Document:

Blueprint

 

 Exhibit
4.2(e)

 

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “1933 SECURITIES ACT”) OR ANY STATE
SECURITIES LAWS. THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED
STATES (AS DEFINED IN REGULATION S UNDER THE 1933 SECURITIES ACT),
OR MAY THIS WARRANT OR THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, UNLESS THE WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE 1933 SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION RECEIVES AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO IT TO SUCH
EFFECT.

 

THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT ARE
SUBJECT TO A VOTING PROXY GRANTED TO [*], AND TO A RIGHT OF FIRST
REFUSAL GRANTED TO COMPANY, AS FURTHER SET FORTH
HEREIN.

 

Right
to Purchase [*] Common Shares of Dolphin Digital Media, Inc.
(subject to adjustment as provided herein)

 

FORM OF COMMON STOCK PURCHASE WARRANT

 

	
 No.
____

	
 Issue Date:
[*]

 

 

DOLPHIN DIGITAL MEDIA, INC., a
corporation organized under the laws of the State of Nevada (the
“Company”),
hereby certifies that, for value received, [*], or its permitted
assigns (the “Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company at any time
commencing on the issue date of this Warrant (the
“Issue Date”)
until [*], [*] time on [*] (the “Expiration Date”), [*] ([*]) fully
paid and non-assessable Common Shares of the Company, at a per
share purchase price of US$[*]. The purchase price per share, as
adjusted from time to time as herein provided, is referred to
herein as the “Purchase
Price.” The number and character of such Common Shares
and the Purchase Price are subject to adjustment as provided
herein. The Company may reduce the Purchase Price or extend the
Expiration Date without the consent of the Holder.

 

Within
seven (7) days hereof, Holder shall pay $[*] to Company as
consideration for the issuance of this Warrant.

 

As used
herein the following terms, unless the context otherwise requires,
have the following respective meanings:

 

(a)           The
term “Company”
shall include Dolphin Digital Media, Inc. and any corporation which
shall succeed or assume the obligations of Dolphin Digital Media,
Inc. hereunder.

 

 

 

 

 

 

 

(b)           The
term “Common
Shares” includes (a) the Company’s Common
Shares, no par value per share and (b) any other securities
into which or for which any of the securities described in (a) may
be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

 

(c)           The
term “Other
Securities” refers to any stock (other than Common
Shares) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any
time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common
Shares, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Shares or Other
Securities pursuant to Section 5 herein or otherwise.

 

(d)           The
term “Warrant
Shares” shall mean the Common Shares issuable upon
exercise of this Warrant.

 

1. Exercise of
Warrant.

 

1.1 Number of Shares Issuable upon
Exercise. From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance
with the terms of subsection 1.2 or upon exercise of this Warrant
in part in accordance with subsection 1.3, Common Shares of the
Company, subject to adjustment pursuant to Section 4.

 

1.2 Full Exercise. This Warrant may
be exercised in full by the Holder hereof by delivery of an
original or facsimile copy of the form of subscription attached as
Exhibit A hereto (the “Subscription Form”) duly executed
by such Holder and surrender of the original Warrant within four
(4) days of exercise, to the Company at its principal office or at
the office of its Warrant Agent (as provided hereinafter),
accompanied by payment, in cash, wire transfer or by certified or
official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of Common Shares for
which this Warrant is then exercisable by the Purchase Price then
in effect (the “Aggregate
Purchase Price”).

 

1.3 Partial Exercise. This Warrant
may be exercised in part (but not for a fractional share) by
surrender of this Warrant in the manner and at the place provided
in subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares designated by the Holder in the
Subscription Form by (b) the Purchase Price then in effect. On
any such partial exercise, the Company, at its expense, will
forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of Common
Shares for which such Warrant may still be exercised.

 

1.4 Cashless Exercise. Subject to
the conditions contained in this Section 1.4, the Holder may,
in its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the
Aggregate Purchase Price, elect instead to receive upon such
exercise the “Net
Number” of Common Shares determined according to the
following formula (a “Cashless Exercise”):

 

Net
Number = (B-C) x
A

     B

 

 

 

 

 

For
purposes of the foregoing formula:

 

A
= 

the total number of
shares with respect to which this Warrant is then being
exercised.

 

B
= 

the Fair Market
Value of a Common Share as of the date of exercise.

 

C
= 

the Purchase Price
then in effect for the applicable Warrant Shares at the time of
such exercise.

 

The
holder of this Warrant agrees not to elect a Cashless Exercise for
a period so long as the Purchase Price of this warrant is above
$[*] per share.

 

1.5 Fair Market Value. Fair Market
Value of a Common Share as of a particular date (the
“Determination
Date”) shall mean:

 

(a) If the
Company’s Common Shares are traded on a national stock
exchange, then the average of the closing or last sale price
reported for each of the last 5 business days immediately preceding
the Determination Date;

 

(b) If the
Company’s Common Shares are not traded on a national stock
exchange, but are traded in the over-the-counter market, then the
average of the closing bid and ask prices reported for each of the
last 5 business days immediately preceding the Determination
Date;

 

(c) Except as provided
in clause (d) below, if the Company’s Common Shares are not
publicly traded, then as the Holder and the Company agree, or in
the absence of such an agreement, by arbitration in accordance with
the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons
qualified by education and training to pass on the matter to be
decided; or

 

(d) If the
Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or
winding up pursuant to the Company’s charter, then all
amounts to be payable per share to holders of the Common Shares
pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Shares in liquidation under the
charter, assuming for the purposes of this clause (d) that all of
the shares of Common Shares then issuable upon exercise of all of
the Warrants are outstanding at the Determination
Date.

 

1.6 Company Acknowledgment. The
Company will, at the time of the exercise of the Warrant, upon the
request of the Holder hereof acknowledge in writing its continuing
obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance
with the provisions of this Warrant. If the Holder shall fail to
make any such request, such failure shall not affect the continuing
obligation of the Company to afford to such Holder any such
rights.

 

 

 

 

 

 

 

1.7 Delivery of Stock Certificates, etc.
on Exercise. The Company agrees that the Common Shares
purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares as
aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within five (5)
business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as
such Holder (upon payment by such Holder of any applicable transfer
taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly
issued, fully paid and non-assessable Common Shares (or Other
Securities) to which such Holder shall be entitled on such
exercise, plus, in lieu of any fractional share to which such
Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then Fair Market Value of one full Common Share,
together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 or otherwise.

 

1.8 Right of First Refusal. Prior
to any sale, assignment, transfer (including by purchase,
inter-spousal disposition pursuant to a domestic relations
proceeding or otherwise by operation of law), pledge, encumbrance
or otherwise disposition of any of the Common Shares issuable upon
exercise of this Warrant, Holder shall provide [*], for as long as
he shall remain alive and not incapacitated, with 10 business days
prior written notice of same (a “Sale Notice”), which Sale Notice
shall contain a description of the material terms of the proposed
sale transaction, including the names of any parties involved,
price per share, etc. Upon receipt of a Sale Notice, [*] shall have
5 business days to provide Holder with written notice of his
election to purchase said Common Shares (a “Purchase Notice”). Any such
purchase shall be made at the higher of the Fair Market Value of
the Common Shares or the price per share of the proposed sale
transaction, as set forth in Section 1.5 above, with the
Determination Date being the date of said Purchase Notice, and
shall be payable in cash at closing, which closing shall occur as
soon as possible and in any event within 30 days of the date of
said Purchase Notice. The certificates evidencing the Common Shares
issuable upon exercise of this Warrant shall contain a restrictive
legend setting forth, or cross-referencing, the provisions of this
Section 1.8.

