Document:

REGISTRATION RIGHTS AGREEMENT

 

EXHIBIT 4.1

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT, dated as of July 5, 2018 (this “Agreement”), is entered into by and among Lois O’Neill and Charles Dougiello (collectively, the “Shareholders” and each individually a “Shareholder”), and Dolphin Entertainment, Inc., a Florida corporation (the “Company”).

WHEREAS, the Company and the Shareholders have entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which the Shareholders will receive a combination of cash and shares of the Company’s common stock, par value $0.015 (“Common Stock”), in consideration for all of the membership interests in The Door Marketing Group, LLC, a New York 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 Stock Consideration” 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.

“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 Stock Consideration, the Post-Closing Stock Consideration  and the Additional Stock Consideration, 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 Stock Consideration, the Post-Closing Stock Consideration or the Additional Stock Consideration, if any, as a result of conversion, exchange, recapitalization, reorganization, replacement, stock dividend, stock split or other distribution.

ARTICLE II

REGISTRATION RIGHTS

Section 2.1

Demand Registration.

(a)

The Company shall use its reasonable efforts to remain qualified to register the offer and sale of securities under the Securities Act pursuant to a Registration Statement on any appropriate registration statement form then available for the registration of securities for resale by the holder thereof, including Form S-3 or any successor form thereto.  Subject to the terms and conditions set forth herein and subject to the lock-up provisions set forth in Section 4.8 of the executive employment agreements, dated the date hereof, by and between each Shareholder and The Door Marketing Group, LLC, from and after the first anniversary of the date hereof, holders of at least a majority of the Registrable Securities then outstanding shall have the right to request up to two registrations under the Securities Act of up to 100% of the aggregate Registrable Securities held by all holders of Registrable Securities at that time pursuant to a 

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Registration Statement on Form S-3 or any similar short-form Registration Statement (each, a “Demand Registration”).  Each request for a Demand Registration shall specify the number of Registrable Securities requested to be included in the Demand 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 ten (10) 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 Demand 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.

(b)

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.

(c)

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.

(d)

 If, at any time after the one year anniversary of this Agreement, there is not an effective Demand Registration covering the Registrable Securities, and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering 

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for its own account or the account of others under the Securities Act of any of its equity securities (other than on Form S-4 or Form S-8, each as promulgated under the Securities Act, or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans) then the Company shall send to the holders of the Registrable Securities a written notice of such determination at least twenty (20) days prior to the filing of any such registration statement and subject to the lock-up provisions set forth in Section 4.8 of the executive employment agreements, dated the date hereof, by and between each Shareholder and The Door Marketing Group, LLC on only two occasions shall include in such registration statement all the Registrable Securities for resale and offer on a continuous basis pursuant to Rule 415 (each, a “Piggyback Registration”); provided, however, that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company determines for any reason not to proceed with such registration, the Company will be relieved of its obligation to register any Registrable Securities in connection with such registration, (ii) in case of a determination by the Company to delay registration of its securities, the Company will be permitted to delay the registration of Registrable Securities for the same period as the delay in registering such other securities, (iii) each holder of Registrable Securities is subject to confidentiality obligations with respect to any information gained in this process or any other material non-public information he, she or it obtains, and (iv) each holder of Registrable Securities or assignee or successor in interest is subject to all applicable laws relating to insider trading or similar restrictions. 

(e)

If a Piggyback Registration involves an underwritten offering and the managing underwriter of the requested Piggyback 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 Piggyback 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 Piggyback 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 Piggyback Registration (i) first, the shares of Common Stock that the Company and/or other holders of Common Stock (if such other holders have exercised demand registration rights) propose to sell, (ii) second, the shares of Common Stock that the holders of Registrable Securities propose to sell,  and (iii) third, the shares of Common Stock proposed to be included therein by any other Persons (not otherwise included in (i) above) 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:

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(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;

(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 

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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;

(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.  Notwithstanding the foregoing, if the registration statement is pursuant to a second Demand Registration, then the Company will be responsible for only one half, and the holders of 

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Registrable Securities will be responsible for the other half, of all the expenses associated with the registration of the Registrable Shares on the second Demand Registration.

