Document:

Exhibit 10.1

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this
“Agreement”), entered into on August 21, 2022 and effective as of August 29, 2022 (the “Effective Date”)
is by and between IDW Media Holdings, Inc. (the “Company”) and Allan Grafman, residing at One Quincy Lane, White Plains,
New York 10605 (the “Employee”) (individually, each a “Party” and collectively, the “Parties”).

 

WHEREAS, in recognition of
the Employee’s experience and abilities, the Company desires to assure itself of the employment of the Employee in accordance with
the terms and conditions provided herein; and

 

WHEREAS, the Employee seeks
to be employed by the Company and to perform services for the Company in accordance with the terms and conditions provided herein.

 

NOW, THEREFORE, in consideration
of the promises and the respective covenants and agreements of the Parties herein contained, and intending to be legally bound hereby,
the Parties hereto agree as follows:

 

1. Employment.
The Company hereby agrees to employ the Employee, and the Employee hereby agrees to be employed by the Company and to perform services
for the Company and its subsidiaries and affiliates, on the terms and conditions set forth herein (the “Employment”).

 

2. Term.
The Employment shall commence on the Effective Date and shall continue until August 28, 2024, unless earlier terminated by either the
Employee or the Company pursuant to Section 7 hereof (the period of the Employee’s employment at the Company, the “Term”).

 

3. Position.
During the Term, the Employee shall serve as the Chief Executive Officer of the Company (the “Position”). The Employee
shall also serve in such additional capacities with subsidiaries and affiliates of the Company as shall be agreed upon between the Employee
and the Company from time to time. In the event that the Employee remains employed by the Company through August 28, 2024 but the Company
does not renew this Agreement or otherwise continue to employ the Employee after August 28, 2024, the Company agrees that it may enter
into discussions with the Employee regarding a one-year production consultant position with the Company for a monthly fee of $10,000 and
such other terms as may be reasonably agreed upon between the Employee and the Company.

 

4. Duties,
Authority, and Reporting Relationship. During the Term, the Employee shall devote one hundred percent of the Employee’s regular
business time and, on a full-time basis, use the Employee’s skills and render services to the best of the Employee’s abilities
on behalf of the Company. Notwithstanding the foregoing, the Company acknowledges that the Employee may conduct those activities described
on Schedule B attached hereto (the “Permitted Activities”) and that, for so long as the Employee performs his
duties hereunder, such service shall not be deemed to be a breach of the terms hereof. The Employee shall report directly to the Company’s
Board of Directors (the “Board”). The Employee shall be responsible for all duties consistent with the role of Chief
Executive Officer, as reasonably determined by the Board. The Employee shall comply with all of the policies and procedures of the Company.
The Company will strive to ensure that with respect to Company employees and consultants engaged or consulting in connection with such
management or executive level initiatives as determined in the discretion of the Chairman of the Board, (i) any such employees and consultants
shall report to Employee in his capacity as Chief Executive Officer, (ii) any such employees or consultants shall not engage with third
parties on behalf of the Company without the approval or direction of the Chief Executive Officer, and (iii) any such consultants shall
not engage with Company employees without the approval or direction of the Chief Executive Officer.

 

     

     

    

 

5. Place
of Performance. The Parties agree that the Employee shall work regularly from the Company’s Newark, NJ headquarters, with remote
work from the Employee’s home permitted consistent with the needs of Employee’s position as determined in the discretion of
the Board. The Employee will also travel for purposes of Company business in accordance with the Company’s business needs and as
directed by the Board, including frequently spending time at the West Coast offices of the Company’s subsidiaries.

 

6. Compensation
and Related Matters.

 

(a) Annual
Base Salary. During the Term, the Employee will be compensated at an annual base salary rate of Four Hundred Ten Thousand Dollars
($410,000) (the “Base Salary”), such Base Salary to be paid to the Employee, less applicable taxes and withholdings, in conformity
with the Company’s payroll policies relating to its employees. The Position qualifies as exempt for purposes of relevant wage-hour
law and the Employee will therefore not be entitled to overtime compensation. The Employee’s Base Salary will be greater than that
of any other Company employee or consultant employed or consulting during the Term.

 

(b) Annual
Bonus. The Employee shall be entitled to receive an annual bonus (“Annual Bonus”) in the amount of $50,000 (prorated
from the Effective Date for fiscal year 2022), provided that the Employee is employed by the Company on the final day of the Company’s
fiscal year, provided further, however, that if the Employee remains employed by the Company through August 28, 2024 but the Company does
not renew this Agreement or otherwise continue to employ the Employee after August 28, 2024, then the Employee shall be entitled to a
prorated Annual Bonus for fiscal year 2024, which shall be paid to the Employee by no later than October 1, 2024.

 

(c) Discretionary
Bonus. The Employee shall be eligible to receive an annual discretionary bonus, the Employee’s entitlement to which and any
amount thereof to be determined in the sole and absolute discretion of the Board based on factors including the Company’s performance
and the Employee’s overall performance.

