Document:

Exhibit

EXHIBIT 4.3

SYSTEMAX, INC.
 
2018 EMPLOYEE STOCK PURCHASE PLAN
 
1.                                            Purpose.  The purpose of the Plan is to provide employees of the Company and its Designated Companies with an opportunity to purchase Common Stock through accumulated Contributions.  The Company intends for the Plan to have two components: a component that is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “423 Component”) and a component that is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “Non-423 Component”).  The provisions of the 423 Component, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.  An option to purchase shares of Common Stock (“Shares”) under the Non-423 Component will be granted pursuant to rules, procedures, or sub-plans adopted by the Administrator designed to achieve tax, securities laws, or other objectives for Eligible Employees and the Company.  Except as otherwise provided herein or as determined by the Administrator, the Non-423 Component will operate and be administered in the same manner as the 423 Component.
 
2.                                      Definitions.
 
(a)                                 “Administrator” means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 14.
 
(b)                                 “Affiliate” means any entity, other than a Subsidiary, in which the Company has an equity or other ownership interest.
 
(c)                                  “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where options are, or will be, granted under the Plan.
 
(d)                                 “Board” means the Board of Directors of the Company.
 
(e)                                  “Change in Control” means the occurrence of any of the following events:

(i)                           A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group as defined under applicable SEC regulation (“Person”), acquires ownership of the stock of the Company that, together with the stock beneficially owned by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to beneficially own more than fifty percent (50%) of the total voting power of the stock of the Company as of the date of adoption of the Plan by the Board will not be considered a Change in Control.  Further, if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event shall not be considered a Change in Control under this subsection (i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from beneficial ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities or through entities or vehicles established for estate planning purposes, such as trusts; or
 
(ii)                        A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12)-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.  For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
 
(iii)                     A change in the beneficial ownership of all or substantially  all of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection, the following will not constitute a change in the beneficial ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is directly or indirectly controlled by the Company’s stockholders immediately after the transfer in a transaction approved by the disinterested members of the Board of Directors or an independent committee thereof, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock in a transaction approved by the disinterested members of the Board of Directors or an independent committee thereof, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is beneficially owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company in a transaction approved by the disinterested members of the Board of Directors or an independent committee thereof, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is beneficially owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3).  For purposes of this subsection, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
 
For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase, or acquisition of stock, or similar business transaction with the Company.
 
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final U.S. Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
 
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be beneficially owned in substantially the same proportions by the persons who beneficially owned the Company’s securities immediately before such transaction.
  
(f)                                   “Code” means the U.S. Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code will include such section, any valid regulation or other official applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
 
(g)                                  “Committee” means a committee of the Board appointed in accordance with Section 14 hereof.
 
(h)                                 “Common Stock” means the common stock of the Company.
 
(i)                                     “Company” means Systemax, Inc., a Delaware corporation, or any successor thereto.
 
(j)                                    “Compensation” includes an Eligible Employee’s base straight time gross earnings and includes commissions and payments for overtime and shift premium, but excludes bonuses and other incentive compensation. The Administrator, in its discretion, may, on a uniform and nondiscriminatory basis, establish a different definition of Compensation for a subsequent Offering Period.
 
(k)                                 “Contributions” means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of options granted pursuant to the Plan.
 
(l)                                     “Designated Company” means any Subsidiary or Affiliate of the Company that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan.  For purposes of the 423 Component, only the Company and its Subsidiaries may be Designated Companies, provided, however that at any given time, a Subsidiary that is a Designated Company under the 423 Component will not be a Designated Company under the Non-423 Component.
 
(m)                             “Director” means a member of the Board.
 
(n)                                 “Eligible Employee” means any individual who is a common law employee providing services to the Company or a Designated Company and is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under applicable local law) for purposes of any separate Offering or the Non-423 Component.  For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws.  Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the commencement of such leave.  Notwithstanding the foregoing, the Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury Regulation Section 1.423-2) that the definition of Eligible Employee will or will not, as applicable, include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or (v) is a highly compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect to each Offering in an identical manner to all highly compensated individuals of the Employer whose Eligible Employees are participating in that Offering.  Each exclusion will be applied with respect to an Offering in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii).
 
(o)                                 “Employer” means the employer of the applicable Eligible Employee(s).
 
(p)                                 “Enrollment Date” means the first Trading Day of an Offering Period.
 
