Document:

Exhibit 10.7

 

GENIUS BRANDS INTERNATIONAL, INC.

 

March __, 2020

 

 

Genius Brands International, Inc.

190 N. Canon, 4th Floor

Beverly Hills, CA 90210

Telephone: (310) 273-4222

Facsimile: (310) 273-4202

Attention: Robert L. Denton

E-mail: bdenton@gnusbrands.com

 

Re: Genius
Brands International, Inc. - Lock-Up Agreement

 

Dear Sirs:

 

This Lock-Up Agreement
is being delivered to you in connection with the Securities Purchase Agreement (the "Securities Purchase Agreement"),
dated as of March 11, 2020 by and among Genius Brands International, Inc. (the "Company") and the investors party
thereto (the "Buyers"), with respect to the issuance of (i) a new series of senior secured convertible notes of
the Company, which are convertible into shares of Common Stock and (ii) warrants which will be exercisable to purchase shares of
Common Stock. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement.

 

In order to induce
the Buyers to enter into the Securities Purchase Agreement, the undersigned agrees that, commencing on the date hereof until ninety
(90) days following the one year anniversary of the Closing Date (as defined in the Securities Purchase Agreement) (the "Lock-Up
Period"), the undersigned will not, and will cause all affiliates (as defined in Rule 144 promulgated under the 1933 Act)
of the undersigned, or any person with whom the undersigned or any affiliate of the undersigned is acting as a group, not to, (i)
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise
dispose of or agree to dispose of, directly or indirectly, any shares of Common Stock or Common Stock Equivalents, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the
Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated
thereunder with respect to any shares of Common Stock or Common Stock Equivalents owned directly by the undersigned (including
holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the
Securities and Exchange Commission (collectively, the "Undersigned's Shares"), or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Undersigned's
Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of Common Stock
or other securities, in cash or otherwise, (iii) make any demand for or exercise any right or cause to be filed a registration
statement, including any amendments thereto, with respect to the registration of any shares of Common Stock or Common Stock Equivalents
or (iv) publicly disclose the intention to do any of the foregoing.

 

The foregoing restriction
is expressly agreed to preclude the undersigned, and any affiliate of the undersigned and any person with whom the undersigned
or any affiliate of the undersigned is acting as a group, from engaging in any hedging or other transaction which is designed to
or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned's Shares even if the Undersigned's
Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include,
without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call
option) with respect to any of the Undersigned's Shares or with respect to any security that includes, relates to, or derives any
significant part of its value from the Undersigned's Shares.

 

 

 

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Notwithstanding the
foregoing, the undersigned may transfer the Undersigned's Shares (a) (i) as a bona fide gift or gifts, including to charitable
organizations or charitable trusts, provided that the donee or donees thereof (other than a charitable organization or charitable
trust transferee) agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, including pursuant to any will or intestate succession upon
the death of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth
herein, and provided further that any such transfer shall not involve a disposition for value, (iii) by operation of law, such
as pursuant to a qualified domestic order or in connection with a divorce settlement or other court order or (iv) if any affiliate
of the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (1) to another corporation,
partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate of the undersigned
or (2) as distributions to the partners, limited liability company members or stockholders of such corporation, partnership, limited
liability company, trust or other business entity, or holders of similar equity interest in such entity, provided, in each case,
that the transferee or transferees thereof agree to be bound in writing by the restrictions set forth herein; or (b) to any third-party
pledgee in a bona fide transaction as collateral to secure obligations pursuant to lending or other arrangements between
such third parties (or their affiliates or designees) and the undersigned and/or its affiliates or any similar arrangement relating
to a financing arrangement for the benefit of the undersigned and/or its affiliates, provided that, upon foreclosure on the pledged
Undersigned’s shares, any such pledgee or other party agrees to be bound in writing by the restrictions set forth herein.
In addition, the foregoing shall not apply to (x) the acquisition or exercise of any stock option issued pursuant to the Company’s
existing equity incentive plans, provided that any securities issued upon such acquisition or exercise, as applicable, shall then
become subject to the restrictions set forth herein, or (y) the entry into any plan, contract or instruction complying with Rule
10b5-1 of the 1934 Act, provided that sales under any such new trading plan do not occur during the Lock-Up Period and to the extent
a public announcement or filing under the 1934 Act, if any, is required of or voluntarily made by or on behalf of the undersigned
or the Company regarding the establishment of such plan, such announcement or filing will include a statement to the effect that
no transfer of the Undersigned’s Shares may be made under such plan during the Lock-Up Period. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first
cousin. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent (the
"Transfer Agent") and registrar against the transfer of the Undersigned's Shares except in compliance with the
foregoing restrictions.