 

(d) Equity.
Within sixty (60) days following the Effective Date, the Company shall cause to be granted to the Employee Incentive Stock Options (the
“Options”) to purchase a number of shares of the Class B Common Stock (“Class B Stock”) of the Company
representing one-half percent (0.5%) of the issued and outstanding stock of the Company prior to such grant. The Company represents to
Employee that Class B Common Stock is the senior equity security of the Company issued, or issuable pursuant to an option or other stock
grant plan granted to any employee or consultant of the Company. The exercise price of all Options shall be the closing price of the Class
B Stock on the trading day immediately prior to grant.  The grant shall be made pursuant to the Company’s 2019 Stock Option
and Incentive Plan (the “Plan”) and subject to conditions applicable to grants of options under such Plan, as well
as prior approval for listing by the NYSE American if necessary. 

 

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The Options shall vest (i) with
respect to one-fourth (1/4) of the underlying shares on the six-month anniversary of the Effective Date and (ii) in equal tranches (in
each case, rounded to a whole number of shares) of the underlying shares on each quarterly anniversary of the six-month anniversary, and
all unvested Options shall vest on the day immediately preceding the second anniversary of the Effective Date. All unvested Options shall
vest upon a “Change of Control” (as defined in the Plan). Any tax liability in connection with the exercise of the Options
shall be borne solely by the Employee.

 

(e) Legal
Fees. Following the Start Date, the Company shall directly pay to the Employee’s attorneys, Ritholz Levy Fields LLP, the reasonable
legal fees and expenses incurred by the Employee in connection with the negotiation and review of this Agreement; provided, that the Employee
shall submit documentation of such legal fees within 30 days following the Effective Date and the amount of such reimbursable fees and
expenses shall not exceed $7,500 in the aggregate. Payment to Ritholz Levy Fields LLP will be made within 30 days following the Employee’s
submission of expense documentation.

 

(f) Car
Allowance. During the Term, the Employee will receive a monthly car allowance in the amount of $800.

 

(g) Benefits.
During the Term, the Employee shall be entitled to participate in the same benefit programs as other similarly situated employees of the
Company (the “Programs”) in accordance with the terms of the Programs.

 

(h) Paid
Time Off. During the Term, the Employee shall be eligible to accrue paid time off (“PTO”) to be calculated and administered
in accordance with applicable law and the Company’s applicable policies, as may be updated from time to time.

 

(i) Holidays.
During the Term, in addition to PTO, the Employee shall be entitled to take off paid holidays in accordance with Company policy. Unused
holidays may not be carried over from one calendar year to the next calendar year and are not paid out upon the Employee’s resignation
or termination of employment for any reason.

 

(j) Company
Property. During the Term, the Employee may be provided with the benefit of using Company property. Any such property shall remain
at all times the property of the Company and is to be used by the Employee in accordance with Company policy. The Employee shall return
any such property to the Company upon the Company’s request, and in any case upon the termination of the Employee’s employment
for any reason.

 

(k) Business
Expenses. The Employee shall be entitled to reimbursement for reasonable and necessary out-of-pocket business expenses incurred by
the Employee in connection with the performance of the Employee’s duties hereunder, provided that such expenses are incurred in
accordance with the Company’s Expense Reimbursement policy.

 

(l) All
sums payable to the Employee under this Agreement shall be paid less applicable taxes and withholdings.

 

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7. Termination.
The Employee’s Employment hereunder may be terminated without breach of this Agreement as set forth below:

 

(a) Death;
Disability. The Employee’s Employment hereunder shall terminate upon the Employee’s death or, as permitted by law, “Disability”
(as hereafter defined). Upon any such termination, the Employee (or, in the event of the Employee’s death, the Employee’s
estate) shall receive the Base Salary, a prorated Annual Bonus, and all benefits set forth in Section 6 above, in each case through the
Date of Termination (as hereafter defined). The Employee (and, in the event of the Employee’s death, the Employee’s
estate) shall not be entitled to any other amounts or benefits from the Company other than as set forth in this Section 7(a). For purposes
of this Agreement, “Disability” shall mean the inability of the Employee to perform the Employee’s duties because
of a physical or mental illness for a period of sixty (60) consecutive days or ninety (90) days in any six (6) month period. Notwithstanding
anything contained herein to the contrary, during any period that the Employee is unable to perform the Employee’s duties because
of a physical or mental illness, the Company shall not be obligated to pay any compensation or other amounts to the Employee except as
otherwise provided for by Company policy or applicable law.

 

(b) Termination
for Cause. The Company may terminate the Employee’s Employment hereunder at any time without advance notice for “Cause.”
For purposes of this Agreement, the Company shall have Cause to terminate the Employee’s Employment hereunder upon the Employee’s:

 

		(i)	commission of fraud, embezzlement, gross negligence, malfeasance, or an act or acts constituting a felony
under the laws of the United States or any state thereof;

 

		(ii)	commission of a willful or negligent act or omission which results in an assessment of a civil or criminal
penalty against the Employee (other than a non-criminal traffic or other similar violation), the Company, or its affiliates.

