REGISTRATION RIGHTS AGREEMENT
Exhibit
4.1
This REGISTRATION
RIGHTS AGREEMENT, dated as of March 30, 2017
(this “Agreement”), is entered
into by and among Xxxxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxxx and the
Xxxxxxxx X. Trust (collectively, the “Shareholders” and each
individually a “Shareholder”), and
Dolphin Digital Media, Inc., a Florida corporation (the
“Company”).
WHEREAS, the
Company, the Shareholders and the Xxxxxxxx X. Trust have entered
into a Membership Interest Purchase Agreement (the
“Purchase
Agreement”) pursuant to which the Shareholders will
receive shares of the Company’s common stock, par value
$0.015 (“Common
Stock”), in consideration for all of the membership
interests in 42West, LLC, a Delaware limited liability company,
held by the Shareholders, all upon the terms and subject to the
conditions set forth in the Purchase Agreement.
NOW, THEREFORE, in
consideration of the promises and the mutual agreements and
covenants hereinafter set forth, the Company and the Shareholders
hereby agree as follows:
ARTICLE
I
DEFINITIONS
As used in this
Agreement, the following terms shall have the following
meanings:
“Additional Consideration
Shares” means those shares of Common Stock issued to
each of the Shareholders pursuant to Section 2.6 of the Purchase
Agreement.
“Board” means the board of
directors of the Company.
“Business Day” means any
day that is not a Saturday, Sunday or other day on which banks are
required or authorized by law to be closed in the City of New
York.
“Closing Dolphin Shares”
has the meaning ascribed to such term in the Purchase
Agreement.
“Commission” means the
United States Securities and Exchange Commission and any successor
agency.
“Exchange Act” means the
United States Securities Exchange Act of 1934, as
amended.
“Person” means any
individual, firm, corporation, partnership, limited partnership,
limited liability company, association, trust, unincorporated
organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the
Exchange Act, including the rules promulgated
thereunder.
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“Prospectus” means the
prospectus or prospectuses included in any Registration Statement
(including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of
an effective Registration Statement in reliance on Rule 430A under
the Securities Act or any successor rule thereto), as amended or
supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such
prospectus or prospectuses.
“register,”
“registered” and
“registration” shall refer
to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and the declaration
or ordering of effectiveness of such registration statement or
document.
“Registrable Securities”
means the Shareholder Shares; provided, however, that any Registrable
Securities shall cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has
been declared effective and such Registrable Securities has been
disposed of pursuant to such effective registration statement, (ii)
such Registrable Securities may be sold without manner of sale,
volume or other restriction pursuant to Rule 144 (or any successor
provision) under the Securities Act, or (iii) such Registrable
Securities cease to be outstanding.
“Registration Statement”
means any registration statement of the Company, including the
Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such registration
statement.
“Securities Act” means the
United States Securities Act of 1933, as amended.
“Shareholder Shares” means
the Closing Dolphin Shares, the Post-Closing Dolphin Shares and the
Additional Consideration Shares, if any, whether or not subject to
transfer or other restrictions, now or hereafter beneficially owned
by the Shareholders, including any securities issued or issuable in
respect of the Closing Dolphin Shares, the Post-Closing Dolphin
Shares or the Additional Consideration Shares, if any, as a result
of conversion, exchange, recapitalization, reorganization,
replacement, stock dividend, stock split or other
distribution.
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ARTICLE
II
REGISTRATION
RIGHTS
Section
2.1 Demand
Registration.
(a) At any time after
the one-year anniversary of this Agreement, holders of at least a
majority of the Registrable Securities then outstanding may request
registration under the Securities Act of up to 25% of the aggregate
Registrable Securities held by all holders of Registrable
Securities at that time pursuant to a Registration Statement on
Form S-1 or any successor form thereto (each, a “Long-Form
Registration”). Each request for a
Long-Form Registration shall specify the number of Registrable
Securities requested to be included in the Long-Form
Registration. Upon receipt of any such request, the
Company shall promptly (but in no event later than ten (10) days
following receipt thereof) deliver notice of such request to all
other holders of Registrable Securities who will then have five (5)
days from the date such notice is given to notify the Company in
writing of their desire to be included in such registration;
provided, however, in the event the aggregate amount of Registrable
Securities requested to be included by holders of Registrable
Securities exceeds 25% of the aggregate Registrable Securities held
by all holders of Registrable Securities at that time, the number
of Regsitrable Securities to be included by each such holder shall
be allocated among them as agreed upon by such
holders. The Company shall prepare and file with (or
confidentially submit to) the Commission a Registration Statement
on Form S-1 or any successor form thereto covering all of the
Registrable Securities that the holders thereof have requested to
be included in such Long-Form Registration within ninety (90) days
after the date on which the initial request is given and shall use
its reasonable efforts to cause such Registration Statement to be
declared effective by the Commission as soon as practicable
thereafter. The Company shall not be required to effect
a Long-Form Registration more than once for the holders of
Registrable Securities as a group; provided, that a Registration
Statement shall not count as a Long-Form Registration requested
under this Section
2.1(a) unless and until it has become effective and the
holders requesting such registration are able to register and sell
at least 50% of the Registrable Securities requested to be included
in such registration.
