Document:

Unassociated Document

 

Exhibit 10.11.2

 

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(k), OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON _______ _, 2014 (THE “EXPIRATION DATE”).

 

	No. W-UPN00_	___________ Shares

 

CAPRIUS, INC.

WARRANT TO PURCHASE _________ SHARES OF

COMMON STOCK, PAR VALUE $0.01 PER SHARE

 

CAPRIUS, INC.,  a Delaware corporation (the “Company”), hereby grants to ______________________ (the “Initial Holder”), subject to the terms set forth in this Common Stock Purchase Warrant Agreement (the “Warrant Agreement”), the right to exercise Common Stock Purchase Warrants (the “Warrants”) for the purchase from the Company of up to ________  shares (the “Shares”) of the Company’s Common Stock, at an exercise price of $0.10 per share, subject to adjustment from time to time as described herein. The term “Common Stock” means, unless the context otherwise requires, the Company’s Common Stock, par value $.01 per share, or other securities or property at the time deliverable upon the exercise of this Warrant.  This Warrant is being issued pursuant to the Unsecured Promissory Note dated as of _____  __, 2009 (the “Note”), among the Company and the Initial Holder and the initial holders of the other warrants (the “Note Warrants”).

 

1.             Exercise

 

1.1           Timing of Exercise.  This Warrant shall be exercisable at any time in whole or in part from time to time commencing as of the date hereof and expiring at 5:00 P.M., New York time, on ______ __, 2014 (the “Expiration Date”), subject to earlier termination as provided herein, and may not be exercised thereafter

 

1.2           Exercise of Warrant.

 

(a)            Exercise. Subject to the provisions hereof, the Warrantholder may exercise this Warrant in whole or in part at any time from and after the Initial Exercise Date and not later than 5:00 P.M., Eastern time, on the Expiration Date upon surrender of the Warrant, together with delivery of the duly executed Warrant Exercise Form attached hereto as Exhibit A and payment by cash, certified check or wire transfer of funds (or, in certain circumstances, by cashless exercise as provided in subsection (b) below) for the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder).

 

  

  

  

 

(b)           Cashless Exercise.  (i) Notwithstanding any other provision contained herein to the contrary, the Warrantholder may elect to receive, without the payment by the Warrantholder of the aggregate Warrant Price in respect of the shares of Common Stock to be acquired, shares of Common Stock equal to the value of this Warrant or any portion hereof by the surrender of this Warrant (or such portion of this Warrant being so exercised) together with the Net Issue Election Notice annexed hereto as Exhibit B duly executed, at the office of the Company.  The Net Issue Election Notice must be received by the Company not more than five (5) business days after the date the election is made.  Thereupon, the Company shall issue to the Warrantholder such number of fully paid, validly issued and nonassessable shares of Common Stock as is computed using the following formula:

 

 

X = Y (A - B)

       A

 

where

 

X =           the number of shares of Common Stock which the Warrantholder has then requested be issued to the Warrantholder;

 

Y =           the total number of shares of Common Stock covered by this Warrant which the Warrantholder has surrendered at such time for cashless exercise (including both shares to be issued to the Warrantholder and shares to be canceled as payment therefor);

 

A =           the average closing “Market Price” of one share of Common Stock for the five (5) consecutive business days preceding the date the net issue election is made; and

 

B =           the Warrant Price in effect under this Warrant at the time the net issue election is made.

 

(ii) For the purposes of this Agreement, “Market Price” as of a particular date (the “Valuation Date”) shall mean the following: (a) if the Common Stock is then listed on a national stock exchange, the closing sale price of one share of Common Stock on such exchange on the last trading day prior to the Valuation Date; (b) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc. (“Nasdaq”), the National Association of Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar exchange or association, the closing sale price of one share of Common Stock on Nasdaq, the Bulletin Board or such other exchange or association on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of the high bid and the low asked price quoted thereon on the last trading day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board or such other exchange or association, the fair market value of one share of Common Stock as of the Valuation Date, shall be determined in good faith by the Board of Directors of the Company and the Warrantholder.  If the Common Stock is not then listed on a national securities exchange, the Bulletin Board or such other exchange or association, the Board of Directors of the Company shall respond promptly, in writing, to an inquiry by the Warrantholder prior to the exercise hereunder as to the fair market value of a share of Common Stock as determined by the Board of Directors of the Company.  In the event that the Board of Directors of the Company and the Warrantholder are unable to agree upon the fair market value, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters.  The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Warrantholder.  Such adjustment shall be made successively whenever such a payment date is fixed.

 

  

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2.            Delivery of Stock Certificates Upon Exercise.  As soon as practicable after the exercise of any Warrants, and in any event within five (5) business days thereafter, the Company, at its expense, will cause to be issued in the name of and delivered to the Holder or other person specified in the Notice of Exercise a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock to which the Holder shall be entitled upon such exercise, subject to compliance with Section 7 hereof.  Any shares of Common Stock as to which this Warrant is exercised shall be deemed issued on and as of the date of such exercise, and the Holder shall thereupon be deemed to be the owner of record of such Shares.

 

3.             Anti-Dilution Adjustments.

 

3.1           Change in Capitalization.  If the Company shall at any time prior to the Expiration Date subdivide its outstanding Common Stock, by forward stock split or otherwise, or combine its outstanding Common Stock (including a reverse split), or issue additional shares of its Common Stock in payment of a stock dividend in respect of its Common Stock, the Shares shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination, and the Exercise Price then applicable to the Shares covered by the unexercised portion of the Warrants shall forthwith be proportionately decreased in the case of a subdivision or stock dividend, or proportionately increased in the case of a combination.

 

3.2           Reclassification.  In case of any reclassification, capital reorganization or change of the outstanding Common Stock of the Company (other than as a result of a subdivision, combination or stock dividend covered by Section 3.1 hereof), at any time prior to the Expiration Date, then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right prior to the Expiration Date to purchase, at a total price not to exceed that payable upon the exercise of the unexercised portion of the Warrants, the kind and amount of shares of stock and other securities and property receivable upon such reclassification, reorganization or change, by a holder of the number of shares of Common Stock of the Company which might have been purchased by the Holder immediately prior to such reclassification, reorganization or change, and in any such case appropriate provisions shall be made with respect to the rights and interest of the Holder to the end that the provisions hereof (including without limitation, provisions for the adjustment of the Exercise Price and of the number of Shares purchasable upon exercise of the Warrants) shall thereafter be applicable in relation to any shares of stock and other securities and property thereafter deliverable upon exercise hereof.

 

  

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3.3           Consolidation, Merger and Sale of Assets.  In case of any consolidation of the Company with or a merger of the Company into another corporation or in case of any sale or conveyance and to another corporation of the property of the Company as an entirety or substantially as an entirety, upon any such consolidation, merger, sale or conveyance (i) the surviving entity or its parent corporation is a public reporting company under the Securities Exchange Act of 1934, as amended, and (ii) the consideration to be received by the holders of the Company’s Common Stock includes publicly traded equity securities in the surviving entity or parent corporation, the Company agrees that a condition of such transaction will be that the successor or purchasing corporation, as the case may be, shall assume the obligations of the Company hereunder in writing.  In the case of any such consolidation, merger or sale or conveyance, the Holder shall have the right until the Expiration Date upon payment of the Exercise Price in effect immediately prior to such action, to receive the kind and amount of shares and other securities and/or property which it would have owned or have been entitled to receive after the happening of such consolidation, merger, sale or conveyance had this Warrant been exercised immediately prior to such action, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3.  The provisions of this Section 3.3 shall similarly apply to successive consolidations, mergers, sales or conveyances.

