Document:

Exhibit 10.1

 

GENIUS BRANDS INTERNATIONAL, INC.

 

January 28,
2021

 

Holder of Common Stock Purchase Warrant

 

Re:       Inducement
Offer to Exercise Common Stock Purchase Warrants

 

Dear Holder:

 

Genius Brands International,
Inc. (the “Company”) is pleased to offer to you the opportunity to exercise all of the Common Stock Purchase
Warrants set forth on the signature page hereto (the “Existing Warrants”) currently held by you (the “Holder”).
The Existing Warrants and the shares underlying the Existing Warrants (“Warrant Shares”) have been registered
pursuant to registration statement Form S-3 (File No. 333-248623) (the “Registration Statement”). The Registration
Statement is currently effective and, upon exercise of the Existing Warrants pursuant to this letter agreement, will be effective
for the issuance or sale, as the case may be, of the Warrant Shares. Capitalized terms not otherwise defined herein shall have
the meanings set forth in the Existing Warrant.

 

In consideration for
exercising in full all of the Existing Warrants held by you and as set forth on the signature page hereto (the “Warrant
Exercise”) at an exercise price of $1.55, the Company hereby offers to issue you or your designee a new Common Stock
Purchase Warrant (“New Warrant”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities
Act”) to purchase up to a number of shares of Common Stock (“New Warrant Shares”) equal to 100%
of the number of Warrant Shares issued pursuant to the Warrant Exercise hereunder, which New Warrant shall be in the form attached
hereto as Annex B. The original New Warrant certificate(s) will be delivered within three Business Days following the date hereof.
Notwithstanding anything herein to the contrary, in the event the Warrant Exercise would otherwise cause the Holder to exceed the
beneficial ownership limitations (“Beneficial Ownership Limitation”) set forth in Section 1(f) of the Existing
Warrants, the Company shall only issue such number of Warrant Shares to the Holder that would not cause the Holder to exceed the
maximum number of Warrant Shares permitted thereunder with the balance to be held in abeyance until notice from the Holder that
the balance (or portion thereof) may be issued in compliance with such limitations, which abeyance shall be evidenced through the
Existing Warrant which shall be deemed prepaid thereafter, and exercised pursuant to a Notice of Exercise in the Existing Warrant
(provided no additional exercise price shall be due and payable).

 

Expressly subject to
the paragraph immediately following this paragraph below, Holder may accept this offer by signing this letter below, with such
acceptance constituting Holder's exercise in full of the Existing Warrants for an aggregate exercise price set forth on the Holder’s
signature page hereto (the “Warrants Exercise Price”).

 

Additionally, the Company
agrees to the representations, warranties and covenants set forth on Annex A attached hereto. Holder represents and warrants
that it is an “accredited investor” as defined in Rule 501 of the Securities Act, and agrees that the New Warrants
will contain restrictive legends when issued, and neither the New Warrants nor the shares of Common Stock issuable upon exercise
of the New Warrants will be registered under the Securities Act, except in the discretion of the Company.

 

The Holder understands that the New Warrants and the shares of Common Stock underlying New Warrants are not, and may never be, registered under the Securities Act, or the securities laws of any state and, accordingly, each certificate, if any, representing such securities shall bear a legend substantially similar to the following:

 

 

 

 

    	 	1	 

     

    

 

“THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”

 

Certificates evidencing shares of Common Stock underlying the New Warrants shall not contain any legend (including the legend set forth above), (i) while a registration statement covering the resale of such Common Stock is effective under the Securities Act, (ii) following any sale of such Common Stock pursuant to Rule 144 under the Securities Act, (iii) if such Common Stock is eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Common Stock and without volume or manner-of-sale restrictions, (iv) if such Common Stock may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144 as to such Common Stock, or (v) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Securities and Exchange Commission (the “Commission”) and the earliest of clauses (i) through (v), the “Delegend Date”)). The Company shall cause its counsel to issue a legal opinion to the transfer agent promptly after the Delegend Date if required by the Company and/or the transfer agent to effect the removal of the legend hereunder or if requested by the Holder, which opinion shall be in form and substance reasonably acceptable to the Holder. Upon the occurrence of any of the events set forth in any of clauses (i) through (v) above, upon the exercise of the New Warrants, then the New Warrant Shares shall be issued free of all legends. The Company agrees that following the Delegend Date or at such time as such legend is no longer required under this Section 2.3(b), it will, no later than two (2) Trading Days following the delivery by the Holder to the Company or the transfer agent of a certificate representing the Common Stock underlying the New Warrants issued with a restrictive legend (such second Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the Holder a certificate representing such shares that is free from all restrictive and other legends or, at the request of the Holder shall credit the account of the Holder’s prime broker with the Depository Trust Company System as directed by the Holder.

