Document:

ex4_6.htm

Exhibit-4.6

 

WARRANT

 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES WHICH MAY BE ACQUIRED UPON THE EXERCISE OF THIS COMMON STOCK PURCHASE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION SATISFACTORY TO THE COMPANY OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT.

 

	
Void after _________, 2013, or 

otherwise as provided herein 

	
Right to Purchase ______ Shares 

of Common Stock, no  par value 

value per share, of Pacific

Entertainment Corporation

Warrant A-__

PACIFIC ENTERTAINMENT CORPORATION

COMMON STOCK PURCHASE WARRANT

Pacific Entertainment Corporation, a California corporation (the “Company”), for value received and subject to the terms set forth below, hereby grants to ____________________________ and its registered successors and assigns (the “Holder”) the right to purchase from the Company, at any time or from time to time before 3:00 P.M., California time, on _________, 2013, ________ fully paid and non-assessable shares of the Common Stock, par value $0.001 per share, of the Company, at the Exercise Price (as defined below). The Exercise Price and the number and character of such shares of Common Stock purchasable pursuant to the rights granted under this Warrant are subject to adjustment as provided herein.

This Warrant is subject to the following provisions:

1.           Definitions. As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a)           “Common Stock” means the Company’s no par value common stock.

(b)           “Exercise Price” means $0.40 pursuant to that certain Amended Private Placement Memorandum dated July 1, 2010 (the “Memorandum”).

(c)           “Issue Date” means __________, 2010.

(d)           “Other Securities” means any stock (other than Common Stock) and other securities of the Company or any other Person (corporate or other) which the Holder of this Warrant at any time shall be entitled to receive, or shall have received, upon the exercise of this Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock.

(e)           “Person” means, without limitation, an individual, a partnership, a corporation, a trust, a joint venture, an unincorporated organization, or a government or any department or agency thereof.

(f)           “This Warrant” means, collectively, this Warrant and all other stock purchase warrants issued in exchange herefor or replacement hereof.

 

2.   Exercise of Warrant.

 

2.1          Exercise Period. The Holder may exercise this Warrant, in whole or in part (but not as to a fractional share of Common Stock), at any time and from time to time prior to 3:00 P.M. California time on ____________, 2013.

 

  

1

  

2.2           Exercise Procedure.

(a)           This Warrant will be deemed to have been exercised at such time as the Company has received all of the following items (the “Exercise Date”):

	
  

	
(i)

	
a completed Subscription Agreement in substantially the form attached to the Memorandum, executed by the Holder exercising all or part of the purchase rights represented by this Warrant (the “Purchaser”);

	
  

	
(ii)

	
this Warrant;

	
  

	
(iii)

	
if this Warrant is not registered in the name of the Purchaser, an Assignment or Assignments in the form set forth in Exhibit B hereto, evidencing the assignment of this Warrant to the Purchaser together with any documentation required pursuant to Section 6(a) hereof; and

	
  

	
(iv)

	
a check payable to the order of the Company in an amount equal to the product of the Exercise Price multiplied by the number of shares of Common Stock being purchased upon such exercise;

(b)           As soon as practicable after the exercise of this Warrant in full or in part, and in any event within ten (10) days after the Exercise Date, the Company at its expense will cause to be issued in the name of and delivered to the Holder hereof, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and non-assessable shares of Common Stock (or Other Securities) to which the Holder shall be entitled upon such exercise, together with any other stock or other securities and property (including cash, where applicable) to which the Holder is entitled upon exercise.

(c)           Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company at its expense will, within ten (10) days after the Exercise Date, issue and deliver to or upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in the name of the Holder calling in the aggregate on the face or faces thereof for the number of shares of Common Stock remaining issuable under this Warrant.

(d)           The Common Stock (or Other Securities) issuable upon the exercise of this Warrant will be deemed to have been issued to the Purchaser on the Exercise Date, and the Purchaser will be deemed for all purposes to have become the record holder of such Common Stock (or Other Securities) on the Exercise Date.

(e)           The issuance of certificates for shares of Common Stock (or Other Securities) upon exercise of this Warrant will be made without charge to the Holder for any issuance tax in respect thereof or any other cost incurred by the Company in connection with such exercise and the related issuance of Shares of Common Stock (or Other Securities).