 

3.4           Non-Public Successor.  In case of any consolidation of the Company with or a merger of the Company into another corporation or in case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, upon any such consolidation, merger, sale or conveyance (i) the surviving entity is not a public reporting company (as defined above), or (ii) the consideration to be received by the holders of the Company’s Common Stock does not include any publicly traded equity securities in the surviving entity or its parent corporation, the Company agrees that a condition of such transaction will be that the Company shall mail to the Holder at the earliest applicable time (and, in any event not less than ten (10) days before any record date for determining the persons entitled to receive the consideration payable in such transaction) written notice of such record date.  Such notice shall also set forth facts as shall indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Exercise Price of and the kind and amount of the Shares and other securities and property deliverable upon exercise of the Warrants.  Upon the closing of the transaction referenced in the foregoing notice, this Warrant Agreement and the Warrants hereunder to the extent then unexercised shall terminate.

 

3.5           Exchanges and Distributions With Respect to Common Stock.  If the Company shall exchange for its Common Stock or distribute with respect to its Common Stock other securities issued by it, the Company shall give notice thereof to the Holder, and the Holder shall have the right thereafter (until the Expiration Date) to exercise the Warrants for the kind and amount of shares of stock and other securities retained or received by a holder of the number of shares of Common Stock of the Company into which the Warrants might have been exercised immediately prior to such exchange or distribution, subject to adjustment as provided hereinabove.

 

3.6           Officer’s Certificate.  Whenever the Exercise Price or the number of shares of Common Stock subject to this Warrant Agreement is adjusted, the Company shall promptly mail to the Holder a notice of adjustment.  The notice of adjustment shall include a brief statement of the facts requiring the adjustment and the manner of computing it, and shall be certified by the chief financial officer of the Company.  The determination of the adjustment shall be made by the Company in its sole discretion and shall be final and binding upon the Holder.

 

  

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4.            Shares to Be Fully Paid; Reservation of Capital Stock Issuable Upon Exercise of Warrants.  The Company covenants and agrees that any Shares issued hereunder will, upon issuance, be fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof.  The Company shall at all times reserve and keep available out of its authorized but unissued capital stock, solely for the issuance and delivery upon the exercise of the Warrants, such number of its duly authorized shares of Common Stock as from time to time shall be issuable upon the exercise of the Warrants.

 

5.            Fractional Shares.  The Company shall not issue fractions of shares of Common Stock upon exercise of the Warrants or scrip in lieu thereof.  If any fraction of a share of Common Stock would, except for the provisions of this Section 5, be issuable upon exercise of the Warrants, then the number of shares of Common Stock to be issued shall be rounded up or down to the nearest whole share.

 

6.            Transfer Restrictions.  A Holder, including the Initial Holder or any subsequent Holder, may transfer this Warrant Agreement together with the Warrants hereunder only to (i) any entity controlled by, controlling or under common control of the Holder, or for which the Holder is acting as the representative, (ii) one or more of its shareholders, directors, officers, members, employees or limited or general partners, or (iii) any member of the immediate family (which shall be deemed to include a spouse, parent, or child) of an individual Holder or trust for the benefit of any such individual.  Prior to any such transfer, the Holder must deliver the Assignment Form in the form of Exhibit C hereto and provide information to the Company, in writing, regarding the proposed transferee sufficient for the Company to determine the eligibility of such transferee under this Section 6.

 

7.             Securities Law Compliance.

 

7.1           Investment.  Unless the Shares to be issued upon exercise of the Warrants are then included in an effective registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), the Holder, by accepting this Warrant Agreement, covenants and agrees that, at the time of exercise hereof, and at the time of any proposed transfer of the Warrants of Shares acquired upon exercise hereof, the Holder shall deliver to the Company a written statement that the securities acquired by the Holder upon exercise hereof are for the account of the Holder or are being held by the Holder as trustee, investment manager, investment advisor or as any other fiduciary for the account of the beneficial owner or owners for investment and are not acquired with a view to, or for sale in connection with, any distribution thereof (or any portion thereof) and with no present intention (at any such time) of offering and distributing such securities (or any portion thereof), and including such other representations as may be reasonably requested by counsel to the Company.  Further, the Holder shall comply with such provisions of applicable state securities laws as counsel to the Company or other counsel reasonably acceptable to the Company shall advise.

 

7.2           Legend.  Unless the Shares issuable upon exercise of the Warrants are registered under the Securities Act, upon exercise of any part of the Warrants and the issuance of any of such Shares, the Company shall instruct its transfer agent to enter stop transfer orders with respect to such Shares, and all certificates representing the Shares issued upon exercise hereof shall bear on the face thereof substantially the following legend, insofar as is consistent with applicable law:

 

  

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“The shares of Common Stock represented by this Certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold, offered for sale, assigned, transferred or otherwise disposed of unless registered pursuant to the provisions of that Act or an opinion of counsel to the Company is obtained stating that such disposition is in compliance with an available exemption from such registration.”

 

7.3           No Registration Rights.  The Holder acknowledges that it will have no demand, “piggy-back” or other rights for inclusion of the Shares in any registration statement which may hereafter be filed by the Company under the Securities Act.

 

8.            Replacement of Warrant Agreement.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Agreement and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement, and if requested by the Board of Directors, a bond in an amount reasonably satisfactory to it, or (in the case mutilation) upon surrender and cancellation hereof, the Company will issue in lieu thereof a new Warrant Agreement of like tenor.

 

9.            Rights as a Warrant Holder.  The Holder shall not, by virtue hereof, be entitled to any rights of a stockholder in the Company, either at law or equity except with respect to certificates representing shares of Common Stock issued upon exercise of this Warrant.  The rights of the Holder are limited to those expressed in this Warrant Agreement and are not enforceable against the Company except to the extent set forth herein.  Prior to due presentment for transfer of this Warrant Agreement, the Company may deem and treat the Holder as the absolute owner of this Warrant Agreement for purposes of any exercise hereof and for all other purposes and such right of the Company shall not be affected by any notice to the contrary.

 

10.           Subdivision of Rights.  This Warrant Agreement (as well as any new Warrants issued pursuant to the provisions of this Section) is exchangeable upon the surrender hereof by the Holder at the principal office of the Company for any number of new Warrants of like tenor and date representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock of the Company that may be purchased hereunder.

 

11.           Sending of Notices.  All notices and other communications with respect to this Warrant Agreement shall be in writing and sent by express mail or courier service or by personal delivery  to the Company address at 10 Forest Avenue, Suite 220, Paramus, NJ 07652 or to such other address as either party hereto may duly give to the other.

 

12.           Headings.  The headings in this Warrant Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of the terms hereof.

 

13.           Change, Waiver, Discharge or Termination.  This Warrant Agreement sets forth the entire agreement between the Company and the Holder with respect to the matters herein.  Neither this Warrant Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.  The Company shall not amend any other Warrant Agreement issued as part of the Series to make terms thereunder more favorable to the holder thereof without offering the same amended terms to the Holder hereof.

