UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 OR 15(d) of
 
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) September 13, 2012
 
DOLPHIN DIGITAL MEDIA, INC.
 
(Exact name of registrant as specified in its charter)
 
Nevada
 
0-50621
 
86-0787790
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
804 Douglas Road, Executive Tower Bldg., Suite 365,
Miami, Florida
 
33134
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: (305) 774-0407
 
Registrant’s facsimile number, including area code: (305) 774-0405
 
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
 
ITEM 1.02      Entry into a Material Definitive Agreement

ITEM 5.02      Directors or Certain Officers, Election of Directors, Appointment of Certain Officers, Compensatory Arrangements of Certain Officers.

On September 13, 2012, effective January 1, 2012 Dolphin Digital Media, Inc. (the “Company”) entered into a three (3) year employment agreement (the “Agreement”) with Mr. William O’Dowd IV, the Company’s President and Chief Executive Officer.  The Agreement provides that the initial term shall be extended for an additional two (2) year term at the option of Mr. O’Dowd.  The Agreement provides for an initial base salary of $250,000.  In addition, Mr. O’Dowd shall be able to receive an annual bonus in an amount to be determined by the Company’s Board of Directors.  In consideration of Mr. O’Dowd’s entry into the Agreement, the waiver by Mr. O’Dowd of any right to compensation for services rendered to the Company prior to the date of the Agreement, and the waiver by Mr. O’Dowd of any subsequent anti-dilution or similar rights Mr. O’Dowd has or had with respect to his equity ownership of the Company, the Company agreed to pay Mr. O’Dowd a bonus in the amount of $1,000,000 effective as of January 1, 2012.  The Company has been accruing annual bonus compensation based upon such terms.

If within one year after a “Change of Control” Mr. O’Dowd voluntarily terminates his employment, or the Company terminates Mr. O’Dowd “without cause” Mr. O’Dowd will be entitled to an amount equal to the sum of (A) his base salary for a period equal to the remainder of the term, and (B) an amount equal to the greater of (i) Mr. O’Dowd’s bonus payment for the year prior to the date of termination and (ii) the annual average of Mr. O’Dowd’s bonus payment during the two (2) years immediately prior to the date of termination.  Such amount should be paid to Mr. O’Dowd in a lump sum within thirty (30) days after the date of termination.  A “Change of Control” is defined as (i) the ownership of any person or entity, other than Mr. O’Dowd of more than forty percent (40%) of the outstanding capital stock of the Company entitled to vote for the election of directors, (ii) a merger or other similar transaction the result of which the holders of the outstanding voting stock of the Company immediately prior to such merger or other transaction hold less than eighty percent (80%) of the voting stock of the surviving entity, or a transfer of all or substantially all the property of the Company other than to an entity of which the Company owns at least eighty percent (80%) of the voting stock, or (iii) the election to the Board of Directors of the Company, without the recommendation or approval of the incumbent Board of Directors of the Company of the lesser of (a) three independent directors or (b) directors constituting a majority of the number directors then in office.

ITEM 3.02      Unregistered Sales of Equity Securities

ITEM 5.03      Amendments to Articles of Incorporation or Bylaws, Change in Fiscal Year

On September 13, 2012 the Company issued to Mr. William O’Dowd, IV, seventeen million seven hundred and one thousand three hundred and sixty-five (17,701,365) shares of common stock in consideration for his exercise of all anti-dilution rights he has or had with respect to his equity ownership of the issuer granted to Mr. O’Dowd in connection with the acquisition of Dolphin Digital Media in June 2008.
 
 
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On September 13, 2012 the Company and T Squared Investments, LLC (“T Squared”) agreed to amend T Squared’s warrant “E” for 7,000,000 shares by extending the expiration date to September 13, 2015 and among other things, giving the Company a right of first refusal prior to any sale, assignment, transfer, pledge, encumbrance, or other disposition of the common shares issuable upon exercise of the “E” Warrant.  The right of first refusal shall only be applicable if the sale transaction represents greater than 20,000 shares in any given twenty-four (24) hour period.  T Squared has also granted to Mr. O’Dowd and any individual designated by him its proxy to vote any common shares underlying the Warrant upon issuance at any meeting of the shareholder’s of the Company or otherwise.  On September 13, 2012 the Company and T Squared also amended their Preferred Stock Purchase Agreement dated October 4, 2007 and subsequently amended, to provide that the Company no longer shall require the consent of T Squared to issue any common stock or securities with a conversion price below the existing conversion price of T Squared’s Convertible Preferred Stock.  In consideration for such amendment the Company executed the Warrant E extension described above and granted T Squared a three (3) year Warrant “F” to purchase seven million (7,000,000) shares of the Company’s Common Stock with an exercise price of $0.25 per share.

The Company also issued a three (3) year Warrant to Strocar Investments, LLC (“Strocar”) to purchase seven million (7,000,000) shares of the Company’s common stock with an exercise price of $0.25 per share.  Strocar shall within seven (7) days of September 13, 2012, pay the Company $35,000 in consideration for the issuance of the Warrant.