2.3           Fractional Shares. If a fractional share of Common Stock would, but for the provisions of Section 2.1 hereof, be issuable upon exercise of the rights represented by this Warrant, the Company will, within ten (10) days after the Exercise Date, deliver to the Purchaser a check payable to the Purchaser in lieu of such fractional share, in an amount equal to the Market Price of such fractional share as of the close of business on the Exercise Date.

3.           Adjustments; Cancellation.

3.1           Stock Splits, Etc. If the Company shall at any time after the Issue Date subdivide its outstanding Common Stock or Other Securities, by split-up or otherwise, or combine its outstanding Common Stock or Other Securities, or issue additional shares of its capital stock in payment of a stock dividend in respect of its Common Stock or Other Securities, the number of shares issuable on the exercise of the unexercised portion of this Warrant shall forthwith be proportionately increased in the case of such a subdivision or stock dividend, or proportionately decreased in the case of such combination, and the Exercise Price then applicable to shares covered by the unexercised portion of this Warrant shall forthwith be proportionately decreased in the case of such a subdivision or stock dividend, or proportionately increased in the case of such combination.

 

  

2

  

3.2           Reclassification, Reorganization, Etc. In case of any reclassification, capital reorganization or change of the outstanding Common Stock or Other Securities (other than as a result of a subdivision, combination or stock dividend) or any exchange or conversion of the Common Stock for or into securities of another entity, or in case of the consolidation or merger of the Company with or into any other Person or in case of any sale or conveyance of all or substantially all of the assets of the Company (any of the foregoing being a “Reorganization Transaction”), then, as a condition of such Reorganization Transaction, lawful provision shall be made so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, the kind and amount of shares of stock and other securities and property receivable upon such Reorganization Transaction by a holder of the number of shares of Common Stock or Other Securities of the Company as to which this Warrant was exercisable immediately prior to such Reorganization Transaction, and in any such case appropriate provision shall be made with respect to the rights and interests 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 this Warrant) shall thereafter be applicable in relation to any shares of stock, and other securities and property, thereafter deliverable upon exercise hereof.

3.3           Dividends. In case the Company shall, at any time or from time to time after the Issue Date, pay any dividend or make any other distribution upon its Common Stock (or Other Securities) payable in cash, property or securities of a corporation other than the Company, then forthwith upon the payment of such dividend, or the making of such other distribution, as the case may be, the Exercise Price then in effect shall be reduced by the amount of such dividend or other distribution in respect of each outstanding share of Common Stock (or Other Securities). The Board of Directors of the Company shall determine the fair value of any dividend or other distribution made upon Common Stock of the Company payable in property or securities of a corporation other than the Company.

3.4           Certificate of Adjustment. Whenever the Exercise Price or the number of shares issuable hereunder is adjusted, as herein provided, the Company shall promptly deliver to the Holder a certificate of the Chief Financial Officer of the Company, which certificate shall state (i) the Exercise Price and the number of shares of Common Stock (or Other Securities) issuable hereunder after such adjustment, (ii) the facts requiring such adjustment, and (iii) the method of calculation for such adjustment and increase or decrease.

3.5           Small Adjustments. No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease in the Exercise Price of at least one percent; provided, however, that any adjustments which by reason of this Section 3.5 are not required to be made immediately shall be carried forward and taken into account at the time of exercise of this Warrant or any subsequent adjustment in the Exercise Price which, singly or in combination with any adjustment carried forward, is required to be made under Sections 3.1, 3.2 or 3.3.

4.           Impairment. The Company will not, by amendment of its Articles of Incorporation or Bylaws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock (or Other Securities) upon the exercise of this Warrant.

5.           Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, all shares of Common Stock (or Other Securities) from time to time issuable upon the exercise of this Warrant.

6.           Disposition of this Warrant, Common Stock, Etc.

(a)           The Holder and any proposed transferee hereof or of the Common Stock (or Other Securities) with respect to which this Warrant may be exercisable, by their acceptance hereof, hereby understand and agree that this Warrant and the Common Stock (or Other Securities) with respect to which this Warrant may be exercisable have not been registered under the Securities Act of 1933, as amended (the “Act”), and may not be sold, pledged, hypothecated, donated, or otherwise transferred (whether or not for consideration) without an effective registration statement under the Act or an opinion satisfactory to the Company of counsel satisfactory to the Company and/or submission to the Company of such other evidence as may be satisfactory to counsel to the Company, in each such case, to the effect that any such transfer shall not be in violation of the Act. It shall be a condition to the transfer of this Warrant that any transferee hereof deliver to the Company its written agreement to accept and be bound by all of the terms and conditions of this Warrant.