 

  

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14.           Binding.  This Warrant Agreement shall be binding upon and inure to the benefit of the Company and the Holder, and their respective successors and assigns.

 

15.           Governing Law.  This Warrant Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to principles of conflicts of law.

 

	 	CAPRIUS, INC.	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Jonathan Joels	 
	 	 	Jonathan Joels	 
	Dated:  _____   __, 2009	 	CFO	 
	 	 	 	 

 

  

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EXHIBIT A

 

NOTICE OF EXERCISE

 

 

(To be executed by a Holder desiring to exercise the right to purchase Shares pursuant to a Warrant.)

 

The undersigned Holder of the attached Warrant Agreement hereby:

 

1.           Irrevocably elects to exercise the Warrant therein to the extent of purchasing ________ Shares at $ ____ per Share, and makes payment in full of the aggregate Exercise Price for those Shares in the amount of $___________ by wire transfer or the delivery of certified funds or a bank cashier’s check.

 

2.           Requests that a certificate for the Shares be issued in the name of the undersigned, or, if the name and address of some other person is specified below, in the name of such other person:

 

___________________________________________________

 

___________________________________________________

  

___________________________________________________

 

___________________________________________________

(Name, address and tax identification number of person other 

than the undersigned in whose name Shares are to be registered.)

 

3.           Requests, if the number of Shares purchased are not all the Shares purchasable pursuant to the unexercised portion of the Warrants, that a new Warrant Agreement of like tenor for the remaining Shares purchasable pursuant to the Warrants be issued and delivered to the undersigned at the address stated below.

 

	Dated:	 	 	 	 
	 	 	 	Signature	 
	 	 	 	 	 	 

 

(This signature must conform in all respects to the name of the Holder as specified on the face of the Warrant Agreement)

 

	 	 	 	 	 	 
	 	 	 	 
	Social Security or Tax Identification Number 	 	Printed Name	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Address: 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

Warrant No.: W-UPN00_

 

  

  

  

 

EXHIBIT B

CAPRIUS, INC.

NET ISSUE ELECTION NOTICE

To: Caprius, Inc.

Date:[_________________________]

The undersigned hereby elects under Section 3(b) of this Warrant to surrender the right to purchase [____________] shares of Common Stock pursuant to this Warrant and hereby requests the issuance of [_____________] shares of Common Stock.  The certificate(s) for the shares issuable upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below.

_________________________________________

Signature

_________________________________________

Name for Registration

_________________________________________

_________________________________________

Mailing Address

 

_________________________________________

Social Security or Tax Identification Number

 

 

Warrant No.: W-UPN00_

 

  

  

  

 

EXHIBIT C

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned,

________________________________, hereby sells, assigns and transfers unto:

Name: ________________________________________________

(Please type or print in block letters.)

Address:    _____________________________________________

    _____________________________________________

the right to purchase ______________ shares (the “Shares”) of Caprius, Inc. (the “Company”) pursuant to the terms and conditions of the Warrant held by the undersigned.  The undersigned hereby authorizes and directs the Company (i) to issue and deliver to the above-named assignee at the above address a new Warrant pursuant to which the rights to purchase being assigned may be exercised, and (ii) if there are rights to purchase Shares remaining pursuant to the undersigned’s Warrant after the assignment contemplated herein, to issue and deliver to the undersigned at the address stated below a new Warrant evidencing the right to purchase the number of Shares remaining after issuance and delivery of the Warrant to the above-named assignee.  Except for the number of Shares purchasable, the new Warrant to be issued and delivered by the Company is to contain the same terms and conditions as the undersigned’s Warrant.  This Assignment is subject to receipt by the Company of such investment representations by the assignee, as may be reasonably required under the Securities Act of 1933, as amended.  To complete the assignment contemplated by this Assignment Form, the undersigned hereby irrevocably constitutes and appoints ______________________________ as the undersigned’s attorney-in-fact to transfer the Warrant and the rights thereunder on the books of the Company with full power of substitution for these purposes.

 

	Dated:	 	 	 	 
	 	 	 	Signature	 
	 	 	 	 	 	 

 

(This signature must conform in all respects to the name of the Holder as specified on the face of the Warrant Agreement)

 

	 	 	 	 	 	 
	 	 	 	 
	Social Security Number or Eployer ID Number 	 	Printed Name	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Address: 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

Stock Warrant No.: # W-UPN00exhibit_10-1.htm

EXHIBIT 10.1

 

INTERIM EMPLOYMENT AGREEMENT

This Interim Employment Agreement, dated June 30, 2010 (the “Agreement”), is entered into by and between Camelot Entertainment Group, Inc., a Delaware Corporation, it affiliates, subsidiaries, divisions, predecessors and successors (the “Company”) one the one hand, and Steven Istock (the “Executive”) on the other hand. The Company and Executive are hereinafter referred to collectively as the “Parties” and individually referred to as a “Party.”

RECITALS

WHEREAS, Executive has served as a consultant to the Company since April 2010; and

WHEREAS, the terms and conditions of the Executive’s Consultant Agreement, attached hereto as Exhibit A, remain binding and in effect; and

WHEREAS, the Company’s current Chief Financial Officer and Secretary has resigned effective June 30, 2010; and

WHEREAS, Executive and the Company desire to continue their working relationship by setting forth the following terms and conditions for an interim employment relationship between Executive and Company whereby Executive shall become the Company’s Interim Chief Financial Officer and Secretary in accordance with the terms and conditions of this Agreement; and

WHEREAS, the Parties contemplate entering into a more formal employment agreement as soon as practicable during the third quarter of 2010.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties to this Agreement hereby agree as follows:

ARTICLE 1

SCOPE OF EMPLOYMENT

1.1           Title and Position.  The Company hereby employs Executive, and Executive hereby accepts employment by the Company, as its Interim Chief Financial Officer for the Term of this Agreement, with the specific duties (the Services,” as defined below) and authority set out below.

1.2           Conflicts with Board Policies.  The employment relationship between the Parties shall be governed by the policies and practices established by the Board.

1.3           Location.  Unless the Parties otherwise agree in writing, during the term of this Agreement Executive shall perform the Services in the Los Angeles, California area.

1.4           Term.  The term of Executive’s employment under this Agreement (the “Term”) shall commence on the date first written above (the “Effective Date”) and shall end on or before September 30, 2010, unless sooner extended or terminated by the Parties.

1.5           Duties and Scope of Employment.  During the Term, Executive shall perform the duties as Chief Financial Officer of a fully reporting, fully audited public company.

1.5.1           During the Term, Executive shall be nominated to the Board of Directors of Camelot Entertainment Group, Inc. (the “Board”).  If elected to the Board by the Company’s stockholders, Executive shall serve as Secretary of the Board of Directors. Executive shall also be named as a member of the Audit and Executive Committee (or comparable committees) of the Board, as a member of the Compensation Committee (or comparable committees) of the Board, as a member of the Internal Controls Committee (or comparable committees) of the Board, and any and all other executive level committees established by the Board.