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.

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 EDGAR 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, 

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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.

(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 

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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.

(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 

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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.

(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

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(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;

(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 

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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.

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 Entertainment, Inc.

2151 LeJeune Road

Suite 150-Mezzanine

Coral Gables, FL 33134

Attention: William O’Dowd

Fax: (305) 774-0405

Email: billodowd@dolphinentertainment.com

 

	with a copy to (which shall not constitute notice to the Company):

	Greenberg Traurig, P.A.

333 Avenue of the Americas

Miami, FL 33131

Attention: Randy Bullard

Fax No: (305) 961-5532

Email: Bullardr@gtlaw.com

 

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	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):

	 Golenbock Eiseman Assor Bell & Peskoe

711 Third Avenue – 17th Floor

New York, New York 10017

Attention:  Andrew Peskoe Esq.

Email: apeskoe@golenbock.com

 

(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 

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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.

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.  

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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]

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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 ENTERTAINMENT, INC.

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	By:

	/s/ William O’Dowd

	 
	Name:

	William O’Dowd IV

	 
	Title:

	Chief Executive Officer

	 
	 
	 

	 
	 
	 

	SHAREHOLDERS:

	 
	 

	 
	 
	 

	 
	/s/ Lois O’Neill

	 
	Lois O’Neill

	 
	 
	 

	 
	/s/ Charles Dougiello

	 
	Charles DougielloExhibit 10.1

 

THIRD SUPPLEMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

 

NEW MOUNTAIN FINANCE CORPORATION

 

Dated as of

July 5, 2018

 

To the Purchaser named in

Schedule A hereto

 

Ladies and Gentlemen:

 

This Third Supplement to Amended and Restated Note Purchase Agreement (the “Supplement”) is between New Mountain Finance Corporation, a Delaware corporation (the “Company”), and the institutional investor named on Schedule A attached hereto (the “Purchaser”).

 

Reference is hereby made to that certain Amended and Restated Note Purchase Agreement dated September 30, 2016 (the “Note Purchase Agreement”) among the Company, the First Closing Purchasers listed on Schedule B-1 thereto and the Second Closing Purchasers listed on Schedule B-2 thereto.  Except as otherwise provided in sections 4 and 6 below with respect to replacements of “Second Closing Notes,” “Second Closing,” “Second Closing Purchaser,” and “Effective Date” all capitalized terms not otherwise defined herein shall have the same meaning as specified in the Note Purchase Agreement.  Reference is further made to Section 4.14 of the Note Purchase Agreement which requires that, prior to the delivery of any Additional Notes, the Company and each Additional Purchaser shall execute and deliver a Supplement.  The Series 2018B Notes (as defined below) constitute Additional Notes under the Note Purchase Agreement.

 

The Company hereby agrees with the Purchaser as follows:

 

1.                     The Company has authorized the issue and sale of $50,000,000 aggregate principal amount of its 5.36% Series 2018B Senior Notes due June 28, 2023 (the “Series 2018B Notes”).  The Series 2018B Notes, together with the Series 2016 Notes issued pursuant to the Note Purchase Agreement, the Series 2017A Notes issued pursuant to that certain First Supplement to Amended and Restated Note Purchase Agreement dated as of June 30, 2017, the Series 2018A Notes issued pursuant to that certain Second Supplement to Amended and Restated Note Purchase Agreement dated as of January 30, 2018, and each series of Additional Notes which may from time to time hereafter be issued pursuant to the provisions of Section 2.2 of the Note Purchase Agreement, are collectively referred to as the “Notes” (such term shall also include any such notes issued in substitution therefor pursuant to Section 13 of the Note Purchase Agreement).  The Series 2018B Notes shall be substantially in the form set out in Exhibit 1 hereto with such changes therefrom, if any, as may be approved by the Purchaser and the Company.

 

 

2.                     Subject to the terms and conditions hereof and as set forth in the Note Purchase Agreement and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company, Series 2018B Notes in the principal amount set forth opposite the Purchaser’s name on Schedule A hereto at a price of 100% of the principal amount thereof on the Closing Date.