 

  

3

  

(b)           The stock certificates of the Company that will evidence the shares of Common Stock (or Other Securities) with respect to which this Warrant may be exercisable will be imprinted with a conspicuous legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION SATISFACTORY TO THE COMPANY OF COUNSEL  SATISFACTORY TO THE COMPANY AND/OR SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH CASE, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT.”

provided, however, that, if the shares of Common Stock (or Other Securities) with respect to which this Warrant has been exercised are registered in accordance with the provisions of the Act, any stock certificates of the Company issued in connection herewith and bearing the foregoing legend will, upon written request of the Holder, be replaced with a certificate(s) not bearing the foregoing legend.

7.           Rights and Obligations of Holder. The Holder shall not, by virtue hereof, be entitled to any voting rights or other rights as a stockholder of the Company. No provision of this Warrant, in the absence of affirmative actions by the Holder to purchase Common Stock (or Other Securities) of the Company by exercising this Warrant, and no enumeration in this Warrant of the rights or privileges of the Holder, will give rise to any liability of the Holder for the Exercise Price of Common Stock (or Other Securities) acquirable by exercise hereof or as a stockholder of the Company.

8.           Transfer of Warrants. Subject to compliance with the restrictions on transfer applicable to this Warrant referred to in Section 6 hereof, this Warrant and all rights hereunder are transferable, in whole or in part, without charge to the registered Holder, upon surrender of this Warrant with a properly executed Assignment (in substantially the form attached hereto as Exhibit B), to the Company, and the Company at its expense will issue and deliver to or upon the order of the Holder a new Warrant or Warrants in such denomination or denominations as may be requested, but otherwise of like tenor, in the name of the Holder or as the Holder (upon payment of any applicable transfer taxes) may direct.

9.           Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

10.         Company Records. Until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

11.         Miscellaneous.

11.1           Notices. All notices and other communications from the Company to the Holder shall be mailed by first class mail, postage prepaid, to such address as may have been furnished to the Company in writing by the Holder, or, until an address is so furnished, to and at the address of the last previous Holder who has so furnished an address to the Company. All communications from the Holder to the Company shall be mailed by first class mail, postage prepaid, to the Company at 5820 Oberlin Drive, Suite 203, San Diego, California 92121, or such other address as may have been furnished to the Holder in writing by the Company.

11.2           Amendment and Waiver. Except as otherwise provided herein, this Warrant and any term hereof may be amended, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such amendment, waiver, discharge or termination is sought.

 

  

4

  

 

11.3           Governing Law; Descriptive Headings. This Warrant shall be construed and enforced in accordance with and governed by the internal laws of the State of California. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

 

	
Dated:  __________, 2010

	
Pacific Entertainment Corporation

	 
	 	 	 	 
	

 

	
By: 

	 	 
	 	 	Klaus Moeller, CEO	 

 

  

5

  

EXHIBIT A

 

	Pacific Entertainment Corporation  	 	 
	5820 Oberlin Drive, Suite 203  	Date of Exercise: 	 
	San Diego, CA 92121	 	 

To Whom It May Concern:

This constitutes notice under the Pacific Entertainment Corporation (the “Company”) common stock purchase warrant granted to me on ______________ (the “Warrant”) that I elect to purchase the number of shares for the price set forth below:

 

	 	Number of shares as to which warrant is exercised:	 	 	 
	 	 	 	 	 
	 	Certificates to be issued in name of:	 	 	 
	 	 	 	 	 
	 	
Social Security Number:

	 	 	 
	 	 	 	 	 
	 	
Total exercise price:

	 	 	 
	 	 	 	 	 
	 	Cash payment delivered herewith: 	 	 	 

By this exercise, I agree to provide such additional documents as you may require pursuant to the terms of the Warrant.