 

1.9 Limitation on Exercise.
Notwithstanding any provision of this Warrant to the contrary, this
Warrant is only exercisable to the extent the Company has available
for issuance that number of authorized and unissued Common Shares
necessary to cover said exercise. To the extent the Company at any
time fails to have that number of authorized and unissued Common
Shares necessary to enable the full exercise of this Warrant, the
Company shall promptly take all reasonable steps necessary to
increase the Company’s authorized and unissued Common Shares
to enable the full exercise of this Warrant, including, but not
limited to, filing a proxy statement or information statement with
the Securities and Exchange Commission, scheduling and holding a
meeting of the Company’s shareholders to the extent
necessary, and filing Articles of Amendment to the Company’s
Articles of Incorporation.

 

1.10 Proxy.
Holder hereby irrevocably grants to, and appoints, [*], for as long
as he shall remain alive and not incapacitated, as its proxy and
attorney-in-fact (with full power of substitution), for and in its
name, place and stead, to vote the Common Shares underlying this
Warrant, upon issuance, at any meeting of the shareholders of the
Company or otherwise. Holder understands and acknowledges that the
Company is entering into this Warrant in reliance upon the proxy
set forth in this Section 1.10. Holder hereby (i) affirms that
the irrevocable
proxy is coupled with an interest and may under no circumstances be
revoked, (ii) ratifies and confirms all that the
proxies appointed hereunder may lawfully do or cause to be done by
virtue hereof, and (iii) affirms that such irrevocable proxy is executed
and intended to be irrevocable in accordance with the provisions of
Section 78.355(5) of the Nevada General Corporation
Law.

 

 

 

 

 

 

 

2. Adjustment
for Reorganization, Consolidation, Merger, etc.

 

2.1 Reorganization, Consolidation, Merger,
etc. In case at any time or from time to time, the Company
shall (a) effect a reorganization, (b) consolidate with
or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the
consummation of such a transaction, proper and adequate provision
shall be made by the Company whereby the Holder of this Warrant, on
the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Shares (or Other Securities)
issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the
case may be, if such Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment
thereafter as provided in Section 3.

 

2.2 Dissolution. In the event of
any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior
to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including
cash, where applicable) receivable in accordance with Section 2.1
by the Holder of the Warrants upon their exercise after the
effective date of such dissolution pursuant to this Section
2.

 

2.3 Continuation of Terms. Upon any
reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this Section 2,
this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and property
receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may
be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed
the terms of this Warrant as provided in Section 3. In the event
this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 2, then
only in such event will the Company’s securities and property
(including cash, where applicable) receivable by the Holder of the
Warrants be delivered to the Trustee as contemplated by Section
2.2.

 

3. Extraordinary Events Regarding Common
Stock. In the event that the Company shall (a) issue
additional Common Shares as a dividend or other distribution on
outstanding Common Shares, (b) subdivide its outstanding
Common Shares, or (c) combine its outstanding Common Shares
into a smaller number of Common Shares, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a
fraction, the numerator of which shall be the number of Common
Shares outstanding immediately prior to such event and the
denominator of which shall be the number of Common Shares
outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events
described herein in this Section 3. The number of Common Shares
that the Holder of this Warrant shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive shall be
adjusted to a number determined by multiplying the number of Common
Shares that would otherwise (but for the provisions of this Section
3) be issuable on such exercise by a fraction of which (a) the
numerator is the Purchase Price that would otherwise (but for the
provisions of this Section 3) be in effect, and (b) the
denominator is the Purchase Price in effect on the date of such
exercise.

 

 

 

 

 

 

 

4. Certificate as to Adjustments.
In each case of any adjustment in the Common Shares (or Other
Securities) issuable on the exercise of the Warrants, the Company
at its expense will promptly cause its Chief Financial Officer or
other appropriate designee to compute such adjustment or
readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment is
based. The Company will forthwith mail a copy of each such
certificate to the Holder of the Warrant.

 

5. Reservation of Stock, etc. Issuable on
Exercise of Warrant; Financial Statements. The Company will,
after amendment of its articles of Inc., at all times reserve and
keep available, solely for issuance and delivery on the exercise of
the Warrants, all Common Shares (or Other Securities) from time to
time issuable on the exercise of the Warrant.

 

6. Assignment; Exchange of
Warrant. Subject to compliance with applicable securities
laws, and the terms contained herein, this Warrant, and the rights
evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”). On the surrender for
exchange of this Warrant, with the Transferor’s endorsement
in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the
Company that the transfer of this Warrant will be in compliance
with applicable securities laws, the Company at its expense, twice,
only, but with payment by the Transferor of any applicable transfer
taxes, will issue and deliver to or on the order of the Transferor
thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor
Endorsement Form (each a “Transferee”), calling in the
aggregate on the face or faces thereof for the number of Common
Shares called for on the face or faces of the Warrant so
surrendered by the Transferor. No such transfers shall result in a
public distribution of the Warrant.

 

7. Replacement of Warrant. On
receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the
case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of
any such mutilation, on surrender and cancellation of this Warrant,
the Company at its expense, twice only, will execute and deliver,
in lieu thereof, a new Warrant of like tenor.

 

8. Transfer on the Company’s
Books. Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.

 

9. Notices. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated
below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received)
or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever
shall first occur or (c) three business days after deposited
in the mail if delivered pursuant to subsection (ii) above. The
addresses for such communications shall be: (i) if to the
Company to: 2151 LeJeune Road, Suite 150, Coral Gables, Florida
33134, facsimile (305) 774-0405; and (ii) if to the Holder,
to: [*]. The Company and the Holder may change their respective
addresses for notices by like notice to the other
party.

 

 

 

 

 

 

10. Reduction of Exercise Price.
The Holder may over the term of the Warrant make a payment to the
Company for an equivalent amount of money to reduce the Purchase
Price of this Warrant until such time as the Purchase Price of this
Warrant is able to be exercised via a cashless provision per
Section 1.4 of this agreement. Each time a payment by the Holder is
made to the Company, a side letter will be executed by both parties
that states the new effective Purchase Price of the Warrant at that
time.

 

11. Miscellaneous. This Warrant and
any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance
with and governed by the laws of Utah without regard to the
conflicts of laws provisions thereof. The headings in this Warrant
are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.

 

 

IN
WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written first written above.

 

 

DOLPHIN
DIGITAL MEDIA, INC.

 

By:                                                                            

Name:                                                                           

Title:                                                                           

 

 

 

Exhibit A

 

FORM OF
SUBSCRIPTION

(to be
signed only on exercise of Warrant)

 

TO:
DOLPHIN DIGITAL MEDIA, INC.

 

The
undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase ____ Common Shares
covered by such Warrant.

 

The
undersigned herewith (check applicable box):

 

 makes payment
of the full purchase price for such shares at the price per share
provided for in such Warrant, which is $____________, in lawful
money of the United States; or

 

 elects a
Cashless Exercise.

 

The
undersigned requests that the certificates for such shares be
issued in the name of, and delivered to ______________________
whose address is _____________________________

 

___________________________________________________________________________

 

____________________________________________________________________________

 

The
undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common
Shares under the Securities Act of 1933, as amended (the
“Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

Dated:
________________ _______

 

 

 

                                                        
                 
                 
                 
    
                 

(Signature must
conform to name of holder as specified on the fact of the
Warrant.)