 

		(iii)	engaging in any act covered by Rule 506(d) of Regulation D under the Securities Act of 1933, as amended,
and/or engaging in any act, or existence of any circumstances that would, in the reasonable judgment of the Company, be harmful to the
Company’s ability to have its common stock be granted approval to list, or continue to be listed, on the NYSE, American, or Nasdaq
exchanges;

 

		(iv)	engaging in any action or any circumstance that would require the Company to include disclosure in an
SEC disclosure document or registration statement (including, without limitation under Section 401(f) of Regulation S-K) that would be
deemed harmful to the Company, as determined by the Company in its reasonable discretion;

 

		(v)	willful or continued failure to substantially perform the Employee’s duties hereunder (other than
any such failure resulting from the Employee’s incapacity due to physical or mental illness) that is not cured (if susceptible to
cure) to the satisfaction of the Company’s Board within five (5) days after written notice to the Employee identifying the manner
in which the Employee has not substantially performed the Employee’s duties;

 

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		(vi)	willful or continued failure to perform an act permitted by the Company’s rules, policies, or procedures,
including without limitation, the Company’s Code of Business Conduct and Ethics that is within his material duties hereunder (other
than by reason of physical or mental illness or disability) or directives of the Board that is not cured (if susceptible to cure) to the
satisfaction of the Company’s Board within five (5) days after written notice to the Employee identifying the act(s) the Employee
failed to perform.

 

		(vii)	breach of any of the material terms or conditions of this Agreement, the Non-Disclosure and Non-Competition
Agreement attached hereto as Schedule A, or Company policy that is not cured (if susceptible to cure) to the satisfaction of the Company’s
Board within five (5) days after written notice to the Employee identifying the breach;

 

		(viii)	misappropriation of the Company’s or its subsidiaries’ or affiliates’ funds or property;

 

		(ix)	failure to provide to the Company, within the first three (3) business days of employment, documentation
that the Employee is authorized to work in the United States, in accordance with applicable law; or

 

		(x)	knowing and intentional misrepresentation, or concealment after inquiry to Employee, of material information
regarding the Company from the Company’s Board.

 

In the event that the Company terminates the Employee’s
Employment for Cause, the Employee shall receive the Base Salary and all benefits set forth in Section 6 above, in each case through the
Date of Termination. The Employee shall not be entitled to any other amounts or benefits from the Company other than as set forth in this
Section 7(b).

 

(c) Termination
by the Company without Cause/Resignation by the Employee Without Good Reason. The Employee’s Employment hereunder may be terminated
by the Company without Cause or by the Employee upon the Employee’s resignation without Good Reason, in either case upon thirty
(30) days’ written notice (the “Notice Period”) by one Party to the other Party in accordance with Section 7(f)
hereunder. In the event of the Employee’s termination without Cause by the Company or the Employee’s resignation without Good
Reason, (i) the Employee shall receive the Base Salary and all benefits set forth in Section 6 above, in each case through the Date of
Termination; and (ii) the Company shall have the right to determine whether or not the Employee shall actively work for the Company during
the Notice Period.

 

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Except as set forth in Section
7(e) below in the event of the Employee’s termination by the Company without Cause, the Employee shall not be entitled to any other
amounts or benefits from the Company other than as set forth in this Section 7(c).

 

(d) Termination
by the Employee for Good Reason. The Employee’s Employment hereunder may be terminated by the Employee for Good Reason if (x)
the Employee has given written notice to the Company of the existence of Good Reason no later than thirty (30) days after the Employee
knows or should know of its initial existence, (y) the Company has not remedied such Good Reason in all material respects within thirty
(30) days after its receipt of such written notice, and (z) the Employee provides written notice of the Employee’s resignation to
the Company in accordance with Section 7(f) hereunder within forty-five (45) days following the notice to Company of such Good Reason.
The Company shall have the right to determine whether or not the Employee shall actively work for the Company after receiving notice of
Good Reason as set forth in (x) above. In the event of the Employee’s resignation for Good Reason, the Employee shall receive the
Base Salary and all benefits set forth in Section 6 above, in each case through the Date of Termination. “Good Reason” shall
mean the occurrence (without the Employee’s express written consent) of any one of the following acts by the Company: (w) material
breach of this Agreement by the Company; (x) a material adverse alteration in the nature or status of the Employee’s responsibilities;
(y) a material reduction in the Employee’s annual Base Salary or the Annual Bonus; or (z) the Company’s failure or inability
to issue the Options as set forth in this Agreement. Except as set forth in Section 7(e) below, the Employee shall not be entitled to
any other amounts or benefits from the Company other than as set forth in this Section 7(d).