 

	 	Sincerely,	 
	 	 	 
	 	 	 
	 	Signature	 
	 	 	 
	 	 	 
	 	Print Name	 

 

  

6

  

EXHIBIT B

ASSIGNMENT

[To be signed only upon exercise of Warrant]

For value received, the undersigned hereby sells, assigns and transfers all of the rights of the undersigned under the within Warrant with respect to the number of shares of the Common Stock (or Other Securities) covered thereby set forth below, unto:

 

	
Name of Assignee

	 	
Address

	 	
No. of Shares

	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

	Dated: 	Signature: 	 	 
	 	 	
(Signature must conform in all

	 
	 	 	
respects to name of Holder as

	 
	 	 	
specified on the face of the Warrant).

	 
	 	 	 	 
	 	 	 	 
	 	Address: 	 	 
	 	 	 	 
	 	 	 	 

 

  

7ex10_1.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made as of April 26, 2011 (the “Effective Date”) by and between Klaus Moeller ("Employee”) and Pacific Entertainment Corporation, a California corporation (“Employer or “Company”), located at 5820 Oberlin Drive, Suite 203, San Diego, California  92121.

 

WITNESSETH:

 

WHEREAS, Employer would like to engage the services of Employee for Employee’s executive skills as Chief Executive Officer and related services as requested by Employer on a full-time basis, and Employee would like to be so engaged;

 

WHEREAS, Employer and Employee have agreed on terms for such services and compensation; and

 

WHEREAS, Employer and Employee wish to enter into a formal written agreement to document such relationship in order to set forth (a) Employee’s services and compensation, (b) the terms of Employee’s employment, including the "at-will" nature thereof, (c) Employer’s exclusive ownership of all proprietary information relating to Employer, (d) certain confidentiality matters, and (e) the manner in which proprietary information produced or acquired by Employee during such relationship shall be handled and made the sole property of Employer;

 

NOW, THEREFORE, in consideration of the foregoing and in exchange for the promises and other good consideration set forth below, Employee and Employer agree as follows:

 

1.              Services; Title.  Employee shall operate as a member of Employer's management team and provide such management and planning responsibilities and other services as Employer shall reasonably request to be performed (together, the "Services") on a full-time basis and shall devote substantially all of Employee's work efforts to the business and operations of Employer. Employee's title, subject to change by Company at any time, shall be "Chief Executive Officer."

 

2.              Compensation, Benefits and Reviews.  Subject to all the other terms of this Agreement, in connection with Employee's performance of the Services, Employer shall:

  

1

  

 

                 (a)  pay Employee's salary by check in equal installments in accordance with Employer's regular salary payment schedule, which shall be paid at the rate (before deductions for advances and deductions made at Employee's request, if any, and for deductions required by federal, state and local law) of $165,000 per year retroactive to March 20, 2011 through December 31, 2011, then $195,000 per year from January 1, 2012 through December 31, 2012, then $225,000 per year from January 1, 2013 through December 31, 2014.  Employee’s salary for the remaining term of this Agreement shall be set by the Board of Directors, but shall not increase less than five percent (5%) per annum.

 

                 (b)  at the sole option of the Board of Directors of Company, pay Employee a year-end performance bonus in the form of cash, options to purchase shares, or shares of the  Company’s common stock or a combination thereof, but in no event shall the dollar value of the combined bonus be less than four and one-half percent (4.5%) of EBITDA of the Company (earnings before interest, depreciation, taxes and amortization) for the immediately preceding fiscal year, as long as that figure is positive, up to 100% of the base salary for the annual period for which the bonus is earned.  The bonus amount may be increased to in excess of 100% of base salary at the discretion of the Board of Directors.  Such bonuses are payable within ninety (90) days of issuance of audited financial statements of the Company.

 