(q)                                 “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
 
(r)                                    “Exercise Date” means a date on which each outstanding option granted under the Plan will be exercised (except if the Plan has been terminated), as may be determined by the Administrator, in its discretion and on a uniform and nondiscriminatory basis from time to time prior to an Enrollment Date for all options to be granted on such Enrollment Date.  For purposes of clarification, there may be multiple Exercise Dates during an Offering Period.
 
(s)                                   “Fair Market Value” means, as of any date, the value of a Share of Common Stock determined as follows:
 
(i)                           the Fair Market Value will be the closing sales price for Common Stock as quoted on any established stock exchange or national market system (including without limitation the New York Stock Exchange) on which the Common Stock is listed on the date of determination (or the closing bid, if no sales were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable.  If the determination date for the Fair Market Value occurs on a non-trading day (i.e., a weekend or holiday), the Fair Market Value will be such price on the immediately preceding trading day, unless otherwise determined by the Administrator.  In the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator.  The determination of fair market value for purposes of tax withholding may be made in the Administrator’s discretion subject to Applicable Laws and is not required to be consistent with the determination of Fair Market Value for other purposes.
 
(ii)                        In the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator.
 
(t)                                    “Fiscal Year” means a fiscal year of the Company.
 
(u)                                 “New Exercise Date” means a new Exercise Date if the Administrator shortens any Offering Period then in progress.
 
(v)                                 “Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4.  For purposes of the Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering.  To the extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each Offering need not be identical provided that the terms of the Plan and an Offering together satisfy U.S. Treasury Regulation Section 1.423-2(a)(2) and (a)(3).
 
(w)                               “Offering Period” means a period beginning on such date as may be determined by the Administrator in its discretion and ending on such Exercise Date as may be determined by the Administrator in its discretion, in each case on a uniform and nondiscriminatory basis.  The duration and timing of Offering Periods may be changed pursuant to Sections 4, 20, and 30.
 
(x)                                 “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
 
(y)                                 “Participant” means an Eligible Employee that participates in the Plan.
 
(z)                                  “Plan” means this Systemax, Inc. 2018 Employee Stock Purchase Plan.
 
(aa)                          “Purchase Period” means the period, as determined by the Administrator in its discretion on a uniform and nondiscriminatory basis, during an Offering Period that commences on the Offering Period’s Enrollment Date and ends on the next Exercise Date, except that if the Administrator determines that more than one Purchase Period should occur within an Offering Period, subsequent Purchase Periods within such Offering Period commence after one Exercise Date and end with the next Exercise Date at such time or times as the Administrator determines prior to the commencement of the Offering Period.
 
(bb)                          “Purchase Price” means the price per Share of the Shares purchased under any option granted under the Plan as determined by the Administrator from time to time, in its discretion and on a uniform and nondiscriminatory basis for all options to be granted on an Enrollment Date.  With respect to any option granted under the 423 Component, the initial Purchase Price shall not be less than the lesser of 85% of the Fair Market Value of a Share on (i) the Enrollment Date and (ii) the Exercise Date, or such other amount as may be required under Section 423 of the Code.
 
(cc)                            “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
 
(dd)                          “Trading Day” means a day on which the national stock exchange upon which the Common Stock is listed is open for trading.
 
(ee)                            “U.S. Treasury Regulations” means the Treasury regulations of the Code.  Reference to a specific Treasury Regulation will include such Treasury Regulation, the section of the Code under which such regulation was promulgated, and any comparable provision of any future legislation or regulation amending, supplementing, or superseding such Section or regulation.
 
3.                                      Eligibility.
 
(a)                                 Offering Periods.  Any Eligible Employee on a given Enrollment Date will be eligible to participate in the Plan, subject to the requirements of Section 5.
 
(b)                                 Non-U.S. Employees.  Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code.  In the case of the Non-423 Component, Eligible Employees may be excluded from participation in the Plan or an Offering if the Administrator determines that participation of such Eligible Employees is not advisable or practicable or if the Administrator determines to make such exclusion in its sole discretion.
 
(c)                                  Limitations.  Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate, which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.
 
4.                                      Offering Periods.  Offering Periods will expire on the earliest to occur of (i) the completion of the purchase of Shares on the last Exercise Date occurring within twenty-seven (27) months of the applicable Enrollment Date on which the option to purchase Shares was granted, or (ii) such shorter period as may be established by the Administrator from time to time, in its discretion and on a uniform and nondiscriminatory basis, prior to an Enrollment Date for all options to be granted on such Enrollment Date.
 