 

 

  

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1.6           Loyal and Conscientious Performance of Duties.  Executive agrees he will at all times loyally and conscientiously perform all of the Services and obligations required under this Agreement and the corporation law of the state of Delaware, to the best of his ability and experience.  Notwithstanding anything to the contrary contained herein, in the Consulting Agreement, or as a result of any obligations that Executive has to California Pictures Inc. and/or Strategic Film Partners, Executive agrees that his other obligations shall not conflict with, or deter from, his ability to render and completely fulfill his services hereunder in any way whatsoever.

ARTICLE 2

COMPENSATION

2.1           Salary.  Executive shall receive a base salary (“Base Salary”) of $62,500 during the Term.

2.1.1           Executive hereby agrees to defer all monies due in excess of ten thousand dollars ($10,000) in any given month until such time as the Company is able to pay Executive’s salary out of revenues generated by the Company or from proceeds provided by funding, whichever occurs first.  Executive further agrees that Company shall pay no form of interest on said deferment.  In the event the Company is unable to generate the funds necessary to satisfy the Salary described under Section 2.1, Executive has the option to receive the Company’s $0.0001 par value Common Stock (“Shares”) (as payment for the services rendered) from time to time, as directed by Consultant, until such time as the amount stated herein is paid in full, or, continue to defer any amounts owed until such time as the Company is able to satisfy those amounts.  In the event this Agreement is terminated due to the expiration of the Term or for any other reason other than involuntary termination for Cause, the terms and conditions of Section 2.1 and this Section 2.1.1 shall remain in full force and effect until such time as Executive has been paid in full in accordance herewith. 

2.2           Performance Bonus.  Executive shall receive a performance bonus equal to one percent (1%) of the actual cash raised and received by the Company (the “Investment”) during the Term, to be paid either in cash or Shares, as mutually agreed upon, within thirty (30) days after Company receives the Investment either directly from the investment source, and/or from any escrow established for the transaction, where applicable.

2.2.1           Company Funding Bonus.  Executive shall also be entitled to receive a bonus of five per cent (5%) of the first $5,000,000, four per cent (4%) of the second $5,000,000, three per cent (3%) of the third $5,000,000, two per cent (2%) of funds raised between $15,000,000 and $30,000,000 and one per cent (1%) of funds raised in excess of $30,000,000 and received by the Company after all “Costs” have been deducted as a direct result of an introduction made solely by Executive and acknowledged by the Company in writing. “Costs” shall be defined as all actual, out-of-pocket third party costs up to a ceiling of fifteen per cent (15%) of the total amount received by the Company, including, but not limited to, additional financing fees, accounting fees, legal fees, registration costs and any other consultant fees related to the funding. Executive shall also have the option to receive the above bonus in either cash or in Shares and/or the Company’s Class A Preferred Stock.

2.2.2           Bonus Allocation.     Any compensation due Executive from the bonuses referred to in Sections 2.2 shall not be calculated as part of Executive’s base Salary.

2.3           Benefits.  Executive shall be entitled to certain benefits outlined below:

2.3.1           Health Insurance. Executive and Executive’s immediate family shall be entitled to participate in such medical, dental, eye and life insurance, long term care, 401(k), pension and other plans as the Company may have or establish from time to time and in which any other Company senior executives are eligible to participate.

 

2.3.3           Executive Transportation.  Executive shall also be entitled to coach (domestic) and business-class air travel (foreign) for all trips made by Executive in connection with Executive’s services to Company.

2.3.4           Directors and Officers Liability Insurance. Executive shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its directors and officers for which Executive may be eligible during the Term.

 

 

  

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2.4           Expenses.  Company shall reimburse Executive for all reasonable and customary expenses incurred by him in the furtherance of the business of Company, in accordance with the then-existing reimbursement policies of Company.

ARTICLE 3

TERMINATION AND TERMINATION PAYMENTS

3.1           Termination.  Executive’s employment with the Company may be terminated under the following conditions:

3.1.1           Death.  Executive’s employment with the Company shall terminate effective upon the date of Executive’s death.

3.1.2           Disability.  The Company may terminate the Executive’s employment for “Complete Disability” by giving the Executive thirty (30) days advanced notice in writing.

3.1.3           Termination by Company.  Company may terminate Executive’s employment under this Agreement at any time for Cause upon two (2) and up to thirty (30) days written notice (hereinafter “Notice of Termination”). For all purposes under this Agreement, “Cause” shall mean: (a) conviction of a felony by a court of competent jurisdiction which would preclude Executive from carrying out his duties hereunder; (b) material breach of any provision of this Agreement; (c) breach of Executive’s fiduciary duties of loyalty and care to Company; (d) failure by the Executive to carry out his duties as defined by his duties as Chief Financial Officer and the guidelines as determined by the Company’s Board of Directors; and (e) an act by Executive which constitutes gross misconduct. Notwithstanding the foregoing, if such Cause is capable of being cured, then Executive shall not be terminated for Cause unless and until the Executive has received notice of the proposed termination for Cause, which states with reasonable detail the bases for the termination, and Executive has had the opportunity to be heard before at least a majority of the Board and the Executive has been given a minimum period of 30 days to cure the cause for termination. Executive shall have the right to be represented by counsel at any such hearing before the Board regarding his termination.  In the event Company terminates Executive for Cause, Executive shall only be entitled to the compensation under Section 3.2.1(a), (b) and (c).

3.1.4           Termination by Company Without Cause. Following the expiration of the Term, the Company may terminate Executive without Cause upon issuing Executive a Notice of Termination.

3.1.5           Termination by Executive.  Executive shall be entitled to terminate his employment for good reason.

3.2           Termination Payments.

3.2.1           Termination by Company.  In the event Company terminates Executive’s employment with or without Cause prior to or after the expiration of the Term (or any subsequent extension or amendment thereof), Company shall pay Executive within 30 days of termination any monies due Executive as of the Termination Date.

ARTICLE 4

MISCELLANEOUS

 

4.1           Entire Agreement.  This Agreement, together with those documents relating to the same transaction that are referred to in this Agreement, is intended to be the final, complete, and exclusive statement of the terms of the Agreement between Company and Executive with regard to the subject matter of this Agreement, and except for the Consulting Agreement, supersedes all other prior agreements, communications, and statements, whether written or oral, express or implied, pertaining to the subject matter of this Agreement,  Notwithstanding anything to the contrary, in the event that there is a conflict between the Consulting Agreement and this Agreement, then the terms and conditions of this Agreement shall govern.

 

 

 

  

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4.2           Amendment; Waiver.  This Agreement may not be amended or modified except in writing and signed by both parties.

4.3           Severability.  If any provision of this Agreement, or its application to any person, place, or circumstance, is held by an arbitrator or a court of competent jurisdiction to be invalid, unenforceable, or void, that provision shall be enforced to the greatest extent permitted by law, and the remainder of this Agreement and of that provision shall remain in full force and effect as applied to other persons, places, and circumstances.

 

4.4           Void Provisions. If any provision of this Agreement, as applied to either party or to any circumstances, shall be adjudged by a court to be void or unenforceable, the same shall be deemed stricken from this Agreement and shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement.

4.5           Section Headings.  Section headings and captions are used for reference purposes only and should be ignored in the interpretation of the Agreement.  Unless the context requires otherwise, all references in this Agreement to Articles or Sections are to the sections of this Agreement.

4.6           Counterparts.  This Agreement may be executed in one or more counterparts all of which together shall constitute one and the same instrument.