                 (c)  grant an option to Employee in the approved form of grant notice for the Company’s 2008 Stock Option Plan (the “Option”) to purchase up to 1,000,000 shares of the Company’s no par value common stock, the terms (including, without limitation, the option price and the time of vesting of the shares issuable pursuant thereto) of which Option shall be governed by the face thereof subject to availability and provisions of Employer’s 2008 Stock Option Plan (the “Plan”) in effect or as amended, a copy of which has been provided to Employer.  The Option shall be granted on the Effective date and vest as to 250,000 shares on April 1, 2011, and as to 250,000 shares on April 1st of each following year during the term.  The exercise price of the Option shall be the greater of $0.44 per share.  The Option shall be exercisable for ten (10) years from date of grant, and shall be treated as a Non-qualified Stock Option (NSO) as such term is defined in section 422 of the Internal Revenue Code when allowed by law.  Upon termination, the Option shall expire as to all vested but unexercised shares and as to all unvested shares in accordance with the Stock Option Grant Notice, unless the Option has otherwise expired or Employee is terminated for Cause, in which case the Option must be exercised in accordance with the Plan, which currently calls for exercise within ninety (90) days of termination.  In the event of a Change of Control that results in the termination of Employee’s employment prior to the Expiration Date, the vesting of the Option shall accelerate and vest in full. A Change of Control means the sale of all or substantially all of the Company’s assets, a merger or consolidation resulting in securities representing 50% of the combined voting power of the outstanding common stock being transferred to persons who are different from the holders immediately preceding the transaction, the acquisition (directly or indirectly) of 50% of the total combined voting power of the common stock pursuant to a tender or exchange offer, or a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election.

 

                 Employee hereby grants a right of first refusal to the Company on all shares underlying and purchased by Employee pursuant to the Option (the “Shares”) in the event of Employee’s Termination for Cause pursuant to Paragraph 3 of this Agreement.  The purchase price for the Shares under this right of first refusal shall be the bid price of the common stock on the date of termination of Employee’s employment hereunder (the “Purchase Price”).  Prior to selling any of the Shares, Employee shall provide the Company with written notice (the “Notice”) stating: (i) the Employee’s bona fide intention to sell or otherwise transfer the Shares, the number of Shares being transferred (the “Offered Shares”), the identity of the proposed transferee, and the terms and conditions of the proposed transfer.  The Company shall have thirty (30) days after receipt of the Notice (“Exercise Period”) to elect to purchase all or less than all of the Offered Shares at the Purchase Price by delivery written notice of exercise of its right of purchase hereunder to Employee (“Notice of Exercise”).  Payment of the Purchase Price shall be made in cash (by check or wire transfer) within thirty (30) days after delivery of the Company’s Notice of Exercise.  If less than all of the Offered Shares are purchased by the Company within the Exercise Period, Employee may sell or otherwise transfer the remaining Offered Shares to the proposed buyer at a minimum of the price included in the Notice within sixty (60) days after the expiration of the Exercise Period.  To the extent the Offered Shares are not so sold, a new Notice shall be given to the Company and the Company shall again be offered the right of first refusal before any of the Shares may be sold or otherwise transferred.

 

  

2

  

 

                 (d)  grant Employee the option to participate in all of the benefit plans offered by Employer to its Employees generally, including without limitation, insurance plans, 401(k) and other savings plans, Section 125 (cafeteria) and similar pre-tax expense plans, etc., in existence or established during the term.

 

                 (e)  grant Employee private health care insurance for Employee and Employee’s dependents, either a cellular telephone or a cellular telephone reimbursement, computer laptop or similar devices, an automobile allowance of $11,400.00 per annum payable in equal installments in accordance with the Employers normal payroll payment schedule and subject to deductions required by federal, state and local law, and such other benefits as Employer shall determine to provide to any of its most senior executives from time to time.

 

                 (f)  reimburse Employee for all reasonable travel, meals, lodging, communications, entertainment and other business expenses incurred by Employee in connection with Employee’s performance under this Agreement subject to the Company’s expense reimbursement policy.  Company shall indemnify Employee for all lawful acts committed in course and scope of employment to fullest extent allowed by law in accordance with the Company’s Articles of Incorporation and Bylaws.

 

                 (g)  grant Employee four (4) weeks' vacation with pay for each twelve-month period, taken at times agreed with Employer, plus holidays observed by Company.

  

3

  

 

