Exhibit 10.1

 

Share Purchase Agreement

 

This share purchase agreement (this “Agreement”) is dated as of July ____, 2019,
by and between the investor identified on the signature page hereto (the
“Investor”) and Chicken Soup for the Soul Entertainment, Inc., a Delaware
corporation (the “Company”), whereby the parties agree as follows:

 

WHEREAS, the Company desires to sell, and the Investor desires to purchase,
shares of the Company’s 9.75% Series A cumulative redeemable preferred stock
(“Series A Preferred Stock”).

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
parties hereto agree as follows:

 

1.       Agreement.

 

(a)       Investor agrees to buy and, subject to acceptance as provided below,
the Company agrees to sell and issue to Investor, such number of shares (the
“Shares”) of the Series A Preferred Stock as are set forth on the signature page
hereto, for the aggregate purchase price set forth on the signature page hereto
(the “Purchase Price”). The Shares are being offered by the Company on a private
placement basis in reliance upon an exemption from the registration requirements
of the Securities Act of 1933, as amended (the “Act”).

 

(b)       The Company may accept this Agreement at any time for all or any
portion of the Shares subscribed for by executing a copy hereof as provided and
notifying the Investor within a reasonable time thereafter. The Company has the
right to reject this Agreement for the Series A Preferred Stock, in whole or in
part for any reason and at any time prior to the Closing (as defined below)
thereon, notwithstanding prior receipt by the Investor of notice of acceptance
of the Investor’s Agreement. In the event the Investor’s Agreement is rejected,
the Investor’s payment will be returned from escrow promptly to the Investor
without interest or deduction and this Agreement will have no force or effect
The Shares subscribed for herein will not be deemed issued to or owned by the
Investor until one copy of this Agreement has been executed by the Investor and
countersigned by the Company and the Closing with respect to the Investor’s
Agreement has occurred.

 

(c)       Provided that the full Purchase Price and a completed and manually
executed copy of this Agreement have been tendered and not returned in
accordance with Section 2, the closing of Investor’s purchase of the Shares
shall occur on or prior to July ___, 2019, which date may be extended by up to
five business days by the Company without notice to the Investor (such date, as
may be extended, the “Closing Date”). Promptly thereafter, the Company shall
cause the Shares to be delivered to the Investor, which delivery shall be made
by delivery of physical certificates to Investor. The certificates shall contain
a customary restrictive legend prohibiting sale or transfer of the Shares
evidenced thereby except under an effective registration statement filed with
the Securities and Exchange Commission or an exemption from such registration
requirements.

 

(d)       The Investor shall have certain registration rights with respect to
the Shares as set forth and prescribed by the registration rights agreement (the
“Registration Rights Agreement”) in the form attached hereto as Exhibit A.

 

2.       Investor Delivery of Documents and Payment. The Investor hereby tenders
to the Company (i) the full Purchase Price by check or wire transfer and (ii)
one completed and manually executed copy of this Agreement and (iii) one
completed and manually executed copy of the Registration Rights Agreement. In
the event that the sale of Shares is not consummated for any reason, the
Purchase Price will be returned to the investor without interest or deduction.
At the closing of the sale of the Shares prescribed hereby, the Company shall
deliver to the Investor (a) certificates evidencing the Shares, (b) one
countersigned copy of this Agreement and (c) one countersigned copy of the
Registration Rights Agreement.

 

3.       Company Representations and Warranties. The Company represents and
warrants to Investor:

 

(a) it has full corporate power and authority to enter into this Agreement (and
the Registration Rights Agreement) and to perform all of its obligations
hereunder and thereunder;

 

 

 

 

(b) this Agreement (and the Registration Rights Agreement) has been duly
authorized and executed by and, when delivered in accordance with the terms
hereof, will constitute a valid and binding agreement of the Company enforceable
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally or subject to general
principles of equity;

 