4.7           Notices.  For purposes of this Agreement, notices and other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by United States certified mail, postage prepaid, return receipt requested, addressed as follows:

	 	
If to Executive: 

	
Steven Istock

Camelot Entertainment Group, Inc.

8001 Irvine Center Drive, Suite 400

Irvine, CA 92618

	 	
If to Company: 

	
Camelot Entertainment Group, Inc.

Attn: Robert P. Atwell, CEO

8001 Irvine Center Drive, Suite 400

Irvine, CA 92618

	 	
With a copy to: 

	
Christopher Flannery

Law Office of Christopher Flannery

555 City Avenue

Bala Cynwyd, PA 1900

4.8           Governing Law.  The laws of the State of Delaware shall govern disputes, claims and controversies relating to and arising under this Agreement and be used to construe the terms of this Agreement.

 

 

  

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The parties have duly executed this Agreement as of the date first written above.

 

 

	“EXECUTIVE”  	 	“COMPANY”	 
	 	 	 	 
	/s/ Steven Istock	 	/s/ Robert P. Atwell	 
	Steven Istock  	 	Robert P. Atwell, CEO	 
	 	 	 	 
	 	 	 	 
	 	 	/s/ George Jackson	 
	 	 	George Jackson, CFO, Secretary	 
	 	 	 	 
	 	 	 	 
	Board of Director Approval:	 	 	 
	 	 	 	 
	 	 	 	 
	/s/ Robert P. Atwell	 	 	 
	Robert P. Atwell	 	 	 
	6/30/2010	 	 	 

 

 

 

  

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EXHIBIT A

 

 

BUSINESS CONSULTANT AGREEMENT

THIS BUSINESS CONSULTANT AGREEMENT (“Agreement”) is made and entered into this 1st day of May 2010, by and between Camelot Entertainment Group, Inc., a Delaware corporation, its predecessors, successors, subsidiaries and affiliates (the “Corporation”), one the one hand, and California Pictures, Inc., a California corporation and Steve Istock, a California resident (collectively the “Consultant”), on the other hand.

 

BACKGROUND

 

A.  The Corporation continues to experience growth while implementing its business model.

 

B.  The Consultant provides specific Services, as defined below, which the Corporation needs.

 

C.  The Consultant has provided Services to the Corporation since May 1, 2010.

 

D.  The Corporation has requested Consultant to provide business development, financial structuring and financing Services to the Corporation on an as-need basis and as a result the Business Consultant Agreement needs to be amended.

 

E.  As a result, the Board of Directors of the Corporation (the “Board”) has determined that it is in the best interests of the Corporation and its stockholders that the Corporation amend the March 1, 2010 agreement with the Consultant and to retain the services of Consultant to consult with the (i) Board, (ii) officers of the Corporation, and (iii) administrative staff of the Corporation concerning issues which may occur relating to the business of the Corporation, including assisting the Corporation in implementing its business model  and to provide business development, financial structuring and financing Services (collectively, and as further described in Exhibit A, the “Services”).

 

F.  It is the desire of the Consultant to provide the Services to the Corporation on an independent contractor basis.

 

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES, COVENANTS AND UNDERTAKINGS SPECIFIED HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND EQUITABLY, THE PARTIES AGREE WITH EACH OTHER AS FOLLOWS:

 

1.           Term of Agreement.  This Agreement shall be in full force and effect commencing May 1, 2010 and concluding at the close of business on April 30, 2011 (the “Term”), unless extended by mutual agreement of the parties.

 

2.           Consultation.  The Consultant shall make appropriate personnel available to consult with the Board, the officers of the Corporation, and the department heads of the administrative staff of the Corporation, at reasonable times, concerning matters relating to any issue of importance regarding the business affairs of the Corporation, including, but not limited to, the specific Services detailed on Exhibit A attached hereto.

 

3.           Management Authority; Independent Contractor Status.  The Consultant shall have no management authority of or for the Corporation.  The Corporation’s officers will operate the business affairs of the Corporation in their sole and absolute discretion.  All the members of the Corporation’s administrative staff shall be employees of the Corporation.  The Consultant shall have no control or charge of the administrative staff and no control or authority to employ, discharge, direct, supervise or control any member of the administrative staff or other employees of the Corporation.  It is the intention of the Corporation that the Consultant not undertake any activities which would make Consultant an affiliate of the Corporation, as that term is defined in the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the rules and regulations promulgated thereunder. The Corporation is interested only in the results obtained by the Consultant, who shall have the sole control of the manner and means of performing the Services under this Agreement.  The Corporation shall not have the right to require the Consultant to collect accounts, investigate customer complaints, attend meetings, periodically report to the Corporation, follow prescribed itineraries, keep records of business transacted, make adjustments, conform to particular policies of the Corporation, or do anything else which would jeopardize the relationship of independent contractor between the Corporation and the Consultant, nor shall the Corporation, nor the Consultant, do anything that would in any way cause the Consultant to be classified as an affiliate as defined in the Securities Act or the Exchange Act.

 

 

  

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4.           No Power of Consultant to Act as Agent.  The Consultant shall have no right, power or authority to be, or act, as an agent of the Corporation for any purpose whatsoever.  In that regard, the Consultant shall not attempt or purport to obligate the Corporation to any obligation or agreement.

 

5.           Limited Liability.  With regard to the Services, the Consultant shall not be liable to the Corporation, or to any person who may claim any right because of that person’s relationship with the Corporation, for any acts or omissions in the performance of the Services on the part of the Consultant or on the part of the agents or employees of the Consultant, except when said acts or omissions of the Consultant are due to the Consultant’s gross negligence or willful misconduct, which definition includes, but is not limited to, any violation by the Consultant of any local, state and or federal securities laws and or regulations, including those established by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”).  In the event Consultant commits or causes to be committed any acts or omissions that are due to the Consultant’s gross negligence or willful misconduct, this Agreement shall be deemed void, and all Shares issued in connection herewith shall be immediately cancelled by the Corporation and the Consultant shall physically return all Shares to the Corporation within three business days of the Consultant being notified of the acts and or omissions by the Corporation. In the event the Consultant has transferred or disposed of the Shares, or a portion thereof, prior to this Agreement becoming void as provided for herein, Consultant shall be solely responsible for replacing those Shares in order to comply with this Section 5.

 

6.           Cash Compensation.

 

a.           The Consultant shall receive Five Thousand Dollars ($5,000) per month in cash and/or stock as mutually agreed upon for consulting services relating to business consulting, financial structuring and corporate financing. All fees received as a result of this Section 6 (a) shall be applied to the consideration received in Section 6 (b) below.

 

b.           The Consultant shall receive a bonus of five per cent (5%) of the first $5,000,000, four per cent (4%) of the second $5,000,000, three per cent (3%) of the third $5,000,000, two per cent (2%) of funds raised between $15,000,000 and $30,000,000 and one per cent (1%) of funds raised in excess of $30,000,000 received by the Corporation as a direct result of an introduction made by Consultant and acknowledged by the Corporation in writing.

 

7.           Stock.

 

a.           Consultant shall receive a signing bonus of 300,000,000 shares of the Corporations $0.0001 par value common stock (“Shares”).