3.             Term and Termination. The term of this Agreement is five (5) years after the effective date ending on March 31, 2016 (the “Expiration Date”), unless earlier terminated by Employer in Employer's sole discretion.  The term of this Agreement may be terminated “at will” by Employer at any time and for any reason or for no reason. In the event Employee shall be terminated by Employer without “Cause” (as defined below) Employer shall provide Employee with the compensation required by clauses (a) and (b) of Paragraph 2 of this Agreement as of the termination date for an eighteen (18) month period (the “Severance Period”) following the date of such termination plus all accrued but unpaid salary and vacation time to the date of termination, with the salary portion of all such compensation payable at regular payroll intervals (less deductions required by law), provided, however, that the Severance Period shall not be extended beyond the Expiration Date.  IT IS EXPRESSLY UNDERSTOOD AND AGREED that Employee need not mitigate damages during the Severance Period, but also that payment during the Severance period is expressly conditioned on a) Employee signing a release of all claims subject to the provisions of this Agreement, and  b) Employee not competing with Company in children’s entertainment during the Severance Period, or soliciting, directly or indirectly, any Company employees to work elsewhere, or disparaging Company during the Severance Period, and if Employee does so, any and all obligation by Company to make Severance payments shall cease and become void. Further, upon termination of Employee without cause, any portion of the Option not yet vested shall immediately be vested. Further, any bonus which would have been earned on the date of termination or within ninety (90) days after termination (earned for the purpose of this paragraph is either the end of the calendar year or payable date, whichever provides Employee with greater benefit) would be deemed earned and payable upon the same payment schedule as provided in paragraph 2(b). Upon termination of Employee's employment with Employer for Cause, Employer shall be under no further obligation to Employee for salary or other compensation except to pay all accrued but unpaid salary and accrued vacation time to the date of termination thereof and to continue Employee’s benefits under paragraph 2 for a period of thirty (30) days. For purposes of this Agreement, “Cause” shall mean (i) conviction of a felony, or a misdemeanor where imprisonment is imposed, or (ii) Employee’s entering into any arrangement with or providing of any services to any company, business or person that produces or markets children’s or infant’s entertainment other than Pacific Entertainment Corporation and its controlled or controlling affiliates and successors, (iii) any act of fraud, embezzlement, or breach of fiduciary duty or duty of good faith to Employer, (iv) gross dereliction of duties, but only after written notice and a thirty (30) day chance to cure, unless such a cure period would be fruitless, or (v) death or complete disability in excess of one hundred twenty (120) days causing an inability to perform duties, in accordance with law. Termination by Employee for Good Reason creates the same rights to Employee as if Employer terminated Employee without Cause.  Termination by Employee for Good Reason is defined as a breach of this contract by Company, a substantial reduction in duties, responsibilities or authority, or being made to change location of work by more than thirty (30) miles, however Employee must give written notice and Company shall have thirty (30) days to cure.  “Cause” shall not be triggered by a Change of Control.  The Parties shall work together in good faith to alter the date of any payment to avoid any penalties under Section 409A of the Internal Revenue Code.

  

4

  

4.             Confidentiality of Terms; Termination Certificate.  Employee covenants and agrees that, other than acknowledging the existence of an Employee relationship between Employer and Employee and as otherwise required by law, Employee shall not at any time divulge, directly or indirectly, any of the terms of this Agreement to any person or entity other than Employee's legal counsel. Upon the termination of Employee's engagement under this Agreement for any reason whatsoever, Employee agrees to sign, date and deliver to Employer a "Termination Certificate" in the form of Annex A and to deliver and take all other action necessary to transfer promptly to Employer all records, materials, equipment, drawings, documents and data of any nature pertaining to any invention, trade secret or confidential information of Employer or to Employee's engagement, and Employee will not take with Employee any description containing or pertaining to any confidential information, knowledge or data of Employer that Employee may produce or obtain during the course of Employee's engagement under this Agreement. This Paragraph 4 shall survive indefinitely any termination of this Agreement or Employee's engagement, and shall be read in addition to, and shall not reduce the restrictions of this Agreement on Employee or limit Employer's rights in any way with respect to, any other Confidentiality or Trade Secrets agreement between Employee and Employer.

 

5.             Nondisclosure. Employee agrees to keep confidential and not to disclose or make any use of (except for the benefit of Employer), at any time, either during or after Employee’s engagement under this Agreement, any trade secrets, confidential information, knowledge, data or other information of Employer relating to products, processes, know-how, designs, formulas, test data, customer lists, business plans, marketing plans and strategies, pricing strategies or other subject matters pertaining to any business or future business of Employer or any of its clients, customers, Employees, licensees or affiliates, which Employee may produce, obtain or otherwise acquire or become aware of during the course of Employee’s engagement under this Agreement. Employee further agrees not to deliver, reproduce or in any way allow any such trade secrets, confidential information, knowledge, data or other information, or any documentation relating thereto, to be delivered or used by any third party without specific direction or consent of a duly authorized officer of Employer. This Paragraph 5 shall survive indefinitely any termination of this Agreement or Employee's engagement and shall be read in addition to, and shall not reduce the restrictions of this Agreement on Employee or limit Employer's rights in any way with respect to, any other Confidentiality or Trade Secrets agreement between Employee and Employer.