 

(e) Severance.
In the event of the Company’s termination of the Employee without Cause or the Employee’s resignation for Good Reason, provided
that the Employee executes and delivers a separation and release agreement in a form acceptable to the Company (which agreement shall
be provided to the Employee on or before the Employee’s Date of Termination and which shall not impose any non-competition or non-solicitation
covenants on the Employee not contained in this Agreement) within twenty-one (21) days after the Employee’s Date of Termination
(unless applicable law requires a longer time period, in which case this date will be extended to the minimum time required by applicable
law) and does not revoke or breach such agreement, (i) the Company shall pay to the Employee the Annual Bonus prorated through the Date
of Termination; and (ii) (x) in the event that the Date of Termination is on or before August 28, 2023, the Company shall continue to
pay to the Employee the Base Salary for a period of twelve (12) months and (y) in the event that the Date of Termination is after August
28, 2023, the Company shall continue to pay to the Employee the Base Salary for a period of the greater of six (6) months or through August
28, 2024, in each case payable, subject to Section 10 hereof, in accordance with the Company’s regular payroll schedule and provided
that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.
The Company agrees that in the event that the Employee requests changes to the separation and release agreement, the Company will respond
to such requests as soon as reasonably practicable.

 

(f) Notice
of Termination. The Employee’s resignation or any termination of the Employee’s Employment by the Company shall be communicated
from one Party to the other Party by written “Notice of Termination” in accordance with Section 9 of this Agreement.
Such Notice of Termination shall specify the last day of the Term.

 

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(g) Date
of Termination. “Date of Termination” shall mean: (i) if the Employee’s Employment is terminated by the Employee’s
death, the date of the Employee’s death, or (ii) if the Employee’s Employment is terminated for any other reason, the date
specified in the Notice of Termination as the last day of the Term.

 

(h) Transition.
Regardless of the circumstances surrounding the Employee’s resignation or termination of Employment, the Employee hereby agrees
that upon the Employee’s resignation or termination of Employment, the Employee will return to the Company all Company property
and will provide reasonable assistance to facilitate the orderly transition of the Employee’s duties and responsibilities.

 

8. Employee Representations.

 

(a) The Employee hereby represents
and warrants that the Employee has not withheld any material information from the Company regarding any matter that would reasonably be
expected to impact his ability to serve in the Position. Employee further represents and warrants that he has disclosed to the Company
any information regarding the Employee that the Company would be required to disclose in SEC disclosure documents and/or registration
statements, including without limitation any information relating to his prior acts, events, and/or business experience. The Employee
further represents and warrants that the Employee’s performance of the terms of this Agreement will not breach any written or oral,
formal or informal agreement entered into by the Employee with a former employer or with any other third party.

 

(b) The Employee further warrants
and agrees that during the Term, the Employee will not (i) take on employment or consulting positions for third parties or engage in recreational
activities that would in any way pose a conflict of interest with the Employment (provided that the Company hereby confirms that the Permitted
Activities will not pose such a conflict of interest if they are as described in Schedule B and consistent with the disclosed scope) nor
will the Employee (ii) become party to an Agreement which would in any way limit the Employee’s ability to perform the Employee’s
obligations pursuant to this Agreement.

 

(c) The Parties agree that
this Agreement and any Schedules attached hereto constitute the entire understanding of the Parties with respect to the subject matter
hereof and supersede any understanding or agreement, whether oral or written, between the Parties with respect to the subject hereof.
The Employee further acknowledges and agrees that he is not owed any amounts by the Company for any work previously performed by him on
behalf of the Company other than any unpaid fee to which the Employee is entitled for service as a Director on the Company’s Board
prior to the Effective Date of this Agreement in accordance with applicable Company policies.

 

(d) The Employee hereby acknowledges
that the Employee’s signing of the Non-Disclosure and Non-Competition Agreement attached hereto as Schedule A (the “NDNC”) constitutes a precondition of the Employment under this Agreement.

 

(e) The Employee acknowledges
that the Employee has been advised to obtain independent counsel to evaluate the terms, conditions and covenants herein set forth and
the Employee has been afforded ample opportunity to obtain such independent advice and evaluation. The Employee warrants to the Company
that the Employee has relied upon such independent counsel and not upon any representation (legal or otherwise), statement or advice said
or offered by the Company or the Company’s counsel in connection with this Agreement.

 

9. Notices.
All notices and other communications under this Agreement shall be in writing and shall be given by hand, by email, or by FedEx, and shall
be deemed to have been duly given three (3) business days after sending by FedEx (with signature required on delivery), one (1) business
day after transmission of an email, or immediately upon hand delivery or explicit acknowledgement of receipt.

