Exhibit 10.1
 
THE SECURITIES BEING ACQUIRED PURSUANT TO THIS DEBT EXCHANGE AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND SUCH STATE LAWS AS MAY BE APPLICABLE, OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.  ADDITIONAL RESTRICTIONS ON TRANSFER OF THE SECURITIES ARE SET FORTH
IN THIS DEBT EXCHANGE AGREEMENT.
 
DEBT EXCHANGE AGREEMENT
 
THIS DEBT EXCHANGE AGREEMENT (this “Agreement”), dated as of [●], 2016, is by
and between Dolphin Digital Media, Inc., a Florida corporation (the “Company”),
and [●] (the “Note Holder”).
 
 
WHEREAS, the Note Holder is the holder of an outstanding promissory note of the
Company, dated as of [●] (the “Existing Note”) in the aggregate principal amount
of $[●], of which $[●] is currently due and outstanding as of the date hereof
(including accrued but unpaid interest), which Existing Note was issued pursuant
to that certain Loan and Security Agreement, dated as of [●], by and between the
Company and the Note Holder (the “Loan and Security Agreement”);

WHEREAS, the Company and the Note Holder have agreed, subject to the terms and
conditions set forth herein,  to convert the aggregate principal amount of the
Existing Note into shares of the Company’s common stock, par value $0.015
(“Common Stock”), in order to improve the financial position of the Company (the
“Conversion”);
 
 
WHEREAS, the Company and the Note Holder have agreed to execute this Agreement
to evidence their agreement with respect to the Conversion and the issuance of
the Exchange Shares;
 
WHEREAS, the Company and the Note Holder are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(a)(2) and/or Regulation D, as promulgated by the
United States Securities and Exchange Commission under the Securities Act of
1933, as amended (the “Securities Act”).
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
 

SECTION 1.                       Debt Exchange; Exchange Price.
 
1.1             Debt Exchange.  The Note Holder, intending to be legally bound,
hereby irrevocably agrees to exchange the aggregate amount outstanding under the
Existing Note for the number of shares of Common Stock set forth on the
signature page hereto (the “Exchange Shares”).  The number of Exchange Shares
being issued hereunder is determined in accordance with the following formula:
 
 
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The aggregate amount outstanding under the Existing Note divided by $ 5.00.
 
Based upon the foregoing, the number of Exchange Shares to be acquired hereunder
shall be [●].
 
1.2             Closing; Conditions to Closing.  Closing on the purchase and
sale of the Exchange Shares shall be consummated on such date as the Company
accepts the Note Holder’s offer to purchase the Exchange Shares as evidenced by
the Company’s counter-execution of the signature page to this Agreement, and the
satisfaction of each of the conditions to closing set forth below (“Closing”).
On or prior to the date of each Closing, the following shall have occurred:
 
 
(a)
The Note Holder shall have delivered to the Company a dated and executed
signature page to this Agreement, with all blanks required to be completed by
the Note Holder properly completed;

 
 
(b)
The Note Holder shall have delivered to the Company a dated completed and signed
Accredited Investor Questionnaire attached as Exhibit B hereto, with all blanks
required to be completed by the Note Holder properly completed;

 
 
(c)
The Note Holder shall have delivered to the Company the cancelled Existing Note;

 
 
(d)
The Note Holder shall have delivered to the Company an acknowledgement of
release of liens, attached as Exhibit C hereto; and

 
 
(e)
Any other conditions to Closing set forth in this Agreement shall have been
satisfied or waived.

 
SECTION 2.                           Representations, Warranties and Covenants
of Company: The Company represents and warrants to the Note Holder that:
 
2.1             Organization and Standing.  The Company is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
Florida.  The Company has the requisite corporate power to own and operate its
properties and assets, and to carry on its business as presently conducted and
as proposed to be conducted.
 
2.2             No Conflicts. This Agreement does not: (i) conflict with any
provision of the Company’s Articles of Incorporation or Bylaws, as each may have
been amended from time to time to date; or (ii) result in a violation of any
federal, state, local or foreign law, rule, regulation, order, judgment or
decree (including Federal and state securities laws and regulations) applicable
to the Company or by which any property or asset of the Company is bound or
affected.
 