  

5

  

6.             Work for Hire; Ownership of Intellectual Property. Employee understands and agrees that all of Employee’s work and the results thereof in connection with the Employer and the Services, whether made solely by Employee or jointly with others, during the period of Employee's association with Employer, that relate in any manner to the actual or anticipated business, work, activities, research or development of Employer or its affiliates, or that result from or are suggested by any task assigned to Employee or any activity performed by Employee on behalf of Employer, shall be the sole property of the Employer, and, to the extent necessary to ensure that all such property shall belong solely to the Employer, Employee by Employee’s execution of this Agreement transfers to the Employer any and all right and interest Employee may possess in such intellectual property and other assets created in connection with Employee’s employment by Employer and that may be acquired by Employee during the term of this Agreement from any source that relate, directly or indirectly, to Employer's business and future business, in each case without restriction of any kind.  Employee also agrees to take any and all actions requested by Employer to preserve Employer's rights with respect to any of the foregoing. This Paragraph 6 shall survive indefinitely any termination of this Agreement or Employee's engagement and shall be read in addition to, and shall not reduce the restrictions of this Agreement on Employee or limit Employer's rights in any way with respect to, any other agreement between Employee and Employer.

 

7.             Exception to assignment.  I understand that the provisions of Paragraph 6 requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870.  I will advise the Company promptly in writing of any inventions that I believe meet the criteria in Labor Code Section 2870, which provides:

 

                (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

  

6

  

 

                         (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.

 

8.             No Partnership; Not Assignable by Employee. This Agreement is between Employee, as such, and Employer, as at-will employer, and shall not form or be deemed to form a partnership or joint venture. Employer’s rights, benefits, duties and obligations under this Agreement shall inure to its successors and assigns. Employee's rights, obligations and duties under this Agreement are personal to Employee and may not be assigned.

 

9.             Trade Secrets of Others: Employee represents that Employee’s performance of all the terms of this Agreement and as the Employer’s Employee does not and will not breach any agreement to keep in confidence any proprietary information, knowledge or data acquired by Employee in confidence or in trust before Employee’s engagement under this Agreement, and Employee will not disclose to Employer or induce Employer to use any confidential or proprietary information or material belonging to any other person or entity. Employee agrees not to enter into any agreement, either written or oral, in conflict with this Paragraph 8.

 

10.           Employee's Representations and Warranties. Employee represents, warrants, covenants, understands and agrees that: (i) Employee is free to enter into this Agreement; (ii) Employee is not obligated or a party to any engagement, commitment or agreement with any person or entity that will, does or could conflict with or interfere with Employee's full and faithful performance of this Agreement, nor does Employee have any commitment, engagement or agreement of any kind requiring Employee to render services or preventing or restricting Employee from rendering services or respecting the disposition of any rights or assets that Employee has or may hereafter acquire or create in connection with the Services and the results thereof; (iii) other than as required by law, Employee shall not at any time divulge, directly or indirectly, any of the terms of this Agreement to any person or entity other than Employee’s legal counsel; (iv) Employee shall not use any material or content of any kind in connection with Employer's products, software or website that is copyrighted or owned or licensed by a party other than Employer or that would or could infringe the rights of any other party; (v) Employee shall not use in the course of Employee’s performance under this Agreement, and shall not disclose to Employer, any confidential information belonging, in part or in whole, to any third party; (vi)  Employee currently has no inventions which fall within are excepted from assignment under Paragraph 7; (vii) EMPLOYEE UNDERSTANDS ALL OF THE TERMS OF THIS “AT WILL” EMPLOYMENT AGREEMENT, AND HAS REVIEWED THIS AGREEMENT FULLY AND IN DETAIL BEFORE AGREEING TO EACH AND ALL OF THE PROVISIONS; and (viii) no statement, representation, promise, or inducement has been made to Employee, in connection with the terms or execution of this Agreement, except as  expressly set forth in this Agreement.

