Document:

trilinc-ex105_10.htm

Exhibit 10.5 

AMENDED AND RESTATED OPERATING EXPENSE RESPONSIBILITY AGREEMENT 

This Amended and Restated Operating Expense Responsibility Agreement, entered into on the date set forth below, is by and among TriLinc Global, LLC, a Delaware limited liability company (“Sponsor”), TriLinc Advisors, LLC, a Delaware limited liability company (“Advisor”), and TriLinc Global Impact Fund, LLC, a Delaware limited liability company (“Fund” and together with the Sponsor and the Advisor, the “Parties”). 

WHEREAS, the Sponsor has agreed to be responsible for the payment of certain of the Fund’s cumulative operating costs incurred through and including December 31, 2017, including the management and incentive fees due to the Advisor that have not been paid by the Fund (all as collectively set forth in Exhibit A hereto and referred to as “Fund Expenses”).

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

	
1.
	
Expense Responsibility for Fund Expenses. The Sponsor shall pay the Fund Expenses and will only be entitled to reimbursement of the cumulative Fund Expenses to the extent the Fund’s investment income for any quarter as reflected on the statement of operations exceeds the sum of (a) total distributions to unitholders incurred during the quarter and (b) the Fund’s expenses as reflected on the statement of operations for the same quarter (the “Reimbursement Hurdle”). To the extent the Fund is not successful in satisfying the Reimbursement Hurdle, no amount will be payable for that quarter by the Fund for reimbursement to the Sponsor of the cumulative Fund Expenses.  If the Sponsor is entitled to receive reimbursement for any given quarter because the Company’s investment income exceeds the Reimbursement Hurdle for such quarter, the Company will apply the excess amount (the “Excess Amount”) as follows: (i) first, the Company will reimburse the Sponsor for all expenses, other than management fees and incentive fees, that the Sponsor previously paid on behalf of the Company as listed on Exhibit A, which will generally consist of operating expenses (the “Previously Paid Operating Expenses”) until all Previously Paid Operating Expenses incurred to date have been reimbursed; and (ii) second, the Company will apply 50% of the Excess Amount remaining after the payment of Previously Paid Operating Expenses to reimburse the Sponsor for the management fees and incentive fees that the Sponsor has agreed to pay on the Company’s behalf until all such management fees and incentive fees [accrued to date] have been reimbursed.  

 

	
2.
	
Entire Agreement.  This Agreement sets forth the entire agreement of the Parties with respect to the matters contained herein and no prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective for any purpose.

 

	
3.
	
Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to its principles of conflicts of laws.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on March 26, 2018

 

	
TRILINC GLOBAL, LLC

	
 
	
 

	
By:
	
 
	
/s/ Brent L. VanNorman 

	
Name: 
	
 
	
 Brent L. VanNorman

	
Title:
	
 
	
 COO and CFO

	
 

	
TRILINC ADVISORS, LLC

	
 
	
 

	
By:
	
 
	
/s/ Brent L. VanNorman

	
Name:
	
 
	
 Brent L. VanNorman

	
Title:
	
 
	
 COO and CFO

	
 

	
TRILINC GLOBAL IMPACT FUND, LLC

	
 
	
 

	
By:
	
 
	
/s/ Gloria S. Nelund

	
Name:
	
 
	
 Gloria S. Nelund

	
Title:
	
 
	
 Chairman and CEO 

 

Attachment A 

Schedule of Services Incurred by TriLinc Global Impact Fund, LLC through December 31, 2017 

 

 

	
Vendor
	
Description of Services
	
Amount
	
 

	
ANDE
	
2013-2014 Membership
	
$
	
5,000
	
 

	
ASTA
	
Document Translation
	
 
	
3,186
	
 

	
Apex Fund Services
	
Fund Administration
	
 
	
293,490
	
 

	
Bank of NY Mellon
	
Fund Administration
	
 
	
90,000
	
 

	
Bank of NY Mellon
	
Bank fees
	
 
	
17,277
	
 

	
Board of Managers
	
Board Wages
	
 
	
715,364
	
 

	
Board of Managers
	
Board Meeting expenses
	
 
	
128,939
	
 

	
Credit Cards
	
Travel - Dead deal costs
	
 
	
62,987
	
 

	
Deloitte & Touche
	
Audit
	
 
	
401,400
	
 

	
Deloitte & Touche
	
Tax services
	
 
	
483,132
	
 

	
Delphos International
	
Consulting
	
 
	
10,000
	
 

	
DST Systems, Inc.
	