2.3             Authorization. The execution, delivery and performance of this
Agreement by the Company has been duly authorized by all requisite corporate
action, and constitutes the valid and binding obligations of the Company
enforceable in accordance with its terms, subject as to enforcement of remedies
to applicable bankruptcy, insolvency, reorganization, or similar laws relating
to or affecting the enforcement of creditors’ rights.  If the Note Holder is a
natural person, the Note Holder is at least twenty-one (21) years of age and a
bona fide resident of the place set forth in Section 9 and has no present
intention of becoming a resident of any other state or jurisdiction.
 
 
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2.4             Capitalization. The authorized capital stock of the Company
immediately upon the consummation of the transactions contemplated by this
Agreement (assuming the conversion of all of the notes representing the
Aggregate Commitment Amount (as defined in the Loan and Security Agreement)
shall consist of:
 
 
(a)
10,000,000 shares of preferred stock of which:

 
 
(1)
4,000,000 shares have been duly designated Series B Convertible Preferred Stock,
of which 3,300,000 are duly and validly issued and outstanding, fully paid and
non-assessable, with no personal liability attaching to the ownership thereof;

 
 
(2)
1,000,000 shares have been duly designated Series C Convertible Preferred Stock,
all of which shall be duly and validly issued and outstanding, fully paid and
non-assessable, with no personal liability attaching to the ownership thereof;

 
 
(b)
400,000,000 shares have been duly designated as Common Stock, of which 6,993,775
shares are duly and validly issued and outstanding, fully paid and
non-assessable, with no personal liability attaching to the ownership thereof;
and

 
 
(c)
1,050,000 shares of Common Stock have been duly reserved for issuance upon
exercise of warrants, 3,185,000 shares of Common Stock have been duly reserved
for issuance upon conversion of preferred stock, and 2,500,000 shares of Common
Stock have been duly reserved for issuance upon conversion of notes representing
the Aggregate Commitment Amount (as defined in the Loan and Security Agreement).

 
SECTION 3.                           Representations, Warranties and Covenants
of the Note Holder.  Note Holder represents and warrants to the Company that:
 
3.1             Own Account. The Existing Note and the Exchange Shares that the
Note Holder would acquire upon conversion have been (or would be) acquired
solely for its, his or her account and are not being (or would not be) purchased
with a view to, or for resale in connection with, any distribution within the
meaning of the Securities Act or related laws and regulations or any other
applicable securities laws of any other jurisdiction (collectively, the
“Securities Laws”).  The Note Holder will not resell or offer to resell the
Common Stock except in accordance with the terms of the Bylaws of the Company
and in compliance with all applicable Securities Laws.
 
3.2             Organization and Standing of Note Holder. If the Note Holder is
an entity, such Note Holder is a corporation, partnership or other entity duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization and has the requisite
corporate power to own its assets and to carry on its business.
 
 
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3.3           Authorization and Power. The Note Holder has all requisite
authority (and in the case of an individual, the capacity) to purchase the
Exchange Shares, and enter into this Agreement and to perform all the
obligations required to be performed by the Note Holder hereunder and
thereunder, and such purchase will not contravene any law, rule or regulation
binding on the undersigned or any investment guideline or restriction applicable
to the Note Holder.
 
3.4             No Conflicts.  The execution, delivery and performance of this
Agreement and the consummation by the Note Holder of the transactions
contemplated hereby or relating hereto do not and will not (i) result in a
violation of the Note Holder’s charter documents or bylaws or other
organizational documents (if the Note Holder is not an individual) or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of any agreement or
instrument or obligation to which the Note Holder is a party or by which its
properties or assets are bound, or result in a violation of any law, rule, or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to the Note Holder or its properties. The Note Holder is not required
to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or to purchase
the Exchange Shares in accordance with the terms hereof.
 
3.5             Residence. The Note Holder is a resident of the state set forth
on the signature page hereto and is not acquiring the Exchange Shares as a
nominee or agent otherwise for any other person.
 
3.6             No Reliance. The Note Holder confirms that it is not relying on
any communication (written or oral) of the Company or any of its affiliates, as
investment advice or as a recommendation to purchase the Exchange Shares.  It is
understood that information and explanations related to the terms and conditions
of the Exchange Shares provided by the Company or any of its affiliates shall
not be considered investment advice or a recommendation to purchase the Exchange
Shares, and that neither the Company nor any of its affiliates is acting or has
acted as an advisor to the Note Holder in deciding to invest in the Exchange
Shares.  The Note Holder acknowledges that neither the Company nor any of its
affiliates has made any representation regarding the proper characterization of
the Exchange Shares for purposes of determining the undersigned's authority to
invest in the Exchange Shares.
 