(b) The Company shall
use its reasonable efforts to qualify and remain qualified to
register the offer and sale of securities under the Securities Act
pursuant to a Registration Statement on Form S-3 or any successor
form thereto. At such time as the Company shall have
qualified for the use of a Registration Statement on Form S-3 or
any successor form thereto, the holders of at least a majority of
the Registrable Securities then outstanding shall have the right to
request a single registration under the Securities Act of up to 25%
of the aggregate Registrable Securities held by all holders of
Registrable Securities at that time pursuant to a Registration
Statement on Form S-3 or any similar short-form Registration
Statement (each, a “Short-Form Registration”
and, together with each Long-Form Registration, a
“Demand
Registration”). Each request for a
Short-Form Registration shall specify the number of Registrable
Securities requested to be included in the Short-Form
Registration. Upon receipt of any such request, the
Company shall promptly (but in no event later than ten (10) days
following receipt thereof) deliver notice of such request to all
other holders of Registrable Securities who shall then have five
(5) days from the date such notice is given to notify the Company
in writing of their desire to be included in such
registration. The Company shall prepare and file with
(or confidentially submit to) the Commission a Registration
Statement on Form S-3 or any successor form thereto covering all of
the Registrable Securities that the holders thereof have requested
to be included in such Short-Form Registration within sixty (60)
days after the date on which the initial request is given and shall
use its reasonable efforts to cause such Registration Statement to
be declared effective by the Commission as soon as practicable
thereafter.
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(c) The Company may
postpone for up to ninety (90) days the filing or effectiveness of
a Registration Statement for a Demand Registration if the Board
determines in its reasonable good faith judgment that such Demand
Registration would (i) materially interfere with a significant
acquisition, corporate organization, financing, securities offering
or other similar transaction involving the Company; (ii) require
premature disclosure of material information that the Company has a
bona fide business purpose for preserving as confidential; or (iii)
render the Company unable to comply with requirements under the
Securities Act or Exchange Act; provided that in such event the
holders of at least a majority of the Registrable Securities
initiating such Demand Registration shall be entitled to withdraw
such request and, if such request for a Demand Registration is
withdrawn, such Demand Registration shall not count as one of the
permitted Demand Registrations hereunder and the Company shall pay
all registration expenses in connection with such
registration.
(d) If a Demand
Registration involves an underwritten offering and the managing
underwriter of the requested Demand Registration advises the
Company and the holders of Registrable Securities in writing that
in its reasonable and good faith opinion the number of shares of
Common Stock proposed to be included in the Demand Registration,
including all Registrable Securities and all other shares of Common
Stock proposed to be included in such underwritten offering,
exceeds the number of shares of Common Stock which can be sold in
such underwritten offering and/or the number of shares of Common
Stock proposed to be included in such Demand Registration would
adversely affect the price per share of the Common Stock proposed
to be sold in such underwritten offering, the Company shall include
in such Demand Registration (i) first, the shares of Common Stock
that the holders of Registrable Securities propose to sell, and
(ii) second, the shares of Common Stock proposed to be included
therein by any other Persons (including shares of Common Stock to
be sold for the account of the Company and/or other holders of
Common Stock) allocated among such Persons in such manner as they
may agree. If the managing underwriter determines that
less than all of the Registrable Securities proposed to be sold can
be included in such offering, then the Registrable Securities that
are included in such offering shall be allocated pro rata among the
respective holders thereof on the basis of the number of
Registrable Securities owned by each such holder.