T Squared and Strocar may each continually pay to the Company an amount of money to reduce the exercise price of their Warrant until such time the exercise price of their Warrant is effectively $0.0001 per share.  Each time a payment is made to the Company, side letters will be executed by each respective party which state the new effective exercise price of their Warrant at that time.  At such time the Warrant has been paid down to an exercise price of $0.0001 per share or less the party shall have the right to exercise the Warrant by a cashless portion and hold it for six (6) months to remove the legend under Rule 144.

T Squared and Strocar have granted a right of first refusal prior to any sale, assignment, transfer, purchase, pledge, encumbrance or the disposition of any of the common shares issued upon exercise of the Warrant to the Company and in the case of Strocar to Mr. O’Dowd, for as long as he shall remain alive and not incapacitated, to purchase the shares issuable upon exercise of the Warrant.  Each has also granted Mr. O’Dowd their proxy to vote the common shares underlying their Warrant upon issuance at any meeting of the shareholders of the Company or otherwise.

The terms of the Employment Agreement, Extension Letter, and Warrants issued to T Squared and Strocar are summaries of the terms and conditions of such agreements and are qualified in their entirety by the actual agreements which are incorporated by reference and filed as exhibits to this 8-K.
 
 
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ITEM 9.01      Financial Statements and Exhibits

Exhibit No.
 
Exhibit Description
     
3(1).8
 
Amendment to Certificate of Designation of Series A Convertible Preferred Stock*
     
 
Executive Employment Agreement between the Company and William O’Dowd IV dated September 13, 2012 and effective January 1, 2012
     
 
Amendment to Preferred Stock Purchase Agreement dated September 13, 2012 between the Company and T Squared Investments, LLC
     
 
Extension Letter dated September 13, 2012 between the Company and T Squared Investments, LLC
     
 
Form of Common Stock Purchase Warrant dated September 13, 2012 between the Company and T Squared Investments, LLC
     
 
Form of Common Stock Purchase Warrant dated September 13, 2012 between the Company and Strocar Investments, LLC
     

* To be filed by amendment
 
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date:  September 19, 2012
  DOLPHIN DIGITAL MEDIA, INC.  
         
   
By:
William O’Dowd IV
 
   
Name:
William O’Dowd IV
 
   
Title:
Chief Executive Officer
 
 
 
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Exhibit 10.1
 
EXECUTIVE EMPLOYMENT AGREEMENT
 
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is dated September 13, 2012, and effective as of January 1, 2012 (the “Effective Date”), between Dolphin Digital Media, Inc., a Nevada corporation (the “Company”) and William O’Dowd IV (the “Executive”).
 
RECITALS
 
The Company is principally engaged in the business of creating original online programming and membership clubs geared toward tweens and teens (collectively the “Business”).
 
The Executive has extensive experience in all aspects of the Business.
 
The Company desires to employ the Executive and the Executive desires to be employed by the Company.
 
The parties agree that a covenant not to compete is essential to the growth and stability of the Business of the Company.
 
NOW, THEREFORE, in consideration of the mutual agreements herein made, the Company and the Executive do hereby agree as follows:
 
1.            Recitals . The above recitals are true, correct, and are herein incorporated by reference.
 
2.            Employment . The Company hereby employs the Executive, and the Executive hereby accepts employment, upon the terms and conditions hereinafter set forth.
 
3.            Authority and Power During Employment Period .
 
a.            Duties and Responsibilities . During the term of this Agreement, the Executive shall serve as the Chief Executive Officer of the Company and shall report to the Company’s Board of Directors. The Executive, as a crucial member of the Company’s executive team, shall be the principal executive officer of the Company and, as such, shall manage the day to day operations of the Company.
 
b.            Time Devoted . Throughout the term of the Agreement, the Executive shall devote the majority of the Executive’s business time and attention to the affairs of the Company, consistent with the Executive’s position with the Company, provided, however, the foregoing restrictions shall not prohibit the Executive from engaging in business activities outside of the Company, including but not limited to, the creation of original programming for other media (e.g. television, film), including the creation of original programming for other media aimed at tweens or teens (e.g. tween-oriented television programming), as well as the creation of original programming not primarily aimed at tweens or teens that may be initially sold to online platforms.
 
 
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4.            Term . The employment hereunder will commence on the Effective Date and will continue for an initial  term of three years thereafter, subject to a two year renewal at the option of the Executive, which option shall be exercisable by notice from the Executive to the Company prior to the end of the initial term hereof (collectively the “Term”).