5.                                      Participation.  An Eligible Employee may participate in the Plan by (i) submitting to the Company’s stock administration office (or its designee) a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose (which may be an on-line electronic agreement or an agreement similar to the form attached hereto as Exhibit A) or (ii) following an electronic or other enrollment procedure determined by the Administrator, in either case on or before a date determined by the Administrator prior to an applicable Enrollment Date.
 
6.                                      Contributions.
 
(a)                                 At the time a Participant enrolls in the Plan pursuant to Section 5, he or she will elect to have Contributions (in the form of payroll deductions or otherwise, to the extent permitted by the Administrator) made on each pay day during the Offering Period in an amount that will be subject to such limits as the Administrator may establish from time to time, in its discretion and on a uniform and nondiscriminatory basis, for all options to be granted on any Enrollment Date.  The Administrator, in its sole discretion, may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Purchase Period.  A Participant’s subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
 
(b)                                 In the event Contributions are made in the form of payroll deductions, such payroll deductions for a Participant will commence on the first pay day following the Enrollment Date and will end on the last pay day on or prior to the last Exercise Date of such Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10 hereof.
  
(c)                                  All Contributions made for a Participant will be credited to his or her account under the Plan and Contributions will be made in whole percentages of his or her Compensation only.  A Participant may not make any additional payments into such account.
 
(d)                                 A Participant may discontinue his or her participation in the Plan as provided under Section 10.  Except as may be permitted by the Administrator, as determined in its sole discretion, a Participant may not change the rate of his or her Contributions during an Offering Period.
 
(e)                                  Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), a Participant’s Contributions may be decreased to zero percent (0%) at any time during a Purchase Period.  Subject to Section 423(b)(8) of the Code and Section 3(c) hereof, Contributions will recommence at the rate originally elected by the Participant effective as of the beginning of the first Purchase Period scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 10.
 
(f)                                   Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow Participants to participate in the Plan via cash contributions instead of payroll deductions if (i) payroll deductions are not permitted under applicable local law, (ii) the Administrator determines that cash contributions are permissible under Section 423 of the Code; or (iii) the Participants are participating in the Non-423 Component.
 
(g)                                  At the time the option is exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of (or any other time that a taxable event related to the Plan occurs), the Participant must make adequate provision for the Company’s or Employer’s federal, state, local or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock (or any other time that a taxable event related to the Plan occurs).  At any time, the Company or the Employer may, but will not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Eligible Employee.  In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
 
7.                                      Grant of Option.  On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of Shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event will an Eligible Employee be permitted to purchase during each Purchase Period more than a maximum number of Shares of Common Stock determined by the Administrator prior to the first Offering Period, if any (with such number subject to any adjustment pursuant to Section 19) and provided further that such purchase will be subject to the limitations set forth in Sections 3(c) and 13.  The Eligible Employee may accept the grant of such option by electing to participate in the Plan in accordance with the requirements of Section 5.  The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of Shares of Common Stock that an Eligible Employee may
purchase during each Purchase Period.  Exercise of the option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10.  The option will expire on the last day of the Offering Period.
 
8.                                      Exercise of Option.
 
(a)                                 Unless a Participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of Shares of Common Stock will be exercised automatically on each Exercise Date, and the maximum number of full Shares subject to the option will be purchased for such Participant at the applicable Purchase Price with the accumulated Contributions from his or her account.  No fractional Shares of Common Stock will be purchased; any Contributions accumulated in a Participant’s account, which are not sufficient to purchase a full Share will be retained in the Participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10.  Any other funds left over in a Participant’s account after the Exercise Date will be returned to the Participant.  During a Participant’s lifetime, a Participant’s option to purchase Shares hereunder is exercisable only by him or her.
 
(b)                                 If the Administrator determines that, on a given Exercise Date, the number of Shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of Shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of Shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the Shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all Participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect or (y) provide that the Company will make a pro rata allocation of the Shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20.  The Company may make a pro rata allocation of the Shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date.
 
9.                                      Delivery.  As soon as reasonably practicable after each Exercise Date on which a purchase of Shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the Shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator.  The Company may permit or require that Shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of Share transfer.  The Company may require that Shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such Shares.  No Participant will have any voting, dividend, or other stockholder rights with respect to Shares of Common Stock subject to any option granted under the Plan until such Shares have been purchased and delivered to the Participant as provided in this Section 9.