Transfer Agent
	
 
	
1,127,551
	
 

	
Duff & Phelps
	
Valuation services
	
 
	
65,831
	
 

	
Emtek Solutions, LLC
	
PAES/TAS
	
 
	
7,875
	
 

	
Federal Agent
	
PAES/TAS
	
 
	
12,750
	
 

	
Greenberg Traurig
	
Legal Services
	
 
	
809,329
	
 

	
IDB Bank
	
Due Diligence
	
 
	
50,000
	
 

	
iUVO Talent
	
PAES/TAS
	
 
	
12,318
	
 

	
Josh Zuckerwise
	
Travel expenses
	
 
	
4,023
	
 

	
Legatum Global Development Limited
	
PAES/TAS
	
 
	
292,500
	
 

	
Leverages Notes
	
Interest
	
 
	
47,573
	
 

	
Lewis Kopp
	
Expense reimbursement
	
 
	
14,348
	
 

	
Lincoln National Insurance
	
Keyman insurance
	
 
	
8,558
	
 

	
Maples and Calder
	
Legal Services
	
 
	
118,288
	
 

	
Moss Adams
	
Audit and 10-Q review
	
 
	
439,538
	
 

	
MF Analytics
	
PAES/TAS
	
 
	
65,159
	
 

	
O'Connor Davies
	
SOX Compliance
	
 
	
80,659
	
 

	
PathNorth
	
2013 Core Membership
	
 
	
4,167
	
 

	
Paul Sanford
	
Travel expenses
	
 
	
5,212
	
 

	
Payroll
	
PAES/TAS
	
 
	
150,091
	
 

	
Pickwick Capital Partners
	
Leverage
	
 
	
4,270
	
 

	
Robert Mora
	
PAES/TAS
	
 
	
97,791
	
 

	
Rothstein Kass
	
SOX Implementation/Compliance
	
 
	
41,027
	
 

	
RR Donnelley
	
10-K, 10-Q & 8-K Processing
	
 
	
252,190
	
 

	
Spolin Cohen
	
Legal Services
	
 
	
83,699
	
 

	
State of California & Delaware
	
Franchise fees
	
 
	
2,350
	
 

	
Steve Napleton
	
Travel expenses
	
 
	
8,979
	
 

	
Tanir Helayel
	
PAES/TAS
	
 
	
6,779
	
 

	
Trilinc Advisors, LLC
	
Copies, postage and miscellaneous
	
 
	
92,579
	
 

	
Trilinc Advisors, LLC
	
eFront
	
 
	
349,656
	
 

	
Trilinc Advisors, LLC
	
Management fees
	
 
	
1,717,750
	
 

	
Trilinc Advisors, LLC
	
Incentive fees
	
 
	
7,832,296
	
 

	
Trilinc Advisors, LLC
	
Due Diligence
	
 
	
131,628
	
 

	
Trilinc Advisors, LLC
	
Travel expenses
	
 
	
97,660
	
 

	
Trilinc Advisors, LLC
	
Legal expenses
	
 
	
219,418
	
 

	
Troy Wiseman
	
Expense reimbursement
	
 
	
9,701
	
 

	
Trustees of Tufts College
	
PAES/TAS
	
 
	
18,150
	
 

	
Various
	
PAES/TAS
	
 
	
14,601
	
 

	
Willis
	
Fund Insurance
	
 
	
153,695
	
 

	
 
	
 
	
$
	
16,660,767FORM OF COMMON STOCK PURCHASE WARRANT

 

EXHIBIT 4.1

FORM OF COMMON STOCK PURCHASE WARRANT

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT (i) EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE BRIGHT MOUNTAIN MEDIA, INC., THAT SUCH REGISTRATION IS NOT REQUIRED, OR (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES.

		
	[•], 2018

	No. W-2018-[•]

BRIGHT MOUNTAIN MEDIA, INC.