 

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10. Section 409A of the
Internal Revenue Code of 1986 as amended. The Parties hereby affirm that with respect to any and all payments and benefits under this
Agreement, the intent is that such payments and benefits either: (i) do not constitute “nonqualified deferred compensation”
within the meaning of Section 409A of the Internal Revenue Code (“Section 409A”), and therefore are exempt from Section
409A, (ii) are subject to a “substantial risk of forfeiture” and are exempt from Section 409A under the “short−term
deferral rule” set forth in Treasury Regulation §1.409A−1(b)(4), or (iii) are in compliance with the terms of 409A. In
any event, the Parties further confirm that they intend to have all provisions of this Agreement construed, interpreted, and administered
in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. By way of example, and not limitation,
solely for purposes of determining the time and form of payments, which are subject to Section 409A, due the Employee under this Agreement
in connection with the Employee’s termination of employment with the Company, the Employee shall not be deemed to have incurred
a termination of employment unless and until he shall incur a “separation from service” within the meaning of Section 409A.
Each amount or installment to be paid or benefit to be provided under this Agreement shall be construed as a separate and distinct payment
for purposes of Section 409A. Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent
required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that
would otherwise be provided pursuant to this Agreement or any other arrangement between the Employee and the Company during the six (6)
month period immediately following the Employee’s separation from service shall instead be paid on the first business day after
the date that is six (6) months following the Employee’s separation from service (or, if earlier, the Employee’s date of death).
To the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts reimbursable to the Employee under
this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred and
the amount of expenses eligible for reimbursement (and in-kind benefits provided to the Employee) during one year may not affect amounts
reimbursable or provided in any subsequent year. The Company makes no representation that any or all of the payments described in this
Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such
payment. The Employee understands and agrees that the Employee shall be solely responsible for the payment of any taxes, penalties, interest
or other expenses incurred by the Employee on account of non-compliance with Section 409A.

 

11. Arbitration. In
the event of a dispute between the Employee and the Company arising out of or related to the Employee’s employment with the Company
(with the exception of disputes arising under the NDNC set forth in Schedule A and claims that pursuant to applicable law a party is prohibited
from requiring another party to agree to submit to arbitration), the Employee and the Company agree to settle such dispute by means of
arbitration pursuant to the Federal Arbitration Act, administered by the American Arbitration Association (“AAA”), with such
arbitration to take place in the state of New Jersey or another mutually agreed upon location and to be conducted in accordance with the
AAA’s Employment Arbitration Rules. In such arbitration, a single arbitrator, appointed by the mutual agreement of the Employee
and the Company: (i) shall not amend or modify the terms of this Agreement or of any Company policy, and (ii) shall render a decision
within ten (10) business days from the later of closing statements or submission of post-hearing briefs by the Parties. The arbitration
award shall be final and binding, and any state or federal court shall have jurisdiction to enter a judgment on such award. The Parties
hereby confirm their understanding that this requirement to arbitrate disputes means that the Employee and the Company specifically waive
any right either Party may have to a trial by jury in a court of law with respect to all claims and demands arising out of or related
to the Employee’s employment with the Company, including, without limitation, any rights the Employee may assert under any federal,
state, or local laws or regulations applicable to the Employee’s employment with the Company (with the exception of disputes arising
under the NDNC set forth in Schedule A and claims that pursuant to applicable law a party is prohibited from requiring another party to
agree to submit to arbitration). For the avoidance of doubt, the Parties acknowledge and agree that the existence of a claim by a Party
that is not subject to arbitration pursuant to this paragraph shall not impair the enforceability of this paragraph with respect to any
other claim brought by that Party. Notwithstanding the foregoing, nothing in this paragraph shall be interpreted to mean that the Employee
cannot file a charge with the Equal Employment Opportunity Commission or the National Labor Relations Board or any comparable federal,
state, or local governmental agency.

 

12. Enforceability of this Agreement.

 

(a) The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or enforceability of any other provision hereunder. If an arbitrator
or court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the
portions of this Agreement that violate such law or public policy shall be stricken, and all other portions of this Agreement that do
not violate any law or public policy shall continue in full force and effect. Further, if any one or more of the provisions contained
in this Agreement is determined by an arbitrator or court of competent jurisdiction to be excessively broad as to duration, scope, activity
or subject, or is unreasonable or unenforceable under applicable law, such provisions will be construed by limiting, reducing, modifying
or amending them so as to be enforceable to the maximum extent permitted by applicable law. If this Agreement is held unenforceable in
any jurisdiction, such holding will not impair the enforceability of the Agreement in any other jurisdiction.

 

(b) This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

 

(c) No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee and
the Company. No waiver by either Party hereto at any time of any breach by the other Party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

 

(d) The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of the New Jersey, without regard to its conflicts of law
principles, unless otherwise mutually agreed upon by the Parties.

 

(e) The Company shall have the
right to assign its rights and obligations under this Agreement to any individual, entity, corporation, or partnership that succeeds to
all or a significant portion of the relevant business or assets of the Company. This Agreement is personal to the Employee, and the Employee
may not assign the Employee’s rights and obligations under this Agreement to any third party.

 

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IN WITNESS WHEREOF, the Employee
has executed this Agreement, and the Company has caused this Agreement to be executed by its duly authorized representative effective
as of the date first set forth above.

 

		 	IDW Media Holdings, Inc.
	 	 	 	 