10.                               Withdrawal.
 
(a)                                 A Participant may withdraw all but not less than all the Contributions credited to his or her account and not yet used to exercise his or her option under the Plan at any time, subject to any limitations imposed by the Administrator and/or by Company policies, by (i) submitting to the Company’s stock administration office (or its designee) a written notice of withdrawal in the form determined by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure determined by the Administrator.  All of the Participant’s Contributions credited to his or her account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of Shares will be made for such Offering Period.  If a Participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the Plan in accordance with the provisions of Section 5.
 
(b)                                 A Participant’s withdrawal from an Offering Period will not have any effect on his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.
 
11.                               Termination of Employment.  Upon a Participant’s ceasing to be an Eligible Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase Shares of Common Stock under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such Participant’s option will be automatically terminated.  Unless otherwise provided by the Administrator, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company will not be treated as terminated under the Plan; however, if a Participant transfers from an Offering under the 423 Component to the Non-423 Component, the exercise of the option will be qualified under the 423 Component only to the extent it complies with Section 423 of the Code, unless otherwise provided by the Administrator.
 
12.                               Interest.  No interest will accrue on the Contributions of a participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, will apply to all Participants in the relevant Offering under the 423 Component, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).
 
13.                               Stock.
 
(a)         Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of Shares of Common Stock that will be made available for sale under the Plan will be 500,000 Shares of Common Stock.  
 
(b)                                 Until the Shares of Common Stock are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will have only the rights of an unsecured creditor with respect to such Shares, and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such Shares.
 
(c)                                  Shares of Common Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse, as the Participant may elect.
 
14.                               Administration.  The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws.  The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to delegate ministerial duties to any of the Company’s employees, to designate separate Offerings under the Plan, to designate Subsidiaries and Affiliates of the Company as participating in the 423 Component or Non-423 Component, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for the administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans may take precedence over other provisions of this Plan, with the exception of Section 13(a) hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan will govern the operation of such sub-plan).  Unless otherwise determined by the Administrator, the Eligible Employees eligible to participate in each sub-plan will participate in a separate Offering or in the Non-423 Component.  Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements.  The Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees residing solely in the U.S.  Every finding, decision, and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all parties.
 
15.                               Designation of Beneficiary.
 
(a)                                 If permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any Shares of Common Stock and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such Participant of such Shares and cash.  In addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option.  If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
 
(b)                                 Such designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Administrator.  In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company will deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
 
(c)                                  All beneficiary designations will be in such form and manner as the Administrator may designate from time to time.  Notwithstanding Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by Participants in non-U.S. jurisdictions to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
 
16.                               Transferability.  Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive Shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the Participant.  Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.
 
17.                               Use of Funds.  The Company may use all Contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions except under Offerings or for Participants in the Non-423 Component for which Applicable Laws require that Contributions to the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited with an independent third party.  Until Shares of Common Stock are issued, Participants will have only the rights of an unsecured creditor with respect to such Contributions and such Shares.
 
18.                               Reports.  Individual accounts will be maintained for each Participant in the Plan.  Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of Shares of Common Stock purchased and the remaining cash balance, if any.
 
19.                               Adjustments, Dissolution, Liquidation, Merger, or Change in Control.
 
(a)                                 Adjustments.  In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock (collectively, “Equity Restructuring”) occurs, the Administrator (i) shall equitably adjust the terms of each outstanding option as it deems appropriate to reflect the Equity Restructuring, which may include, adjusting the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan that has not yet been exercised, and (ii) shall adjust the numerical limits of Sections 7 and 13 and the number and class of Common Stock that may be delivered under the Plan. For purposes of this Section 19(a), “Equity Restructuring” means a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split (including a reverse stock split), spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the share price of Shares (or other Company securities) and causes a change in the per-share value of the Shares underlying outstanding options granted pursuant to the Plan.
 
(b)                                 Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a New Exercise Date, and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator.  The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation.  The Administrator will notify each Participant in writing or electronically, prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.
 
(c)                                  Merger or Change in Control.  In the event of a merger or Change in Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period with respect to which such option relates will be shortened by setting a New Exercise Date on which such Offering Period will end.  The New Exercise Date will occur before the date of the Company’s proposed merger or Change in Control.  The Administrator will notify each Participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.
 