3.7             Investment Experience.
 
(a)           The Note Holder has such knowledge, skill and experience in
business, financial and investment matters that it is capable of evaluating the
merits and risks of an investment in the Exchange Shares. The Note Holder has
made its own legal, tax, accounting and financial evaluation of the merits and
risks of an investment in Company.
 
 
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(b)           The Note Holder has had access to the legal, financial, tax and
accounting information concerning the Company and the Exchange Shares as it
deems necessary to enable it to make an informed investment decision concerning
the purchase of the Exchange Shares.
 
(c)           The Note Holder understands that neither the Exchange Shares that
the Note Holder is acquiring upon conversion of the Existing Note have not and
will not be registered under the Securities Laws.  The Note Holder understands
that it, he or she has no rights whatsoever to request, and that the Company is
under no obligation whatsoever to furnish, a registration of the Exchange Shares
under the Securities Laws.
 
(d)           The Note Holder understands that the Conversion and issuance of
Common Stock is intended to be exempt from registration under the Securities Act
by virtue of Section 4(2) and/or the provisions of Regulation D promulgated
thereunder based, in part, upon the representations, warranties and agreements
of the Note Holder contained in this Agreement.
 
(e)           The Note Holder acknowledges that it has been furnished with true
and complete copies of the following documents which the Company has filed with
the Securities and Exchange Commission (the “SEC”) pursuant to Sections 13(a),
14(a), 14(c) or 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”): (a) the Annual Report on Form 10-K for the year ended December
31, 2015; (b) Current Report on Form 8-K, date of earliest event reported April
1, 2016; (c) the Company’s Proxy Statement relating to the 2015 Annual Meeting
of Shareholders; and (d) the information contained in any reports or documents
required to be filed by the Company under Sections 13(a), 14(a), 14(c) or 15(d)
of the Exchange Act since the distribution of the Form 10-K.  Copies of the
foregoing SEC filings are attached hereto as Exhibit C.
 
(f)           The Note Holder represents that the Note Holder is an “accredited
investor”, as defined in Rule 501 promulgated under the Securities Act, which
definition is attached as Exhibit A hereto and has accurately completed the
Accredited Investor Questionnaire attached as Exhibit B hereto.  The Note Holder
also represents that the Note Holder has not been organized for the purpose of
acquiring the Exchange Shares.
 
(g)           The Note Holder is aware that the Note Holder will have to
surrender the Existing Note in consideration for receipt of the Exchange Shares.
 
(h)           The Note Holder acknowledges that neither the SEC nor any state
securities commission has approved the Common Stock offered hereby or passed
upon or endorsed the merits of the issuance of the Common Stock by the Company. 
The Note Holder acknowledges that an investment in the Company is highly
speculative and involves a risk of loss of the entire investment and no
assurances can be given of any income or profit from such investment.  THE NOTE
HOLDER HEREBY ACKNOWLEDGES AND CONFIRMS THAT THE UNDERSIGNED HAS CAREFULLY
CONSIDERED THE RISKS AND UNCERTAINTIES INVOLVED IN INVESTING IN THE COMMON STOCK
BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE THE EXCHANGE SHARES.  The Note
Holder can bear the economic risk of losing its entire investment in the Company
without impairing the Note Holder’s ability to provide for itself, himself or
herself and/or his or her family (as applicable) in the same manner that the
Note Holder would have been able to provide prior to making an investment in the
Company.
 
3.8           Dilution Protection.  The Note Holder has been furnished with a
copy of the Articles of Incorporation of the Company (including the Certificates
of Designation with respect to the Series B and Series C Convertible Preferred
Stock) and understands that the holder of the Series C Convertible Preferred
Stock is entitled to anti-dilution protection with respect to any issuances of
Common Stock occurring after the issuance of the Series C Convertible Preferred
Stock on March 7, 2016.
 
 
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3.9             Confidentiality. The Note Holder understands and hereby
acknowledges and agrees that all of the information appearing herein and
otherwise provided to the Note Holder in connection with the purchase of the
Exchange Shares made hereby is confidential and that the Note Holder and the
Note Holder’s representatives and agents may not disclose such information to
any person that is not a party to the transactions contemplated hereby.
 
3.10             No General Solicitation. The Note Holder acknowledges that
neither the Company nor any other person offered to sell the Exchange Shares to
it by means of any form of general solicitation or advertising, including but
not limited to: (a) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or (b) any seminar or meeting whose attendees were invited
by any general solicitation or general advertising.
 