 

 

                                                         
                 
                 
                 
    
                 

                                                         
                 
                 
                 
    
                 

(Address)

 

 

 

 

Exhibit B

 

FORM OF
TRANSFEROR ENDORSEMENT

(To be
signed only on transfer of Warrant)

 

For
value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading
“Transferees” the right represented by the within
Warrant to purchase the percentage and number of Common Shares of
DOLPHIN DIGITAL MEDIA, INC. to which the within Warrant relates
specified under the headings “Percentage Transferred”
and “Number Transferred,” respectively, opposite the
name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of DOLPHIN DIGITAL
MEDIA, INC. with full power of substitution in the
premises.

 

	

Transferees

	

Percentage
Transferred

	

Number
Transferred

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

Dated:
___________, _______

 

                                                       
                 
                 
                 
    
                 

(Signature must
conform to name of holder as specified on the fact of the
Warrant.)

 

 

                                                         
                 
                 
                 
    
                 

                                                         
                 
                 
                 
    
                 

(Address)

 

 

	

Signed
in the presence of:

	
 

	
 
______________________________________

(Name)

 

	
 
__________________________________________________

 
__________________________________________________

(address)

 

 

 

	

ACCEPTED
AND AGREED: [TRANSFEREE]

 

 

 
_______________________________________

(Name)

 

	

 
__________________________________________________

 
__________________________________________________

(address)Blueprint

 

Exhibit 10.16

 

Executive Employment Agreement

 

This
Executive Employment Agreement (the “Agreement”) is made and
entered into as of March 30, 2017 by and between Allan Mayer (the
“Executive”) and Dolphin
Digital Media, Inc., a Florida corporation (the “Company”).

 

WHEREAS, the
Company intends to acquire from the Executive all of his
outstanding membership interests in 42West, LLC, a Delaware limited
liability company (“42West”), pursuant to the
Membership Interest Purchase Agreement, by and among the Executive,
Leslee Dart, Amanda Lundberg and the Beatrice B. Trust (each, a
“Seller”, and
collectively, the “Sellers”) and the
Company, as Purchaser, (the “Purchase
Agreement”);

 

WHEREAS, it is a
condition to the closing of acquisition of the membership interests
of 42West under the Purchase Agreement (the “Closing”) that Executive
remains employed by 42West after the Closing, pursuant to this
Agreement;

 

WHEREAS, except as
set forth in Paragraph 1 below and the definition of EBITDA as set
forth in Section 4.1 below, this
Agreement and the Purchase Agreement are separate and independent
sets of rights and obligations without cross-defaults or other
interdependent obligations, and the terms of this Agreement shall
be independent of and not dependent on or affected by the terms of
the Purchase Agreement, and vice versa;

 

WHEREAS, the
Company desires to employ the Executive as an officer of 42West on
the terms and conditions set forth herein; and

 

WHEREAS, the
Executive desires to be employed by 42West on such terms and
conditions.

 

NOW,
THEREFORE, in consideration of the mutual covenants, promises, and
obligations set forth herein, the parties agree as
follows:

 

1. Term.
The Executive’s employment hereunder shall be effective as of
the date of the Closing (the “Effective Date”) and
shall continue therefrom until the third anniversary of the
Effective Date, unless otherwise terminated pursuant to
Section 5. If the
Purchase Agreement terminates for any reason prior to Closing, all
of the provisions of this Agreement will terminate and there will
be no liability of any kind under this Agreement. The period during
which the Executive is employed by the Company hereunder is
hereinafter referred to as the “Employment Term”. This
Agreement may be terminated by either party hereto, subject to the
provisions and limitations of Section 5.

 

2. Position and
Duties.

 

2.1 Position.
During the Employment Term, the Executive shall serve as the
Co-Chief Executive Officer of 42West, reporting to the Chief
Executive Officer of the Company, (the “Company
Officer”).

 

 

1

 

 

2.2 Duties.
During the Employment Term, the Executive shall devote
substantially all of the Executive’s business time and
attention to the performance of the Executive’s duties
hereunder and will not engage in any other business, profession, or
occupation for compensation or otherwise which would conflict or
interfere with the performance of such services either directly or
indirectly without the prior written consent of the Company
Officer. The Executive’s duties shall include continuing,
full participation in all aspects of management of the business of
42West reporting to the Company Officer, including but not limited
to budgeting and financial management, strategy and business
planning, personnel decisions and all other management decisions
consistent with the role the Executive has previously engaged in as
a partner in 42West.

 

3. Place
of Performance. The principal
place of the Executive’s employment shall be Los Angeles,
California; provided that, the Executive may be required to travel
on Company business during the Employment Term.

 

4. Compensation.

 

4.1 Base
Salary. The Company shall
pay the Executive an annual rate of base salary in periodic
installments in accordance with the Company’s customary
payroll practices and applicable wage payment laws, but no less
frequently than monthly. The Executive’s base salary in the
first year of the Term of this Agreement shall be $400,000. For
purposes of this Agreement including Annex I, EBITDA shall be
determined as defined in Appendix A of the Purchase Agreement. If
42West exceeds the EBITDA threshhold set forth in Annex I hereto in
any fiscal year of the term of this Agreement, then the base salary
for the next fiscal year shall be $450,000. If 42West exceeds the
EBITDA threshold for a second fiscal year during the term of this
Agreement, then the base salary shall be increased to $500,000 for
the following fiscal year. Salary increases based on the
achievement of the EBITDA thresholds in Annex I shall take effect
the first pay period after the completion of 42West’s audit
and determination of the EBITDA of 42West for the prior fiscal
year. If it is determined that the Executive’s salary has
increased, the Company shall retroactively apply the increased
salary to those pay periods already passed during that fiscal year
before the completion of the audit for the prior fiscal year. The
total amount of the retroactive increase of the Executive’s
Salary shall be paid in the first pay installment following the
completion of 42West’s audit. Regardless of whether 42West
reaches the EBITDA threshhold, the Executive’s base salary
shall be reviewed at least annually by the Company Officer, and the
Company Officer may, but shall not be required to, increase the
base salary during the Employment Term, subject to the approval of
the board of directors of the Company (the “Board”). The
Executive’s annual base salary, as in effect from time to
time, is hereinafter referred to as “Base
Salary”.

 

4.2 Annual
Bonus.

 

(a) For each year of
the Employment Term, the Executive shall be eligible to receive an
annual bonus (the “Annual Cash Bonus”), if
employed by the Company, in accordance with the provisions of the
Company’s incentive compensation plan as adopted or amended
by the Company from time to time. The Company shall have such a
bonus plan in place during each year of the Term of this Agreement.
As of the Effective Date, the Executive’s Annual Cash Bonus
opportunity shall be based on the achievement of Company
performance goals set forth on Annex II. If threshold performance
goals are not achieved, then the Executive shall not receive an
Annual Cash Bonus for such year.

 

 

2

 

 

(b) For each year of
the Employment Term the Company shall issue to the Executive an
annual stock bonus (the “Annual Stock Bonus” and
together with the Annual Cash Bonus, the “Annual Bonuses”) equal to
the amount of restricted shares of the Company’s common
stock, par value $0.015 (“Common Stock”) obtained
by dividing $200,000 by the 30-day trading average of the Common
Stock prior to the payment date.

 

(c) The Annual Bonuses,
if any, will be paid within two and a half (2 1/2) months after the
end of the applicable year.

 

(d) Except as otherwise
provided in Section 5, (i) the Annual Bonuses will
be subject to the terms of the Company annual bonus plan under
which it is granted and (ii) in order to be eligible to
receive an Annual Bonus, the Executive must be employed by the
Company on the last day of the applicable year/date that Annual
Bonuses are paid.