20.                               Amendment or Termination.
 
(a)                                 The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason.  If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of Shares of Common Stock on the next Exercise Date (which may be sooner than originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 19).  If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts that have not been used to purchase Shares of Common Stock will be returned to the Participants (without interest thereon, except as otherwise required under Applicable Laws, as further set forth in Section 12 hereof) as soon as administratively practicable.
 
(b)                                 Without stockholder consent and without limiting Section 20(a), the Administrator will be entitled to change the Offering Periods or Purchase Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed Contribution elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable that are consistent with the Plan.
 
(c)                                  In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:
  
(i)             amending the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time;
 
(ii)          altering the Purchase Price for any Offering Period or Purchase Period including an Offering Period or Purchase Period underway at the time of the change in Purchase Price;
 
(iii)       shortening any Offering Period or Purchase Period by setting a New Exercise Date, including an Offering Period or Purchase Period underway at the time of the Administrator action;
 
(iv)      reducing the maximum percentage of Compensation a Participant may elect to set aside as Contributions; and
 
(v)         reducing the maximum number of Shares of Common Stock a Participant may purchase during any Offering Period or Purchase Period.
 
Such modifications or amendments will not require stockholder approval or the consent of any Participants.
 
21.                               Notices.  All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
 
22.                               Conditions Upon Issuance of Shares.  Shares of Common Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the U.S. Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance.
 
As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
 
23.                               Code Section 409A.  The 423 Component of the Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A.  In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Code Section 409A.  Notwithstanding the foregoing, the Company will have no liability to a Participant or any other party if any option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto.  The Company makes no representation that any option to purchase Common Stock under the Plan is compliant with Code Section 409A.
 
24.                               Term of Plan.  The Plan will become effective upon the later to occur of (i) its adoption by the Board or (ii) the business day immediately prior to the Registration Date.  It will continue in effect for a term of twenty (20) years, unless sooner terminated under Section 20.
 
25.                               Stockholder Approval.  The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board.  Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
 
26.                               Governing Law.  The Plan will be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions).
 
27.                               No Right to Employment.  Participation in the Plan by a Participant will not be construed as giving a Participant the right to be retained as an employee of the Company or a Subsidiary or affiliate of the Company, as applicable.  Further, the Company or a Subsidiary or affiliate of the Company may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.
 
28.                               Severability.  If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
 
29.                               Compliance with Applicable Laws.  The terms of this Plan are intended to comply with all Applicable Laws and will be construed accordingly.
 

1Exhibit 10.1

 

NONCOMPETE ESCROW AGREEMENT

 

ESCROW AGREEMENT (“Agreement”)
dated as of August ___, 2018 by and among Chicken Soup for the Soul Entertainment Inc., a Delaware corporation (“CSSE”),
Adam Mosam (“Mosam”), who is the principal stockholder of Pivotshare, Inc. (“Pivotshare”), and Graubard
Miller, as escrow agent (the “Escrow Agent”). Capitalized terms used herein that are not otherwise defined herein shall
have the meanings ascribed to them in the stock purchase agreement by and among CSSE, Pivotshare, Mosam and all of the other stockholders
of Pivotshare, dated as of August 14, 2018 (the “Stock Purchase Agreement”).

 

WHEREAS, under the terms
of the Stock Purchase Agreement, (a) CSSE has acquired 100% of the outstanding capital stock of Pivotshare, (b) Pivotshare has
become a wholly owned subsidiary of CSSE and (c) Mosam has been issued, as a part of the Purchase Price under the Stock Purchase
Agreement, 74,235 shares of CSSE’s Class A common stock (the “Mosam Stock”);

 

WHEREAS, all of the Mosam
Stock is being deposited into escrow with the Escrow Agent (the “Escrow Stock”), pursuant to Section 1.4 of the Stock
Purchase Agreement, to serve as security for the noncompete and nonsolicitation obligations of Mosam and others under Section 5.5
of the Stock Purchase Agreement; and

 

WHEREAS, the parties desire
to enter into this Agreement to establish an escrow fund as a remedy, but not the sole remedy, for any breaches of the obligations,
covenants and restrictions prescribed by Section 5.5 of the Stock Purchase Agreement.