  

7

  

 

11.           Governing Law; Arbitration.  This Agreement shall be subject to and construed in accordance with the laws of the State of California applicable to agreements entered into and to be performed fully therein and without giving effect to conflicts of laws principles thereof. In the event of any dispute in connection with the Services or this Agreement that cannot be resolved privately between the parties, resolution of such dispute shall be through binding arbitration before a single arbitrator conducted in the County of San Diego, California under the simple employment rules of the Judicial Arbitration and Mediation Service (JAMS) then in effect that are not contrary to  California law.  Nothing contained in this paragraph 10 shall limit either party’s right to seek temporary restraining orders or injunctive or other equitable relief in court in connection with this Agreement. EMPLOYEE UNDERSTANDS THAT BY AGREEING TO ARBITRATION IN THE EVENT OF A DISPUTE BETWEEN EMPLOYER AND EMPLOYEE, EMPLOYEE IS EXPRESSLY WAIVING EMPLOYEE'S RIGHT TO REQUEST A TRIAL BY JURY IN A COURT OF LAW.  The prevailing party in any arbitration shall be entitled to reasonable attorneys fees and costs, but only if the party initiating arbitration first sought in good faith to mediate the dispute with the other party.

 

12.           Entire Agreement; Modification; Waiver; Construction Generally. This Agreement constitutes the entire agreement between Employer and Employee relating to its subject matter, and, other than as expressly set forth in the last sentence of each of Paragraphs 5 and 6 solely for the benefit of Employer, supersedes all previous agreements, if any, whether oral, written or unwritten. Other than the agreements expressly contemplated by this Agreement, there is no separate agreement, contract or understanding, express or implied, of any kind or with respect to any subject matter between Employer and Employee, and none shall be deemed to exist under any circumstances. No provision of this Agreement shall be construed strictly against any party, including, without limitation, the drafter. Neither this Agreement nor any provision may be amended, waived or modified in any way other than by a writing executed by the party against whom such amendment, waiver or modification would be enforced. No failure to exercise, and no delay in exercising and no course of dealing with respect to any right shall operate as a waiver. Nor shall a waiver by any party of a breach of any provision be deemed a waiver of any subsequent breach. The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either party (or by its successor), whether pursuant to this Agreement, to any other agreement, or to law, shall not preclude or waive its right to exercise any or all other rights and remedies. The headings or titles of the several paragraphs of this Agreement are inserted solely for convenience and are not a part of, nor shall they be used or referred to in the construction of, any provision of this Agreement. Words in the singular number shall include the plural, and vice versa. Whenever examples are used in this Agreement with the words “including,” “for example,” “any,” “e.g.,” “such as,” “etc.” or any derivation thereof, such examples are intended to be illustrative and not in limitation. All references to the masculine, feminine or neuter genders shall mean and include all genders.

  

8

  

 

IN WITNESS WHEREOF, each of the undersigned has set forth Employee’s, Employer’s or its signature as of the date first set forth above.

 

EMPLOYER:

 

	Pacific Entertainment Corporation, a California corporation	 
	 	 	 
	
By: 

	/s/ Michael Meader	 
	 	Michael Meader, President	 
	 	 	 

	EMPLOYEE:	/s/ Klaus Moeller	 
	 	Klaus Moeller	 

 

  

9

  

Annex A

 

TERMINATION CERTIFICATE

 

This is to certify that undersigned does not have in the undersigned’s possession, nor has undersigned failed to return, any customer information, records, files, programs, documents, data, specifications, drawings, blueprints, reproductions, sketches, notes, reports, proposals, or copies of them, or other documents or materials, equipment, or other property or asset belonging to Pacific Entertainment Corporation (“Employer”), its successors and assigns.

 

Undersigned further certify that undersigned has fully complied with and will continue to comply with all the terms of the Employment Agreement dated as of April 25, 2011 between Employer and the undersigned (the “Agreement").

 

Undersigned further agree that, in compliance with the Agreement, undersigned will preserve as confidential all any trade secrets, confidential information, knowledge, data or other information of Employer relating to products, processes, know-how, designs, formulas, test data, customer lists, business plans, marketing plans and strategies, pricing strategies or other subject matters pertaining to any business of Employer or any of its clients, customers, Employees, licensees or affiliates, that Employee produced, obtained or otherwise acquired or became aware of during the course of Employee’s engagement under the Agreement.

 

EMPLOYEE:

 

_______________________________

Klaus Moeller

 

Date:   __________________________

  

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]