Exhibit 10.7

 

affiliate LOCK UP LEAK OUT AGREEMENT

 

THIS LOCK UP LEAK OUT AGREEMENT (the “Agreement”) is entered into as of this
15th day of August, 2019 (the “Effective Date”) by and between W. Kip Speyer, an
individual with his principal business address at 6400 Congress Avenue, Suite
2050, Boca Raton, Florida 33487 (the “Shareholder”) and Bright Mountain Media,
Inc., a Florida corporation with its principal place of business located at 6400
Congress Avenue, Suite 2050, Boca Raton, Florida 33487 (“Bright Mountain”).

 

WHEREAS, pursuant to the terms of the Share Exchange Agreement and Plan of
Merger (the “Share Exchange Agreement”) dated July 31, 2019, by and among Bright
Mountain, Bright Mountain Israeli Acquisition Ltd., Slutzky & Winshman, Ltd., an
Israeli company (“S&W”), and the shareholders of S&W (collectively, the “S&W
Shareholders”), the S&W Shareholders received an aggregate of Twelve Million,
Fifty Thousand, Seven Hundred and Ninety Nine (12,050,799) shares (the “SEA
Shares”) of the common stock (the “Common Stock”) of Bright Mountain.

 

WHEREAS, as a condition of the issuance of the SEA Shares, certain affiliates of
Bright Mountain agreed to enter into an agreement restricting the transfer or
resale of an aggregate of Nine Million Five Hundred Forty Three Thousand Five
Hundred and Forty Six (9,543,546) shares of Common Stock held by such affiliates
as of the Effective Date (the “Shares”), such shares constituting together with
the SEA Shares and other shares which are subject to similar restrictions as set
forth herein, Twenty Five Percent (25%) of the issued and outstanding share
capital of Bright Mountain as of the Effective Date.

 

NOW THEREFORE, in consideration of the premises and of the terms and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

1. LOCK UP OF SHARES; PERMITTED LEAK OUTS.

 

(a) The Shareholder acknowledges that as of the date of the Closing (as defined
in Share Exchange Agreement), (i) the Shares have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”) and are considered
“restricted securities,” and (ii) such Shares may only be sold, transferred,
hypothecated or otherwise disposed of by the Shareholder in accordance with the
holding periods and other provisions of Rule 144 promulgated under the
Securities Act.

 

(b) The Shareholder hereby agrees that during the period commencing on the
Effective Date and ending six (6) months from the Effective Date (the “Lock Up
Period”) the Shareholder will not without the prior written consent of Bright
Mountain, which such consent may not be unreasonably withheld, delayed or
conditioned, (i) offer, pledge, gift, donate, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any Shares, or (ii) enter into any swap, option
(including, without limitation, put or call options), short sale, future,
forward or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of the Shares, whether any such
transaction is to be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise ((i) and (ii) being hereinafter collectively
referred to as the “Lock Up”), in each case other than (A) transfers to
immediate family members of the undersigned, trusts for the benefit of the
undersigned or immediate family members of the undersigned, and (B) transfers by
will or intestacy upon the death of the undersigned.

 

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(c) During the Lock Up Period the Shareholder authorizes Bright Mountain to
cause any transfer agent for the Shares to decline to transfer, and to note stop
transfer restrictions on the stock register and other records relating to the
Shares subject to the Lock Up.

 

(d) Following the expiration of the Lock Up Period any resales of Shares by the
Shareholder in NYSE American, or such other market or stock exchange which is
the primary trading market for the Common Stock (the “Primary Market”) shall be
subject to compliance with Bright Mountain’s insider trading policies as may be
in effect from time to time. At any time following the Effective Date, if the
Shareholder reasonably determines that any resales of the Shares by the
Shareholder shall cause, in and of themselves (i.e. disregarding any sales made
by other shareholders of Bright Mountain), the trading price of Bright
Mountain’s Common Stock in the Primary Market to decline in value, the
Shareholder shall reduce the number of Shares he resells in the Primary Market
at such time, it being the intent of the parties hereto that the market price of
the Common Stock shall not be adversely impacted solely by resales of the Shares
by the Shareholder.

 

(e) The number of Shares which may be resold pursuant to Section 1(d) hereof are
subject to proportional adjustment in the event of stock splits, combinations,
stock dividends and similar corporate events.