COMMON STOCK PURCHASE WARRANT

This certifies that, for good and valuable consideration, receipt of which is hereby acknowledged, [•] (“Holder”) is entitled to purchase, subject to the terms and conditions of this Warrant, from Bright Mountain Media, Inc., a Florida corporation (the “Company”), [•] ([•]) fully paid and nonassessable shares of the Company’s common stock, par value $0.01 per share (“Common Stock”).  Holder shall be entitled to purchase the shares of Common Stock in accordance with Section 2 at any time subsequent to the date of this Warrant set forth above and prior to the Expiration Date (as defined below).  The shares of Common Stock of the Company for which this Warrant is exercisable, as adjusted from time to time pursuant to the terms hereof, are hereinafter referred to as the “Shares.”  This Warrant is one of a series of Warrants included in the Units issued and sold pursuant to the terms and conditions of the Company’s Confidential Private Offering Memorandum for Accredited Investors dated January 4, 2018 and the exhibits (the “Offering Documents”), as may be supplemented from time to time.  

1.

Exercise Period; Price.  

1.1

Exercise Period.  This Warrant shall be immediately exercisable and the exercise period (“Exercise Period”) shall terminate at 5:00 p.m. Eastern time on [•], 2023 (the “Expiration Date”).

1.2

Exercise Price.  The initial purchase price for each of the Shares shall be $0.65 per share.  Such price shall be subject to adjustment pursuant to the terms hereof (such price, as adjusted from time to time, is hereinafter referred to as the “Exercise Price”).

2.

Exercise and Payment.  

2.1

Exercise.  At any time after the date of this Warrant, this Warrant may be exercised, in whole or in part, from time to time by the Holder, during the term hereof, by surrender of this Warrant and the Notice of Exercise attached hereto as Annex I, duly completed and executed by the Holder, to the Company at the principal executive offices of the Company, together with payment in the amount obtained by multiplying the Exercise Price then in effect by the number of Shares thereby purchased, as designated in the Notice of Exercise.  Payment may be in cash, wire transfer or by check payable to the order of the Company in immediately available funds.  If not exercised in full, this Warrant must be exercised for a whole number of Shares.

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2.2

Cashless Exercise.  If: (i) the Company shall have failed to timely file the Resale Registration Statement (as hereinafter defined); or (ii) at any time thereafter during the Exercise Period there is not an effective registration statement registering the Shares, or the prospectus contained therein is not available for the issuance of the Shares to the Holder, for a period of at least sixty (60) days following the delivery of the Suspension Notice (as hereinafter defined), then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the average of the closing sale prices for the five (5) trading days immediately prior to (but not including) the exercise date;

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and 

(X) = the number of Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

When used herein, a “Suspension Notice” shall mean the occurrence of any of the following events: (i) any request by the Securities and Exchange Commission ("SEC") or any other federal or state governmental authority, during the period of effectiveness of the Resale Registration Statement, for amendments or supplements to such registration statement or related prospectus or for additional information; (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the Resale Registration Statement or the initiation of any proceedings for that purpose; (iii) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction from a state governmental authority or the initiation of any proceeding for such purpose by a state governmental authority; or (iv) any event or circumstance which necessitates the making of any changes to the Resale Registration Statement or related prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Resale Registration Statement, it will not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading and, in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  The Company will promptly provide written notice to the Holder of the occurrence of any Suspension Event.  The Company shall thereafter promptly prepare a supplement or amendment to the Resale Registration Statement to correct such untrue statement or omission, and provide a copy of such supplement or amendment to the Holder. The Company shall also promptly notify the Holder in writing (x) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a registration statement or any post-effective amendment has become effective and (y) of the Company’s reasonable determination that a post-effective amendment to a registration statement would be appropriate.

For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Act”), it is intended, understood and acknowledged that the Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Offering Documents  (provided the SEC continues to take the position that such treatment is proper at the time of such exercise).  

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2.3

Holder's Exercise Limitation.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2.1, Section 2.2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates (as that term is defined in the Securities Exchange Act of 1934, as amended (the "Exchange Act")), and any other persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates, and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 2.3, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.  To the extent that the limitation contained in this Section 2.3 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation.  For purposes of this Section 2.3, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Securities and Exchange Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall as promptly as practicable confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2.3, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2.3 shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a 

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manner otherwise than in strict conformity with the terms of this Section 2.3 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.  