 

The parties agree as follows:

 

1.            (a)          Concurrently
with the execution hereof, Mosam (or CSSE, on his behalf) is delivering to the Escrow Agent, to be held in escrow pursuant to the
terms of this Agreement, certificates representing the Escrow Stock. The Escrow Stock delivered to the Escrow Agent during the
period such Escrow Stock is held in escrow under the terms of this Agreement is referred to herein in the aggregate as the “Escrow
Fund.”

 

(b)          The
Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse the Escrow Fund pursuant to the terms and
conditions hereof. It shall treat the Escrow Fund as a trust fund in accordance with the terms of this Agreement. The Escrow Agent’s
duties hereunder shall terminate upon its distribution of the entire Escrow Fund in accordance with this Agreement.

 

(c)          Except
as herein provided, Mosam shall retain all of his rights as holder of the shares of Escrow Stock until the earlier of (i) the date
such shares are forfeited or returned to CSSE under the terms of this Agreement and (ii) the end of the escrow period applicable
to such shares. The rights retained by Mosam with respect to the Escrow Stock, shall include the right to vote such shares (to
the extent votable) and the right to receive any dividends declared and paid by CSSE on its Class A common stock. Accordingly,
no such dividends shall be deemed part of the Escrow Fund.

 

    	 	 	 

     

    

  

(d)          Subject
to the Pending Claims Reserve prescribed by Section 3 of this Agreement, to the extent no claims have been made by CSSE on the
Escrow Stock in accordance with this Agreement, the shares of Escrow Stock shall be released from escrow and delivered to Mosam
as follows: (i) within five business days following the six-month anniversary of the date of this Agreement, 25% of the shares
shall be released from escrow and delivered to Mosam, (ii) within five business days of the one-year anniversary of the date of
this Agreement, an additional 25% of the shares shall be released from escrow and delivered to Mosam, and (iii) thereafter, the
balance of the shares shall be released in equal monthly tranches (within five business days of the end of each such month) during
the second and third years immediately following such one-year anniversary. Notwithstanding the above, in the event that Mosam’s
employment is terminated prior to the end of the Escrow Period, by CSSE without Cause or by Mosam with Good Reason (with such capitalized
terms to have the meanings ascribed to them in Mosam’s Employment Agreement, dated as of the date hereof), then all of the
Escrow Stock shall immediately be released to Mosam.

 

(e)          During
the period that any shares of Escrow Stock are held in escrow under the terms of this Agreement (the “Escrow Period”)
and, subject to the additional restrictions prescribed by any lock-up provisions contained in the Stock Purchase Agreement, no
sale, transfer or other disposition may be made of any shares while same constitutes Escrow Stock. During the Escrow Period, Mosam
shall not pledge or grant a security interest in such shares of Escrow Stock included in the Escrow Fund or grant a security interest
in his rights therein or under this Agreement.

 

2.            (a)          In
the event CSSE determines that Mosam or any other person subject to Section 5.5 of the Stock Purchase Agreement has breached their
respective covenants contained therein, CSSE may make a claim for 100% of the Escrow Fund, by giving notice (a “Notice”)
to Mosam, with a copy to the Escrow Agent, specifying (i) the circumstances and material facts relating to the breach of Section
5.5. CSSE also shall deliver to the Escrow Agent (with a copy to Mosam), concurrently with its delivery to the Escrow Agent of
the Notice, a certification as to the date on which the Notice was delivered to Mosam.

 

(b)          Mosam
shall give a notice to CSSE (with a copy to the Escrow Agent and CSSE) (a “Counter Notice”), within 10 days following
the date of receipt (as specified in CSSE’s certification) by Mosam of a copy of the Notice, disputing or accepting the claims
set forth in the Notice. In the event of a dispute, CSSE and Mosam shall attempt to resolve such dispute by voluntary settlement
as provided in paragraph 2(c) below. If no Counter Notice with respect to the claims in the Notice is received by the Escrow Agent
from Mosam within such 10-day period, the claims shall be deemed to be an Established Claim (as hereinafter defined).

 

(c)          Upon
delivery of a Counter Notice by Mosam to CSSE and the Escrow Agent, CSSE and Mosam shall, during the period of 10 days following
the delivery of such Counter Notice or such greater period of time as the parties may agree to in writing (with a copy to the Escrow
Agent), attempt to resolve the dispute in good faith with respect to which the Counter Notice was given. If CSSE and Mosam shall
reach a settlement with respect to any such dispute, they shall jointly deliver written notice of such settlement to the Escrow
Agent specifying the terms thereof.