 

In addition to the
Holder’s other available remedies, the Company shall pay to a Holder, in cash, (i) as partial liquidated damages and not
as a penalty, for each $1,000 of Shares or Warrant Shares (based on the VWAP of the Common Stock on the date such Warrant Shares
are submitted to the Transfer Agent) delivered for removal of the restrictive legend, $10 per Trading Day (increasing to $20 per
Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date
until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered)
to the Holder by the Legend Removal Date a certificate representing the Securities so delivered to the Company by the Holder that
is free from all restrictive and other legends and (b) if after the Legend Removal Date the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the
number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of
shares of Common Stock that the Holder anticipated receiving from the Company without any restrictive legend, then, an amount
equal to the excess of the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any)
(the “Buy-In Price”) over the product of (A) such number of Warrant Shares that the Company was required
to deliver to the Holder by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any
Trading Day during the period commencing on the date of the delivery by the Holder to the Company of the applicable Warrant Shares
(as the case may be) and ending on the date of such delivery and payment under this clause (ii).   As soon as practicable
(and in any event within 5 calendar days of the date hereof), the Company shall file a registration statement on Form S-3 (or
other appropriate form if the Company is not then S-3 eligible) providing for the resale by the Holder of the New Warrant Shares
issued and issuable upon exercise of the New Warrants.  The Company shall use commercially reasonable efforts to cause such
registration statement to become effective within 65 days following the date hereof and to keep such registration statement effective
at all times until the Holder no longer owns any Warrants or Warrant Shares issuable upon exercise thereof.

 

 

 

 

    	 	2	 

     

    

 

From the date hereof
until the end of the 20th Trading Day following the date hereof, neither the Company nor any subsidiary of the Company
(the Company acknowledging that it does not currently have any subsidiaries) shall issue, enter into any agreement to issue or
announce the issuance or proposed issuance of any shares of Common Stock or any securities of the Company or any subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock,
right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock, other than (i) the issuance of New Warrants to Other Holders (defined below)
and (ii) the issuance of shares of Common Stock having a fair market value of up to $6 million in the aggregate pursuant to a settlement
agreement and a previously announced acquisition which shares of Common Stock shall carry no registration rights that require or
permit the filing of any registration statement in connection therewith during such 20 Trading Day period.

 

If this offer is accepted
and the transaction documents are executed on or before 8:00 a.m. Eastern on January 28, 2021, then on or before 9:15 am ET on
the same Trading Day, the Company shall file a Current Report on Form 8-K with the SEC disclosing all material terms of the transactions
contemplated hereunder. The Company represents, warrants and covenants that, upon acceptance of this offer, the shares underlying
the Existing Warrants shall be issued free of any legends or restrictions on resale by Holder and all of the Warrant Shares shall
be delivered electronically through the Depository Trust Company within 1 Business Day of the date the Company receives the Warrants
Exercise Price (or, with respect to Warrant Shares that would otherwise be in excess of the Beneficial Ownership Limitation, within
2 Business Days of the date the Company is notified by Holder that its ownership is less than the Beneficial Ownership Limitation).
The terms of the Existing Warrants, including but not limited to the obligations to deliver the Warrant Shares, shall otherwise
remain in effect as if the acceptance of this offer were a formal Notice of Exercise (including but not limited to any liquidated
damages and compensation in the event of late delivery of the Warrant Shares).

 

The Company acknowledges
and agrees that the obligations of the Holders under this letter agreement are several and not joint with the obligations of any
other holder or any other holders of Warrants to Purchase Common Stock of the Company (each, an “Other Holder”)
under any other agreement related to the exercise of such warrants (“Other Warrant Exercise Agreement”), and
the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder or under any such Other
Warrant Exercise Agreement. Nothing contained in this letter agreement, and no action taken by the Holders pursuant hereto, shall
be deemed to constitute the Holder and the Other Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by this letter agreement and the Company acknowledges that the Holder and
the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by
this letter agreement or any Other Warrant Exercise Agreement. The Company and the Holder confirm that the Holder has independently
participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder
shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this
letter agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for
such purpose.