 

3.                     The sale and purchase of the Series 2018B Notes to be purchased by the Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at 9:00 a.m. Chicago time, at a closing (the “Closing”) on July 5, 2018 (the “Closing Date”).  At the Closing, the Company will deliver to the Purchaser the Series 2018B Notes to be purchased by the Purchaser in the form of a single Series 2018B Note (or such greater number of Series 2018B Notes in denominations of at least $100,000 as the Purchaser may request) dated the date of the Closing and registered in the Purchaser’s name (or in the name of the Purchaser’s nominee), against delivery by the Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number XXXXXXXXXXXX at U.S. Bank National Association, in Boston, MA, ABA No. XXXXXXXXX.  If, at the Closing, the Company shall fail to tender such Series 2018B Notes to the Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to the Purchaser’s satisfaction, the Purchaser shall, at the Purchaser’s election, be relieved of all further obligations under this Agreement, without thereby waiving any rights the Purchaser may have by reason of such failure or such nonfulfillment.

 

4.                     The Company represents and warrants to the Purchaser, as of the Closing Date, (or, if any such representations and warranties expressly relate to an earlier date, then as of such earlier date), each of the matters set forth in Section 5 of the Note Purchase Agreement, as specified subsections of such Section 5 have been supplemented, amended or superseded as set forth on Exhibit A hereto.  The obligation of the Purchaser to purchase and pay for the Series 2018B Notes to be sold to the Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of (i) the conditions set forth in Section 4 of the Note Purchase Agreement with respect to the Series 2018B Notes to be purchased at the Closing as if each reference to “Second Closing Notes,” “Second Closing,” “Second Closing Purchaser,” “Effective Date,” “Schedule B-2,” and “Schedule 5.5” set forth therein was replaced by “Series 2018B Notes,” the “Closing,” the “Purchaser,” the “Closing Date,” “Schedule A,” and “Schedule 5.5C” (each as defined in or attached to this Supplement), respectively, and except to the extent such conditions set forth in Section 4 of the Note Purchase Agreement are supplemented, amended or superseded hereby, and (ii) the following additional conditions:

 

(a)                        Except as supplemented, amended or superseded by the representations and warranties set forth in Exhibit A hereto, each of the representations and warranties of the Company set forth in Section 5 of the Note Purchase Agreement shall be correct as of the date of Closing (except for representations and warranties which apply to a specific earlier date which shall be true as of such earlier date or as of the date specified in Exhibit A to the extent such provision is superseded in Exhibit A) and the Company shall have delivered to the Purchaser an Officer’s Certificate, dated the date of the Closing certifying that such condition has been fulfilled.

 

2

 

(b)                         Contemporaneously with the Closing, the Company shall sell to the Purchaser, and the Purchaser shall purchase, the Series 2018B Notes to be purchased by the Purchaser at the Closing as specified in Schedule A.

 

5.                     The terms of Section 8 of the Note Purchase Agreement shall apply to the Series 2018B Notes except that the proviso in the first sentence of Section 8.2 of the Note Purchase Agreement shall be amended in its entirety to read as follows:

 

“provided, that at any time on or after February 15, 2021 the Company may, at its option, upon notice as provided below, prepay all or any part of the Series 2016 Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date; provided, further, that at any time on or after April 15, 2022 the Company may, at its option, upon notice as provided below, prepay all or any part of the Series 2017A Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date; provided, further, that at any time on or after October 30, 2022 the Company may, at its option, upon notice as provided below, prepay all or any part of the Series 2018A Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date; provided, further, that at any time on or after March 28, 2023, the Company may, at its option, upon notice as provided below, prepay all or any part of the Series 2018B Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date.”

 

For the avoidance of doubt, the definition of “Make-Whole Amount” set forth in Section 8.6 of the Note Purchase Agreement shall be applicable to any Series 2018B Note.

 

6.                     The Purchaser represents and warrants that the representations and warranties set forth in Section 6 of the Note Purchase Agreement are true and correct on the date hereof with respect to the purchase of the Series 2018B Notes by the Purchaser as if each reference to “Second Closing Notes,” “Second Closing” and “Second Closing Purchaser” set forth therein was replaced by “Series 2018B Notes,” the “Closing” and the “Purchaser,” respectively, and each reference to “this Agreement” therein was modified to refer to the Note Purchase Agreement as supplemented by this Supplement.