 

4.3 Fringe
Benefits and Perquisites. During the
Employment Term, the Executive shall be entitled to fringe benefits
and perquisites consistent with the practices of the Company, and
to the extent the Company provides similar benefits or perquisites
(or both) to similarly situated executives of the
Company.

 

4.4 Employee
Benefits. During the
Employment Term, the Executive shall be entitled to participate in
all employee benefit plans, practices, and programs maintained by
the Company or any subsidiary of the Company, as in effect from
time to time (collectively, “Employee Benefit Plans”),
on a basis which is no less favorable than is provided to other
similarly situated executives of the Company, to the extent
consistent with applicable law and the terms of the applicable
Employee Benefit Plans. The Company reserves the right to amend or
cancel any Employee Benefit Plans at any time in its sole
discretion, subject to the terms of such Employee Benefit Plan and
applicable law.

 

4.5 Vacation;
Paid Time-Off. During the
Employment Term, the Executive will be entitled to paid vacation on
a basis that is at least as favorable as that provided to other
similarly situated executives of the Company. The Executive shall
receive other paid time-off in accordance with the Company’s
policies for executive officers as such policies may exist from
time to time.

 

4.6 Business
Expenses. The Executive
shall be entitled to reimbursement for all reasonable and necessary
out-of-pocket business, entertainment, and travel expenses incurred
by the Executive in connection with the performance of the
Executive’s duties hereunder in accordance with the
Company’s expense reimbursement policies and
procedures.

 

4.7 Indemnification.
In the event that the Executive is made a party or threatened to be
made a party to any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (a “Proceeding”), other than
any Proceeding initiated by the Executive or the Company related to
any contest or dispute between the Executive and the Company or any
of its affiliates with respect to the Purchase Agreement, this
Agreement or the Executive’s employment hereunder, by reason
of the fact that the Executive is or was a director or officer of
the Company, or any affiliate of the Company, or is or was serving
at the request of the Company as a director, officer, member,
employee, or agent of another corporation or a partnership, joint
venture, trust, or other enterprise, the Executive shall be
indemnified and held harmless by the Company to the fullest extent
applicable to any other officer or director of the Company/to the
maximum extent permitted under applicable law and the
Company’s bylaws from and against any liabilities, costs,
claims, and expenses, including all costs and expenses incurred in
defense of any Proceeding (including attorneys’
fees).

 

 

3

 

 

4.8 Executive
Lock-Up Period. The Executive
acknowledges and agrees that at no time from the Effective Date
until the first anniversary of the Closing Date, shall the
Executive Transfer or permit to be Transferred any of the shares of
Common Stock, including any shares received from an Annual Stock
Bonus, (the “Shares”), except pursuant
to an effective registration statement on Form S-1 or Form S-3
promulgated under the Securities Act of 1933, as amended (the
“Securities
Act”) or upon exercise of put rights (the
“Put
Rights”) pursuant to the put agreement between the
Executive and the Company dated the date hereof (the
“Put
Agreement”). Furthermore, the Executive acknowledges
and agrees that, except pursuant to an effective registration
statement on Form S-1 or Form S-3 promulgated under the Securities
Act, the Executive shall not: (i) on or after the first anniversary
of the Closing Date but before the second anniversary of the
Closing Date, Transfer or permit to be Transferred more than
262,878 Shares (the “First Period Shares”);
(ii) on or after the second anniversary of the Closing Date but
before the third anniversary of the Closing Date, Transfer or
permit to be Transferred more than 262,878 Shares plus any portion
of the First Period Shares not yet Transferred. After the third
anniversary of the Closing Date the Exective shall no longer be
restricted under this Section 4.8 from
Transferring or permitting to be Transferred any of the
Executive’s Shares. For purposes of this Agreement,
“Transfer” means in
respect of a Person, any direct or indirect transfer, sale,
assignment, gift, exchange or other transaction (other than the
creation of a Lien), whether voluntary, involuntary or by operation
of law, by which the legal or beneficial ownership of, or other
interest in, such Person, passes from one Person to another Person,
whether or not for value.

 

4.9 Legend.
The Executive acknowledges and understands that any Shares issued
to him or her, including Shares received as an Annual Stock Bonus,
will be “restricted securities” as that term is defined
in Rule 144 under the Securities Act and that the certificate(s),
if any, representing the Shares will bear restrictive legends
thereon in substantially the forms that appears below:

 

“THESE
SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (I) PURSUANT TO A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME
EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (II)
PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, BUT ONLY UPON THE HOLDER HEREOF FIRST HAVING
OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE ISSUER, OR OTHER
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE
SECURITIES ACT AS WELL AS ANY APPLICABLE “BLUE SKY” OR
OTHER SIMILAR SECURITIES LAW.”

 

“THE
SHARES OF COMMON STOCK REPRESENTED HEREBY MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF,
EXCEPT IN COMPLIANCE WITH THE TERMS OF THE PUT AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES) AND THE LOCK-UP PROVISIONS
SET FORTH IN THE EXECUTIVE EMPLOYMENT AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN
INTEREST TO THE SHARES). THE SECRETARY OF THE COMPANY WILL, UPON
WRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE.”

 

 

4

 

 

4.10 Company
Insider Trading Policy. The Executive
acknowledges and agrees that he has received a copy of the
Company’s Insider Trading Policy, agrees to abide by such
policy and is aware of his obligations under the Company’s
Insider Trading Policy and the applicable provisions of Section 16
of the Securities Exchange Act of 1934, as amended.

 

5. Tax
Matters; Section 83(b) Election.

 

5.1 Section
83(b) Election. If the Executive
properly elects, within thirty (30) days of the date of payment of
an Annual Stock Bonus (the “Payment Date”), to
include in gross income for federal income tax purposes an amount
equal to the fair market value (as of the Payment Date) of the
Annual Stock Bonus pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), the Executive
shall make arrangements satisfactory to the Company to pay to the
Company any federal, state or local income taxes required to be
withheld with respect to the Annual Stock Bonus. If the Executive
shall fail to make such tax payments as are required, the Company
shall, to the extent permitted by law, have the right to deduct
from any payment of any kind (including without limitation, the
withholding of any shares of Common Stock that otherwise would be
issued to the Executive under this Agreement) otherwise due to the
Executive any federal, state or local taxes of any kind required by
law to be withheld with respect to the Annual Stock
Bonus.

 

5.2 No
Section 83(b) Election. If the Executive
does not properly make the election described in paragraph 5.1
above, the Executive shall, no later than the date or dates as of
which the restrictions referred to in this Agreement hereof shall
lapse, pay to the Company, or make arrangements satisfactory to the
Committee for payment of, any federal, state or local taxes of any
kind required by law to be withheld with respect to the Annual
Stock Bonus (including without limitation the vesting thereof), and
the Company shall, to the extent permitted by law, have the right
to deduct from any payment of any kind (including without
limitation, the withholding of any shares of Common Stock that
otherwise would be distributed to the Executive under this
Agreement) otherwise due to Executive any federal, state, or local
taxes of any kind required by law to be withheld with respect to
the Annual Stock Bonus.

 

5.3 Satisfaction
of Withholding Requirements. The Executive may
satisfy the withholding requirements with respect to the Restricted
Stock by payment in cash.

 

5.4 Executive’s
Responsibilities for Tax Consequences. Tax consequences
on the Executive (including without limitation federal, state,
local and foreign income tax consequences) with respect to the
Annual Stock Bonus (including without limitation the grant, vesting
and/or forfeiture thereof) are the sole responsibility of the
Executive. The Executive shall consult with his own personal
accountant(s) and/or tax advisor(s) regarding these matters, the
making of a Section 83(b) election, and the Executive’s
filing, withholding and payment (or tax liability)
obligations.