3.11             Legend. The Note Holder understands that the Exchange Shares to
be purchased by it, him or her will be “restricted securities” as that term is
defined in Rule 144 under the Securities Act and that the certificate(s), if
any, representing the Exchange Shares will bear a restrictive legend thereon in
substantially the form that appears below:
 
“THESE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THEY MAY NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (I) PURSUANT TO A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND
IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (II) PURSUANT TO A SPECIFIC
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON THE HOLDER
HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE ISSUER, OR
OTHER COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT
AS WELL AS ANY APPLICABLE “BLUE SKY” OR OTHER SIMILAR SECURITIES LAW.”
 
 
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3.12             Additional Information. The Note Holder agrees to furnish any
additional information requested by the Company or any of its affiliates to
assure compliance with
 
applicable U.S. federal and state securities laws in connection with the
issuance of the Exchange Shares.
 
3.13             Survival. The Note Holder understands that all representations
and warranties and agreements hereunder shall survive execution and delivery of
this Agreement and the issuance of the Exchange Shares.
 
SECTION 4.                           Indemnification. The Note Holder agrees to
indemnify, hold harmless, reimburse and defend the Company and each of the
Company’s officers, directors, agents, attorneys, affiliates, and control
persons against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Company or its successor or any such person which results, arises out of or is
based upon any material misrepresentation by such Note Holder in this Agreement
or in any Exhibits attached hereto, or other agreement delivered pursuant
hereto.
 
SECTION 5.                           Amendments.  This Agreement may not be
modified or amended except pursuant to an instrument in writing signed by the
Company and the Note Holder.  No waiver of any provision this Agreement shall be
binding unless executed in writing by the party to be bound thereby.  No waiver
of any provision of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (regardless of whether similar), nor shall any
such waiver constitute a continuing waiver unless otherwise expressly provided.
 
SECTION 6.                           Headings.  The headings of the sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.
 
SECTION 7.                           Severability.  In case any provision
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
 
SECTION 8.                           Governing Law.  This Agreement and any
disputes or claims arising out of or in connection with its subject matter shall
be governed by and construed in accordance with the laws of the State of Florida
without regard to the rules of conflict of laws of such state that would cause
the laws of another jurisdiction to apply. The parties hereto acknowledge and
agree that venue and jurisdiction for any claim, suit or controversy related to
or arising out of this Agreement shall lie in the state or federal courts
located in Miami-Dade County, Florida.  THE PARTIES HEREBY WAIVE THE RIGHT TO
JURY TRIAL OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE CONDUCT OF THE
RELATIONSHIP BETWEEN THEM.
 
SECTION 9.                           Notices. All notices, requests, demands or
other communications to the respective parties hereto shall be in writing
addressed to the respective parties and their respective addresses as follows:
 
 
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to the Company, at:
 
2151 LeJeune Road
Suite 150-Mezzanine
Coral Gables, FL 33134
United States
 
Attention:                     William O’Dowd
Facsimile:                      (305) 774-0405
E-mail:                            billodowd@dolphinentertainment.com

to Note Holder at:
 
[●]
[●]
[●]
Attention:                     [●]
Facsimile:                      [●]
E-mail:                            [●]
 
or to such address of which either party may subsequently give notice. All
notices, requests, demands or other communications to the respective parties
hereto shall be in writing addressed to the respective parties at their
respective addresses shown beneath their signatures hereto.  All such notices,
requests, demands and communications described above and all other notices,
demands, requests and other communications made in connection with this
Agreement shall be effective and be deemed to have been received (i) if
delivered by hand, upon personal delivery, (ii) if delivered by reputable
overnight courier service, one business day after its delivery to such courier
service with all charges prepaid (or charged to the account of the sender) and
with receipt confirmed (by a record of receipt maintained) by such overnight
courier, (iii) if delivered by United States mail upon the earlier of actual
receipt and three business days after deposit, registered or certified mail,
return receipt requested, with proper postage prepaid, (iv) if delivered by
facsimile, upon sender’s receipt of confirmation of proper transmission, and (v)
if delivered by electronic transmission, upon transmission.
 
SECTION 10.                           Counterparts; Facsimile Signatures.  This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original, but all of which, taken together, shall constitute but
one instrument.  Facsimile or other electronically scanned and transmitted
signatures shall be deemed originals for all purposes of this Agreement.
 