 

    	 	2	 

     

    

  

(d)          If
CSSE and Mosam cannot resolve a dispute prior to expiration of the 10-day period referred to in paragraph 2(c), above, or such
longer period as the parties may have agreed to in writing, then such dispute shall be submitted (and either party may submit such
dispute) for arbitration in accordance with Section 8.

 

(e)          As
used in this Agreement, “Established Claim” means any (i) claim for the Escrow Fund deemed established pursuant to
the last sentence of paragraph 2(b) above, (ii) any claims that are resolved in favor of CSSE by settlement pursuant to Section
2(c) above resulting in an award of shares from the Escrow Fund to CSSE, or (iii) any claim established by the decision of an arbitrator
pursuant to paragraph 2(d) above and in accordance with Section 8, resulting in an award of shares from the Escrow Fund to CSSE.

 

(f)           (i)           Promptly
after a claim becomes an Established Claim, CSSE and Mosam shall have the sole right to jointly deliver a notice to the Escrow
Agent (a “Payment Notice”) directing the Escrow Agent to issue all or a portion of the Escrow Fund to CSSE, and the
Escrow Agent promptly shall deliver the applicable portion of the Escrow Fund to CSSE.

 

(ii)         The
parties hereto (other than the Escrow Agent) agree that the foregoing right to make payments of Established Claims in shares of
Escrow Stock may be made notwithstanding any other agreements restricting or limiting the ability of Mosam to sell any shares of
Escrow Stock or otherwise. Mosam and CSSE shall be required to exercise utmost good faith in all matters relating to the preparation
and delivery of each Payment Notice.

 

3.            (a)          If,
at the end of the Escrow Period with respect to shares of Escrow Stock, there are any claims with respect to which Notices have
been received but which have not been resolved pursuant to Section 2 hereof or in respect of which the Escrow Agent has not been
notified of, and received a copy of, a final determination (after exhaustion of any appeals) by a court of competent jurisdiction,
as the case may be (in either case, “Pending Claims”), and which, if resolved or finally determined in favor of CSSE,
would result in a payment to CSSE of any portion of the Escrow Fund, the Escrow Agent shall retain (the “Pending Claims Reserve”)
all shares of Escrow Stock then held in escrow. Thereafter, if any Pending Claim becomes an Established Claim, CSSE and Mosam shall
jointly deliver to the Escrow Agent a Payment Notice directing the Escrow Agent to deliver to CSSE the number of shares in the
Pending Claims Reserve in respect thereof determined in accordance with paragraph 2(f) above and to deliver to Mosam the remaining
shares in the Pending Claims Reserve (if the claim is resolved by settlement between CSSE and Mosam or adjudicated with a settlement
or finding that less than 100% of the Escrow Fund shall be delivered to CSSE), all as specified in such Payment Notice. If any
Pending Claim is resolved against CSSE in its entirety, CSSE and Mosam shall deliver to the Escrow Agent a Joint Notice directing
the Escrow Agent to deliver to Mosam the shares of Escrow Stock then held in escrow.

 

(b)          At
the end of the Escrow Period applicable to shares of Escrowed Stock, upon receipt of a Joint Notice, the Escrow Agent shall distribute
and deliver to Mosam certificates representing the remaining shares of Escrow Stock then in the Escrow Fund other than the shares
in the Pending Claims Reserve.

 

    	 	3	 

     

    

  

4.            The
Escrow Agent, CSSE and Mosam shall cooperate in all respects in implementing the procedures necessary to affect such payments.

 

5.            (a)          The
Escrow Agent undertakes to perform only such duties as are expressly set forth herein. It is understood that the Escrow Agent is
not a trustee or fiduciary and is acting hereunder merely in a ministerial capacity.

 

(b)          The
Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment,
and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein
contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement
unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights
of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

 

(c)          The
Escrow Agent’s sole responsibility upon receipt of any notice requiring any payment to CSSE pursuant to the terms of this
Agreement or, if such notice is disputed by CSSE or Mosam, the settlement with respect to any such dispute, whether by virtue of
joint resolution, arbitration or determination of a court of competent jurisdiction, is to pay to CSSE the amount specified in
such notice, and the Escrow Agent shall have no duty to determine the validity, authenticity or enforceability of any specification
or certification made in such notice.