 

b.           In the event Consultant and Corporation mutually agree that all or a portion of the cash compensation described in Section 6 (a) and 6 (b) above shall be paid in stock, the following shall apply on a pro-rata basis: If applicable,  Consultant will be paid in stock as follows in Shares: For consulting services relating to corporate and film financing, the Consultant shall receive up to Three Thousand Dollars ($2,500) in Shares issued pursuant to an exemption from registration provided by Section 4(2) of the Securities Act and the rules and regulations promulgated by the Commission under that section of the Securities Act, specifically Rule 506.  For consulting services relating to all other aspects of the Corporation’s business excluding promotion and corporate financing, the Consultant shall receive up to Three Thousand Dollars ($2,500) in Shares issued in accordance with the terms and conditions of the Corporation’s 2009 Common Stock Option/Issuance Plan, which was registered under the Securities Act with the SEC on a Form S-8 registration statement filed November 5, 2009 and any amendments thereto.  The price per Share shall be calculated upon the average bid price of the Shares for the 30 day period immediately preceding the issuance of the Shares.  Consultant acknowledges and confirms that none of the services provided in connection with the registered Shares as identified in this Section 7 are for promotion and/or for financing.  In the event the services and resultant consideration, including any consideration due in accordance with 6 (b) in which Consultant requests Shares in lieu of cash payments, shall be greater in restricted Shares than in registered Shares, the allocated amounts herein shall be adjusted accordingly. Further, in the event this Agreement is terminated due to the expiration of the Term or for any other reason, other than those contained in Sections 5 and 18, respectively, the terms and conditions of Section 7 of this Agreement shall remain in full force and effect.

 

 

 

  

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c.           The Consultant will be solely responsible for all tax returns and payments required to be filed with or made to any federal, state or local tax authority with respect to the Consultant’s performance of the Services and receipt of compensation under this Agreement.  Because the Consultant is an independent contractor, the Company will not withhold or make payments for Social Security, make disability insurance contributions, or obtain worker’s compensation insurance on the Consultant’s behalf.  The Consultant agrees to accept exclusive liability for complying with all applicable state and federal laws governing self-employed individuals, including obligations such as payment of taxes, Social Security, disability and other contributions based on fees paid to the Consultant under this Agreement.  The Consultant hereby agrees to indemnify and defend the Company against any and all such taxes or contributions, including penalties and interest.

8.            Warrants.

 

The Consultant shall not receive any warrants.

 

9.           Options.

 

The Consultant shall not receive any options.

 

10.          Expenses.  The Consultant shall be responsible for its out-of-pocket expenses incurred in connection with this Agreement, including fees and expenses of its legal counsel.

 

11.          Minimum Service/Effort.  During the Term the Consultant, shall devote only so much time to the affairs of the Corporation as the Consultant and the Corporation mutually determine to be necessary or appropriate; and the Consultant may represent, perform services for, and be employed by, any additional persons as the Consultant, in the Consultant’s sole discretion, determines to be necessary or appropriate.  Notwithstanding the foregoing, Consultant hereby agrees to utilize its best efforts in performing the Services.

 

12.          Change of Control.  In the event the Corporation experiences a “change in control” transaction, including, but not limited to, a merger, acquisition or sale of a controlling interest in the Corporation, the terms and conditions of this Agreement shall remain in effect and in full force, and such action by the Corporation shall not in any way diminish, affect or compromise the Consultant’s rights, including but not limited to, all compensation as described in this Agreement.

 

13.          Hold Harmless.  The Corporation agrees to indemnify and hold harmless Consultant, its affiliates, agents, attorneys, stockholders, directors, officers, employees and controlling persons, within the meaning of Section 15 of the Securities Act, or Section 20 of the Exchange Act, for any violations of state or federal securities laws by the Corporation or any of its officers, other employees, agents, affiliates, counsel, stockholders, directors, and controlling persons in connection with the terms and conditions of this Agreement and all acts by the Corporation as a result thereof.  Likewise, the Consultant agrees to indemnify and hold harmless the Corporation and its affiliates, agents, attorneys, stockholders, directors, officers, employees and controlling persons, within the meaning of Section 15 of the Securities Act, or Section 20 of the Exchange Act, for any violations of state or federal securities laws by the Consultant or any of its officers, other employees, agents, affiliates, attorney, stockholders, directors, and controlling persons in connection with the terms and conditions of this Agreement and all acts by the Consultant as a result thereof.

 

 

  

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14.          Corporate Documents.  The Corporation will provide and deliver to Consultant, at the Corporation’s expense, all documents, appraisals, projections, financial data, and other information (collectively referred to herein as the “Information”), requested by Consultant for the purpose of rendering the Services under this Agreement.  All Information shall be accurate and complete, in all material respects, and the Corporation recognizes and confirms that (a) Consultant will use and rely on the Information without having independently verified the same, and (b) Consultant does not assume responsibility for the accuracy or completeness of the Information.

 

15.          Corporate Disclosure.  The Corporation shall use its best efforts to disclose to Consultant all material events and developments that have occurred prior to the date of this Agreement relating to the Corporation’s financial condition, operations or prospects.  During the Term, the Corporation will promptly notify Consultant of any material event or development relating to the financial condition, business operations or business prospects of the Corporation and promptly deliver to Consultant copies of all material filings made by the Corporation with any regulatory agency and copies of all press releases issued by the Corporation and make available same for inspection by Consultant, during regular business hours and upon 24 hours notice by Consultant.

 

16.          Confidentiality.  Consultant agrees to keep confidential all material, non-public Information provided to it by the Corporation, except as required by law or as contemplated by the terms of this Agreement. It is further agreed that from time to time that the Corporation may designate certain disclosed Information as confidential for purposes of this Agreement.  Notwithstanding anything to the contrary herein, Consultant may disclose non-public Information to its agents and advisors whenever Consultant determines that such disclosure is necessary or advisable to provide the Services.  The Consultant hereby acknowledges and affirms that it has been notified by the Corporation that this Agreement and all other agreements between the parties may be included in various filings that the Corporation is required make, or elects to make, with the SEC and various state agencies.

 

17.          Work Product.  The Consultant hereby irrevocably assigns to Corporation, and Corporation shall have, exclusive ownership rights, including, without limitation, all patent, copyright, trademark and trade secret rights, with respect to any work produced by Consultant in the course of rendering Services to Corporation including, but not limited to, the development, modification or enhancement of systems, programs, instructions, concepts and documentation developed for or relating to Corporation and all documents, data and other information of any kind including information incorporating, based upon or derived from the foregoing, including reports and notes prepared by the Consultant.  Such work product will be the property of Corporation and may not be used by the Consultant for any other purpose than the benefit of Corporation.  Any and all such property and material containing such property shall be delivered promptly to Corporation on request of the Corporation and in any event at the termination of the Consultant’s work for Corporation and no copies thereof shall be retained by the Consultant unless the prior written consent of the Corporation.  A certificate evidencing compliance with this provision shall, if requested by Corporation, accompany such materials.  Further, the Consultant will execute and deliver all documents required by Corporation to document or perfect Corporation’s proprietary rights in said work.  Such work shall be a work made for hire and the Consultant shall have no proprietary interest herein.  All deliverables shall bear Corporation’s copyright and trade secret notices.