SECTION 11.                           Entire Agreement.  This Agreement contains
the entire understanding of the parties with respect to the matters covered
herein and therein; and, except as specifically set forth herein or therein,
neither the Company nor the Note Holder makes any representation, warranty,
covenant or undertaking with respect to such matters.
 
SECTION 12.                           Fees and Expenses.  Except as set forth in
the Bylaws of the Company, each party hereto shall pay its respective fees and
expenses related to the transactions contemplated by this Agreement.
 
 
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SECTION 13.                           Parties.  This Agreement is made solely
for the benefit of and is binding upon the Company and the Note Holder, and no
other person or entity shall acquire or have any right under or by virtue of
this Agreement.
 
SECTION 14.                                Assignment.  Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the parties hereto and their respective successors and
assigns.  This Agreement and the rights of the Note Holder hereunder may be
assigned by Note Holder only with the prior written consent of the Company.  The
Company may not assign this Agreement without the written consent of the Note
Holder.
 
SECTION 15.                           Blue Sky Qualification.  The purchase of
the Common Stock under this Agreement is expressly conditioned upon the
exemption from qualification of the offer and sale of the Common Stock from
applicable federal and state securities laws.  The Company shall not be required
to qualify this transaction under the securities laws of any jurisdiction, and
should qualification be necessary, the Company shall be released from any and
all obligations to maintain its offer, and may rescind any sale contracted, in
the jurisdiction.
 
SECTION 16.                           Further Assurances.  Each party agrees to
cooperate fully with the other party hereto and to execute such further
instruments, documents and agreements and to give such further written assurance
as may be reasonably requested by the other party to evidence and reflect the
transactions described herein and contemplated hereby and to carry into effect
the intents and purposes of this Agreement.
 
[Signature pages follow]
 
 
 
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The Note Holder hereby agrees to receive [●] shares of Common Stock as payment
in full of the Existing Note.  Entered into as of the day and year below
written:
Date:                                               
NOTE HOLDER
 
     
______________________________
 
[●]
 
[●]

 
 
 

 
 
 

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           IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
the date first above written.

DOLPHIN DIGITAL MEDIA, INC.
 

By: ________________________________
       Name: William O’Dowd IV
       Title: Chief Executive Officer

 
 
 

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EXHIBIT A
 
Definition Accredited Investor
 

 
Accredited investor means any person who comes within any of the following
categories:
 
 
1.           Any bank as defined in section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934; any insurance company as defined in section
2(a)(13) of the Securities Act; any investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
section 2(a)(48) of that Act; any Small Business Investment Company licensed by
the U.S. Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; any employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, as defined in section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;
 
2.           Any private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
 
3.           Any organization described in section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
 
4.           Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;
 
5.           Any natural person whose individual net worth, or joint net worth
with that person's spouse, exceeds $1,000,000;
 
a.                      Except as provided in paragraph (b) of this section, for
purposes of calculating net worth under this paragraph:
 
(i)           The person’s primary residence shall not be included as an asset;
 
(ii)           Indebtedness that is secured by the person’s primary residence,
up to the estimated fair market value of the primary residence at the time of
the sale of securities, shall not be included as a liability (except that if the
amount of such indebtedness outstanding at the time of the sale of securities
exceeds the amount outstanding 60 days before such time, other than as a result
of the acquisition of the primary residence, the amount of such excess shall be
included as a liability); and
 
(iii)            Indebtedness that is secured by the person’s primary residence
in excess of the estimated fair market value of the primary residence at the
time of the sale of securities shall be included as a liability.
 
 
 

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b.                      Paragraph (a) of this section will not apply to any
calculation of a person’s net worth made in connection with a purchase of
securities in accordance with a right to purchase such securities, provided
that:
 
(i)           such right was held by the person on July 20, 2010;
 
(ii)           the person qualified as an accredited investor on the basis of
net worth at the time the person acquired such right; and
 
(iii)           the person held securities of the same issuer, other than such
right, on July 20, 2010.
 
6.           Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
 
7.           Any trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii); and
 
8.           Any entity in which all of the equity owners are accredited
investors.
 

 
 

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EXHIBIT B
Accredited Investor Questionnaire

Please see attached for Accredited Investor Questionnaire.
 
 
 
 
 
 
 
 
 
 

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EXHIBIT C
Exchange Act Filings

Please see attached.
 

 
 
 

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