 

 

***************

 

 

 

 

 

 

 

 

    	 	3	 

     

    

 

Within one business
day from the Holder’s execution of this letter, the Holder shall make available for wire to the Company immediately available
funds equal to the number of Existing Warrants being exercised multiplied by $1.55 and the Company shall deliver the Warrant Shares
via DWAC to the Holder and shall deliver the New Warrants registered in the name of the Holder.

 

To accept this offer,
Holder must counter execute this letter agreement and return the fully executed agreement to the Company by e-mail at: bdenton@gnusbrands.com

 

Please do not hesitate
to call me if you have any questions.

 

Sincerely yours,

 

GENIUS BRANDS INTERNATIONAL,
INC.

 

 

By: _______________________

Name:

Title:

 

Accepted and Agreed to:

 

Name of Holder: ____________________________________________________________

 

Signature of Authorized Signatory of
Holder: _____________________________________

 

Name of Authorized Signatory: ________________________________________________

 

Title of Authorized Signatory: _________________________________________________

 

Existing Warrant Shares: ______________

 

Aggregate Exercise Price: _____________

 

New Warrants: ___________

 

DWAC Instructions:

 

 

 

 

 

 

 

 

    	 	4	 

     

    

 

Annex A

 

Representations,
Warranties and Covenants of the Company. The Company hereby makes the following representations and warranties to the Holder:

 

(a)               
Affirmation of Prior Representations, Warranties and Covenants. The Company hereby represents and warrants to the
Holder that the Company’s representations and warranties as set forth in Article III and the Company’s covenants listed
in Article IV of that certain Securities Purchase Agreement, dated October 28, 2020, between the Company and the investors listed
thereto (the “SPA”), together with any updates in the Company’s public reports filed with the SEC subsequent
to the SPA, are true and correct as of the date hereof and have been fully performed as of the date hereof.

 

(b)               
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this letter agreement and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this letter agreement by the Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company,
its board of directors or its stockholders in connection therewith. This letter agreement has been duly executed by the Company
and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(c)               
No Conflicts. The execution, delivery and performance of this letter agreement by the Company and the consummation
by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any  liens,
claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company in connection with,
or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or
other material understanding to which such Company is a party or by which any property or asset of the Company is bound or affected;
or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company is bound or affected, except, in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a material adverse effect upon the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company, taken as a whole, or in its ability to perform its
obligations under this letter agreement.

 

(d)               
Nasdaq Corporate Governance. The transactions contemplated under this letter agreement, comply with all rules of
the Nasdaq Capital Market.

 

 

 

 

 

 

    	 	5	 

     

    

 

 

ANNEX B

 

FORM OF NEW WARRANT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	6Exhibit
4.2

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHANGE ACT OF 1934

 

The
following summary of the capital stock of Evergreen International Corp. (the “Company”) does not purport to be complete
and is qualified in its entirety by reference to the Company’s certificate of incorporation, as amended from time to time,
and the Company’s bylaws, as amended from time to time, each of which is incorporated by reference as an exhibit to this
Quarterly Report on Form 10-Q of which this Exhibit is a part, and certain provisions of Delaware General Corporation Law. 

 

Evergreen
International Corp. had two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended
- the preferred stock and common stock.

 

I.
DESCRIPTION OF OUR COMMON STOCK

 

We
are authorized, subject to limitations prescribed by Delaware law, to issue up to 100,000,000 shares of common stock with a nominal
par value of $0.001 per share.

 

Voting
Rights

 

Each
holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders.
Under our Certificate of Incorporation, as amended, and bylaws, stockholders do not have the right to cumulate votes for the election
of directors.

 

Dividends

 

The
holders of Common Stock are entitled to receive dividends or other distributions on an equal basis, as the board of directors
may, from time to time, declare from of funds legally available.

 

Liquidation

 

Upon
our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable
ratably among the holders of our common stock, subject to prior satisfaction of all outstanding debt and liabilities and the preferential
rights and payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

 

II.
DESCRIPTION OF OUR PREFERRED STOCK

 

We
are authorized to issue up to 1,000,000 shares of preferred stock with a nominal par value of $0.001. Delaware law and our Certificate
of Incorporation, as amended, allow our board of directors, without the necessity of obtaining stockholder approval, to establish
and designate the name of each class or series of the shares and to set the terms of such shares (including terms with respect
to redemption, sinking fund, dividend, liquidation, preemptive, conversion and voting rights and preferences). Accordingly, our
Board of Directors, without shareholder approval, may issue preferred stock with terms (including terms with respect to redemption,
sinking fund, dividend, liquidation, preemptive, conversion and voting rights and preferences) that could adversely affect the
voting power and other rights of holders of the common stock. The issuance of preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring
or preventing a change in control of our company and may adversely affect the market price of our common stock and the voting
and other rights of the holders of common stock. We have no current plans to issue any shares of preferred stock.