5.            Compensation and Benefits .
 
a.            Salary . The Executive shall be paid a base salary (the “Base Salary”) at an annual rate of $250,000. The Base Salary shall be reviewed annually throughout the Term by Company’s Board of Directors and may be raised in its sole discretion.
 
b.            Performance Based Bonus . As additional compensation, the Executive shall be entitled to receive a bonus (“Bonus”) for each year during the Term of the Executive’s employment in an amount determined by the Company’s Board of Directors.

c.            Signing Bonus .  In consideration for (i) the Executive’s entry into this Agreement, including the Covenant Not to Compete under paragraph 7; (ii) the waiver by the Executive of any right to compensation for services rendered to the Company prior to the Effective Date of this Agreement; and (iii) the waiver by the Executive of any anti-dilution, preemptive, or similar rights the Executive has or had with respect to the Executive’s equity ownership of the Company, the Company shall pay the Executive a signing bonus in the amount of $1,000,000 concurrently with the execution hereof.

d.            Executive Benefits . The Executive shall be entitled to participate in benefit programs of the Company currently existing or hereafter established, including, but not limited to, group life insurance, health insurance, dental, and 401 K.
 
d.            Vacation . The Executive shall be entitled to four (4) weeks of paid time off each year during the Term.
 
e.            Business Expense Reimbursement. During the Term of employment, the Executive shall be entitled to receive proper reimbursement for all reasonable, out-of-pocket expenses incurred by the Executive (in accordance with the policies and procedures established by the Company for its senior executive officers) in performing services hereunder, provided the Executive properly accounts therefore.

f.            Accrued Compensation .  Any compensation due Executive under this Agreement that is unpaid and accrued by the Company shall accrue interest on the principal amount thereof, from the date due until paid in full, in the amount of 10% per annum.
 
6.            Consequences of Termination of Employment .
 
a.            Death . In the event of the death of the Executive during the Term, Base Salary and any earned Bonus shall be paid to the Executive’s designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive until the date of death. Other death benefits will be determined in accordance with the terms of the Company’s benefit programs and plans.
 
 
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b.            Disability .
 
(1)           In the event of the Executive’s Disability, as hereinafter defined, the Executive shall be entitled to compensation in accordance with the Company’s disability compensation practice for senior executives, including any separate arrangement or policy covering the Executive, but in all events the Executive shall continue to receive the Executive’s Base Salary for ninety (90) days from the date on which the Disability has been deemed to occur. Any amounts provided for in this Section 6(b) shall be offset by other long-term disability benefits provided to the Executive by the Company.
 
(2)           “Disability,” for the purposes of this Agreement, shall be deemed to have occurred in the event (A) the Executive is unable by reason of sickness or accident to perform the Executive’s duties under this Agreement for an aggregate of 30 days in any twelve-month period or (B) the Executive has a guardian of the person or estate appointed by a court of competent jurisdiction. Termination due to Disability shall be deemed to have occurred upon the first day of the month following the determination of Disability as defined in the preceding sentence.
 
Anything herein to the contrary notwithstanding, if, following a termination of employment hereunder due to Disability as provided in the preceding paragraph, the Executive becomes reemployed, whether as an Executive or a consultant to the Company, any salary, annual incentive payments or other benefits earned by the Executive from such reemployment shall offset any salary continuation due to the Executive hereunder commencing with the date of re-employment.
 
c.            Termination by the Company for Cause .
 
(1)           Nothing herein shall prevent the Company from terminating the Executive’s employment hereunder for “Cause,” as hereinafter defined. In the event of a termination for Cause, the Executive shall receive Base Salary and benefits through the date of termination only, together with any Bonus that has been earned as of that date.
 
(2)           “ Cause ” shall mean:

(A)           Executive’s material violation of any of the material provisions of this Agreement, or the material rules, policies, and/or procedures of the Company, or commission of any material act of fraud, misappropriation, breach of fiduciary duty or theft against or from the Company, if such violation is not cured as soon as is reasonably practical, and in any event within sixty (60) days after written notice from the Company.
 
 
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(B)           Executive’s material violation of any law, rule or regulation of a governmental authority or regulatory body with jurisdiction over the Company or Executive relative to the conduct of Executive in connection with the Company’s business or its securities, if such material violation is not cured as soon as is reasonably practical, and in any event within sixty (60) days after written notice from the Company.

(C)           The conviction of Executive of a felony under the laws of the United States of America or any state therein.

d.            Termination by the Company Other than for Cause . The Company may terminate the Executive’s employment in the Company’s sole discretion at any time; provided, however, that in the event such termination is not pursuant to Section 6(a), Section 6(b), or Section 6(c) hereof, the Company may terminate this Agreement upon three (3) months’ prior written notice. During such three (3) month period the Executive shall continue to perform the Executive’s duties pursuant to this Agreement and the Company shall continue to compensate the Executive pursuant to this Agreement. In the event of a termination under this Section 6(d), the Executive shall receive any Bonus that has been earned as of the date of termination, plus Base Salary only (i.e. no fringe benefits, additional Bonus, or other compensation) for the one year period following termination.
 
e.            Voluntary Termination . In the event the Executive terminates the Executive’s employment on the Executive’s own volition the Executive shall receive Base Salary and benefits through the date of termination only, together with any Bonus that has been earned as of that date.
 
f.            Change of Control . If, within one year after a Change in Control the Company terminates Executive’s employment with the Company under Section 6(d) OR Executive voluntarily terminates such employment under Section 6(e), the following provisions will apply:

(1)           An amount equal to the sum of (A) Executive’s aggregate Base Salary (at the rate most recently determined) for a period equal to the remainder of the Term (the “ Severance Period ”), and (B) an amount equal to the greater of (i) Executive’s Bonus payment for the year preceding the date of termination, and (ii) the annual average of Executive’s Bonus payment during the two (2) years immediately preceding the date of termination, shall be paid to, or in trust for, Executive pursuant to Section 6(f)(7) in a lump sum within 30 days after the date of termination.

