tax grossed-up basis, and it shall be Executive’s
responsibility to elect and maintain medical coverage under COBRA.

 

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8.5          Non-Renewal.

 

If this Agreement is not terminated before the last day of the Term and prior to
that date the Company and Executive do not (i) enter into a mutually acceptable
extension of this Agreement, or (ii) enter into a new agreement relating to
Executive’s employment with the Company to have effect after such date, or (iii)
otherwise agree to continue Executive’s employment with the Company after such
date without the benefit of an agreement relating to such employment, then this
Agreement shall automatically end on the last day of the Term, and in such
event:

 

(a)          Executive is entitled to receive or otherwise to be provided, and
the Company shall pay or provide to Executive:

 

(i)       the aggregate of the following, in a single lump sum, on or before the
date thirty (30) days after the effective date of such termination: (x) the
Accrued Obligations and (y) any unpaid Prior Year Bonus;

 

(ii)       a Performance Bonus for the completed portion of the final fiscal
year of the Term calculated pursuant to and payable in accordance with Section
5.3; and

 

(iii)       the timely payment or timely provision of the Other Benefits in
accordance with the terms and conditions of the applicable plan.

 

(b)          Any Unvested Equity shall be immediately forfeited and any
outstanding vested portion of the Service Option, Performance Option and Other
Equity Awards shall remain outstanding and be exercisable, to the extent
applicable, for a period of twelve (12) months from the later of the last day of
the Term or the date the award first becomes exercisable, but in all events no
later than the applicable term for each such award.

 

8.6          Release. In connection with any termination of Executive’s
employment by the Company without Cause or by Executive for Good Reason, each of
the Company and Executive shall execute and deliver a Mutual General Release in
the form and substance of attached hereto as Exhibit “B” (a “Release”) and the
Executive’s right to payment of the amounts specified in Sections 8.4(a)(ii),
8.4(b) and 8.4(c) shall be subject to Executive’s execution (without revocation)
of such a Release within sixty (60) days after the Termination Date.

 

8.7          No Mitigation. Executive is not required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise. The Company shall not reduce the amount of any payment
or benefit provided for herein by any compensation that Executive earns from
another employer or from any other employment or from rendering services to or
for the benefit of any other person or entity (including self-employment).

 

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8.8          Compliance with Section 409A. Unless otherwise expressly provided,
any payment of compensation by Company to Executive, whether pursuant to this
Agreement or otherwise, shall be made no later than the fifteenth (15th) day of
the third (3rd) month (i.e., 2½ months) after the later of the end of the
calendar year or the Company’s fiscal year in which Executive’s right to such
payment vests (i.e., is not subject to a “substantial risk of forfeiture” for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”). For purposes of this Agreement, termination of employment
shall be deemed to occur only upon “separation from service” as such term is
defined under Section 409A. Each payment and each installment of any severance
payments provided for under this Agreement shall be treated as a separate
payment for purposes of application of Section 409A. To the extent any amounts
payable by the Company to the Executive constitute “nonqualified deferred
compensation” (within the meaning of Section 409A) such payments are intended to
comply with the requirements of Section 409A, and shall be interpreted in
accordance therewith. Neither Party individually or in combination may
accelerate, offset or assign any such deferred payment, except in compliance
with Section 409A. No amount shall be paid prior to the earliest date on which
it is permitted to be paid under Section 409A, including a six (6) month delay
of termination payments made to specified employees of a public company, to the
extent then applicable. Executive shall have no discretion with respect to the
timing of payments except as permitted under Section 409A. Any Section 409A
payments which are subject to execution of a Release which may be executed
and/or revoked in a calendar year following the calendar year in which the
payment event (such as termination of employment) occurs shall commence payment
only in such following calendar year as necessary to comply with Section 409A.
All expense reimbursement or in-kind benefits subject to Section 409A provided
under this Agreement or, unless otherwise specified in writing, under any
Company program or policy, shall be subject to the following rules: (i) the
amount of expenses eligible for reimbursement or in-kind benefits provided
during one calendar year may not affect the benefits provided during any other
year; (ii) reimbursements shall be paid no later than the end of the calendar
year following the year in which Executive incurs such expenses, and Executive
shall take all actions necessary to claim all such reimbursements on a timely
basis to permit the Company to make all such reimbursement payments prior to the
end of said period, and (iii) the right to reimbursement or in-kind benefits
shall not be subject to liquidation or exchange for another benefit. It is the
intent of the Company that the provisions of this Agreement and all other plans
and programs sponsored by the Company be interpreted to comply in all respects
with Section 409A, however, the Company shall have no liability to Executive, or
any successor or beneficiary thereof, in the event taxes, penalties or excise
taxes may ultimately be determined to be applicable to any payment or benefit
received by Executive or any successor or beneficiary thereof, nor for reporting
in good faith any payment of benefit as subject to Section 409A.

 

9.           Additional Provisions

 

9.1          Entire Agreement; No Oral Amendments. This Agreement and the
Confidentiality Agreement (including all exhibits and schedules attached hereto
and thereto) together set forth the compete, entire, and final agreement between
the Company and Executive relating to the subject matter hereof and terminates,
cancels, and supersedes any and all prior agreements, communications, contracts,
representations, or understandings, in each case whether oral or written,
between the Company and Executive relating to the subject matter hereof. No
amendment, modification, or supplement to this Agreement is valid, binding, or
enforceable unless the same is in writing and executed and delivered on behalf
of the Company and by Executive.