(c) the execution and delivery of this Agreement (and the Registration Rights
Agreement) and the consummation of the transactions contemplated hereby and
thereby do not conflict with or result in a breach of (i) the Company’s Amended
and Restated Certificate of Incorporation (including the Certificate of
Designations of the Series A Preferred Stock) or Bylaws, or (ii) any material
agreement to which the Company is a party or by which any of its property or
assets is bound;

 

(d) the Shares when issued and paid for in accordance with the terms of this
Agreement will be duly authorized, validly issued, fully paid and
non-assessable;

 

(e) all preemptive rights or rights of first refusal held by stockholders of the
Company and applicable to the transactions contemplated hereby have been duly
satisfied or waived in accordance with the terms of the agreements between the
Company and such stockholders conferring such rights.

 

(f) the Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to carry on its business as now conducted and as currently
proposed to be conducted. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on the business or properties of the
Company and its subsidiaries taken as a whole.

 

(g) the Company is not the subject of any pending or, to its knowledge,
threatened or contemplated investigation or administrative or legal proceeding
by the Internal Revenue Service, the taxing authorities of any state or local
jurisdiction, or the Securities and Exchange Commission, or any state securities
commission, or any other governmental entity.

 

(h) the Company has timely filed all forms, and reports and documents with the
Securities and Exchange Commission required to be filed by it under the
Securities Exchange Act 1934, as amended (the “Exchange Act”) through the date
hereof (collectively, the “SEC Reports”). Each of the SEC Reports, at the time
filed, complied in all material respects with the requirements of the Exchange
Act. The Company has made available to the Investor a copy of the Company’s Form
10-K for the fiscal year ended December 31, 2018, a copy of the Company’s Forms
10-Q and 8-K.s filed by the Company since January 1, 2019 (the “Most Recent
Filings Report”). There have been no material adverse changes in the Company’s
business, prospects, operations or financial condition since the date of the
Most Recent Filings Report. The SEC Reports furnished herewith by the Company to
the Investor are referred to collectively as the “Disclosure Documents.” The
financial statements contained in the Disclosure Documents have been prepared in
accordance with generally accepted accounting principles, consistently applied,
and fairly present in all material respects the consolidated financial condition
of the Company as of the dates of the balance sheets included therein and the
consolidated results of its operations and cash flows for the periods then
ended. Without limiting the foregoing, there are no material liabilities,
contingent or actual that are not disclosed in the Disclosure Documents (other
than liabilities incurred by the Company in the ordinary course of its business,
consistent with its past practice, after the periods covered by the Disclosure
Documents).

 

4.       Investor Representations, Warranties and Acknowledgments.

 

(a) The Investor represents and warrants that: (i) it has full right, power and
authority to enter into this Agreement and to perform all of its obligations
hereunder; (ii) this Agreement has been duly authorized and executed by the
Investor and, when delivered in accordance with the terms hereof, will
constitute a valid and binding agreement of the Investor enforceable against the
Investor in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally or subject to general
principles of equity; (iii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not conflict with or
result in a breach of (A) the Investor’s certificate of incorporation or by-laws
(or other governing documents), or (B) any material agreement or any law or
regulation to which the Investor is a party or by which any of its property or
assets is bound; (iv) it has had full access to the Disclosure Documents and the
Company’s other periodic reports and other information incorporated by reference
therein, and was able to read, review, download and print such materials; (v) in
making its investment decision in this offering, the Investor and its advisors,
if any, have relied solely on the Company’s public filings with the Securities
and Exchange Commission; and (vi) it is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in securities representing an investment decision like that involved
in the purchase of the Shares.

 

 

 

 

(b) The Investor also represents and warrants that, other than the transactions
contemplated hereunder, the Investor has not directly or indirectly, nor has any
person acting on behalf of or pursuant to any understanding with the Investor,
executed any “short sales” as defined in Rule 200 of Regulation SHO under the
Securities Exchange Act of 1934 (the “Short Sales”), in the securities of the
Company during the period commencing from the time that the Investor first
became aware of the proposed transactions contemplated hereunder until the date
hereof. The Investor has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of
this transaction).