Section
2.2 Registration
Procedures. In connection with the obligations of
the Company with respect to any registration pursuant to this
Agreement, the Company shall, as expeditiously as
possible:
(a) before filing with
the Commission a registration statement or prospectus thereto with
respect to the Registrable Securities and any amendments or
supplements thereto, at the Company’s expense, furnish to
counsel to the Shareholders (or if applicable, the Shareholder
Representative) copies of all such documents (other than documents
that are incorporated by reference) proposed to be filed and such
other documents reasonably requested by the Shareholders (or if
applicable, the Shareholder Representative) and provide a
reasonable opportunity for review and comment on such documents by
counsel to the Shareholders (or if applicable, the Shareholder
Representative);
(b) prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement and as may be
necessary to keep such registration statement
effective;
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(c) furnish to each
Shareholder selling Registrable Securities such numbers of copies
of the registration statement and the prospectus included therein
(including each preliminary prospectus and any amendments or
supplements thereto) and any exhibits filed therewith or documents
incorporated by reference therein as such Shareholder may
reasonably request to facilitate the disposition of such
Registrable Securities;
(d) use all reasonable
efforts to register or qualify the Registrable Securities covered
by such registration statement under such other securities or blue
sky laws of such jurisdiction within the United States and Puerto
Rico as shall be reasonably appropriate for the distribution of the
Registrable Securities covered by the registration statement;
provided,
however, that the
Company shall not be required in connection therewith or as a
condition thereto to qualify to do business in any jurisdiction
where it would not be required to qualify but for the requirements
of this paragraph (d); provided, further, that the Company shall
not be required to qualify such Registrable Securities in any
jurisdiction in which the securities regulatory authority requires
that any Shareholder submit any shares of its Registrable
Securities to the terms, provisions and restrictions of any escrow,
lockup or similar agreement(s) for consent to sell Registrable
Securities in such jurisdiction unless such Shareholder agrees to
do so;
(e) use all reasonable
efforts to cause all Registrable Securities covered by such
registration statement to be registered and approved by such other
domestic governmental agencies or authorities, if any, as may be
necessary to enable the Shareholders to consummate the disposition
of such Registrable Securities;
(f) promptly notify
each Shareholder at any time when a prospectus relating to the sale
of Registrable Securities is required to be delivered under the
Securities Act of the happening of any event, as a result of which
the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances under which they were made, and at the request of a
Shareholder promptly prepare and furnish to such Shareholder a
reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus
shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances under which they were made;
(g) to the extent any
registration pursuant to Section 2.1 is by means of an
underwritten offering, enter into customary agreements (including,
if the method of distribution is by means of an underwriting, an
underwriting agreement in customary form);
(h) provide a transfer
agent and registrar for all Registrable Securities covered by such
registration statement not later than the effective date of such
registration statement;
(i) notify each
Shareholder, promptly after it shall receive notice thereof, of the
time when such registration statement, or any post-effective
amendments to the registration statement, shall have become
effective, or a supplement to any prospectus forming part of such
registration statement has been filed;
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(j) respond as soon as
reasonably practicable to any and all comments received from the
Commission or the staff of the Commission with a view towards
causing such registration statement or any amendment thereto to be
declared effective by the Commission as soon as reasonably
practicable;
(k) advise each
Shareholder promptly after it shall receive notice or obtain
knowledge thereof, of (i) the issuance of any stop order,
injunction or other order or requirement by the Commission
suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose, (ii)
the issuance by any state securities or other regulatory authority
of any order suspending the qualification or exemption from
qualification of any of the Registrable Securities under state
securities or “blue sky” laws or the initiation or
threat of initiation of any proceedings for that purpose and (iii)
the removal of any such stop order, injunction or other order or
requirement or proceeding or the lifting of any such suspension;
and
(l) within the
deadlines specified by the Securities Act, make all required filing
fee payments in respect of any registration statement or prospectus
used under this Agreement (and any offering covered
thereby).
Section
2.3 Furnish
Information. The Shareholders shall furnish to
the Company such information regarding themselves, the Registrable
Securities held by them, and the intended method of disposition of
such securities as the Company shall reasonably request and as
shall be required in connection with the registration of the
Registrable Securities.
Section
2.4 Expenses of
Registration. All expenses incurred in connection
with each registration statement pursuant to this Agreement,
excluding underwriters’ discounts and commissions, but
including without limitation all registration, filing and
qualification fees, word processing, duplicating, printers’
and accounting fees, stock exchange fees, messenger and delivery
expenses, all fees and expenses of complying with state securities
or blue sky laws and the fees and disbursements of counsel for the
Company shall be paid by the Company.