 

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9.2          Notices. Each notice or other communication relating to this
Agreement, in order to be effective, must be in writing, must be sent to the
applicable address indicated below for the recipient (or to the then-most recent
address of which the recipient has notified the sender in writing in accordance
herewith), and must be sent, all costs, expenses, and fees prepaid by the
sender, by (a) personal delivery, (b) first class registered mail, return
receipt requested, or (c) a nationally recognized courier service that provides
proof of delivery (e.g., FedEx, UPS) for delivery on the first business day
immediately following the day on which the notice or other communication is
deposited with the courier service. Each notice or communication given in
accordance herewith is deemed effective: (i) upon actual receipt when delivered
personally or by courier service, or (ii) three (3) business days after the date
on which the notice or communication is deposited with the United States Postal
Service, if sent by first class registered mail (or any earlier date evidenced
by the proof of delivery).

 

If to the Company: to the attention of the Chairman of the Board, at the address
of Company’s principle place of business.

 

If to Executive: to the address listed as Executive’s primary residence in the
human resource records and to Executive’s principal place of business.

 

9.3          Successors

 

(a)          This Agreement is personal to Executive and Executive may not
assign or delegate this Agreement without the prior written consent of the
Company. This Agreement inures to the benefit of and is enforceable by
Executive’s legal representatives, heirs, or legatees.

 

(b)          The Company may not assign or delegate this Agreement without the
prior written consent of Executive, except that the Company may assign or
delegate this Agreement to any successor (whether direct or indirect, whether by
purchase, merger, consolidation, operation of law, or otherwise) to all or
substantially all of the business or assets of the Company, subject to the
condition that the successor, no later than fifteen (15) days after the
occurrence of such succession, executes and delivers to Executive an instrument
in from and substance acceptable to Executive (such approval not to be
unreasonably withheld) pursuant to which the successor explicitly assumes and
agrees to perform, comply with, and otherwise be bound by this Agreement in the
same manner and to the same extent that the Company would be required to do so
if no such succession had occurred. Subject to the immediately preceding
sentence, this Agreement is binding upon and inures to the benefit of the
Company and its permitted successors and permitted assigns. As used in this
Agreement, the term “Company” means the Company as hereinbefore defined and any
successor to is business or assets as aforesaid that assumes and agrees to
perform this Agreement, whether by operation of law or otherwise.

 

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(c)          Any purported assignment or delegation in violation of this Section
9.3 is null and void ab initio and of no force or effect.

 

9.4          Severability. If any provision of this Agreement is determined to
be illegal, invalid, or unenforceable, then such determination does not affect
the legality, validity, or enforceability of the other provisions of this
Agreement, all of which remain in full force and effect. Each of the Company and
Executive agrees that in the event of any such determination the Company and
Executive will negotiate to modify this Agreement so as to effect the original
intent of the Company and Executive as close as possible to the fullest extent
permitted by applicable law.

 

9.5          Certain Interpretative Matters.

 

(a)          For the purposes of this Agreement: (i) the term “Affiliate” means,
with respect to a specified entity (the “specified entity”), at any particular
time, any other present or future person or entity that at such time, directly
or indirectly, controls, is under common control with, or is controlled by, the
specified entity; and the term “control” (and, with correlative meanings, the
terms “under common control with” and “controlled by) means the possession,
direct or indirect, of the power to direct or cause the direction of the
management or policies of any entity, whether through ownership of voting
securities, by contract, or otherwise).the terms
“herein,”“hereof,”“hereto,”“hereunder,” and terms of similar import refer to
this Agreement in its entirety and not to any particular provision; (ii) the
term “include” (and its grammatical variations) is not limiting; and (iii) the
term “or” is not exclusive. The headings of the Sections and other subdivisions
of this Agreement are for convenience only, do not constitute a part of this
Agreement, and are of no force or effect in connection with the construction or
the interpretation of this Agreement. Except where expressly provided otherwise,
each reference herein to an Article, Section, or other subdivision, or to an
Exhibit or Schedule, is a reference to the applicable Article, Section, or other
subdivision of, or exhibit or schedule to, this Agreement.

 

(b)          In the event of any inconsistency or conflict between any of the
provisions of this Agreement and any of the provisions of any of the Benefit
Plans or any other award, code, form, plan, policy, or program of the Company,
the provisions of this Agreement control and govern. No provision in any of the
Benefit Plans or in any other award, code, form, plan, policy, or program
related to a violation thereof being grounds for termination, or similar
language, will result in a “cause” termination unless such violation is also
Cause under this Agreement and the provisions hereof are complied with, and the
foregoing applies even if Executive signs an acknowledgement or otherwise agrees
to the provisions of such Benefit Plan or other policy, code, plan, or program.
If any ambiguity or question of interpretation or of construction arises in
connection with or relating to this Agreement, each of the Company and Executive
agrees that this Agreement is to be interpreted and construed as if jointly
drafted by both the Company and Executive and that no presumption or burden of
proof is to arise favoring or disfavoring the Company or Executive by virtue of
the authorship of any provision of this Agreement.