 

The Purchaser further represents and warrants that such Purchaser:

 

(a)                        is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act;

 

(b)                         has reviewed the Disclosure Documents and has been furnished with all other materials that it considers relevant to a purchase of the Series 2018B Notes, has had

 

3

 

a full opportunity to ask questions of and receive answers from the Company or any person or persons acting on behalf of the Company concerning the terms and conditions of a purchase of the Series 2018B Notes and no statement or printed material which is contrary to the Disclosure Documents has been made or given to the purchaser by or on behalf of the Company; and

 

(c)                         is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, including, without limitation, Goldman Sachs & Co. LLC, any of its affiliates or any of its or their control persons, officers, directors or employees, except for the statements, representations and warranties contained in the Note Purchase Agreement (as supplemented, amended or superseded hereby) and the other Disclosure Documents, in making its decision to purchase the Series 2018B Notes.

 

7.                     The Company and the Purchaser agree to be bound by and comply with the terms and provisions of the Note Purchase Agreement (except as supplemented, amended or superseded hereby) as fully and completely as if the Purchaser were an original signatory to the Note Purchase Agreement.

 

8.                     Covenants of the Company.  In addition to the covenants and agreements set forth in the Agreement, the Company covenants and agrees, which covenants and agreements shall have the benefit of Section 11(c) of the Note Purchase Agreement, for the benefit of the Purchaser and each other holder of a Note that:

 

(a)                        Debt to Equity Ratio.                             Immediately after the issuance of any senior security representing indebtedness (as determined pursuant to the Investment Company Act), and after giving pro forma effect thereto and the application of the proceeds thereof, the Company will not permit the Debt to Equity Ratio, to be greater than 1.65 to 1.00.

 

“Debt to Equity Ratio” means the ratio of (a) the aggregate amount of senior securities representing indebtedness of the Company and its Subsidiaries (including under the Notes), in each case as determined pursuant to the Investment Company Act, and any orders of the SEC issued to or with respect to Company thereunder, including any exemptive relief granted by the SEC with respect to the indebtedness of any SBIC Subsidiary to (b) Shareholders’ Equity at the last day of the immediately preceding fiscal quarter of the Company.

 

(b)                         Maximum Secured Debt.  The Company will not permit the Secured Debt Ratio at any time to exceed 0.70 to 1.00.

 

“Secured Debt” means Indebtedness of the Company and its Subsidiaries that are consolidated with the Company for purposes of GAAP  (excluding any Indebtedness of any of the Company’s Subsidiaries which are SBIC Subsidiaries) outstanding at any time that is secured in any manner by any Lien on assets of the Company or any such Subsidiaries.

 

4

 

“Secured Debt Ratio” means the ratio of (a) Secured Debt to (b) the aggregate amount of Indebtedness of the Company and its Subsidiaries that are consolidated with the Company for purposes of GAAP  (including Indebtedness under the Notes and excluding any Indebtedness of any of the Company’s Subsidiaries which are SBIC Subsidiaries).

 

9.                     Ratings Covenant of the Company.  In addition to the covenants and agreements set forth in the Note Purchase Agreement and this Supplement, the Company covenants and agrees for the benefit of the Purchaser and each other holder of a Note that, to the extent the Company shall maintain or deliver, in accordance with the Note Purchase Agreement, a Rating, such Rating shall be a public rating, issued by a NRSRO, of the Notes and, with respect to the Series 2018B Notes, shall specifically describe the Series 2018B Notes, including their interest rate, maturity and Private Placement Number.