Section
2.5 Underwriting
Requirements. In connection with any underwritten
offering pursuant to Section 2.1, the Company shall
not be required to include shares of Registrable Securities in such
underwritten offering unless the holders of such shares of
Registrable Securities accept the terms of the underwriting of such
offering that have been agreed upon between the Company and the
underwriters and such holders of Registrable Securities complete
and execute all questionnaires, powers of attorney, indemnities and
other documents required under the terms of such underwriting
agreement; provided, that no Shareholder
selling Registrable Securities in any such underwritten
registration shall be required to make any representations or
warranties to the Company or the underwriters (other than
representations and warranties regarding such Shareholder, such
Shareholder’s ownership of Registrable Securities to be sold
in the offering, such Shareholder’s intended method of
distribution and any other representation required by
law). If any Shareholder selling Registrable Securities
in any such underwritten registration disapproves of the terms of
such underwriting, then such Shareholder may elect to withdraw
therefrom by delivering written notice to the Company and the
managing underwriter, which notice must be delivered no later than
the date immediately preceding the date on which the underwriters
price such offering.
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Section
2.6 Covenants Relating
to Rule 144. With a view to making available the
benefits of certain rules and regulations of the Commission that
may permit the Shareholders’ sale of the Registrable
Securities to the public without registration, the Company agrees,
so long as a Shareholder owns any Registrable Securities,
to:
(a) make
and keep public information regarding the Company available, as
those terms are understood and defined in Rule 144 under the
Securities Act;
(b) use
its best efforts to file with the Commission in a timely manner all
reports and other documents required to be filed by the Company
under the Securities Act and the Exchange Act; and
(c) furnish,
unless otherwise available at no charge by access electronically to
the Commission’s XXXXX filing system, to a Shareholder
forthwith upon request (i) a copy of the most recent annual or
quarterly report of the Company, and (ii) such other reports and
documents of the Company so filed with the Commission (other than
comment letters and other correspondence between the Company and
the Commission or its staff) as such Shareholder may reasonably
request in availing itself of any rule or regulation of the
Commission allowing such Shareholder to sell any such securities
without registration.
Section
2.7 Indemnification. In
the event any Registrable Securities is included in a registration
statement under this Agreement:
(a) The Company shall
indemnify, defend and hold harmless each Shareholder, such
Shareholder’s directors and officers, each person who
participates in the offering of such Registrable Securities, and
each person, if any, who controls such Shareholder or participating
person within the meaning of the Securities Act, against any
losses, claims, damages, liabilities, expenses or actions, joint or
several, to which they may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages, liabilities,
expenses or actions (or proceedings in respect thereof) arise out
of or are based on any untrue or alleged untrue statement of any
material fact contained in such registration statement on the
effective date thereof (including any prospectus filed under Rule
424 under the Securities Act or any amendments or supplements
thereto) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and shall reimburse each such Shareholder, such Shareholder’s
directors and officers, such participating person or controlling
person for any documented legal or other expenses reasonably
incurred by them (but not in excess of expenses incurred in respect
of one counsel for all of them) in connection with investigating or
defending any such loss, claim, damage, liability, expense or
action; provided,
however, that the
indemnity agreement contained in this
Section 2.7(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
reasonable consent of the Company; provided, further, that the Company shall
not be liable to any Shareholder, such Shareholder’s
directors and officers, participating person or controlling person
in any such case for any such loss, claim, damage, liability,
expense or action to the extent that it arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus or amendments
or supplements thereto, in reliance upon and in conformity with
written information furnished expressly for use therein, by any
such Shareholder, such Shareholder’s directors and officers,
participating person or controlling person. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such Shareholder, such
Shareholder’s directors and officers, participating person or
controlling person, and shall survive the transfer of such
securities by such Shareholder.