(2)           Executive shall receive any and all benefits accrued under any Incentive Plans and Benefit Plans to the date of his termination. The amount, form and time of payment of such benefits shall be determined by the terms of such Incentive Plans and Benefit Plans, and for purposes of such plans, Executive’s employment shall be deemed to have terminated by reason of retirement.
 
 
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(3)           The Company agrees that for purposes of all Incentive Plans and Benefit Plans Executive shall be given service credit for all purposes for, and shall be deemed to be an employee of the Company during, the Severance Period, notwithstanding his inability to render services by reason of death or disability during the Severance Period or the fact that he is not an employee of the Company during the Severance Period; provided that, if the terms of any of such Incentive Plan or Benefit Plan do not permit such credit or deemed employee treatment, the Company will make identical payments and distributions outside of the Plans.

(4)           During the Severance Period Executive and his dependents will continue to be covered by all health, dental, disability, accident and life insurance plans or arrangements made available by the Company in which he or his dependents were participating immediately prior to the date of his termination as if he continued to be an employee of the Company, provided that, if participation in any one or more of such plans and arrangements is not possible under the terms thereof, the Company will provide substantially identical benefits. Executive’s right to continuation of coverage under the health insurance plan of employer pursuant to Section 4980B (or any successor section) shall commence at the end of the Severance Period.

(5)           No payments or benefits payable to or with respect to Executive during the Severance Period pursuant to this Section 6(f) shall be reduced by any amount Executive or his dependents, spouse or beneficiary may earn or receive from employment with another employer or from any other source.

(6)           Except as otherwise provided in Section 6(f)(7), upon the death of Executive all amounts payable hereunder to Executive pursuant to this Section 6(f) shall be paid to his devisee, legates or other designee, or in the absence of a designee, to his estate.

(7)           Amounts payable pursuant to Section 6(f)(1) shall be, at the election of Executive set forth in a written instrument delivered to the Company within 15 days after his termination of employment, be either paid to him in a lump sum or paid to the trustee of a trust to be established by the Company for the benefit of Executive, with a bank or trust company selected by Executive as trustee. If Executive elects to have payments made to the trustee of such trust, the trust agreement shall conform to the provisions of any applicable model trust set forth in any Internal Revenue Service authority and shall contain terms and conditions mutually satisfactory to Executive and the Company and that are not inconsistent with the provisions of any such model trust.
 
 
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(8)            Treatment of Options .

(A)           If upon termination of his employment pursuant to Section 6(f)(1) Executive holds any options (the “Options”) with respect to the common stock (the “Common Stock”) of the Company, which are not then exercisable, said Options shall immediately vest upon termination. All such Options shall remain outstanding and exercisable for the remainder of the full term thereof (i.e. the term of said Option shall not be shortened as a result of any change in control provisions or other adjustment provisions contained in the Option agreement or the plan under which the Options were issued).

(B)           If Executive holds Options and (i) the Company effects any merger or consolidation of the Company with or into another person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each a “ Fundamental Transaction ”), then, upon any subsequent exercise of the Options, Executive shall have the right to receive, for each share of Common Stock underlying the Option that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “ Alternate Consideration ”) receivable as a result of such merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which the Option is exercisable immediately prior to such event. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then Executive shall be given the same choice as to the Alternate Consideration it receives upon any exercise of the Option following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to Company or surviving entity in such Fundamental Transaction shall issue to Executive a new option consistent with the foregoing provisions and evidencing Executive’s right to exercise such Option into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 6(f)(8) and insuring that the Options (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
 
 
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(9)            Expenses . The Company shall pay to Executive all out-of-pocket expenses, including attorneys’ fees, incurred by Executive in connection with the successful enforcement of this Section 6(f) by Executive.

(10)            Definitions . For purposes of this Agreement:

(A)           “ Benefit Plans ” shall mean any qualified or supplemental defined benefit retirement plan or defined contribution retirement plan, currently or hereafter made available by the Company to Executive in which Executive is eligible to participate, or any private arrangement maintained by the Company solely for executive.

(B)           “ Change in Control ” shall be deemed to occur on the earliest of any of the following events:

(i)           The ownership by any entity, person, or group of beneficial ownership, as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, other than Executive, of more than 40% of the outstanding capital stock of the Company entitled to vote for the election of directors (“ Voting Stock ”);

(ii)           The effective time of (a) a merger or consolidation of the Company with one or more other corporations as a result of which the holders of the outstanding Voting Stock of the Company immediately prior to such merger hold less than 80% of the Voting Stock of the surviving or resulting corporation, or (b) a transfer of all or substantially all of the property of the Company other than to an entity of which the Company owns at least 80% of the Voting Stock; or

(iii)           The election to the Board of Directors of the Company, without the recommendation or approval of the incumbent Board of Directors of the Company, of the lesser of (a) three independent directors or (b) directors constituting a majority of the number of directors of the Company then in office.