	 	 	By:	/s/ Howard S. Jonas
	/s/ Allan
    Grafman	 	 	Howard S. Jonas
	Allan Grafman	 	 	Chairman of the Boardex_416156.htm

Exhibit 10.1

 

 

CONVERTIBLE PROMISSORY NOTES PURCHASE AGREEMENT

 

 

This Convertible Promissory Notes Purchase Agreement ("Agreement") is made and effective the August 19, 2022,

 

	BETWEEN:	Fuse Group Holding Inc. (the "Company"), a corporation organized and existing under the laws of the Nevada, with its head office located at:
	 	 
	 	805 W. Duarte Rd. Suite 102 Arcadia CA 91007
	 	 
	AND:	Each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
	 	 

 

WHEREAS, Purchasers desire to purchase from the Company notes in the aggregate sum of Fifty Thousand Dollars USD ($50,000) be evidenced by 3% Convertible Notes.

 

In consideration of the mutual covenants and conditions herein contained, the parties hereby agree, represent and warrant as follows:

 

	 	
			1.

				
			ISSUE OF NOTES

			

 

	 	
			a.

				
			The Company will authorize the issue of its 3% Convertible Promissory Notes (hereinafter called "Notes") to the Purchasers in the aggregate principal amount of $50,000 to be dated on August 19, 2022 to mature on that is twenty-four (24) months after the Purchase Price Date, as defined in the Notes, to bear interest on the unpaid principal thereof at the rate of 3% per annum until maturity, payable on August 19 of 2023 and 2024, respectively, commencing on Purchase Price Date, and after maturity at the rate of 3% per annum until Notes are fully paid, and to be substantially in the form of Exhibit A attached hereto.

			

 

	 	
			b.

				
			For the purposes of calculating interest for any period for which the interest shall be payable, such interest shall be calculated on the basis of a 30-day month and a 365-day year. The Company will promptly and punctually pay to Notes Holders (the “Holders”) the interest on the Notes held by Holders without presentment of the original copies of the Notes. In the event that any of the Holders shall sell or transfer the Notes, it shall notify the Company of the name and address of the transferee and send the assignment notice to the Company for approval. In the event the Company defaults on any installment of interest or principal of any Note and fails to cure such defaults within 90 days after the written notice from such Holder of the Note, then the Holder, at its option, may declare the entire principal and the interest accrued thereon for such Note immediately due and payable and may proceed to enforce the collection thereof.

			

 

	 	
			c.

				
			The Company will also authorize and reserve sufficient shares of its common stock (hereinafter called "Shares") as may be required for issuance upon conversion of the Notes pursuant to the conversion terms hereinafter stated.

			

 

	 	
			d.

				
			The Purchasers have the right at any time after the date of this Agreement until the outstanding balance has been paid in full, at its election, to convert (“Conversion”) all or any portion of the outstanding balance of the Notes into shares of Common Stock of the Company. Conversion notices in the form attached the Notes (each, a “Conversion Notice”) may be effectively delivered

			

 

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to the Company by any method set forth in the “Notices” Section of this Agreement. The Company shall deliver the conversion shares from any conversion to Holder in accordance with the Notes. Subject to adjustment as set forth in this Agreement, the price at which the Purchasers have the right to convert all or any portion of the outstanding balance into Common Stock of the Company is $0.45 per share of Common Stock (the “Conversion Price”).

 

 

	 	
			2.

				
			SALE AND PURCHASE OF NOTES

			

 

The Company will sell the Notes to the Purchasers listed on the signature pages of this Agreement, each of whom agrees to purchase the principal amount of the Notes set opposite his/her/its names, subject to the terms and conditions hereof and in reliance upon the representations and warranties of the Company contained herein, at the purchase price of 100% of the principal amount.

 

 

	 	
			2.

				
			REPRESENTATIONS AND WARRANTIES BY THE COMPANY

			

 

	 	
			a.

				
			Company is a corporation duly organized and existing in good standing under the laws of the State of Nevada has the corporate power to carry on in the business as it is now being conducted.

			

 

	 	
			b.

				
			The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and Notes and otherwise to carry out its obligations hereunder and thereunder.

			

 

	 	
			c.

				
			There is no action or proceeding pending or, to the knowledge of the Company, threatened against the Company before any court or administrative agency, the determination of which might result in any material adverse change in the business of the Company.

			

 

	 	
			d.

				
			The Company is not a party to any contract or agreement or subject to any restriction which materially and adversely affects its business, property or assets, or financial condition, and neither the execution nor delivery of this Agreement, nor the confirmation of the transactions contemplated herein, nor the fulfillment of the terms hereof, nor the compliance with the terms and provisions hereof and of the Notes, will conflict with or result in the breach of the terms, conditions or provisions or constitute a default, under the Articles of Incorporation of the Company or of any Agreement or instrument to which the Company is now a party.

			

 

	 	
			e.

				
			The Company has not declared, set aside, paid or made any dividend or other distributions with respect to its capital stock and has not made or caused to be made directly or indirectly, any payment or other distribution of any nature whatsoever to any of the holders of its capital stock except for regular salary payments for services rendered and the reimbursement of business expenses.

			

 

	 	
			f.

				
			There are no outstanding options or rights to purchase shares of the Company and no outstanding securities with the right of conversion into shares of the Company.

			

 

	 	
			g.