 

(f) In the event of a “Change of Control” (as defined below) of Bright Mountain
Media, Inc., this Agreement shall terminate. For purposes hereof, a “Change of
Control” shall mean a change of control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
whether or not Bright Mountain is in fact required to comply with that
regulation, provided that, without limitation, such a change in control shall be
deemed to have occurred if (A) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of Bright Mountain or a
corporation owned, directly or indirectly, by the shareholders of Bright
Mountain in substantially the same proportions as their ownership of stock of
Bright Mountain, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of Bright
Mountain representing more than 50% of the combined voting power of Bright
Mountain’s then outstanding securities; or (B) during any period of two
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the Board
of Directors and any new director (other than a director designated by a person
who has entered into an agreement with Bright Mountain to effect a transaction
described in clauses (A) or (D) of this Section) whose election by the Board of
Directors or nomination for election by Bright Mountain’s shareholder’s was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority; (C) Bright Mountain enters into an agreement, the
consummation of which would result in the occurrence of a change in control of
Bright Mountain; or (D) the shareholders of Bright Mountain approve a merger or
consolidation of Bright Mountain with any other corporation, other than a merger
or consolidation which would result in the voting securities of Bright Mountain
outstanding immediately prior to its continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) of more than 50% of the combined voting power of the voting
securities of Bright Mountain or such surviving entity outstanding immediately
after such merger or consolidation, or the shareholders of Bright Mountain
approve a plan of complete liquidation of Bright Mountain or an agreement for
the sale or disposition by Bright Mountain of all or substantially all Bright
Mountain’s assets.

 

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2. LEGENDS.

 

(a) The Shareholder hereby agrees that each outstanding certificate representing
the Shares shall during the Lock Up Period, in addition to any other legends as
may be required in compliance with Federal securities laws, bear legends reading
substantially as follows:

 

“THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK UP AGREEMENT DATED AUGUST 15, 2019
BY AND BETWEEN BRIGHT MOUNTAIN MEDIA, INC. AND THE SHAREHOLDER LISTED ON THE
FACE HEREOF. NO TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF BRIGHT
MOUNTAIN MEDIA, INC. UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS
OF SUCH LOCK UP AGREEMENT.”

 

(b) A copy of this Agreement shall be filed with Bright Mountain’s transfer
agent of record.

 

3. SPECIFIC PERFORMANCE. The Shareholder acknowledges that there would be no
adequate remedy at law if the Shareholder fails to perform any of his
obligations hereunder, and, accordingly, agrees that Bright Mountain, in
addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of the
Shareholder under this Agreement in accordance with the terms and conditions of
this Agreement. Any remedy under this Section 3 is subject to certain equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.

 

4. NOTICES. All notices, statements, instructions or other documents required to
be given hereunder shall be in writing and shall be given either personally or
by mailing the same in a sealed envelope, first-class mail, postage prepaid and
either certified or registered, return receipt requested, or by telecopy, and
shall be addressed to the respective party as its address set forth earlier in
this Agreement.

 

5. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida. Any suit, action or proceeding
with respect to this Agreement shall be brought in the U.S. District Court for
the Southern District of Florida, West Palm Beach, Florida. The parties hereto
hereby accept the exclusive jurisdiction and venue of such court for the purpose
of any such suit, action or proceeding. The parties hereto hereby irrevocably
waive, to the fullest extent permitted by law, any objection that any of them
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any judgment entered
by any court in respect thereof brought in U.S. District Court for the Southern
District of Florida, West Palm Beach, Florida, and hereby further irrevocably
waive any claim that any suit, action or proceeding brought in the U.S. District
Court for the Southern District of Florida, West Palm Beach, Florida, has been
brought in an inconvenient form.

 

6. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

7. ATTORNEYS’ FEES. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys’ fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled as determined by such court,
equity or arbitration proceeding.

 

8. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended with the
written consent of Bright Mountain and the Shareholder. No delay or failure on
the part of Bright Mountain in exercising any power or right under this
Agreement shall operate as a waiver of any power or right.

 

9. SEVERABILITY. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

 

10. CONSTRUCTION. This Agreement has been entered into freely by each of the
parties, following consultation with their respective counsel, and shall be
interpreted fairly in accordance with its respective terms, without any
construction in favor of or against either party.

 

11. ENTIRE AGREEMENT. This Agreement and the documents referred to herein
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements existing
between the parties hereto are expressly canceled.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

  BRIGHT MOUNTAIN MEDIA, INC.         By: /s/ Alan B. Bergman     Alan B.
Bergman, Chief Financial Officer           /s/ W. Kip Speyer     W. Kip Speyer

 

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