 

19

 

 

LiveXLive Media, Inc./Schuon Employment Agreement

 

9.6          Survival. The following provisions survive the expiration or
termination of the Employment Period and the Term (including any termination by
reason of Executive’s breach of this Agreement): Section 6.5, Article 8, and
this Article 9.

 

9.7          Chosen Law. The laws of the State of California (excluding any
conflict of laws principles of that State that would result in the application
of the laws of any jurisdiction other than the State of California) govern all
matters in connection with, relating to, or arising from this Agreement.

 

9.8          Authority. The Company represents and warrants that (a) it has the
full corporate power and authority to execute, deliver, and perform this
Agreement, and (b) the execution, delivery, and performance of this Agreement
has been duly and validly authorized.

 

9.9          Counterparts. This Agreement may be executed in multiple
counterparts, each of which constitutes an original and all of which together
constitute one and the same instrument. A manually executed counterpart of this
Agreement delivered by means of e-mail as a Portable Document Format file
(“.pdf”) (or in any present or future file format intended to preserve the
original graphic and pictorial appearance of a document), or by means of
facsimile transmission, constitutes the valid and effective execution and
delivery of this Agreement for all purposes and has the same force and effect
for all purposes as the personal delivery of a manually executed counterpart
bearing an original ink signature.

 

[SIGNATURE PAGE FOLLOWS]

 

20

 

 

LiveXLive Media, Inc./Schuon Employment Agreement

 

By signing below, each of the Company and Executive acknowledges that it or he
has carefully read, fully understands, and accepts and agrees to be bound by the
provisions of this Agreement.

 

  LIVEXLIVE MEDIA, INC.         By: /s/ Jerome N. Gold    Name: Jerome N. Gold  
      Its: Executive Vice President and CFO         ANDY SCHUON       /s/ Andy
Schuon

 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT BETWEEN LIVEXLIVE AND ANDY SCHUON]

 

21

 

 

LiveXLive Media, Inc./Schuon Employment Agreement

 

Schedule “1”

 

Outside Activities, Investments and Board Positions

 

1)       Business Rockstars, LLC:

 

●Director (or performing a similar function)

 

●Member (owner of membership interests)

 

2)       Elevated Music Services, Inc.:

 

●shareholder

 

●Officer

 

●Director

 

●Supervises, directs, manages, and controls the business, operations, and
affairs of Elevated Music Services, Inc.

 

[END OF SCHEDULE “1”]

 

22

 

 

EXHIBIT “A”

 

[FORM OF]

 

CONFIDENTIALITY, NON-INTERFERENCE AND INVENTION ASSIGNMENT AGREEMENT

 

As a condition of my becoming employed by, or continuing employment with,
LiveXLive Media, Inc. a Nevada corporation (the “Company”), and in consideration
of my employment with the Company and my receipt of the compensation now and
hereafter paid to me by the Company, I agree to the following. All initially
capitalized terms used but not defined herein have the respective meanings given
to such terms in the Employment Agreement between the Company and me dated
September 1, 2017, as amended (the “Employment Agreement”)

 

Section 1.       Confidential Information.

 

(a)          Company Group Information. I acknowledge that, during the course of
my employment, I will have access to non-public information about the Company
and its direct and indirect subsidiaries and affiliates (collectively, the
“Company Group”) and that my employment with the Company shall bring me into
close contact with confidential and proprietary information of the Company
Group. In recognition of the foregoing, I agree, at all times during the term of
my employment with the Company and for the five (5) year period following my
termination of my employment for any reason, to hold in confidence, and not to
use, except for the benefit of the Company Group, or to disclose to any person,
firm, corporation, or other entity without written authorization of the Company
or except as expressly permitted herein, any Confidential Information that I
obtain or create. I further agree not to make copies of such Confidential
Information except as authorized by the Company, or except as permitted herein,
or as otherwise necessary to fulfill my duties to the Company. For the purposes
hereof, “Confidential Information” means information that the Company Group has
developed, acquired, created, compiled, discovered, or owned or will develop,
acquire, create, compile, discover, or own, that has value in or to the business
of the Company Group that is not generally known and that the Company wishes to
maintain as confidential. I understand that Confidential Information includes,
but is not limited to, any and all non-public information that relates to the
actual or anticipated business and/or products, research, or development of the
Company, or to the Company’s technical data, trade secrets, or know-how,
including, without limitation, proposals and development work for television
programs, formats, copyright works, research, product plans, or other
information regarding the Company’s products or services and markets, customer
lists, and customers (including, without limitation, customers of the Company on
whom I called or with whom I may become acquainted during the term of my
employment), software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware configuration information,
marketing, finances, and other business information disclosed by the Company
either directly or indirectly in writing, orally, or by drawings or inspection
of premises, parts, equipment, or other Company property. Notwithstanding the
foregoing, Confidential Information shall not include (i) any of the foregoing
items that are, or become, publicly known through no unauthorized disclosure by
me, (ii) any of the foregoing items lawfully disclosed to me free of restriction
from a source that was not legally or contractually prohibited from disclosing
such item, or (iii) any of the foregoing items or other information that I had
or owned prior to my employment with the Company. Notwithstanding anything to
the contrary contained herein, I am permitted to disclose any Confidential
Information if and to the extent I am required to do so by, or pursuant to any
order of, any court, tribunal, or other governmental, judicial, arbitral,
administrative, or regulatory authority, agency, or instrumentality. In the
event I am so required to disclose any Confidential Information, I will, if
permitted pursuant to applicable law, give the Company prompt notice thereof so
that the Company Group, at its sole cost and expense, may seek an appropriate
protective order and/or waive compliance with the confidentiality provisions of
this Confidentiality, Non-Interference, and Invention Assignment Agreement (the
“Confidentiality Agreement”).