 

10.                    Events of Default of the Company.  In addition to the covenants, agreements and Events of Default set forth in the Note Purchase Agreement and this Supplement, the Company covenants and agrees for the benefit of the Purchaser and each other holder of a Note that, in addition to the defaults or conditions under any Material Indebtedness of the Company and its Significant Subsidiaries that constitute an Event of Default under Section 11(f) of the Note Purchase Agreement, any such defaults or conditions, as specified in Section 11(f) of the Note Purchase Agreement, under any Material Indebtedness of the Company’s Subsidiaries that are consolidated with the Company for purposes of GAAP (excluding any Indebtedness of any of the Company’s Subsidiaries which are SBIC Subsidiaries) shall also constitute an Event of Default under Section 11(f) of the Note Purchase Agreement.

 

5

 

The execution hereof shall constitute a contract between the Company and the Purchaser for the uses and purposes hereinabove set forth, and this agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.

 

	
 
    	
NEW MOUNTAIN FINANCE   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Shiraz Y. Kajee
    
	
 
    	
 
    	
Name: 
    	
Shiraz Y. Kajee
    
	
 
    	
 
    	
Title: 
    	
Chief Financial Officer   and Treasurer
    

 

NEW MOUNTAIN FINANCE CORPORATION

THIRD SUPPLEMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

 

 

This Agreement is hereby

accepted and agreed to as

of the date hereof.

 

	
 
    	
TEACHERS INSURANCE AND ANNUITY 
    
	
 
    	
ASSOCIATION OF AMERICA
    
	
 
    	
 
    
	
 
    	
By:
    	
Nuveen Alternatives   Advisors LLC,
    
	
 
    	
 
    	
its investment manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Chris Miller
    
	
 
    	
 
    	
 
    	
Name: 
    	
Chris Miller
    
	
 
    	
 
    	
 
    	
Title: 
    	
Director
    
						

 

NEW MOUNTAIN FINANCE CORPORATION

THIRD SUPPLEMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

 

 

SUPPLEMENTAL REPRESENTATIONS

 

The Company represents and warrants to the Purchaser that except as hereinafter set forth in this Exhibit A, each of the representations and warranties set forth in Section 5 of the Note Purchase Agreement (other than representations and warranties that apply solely to a specific earlier date which shall be true as of such earlier date) is true and correct in all material respects as of the date hereof with respect to the Series 2018B Notes with the same force and effect as if each reference to “the Second Closing Notes” set forth therein was modified to refer to the “Series 2018B Notes” and each reference to “this Agreement” therein was modified to refer to the Note Purchase Agreement as supplemented by the Third Supplement.  The Section references hereinafter set forth correspond to the similar sections of the Note Purchase Agreement which are supplemented hereby:

 

Section 5.3.                      Disclosure.  (a) The Company, through its agent, Goldman Sachs & Co. LLC, has delivered to each Purchaser a copy of the documents, certificates or other writings identified in Schedule 5.3C and has made publicly available via the SEC’s EDGAR filing system its quarterly and annual reports on Form 10-Q and Form 10-K, respectively, including the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017 and its quarterly report on Form 10-Q for the quarter ended March 31, 2018 (the “Initial Disclosure Materials”), relating to the transactions contemplated hereby.  The Initial Disclosure Materials fairly describe, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries.  This Agreement, the Initial Disclosure Materials, the financial statements listed in Schedule 5.5C and the documents, certificates or other writings delivered to the Purchaser by or on behalf of the Company (other than financial projections, pro forma financial information, and other forward-looking information referenced in Section 5.3(b)) on or prior to June 28, 2018 in connection with the transactions contemplated hereby and identified in Schedule 5.3C (this Agreement, the Initial Disclosure Materials and such documents, certificates or other writings, including, without limitation, valuations of Investments of the Company, and such financial statements delivered to each Purchaser (other than financial projections, pro forma financial information, and other forward-looking information referenced in Section 5.3(b)) being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since December 31, 2017, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

 

(b)                     All financial projections, pro forma financial information and other forward-looking information which has been delivered to the Purchaser by or on behalf of the Company in connection with the transactions contemplated by this Agreement are based upon good faith assumptions and, in the case of financial projections and pro forma financial information, good faith estimates, in each case, believed to be reasonable at the time made, it being recognized that (i) such financial information as it relates to future events is subject to significant uncertainty and

 

SCHEDULE 5.15C

(to Third Supplement)

 

 

contingencies (many of which are beyond the control of the Company) and are therefore not to be viewed as fact, and (ii) actual results during the period or periods covered by such financial information may materially differ from the results set forth therein.

