Exhibit 10.4
NOTE PURCHASE AGREEMENT
NOTE PURCHASE AGREEMENT (the "Agreement"), dated as of March [], 2020, by and
among Genius Brands International, Inc., a Nevada corporation with offices
located at 190 N. Canon Drive, 4th Fl., Beverly Hills, CA 90210 (the "Company")
and the investor signatory hereto (the "Investor").
WHEREAS:
A.
Concurrently herewith, the Company, the Investor and certain other
investors (the "Other Investors", and together with the Investor, the
"Investors") have entered into that certain Securities Purchase Agreement, dated
March 11, 2020, pursuant to which, among other things, the Investors shall
acquire certain senior secured convertible notes (the "Notes) of the Company
(the "Securities Purchase Agreement").
B.
The Company and the Investor are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), as
promulgated by the United States Securities and Exchange Commission (the "SEC")
under the 1933 Act.
C.
The Investor has authorized the issuance of a new secured promissory
Investor Note in substantially the form attached hereto as Exhibit A, pursuant
to the terms set forth herein (collectively, the "Investor Note").
D.
The Investor wishes to purchase Notes from the Company pursuant to the
Securities Purchase Agreement and to issue the Investor Note in full
satisfaction of the Note Purchase Price (as defined in the Securities Purchase
Agreement), and the Company wishes to (x) sell Notes to the Investor, (y)
acquire the Investor Note in full satisfaction of the Note Purchase Price and
(z) pledge the Investor Note to the Investor as collateral for its obligations
under the Notes.
E.
The Investor Note will be secured by a first priority security interest
in certain Eligible Assets (as defined in the Investor Note) (collectively, the
"Collateral") held in one or more collateral accounts of the Investor described
in the Investor Note (the "Collateral Account").
F.
Concurrently herewith, each of the Company and the Investor are entering
into that certain Master Netting Agreement, in substantially the form attached
hereto as Exhibit B (the "Master Netting Agreement"), to provide further
clarification of the Investor's right (but not, in the case of Investor only,
its obligation) to Net (as defined below) certain Obligations (as defined in the
Master Netting Agreement) arising under and across this Agreement, the Investor
Note, the Notes and the Securities Purchase Agreement (collectively, the
"Underlying Agreements") and to treat the Master Netting Agreement, this
Agreement and the other Underlying Agreements as a single agreement for the
purposes set forth herein and this Agreement and the Securities Purchase
Agreement each as a "securities contract" (11 U.S.C. § 741), or other similar
agreements.
1
NOW, THEREFORE, the Company and the Investor hereby agree as follows:
1.
PURCHASE AND SALE OF INVESTOR NOTE.
(a)
Investor Note. Subject to the satisfaction (or waiver) of the
conditions set forth in Sections 5 and 6 below, the Investor agrees to issue and
sell to the Company, and the Company agrees to purchase from the Investor