 

23

 

 

LiveXLive Media, Inc./Schuon Employment Agreement-Exhibit A

 

(b)         Former Employer Information. I represent that my performance of all
of the terms of this Confidentiality Agreement as an employee of the Company has
not breached and will not breach any agreement to keep in confidence proprietary
information, knowledge, or data acquired by me in confidence or trust prior or
subsequent to the commencement of my employment with the Company, and I will not
disclose to any member of the Company Group, or induce any member of the Company
Group to use, any developments, or confidential or proprietary information or
material I may have obtained in connection with employment with any prior
employer in violation of a confidentiality agreement, nondisclosure agreement,
or similar agreement with such prior employer.

 

Section 2.     Developments.

 

(a)         Developments Retained and Licensed. I hereby represent and warrant
that there are not any developments, original works of authorship, improvements,
or trade secrets which were created or owned by me prior to the commencement of
the Employment Period (collectively referred to as “Prior Developments”). If the
foregoing representation and warranty is breached, and during any period during
which I perform or performed services for the Company both before or after the
date hereof (the “Assignment Period”), I incorporate or have incorporated into a
Company product, program, service or other work a Prior Development owned by me
or in which I have an interest, then I hereby grant the Company a non-exclusive,
royalty-free, irrevocable, perpetual, worldwide license (with the right to
sublicense) to make, have made, copy, modify, make derivative works of, use,
sell and otherwise distribute such Prior Development, to the extent of my
interest therein, as part of or in connection with such product, program,
service or work.

 

(b)         Assignment of Developments. I hereby assign to the Company all my
right, title and interest throughout the world (if any) in and to any and all
(i) inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof,
(ii) trademarks, service marks, trade dress, logos, titles and working titles,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (iii) copyrightable works,
all copyrights, and all applications, registrations and renewals in connection
therewith, (iv) trade secrets and confidential business information (excluding
general industry knowledge and contacts) and all ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
technology, systems, and business and marketing plans and proposals, (v) rights
in and to computer software (including object code, source code, data and
related documentation), (vi) Internet Web sites, including domain name
registrations and content and software included therein, (vii) other proprietary
rights, including, without limitation, original works of authorship, content,
dialogue, plots, scripts, scenarios, music programming, formats, graphics,
productions, products, programs, services, concepts, moral rights, rights to
characters, actions, acts, gags, routines, materials, ideas, names, likeness,
image, personality, publicity etc., (viii) rights to exploit, collect
remuneration for, and recover for past infringements of any of the foregoing and
(ix) copies and tangible embodiments thereof (in whatever form or medium),
whether or not patentable or registrable under copyright or similar laws, which
I may solely or jointly conceive or develop or reduce to practice or cause to be
conceived or developed or reduced to practice, or have conceived or developed or
reduced to practice or have caused to be conceived or developed or reduced to
practice, during the Employment Period, whether or not during regular working
hours, in each case only if the applicable item (A) relates at the time of
conception or development to the actual or demonstrably proposed business or
research and development activities of the Company; (B) results from or relates
to any work performed by me for the Company; or (C) is developed through the use
of Confidential Information and/or resources of the Company (collectively
referred to as “Developments”). I further acknowledge that all Developments
which are or were made by me (solely or jointly with others) during the
Assignment Period are “works made for hire” as to my contribution (to the
greatest extent permitted by applicable law) for which I am, in part,
compensated by my salary, unless regulated otherwise by law, but that, in the
event any such Development is deemed not to be a work made for hire, I hereby
assign any right, title and interest throughout the world in any such
Development to the Company or its designee. If any Developments cannot be
assigned, I hereby grant to the Company an exclusive, assignable, irrevocable,
perpetual, worldwide, sublicenseable (through one or multiple tiers),
royalty-free, unlimited license to use, make, modify, sell, offer for sale,
reproduce, distribute, create derivative works of, publicly perform, publicly
display and digitally perform and display such work in any media now known or
hereafter known. Outside the scope of my service, whether during or after my
employment with the Company, I agree not to (x) modify, adapt, alter, translate,
or create derivative works from any such work of authorship or (y) merge any
such work of authorship with other Developments. To the extent rights related to
paternity, integrity, disclosure and withdrawal (collectively, “Moral Rights”)
may not be assignable under applicable law and to the extent the following is
allowed by the laws in the various countries where Moral Rights exist, I hereby
irrevocably waive such Moral Rights in and to all or any Developments and
consent to any action of the Company Group that would violate such Moral Rights
in the absence of such consent. I understand that the provisions of this
Non-Interference Agreement requiring assignment of Inventions to the Company do
not apply to any invention which qualifies fully under the provisions of
Section 2870 of the California Labor Code (attached hereto as Schedule A). I
will advise the Company promptly in writing of any inventions that I believe
meet the criteria in Section 2870 of the California Labor Code and I bear the
full burden of proving to the Company Group that an invention qualifies fully
under Section 2870 of the California Labor Code. I acknowledge receipt of this
Confidentiality Agreement and of written notification of the provisions of
Section 2870 of the California Labor Code.