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(b) Each Shareholder
whose shares of Registrable Securities are included in the
registration being effected shall, severally and not jointly,
indemnify, defend and hold harmless the Company, each of its
directors and officers, each person, if any, who controls the
Company within the meaning of the Securities Act, and each agent
for the Company against any losses, claims, damages, liabilities,
expenses or actions to which the Company or any such director,
officer, controlling person, agent or underwriter may become
subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages, liabilities, expenses or actions (or
proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in such registration statement on the effective date
thereof (including any prospectus filed under Rule 424 under the
Securities Act or any amendments on supplements thereto) or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, or
amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by or on behalf of
such Shareholder expressly for use therein; and each such
Shareholder shall reimburse any documented legal or other expenses
reasonably incurred by the Company or any such director, officer,
controlling person or agent (but not in excess of expenses incurred
in respect of one counsel for all of them) in connection with
investigating or defending any such loss, claim, damage, liability,
expense or action; provided, however, that the indemnity
agreement contained in this Section 2.7(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability, expense or action if such settlement is effected without
the reasonable consent of such Shareholder; provided, further, that the liability of
each Shareholder hereunder shall be limited to the proportion of
any such loss, claim, damage, liability, expense or action which is
equal to the proportion that the net proceeds from the sale of the
shares sold by such Shareholder under such registration statement
bears to the total net proceeds from the sale of all securities
sold thereunder, but not in any event to exceed the net proceeds
received by such Shareholder (after the deduction of all
underwriters’ discounts and commissions and all other
expenses paid by such Shareholder in connection with such
registration) from the sale of Registrable Securities covered by
such registration statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or
on behalf of the Company, the Company’s directors and
officers, participating person or controlling person, and shall
survive the transfer of such securities by such
Shareholder.
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(c) Promptly after
receipt by an indemnified party under this
Section 2.7 of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying
party under this Section 2.7, notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in and
assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified
party (unless (i) such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to
it which are different from or in addition to those available to
such indemnifying party, (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of
such counsel or (iii) in the reasonable opinion of such indemnified
party representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified
party and any other party represented by such counsel in such
proceeding, in which case the indemnified party shall be reimbursed
by the indemnifying party for the reasonable expenses incurred in
connection with retaining separate legal counsel); provided, however, that an indemnified
party shall have the right to retain its own counsel, with all fees
and expenses thereof to be paid by such indemnified party, and to
be apprised of all progress in any proceeding the defense of which
has been assumed by the indemnifying party. The failure
to notify an indemnifying party promptly of the commencement of any
such action shall not relieve the indemnifying party from any
liability in respect of such action which it may have to such
indemnified party on account of the indemnity contained in this
Section 2.7, unless (and only
to the extent) the indemnifying party was prejudiced by such
failure, and in no event shall such failure relieve the
indemnifying party from any other liability which it may have to
such indemnified party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect
any settlement of any claim or pending or threatened proceeding in
respect of which the indemnified party is or could have been a
party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability arising out of
such claim or proceeding.
(d) (i) To
the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the indemnifying party
and indemnified party in connection with the actions which resulted
in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action
in question, including any untrue or alleged untrue statement of
material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties’
relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages,
liabilities, expenses or actions referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or
proceeding.
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(ii) The parties hereto
agree that it would not be just and equitable if contribution
pursuant to this Section 2.7(d) were determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to
in the immediately preceding paragraph. No person guilty
of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act,) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(iii) The liability of
each Shareholder in respect of any contribution obligation of such
Shareholder under this Agreement with respect to a particular
registration shall not exceed the net proceeds (after the deduction
of all underwriters’ discounts and commissions and all other
expenses paid by such Shareholder in connection with such
registration) received by such Shareholder from the sale of the
Registrable Securities covered by such registration
statement.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations and
Warranties of the Company. The Company represents
and warrants to the Shareholders as follows:
(a) the Company has the
requisite corporate power and authority to execute, deliver and
perform this Agreement;
(b) this Agreement has
been duly and validly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except that (i)
such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium or other laws, now or hereafter in
effect relating to or limiting creditors’ rights generally
and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief and certain equitable defenses and
to the discretion of the court before which any proceedings
therefor may be brought;
(c) the execution,
delivery and performance of this Agreement by the Company do not
violate or conflict with or constitute a default under the
Company’s certificate of incorporation or bylaws;
and
(d) no holders of
Common Stock or any securities converted into Common Stock have
been granted as of the date of this Agreement registration rights
superior to or pari passu
to those granted to the Shareholders.