(C)           “ Incentive Plans ” shall mean any incentive, bonus, deferred compensation or similar plan or arrangement currently or hereafter made available by the Company in which Executive is eligible to participate.
 
7.            Covenant Not to Compete .
 
a.            Covenant Not to Compete . The Executive acknowledges and recognizes the highly competitive nature of the Company’s business and the goodwill, continued patronage, and specifically the names and addresses of the Company’s Clients (as hereinafter defined) constitute a substantial asset of the Company having been acquired through considerable time, money and effort. Accordingly, in consideration of the execution of this Agreement the Executive agrees to the following:
 
 
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(1)       That during the Restricted Period (as hereinafter defined) and within the Restricted Area (as hereinafter defined), the Executive will not, individually or in conjunction with others, directly or indirectly, engage in any Business Activities (as hereinafter defined), whether as an officer, director, proprietor, employer, partner, independent contractor, investor (other than as a holder solely as an investment of less than 1% of the outstanding capital stock of a publicly traded corporation), consultant, advisor or agent.
 
(2)       That during the Restricted Period and within the Restricted Area, the Executive will not, directly or indirectly, solicit, induce or influence any of the Company’s Clients which have a business relationship with the Company at the time during the Restricted Period to discontinue or reduce the extent of such relationship with the Company.
 
b.            Non-Disclosure of Information . Executive agrees that Executive will not use or disclose any Proprietary Information of the Company for the Executive’s own purposes or for the benefit of any entity engaged in Business Activities. As used herein, the term “Proprietary Information” shall mean trade secrets or confidential proprietary information of the Company which are material to the conduct of the business of the Company. No information can be considered Proprietary Information unless the same is a unique process or method material to the conduct of Company’s Business, or is a customer list or similar list of persons engaged in business activities with Company, or if the same is otherwise in the public domain or is required to be disclosed by order of any court or by reason of any statute, law, rule, regulation, ordinance or other governmental requirement. Executive further agrees that in the event his employment is terminated for any reason all Documents in his possession at the time of his termination shall be returned to the Company at the Company’s principal place of business. As used herein, the term “Documents” shall mean all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, including, but not limited to: papers; books; records; tangible things; correspondence; communications; telex messages; memoranda; work-papers; reports; affidavits; statements; summaries; analyses; evaluations; client records and information; agreements; agendas; advertisements; instructions; charges; manuals; brochures; publications; directories; industry lists; schedules; price lists; client lists; statistical records; training manuals; computer printouts; books of account, records and invoices reflecting business operations; all things similar to any of the foregoing however denominated. In all cases where originals are not available, the term “Documents” shall also mean identical copies of original documents or non-identical copies thereof.
 
c.            Company’s Clients . The “Company’s Clients” shall be deemed to be any individuals, partnerships, corporations, professional associations or other business organizations for whom the Company or its subsidiaries have performed Business Activities.
 
 
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d.            Restrictive Period . The “Restrictive Period” shall be deemed to commence on the date of this Agreement, and end on the earliest to occur of the following:
 
(1)           twelve (12) months after the termination of this Agreement under Section 6(b), Section 6(c), Section 6(e), or Section 6(f); or
 
(2)           the date of the termination of this Agreement under Section 6(d); or
 
(3)           the end of the Term (provided the Agreement wasn’t earlier terminated under one of the provisions of Section 6).
 
e.            Competitive Business Activities . The term “Business Activities” as used herein shall be deemed to mean the Business.
 
f.            Restrictive Area . The term “Restrictive Area” shall be deemed to mean any State in which the Company does business.
 
g.            Covenants as Essential Elements of this Agreement . It is understood by and between the parties hereto that the foregoing covenants contained in Section 7 are essential elements of this Agreement, and that but for the agreement by the Executive to comply with such covenants, the Company would not have agreed to enter into this Agreement. Such covenants by the Executive shall be construed to be agreements independent of any other provisions of this Agreement. The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties shall not constitute a defense to the enforcement of such covenants against the Executive.
 
h.            Survival After Termination of Agreement . Notwithstanding anything to the contrary contained in this Agreement, the covenants in Section 7 shall survive the termination of this Agreement and the Executive’s employment with the Company.
 
i.            Revisions . The parties hereto acknowledge that (A) the restrictions contained in Section 7 are fair and reasonable and are not the result of overreaching, duress, or coercion of any kind, and (B) Executive’s full, uninhibited, and faithful observance of each of the covenants contained in this Agreement will not cause Executive any undue hardship, financial or otherwise. It is the intention of all parties to make the covenants of Section 7 binding only to the extent that it may be lawfully done under existing applicable laws. In the event that any part of any covenant of Section 7 is determined by a court of law to be overly broad thereby making the covenant unenforceable, the parties hereto agree, and it is their desire, that such court shall substitute a reasonable, judicially enforceable limitation in place of the offensive part of the covenant and as so modified the covenant shall be as fully enforceable as set forth herein by the parties themselves in the modified form.
 