 

(c) The Investor hereby represents and warrants to the Company that it is an
“accredited investor,” as defined in Rule 501 of Regulation D, and has marked
the applicable box set forth in Section 9 of this Agreement signifying such
status.

 

(d) The Investor is acquiring the Shares solely for investment purposes for the
Investor’s own account (or for beneficiaries’ accounts over which the Investor
has investment discretion but no discretionary authority as to voting or
disposition) and not with a view to a distribution of all or any part thereof.
The Investor is aware that there are legal and practical limits on its ability
to sell or dispose of the Shares and therefore, that the Investor must bear the
economic risk of its investment for an indefinite period of time.

 

(e) The Shares were not offered to the Investor through, and the Investor is not
aware of, any form of general solicitation or general advertising, including,
without limitation, (i) any advertisement, articles, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, and (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.

 

(f) The Investor understands that the issuance of the Shares has not been
registered and the Shares therefore are “restricted securities” under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering, and that, under such laws and
applicable regulations, such securities may not be transferred or resold without
registration under the Securities Act or pursuant to an exemption therefrom. In
this connection, the Investor represents that it is familiar with Rule 144 under
the Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.

 

5.       Investor Covenant Regarding Short Sales and Confidentiality. The
Investor covenants that neither it nor any affiliates acting on its behalf or
pursuant to any understanding with it will execute any Short Sales of securities
of the Company during the period from the date hereof and ending at the time
that the transactions contemplated by this Agreement are first publicly
announced through a press release and/or Form 8-K. The Investor covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company through a press release and/or Form 8-K, the Investor
will maintain the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this transaction).

 

6.       Miscellaneous.

 

(a) The Company will reimburse Investor $80,000 for due diligence fees, legal
fees and other related expenses incurred by it in connection with this
transaction. This Agreement (and the Registration Rights Agreement) constitute
the entire understanding and agreement between the parties with respect to its
subject matter, and there are no agreements or understandings with respect to
the subject matter hereof which are not contained in this Agreement and the
Registration Rights Agreement. This Agreement may be modified only in writing
signed by the parties hereto.

 

 

 

 

(b) This Agreement may be executed in counterparts, all of which taken together
shall constitute one and the same instrument and shall become effective when
counterparts have been signed by each party and delivered to the other parties
hereto, it being understood that all parties need not sign the same counterpart.
Execution may be made by delivery by facsimile.

 

(c) The provisions of this Agreement are severable and, in the event that any
court or officials of any regulatory agency of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible, so long as such construction does
not materially adversely affect the economic rights of either party hereto.

 

(d) All communications hereunder, except as may be otherwise specifically
provided herein, shall be in writing and shall be mailed, hand delivered, sent
by a recognized overnight courier service such as Federal Express, or sent via
facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in
writing:

 

To the Company: as set forth on the signature page hereto.

 

To the Investor: as set forth on the signature page hereto.

 

All notices hereunder shall be effective upon receipt by the party to which it
is addressed.

 

(e) This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Connecticut for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. To the extent determined by such court, the prevailing party shall
reimburse the other party for any reasonable legal fees and disbursements
incurred in enforcement of, or protection of any of its rights under this
Agreement.

 

 

 

 

If the foregoing correctly sets forth our agreement, please confirm this by
signing and returning to us the duplicate copy of this Agreement.

 

 

Number of Shares: 40,000

Purchase Price Per Share: $25.00

Aggregate Purchase Price: $1,000,000

 

INVESTOR:

[ENTITY]

 

By:    

Name:
Title:

 

Address for Notice:

 

CHICKEN SOUP FOR THE SOUL ENTERTAINMENT, INC.

 

By:    

Name: William J. Rouhana, Jr.
Title: Chairman and CEO

 

Address for Notice:

132 E. Putnam Ave

Cos Cob CT

Facsimile:

Attention: CEO

 

 

 

 

EXHIBIT A

 

REGISTRATION RIGHTS AGREEMENT