Exhibit 10.1

 

Subscription Agreement

 

 

This subscription agreement (this “Subscription”) is dated April 5, 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.Subscription.

 

(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”).

 

(b)                The Shares have been registered pursuant to a Registration
Statement on Form S-3, Registration No. 333-227596, which registration statement
(the “Registration Statement”) has been declared effective by the Securities and
Exchange Commission and is effective on the date hereof. A final prospectus
supplement will be delivered as required by law.

 

(c)                The Company may accept this Subscription 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 subscription 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 subscription. In the event the Investor’s
subscription is rejected, the Investor’s payment will be returned from escrow
promptly to the Investor without interest or deduction and this Subscription
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 Subscription
has been executed by the Investor and countersigned by the Company and the
Closing with respect to the Investor’s subscription has occurred.

 

(d)                Provided that the full Purchase Price and a completed and
manually executed copy of this Subscription 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 April 5, 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, or if so designated, through
the facilities of The Depository Trust Company’s DWAC system in accordance with
the instructions set forth on the Investor’s signature page attached hereto
under the heading “DWAC Instructions.”

 

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 Subscription.
In the event that the sale of Shares are not consummated for any reason, the
Purchase Price will be returned to the investor without interest or deduction.

 

 

 

 

3.                   Company Representations and Warranties.  The Company
represents and warrants that: (a) it has full corporate power and authority to
enter into this Subscription and to perform all of its obligations hereunder;
(b) this Subscription 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 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; (c) the
execution and delivery of this Subscription and the consummation of the
transactions contemplated hereby 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 Subscription will be duly authorized, validly
issued, fully paid and non-assessable; (e) the Registration Statement and any
post-effective amendment thereto, at the time it became effective, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (f) the prospectus contained in the Registration Statement, as
amended or supplemented, did not contain as of the effective date thereof, and
as of the date hereof does not contain, any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and (g) 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.

 

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 Subscription and to perform all of
its obligations hereunder; (ii) this Subscription 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 Subscription 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 base prospectus included in the Registration
Statement and the Company’s 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; (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; and (vii) except as set forth
below, the Investor is not a, and it has no direct or indirect affiliation or
association with any, National Association of Securities Dealers, Inc. member as
of the date hereof.

 

Exceptions:

 

 

 

 

(If no exceptions, write “none.” If left blank, response will be deemed to be
“none.”)

 

(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 disposition, including “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 (“Discussion
Time”). 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).

 

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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 or other disposition of securities of the Company during the period
after the Discussion Time and ending at the time that the transactions
contemplated by this Subscription 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 Subscription 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 $140,000 for due
diligence fees in connection with this transaction. This Subscription
constitutes 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
Subscription. This Subscription may be modified only in writing signed by the
parties hereto.

 

(b)                This Subscription may be executed in any number of
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 Subscription 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 Subscription 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 Subscription and this Subscription 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 effect 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 Seller:  as set forth on the signature page hereto.

 

To the Buyer:  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 Subscription 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 Subscription.

 

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

 

  CHICKEN SOUP FOR THE SOUL ENTERTAINMENT, INC.                     By:  /s/
William J. Rouhana, Jr.       Name: William J. Rouhana, Jr.       Title: Chief
Executive Officer

 

Number of Shares: 80,000

 

Purchase Price Per Share: $25.00

 

Aggregate Purchase Price: $2,000,000

 

 

Address for Notice:

 

Chicken Soup for the Soul Entertainment, Inc.

132 E. Putnam Avenue, Floor 2W

Cos Cob, Connecticut 06807

Facsimile: [( )_____]
Attention: Chief Executive Officer

      INVESTOR: DAVID S. NAGELBERG 2003 REVOCABLE TRUST                 By: /s/
David S. Nagelberg  _      Name: David S. Nagelberg      Title: Trustee        
  Address for Notice:     939 Coast Blvd., Unit 21 DE     La Jolla, CA 92037    
      Facsimile: 858-750-2348     Attention: David S. Nagelberg    

  

DWAC Instructions:    

 

Name of DTC Participant (broker-dealer at which the account or accounts to be
credited with the Shares are maintained):

 

_________________________________       DTC Participant Number:  
_________________________________       Name of Account at DTC Participant being
credited with the Shares:  
_________________________________       Account Number at DTC Participant being
credited
with the Shares  
_________________________________      

 

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