3.

Company’s Right to Call this Warrant.  Subject to the terms and conditions set forth herein, and providing that there is an effective registration statement registering the Shares issuable upon exercise of this Warrant, during the Exercise Period, upon thirty (30) days prior written notice to the Holder (each, a “Call Notice”) following the date on which the last sale price of the Company’s Common Stock equals or exceeds $1.50 per share for ten (10) consecutive trading days, as may be adjusted for stock splits, stock dividends and similar corporate events, if the average daily trading volume of the Company’s Common Stock is not less than thirty thousand (30,000) shares during such ten (10) consecutive trading day period, the Company shall have the right to call any or all of the Warrants at a call price of $0.01 per underlying Share (the "Call Price").  Warrant holders shall have the period from the date of the Call Notice until 5 p.m., Eastern time, on the twentieth (20th) day following the Call Notice (the "Call Date") to exercise the Warrant pursuant to the terms hereof.  Any Warrants which have been called but remain unexercised by the Call Date shall automatically terminate and no longer entitle the Holder to exercise such Warrant or to receive any consideration therefor, other than the Call Price.  For any Warrants which are not exercised by the Call Date, the Company shall promptly as possible following the Call Date pay the Call Price to the Holder of any Warrants which have been called and not exercised. 

4.

Registration Rights.  No later than one hundred and twenty (120) days (the "Filing Deadline") following the Final Closing (as that term is defined in the Offering Documents), the Company will file a registration statement with the SEC to register the resale of the Shares by the Holder so as to permit the public resale thereof (the “Resale Registration Statement”).  The Company will use its reasonable efforts to ensure that such Resale Registration Statement is declared effective by the SEC as soon as practicable.  The Company will keep such Resale Registration Statement effective until the earlier of the date upon which all Shares may be sold without registration under Rule 144 or the date which is six months after the expiration of the Warrants.  If the Company should fail to file the Resale Registration Statement by the Filing Deadline, then within five (5) business days of the end of month the Company shall pay the Holder an amount in cash, as partial liquidated damages, equal to two percent (2%) of the aggregate Purchase Price (as that term is defined in the Offering Documents) paid by such Holder for each 30 days, or portion thereof, until the earlier of the date the deficiency is cured or the expiration of six (6) months from Filing Deadline (the “Penalty”).  No Holder shall be entitled to a Penalty payment pursuant to this Section 4 if the filing of the Resale Registration Statement has been delayed as the result of the failure by such Holder to promptly provide on request by the Company the information required under the Subscription Agreement which is part of the Offering Documents.  Notwithstanding any other provision of this Warrant, if any (i) any publicly-available written guidance, or rule of general applicability of the SEC staff, or (ii) oral or written comments, requirements or requests of the SEC staff to the Company in connection with the review of the Resale Registration Statement sets forth a limitation on the number of Shares to be registered in the Resale Registration Statement (and the Company has used its best efforts to advocate with the SEC for the registration of all or the maximum number of Shares), the number of Shares to be registered on such Resale Registration Statement will be reduced on a pro rata basis among the purchasers of Warrants issued and sold pursuant to the Offering Documents based on the total number of Shares underlying Warrants held by such purchasers.

5.

Reservation of Shares.  The Company hereby agrees that at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of Shares or other shares of capital stock of the Company from time to time issuable upon exercise of this Warrant.  All such shares 

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shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully paid and non-assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights.

6.

Delivery of Stock Certificates.  Within three (3) trading days after exercise, in whole or in part, of this Warrant, the Company shall issue in the name of and deliver to the Holder a certificate or certificates for the number of fully paid and nonassessable Shares which the Holder shall have requested in the Notice of Exercise.  If this Warrant is exercised in part, the Company shall deliver to the Holder a new Warrant (dated the date hereof and of like tenor) for the unexercised portion of this Warrant at the time of delivery of such stock certificate or certificates.  

7.

No Fractional Shares.  This Warrant must be exercised for a whole number of Shares.  No fractional shares or scrip representing fractional Shares will be issued upon exercise of this Warrant.  Any fractional Share which otherwise might be issuable on the exercise of this Warrant as a result of the anti-dilution provisions Section 10 hereof will be rounded up to the nearest whole Share.