 

Notwithstanding the
foregoing, the undersigned shall be permitted to make transfers, sales, tenders or other dispositions of the Undersigned’s
Shares to a bona fide third party pursuant to a tender or exchange offer for securities of the Company or other transaction, including,
without limitation, a merger, consolidation or other business combination, involving a change in control that, in each case, has
been approved by the Board of Directors of the Company (including, without limitation, entering into any lock-up, voting or similar
agreement pursuant to which the undersigned may agree to transfer, sell, tender or otherwise dispose of the Undersigned’s
Shares in connection with any such transaction, or vote any of the Undersigned’s Shares in favor of any such transaction),
provided that all of the Undersigned’s Shares subject to this Lock-Up Agreement that are not so transferred, sold, tendered
or otherwise disposed of remain subject to this Lock-Up Agreement; and provided, further, that it shall be a condition of
transfer, sale, tender or other disposition that if such tender offer or other transaction is not completed, any of the Undersigned’s
Shares subject to this Lock-Up Agreement shall remain subject to the restrictions herein.

 

In order to enforce
this covenant, the Company shall impose irrevocable stop-transfer instructions preventing the Transfer Agent from effecting any
actions in violation of this Lock-Up Agreement.

 

The undersigned acknowledges
that the execution, delivery and performance of this Lock-Up Agreement is a material inducement to each Buyer to complete the transactions
contemplated by the Securities Purchase Agreement and that the Company shall be entitled to specific performance of the undersigned's
obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and
perform this Lock-Up Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will
indirectly benefit from the closing of the transactions contemplated by the Securities Purchase Agreement.

 

The undersigned understands
and agrees that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives,
successors, and assigns.

 

This Lock-Up Agreement
may be executed in two counterparts, each of which shall be deemed an original but both of which shall be considered one and the
same instrument.

 

This Lock-Up Agreement
will be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of
law or conflicting provision or rule (whether of the State of New York, or any other jurisdiction) that would cause the laws of
any jurisdiction other than the State of New York to be applied. In furtherance of the foregoing, the internal laws of the State
of New York will control the interpretation and construction of this Lock-Up Agreement, even if under such jurisdiction's choice
of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

 

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page intentionally left blank]

 

 

 

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Very
truly yours,

 

______________________________

Exact
Name of Shareholder

 

______________________________

Authorized
Signature

 

______________________________

Title

 

 

Agreed
to and Acknowledged:

 

GENIUS
BRANDS INTERNATIONAL, INC.

 

 

By: _______________________

 Name:

 Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	3Exhibit

Exhibit 4.1

DESCRIPTION OF THE REGISTRANT’S SECURITIES 
REGISTERED PURSUANT TO SECTION 12 OF THE 
SECURITIES EXCHANGE ACT OF 1934 
The following description sets forth certain material terms and provisions of our securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the applicable provisions of our articles of incorporation and our bylaws, copies of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. We encourage you to read our articles of incorporation and our bylaws for additional information.
Authorized Common Stock 
Our articles of incorporation authorize us to issue up to 250,000,000 shares of common stock, par value $0.001 per share and 50,000,000 shares of preferred stock, par value $0.001 per share.  All of the outstanding shares of our common stock are fully paid and non-assessable. 
Dividends
The holders of shares of our common stock are entitled to dividends as our board of directors may declare from time to time from legally available funds subject to the preferential rights of the holders of any shares of Pixelworks preferred stock that may be issued in the future. 
Voting Rights
The holders of shares of our common stock are entitled to one vote per share on any matter to be voted upon by Pixelworks shareholders. Our articles of incorporation do not provide for cumulative voting in connection with the election of directors. Accordingly, directors are elected by a plurality of the shares of common stock voting once a quorum is present. 
Preemptive and Conversion Rights
No holder of shares of our common stock has any preemptive subscription or conversion rights. 
Liquidation Rights
In the event of our liquidation, dissolution or winding up, after full payment of all debts and other liabilities and liquidation preferences of any other series of common stock and any preferred stock, the holders of shares of our existing common stock are entitled to share ratably in all remaining assets.
Preferred Stock 
Under our articles of incorporation, our board of directors, without further action by our shareholders, will be authorized to issue up to an aggregate of 50,000,000 shares of preferred stock in one or more series. Our board of directors may determine or alter the rights, preferences and privileges of the preferred stock, along with any limitations or restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each class or series of preferred stock. The shares of preferred stock could have voting or conversion rights that could adversely affect the voting power or other rights of holders of shares of common stock. The issuance of shares of preferred stock could also have the effect, under certain circumstances, of delaying, deferring or preventing a takeover or other transaction that holders of some or a majority of shares of common stock might believe to be in their best interests or in which holders might receive a premium for their shares over the then-market price of the shares. 