 
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j.            Remedies . The Executive acknowledges and agrees that the Company’s remedy at law for a breach or threatened breach of any of the provisions of Section 7 herein would be inadequate and a breach thereof will cause irreparable harm to the Company. In recognition of this fact, in the event of a breach by the Executive of any of the provisions of Section 7, the Executive agrees that, in addition to any remedy at law available to the Company, including, but not limited to, monetary damages and all rights of the Executive to payment or otherwise under this Agreement may be terminated, and the Company, without posting any bond, shall be entitled to obtain, and the Executive agrees not to oppose the Company’s request for, equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.
 
8.            Indemnification . The Executive shall continue to be covered by the Certificate of Incorporation and/or the Bylaws of the Company with respect to matters occurring on or prior to the date of termination of the Executive’s employment with the Company, subject to all the provisions of Nevada corporate law, Federal law and the Certificate of Incorporation and Bylaws of the Company then in effect. Such reasonable expenses, including attorneys’ fees that may be covered by the Certificate of Incorporation and/or Bylaws of the Company shall be paid by the Company on a current basis in accordance with such provision, the Company’s Certificate of Incorporation and Nevada corporate law. To the extent that any such payments by the Company pursuant to the Company’s Certificate of Incorporation and/or Bylaws may be subject to repayment by the Executive pursuant to the provisions of the Company’s Certificate of Incorporation or Bylaws, or pursuant to Nevada corporate law or Federal law, such repayment shall be due and payable by the Executive to the Company within twelve (12) months after the termination of all proceedings, if any, which relate to such repayment and to the Company’s affairs for the period prior to the date of termination of the Executive’s employment with the Company and as to which Executive has been covered by such applicable provisions.
 
9.            Withholding . Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or the Executive’s estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, the Company may accept other arrangements pursuant to which it is satisfied that such tax and other payroll obligations will be satisfied in a manner complying with applicable law or regulation.
 
10.            Notices . Any notice required or permitted to be given under the terms of this Agreement shall be sufficient if in writing and if sent postage prepaid by registered or certified mail, return receipt requested; by overnight delivery; by courier; or by confirmed telecopy, in the case of the Executive to the Executive’s last place of business or residence as shown on the records of the Company, or in the case of the Company to its principal office as set forth in the first paragraph of this Agreement, or at such other place as it may designate.
 
 
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11.            Waiver . Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provisions hereunder shall not affect its right thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement. No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.
 
12.            Completeness and Modification . This Agreement constitutes the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the employment of the Executive and the matters set forth herein. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties or, in the case of a waiver, by the party to be charged.
 
13.            Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute but one agreement.
 
14.            Binding Effect/Assignment . This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns. This Agreement shall not be assignable by the Executive but shall be assignable by the Company in connection with the sale, transfer or other disposition of its business or to any of the Company’s affiliates controlled by or under common control with the Company.
 
15.            Governing Law . This Agreement shall become valid when executed and accepted by Company. The parties agree that it shall be deemed made and entered into in the State of Florida and shall be governed and construed under and in accordance with the laws of the State of Florida. Anything in this Agreement to the contrary notwithstanding, the Executive shall conduct the Executive’s business in a lawful manner and faithfully comply with applicable laws or regulations of the state, city or other political subdivision in which the Executive is located.
 
16.            Further Assurances . All parties hereto shall execute and deliver such other instruments and do such other acts as may be necessary to carry out the intent and purposes of this Agreement.
 
17.            Headings . The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.
 
18.            Survival . Any termination of this Agreement shall not, however, affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.
 
 
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19.            Severability . The invalidity or unenforceability, in whole or in part, of any covenant, promise or undertaking, or any section, subsection, paragraph, sentence, clause, phrase or word or of any provision of this Agreement shall not affect the validity or enforceability of the remaining portions thereof.
 
20.            Enforcement . Should it become necessary for any party to institute legal action to enforce the terms and conditions of this Agreement, the successful party will be awarded reasonable attorneys’ fees at all trial and appellate levels, expenses and costs.
 
21.            Venue . Company and Employee acknowledge and agree that Dade County, Florida, shall be the venue and exclusive proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement and the parties further agree that, in the event of litigation arising out of or in connection with this Agreement in these courts, they will not contest or challenge the jurisdiction or venue of these courts.
 
22.           Construction . This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document.

THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS ENTIRE AGREEMENT, HAS HAD THE OPPORTUNITY TO DISCUSS THIS WITH HIS COUNSEL AND FURTHER ACKNOWLEDGES THAT HE UNDERSTANDS THE RESTRICTIONS, TERMS AND CONDITIONS IMPOSED UPON THE EXECUTIVE BY THIS AGREEMENT AND UNDERSTANDS THAT THESE RESTRICTIONS, TERMS AND CONDITIONS MAY BE BINDING UPON THE EXECUTIVE DURING AND AFTER TERMINATION OF THE EMPLOYMENT OF THE EXECUTIVE.
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of date set forth above.
 