8.

Charges, Taxes and Expenses.  The Company shall pay all transfer taxes or other incidental charges, if any, in connection with the transfer of the Shares purchased pursuant to the exercise hereof from the Company to the Holder.

9.

Loss, Theft, Destruction or Mutilation of Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of this Warrant.

10.

Saturdays, Sundays, Holidays, Etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding weekday which is not a legal holiday.

11.

Adjustment of Exercise Price and Number of Shares.  The Exercise Price and the number of and kind of securities purchasable upon exercise of this Warrant shall be subject to adjustment from time to time as follows:

11.1

Subdivisions, Combinations and Other Issuances.  If the Company shall at any time after the date hereof but prior to the expiration of this Warrant subdivide its outstanding securities as to which purchase rights under this Warrant exist, by split-up or otherwise, or combine its outstanding securities as to which purchase rights under this Warrant exist, the number of Shares as to which this Warrant is exercisable as of the date of such subdivision, split-up or combination shall forthwith be proportionately increased in the case of a subdivision, or proportionately decreased in the case of a combination.  Appropriate adjustments shall also be made to the Exercise Price, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant as of such date shall remain the same.

11.2

Stock Dividend.  If at any time after the date hereof the Company declares a dividend or other distribution on its Common Stock payable in Common Stock or other securities or rights convertible into Common Stock (“Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon exercise or conversion 

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thereof), then the number of Shares for which this Warrant may be exercised shall be increased as of the record date (or the date of such dividend distribution if no record date is set) for determining which holders of Common Stock shall be entitled to receive such dividend, in proportion to the increase in the number of outstanding shares (and shares of Common Stock issuable upon conversion of all such securities convertible into Common Stock) of Common Stock as a result of such dividend, and the Exercise Price shall be adjusted so that the aggregate amount payable for the purchase of all the Shares issuable hereunder immediately after the record date (or on the date of such distribution, if applicable), for such dividend shall equal the aggregate amount so payable immediately before such record date (or on the date of such distribution, if applicable).

11.3.

Other Distributions.  If at any time after the date hereof the Company distributes to holders of its Common Stock, other than as part of its dissolution or liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than cash, Common Stock or Common Stock Equivalents), then the Company may, at its option, either (i) decrease the Exercise Price of this Warrant by an appropriate amount based upon the value distributed on each share of Common Stock as determined in good faith by the Company’s Board of Directors, or (ii) provide by resolution of the Company’s Board of Directors that on exercise of this Warrant, the Holder hereof shall thereafter be entitled to receive, in addition to the shares of Common Stock otherwise receivable on exercise hereof, the number of shares or other securities or property which would have been received had this Warrant at the time been exercised.

11.4

Effect of Consolidation, Merger or Sale.  In case of any reclassification, capital reorganization, or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of any subdivision, combination, stock dividend or other distribution provided for in Sections 11.1, 11.2 and 11.3 above), or in case of any consolidation or merger of the Company with or into any corporation (other than a consolidation or merger with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), or the Company shall make appropriate provision without the issuance of a new Warrant, so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the Shares theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, capital reorganization, change, merger or sale by a holder of the number of Shares then purchasable under this Warrant.  In any such case, appropriate provisions shall be made with respect to the rights and interest of Holder so that the provisions hereof shall thereafter be applicable to any shares of stock or other securities and property deliverable upon exercise hereof, or to any new Warrant delivered pursuant to this Section 11.4, and appropriate adjustments shall be made to the Exercise Price per share payable hereunder, provided, that the aggregate Exercise Price shall remain the same.  The provisions of this Section 11.4 shall similarly apply to successive reclassifications, capital reorganizations, changes, mergers and transfers. 

12.

Notice of Adjustments; Notices.  Whenever the Exercise Price or number of Shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall execute and deliver to the Holder a certificate setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated and the Exercise Price and number of and kind of securities purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

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13.