Section
3.2 Representations and
Warranties of the Shareholders. Each Shareholder
represents and warrants to the Company as follows:
(a) such Shareholder
has the requisite power and authority (whether corporate or
otherwise) to execute, deliver and perform this
Agreement;
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(b) this Agreement has
been duly and validly authorized, executed and delivered by such
Shareholder and constitutes a valid and binding obligation of such
Shareholder, enforceable in accordance with its terms, except that
(i) such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter
in effect relating to or limiting creditors’ rights generally
and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief and certain equitable defenses and
to the discretion of the court before which any proceedings
therefor may be brought; and
(c) as of the date of
this Agreement, such Shareholder does not own any securities of the
Company other than the Company’s Common Stock received
pursuant to the Purchase Agreement.
ARTICLE
IV
MISCELLANEOUS
Section
4.1 Interpretation.
(a) The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
(b) In the event of an
ambiguity or a question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
(c) The definitions of
the terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words
“include,” “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation.” The word
“will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the
context requires otherwise, (i) any definition of or reference to
any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include the
Person’s successors and permitted assigns, (iii) the words
“herein,” “hereof” and
“hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any
particular provision hereof, and (iv) all references herein to
Articles and Sections shall be construed to refer to Articles and
Sections of this Agreement.
Section
4.2 Amendments. No
amendment, modification or waiver in respect of this Agreement
shall be effective unless it shall be in writing and signed by the
Company and each of the Shareholders (or if applicable, the
Shareholder Representative).
Section
4.3 Assignment. Except
where otherwise expressly provided herein, this Agreement and the
rights and obligations hereunder shall not be assignable or
transferable by the parties hereto (except by operation of law in
connection with a merger, or pursuant sale of substantially all the
assets, of a party hereto) without the prior written consent of the
Company, in the case of a Shareholder, or the Shareholders (or if
applicable, the Shareholder Representative), in the case of the
Company. Any attempted assignment in violation of this
Section 4.3 shall be
void.
11
Section
4.4 No Third-Party
Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their respective permitted
assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and
such assigns, any legal or equitable rights hereunder.
Section
4.5 Notices.
(a) All notices and
other communications under this Agreement shall be in writing and
shall be deemed given (i) when delivered personally by hand (with
written confirmation of receipt), (ii) when sent by facsimile (with
written confirmation of transmission) or (iii) one Business Day
following the day sent by overnight courier (with written
confirmation of receipt), in each case at the following addresses
and facsimile numbers (or to such other address or facsimile number
as a party may have specified by notice given to the other party
pursuant to this provision):
|
If to the
Company:
|
Dolphin Digital
Media, Inc.
0000 XxXxxxx
Xxxx
Xxxxx
000-Xxxxxxxxx
Xxxxx Xxxxxx, XX
00000
Attention: Xxxxxxx
X’Xxxx
Fax: (000)
000-0000
Email:
xxxxxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
|
|
with a copy to
(which shall not constitute notice to the Company):
|
Xxxxxxxxx Xxxxxxx,
P.A.
000 Xxxxxx xx xxx
Xxxxxxxx
Xxxxx, XX
00000
Attention: Xxxxx
Xxxxxxx
Fax No: (000)
000-0000
Email:
Xxxxxxxx@xxxxx.xxx
|
|
If to a
Shareholder, to the respective address set forth on Appendix
A.
|
|
|
with a copy to
(which shall not constitute notice to any
Shareholder):
|
Xxxxx & Xxxxxxx
LLP
0000
Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Xxxx
X. Xxxxxxxxxxxx, Esq.
Fax No.: (000)
000-0000
Email:
Xxxxxxxxxxxxx@xxxxx.xxx
|
12
(b) Any party hereto
may change its address specified for notices herein by designating
a new address by notice in accordance with this
Section 4.5.
Section
4.6 Counterparts. This
Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by
each of the parties and delivered to the other
party. Copies of executed counterparts transmitted by
telecopy, telefax or other electronic transmission service,
including by email attachment, shall be considered original
executed counterparts for purposes of this Agreement.
Section
4.7 Severability. If
any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any
Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect
any other provision hereof (or the remaining portion thereof) or
the application of such provision to any other Persons or
circumstances.
Section
4.8 Governing Law;
Jurisdiction; Waiver of Jury Trial.
(a) This Agreement
shall be governed by, and construed in accordance with, the laws of
the State of New York, applicable to contracts executed in and to
be performed entirely within that State, without regard to
conflicts of laws principles.