 

18.          Advertisements; No Faxes; No emails.  In the event that the Consultant finds itself in a position to make a newsworthy announcement, including, but not limited to, a new product, sales results, existing product information or expansion, Consultant will have the right to place advertisements in various media outlets, including, but not limited to, print publications, the internet, direct mail, radio, television, satellite, or cable, describing its Services to the Corporation hereunder; provided, however, that Consultant will submit copies of such advertisements to the Corporation so that the Corporation may consent to the form and content of such advertisements, approval of which shall not reasonably be withheld.  Notwithstanding the foregoing, Consultant shall not either directly or indirectly authorize, direct, place or allow any announcements or other material of any type whatsoever to be faxed and or emailed, including, but not limited to, promotional material of any nature, type or form, relating to the Corporation, nor shall the Consultant contract with any third party which as a result of said contract would result in some type of fax or email program being contemplated or implemented, without the expressed written consent of the Corporation.  In the event Consultant fails to honor, and is therefore in default of this Section 18 (“Default”), this Agreement shall be deemed void, and all Shares shall be immediately cancelled by the Corporation and the Consultant shall physically return all certificates representing Shares to the Corporation within three business days of the Consultant being notified of the Default by the Corporation.  The Default, should it occur, would be by definition “gross negligence and willful misconduct” by the Consultant.  In the event the Consultant has transferred or disposed of the Shares or a portion thereof prior to a Default occurring, Consultant shall be solely responsible for replacing the Shares in order to comply with this Section 18.

 

 

  

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19.          Consultant Representation. Consultant represents and warrants to Corporation that: (a) Consultant is not a broker dealer; (b) Consultant and its principals, employees, advisors and/or consultants are not and will not violate any federal and/or state securities laws and/or regulations in performing the Services contemplated by this Agreement; (c) Consultant and its principals, employees, advisors and/or consultants are not receiving compensation based upon the performance, including, but not limited to, price and volume, of any security connected with this Agreement, including, but not limited to, the Shares; (d) Consultant is receiving as consideration hereunder a specific number of Shares for the Services performed; and (e) Consultant agrees to indemnify and hold harmless Corporation from any claim brought against Corporation as a result of the Services to be performed, including, but not limited to, any claims and/or actions resulting from a breach by Consultant and his principals, employees, advisors and/or consultants of the representations made hereunder.

 

20.          Failure to act by One Person.  Any direction, consultation given, or service performed by any persons acting on behalf of the Consultant pursuant to the provisions of this Agreement shall constitute the performance of the Service by the Consultant.

 

21.          Indemnification.  In addition to the limitation of liability found in Sections 5 and 13, respectively, each party (the “Indemnifying Party”) agrees to indemnify, defend, and hold harmless the other party (the “Indemnified Party”) from and against any and all claims, damages, and liabilities, including any and all expense and costs, legal or otherwise, caused by the negligent act or omission of the Indemnifying Party, its subcontractors, agents, or employees, incurred by the Indemnified Party in the investigation and defense of any claim, demand, or action arising out of the work performed under this Agreement; including breach of the Indemnifying Party of this Agreement.  The Indemnifying Party shall not be liable for any claims, damages, or liabilities caused by the sole negligence of the Indemnified Party, its subcontractors, agents, or employees.

 

The Indemnified Party shall notify promptly the Indemnifying Party of the existence of any claim, demand, or other matter to which the Indemnifying Party’s indemnification obligations would apply, and shall give them a reasonable opportunity to settle or defend the same at their own expense and with counsel of their own selection, provided that the Indemnified Party shall at all times also have the right to fully participate in the defense.  If the Indemnifying Party, within a reasonable time after this notice, fails to take appropriate steps to settle or defend the claim, demand, or the matter, the Indemnified Party shall, upon written notice, have the right, but not the obligation, to undertake such settlement or defense and to compromise or settle the claim, demand, or other matter on behalf, for the account, and at the risk, of the Indemnifying Party.

 

The rights and obligations of the Parties under this Article shall be binding upon and inure to the benefit of any successors, assigns and heirs of the Parties.

 

22.          Equitable Remedies.  As a result of the uniqueness of the Services to be performed by the Consultant for the Corporation, and because the Consultant’s reputation in the community may be affected by the financial success or failure of the Corporation, in addition to the other rights and remedies that the Consultant may have for a breach of this Agreement, the Consultant shall have the right to enforce this Agreement, in all of its provisions, by specific performance or other relief in a court or equity.

 

 

  

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23.          Consultant’s Representatives.  In its performance of the Services, the Consultant shall have the right to appoint or otherwise designate suitable and desirable employees, agents and representatives (the “Consultant’s Representatives”).  The Consultant shall be solely responsible for the Consultant’s Representatives, including but not limited to, their acts, omissions, and liabilities.  Consultant agrees that the Consultant’s Representatives shall not have any claim against the Corporation for salaries, commissions, items of cost, or other form of compensation or reimbursement.  The Consultant represents, warrants, and covenants that the Consultant’s Representatives shall be subordinate to the Consultant and subject to each and all of the terms, provisions and conditions applying to the Consultant specified in this Agreement.

 

24.          Attorneys’ Fees.  In the event any party to this Agreement shall commence legal proceedings against another party to enforce the terms hereof, or to declare rights hereunder, as the result of a breach of any covenant or condition of this Agreement, the prevailing party in any such proceeding shall be entitled to recover from the losing party its costs of suit, including reasonable attorneys’ fees, as may be fixed by the court.

 

25.          Governmental Rules and Regulations.  The provisions of this Agreement are subject to any and all present and future orders, rules and regulations of any duly constituted authority having jurisdiction of the relationship contemplated by the provisions of this Agreement.

 

26.          Notices.  Any notice, request, instruction, or other document required by the terms of this Agreement, or deemed by any of the parties hereto to be desirable, to be given to any other party hereto shall be in writing and shall be given by personal delivery, overnight delivery, mailed by registered or certified mail, postage prepaid, with return receipt requested, or sent by facsimile transmission to the addresses of the Parties as follows:

	
  

	
If to the Corporation:

	
Camelot Entertainment Group, Inc.

8001 Irvine Center Drive, Suite 438

Irvine, CA 95618

Telecopier: 949.643.5504

 

	 	
If to the Consultant:

	
Steve Istock, CEO

California Pictures, Inc.

10 Universal City Plaza

20th Floor

Universal City, CA 91608

Telecopier:

 

The persons and addresses set forth above may be changed from time to time by a notice sent to the address noted above.  If notice is given by personal delivery or overnight delivery in accordance with the provisions of this Section 26, such notice shall be conclusively deemed given at the time of such delivery, provided a receipt is obtained from the recipient.  If notice is given by mail in accordance with the provisions of this Section, such notice shall be conclusively deemed given upon receipt and delivery or refusal.  If notice is given by facsimile transmission in accordance with the provisions of this Section, such notice shall be conclusively deemed given at the time of delivery if during business hours and if not during business hours, at the next business day after delivery, provided a confirmation is obtained by the sender.

27.          Entire Agreement.  This Agreement supersedes any and all other agreements, either oral or in writing, between the parties regarding the subject matter of this Agreement and specifies all the covenants and agreements between the parties with respect to that subject matter, and each party acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not specified in this Agreement; and any other agreement, statement or promise concerning the subject matter specified in this Agreement shall be of no force or effect in a subsequent modification in writing signed by the party to be charged.