Certain Anti-Takeover Provisions 
Certain provisions of our articles of incorporation and bylaws as well as provisions of Oregon law may have the effect of delaying, deferring or discouraging another person from acquiring control of Pixelworks, including the following: 
		
	•
	Board Size. Our articles of incorporation authorize our board of directors to change the size of the board of directors without shareholder approval. If the board of directors is fixed at seven members or less, the directors shall hold office until the next annual meeting of shareholders and if the board of directors is fixed at eight or more members, the board of directors will be divided into three classes serving staggered terms, which would make it more difficult for a group of shareholders to quickly change the composition of our board of directors. This provision may not be amended or repealed unless approved by the holders of not less than seventy-five percent (75%) of the votes then entitled to be cast for the election of directors.

		
	•
	Authorized but Unissued or Undesignated Capital Stock. Our articles of incorporation grant our board of directors broad power to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any series of preferred stock, and the number of shares constituting any such series and the designation thereof. The issuance of shares of preferred stock pursuant to our board of directors’ authority described above could decrease the amount of earnings and assets available for distribution to holders of shares of our common stock and adversely affect the rights and powers, including voting rights, of such holders and may have the effect of delaying, deferring or preventing a change in control. 

		
	•
	Special Meetings of Shareholders. Our bylaws provide that special meetings of Pixelworks shareholders may be called by the President of our board of directors or by the board of directors and shall be called by the President at the request of the holders of not less than one-tenth of all the outstanding shares of the Corporation entitled to vote at the meeting. The requesting shareholders shall sign, date, and deliver to the Secretary a written demand describing the purpose or purposes for holding the special meeting.   

		
	•
	Removal of Directors. Our articles of incorporation provide that members of our board of directors can only be removed for cause and at a meeting of the shareholders called expressly for that purpose, by the vote of seventy-five percent (75%) of the votes then entitled to be cast for the election of directors. Cause for removal shall be deemed to exist only if the director whose removal is proposed has engaged in criminal conduct or has engaged in fraudulent or dishonest conduct or gross abuse of authority or discretion with respect to Pixelworks. 

		
	•
	Notice Procedures. Our bylaws establish advance notice procedures with regard to all shareholder proposals to be brought before meetings of Pixelworks shareholders. These procedures provide that notice of such stockholder proposals must be timely given in writing to the Pixelworks Secretary prior to the meeting. The notice must contain certain information specified in our bylaws.

		
	•
	Change of Control Transactions. Oregon law permits our board of directors to consider factors beyond shareholder value in evaluating any acquisition offer. The holders of no less than sixty-seven percent (67%) of the outstanding shares of the corporation entitled to vote must approve: (i) any agreements of merger or consolidation which require shareholder approval under the Oregon Business Corporation Act, (ii) any sale, lease or exchange of all or substantially all of Pixelworks’ property and assets and (iii) and dissolution or liquidation of the corporation.

Transfer Agent
Our transfer agent for the common stock is Broadridge Corporate Issuer Solutions, Inc.
Listing
Our common stock is listed on The Nasdaq Global Market under the trading symbol “PXLW.”

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