 
/s/ William O’Dowd IV
 
William O’Dowd IV
 
 
 
 
Dolphin Digital Media, Inc.
 
 
 
 
Signature:
/s/ Michael Espensen
 
Printed Name:
Michael Espensen  
Title:
Director  
 
 
 
13
Exhibit 10.2
 
AMENDMENT OF PREFERRED STOCK PURCHASE AGREEMENT

September 13 th , 2012

Reference is hereby made to that certain PREFERRED STOCK PURCHASE AGREEMENT (the “ Agreement ”) originally dated October 4, 2007, and subsequently amended, by and among Dolphin Digital Media, Inc (formerly Logica Holdings Inc., the “ Company ”), and T Squared Investments LLC (“ T Squared ” or the “ Investor ”).  All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

WHEREAS, the parties to the Agreement (the “ Parties ”) wish to amend the Agreement to alter certain sections outlined below in consideration of additional agreements executed and attached herein.  All else within such agreements shall remain.

 NOW THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to eliminate the need for consent for stock issuances by the Company from the Investor as referenced in the clause below from the modified Preferred Stock Purchase Agreement dated in May of 2011.

“The parties agree that the Amendment to the Company’s Certificate of Designation, attached as Exhibit A hereto, contains a provision, (Section 7(b)), which specifically provides that the Company will not issue Company common stock or securities with a conversion right to acquire Company common stock below the existing Conversion Price (as defined) without our consent.”

As a result of the termination of the need for consent by the Investor for Company’s stock issuances in the future the Company shall execute the Warrant “E” extension agreement and Warrant “F” agreement, both for the benefit of the Investor and attached herein as Exhibits.

This Amendment and the transactions contemplated hereby, and all disputes between the parties under or related to this side letter or the facts and circumstances leading to its execution, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the internal laws of the State of New York.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date set forth above.
 
THE COMPANY:   
 
DOLPHIN DIGITAL MEDIA, INC.
 
   
 
T SQUARED INVESTMENTS LLC
By: T Squared Capital LLC, Managing Member
 
           
By:
/s/ William O’Dowd
  By:
/s/ Thomas Sauve
 
Name:
William O’Dowd
  Name:
Thomas Sauve
 
Title:
CEO 
  Title:
Managing Member
 

 
 
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Exhibit A – Investor Warrant “F” Agreement
 
 
 
 
 
 
 
3
 
 
Exhibit B – Investor Warrant “E” Extension Agreement
 
 
 
 
 
 
4
Exhibit 10.3
 
September 13 th , 2012

Bill O’Dowd
CEO, Dolphin Digital Media
2151 Le Jeune Rd., Suite 150
Coral Gables, FL 33134

REF: Extension of Warrant “E”

Dear Bill,

By executing this letter, you agree:

1.
That the Expiration Date of the Dolphin Digital Media, Inc. (the “Company”) Common Stock Purchase Warrant “E” (“Warrant E”) shall be extended from December 31 st , 2012 to September 13 th , 2015.

2. 
That the following clause will be added to the Warrant “E”

“ No Transfer Clause .  Holder hereby agrees that it will for no reason whatsoever transfer the control of the Warrant into the name of any other party that would result in the current representative party (“Control Person(s)”) of the entity or person(s) holding the Warrant, being another Control Person(s).”
 
3. 
The following clause will be added to the Warrant “E”

“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 Company 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, the Company shall have 5 business days to provide Holder with written notice of the Company’s election to redeem said Common Shares (a “Redemption Notice”).  Any such redemption shall be made at the Fair Market Value of the Common Shares, as set forth in Section 1.5 of the Warrant, with the Determination Date being the date of said Redemption 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 Redemption 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”. This provision shall only be applicable if the Holder’s sale transaction represents greater than 20,000 shares in any given 24 hour period.

4. 
The following clause will be added to the Warrant “E”
 
“ Proxy .  Holder hereby irrevocably grants to, and appoints, William O’Dowd, and any individual designated in writing by him, and each of them individually, 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.”
 
 
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5. 
All other terms in “Warrant E” shall remain the same.
 
Please indicate your acceptance of these terms by signing below:
 
T Squared Investments, LLC 
By: T Squared Capital LLC, Managing Member
  Dolphin Digital Media, Inc.  
           
By:
/s/ Thomas Sauve 
  By:
/s/ Bill O’Dowd
 
Name:
Thomas Sauve 
  Name:
Bill O’Dowd
 
Title:
Managing Member   
  Title:
CEO
 
 
 

2
Exhibit 10.4
 
 
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), NOR 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 WILLIAM O’DOWD, AND TO A RIGHT OF FIRST REFUSAL GRANTED TO COMPANY, AS FURTHER SET FORTH HEREIN.
 