 

     

     

    

 

Anti-takeover
Provisions

 

Some
of the provisions of Delaware law, our Certificate of Incorporation, as amended, and our Bylaws may have the effect of delaying,
deferring or discouraging another person from acquiring control of our company or removing our incumbent officers and directors.
These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover
bids.  These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with
our board of directors.  We believe that the benefits of increased protection against an unfriendly or unsolicited proposal
to acquire or restructure us outweigh the disadvantages of discouraging such proposals. Among other things, negotiation of such
proposals could result in an improvement of their terms.

 

Our
Certificate of Incorporation, as amended, or Bylaws provide that:

 

	 	●	Board
    of Directors Vacancies. Our board of directors may fill vacant directorships, including newly created seats. In addition,
    the number of directors constituting our board of directors is permitted to be set only by a resolution adopted by a majority
    vote of our entire board of directors. These provisions would prevent a stockholder from increasing the size of our board
    of directors and then gaining control of our board of directors by filling the resulting vacancies with its own nominees.
    This makes it more difficult to change the composition of our board of directors but promotes continuity of management.

 

	 	●	Director Removals.
    Our Bylaws provide that directors can only be removed by holders of at least a majority of the shares entitled to vote at
    an election of directors. This makes it more difficult to change the composition of the Board. 

 

	 	●	No Cumulative
    Voting. The Delaware General Corporation Law provides that stockholders are not entitled to the right to cumulate votes
    in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our Certificate
    of Incorporation, as amended, and bylaws do not provide for cumulative voting. 

 

	 	●	Issuance of “Blank
    Check” Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to
    issue up to 1,000,000 shares of “blank check” preferred stock with rights and preferences, including voting rights,
    designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock
    enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a
    merger, tender offer, proxy contest, or otherwise; 

 

	 	●	Bylaws Amendments
    Without Stockholder Approval. Our Bylaws provide that a majority of the authorized number of directors will generally
    have the power to adopt, amend or repeal our bylaws without stockholder approval;
	 	 	 
	 	●	Broad Indemnity.
    We are permitted to indemnify directors and officers against losses that they may incur in investigations and legal proceedings
    resulting from their services to us, which may include services in connection with takeover defense measures. This provision
    may make it more difficult to remove directors and officers and delay a change in control of our management.

 

Delaware
Anti-Takeover Provisions

 

Section
203 of the Delaware General Corporation Law (the “DGCL”) prohibits public companies from entering into a business
combination (including a merger, sale of assets or transfer of stock) with an “interested stockholder” for a period
of three years after the person becomes an interested stockholder, unless certain conditions apply. An “interested stockholder”
is defined as a person or group of persons who beneficially acquire 15% or more of the outstanding voting stock of the corporation.
Section 203 does not apply if the corporation’s board of directors preapproves the transaction by which a stockholder becomes
an interested stockholder, or if the subsequent business combination with an interested stockholder is authorized at a stockholder
meeting by two-thirds of the corporation’s outstanding voting stock (excluding the stock held by the interested stockholder).
Further, a stockholder who acquires 85% or more of the voting stock of a corporation (excluding stock held by directors who are
also officers and certain employee stock plans) in the first transaction in which it becomes an interested stockholder is not
subject to the three-year waiting period for any subsequent business combination.

 

     

     

    

 

A
Delaware corporation may amend its certificate of incorporation to “opt out” of Section 203’s anti-takeover
protection. The amendment must be approved by the affirmative vote of a majority of the shares entitled to vote, in addition to
any other vote required by law, and it must be effected before any stockholder becomes an interested stockholder. Subject to certain
exceptions, such amendment will not take effect until twelve months after its adoption.

 

We
expect to amend our Certificate of Incorporation to elect not to be governed by Section 203 of the DGCL to facilitate potential
future business combinations regardless of whether such business combinations are with interested stockholders.

 

Transfer
Agent and Registrar

 

The
transfer agent and registrar for the Company’s common stock is Action Stock Transfer.

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