				
			The Company owns or possesses adequate licenses or other rights to use, all patents, trademarks, trade names, trade secrets, and copyrights used in its business. No one has asserted to the Company that its operations infringe on the patents, trademarks, trade secrets or other rights utilized in the operation of its business.

			

 

	 	
			h.

				
			The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Notes, will not be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

			

 

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			3.

				
			REPRESENTATIONS AND WARRANTIES BY THE PURCHASERS

			

 

Each of the Purchasers represents and warrants that:

 

	 	
			a.

				
			Each of the Purchasers is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. This Agreement has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms.

			

 

	 	
			b.

				
			Each of the Purchasers is acquiring the Note for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Note or Shares (this representation and warranty not limiting the Purchaser’s right to sell the Note and Shares in compliance with applicable federal and state securities laws). Each of the Purchaser is acquiring the Note as principal, not as nominee or agent, and not with a view to or for distributing or reselling the Note or Shares or any part thereof in violation of the Securities Act or any applicable state securities law.

			

 

	 	
			c.

				
			Each of the Purchasers is a non-U.S. person (as such term is defined in Rule 902 of Regulation S under the Securities Act) and is not acquiring the Note for the account or benefit of a U.S. person. Each of the Purchasers will not, within one year of the date of the issuance of Note or the Shares to such Purchaser, (i) make any offers or sales of the Note or Shares in the United States or to, or for the benefit of, a U.S. person (in each case, as defined in Regulation S) other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act, or (ii) engage in hedging transactions with regard to the Shares unless in compliance with the Securities Act. Neither such Purchaser nor any of such Purchaser’s affiliates or any person acting on his/her or their behalf has engaged or will engage in directed selling efforts (within the meaning of Regulation S) with respect to the Note or Shares, and all such persons have complied and will comply with the offering restriction requirements of Regulation S in connection with the offering of the Note or Shares outside of the United States.

			

 

	 	
			d.

				
			Each of the Purchasers, either alone or together with his/her/its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Note, and has so evaluated the merits and risks of such investment. Each of the Purchasers are able to bear the economic risk of an investment in the Note or the Shares and, at the present time, is able to afford a complete loss of such investment.

			

 

	 	
			e.

				
			Each of the Purchasers has a net worth in excess of $1,000,000 exclusive of its/his/her residences and that each of the Purchasers is an “accredited investor” as defined in Rule 501(a) under the Securities Act at the time such Purchaser was offered the Note and as of the date hereof.

			

 

	 	
			f.

				
			Each of the Purchasers hereby represents that he/she/it has satisfied his/her/itself as to the full observance by such Purchaser of the laws of the jurisdictions applicable to such Purchaser in connection with the purchase of the Note or the execution and delivery by such Purchaser. Each of the Purchaser’s subscription and payment for, and continued beneficial ownership of, the Note or the Shares will not violate any securities or other laws of such Purchaser’s jurisdiction applicable to such Purchaser.

			

 

3 of 7

 

 

	 	
			g.

				
			Each of the Purchasers understands that the Note or the Shares have not been, and will not be, registered under the Securities Act or applicable securities laws of any state or country and therefore the Note or the Shares cannot be sold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and applicable state securities laws or exemptions from such registration requirements are available. The Company shall be under no obligation to register the Notes or Shares under the Securities Act and applicable state securities laws, and any such registration shall be in the Company’s sole discretion.

			

 

	 	
			h.

				
			Each of the Purchasers acknowledges that he/she/it has had the opportunity to review the information of the Company and the SEC reports filed by the Company and has been afforded (i) the opportunity to ask such questions as he/she/it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Note and the merits and risks of investing in the Note; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate his/her/its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment

			

 

	 	
			i.

				
			Each of the Purchasers is not purchasing the Note as a result of any advertisement, article, notice or other communication regarding the Notes published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

			

 

 

	 	
			4.

				
			CONVERSION

			

 

	 	
			a.

				
			Upon conversion of the Notes, all accrued and unpaid interest on the principal amount converted shall be paid in cash to the Holder by the Company.

			

 

	 	
			b.

				
			In case the Company shall at any time divide its outstanding shares of Common Stock of the Company (“Common Stock”) into a greater number of shares, the conversion price in effect immediately prior to such subdivision should be proportionately reduced, and, conversely, in the case of outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the actual conversion price in effect immediately prior to such combination shall be proportionately increased.

			

 

	 	
			c.

				
			No fractional share of Common Stock shall be issued upon conversion of any of the Notes. If any Holder of the Notes shall have converted all the Notes held by him/her/it other than a principal amount so small that less than a whole share of Common Stock would be issuable upon conversion thereof, the Company may elect to prepay such balance, with interest accrued thereon to the date fixed for prepayment or leave the same outstanding until the maturity of the Note.

			

 

	 	
			d.