 

6. Termination of
Employment. The Employment
Term and the Executive’s employment hereunder may be
terminated by the Company for cause or by the Executive for good
reason; provided that, unless otherwise provided herein, either
party shall be required to give the other party at least sixty (60)
days’ advance written notice of any termination of the
Executive’s employment with the other party having an
opportunity to cure during that 60-day notice period. The failure
of either party to provide notice of employment termination within
sixty (60) days after the first occurance of the applicable grounds
waves the right to terminate upon such grounds. Upon termination of
the Executive’s employment during the Employment Term, the
Executive shall be entitled to the compensation and benefits
described in this Section 5 and shall have no further
rights to any compensation or any other benefits from the Company
or any of its affiliates.

 

 

5

 

 

6.1 For
Cause.

 

(a) The
Executive’s employment hereunder may be terminated by the
Company for Cause. If the Executive’s employment is
terminated by the Company for Cause, the Executive shall be
entitled to receive:

 

(i) any accrued but
unpaid Base Salary and accrued but unused vacation which shall be
paid in accordance with the Company’s customary payroll
procedures;

 

(ii) reimbursement
for unreimbursed business expenses properly incurred by the
Executive, which shall be subject to and paid in accordance with
the Company’s expense reimbursement policy; and

 

(iii) such
employee benefits, if any, to which the Executive may be entitled
under the Company’s employee benefit plans as of the
Termination Date; provided that, in no event shall the Executive be
entitled to any payments in the nature of severance or termination
payments except as specifically provided herein.

 

Items
5.1(a)(i) through 5.1(a)(iii) are referred to herein collectively
as the “Accrued
Amounts”.

 

(b) For purposes of
this Agreement, “Cause”
means:

 

(i) the
Executive’s failure to comply with any valid and legal
directive of the Company Officer;

 

(ii) the
Executive’s engagement in dishonesty or misconduct, which is,
in each case, injurious to the Company’s or its
affiliates;

 

(iii) the
Executive’s engagement in illegal conduct, embezzlement,
misappropriation, or fraud, whether or not related to the
Executive’s employment with the Company;

 

(iv) the
Executive’s conviction of or plea of guilty or nolo
contendere to a crime that constitutes a felony (or state law
equivalent) or a crime that constitutes a misdemeanor involving
moral turpitude;

 

(v) the
Executive’s violation of a material policy of the
Company;

 

(vi) the
Executive’s willful unauthorized disclosure of Confidential
Information (as defined below);

 

(vii) the
Executive’s material breach of any material obligation under
this Agreement or any other written agreement between the Executive
and the Company; or

 

 

6

 

 

(viii) any
material failure by the Executive to comply with the
Company’s written policies or rules, as they may be in effect
from time to time during the Employment Term.

 

The
Company cannot terminate Executive’s employment for cause
unless the Company has provided written notice to the Executive of
the existence of the circumstances providing grounds for
termination for cause within sixty (60) days of the initial
existence of such grounds and the Executive has had at least sixty
(60) days from the date on which such notice is provided to cure
such circumstances, except that there is no opportunity to cure a
termination involving items 5.1(b)(iii) and (iv). In a termination
involving items 5.1(b)(iii) and (iv), the Company may place the
Executive on paid leave during the notice period and any such
action by the Company will not constitute Good Reason.

 

6.2 For
Good Reason.

 

(a) The
Executive’s employment hereunder may be terminated by the
Executive for Good Reason. If the Executive’s employment is
terminated by the Executive for Good Reason, the Executive shall be
entitled to receive:

 

(i) Any accrued but
unpaid Base Salary and accrued but unused vacation which shall be
paid in accordance with the Company’s customary payroll
procedures;

 

(ii) All
Base Salary for the full duration of the Term of this Agreement
which shall be paid in accordance with the Company’s
customary payroll procedures;

 

(iii) Any
unpaid Annual Bonus with respect to any completed year immediately
preceding the Termination Date (to the extent such performance
targets are achieved), which shall be paid on the otherwise
applicable payment date;

 

(iv) Any
Annual Bonus with respect to the full year in which the Termination
Date occurs (to the extent such performance targets are achieved),
which shall be paid on the otherwise applicable date;

 

(v) reimbursement for
unreimbursed business expenses properly incurred by the Executive,
which shall be subject to and paid in accordance with the
Company’s expense reimbursement policy;

 

(vi) such
employee benefits, if any, to which the Executive may be entitled
under the Company’s employee benefit plans as of the
Termination Date; provided that, in no event shall the Executive be
entitled to any payments in the nature of severance or termination
payments except as specifically provided herein; and

 

 

7

 

 

(vii) the
Executive shall be relieved of the obligations set forth in
Sections 8.2
and 8.3 of this
Agreement which shall terminate as of the Termination Date (as
defined in Section
5.5(d)).

 

(b) For purposes of
this Agreement, “Good Reason” means the
occurrence of any of the following, in each case during the
Employment Term without the Executive’s written
consent:

 

(i) Removal of the
Executive from the position of Co-CEO of 42West (or any
successor);

 

(ii) A
reduction in the Executive’s Base Salary;

 

(iii) any
material breach by the Company of any material provision of this
Agreement;

 

(iv) the
Company’s failure to obtain an agreement from any successor
to the Company to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform if no succession had taken place, except where
such assumption occurs by operation of law;

 

(v) a material, adverse
change in the Executive’s title, authority, duties, or
responsibilities (other than temporarily while the Executive is
physically or mentally incapacitated or as required by applicable
law as set forth in Section 2.2
above);

 

(vi) a
material adverse change in the reporting structure applicable to
the Executive; or

 

(vii) transfer
of the Executive to a location outside of New York, New
York.

 

The
Executive cannot terminate his employment for Good Reason unless
the Executive has provided written notice to the Company of the
existence of the circumstances providing grounds for termination
for Good Reason within sixty (60) days of the initial existence of
such grounds and the Company has had at least sixty (60) days from
the date on which such notice is provided to cure such
circumstances.

 

6.3 Death
or Disability.

 

(a) The Executive’s employment
hereunder shall terminate automatically upon the Executive’s
death during the Employment Term, and the Company may terminate the
Executive’s employment on account of the Executive’s
Disability.

 

(b) If the
Executive’s employment is terminated during the Employment
Term on account of the Executive’s death or Disability, the
Executive (or the Executive’s estate and/or beneficiaries, as
the case may be) shall be entitled to receive the
following:

 

 

8

 

 

(i) the Accrued
Amounts; and

 

(ii) a
lump sum payment equal to the Pro-Rata Bonus/Annual Bonus, if any,
that the Executive would have earned for the year in which the
Termination Date occurs based on the achievement of applicable
performance goals for such year, which shall be payable on the date
that annual bonuses are paid to the Company’s similarly
situated executives, but in no event later than two-and-a-half
(2 1/2) months following the end of the year in which the
Termination Date occurs.

 

Notwithstanding any
other provision contained herein, all payments made in connection
with the Executive’s Disability shall be provided in a manner
which is consistent with federal and state law.

 

(c) For purposes of
this Agreement, “Disability” shall mean
the Executive’s inability, due to physical or mental
incapacity, to perform the essential functions of Executive’s
job, with or without reasonable accommodation, for one hundred
eighty (180) days out of any three hundred sixty-five (365) day
period or one hundred twenty (120) consecutive days. Any question
as to the existence of the Executive’s Disability as to which
the Executive and the Company cannot agree shall be determined in
writing by a qualified independent physician mutually acceptable to
the Executive and the Company. If the Executive and the Company
cannot agree as to a qualified independent physician, each shall
appoint such a physician and those two physicians shall select a
third who shall make such determination in writing. The
determination of Disability made in writing to the Company and the
Executive shall be final and conclusive for all purposes of this
Agreement.