 

Section 5.4.                      Organization and Ownership of Shares of Subsidiaries; Affiliates.  (a) Schedule 5.4C contains (except as noted therein) complete and correct lists of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and senior officers.

 

(b)                     All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4C as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of any Lien that is prohibited by this Agreement.

 

(d)                     No Subsidiary is subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.4C and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or to any other Subsidiary of the Company that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

 

Section 5.5.                      Financial Statements; Material Liabilities.  The Company has delivered to each Purchaser or made publicly available via the SEC’s EDGAR filing system copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5C.  All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).  The Company and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents.

 

Section 5.13.                     Private Offering by the Company.  Neither the Company nor anyone acting on its behalf has offered the Series 2018B Notes or any similar Securities (other than any Notes previously issued pursuant to the Note Purchase Agreement and identified on Schedule 5.15C) for sale to, or solicited any offer to buy the Series 2018B Notes or any similar Securities (other than any Notes previously issued pursuant to the Note Purchase Agreement and identified on Schedule 5.15C) from, or otherwise approached or negotiated in respect thereof with, any Person other than not more than 30 Institutional Investors (including the Purchaser), each of which has been offered the Series 2018B Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Series 2018B Notes to the registration requirements of

 

2

 

section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14.                     Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Series 2018B Notes to repay outstanding Indebtedness of the Company and its Subsidiaries and/or for other general corporate purposes of the Company, including the acquisition and funding (either directly or through one or more wholly-owned Subsidiaries) of leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock, and other Portfolio Investments.  No part of the proceeds from the sale of the Series 2018B Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 10% of the value of the consolidated assets of the Company and the Company does not have any present intention that margin stock will constitute more than 10% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.

 

Section 5.15.                     Existing Indebtedness; Future Liens.  (a) Except as described therein, Schedule 5.15C sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of March 31, 2018 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranties thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.  Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

(b)                     Except as disclosed in Schedule 5.15C, neither the Company nor any Subsidiary has agreed or consented to cause or permit any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness.

 

(c)                     Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as disclosed in Schedule 5.15C.

 

3

 

[FORM OF SERIES 2018B NOTE]

 

NEW MOUNTAIN FINANCE CORPORATION

 

5.36% SERIES 2018B SENIOR NOTE DUE JUNE 28, 2023

 

	
No. [         ]
    	
[Date]
    
	
$[                     ]
    	
PPN 647551 B@8
    

 

FOR VALUE RECEIVED, the undersigned, NEW MOUNTAIN FINANCE CORPORATION (herein called the “Company”), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [            ], or registered assigns, the principal sum of [                     ] DOLLARS (or so much thereof as shall not have been prepaid) on June 28, 2023 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of (a) subject to adjustment pursuant to Section 1.2 of the hereinafter defined Note Purchase Agreement, 5.36% per annum from the date hereof, payable semiannually, on the 15th day of January and July in each year, commencing January 15, 2019, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the Default Rate (as defined in the hereinafter defined Note Purchase Agreement).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Wells Fargo Bank, National Association at its offices in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes (the “Notes”) issued pursuant to a Supplement to the Amended and Restated Note Purchase Agreement dated September 30, 2016 (as from time to time amended, supplemented or modified, the “Note Purchase Agreement”), among the Company, the First Closing Purchasers and the Second Closing Purchasers named therein and Additional Purchasers of Notes from time to time issued pursuant to any Supplement to the Note Purchase Agreement.  This Note and the holder hereof are entitled equally and ratably with the holders of all other Notes of all series from time to time outstanding under the Note Purchase Agreement to all the benefits provided for thereby or referred to therein.  Each holder of this Note will be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to have made the representation set forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note with the Company and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney

 

EXHIBIT 1

(to Third Supplement)

 

 

duly authorized in writing, a new Note of the same series for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

 

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

	
 
    	
NEW MOUNTAIN   FINANCE CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
Shiraz Y. Kajee
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer   and Treasurer
    

 

2

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