Right to Purchase 7,000,000 Common Shares of Dolphin Digital Media, Inc. (subject to adjustment as provided herein)

FORM OF COMMON STOCK PURCHASE WARRANT
 
No. F Issue Date:  September 13, 2012
 
DOLPHIN DIGITAL MEDIA, INC. , a corporation organized under the laws of the State of Nevada (the “ Company ”), hereby certifies that, for value received, T Squared Investments LLC, 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 5:00 p.m., Florida time on September 13, 2015 (the “ Expiration Date ”), Seven Million (7,000,000) fully paid and non-assessable Common Shares of the Company, at a per share purchase price of US$0.25.  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.
 
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.
 
 
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(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 and Section 1.12, 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  
 
 
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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 $0.001 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.
 
 
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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 Company 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, the Company shall have 5 business days to provide Holder with written notice of the Company’s election to redeem said Common Shares (a “Redemption Notice”).  Any such redemption shall be made at 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 Redemption 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 Redemption 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. Such clause shall only be valid if the Holders sale transaction represents greater than 20,000 shares in any given 24 hour period.
 
1.9   No Transfer Clause .  Holder hereby agrees that it will for no reason transfer the control of the Warrant into the name of any other party that would result in the current representative party (“Control Person(s)”) of the entity or person(s) holding the Warrant, being another Control Person(s).
 
1.10   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.
 
 
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1.11   Proxy . Holder hereby irrevocably grants to, and appoints, William O’Dowd, and any individual designated in writing by him, and each of them individually, 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 1.11.  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.
 
1.12   Maximum Exercise . The Holder shall not be entitled to exercise thisWarrant on a date of exercise in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of more than 9.99% of the outstanding shares of Common Stock on such date. If the Warrant Holder is unable to exercise this Warrant as a result that it would put them over the 9.99% limitation, the Expiration Date of this Warrant shall be extended until such time as the Warrant Holder is able to exercise this warrant and stay below the 9.99% limitation. This Section 1.12 may be waived or amended only with the consent of the Holder and the Board of Directors of the Company. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 there under.
 
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.
 
 
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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.
 
 
6
 
 
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: 1325 Sixth Ave., Floor 27, New York, NY 10019, facsimile (212) 671-1403.  The Company and the Holder may change their respective addresses for notices by like notice to the other party.
 
 
7
 
 
10.   Sale or Merger of the Company . Upon a Change in Control, the restriction contained in Section 1.12 shall immediately be released and the Holder will have the right to exercise this Warrant concurrently with such Change in Control event.  For purposes of this Warrant, the term “Change in Control” shall mean a consolidation or merger of the Company with or into another company or entity in which the Company is not the surviving entity or the sale of all or substantially all of the assets of the Company to another company or entity not controlled by the then existing stockholders of the Company in a transaction or series of transactions.
 
11.   Notice of Intent to Sell or Merge the Company . To the extent legally practicable, the Company will give Warrant Holder ten (10) business days notice before the event of a sale of all or substantially all of the assets of the Company or the merger or consolidation of the Company in a transaction in which the Company is not the surviving entity. Failure to provide such notice will not invalidate any such corporate action.
 
12.   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.  At such time when the Holder has paid a total amount to effectively reduce the Purchase Price down to an Purchase Price that is below the limitation in Section 1.4 of this agreement, then the Holder shall have the right to exercise this Warrant via a cashless provision and hold for a period of six months since the last payment to reduce the exercise price was made to remove the legend under Rule 144.
 
13.   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 New York 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 above.
 
  DOLPHIN DIGITAL MEDIA, INC.


By: _____________________________________________
Name: ___________________________________________
Title: ____________________________________________
 
 
8
 

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)
 
 
A-1
                                                     
Exhibit 10.5
 
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), NOR 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 WILLIAM O’DOWD, AND TO A RIGHT OF FIRST REFUSAL GRANTED TO COMPANY, AS FURTHER SET FORTH HEREIN.
 
 
Right to Purchase 7,000,000 Common Shares of Dolphin Digital Media, Inc.
(subject to adjustment as provided herein)

FORM OF COMMON STOCK PURCHASE WARRANT
 
No. _____ Issue Date:  September 13, 2012
 
DOLPHIN DIGITAL MEDIA, INC. , a corporation organized under the laws of the State of Nevada (the “ Company ”), hereby certifies that, for value received, Strocar Investments, LLC, 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 5:00 p.m., Florida time on September 13, 2015 (the “ Expiration Date ”), Seven Million (7,000,000) fully paid and non-assessable Common Shares of the Company, at a per share purchase price of US$0.25.  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 $35,000 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
 
 
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 $0.001 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;
 
 
2
 
 
(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.
 
 
3
 
 
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 William O’Dowd, 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, William O’Dowd 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, William O’Dowd, 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.
 
 
4
 
 
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.
 
 
5
 
 
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: 4450 U.S. Highway 1, Vero Beach, Florida 32967.  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.
 
 
6
 
 
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
 
 
  DOLPHIN DIGITAL MEDIA, INC.  
       
 
By:
   
  Name   
  Title   
 
 
 
7
 

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)  
                                                     
 
A-1
 
 
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 face of the warrant)
     
Signed in the presence of:    
     
     
     
(Name)   (address)
     
ACCEPTED AND AGREED:     
[TRANSFEREE]   (address)
     
     
(Name)    
 
 
B-1