 

6.4 Notice
of Termination. Any termination
of the Executive’s employment hereunder by the Company or by
the Executive during the Employment Term (other than termination
pursuant to Section 5.3(a) on account of the
Executive’s death) shall be communicated by written notice of
termination (“Notice
of Termination”) to the other party hereto in
accordance with Section 23. The Notice of Termination
shall specify:

 

(a) The termination
provision of this Agreement relied upon; and

 

(b) The applicable
Termination Date.

 

6.5 Termination
Date. The
Executive’s “Termination Date” shall
be:

 

(a) If the
Executive’s employment hereunder terminates on account of the
Executive’s death, the date of the Executive’s
death;

 

(b) If the
Executive’s employment hereunder is terminated on account of
the Executive’s Disability, the date that it is determined
that the Executive has a Disability;

 

 

9

 

 

(c) If the Company
terminates the Executive’s employment hereunder for Cause,
the sixty-first (61st) day after the
Company’s Notice of Termination is delivered to the
Executive;

 

(d) If the Executive
terminates his employment hereunder for Good Reason, the
sixty-first (61st) day after the date
specified in the Executive’s Notice of Termination is
delivered to the Company.

 

6.6 Resignation
of All Other Positions. Upon termination
of the Executive’s employment hereunder for any reason, the
Executive shall be deemed to have resigned from all positions that
the Executive holds as an officer or member of the Board (or a
committee thereof) of the Company or any of its
affiliates.

 

7. Cooperation. 
The
parties agree that certain matters in which the Executive will be
involved during the Employment Term may necessitate the
Executive’s cooperation in the future. Accordingly, following
the termination of the Executive’s employment for any reason,
to the extent reasonably requested by the Board, the Executive
shall cooperate with the Company in connection with matters arising
out of the Executive’s service to the Company; provided that,
the Company shall make reasonable efforts to minimize disruption of
the Executive’s other activities. The Company shall reimburse
the Executive for reasonable expenses incurred in connection with
such cooperation and, to the extent that the Executive is required
to spend substantial time on such matters, the Company shall
compensate the Executive at an hourly rate.

 

8. Confidential
Information. The Executive
understands and acknowledges that during the Employment Term, he
will have access to and learn about Confidential Information, as
defined below.

 

8.1 Confidential
Information Defined.

 

(a) Definition.

 

For
purposes of this Agreement, “Confidential Information”
includes, but is not limited to, proprietary information not
generally known to the public, in spoken, printed, electronic or
any other form or medium, relating directly or indirectly to:
business processes, practices, methods, policies, plans,
publications, documents, research, operations, services,
strategies, techniques, agreements, contracts, terms of agreements,
transactions, potential transactions, negotiations, pending
negotiations, know-how, trade secrets, computer programs, computer
software, applications, operating systems, software design, web
design, work-in-process, databases, manuals, records, articles,
systems, material, sources of material, supplier information,
vendor information, financial information, results, accounting
information, accounting records, legal information, marketing
information, advertising information, pricing information, credit
information, design information, supplier lists, vendor lists,
developments, reports, internal controls, security procedures,
graphics, drawings, sketches, market studies, sales information,
revenue, costs, formulae, notes, communications, algorithms,
product plans, designs, styles, models, ideas, audiovisual
programs, inventions, unpublished patent applications, original
works of authorship, discoveries, experimental processes,
experimental results, specifications, customer information,
customer lists, client information, client lists, manufacturing
information, factory lists, distributor lists, and buyer lists of
the Company or its businesses or any existing or prospective
customer, supplier, investor or other associated third party, or of
any other person or entity that has entrusted information to the
Company in confidence.

 

 

10

 

 

The
Executive understands that the above list is not exhaustive, and
that Confidential Information also includes other information that
is marked or otherwise identified as confidential or proprietary,
or that would otherwise appear to a reasonable person to be
confidential or proprietary in the context and circumstances in
which the information is known or used.

 

The
Executive understands and agrees that Confidential Information
includes information developed by Executive in the course of his
employment by the Company as if the Company furnished the same
Confidential Information to the Executive in the first instance.
Confidential Information shall not include information that is
generally available to and known by the public at the time of
disclosure to the Executive; provided that, such disclosure is
through no direct or indirect fault of the Executive or person(s)
acting on the Executive’s behalf.

 

(b) Company Creation and Use of
Confidential Information.

 

The
Executive understands and acknowledges that the Company has
invested, and continues to invest, substantial time, money, and
specialized knowledge into developing its resources, creating a
customer base, generating customer and potential customer lists,
training its employees, and improving its offerings. The Executive
understands and acknowledges that as a result of these efforts, the
Company has created, and continues to use and create Confidential
Information. This Confidential Information provides the Company
with a competitive advantage over others in the
marketplace.

 

(c) Disclosure and Use
Restrictions.

 

The
Executive agrees and covenants: (i) to treat all Confidential
Information as strictly confidential; (ii) not to directly or
indirectly disclose, publish, communicate, or make available
Confidential Information, or allow it to be disclosed, published,
communicated, or made available, in whole or part, to any entity or
person whatsoever (including other employees of the Company) not
having a need to know and authority to know and use the
Confidential Information in connection with the business of the
Company and, in any event, not to anyone outside of the direct
employ of the Company except as required in the performance of the
Executive’s authorized employment duties to the Company or
with the prior consent of the Company Officer acting on behalf of
the Company in each instance (and then, such disclosure shall be
made only within the limits and to the extent of such duties or
consent); and (iii) not to access or use any Confidential
Information, and not to copy any documents, records, files, media,
or other resources containing any Confidential Information, or
remove any such documents, records, files, media, or other
resources from the premises or control of the Company, except as
required in the performance of the Executive’s authorized
employment duties to the Company or with the prior consent of the
Company Officer acting on behalf of the Company in each instance
(and then, such disclosure shall be made only within the limits and
to the extent of such duties or consent). Nothing herein shall be
construed to prevent disclosure of Confidential Information as may
be required by applicable law or regulation, or pursuant to the
valid order of a court of competent jurisdiction or an authorized
government agency, provided that the disclosure does not exceed the
extent of disclosure required by such law, regulation, or order.
The Executive shall promptly provide written notice of any such
order to the Company Officer.

 

 

11

 

 

(d) Notice of Immunity
Under the Economic Espionage Act of 1996, as amended by the Defend
Trade Secrets Act of 2016 (“DTSA”). Notwithstanding
any other provision of this Agreement:

 

(i) The Executive will
not be held criminally or civilly liable under any federal or state
trade secret law for any disclosure of a trade secret
that:

 

(A) is made (1) in
confidence to a federal, state, or local government official,
either directly or indirectly, or to an attorney; and (2) solely
for the purpose of reporting or investigating a suspected violation
of law; or

 

(B) is made in a
complaint or other document filed under seal in a lawsuit or other
proceeding.

 

(ii) If
the Executive files a lawsuit for retaliation by the Company for
reporting a suspected violation of law, the Executive may disclose
the Company’s trade secrets to the Executive’s attorney
and use the trade secret information in the court proceeding if the
Executive:

 

(A) files any document
containing trade secrets under seal; and

 

(B) does not disclose
trade secrets, except pursuant to court order.