 

(d)          The
Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights
or powers conferred upon it by this Agreement, and may consult with counsel of its own choice and shall have full and complete
authorization and indemnification under Section 5(g), below, for any action taken or suffered by it hereunder in good faith and
in accordance with the opinion of such counsel.

 

(e)          The
Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties
hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective
at such time that the Escrow Agent shall turn over the Escrow Fund to a successor escrow agent appointed jointly by CSSE and Mosam.
If no new escrow agent is so appointed within the 60-day period following the giving of such notice of resignation, the Escrow
Agent may deposit the Escrow Fund with any court it reasonably deems appropriate. The Escrow Agent shall resign and be discharged
from its duties as escrow agent hereunder if so requested in writing at any time by the parties hereto, jointly, provided, however,
that such resignation shall become effective only upon acceptance of appointment by a successor escrow agent as provided in this
Section 5(e).

 

    	 	4	 

     

    

  

(f)           The
Escrow Agent shall be indemnified and held harmless by CSSE from and against any expenses, including counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way,
directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Fund
held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent.
Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding,
the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent,
in its sole discretion, may commence an action in the nature of interpleader in the any state or federal court located in New York
County, State of New York.

 

(g)          The
Escrow Agent shall be entitled to reimbursement from CSSE for all expenses paid or incurred by it in the administration of its
duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes
or other governmental charges.

 

(h)          From
time to time on and after the date hereof, CSSE and Mosam shall deliver or cause to be delivered to the Escrow Agent such further
documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry
out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it
is protected in acting hereunder.

 

(i)          Notwithstanding
anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or
its own willful misconduct.

 

6.            This
Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions
of any agreement among the parties hereto except this Agreement and the Put/Call Escrow Agreement and shall have no duty to inquire
into the terms and conditions of any agreement made or entered into in connection with this Agreement, including, without limitation,
the Stock Purchase Agreement.

 

7.            This
Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, successors, assigns and legal
representatives shall be governed by and construed in accordance with the law of New York applicable to contracts made and to be
performed therein. This Agreement cannot be changed or terminated except by a writing signed by CSSE, the Escrow Agent and a majority
of Mosam.

 

8.            All
disputes arising under this Agreement between CSSE and Mosam, including a dispute arising from a party’s failure or refusal
to sign a Joint Notice, shall be submitted to arbitration to the American Arbitration Association in New York City. CSSE and Mosam
each hereby consents to the exclusive jurisdictions of the federal and state courts sitting in New York County, State of New York,
with respect to any claim or controversy arising out of this Agreement. Service of process in any action or proceeding brought
against CSSE or Mosam in respect of any such claim or controversy may be made upon it by registered mail, postage prepaid, return
receipt requested, at the address specified in Section 10, with copies delivered by nationally recognized overnight carrier to
Graubard Miller, The Chrysler Building, 405 Lexington Avenue, New York, N.Y. 10174, Attention: David Alan Miller, Esq., and to
Stradling Yocca Carlson & Rauth, 660 Newport Center Drive, Suite 1600,| Newport Beach, CA 92660, Attention: Mark Skaist,
Esq.

 

    	 	5	 

     

    

  

9.            [Reserved]

 

10.          All
notices and other communications under this Agreement shall be in writing and shall be deemed given if given by hand or delivered
by nationally recognized overnight carrier, or if given by telecopier and confirmed by mail (registered or certified mail, postage
prepaid, return receipt requested), to the respective parties at the addresses indicated in the Stock Purchase Agreement (with
copies to their counsel as indicated in the Stock Purchase Agreement) or to such other person or address as any of the parties
hereto shall specify by notice in writing to all the other parties hereto.

 

11.          (a)          If
this Agreement requires a party to deliver any notice or other document, and such party refuses to do so, the matter shall be submitted
to arbitration pursuant to paragraph 2(d) of this Agreement.

 

(b)          All
notices delivered to the Escrow Agent shall refer to the provision of this Agreement under which such notice is being delivered.

 

(c)          This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of
which together shall constitute a single agreement.

 

[Signatures are on following page]

 

    	 	6	 

     

    

 

IN WITNESS WHEREOF, each
of the parties hereto has duly executed this Agreement on the date first above written.

 

	 	CHICKEN SOUP FOR THE SOUL ENTERTAINMENMT INC.

 

	 	By:	 

	 	Name:	 

	 	Title:	 

 

	 	 
	 	ADAM MOSAM, Individually

 

    	 	7

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