 

 

  

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28.          Severability.  In the event any provision of this Agreement, for any reason, is determined to be invalid, such determination shall not affect the validity of any remaining portion of this Agreement, which remaining portion shall remain in complete force and effect as if this Agreement had been executed without the invalid portion of this Agreement.  It is hereby declared the intention of the parties that the parties would have executed the remaining portion of this Agreement without including any such part, parts or portion which, for any reason, hereafter my be determined invalid.

 

29.          Captions and Interpretation.  Captions of the paragraphs of this Agreement are for convenience and reference only, and the words contained in those captions shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement.  The language in all parts to this Agreement, in all cases, shall be construed in accordance with the fair meaning of that language as if that language was prepared by all parties and not strictly for or against any party.

 

30.          Further Assurances.  Each party shall take any and all action necessary, appropriate or advisable to execute and discharge such party’s responsibilities and obligations created by the provisions of this Agreement and to further effectuate, perform and carry out the intents and purposes of this Agreement and the relationship contemplated by the provision of this Agreement.

 

31.          Number and Gender.  Whenever the singular number is used in this Agreement, and when required by the context, the same shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders, and vice versa; and the word “person” shall include corporation, firm, trust, association, governmental authority, municipality, association, sole proprietorship, joint venture, association, organization, estate, joint stock company, partnership, or other form of entity.

 

32.          Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

 

33.          Successors and Assigns.  This Agreement and each of the provisions of this Agreement shall obligate and inure to the benefit the heirs, executors, administrators, successors and assigns of each of the parties; provided, however, nothing specified in this paragraph shall be a consent to the assignment or delegation by any party of such party’s respective rights and obligations created by the provisions of this Agreement.

 

34.          Reservation of Rights.  The failure of any party at any time hereafter to require strict performance by the other party of any of the warranties, representations, covenants, terms, conditions and provisions specified in this Agreement shall not waive, affect or diminish any right of such failing party to demand strict compliance and performance therewith and with respect to any other provisions, warranties, terms and conditions specified in this Agreement.  None of the representations, warranties, covenants, conditions, provisions and terms specified in this Agreement shall be deemed to have been waived by any act or knowledge of either party or such party’s agents, officers or employees, and any such waiver shall be made only by an instrument in writing, signed by the waiving party and directed to each non-waiving party specifying such waiver.

 

35.          Concurrent Remedies.  No right or remedy specified in this Agreement conferred on or reserved to the parties is exclusive of any other right or remedy specified in this Agreement or by law or equity provided or permitted; but each such right and remedy shall be cumulative of, and in addition to, every other right and remedy specified in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, and may be enforced concurrently therewith or from time to time.  The termination of this Agreement for any reason whatsoever shall not prejudice any right or remedy which either party may have, either at law, in equity, or pursuant to the provisions of this Agreement.

 

  

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36.          Choice of Law.  This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

 

37.          Exclusive Jurisdiction and Venue.  The parties agree that the Courts of the County of Orange, State of California shall have sole and exclusive jurisdiction and venue for the resolution of all disputes arising under the terms of this Agreement and the transactions contemplated herein.

 

38.          Assignability.  Neither party shall sell, assign, transfer, covey or encumber this Agreement or any right or interest in this Agreement, or suffer or permit any such sale, assignment, transfer or encumbrance to occur by operation of law without the prior written consent of the other party.  In the event of any sale, assignment, transfer or encumbrance consented to by such other party, the transferee or such transferee’s legal representative shall agree with such other party in writing to assume personally, perform and be obligated by the covenants, obligations, warranties, representations, terms, conditions and provisions specified in this Agreement.

 

39.          Continuing Provisions.  Notwithstanding anything to the contrary contained herein, all provisions concerning confidentiality, indemnification, contribution, and the Corporation’s payment obligations contained herein shall survive any expiration or termination of this Agreement.

 

40.          Force Majeure.

 

a.           If any party is rendered unable, completely or partially, by the occurrence of any event of “force majeure” (as defined below) to perform such party’s obligations under this Agreement , such party shall give to the other party prompt written notice of the event of “force majeure” with reasonably complete particulars concerning such event; thereupon, the obligations of the party giving such notice, so far as those obligations are affected by the event of “force majeure,” shall be suspended during, but no longer than, the continuance of the event of “force majeure.”  The party affected by such event of “force majeure” shall use all reasonable diligence to resolve, eliminate and terminate the event of “force majeure” as quickly as practicable.

 

b.           The requirement that an event of “force majeure” shall be remedied with all reasonable dispatch as herein above specified, shall not require the settlement of strikes, lockouts or other labor difficulties by the party involved, contrary to such party’s wishes, and the resolution of any and all such difficulties shall be handled entirely within the discretion of the party concerned.

 

c.           The term “force majeure” as used herein shall be defined to mean any act of God, strike, civil disturbance, lockout or other industrial disturbance, act of the public enemy, war, blockage, public riot, earthquake, tornado, hurricane, lightening, fire, public demonstration, storm, flood, explosion, governmental action, governmental delay, restraint or inaction, unavailability of equipment, and any other cause or event, whether of the kind enumerated specifically herein, or otherwise, which is not reasonably within the control of the party claiming such suspension.

 

41.          Consent to Agreement.  By executing this Agreement, each party, for itself, represents such party has read or caused to be read this Agreement in all particulars, and consents to the rights, conditions, duties and responsibilities imposed upon such party as specified in this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the date first written hereinabove.

 

 

	CORPORATION:	 	CONSULTANT:	 
	 	 	 	 	 	 
	Camelot Entertainment Group, Inc.  	 	California Pictures, Inc.	 
	a Delaware corporation  	 	a California corporation	 
	 	 	 	 	 	 
	By: 	/s/  Robert P. Atwell    	 	By: 	/s/  Steve Istock	 
	Robert P. Atwell          	 	Steve Istock 	 
	President   	 	Consultant 	 
	 	 	 	CEO California Pictures, Inc. 	 
	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	By:	/s/  Steve Istock 	 
	 	 	 	Steve 	 
	 	 	 	an Individual 	 

 

  

A-8

  

Exhibit A

 

Specific Services

 

 

	
A. 

	
Provide management consulting services and business development support;

	
B.

	
Provide a general business and financial analysis of the Corporation’s proposed business plan with respect to the business of Corporation;

	
C. 

	
Assist in the formulation and evaluation of various financial structural and financial alternatives;

	
D.

	
Provide the Corporation with business advisory services; and

	
E.

	
Review and analyze all aspects of the Corporation’s structure and its goals and make recommendations on feasibility and achievement of desired goals.

	
F.

	
Develop a general strategy for identifying potential sources of funds such as equity capital, debt financing, or licensing fees and/or merger, acquisition or licensing transactions.

 

	
G.

	
Assist in briefing potential investors introduced by the Consultant, evaluating such entities, providing marketing materials and strategy, consulting with the Corporation to evaluate their risks and potential, and other such indirect support as required.

	
H. 

	
Assist in implementing the Company’s overall integrated marketing program (as mutually agreed).

	
I. 

	
Assist Corporation in securing funding as determined by the Corporation’s Board of Directors

 

 

A-A-1

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