 

The
Executive understands and acknowledges that his obligations under
this Agreement with regard to any particular Confidential
Information shall commence immediately upon the Executive first
having access to such Confidential Information (including
information obtained prior to the commencement of employment
pursuant to this Agreement) and shall continue during and after
Executive’s employment by the Company until such time as such
Confidential Information has become public knowledge other than as
a result of the Executive’s breach of this Agreement or
breach by those acting in concert with the Executive or on the
Executive’s behalf.

 

9. Restrictive
Covenants.

 

9.1 Acknowledgement.
The Executive understands that the nature of the Executive’s
position gives Executive access to and knowledge of Confidential
Information and places Executive in a position of trust and
confidence with the Company. The Executive understands and
acknowledges that the intellectual or artistic services Executive
provides to the Company are unique, special, or extraordinary. The
Executive further understands and acknowledges that the
Company’s ability to reserve these for the exclusive
knowledge and use of the Company is of great competitive importance
and commercial value to the Company, and that improper use or
disclosure by the Executive is likely to result in unfair or
unlawful competitive activity.

 

 

12

 

 

9.2 Non-Solicitation
of Employees. Except as set
forth in Section 
5.2(a)(vii), the Executive agrees and covenants not to
directly or indirectly solicit, hire, recruit, attempt to hire or
recruit, or induce the termination of employment of any person who
is an employee of the Company as of the Termination Date during the
period of three (3) years, to run consecutively, beginning on the
last day of the Executive’s employment with the
Company.

 

9.3 Non-Solicitation
of Customers. The Executive
understands and acknowledges that because of the Executive’s
experience with and relationship to the Company, Executive will
have access to and learn about much or all of the Company’s
customer information. “Customer Information”
includes, but is not limited to, names, phone numbers, addresses,
e-mail addresses, order history, order preferences, chain of
command, pricing information, and other information identifying
facts and circumstances specific to the customer. The Executive
understands and acknowledges that loss of this customer
relationship and/or goodwill will cause significant and irreparable
harm. Except as set forth in Section 5.2(a)(vii), the
Executive agrees and covenants, during the period of three (3)
years, to run consecutively, beginning on the last day of the
Executive’s employment with the Company, not to directly or
indirectly solicit, contact (including but not limited to e-mail,
regular mail, express mail, telephone, fax, and instant message)
attempt to contact, or meet with the Company’s current or
prospective customers as of the Termination Date for purposes of
offering or accepting goods or services similar to or competitive
with those offered by the Company.

 

10. Non-Disparagement.
The Executive and the officers of the Company agree and covenant
that they shall not at any time make, publish or communicate to any
person or entity or in any public forum any defamatory or
disparaging remarks, comments, or statements concerning the
Executive or the Company or its businesses, or any of its employees
or officers. This Section 9 does not, in any way,
restrict or impede the parties hereto from exercising protected
rights to the extent that such rights cannot be waived by agreement
or from complying with any applicable law or regulation or a valid
order of a court of competent jurisdiction or an authorized
government agency, provided that such compliance does not exceed
that required by the law, regulation, or order. The parties hereto
shall promptly provide written notice of any such order to the
other party.

 

11. Acknowledgement.
The Executive acknowledges and agrees that the services to be
rendered by him to the Company are of a special and unique
character; that the Executive will obtain knowledge and skill
relevant to the Company’s industry, methods of doing business
and marketing strategies by virtue of the Executive’s
employment; and that the restrictive covenants and other terms and
conditions of this Agreement are reasonable and reasonably
necessary to protect the legitimate business interest of the
Company.

 

The
Executive further acknowledges that the amount of his compensation
reflects, in part, Executive’s obligations and the
Company’s rights under Section 7, Section 8, and Section 9 of this Agreement; that
Executive has no expectation of any additional compensation,
royalties or other payment of any kind not otherwise referenced
herein in connection herewith; and that Executive will not be
subject to undue hardship by reason of Executive’s full
compliance with the terms and conditions of Section 7, Section 8, and Section 9 of this Agreement or the
Company’s enforcement thereof.

 

 

13

 

 

12. Remedies.
In the event of a breach or threatened breach by the Executive of
Section 7, Section 8, or Section 9 of this Agreement, the
Executive hereby consents and agrees that the Company shall be
entitled to seek, in addition to other available remedies, a
temporary or permanent injunction or other equitable relief against
such breach or threatened breach from any court of competent
jurisdiction, without the necessity of showing any actual damages
or that money damages would not afford an adequate remedy, and
without the necessity of posting any bond or other security. The
aforementioned equitable relief shall be in addition to, not in
lieu of, legal remedies, monetary damages, or other available forms
of relief.

 

13. Security.

 

13.1 Security
and Access. The Executive
agrees and covenants (a) to comply with all Company security
policies and procedures as in force from time to time including
without limitation those regarding computer equipment, telephone
systems, voicemail systems, facilities access, monitoring, key
cards, access codes, Company intranet, internet, social media and
instant messaging systems, computer systems, e-mail systems,
computer networks, document storage systems, software, data
security, encryption, firewalls, passwords and any and all other
Company facilities, IT resources and communication technologies
(“Facilities and
Information Technology Resources”); (b) not to access
or use any Facilities and Information Technology Resources except
as authorized by the Company; and (c) not to access or use any
Facilities and Information Technology Resources in any manner after
the termination of the Executive’s employment by the Company,
whether termination is voluntary or involuntary. The Executive
agrees to notify the Company promptly in the event Executive learns
of any violation of the foregoing by others, or of any other
misappropriation or unauthorized access, use, reproduction, or
reverse engineering of, or tampering with any Facilities and
Information Technology Resources or other Company property or
materials by others.

 

13.2 Exit
Obligations. Upon (a)
voluntary or involuntary termination of the Executive’s
employment or (b) the Company’s request at any time during
the Executive’s employment, the Executive shall (i) provide
or return to the Company any and all Company property, including
keys, key cards, access cards, identification cards, security
devices, employer credit cards, network access devices, computers,
cell phones, smartphones, PDAs, pagers, fax machines, equipment,
speakers, webcams, manuals, reports, files, books, compilations,
work product, e-mail messages, recordings, tapes, disks, thumb
drives or other removable information storage devices, hard drives,
negatives and data and all Company documents and materials
belonging to the Company and stored in any fashion, including but
not limited to those that constitute or contain any Confidential
Information or work product, that are in the possession or control
of the Executive, whether they were provided to the Executive by
the Company or any of its business associates or created by the
Executive in connection with Executive’s employment by the
Company; and (ii) delete or destroy all copies of any such
documents and materials not returned to the Company that remain in
the Executive’s possession or control, including those stored
on any non-Company devices, networks, storage locations, and media
in the Executive’s possession or control.

 

 

14

 

 

14. Developments.

 

14.1 Disclosure.
While the Executive is an employee of the Company, the Executive
shall promptly and fully disclose to the Company and its attorneys,
in writing whenever possible, any ideas, devices, computer
programs, programming tools and techniques, inventions,
improvements, developments, works of authorship, technical
information and know-how which relate to the Company’s
business as then conducted or proposed to be conducted, whether or
not patentable, copyrightable or otherwise protectable, which the
Executive, alone or with others, conceives, discovers or reduces to
practice while he is an Executive, whether during or outside the
usual hours of work (together, the “Developments”).