Rights As Shareholder; Notice to Holders.  Nothing contained in this Warrant shall be construed as conferring upon the Holder or his or its transferees the right to vote or to receive dividends or to consent or to receive notice as a shareholder in respect of any meeting of shareholders for the election of directors of the Company or of any other matter, or any rights whatsoever as shareholders of the Company.  The Company shall give notice to the Holder by registered mail if at any time prior to the expiration or exercise in full of the Warrants, any of the following events shall occur:

(i)

a dissolution, liquidation or winding up of the Company shall be proposed; 

(ii)

a capital reorganization or reclassification of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of any subdivision, combination, stock dividend or other distribution) or any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company; or

(iii)

a taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) for other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other rights.

Such giving of notice shall be simultaneous with (or in any event, no later than) the giving of notice to holders of Common Stock.  Such notice shall specify the record date or the date of closing the stock transfer books, as the case may be.  Failure to provide such notice shall not affect the validity of any action contemplated in this Section 13.

14.

Restricted Securities.  The Holder understands that this Warrant and the Shares purchasable hereunder constitute “restricted securities” under the federal securities laws inasmuch as they are, or will be, acquired from the Company in transactions not involving a public offering and accordingly may not, under such laws and applicable regulations, be resold or transferred without registration under the Act, or an applicable exemption from such registration.  The Holder further acknowledges that a securities legend to the foregoing effect shall be placed on any Shares issued to the Holder upon exercise of this Warrant.

15.

Disposition of Shares; Transferability.

15.1

Transfer.  This Warrant shall be transferable only on the books of the Company, upon delivery thereof duly endorsed by the Holder or by its duly authorized attorney or representative, accompanied by proper evidence of succession, assignment or authority to transfer.  Upon any registration of transfer, the Company shall execute and deliver new Warrants to the person entitled thereto.

15.2

Rights, Preferences and Privileges of Common Stock.  The powers, preferences, rights, restrictions and other matters relating to the shares of Common Stock will be as determined in the Company’s Amended and Restated Articles of Incorporation, as amended, as then in effect. 

7

 

16.

Miscellaneous.

16.1

Binding Effect.  This Warrant and the various rights and obligations arising hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

16.2

Entire Agreement.  This Warrant and the Offering Documents constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, whether oral or written, between the parties hereto with respect to the subject matter hereof.

16.3

Amendment and Waiver.  Any term of this Warrant may be amended and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder.

16.4

Governing Law.  This Agreement shall be governed by and construed under the laws of the State of Florida without reference to the conflicts of law principles thereof.  The exclusive jurisdiction for any legal suit, action or proceeding arising out of or related to this Warrant shall be the United States District Court for the Southern District of Florida.

16.5

Headings.  The headings in this Agreement are for convenience only and shall not alter or otherwise affect the meaning hereof.

16.6

Severability.  If one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and the balance shall be enforceable in accordance with its terms.

16.7

Notices.  Unless otherwise provided, any notice required or permitted under this Warrant shall be given in the same manner as provided in the Agreement.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Warrant as of the date appearing on the first page of this Warrant.

THE COMPANY:

BRIGHT MOUNTAIN MEDIA, INC.

By: _______________________________

W. Kip Speyer, Chief Executive Officer

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ANNEX I

NOTICE OF EXERCISE

To:

Bright Mountain Media, Inc.

1.

The undersigned Holder hereby elects to purchase _____________ shares of common stock, $0.01 par value per share (the “Shares”) of Bright Mountain Media, Inc., a Florida corporation (the “Company”), pursuant to the terms of the attached Warrant.  The Holder shall make payment of the Exercise Price by delivering the sum of $____________, in lawful money of the United States, to the Company in accordance with the terms of the Warrant.

2.

Please issue and deliver certificates representing the Warrant Shares purchased hereunder to Holder:____________________, Address:__________________ in the following denominations: ____________________________.

3.

Please issue a new Warrant for the unexercised portion of the attached Warrant, if any, in the name of the undersigned.

Holder:

______________________________________________________________

Dated:

______________________________________________________________

By:

______________________________________________________________

Its:

______________________________________________________________

Address:

______________________________________________________________

4.

The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

SIGNATURE OF HOLDER

Name of Investing Entity:

_________________________________________________________

Signature of Authorized Signatory of Investing Entity:

___________________________________

Name of Authorized Signatory:

______________________________________________________

Title of Authorized Signatory:

______________________________________________________

Date:

_________________________________________________________________________

1

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