 

24

 

 

LiveXLive Media, Inc./Schuon Employment Agreement-Exhibit A

 

(c)          Maintenance of Records. I agree to keep and maintain adequate and
current written records of all Developments made by me (solely or jointly with
others) during the Assignment Period. The records may be in the form of notes,
sketches, drawings, flow charts, electronic data or recordings, and any other
format. The records will be available to and remain the sole property of the
Company at all times. I agree not to remove such records from the Company’s
place of business except as expressly permitted by Company policy, which may,
from time to time, be revised at the sole election of the Company for the
purpose of furthering the business of the Company.

 

(d)         Intellectual Property Rights. I agree to assist the Company, or its
designee, at the Company’s expense, in every way to secure the rights of the
Company in the Developments and any copyrights, patents, trademarks, service
marks, database rights, domain names, mask work rights, moral rights, or other
intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments, recordations, and all other instruments which the Company shall
deem necessary in order to apply for, obtain, maintain and transfer such rights
and in order to assign and convey to the Company the sole and exclusive right,
title and interest in and to such Developments, and any intellectual property or
other proprietary rights relating thereto. I further agree that my obligation to
execute or cause to be executed, when it is in my power to do so, any such
instrument or papers shall continue after the Assignment Period until the
expiration of the last such intellectual property right to expire in any country
of the world; provided, however, the Company shall reimburse me for my
reasonable expenses incurred in connection with carrying out the foregoing
obligation. If the Company is unable because of my mental or physical incapacity
or unavailability for any other reason to secure my signature to apply for or to
pursue any application for any United States or foreign patents or copyright
registrations covering Developments or original works of authorship assigned to
the Company as above, then I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents as my agent and attorney in
fact, to act for and in my behalf and stead only to execute and file any such
applications or records and only to do all other lawfully permitted acts to
further the application for, prosecution, issuance, maintenance or transfer of
letters patent or registrations thereon with the same legal force and effect as
if originally executed by me. I hereby waive and irrevocably quitclaim to the
Company any and all claims, of any nature whatsoever, which I now or hereafter
have for past, present or future infringement of any and all proprietary rights
assigned to the Company hereunder.

 

Section 3.     Returning Company Group Documents.

 

I agree that, at the time of termination of my employment with the Company for
any reason, or earlier if reasonably requested, I will deliver to the Company
(and will not keep in my possession, recreate, or deliver to anyone else) any
and all Confidential Information and all other documents, materials,
information, and property developed by me pursuant to my employment or otherwise
belonging to the Company. I agree further that any property situated on the
Company’s premises and owned by the Company (or any other member of the Company
Group), including disks and other storage media, filing cabinets, and other work
areas, is subject to inspection by personnel of any member of the Company Group
at any time with or without notice.

 

25

 

 

LiveXLive Media, Inc./Schuon Employment Agreement-Exhibit A

 

Section 4.     Disclosure of Agreement.

 

As long as it remains in effect, I will disclose the existence of this
Confidentiality Agreement to any prospective employer, partner, co-venturer,
investor, or lender prior to entering into an employment, partnership, or other
business relationship with such person or entity.

 

Section 5.     Restrictions on Interfering.

 

(a)          Non-Interference. During the period of my employment with the
Company (the “Employment Period”) and the Post-Termination Non-Interference
Period, I shall not, directly or indirectly for my own account or for the
account of any other individual or entity, engage in Interfering Activities.

 

(b)         Definitions. For purposes of this Confidentiality Agreement:

 

(i)          “Business Relation” shall mean any current or prospective client,
customer, licensee, account, supplier or other business relation of the Company
Group, or any such relation that was a client, customer, licensee, account,
supplier, or other business relation within the six (6) month period prior to
the expiration of the Employment Period, in each case, to whom I provided
services, or with whom I transacted business.

 

(ii)         “Interfering Activities” means (A) encouraging, soliciting, or
inducing, or in any manner attempting to encourage, solicit, or induce, any
Person employed by, or providing consulting services to, any member of the
Company Group(each, a “Restricted Associate”) to terminate such Person’s
employment or services (or in the case of a consultant, materially reducing such
services) with the Company Group, provided that the foregoing shall not be
violated by general advertising not targeted at employees or consultants of any
member of the Company Group; or (B) encouraging, soliciting, or inducing, or in
any manner attempting to encourage, solicit, or induce, any Business Relation to
cease doing business with or reduce the amount of business conducted with the
Company Group, or in any way interfering with the relationship between any such
Business Relation and the Company Group. Notwithstanding the foregoing, for the
purposes hereof the term “Interfering Activities” excludes my taking all or any
of the following actions, whether for my account or benefit or for the account
or benefit of any other Person: (x) hiring any Restricted Associate or engaging
any Restricted Associate to otherwise render services (whether consulting or
otherwise), so long as in connection therewith I do not knowingly encourage,
induce, or solicit, or knowingly attempt to encourage, induce, or solicit, the
respective Restricted Associate in violation of the above clause (A) of this
definition; (y) engaging in, accepting, or otherwise conducting business with
any Business Relation, so long as in connection therewith I do not knowingly
encourage, solicit, or induce, or knowingly attempt to encourage, solicit, or
induce, the respective Business Relation in violation of the above clause (C) of
this definition; or (z) communicating, or any Person at my direction
communicating, to any Persons, including, without limitation, any Restricted
Associate or any Business Relation, by any means, method, media, or format now
or hereafter known (including, without limitation, via any present or future
social media service, such as, without limitation, LinkedIn, Facebook, or
Twitter), any change in my employment, including, but not limited to, the
cessation of my employment with the Company or my employment with any Person
other than the Company.