 

14.2 Ownership.
The Executive agrees that any Development shall be deemed to be a
“work for hire”
to the extent consistent with Section 101 of the United States
Copyright Act and, in any event, that each Development and all
related patents, copyrights and trademarks shall be the
Company’s property exclusively and shall be subject to the
confidentiality provisions of Section 1102. The Executive agrees
that all of his right, title and interest, if any, in and to any
Development shall be deemed to be held by him in a fiduciary
capacity solely for the benefit of the Company and the Executive
hereby assigns all such right, title and interest to the Company.
If the Company so requests, the Executive shall at any time, for no
additional compensation, execute a written assignment to the
Company of his entire right, title and interest in and to the
Developments and such related patents, copyrights and trademarks to
the extent not owned by the Company as a matter of law or pursuant
to this Agreement from the time of their creation. Further, at the
Company’s expense, the Executive shall execute such documents
(including copyright registration or patent applications) and do
whatever is reasonably required to (a) evidence and maintain the
Company’s interest in the Developments, (b) execute and
assist the Company’s agents in preparing patent or copyright
applications, domestic and foreign, covering the Developments and
(c) generally give all information and testimony, sign all papers
and do all things which may be needed or reasonably requested by
the Company so that it may obtain, extend, reissue, maintain and
enforce United States and foreign patents or copyrights
registrations covering the Developments.

 

15. Governing
Law. This Agreement
shall be governed by and construed in accordance with the laws of
the State of New York without reference to the conflicts of law
rules thereof that may require the application of the laws of
another jurisdiction.

 

16. Jurisdiction;
Forum. The parties agree
that the appropriate and exclusived forum for any dispute between
any of the parties arising out of this Agreement shall be in any
state or federal court in New York, New York, and the parties
further agree that the parties will not bring suit with respect to
any disputes arising out of this Agreement in any court or
jurisdiction other than the above-specified courts. The Executive
waives any defense of inconvenient forum to the maintenance of any
dispute so brought in the above-specified courts. The Executive
further agrees, to the extent permitted by applicable law, that
final and non-appealable judgment against the Executive in any
dispute contemplated above shall be conclusive and may be enforced
in any other jurisdiction within or outside the United States by
suit on the judgment, or certified or exemplified copy of which
shall be conclusive evidence of the fact and amount of such
judgment. The Executive irrevoably consent to the service of
process in any dispute by the mailing of copies thereof by
registered or certified mail, return receipt requested, first class
postage prepaid to the addresses set forth in Section 24 hereto. Nothing
in this Agreement will affect the right of any party to serve
process in any other manner permitted by applicable
law.

 

 

15

 

 

17. Entire
Agreement. Unless
specifically provided herein, this Agreement contains all of the
understandings and representations between the Executive and the
Company pertaining to the subject matter hereof and supersedes all
prior and contemporaneous understandings, agreements,
representations and warranties, both written and oral, with respect
to such subject matter. The parties mutually agree that the
Agreement can be specifically enforced in court and can be cited as
evidence in legal proceedings alleging breach of the
Agreement.

 

18. Modification
and Waiver. No provision of
this Agreement may be amended or modified unless such amendment or
modification is agreed to in writing and signed by the Executive
and by the Chief Executive Officer of the Company. No waiver by
either of the parties of any breach by the other party hereto of
any condition or provision of this Agreement to be performed by the
other party hereto shall be deemed a waiver of any similar or
dissimilar provision or condition at the same or any prior or
subsequent time, nor shall the failure of or delay by either of the
parties in exercising any right, power, or privilege hereunder
operate as a waiver thereof to preclude any other or further
exercise thereof or the exercise of any other such right, power, or
privilege.

 

19. Severability.
Should any provision of this Agreement be held by a court of
competent jurisdiction to be enforceable only if modified, or if
any portion of this Agreement shall be held as unenforceable and
thus stricken, such holding shall not affect the validity of the
remainder of this Agreement, the balance of which shall continue to
be binding upon the parties with any such modification to become a
part hereof and treated as though originally set forth in this
Agreement. The parties further agree that any such court is
expressly authorized to modify any such unenforceable provision of
this Agreement to the minimum extent necessary to render it
enforceable, in lieu of severing such unenforceable provision from
this Agreement in its entirety, whether by rewriting the offending
provision, deleting any or all of the offending provision, adding
additional language to this Agreement, or by making such other
modifications as it deems warranted to carry out the intent and
agreement of the parties as embodied herein to the maximum extent
permitted by law. The parties expressly agree that this Agreement
as so modified by the court shall be binding upon and enforceable
against each of them. In any event, should one or more of the
provisions of this Agreement be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions hereof, and
if such provision or provisions are not modified as provided above,
this Agreement shall be construed as if such invalid, illegal, or
unenforceable provisions had not been set forth
herein.

 

20. Captions.
Captions and headings of the Sections and paragraphs of this
Agreement are intended solely for convenience and no provision of
this Agreement is to be construed by reference to the caption or
heading of any Section or paragraph.

 

21. Counterparts.
This Agreement may be executed in separate counterparts, each of
which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.

 

22. Tolling.
Should the Executive violate any of the terms of the restrictive
covenant obligations articulated herein, the obligation at issue
will run from the first date on which the Executive ceases to be in
violation of such obligation.

 

 

16

 

 

23. Successors
and Assigns. This Agreement is
personal to the Executive and shall not be assigned by the
Executive. Any purported assignment by the Executive shall be null
and void from the initial date of the purported assignment. The
Company may assign this Agreement to any successor or assign
(whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business or assets of
the Company. This Agreement shall inure to the benefit of the
Company and permitted successors and assigns.

 

24. Notice. Notices and all
other communications provided for in this Agreement shall be in
writing and shall be delivered personally or sent by registered or
certified mail, return receipt requested, or by overnight carrier
to the parties at the addresses set forth below (or such other
addresses as specified by the parties by like notice):

 

	

If to
the Company:

	

Dolphin
Digital Media, 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

 

	

If to
the Executive:

	

Allan
Mayer

 

	

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

	

Baker
Hostetler LLP

45
Rockefeller Plaza

New
York, NY 10111

Attention:
John Siegal

Fax No:
(212) 589-4201

Email:
jsiegal@BakerLaw.com

 

25. Withholding. 
The
Company shall have the right to withhold from any amount payable
hereunder any Federal, state, and local taxes in order for the
Company to satisfy any withholding tax obligation it may have under
any applicable law or regulation.

 

26. Survival.
Upon the expiration or other termination of this Agreement, the
respective rights and obligations of the parties hereto shall
survive such expiration or other termination to the extent
necessary to carry out the intentions of the parties under this
Agreement.

 

 

17

 

 

27. Acknowledgement
of Full Understanding. THE EXECUTIVE
ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND
VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES
AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND
CONSULT WITH AN ATTORNEY OF EXECUTIVE’S CHOICE BEFORE SIGNING
THIS AGREEMENT.

 

[SIGNATURE
PAGE FOLLOWS]

 

 

 

 

 

 

18

 

 

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

 

	
 

	

DOLPHIN DIGITAL MEDIA, INC.

 

By:
/s/ William O’Dowd
IV                     

Name:
William O’Dowd IV

Title:
Chief Executive Officer

 

 

 

 

 

 

 

 

 

19

 

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

 

	
 

	

EXECUTIVE

 

 

 

 

  /s/ Allan
Mayer                                  

ALLAN
MAYER

 

 

 

 

 

 

 

 

Annex I

 

Base Salary Performance Goal

 

	

EBITDA
Target

	

$3,750,000

 

 

 

 

 

 

 

 

 

 

 

Annex II

 

Bonus Performance Goals

 

With
respect to the performance of 42West, at the end of each calendar
year the Executive shall be eligible for a bonus equal to at least
10% of every dollar of 42West’s EBITDA for that calendar year
over an EBITDA of $3,750,000.

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