				
			In any reclassification of outstanding shares of Common Stock (other than a change in stated value or from no par to par value) or in the case of any consolidation or merger of the Company with any other company and the other company will be the surviving company, the Company shall place a condition precedent to such transaction, so that each Holder of the Notes then outstanding shall have the right thereafter to convert his/her/its Note into the corresponding amount of shares and other securities upon such reclassification, consolidation or merger as if such Note had been converted immediately prior to such reclassification, consolidation or merger.

			

 

 

	 	
			5.

				
			COVENANTS

			

 

4 of 7

 

 

	 	
			a.

				
			The Company covenants that so long as the Notes are outstanding, it will deliver to the Holders thereof as soon as practical, the quarterly or annual report of the Company filed with SEC including consolidated financial statements. The public filing with SEC shall be considered that such report has been delivered to the Holders.

			

 

	 	
			b.

				
			The Company covenants that, so long as any of the Notes are outstanding, it will permit any Holder of the Notes to visit and inspect, at the Holder's expense, any of the property of the Company, including its books and records, and to discuss affairs, finances and accounts with its officers, provided such visit should be in normal business hours with reasonable advance notice. The Holders agree that each of them will keep any business information of the Company in confidence and will not trade the Company’s shares when it has any material non-public information of the Company.

			

 

	 	
			c.

				
			The Company covenants that, without the written consent of the Holders of more than 51% in principal amount of the Notes, it will not:

			

 

      Create or suffer to exist any mortgage, pledge, encumbrance, lien or charge of any kind on any of its properties or assets, whether now owned or hereafter acquired except for (i) mortgages, encumbrances, liens or charges which are now in existence; (ii) mortgages, liens, charges and encumbrances (a) for taxes, assessments or governmental charges or levies on property of the Company if the same shall not be due or delinquent or thereafter can be paid without penalty, or being contested in good faith and by appropriate proceedings; (b) of mechanics and material men for sums not yet due or being contested in good faith and by appropriate proceedings; or (c) in connection with workers' compensation, unemployment insurance and other state employment legislation.

 

 

	 	
			6.

				
			EVENT OF DEFAULT

			

 

	 	
			a.

				
			The default on any installment payment of interest or principal of any Note and fails to cure such default within 90 days after the written notice from the Holder of such Note will be considered as an event of default. The Holder of such Note may, at its option, declare the entire principal and interest accrued thereon immediately due and payable and may proceed with collection due to such event of default.

			

 

	 	
			b.

				
			If the Company has made a material misrepresentation in connection with this Agreement or with the transactions contemplated by this Agreement, or if any proceeding involving the Company is commenced under any receivership, bankruptcy, insolvency, such event shall be deemed a default which will immediately entitled Holders of the Notes, at their option and without notice, to declare the entire amount of interest accrued thereon immediately due and payable and proceed to enforce the collection thereof.

			

 

 

	 	
			7.

				
			MISCELLANEOUS

			

 

	 	
			a.

				
			Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (California time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (California time) on any business day, (c) the second (2nd) business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice

			

 

5 of 7

 

 

is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

	 	
			b.

				
			This Agreement may not be modified, amended or terminated except by written agreement executed by all the parties hereto.

			

 

	 	
			c.

				
			The waiver of any breach or default hereunder shall not be considered valid unless in writing and signed by the party such waiver is sought and no waiver shall be deemed a waiver of any subsequent breach or default of same.

			

 

	 	
			d.

				
			The paragraph headings contained herein are for the purpose of convenience only and are not intended to define or limit the contents of such.

			

 

	 	
			e.

				
			The validity, construction, interpretation and enforceability of this Agreement and the Notes executed pursuant to this Agreement shall be determined and governed by the laws of the State of California. Any disputes that arise under this Agreement, shall be heard only in the state or federal courts located in the City of Los Angeles, State of California.

			

 

	 	
			f.

				
			This Agreement may be executed in one or more counterparts, each of which shall be deemed an original.

			

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Convertible Promissory Notes Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

       

 

 

	FUSE GROUP HOLDING INC.  	Address for Notice:

 

	 	 	 
	
			By:

				
			/s/Umesh Patel

				
			Fax:

			
	 	
			Name: Umesh Patel

			Title: Chief Executive Officer

				
			E-mail:

			

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

Convertible Promissory Note Agreement

6 of 7

 

 

 

[PURCHASER SIGNATURE PAGES TO CONVERTIBLE PROMISSORY NOTES PURCHASE AGREEMENT]

 

 

IN WITNESS WHEREOF, the undersigned have caused this Convertible Promissory Notes Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

Name of Purchaser: Liu Marketing (M) SDN BHD

 

Signature of Authorized Signatory of Purchaser: /s/Liu Jun

 

Name of Authorized Signatory: Liu Jun

 

Title of Authorized Signatory: Chief Executive Officer

 

Email Address of Authorized Signatory:

 

Facsimile Number of Authorized Signatory:

 

Address for Notice to Purchaser: Sunway Velocity, 55100 Kuala Lumpur, Malaysia

 

Address for Delivery of Notes to Purchaser (if not same as address for notice): Subscription Amount: $50,000          

 

EIN Number:

 

 

Convertible Promissory Note Agreement

7 of 7

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