 

26

 

 

LiveXLive Media, Inc./Schuon Employment Agreement-Exhibit A

 

(iii)        “Person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust
(charitable or non-charitable), unincorporated organization, or other form of
business entity.

 

(iv)        “Post-Termination Non-Interference Period” means the period
commencing on the date of the termination of my employment with the Company for
any reason and ending on the twelve (12) month anniversary of such date of
termination.

 

Section 6.     Reasonableness of Restrictions.

 

I acknowledge and recognize the highly competitive nature of the Company’s
business, that access to Confidential Information renders me special and unique
within the Company’s industry, and that I will have the opportunity to develop
substantial relationships with existing and prospective clients, accounts,
customers, consultants, contractors, investors, and strategic partners of the
Company Group during the course of and as a result of my employment with the
Company. In light of the foregoing, I recognize and acknowledge that the
restrictions and limitations set forth in this Confidentiality Agreement are
reasonable and valid in geographical and temporal scope and in all other
respects and are essential to protect the value of the business and assets of
the Company Group. I acknowledge further that the restrictions and limitations
set forth in this Confidentiality Agreement will not materially interfere with
my ability to earn a living following the termination of my employment with the
Company and that my ability to earn a livelihood without violating such
restrictions is a material condition to my employment with the Company.

 

Section 7.     Independence; Severability; Blue Pencil.

 

Each of the rights enumerated in this Confidentiality Agreement shall be
independent of the others and shall be in addition to and not in lieu of any
other rights and remedies available to the Company Group at law or in equity. If
any of the provisions of this Confidentiality Agreement or any part of any of
them is hereafter construed or adjudicated to be invalid or unenforceable, the
same shall not affect the remainder of this Confidentiality Agreement, which
shall be given full effect without regard to the invalid portions.

 

Section 8.     Injunctive Relief.

 

I expressly acknowledge that any breach or threatened breach of any of the terms
and/or conditions set forth in this Confidentiality Agreement may result in
substantial, continuing, and irreparable injury to the members of the Company
Group. Therefore, I hereby agree that, in addition to any other remedy that may
be available to the Company, any member of the Company Group shall be entitled
to seek injunctive relief, specific performance, or other equitable relief by a
court of appropriate jurisdiction in the event of any breach or threatened
breach of the terms of this Confidentiality Agreement without the necessity of
posting of a bond.

 

Section 9.     General Provisions.

 

(a)          Governing Law. Except where preempted by federal law, all matters
in connection with, relating to, or arising from this Confidentiality Agreement,
including, without limitation, the validity, interpretation, construction, and
performance of this Confidentiality Agreement, is governed by and is to be
construed under the laws of the state of California applicable to agreements
made and to be performed in that state, without regard to conflict of laws rules
of the State of California that would result in the application of the laws of
any jurisdiction other than the state of California.

 

27

 

 

LiveXLive Media, Inc./Schuon Employment Agreement-Exhibit A

 

(b)          Entire Agreement. This Confidentiality Agreement sets forth the
entire agreement and understanding between the Company and me relating to the
subject matter herein and merges all prior discussions and communications
between the Company and me relating to the same. No modification or amendment to
this Confidentiality Agreement, nor any waiver of any rights under this
Confidentiality Agreement, will be effective unless in writing and signed and
delivered by each of the Company and me. Any subsequent change or changes in my
duties, obligations, rights, or compensation will not affect the validity or
scope of this Confidentiality Agreement.

 

(c)          Successors and Assigns. Sections 9.3(b) and 9.3(c) of the
Employment Agreement are incorporated into this Confidentiality Agreement by
reference, mutatis mutandis. Notwithstanding anything to the contrary contained
in the Employment Agreement or in this Confidentiality Agreement, the Company is
prohibited from assigning or delegating all or any portion of this
Confidentiality Agreement except in compliance with this Section 9(c) in
connection with an assignment or delegation of the Employment Agreement that is
effected in compliance with Sections 9.3(b) and 9.3(c) of the Employment
Agreement. Subject to the two immediately preceding sentences, this
Confidentiality Agreement will be binding upon my heirs, executors,
administrators, and other legal representatives and will be binding upon and for
the benefit of the Company, its successors, and its assigns.

 

(d)         Survival. The provisions of this Confidentiality Agreement shall
survive the termination of my employment with the Company and/or the assignment,
in compliance with the requirements hereof, of this Confidentiality Agreement by
the Company to any successor in interest or other assignee, in each case subject
to the temporal limitations contained herein.

 

(e)          Construction. Each party hereto has had an adequate opportunity to
have this Confidentiality Agreement reviewed by counsel. If an ambiguity or
question of intent or interpretation arises, this Confidentiality Agreement
shall be construed as if drafted jointly by the parties hereto. This
Confidentiality Agreement shall be construed without regard to any presumption,
rule or burden of proof regarding the favoring or disfavoring of any party
hereto by virtue of the authorship of any of the provisions of this
Confidentiality Agreement. In the event any of the provisions of this
Confidentiality Agreement conflict with any of the provisions of the Employment
Agreement, the respective provisions of the Employment Agreement govern and
control.