(b) All actions and
proceedings arising out of or relating to this Agreement shall be
heard and determined in any state or federal court sitting in New
York, New York, and the parties hereby irrevocably submit to the
exclusive jurisdiction of such court (and, in the case of appeals,
appropriate appellate courts therefrom) in any such action or
proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or
proceeding. The consent to jurisdiction set forth in
this paragraph shall not constitute general consents to service of
process in the State of New York and shall have no effect for any
purpose except as provided in this paragraph and shall not be
deemed to confer rights on any Person other than the parties or as
specifically provided herein. The parties agree that a
final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by applicable law. Each
party irrevocably consents to the service of any and all process in
any such action, suit or proceeding by the delivery of such process
to such party at the address and in the manner provided in
Section 4.5.
(c) EACH OF THE PARTIES
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT.
Section
4.9 Specific
Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or
equity.
13
Section
4.10 Shareholder
Representative. The Shareholders, from time to
time, by holders of a majority of the Registrable Securities held
by all Shareholders, may appoint one of the Shareholders, as the
Shareholder Representative, as his or her true and lawful
attorney-in-fact (i) to give and receive all notices and
communications required or permitted under this Agreement, (ii) to
agree to, negotiate, enter into settlements and compromises with
respect to this Agreement, (iii) to negotiate, agree and enter into
any amendments to this Agreement as per
Section 4.2 of this Agreement,
and (iv) to communicate to the Company any elections of the
Shareholders with respect to the registration rights provided for
in ARTICLE II
hereof. If so designated, the Shareholder Representative
may take all actions necessary or appropriate in the judgment of
the Shareholder Representative for the accomplishment of any of the
foregoing, each Shareholder agreeing to be fully bound by the acts,
decisions and agreements of the Shareholder Representative taken
and done pursuant to the authority herein granted. The
Shareholder Representative shall not be liable, responsible or
accountable in damages or otherwise to the Shareholders for any
loss or damage incurred by reason of any act or failure to act by
the Shareholder Representative, and each Shareholder shall jointly
and severally indemnify and hold harmless the Shareholder
Representative against any loss or damage except to the extent such
loss or damage shall have been the result of the individual gross
negligence or willful misconduct of the Shareholder
Representative. In the event that the Shareholder
Representative dies, becomes incapacitated or otherwise stops
fulfilling his or her duties, the Shareholders shall promptly
select an alternate person to serve as the Shareholder
Representative and shall promptly notify the Company of such
selection. The Company may conclusively and absolutely
rely, without inquiry, upon any decision, act, consent, notice or
instruction of the Shareholder Representative as being the
decision, act, consent, notice or instruction of each of and all of
the Shareholders. The Company is hereby relieved from
any liability to any Person, including any Shareholder, for any
acts done by it in accordance with or reliance on such decision,
act, consent, notice or instruction of the Shareholder
Representative. All notices or other communications
required to be made or delivered by the Company to the Shareholders
shall be made to the Shareholder Representative for the benefit of
the Shareholders, and any notices so made shall discharge in full
all notice requirements of the Company to the Shareholders with
respect thereto. All notices or other communications
required to be made or delivered by the Shareholders to the Company
shall be made by the Shareholder Representative for the benefit of
the Shareholders, and any notices so made shall discharge in full
all notice requirements of the Shareholders to the Company with
respect thereto.
Section
4.11 Termination. The
provisions of this Agreement shall terminate as to a particular
Shareholder at such time as the Shareholder no longer holds any
Registrable Securities.
Section
4.12 Change in
Law. In the event any law, rule or regulation
comes into force or effect which conflicts with the terms and
conditions of this Agreement, the parties shall negotiate in good
faith to revise this Agreement to achieve the parties’
intention set forth herein.
[signature page
follows]
14
IN WITNESS WHEREOF,
the parties have caused this Registration Rights Agreement to be
duly executed as of the date first above written.
THE
COMPANY: DOLPHIN
DIGITAL MEDIA, INC.
By: /s/ Xxxxxxx
X'Xxxx
Name: Xxxxxxx
X'Xxxx
Title:
Chief Executive Officer
SHAREHOLDERS:
/s/ Xxxxxx
Xxxx
Xxxxxx
Xxxx
/s/ Xxxxxx
Xxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
/s/ Xxxxx
Xxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx
XXXXXXXX X.
TRUST
By: /s/ Xxxx X.
Xxxxx
Xxxx X. Xxxxx, as
Trustee
APPENDIX
A
SHAREHOLDERS
Xxxxxx
Xxxx
Xxxxxx
Xxxxxxxx
Xxxxx
Xxxxx
Xxxxxxxx X.
Trust
17