 

[SIGNATURE PAGE FOLLOWS]

 

28

 

 

LiveXLive Media, Inc./Schuon Employment Agreement-Exhibit A

 

I, Andy Schuon, have executed this Confidentiality, Non-Interference, and
Invention Assignment Agreement on the date set forth below:

 

Date: August 30, 2017 /s/ Andy Schuon   (Signature)           Andy Schuon

 

ACCEPTED AND AGREED TO:         LIVEXLIVE MEDIA, INC         By: /s/ Jerome N.
Gold    Name: Jerome N. Gold         Its: Executive Vice President and CFO      
  Date: August 30, 2017  

 

29

 

  

SCHEDULE A

 

SECTION 2870 of the CALIFORNIA LABOR CODE
INVENTION ON OWN TIME-EXEMPTION FROM AGREEMENT

 

“(a)        Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

 

(1)          Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer; or

 

(2)           Result from any work performed by the employee for the employer.

 

(b)         To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.”

 

 

 

 

EXHIBIT “B”

 

[FORM OF]

 

MUTUAL RELEASE OF CLAIMS 

 

This Mutual Release of Claims (this “Release”), is entered into as of the date
of the last signature below, by and between LiveXLive Media, Inc. (the
“Company”) and Andy Schuon (“Executive”) and is executed by each of the Company
and Executive pursuant to Section [8] of that certain Employment Agreement,
dated [September 1, 2017][, as amended] (the “Employment Agreement”), by and
between the Company and Executive. Capitalized terms used in this Release
without definition shall have the meanings ascribed thereto in the Employment
Agreement. Executive and the Company sometimes are referred to herein
collectively as the “Parties” and each individually as a “Party”. The Company
and Executive agree as follows:

 

1.            Release by Executive. Executive, on his own behalf and on behalf
of his descendants, dependents, heirs, devisees, legatees, executors,
administrators, legal or personal representatives, trustees, assigns, and
successors (individually and collectively, the “Executive Parties”), and each of
them, hereby acknowledges full and complete satisfaction of and releases and
discharges the Company, and each of its Affiliates, subsidiaries, divisions, or
parents,, past and present, and each of them, as well as their respective
predecessors, assignees, successors, directors, officers, stockholders,
partners, representatives, attorneys, agents or employees, past or present, or
any of them (individually and collectively, the “Company Parties”), from and
with respect to any and all claims, agreements, obligations, demands and causes
of action, known or unknown, suspected or unsuspected, that Executive has ever
had, or now has, or ever will have, against the Company Parties by reason of any
and all acts, omissions, conditions, events, circumstances, or facts existing,
occurring, or failing to occur at any time through the date of Executive’s
execution of this Release that directly or indirectly arise out of, relate to,
or are connected in any way with Executive’s employment by, services to (whether
as an employee, officer, director, or otherwise), or separation from, all or any
of the Company Parties, including, without limiting the generality of the
foregoing, any claim under Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Family and Medical Leave Act, the
California Fair Employment and Housing Act, California Labor Code Section 132a,
the California Family Rights Act, or any other federal, state or local law,
regulation or ordinance relating to employment (the foregoing, as modified by
the following clause, collectively, the “Executive Released Claims”); except
that notwithstanding anything to the contrary herein, the release set forth in
this Section 1 expressly excludes, and shall not alter, limit, release, apply
to, or otherwise affect, and the term Executive Released Claims shall not
include; (a) the obligations and covenants of the Company and the rights of
Executive in each case that, directly or by implication, survive the termination
of Executive’s employment with the Company pursuant to Section [9.6] of the
Employment Agreement; (b) any claim that is prohibited from being released as a
matter of law; (c) Executive’s rights to tail indemnification or contribution,
whether pursuant to the governance documents of any of the Company Parties
(including, without limitation, pursuant to any certificate of incorporation,
bylaws or any written agreements) or Section [6.5] of the Employment Agreement
(d) any rights or claims of Executive as a stockholder of the Company; (e) any
vested rights or vested benefits under ERISA or under any Benefit Plan; (f)
workers’ compensation benefits; and (g) any claims arising after the date of
Executive’s execution of this Release.

 

 

 

 

LiveXLive Media, Inc./Schuon Employment Agreement- Exhibit B

 

2.            It is a condition hereof, and it is the Parties’ intention in the
execution of this Release, that the release set forth in Section 1 above shall
be effective as a bar to each and all of the Executive Released Claims, and in
furtherance of this intention, Executive, on behalf of himself and each and all
of the other Executive Parties, hereby waives any and all rights and benefits
conferred upon him by Section 1542 of the California Civil Code, which provides:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

3.            ADEA Waiver. Executive expressly acknowledges and agrees that by
entering into this Release, he is waiving any and all rights or claims that he
may have arising under the Age Discrimination in Employment Act of 1967, as
amended (“ADEA”), which have arisen on or before the date of execution of this
Release. Executive further expressly acknowledges and agrees that:

 

(a)           In return for this Release, he will receive consideration beyond
that which he was already entitled to receive before entering into this Release;

 

(b)           He is hereby advised in writing by this Release to consult with an
attorney before signing this Release;

 

(c)           He was given a copy of this Release on [_________], and informed
that he had twenty-one (21) days within which to consider this Release, that
changes (whether material or otherwise) will not restart the 21-day period;

 

(d)           Nothing in this Release prevents or precludes Executive from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties or
costs from doing so, unless specifically authorized by federal law; and

 

(e)           He was informed that he has seven (7) days following the date of
execution of this Release in which to revoke this Release, and this Release will
become null and void if Executive so elects revocation during that time. Any
revocation must be in writing and must be received by the Company during the
seven (7)-day revocation period. In the event that Executive exercises his right
of revocation, neither the Company nor Executive will have any obligations under
this Release.

 

 

 

 

LiveXLive Media, Inc./Schuon Employment Agreement- Exhibit B

 

4.            Release by Company. The Company, on behalf of itself and each and
all of the other Company Parties, hereby acknowledges full and complete
satisfaction of and releases and discharges each and all of the Executive
Parties from and with respect to any and all claims, agreements, obligations,
demands and causes of action, known or unknown, suspected or unsuspected, that
all or any of the Company Parties have ever had, or now have, or ever will have,
against all or any of the Executive Parties by reason of any and all acts,
omissions, conditions, events, circumstances, or facts existing, occurring, or
failing to occur at any time through the date of the Company’s execution of this
Release that directly or indirectly arise out of, relate to, or are connected
with Executive’s employment by, services to (whether as an employee, officer,
director, or otherwise), or separation from, all or any of the Company
Parties(the foregoing, as modified by the following clause, collectively, the
“Company Released Claims”); except that notwithstanding anything to the contrary
herein, the release set forth in this Section 4 expressly excludes, and shall
not alter, limit, release, apply to, or otherwise affect, and the term Company
Released Claims shall not include (a) the obligations of Executive that survive
the termination of Executive’s employment with the Company pursuant to Section
[9.6] of the Employment Agreement and that certain Confidentiality,
Non-Interference, and Invention Assignment Agreement dated [*] between the
Company and Executive; and (b) any claims arising after the date of the
Company’s execution of this Release.

 

5.            It is a condition hereof, and it is the Parties’ intention in the
execution of this Agreement, that the release set forth in Section 4 above shall
be effective as a bar to each and all of the Company Released Claims, and in
furtherance of this intention, the Company, on behalf of itself and each and all
of the other Company Parties, hereby waives any and all rights and benefits
conferred upon the Company Parties by Section 1542 of the California Civil Code,
which provides:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

6.            No Transferred Claims. Executive represents and warrants to the
Company, that he has not heretofore assigned or transferred to any person or
entity any of the Executive Released Claims or any part or portion thereof. The
Company represents and warrants to Executive that it has not heretofore assigned
or transferred to any person or entity any of the Company Released Claims or any
part or portion thereof.

 

7.            Miscellaneous. The following provisions shall apply for purposes
of this Release:

 

(a)          Section Headings. The section headings contained in this Release
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Release.

 

(b)          Governing Law. All matters in connection with, relating to, or
arising from this Release shall be governed by and construed in accordance with
the internal laws of the State of California, without regard to the principles
of conflicts of law thereof (to the extent that the application of the laws of
another jurisdiction would be required thereby).

 

(c)           Amendments. This Release may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by Executive and the Company or, in the case of a waiver, by
the Party waiving compliance.

 

 

 

 

LiveXLive Media, Inc./Schuon Employment Agreement- Exhibit B

 

(d)          Waivers.

 

(i)       Except as otherwise provided herein, no action taken pursuant to this
Release, including any investigation by or on behalf of any Party, shall be
deemed to constitute a waiver by the Party taking such action of compliance with
any representations, warranties, covenants or agreements contained in this
Release. Any term, covenant, agreement, obligation, undertaking, condition,
representation or warranty under this Release may be waived at any time by the
Party which is entitled to the benefit thereof, but only by a written notice
signed by such Party expressly waiving such term, covenant, agreement,
obligation, undertaking, condition, representation or warranty.

 

(ii)       The failure of any Party to insist, in any one or more instances,
upon performance of the terms or conditions of this Release shall not be
construed as a waiver or relinquishment of any right granted hereunder or of the
future performance of any such term, covenant or condition. No waiver on the
part of any Party of any right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, shall preclude any further
exercise thereof or the exercise of any other such right, power or privilege.

 

(e)          Severability. Any provision of this Release which is invalid or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Release, and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by law, the
Parties waive any provision of law which renders any such provision prohibited
or unenforceable in any respect.

 

(f)           Counterparts. This Release may be executed in counterparts, each
of which shall be deemed an original, and it will not be necessary in making
proof of this Release or the terms of this Release to produce or account for
more than one of such counterparts. All counterparts shall constitute one and
the same instrument. Each Party may execute this Release via a facsimile (or
transmission of a PDF file) of a counterpart of this Release. In addition,
facsimile or PDF signatures of authorized signatories of any Party shall be
valid and binding and delivery of a facsimile or PDF signature by any Party
shall constitute due execution and delivery of this Release.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

LiveXLive Media, Inc./Schuon Employment Agreement- Exhibit B

  

IN WITNESS WHEREOF, each of the Company and Executive has executed this Release
as of the respective date set forth below.

 

  LIVEXLIVE MEDIA, INC.         By:                                            
    Name:         Its:         ANDY SCHUON