UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 28, 2018
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Bright Mountain Media, Inc.
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(Exact
name of registrant as specified in its charter)
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Florida
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000-54887
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27-2977890
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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6400 Congress Avenue, Suite 2050, Boca Raton, Florida
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33487
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's telephone number, including area code:
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561-998-2440
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not applicable
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(Former
name or former address, if changed since last report)
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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):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in in Rule 405 of the Securities Act of 1933
(
§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter)
.
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Emerging growth company
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☒
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If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01
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Entry into a Material Definitive Agreement.
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Item 3.02
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Unregistered Sales of Equity Securities.
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Agreements with Spartan Capital Securities
On
September 6, 2017 Bright Mountain Media, Inc. entered into a five
year Consulting Agreement with the Spartan Capital Securities, LLC
(“Spartan Capital”), a broker-dealer and member of
FINRA, which under its terms would not become effective until the
closing of the maximum offering of our securities in a private
placement in which Spartan Capital served as placement agent as
described below. On September 28, 2018 the Consulting Agreement
became effective and Spartan Capital was engaged to provide such
advisory services that we may reasonably request related to general
corporate matters, including, but not limited to advice and input
with respect to raising capital, assisting us with strategic
introductions, and assisting management with enhancing corporate
and shareholder value. As compensation for these services, on the
effective date of the agreement we paid Spartan Capital $500,000
and issued it 1,000,000 shares of our common stock valued at
$750,000 (the “Consulting Shares”). We agreed to
register the Consulting Shares for public resale under the resale
registration statement to be filed by us with the Securities and
Exchange Commission (the “SEC”) described
below.
Spartan
Capital is an accredited investor and the issuance of the
Consulting Shares was exempt from registration under the Securities
Act of 1933, as amended (the “Securities Act”) in
reliance on an exemption provided by Section 4(a)(2) of the
Securities Act.
On
September 6, 2017 we also entered into a five year M&A Advisory
Agreement with Spartan Capital which became effective on September
28, 2018 following the sale of the maximum offering in the private
placement described below. Under the terms of the agreement,
Spartan Capital will provide consulting services to us related to
potential mergers or acquisitions, including candidates, valuations
and transaction terms and structures. As compensation, we paid
Spartan Capital a fee of $500,000 on the effective date of the
agreement.
Both
agreements contain customary confidentiality and indemnification
provisions.
The
foregoing descriptions of the terms and conditions of the
Consulting Agreement and M&A Advisory Agreement are qualified
in their entirety by reference to the agreements which are filed as
Exhibit 10.45 and 10.46, respectively, to this Current Report on
from 8-K.
Final closing of private placement
On
September 28, 2018, we sold 3,475,000 units of our securities to 26
accredited investors in a private placement exempt from
registration under the Securities Act in reliance on exemptions
provided by Section 4(a)(2) and Rule 506(b) of Regulation D. The
units (the “Units”) were sold at a purchase price of
$0.40 per Unit resulting in gross proceeds to us of $1,390,000.
Each unit consisted of one share of our common stock and one five
year common stock purchase warrant to purchase one share of our
common stock at an exercise price of $0.65 per share (the
“Private Placement Warrants”).
We paid
Spartan Capital a cash commission of $139,000 and issued it five
year placement agent warrants (“Placement Agent
Warrants”) to purchase an aggregate of 347,500 shares of our
common stock as compensation for its services. We used $1 million
of the proceeds from this final closing for the payment of the fees
due Spartan Capital under the terms of the Consulting Agreement and
M&A Advisory Agreement described above, and are using the
balance of $251,000 for general working capital.
Spartan
Capital acted as placement agent for us in this private placement,
and this latest closing represented the final closing of the
offering which commenced in January 2018 pursuant to which we
issued and sold an aggregate of 10,100,000 Units resulting in gross
proceeds to us of $4,040,000. During the course of this offering,
we paid Spartan Capital an aggregate cash commission of $404,000
and issued it Placement Agents Warrants to purchase an aggregate of
1,010,000 shares of our common stock, including the cash commission
and Placement Agent Warrants issued pursuant to the final closing
on September 28, 2018.
For the
36 months from the final closing of this private placement, we
granted Spartan Capital certain rights of first refusal if we
decide to undertake a future private or public offering or if we
decide to engage an investment banking firm.
We
granted the purchasers in the offering demand and piggy-back
registration rights with respect to the shares of our common stock
included in the Units and the shares of common stock issuable upon
the exercise of the Private Placement Warrants. In addition, we
agreed to file a resale registration statement within 120 days
following the final closing of this offering covering the shares of
our common stock issuable upon the exercise of the Private
Placement Warrants included in the Units. If we should fail to
timely file this resale registration statement, then within five
business days of the end of month we will pay the holders an amount
in cash, as partial liquidated damages, equal to 2% of the
aggregate purchase price paid by the holder for each 30 days, or
portion thereof, until the earlier of the date the deficiency is
cured or the expiration of six months from filing deadline. We will
keep any such registration statement effective until the earlier of
the date upon which all such securities may be sold without
registration under Rule 144 promulgated under the Securities Act or
the date which is six months after the expiration date of the
Private Placement Warrants. We are obligated to pay all costs
associated with this registration statement, other than selling
expenses of the holders.
Additional terms of
the Private Placement Warrants include:
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standard
anti-dilution provisions;
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become
subject to a “cashless exercise” under certain
conditions; and
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certain
call provisions at $0.01 per warrant if our stock trades at or
above $1.50 per share for 10 consecutive trading days with an
average daily trading volume of not less than 30,000 shares during
such 10 consecutive trading day period.
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The
exercise price of the Placement Agent Warrants is also subject to
the proportional adjustment in the event of stock splits, stock
dividends and similar corporate events, and may be exercised on a
cashless basis. We also granted Spartan Capital piggy-back
registration rights with respect to the shares of our common stock
issuable upon the exercise of the Placement Agent
Warrants.
The
foregoing descriptions of the terms and conditions of the Private
Placement Warrants and Placement Agent Warrants are qualified in
their entirety by reference to the warrants which are filed as
Exhibit 4.1 and 4.2, respectively, to this Current Report on from
8-K.
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Item 9.01
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Financial Statements and Exhibits.
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Incorporated by Reference
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Filed or
Furnished
Herewith
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No.
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Exhibit Description
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Form
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Date Filed
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Number
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Form of
Private Placement Warrant
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10-K
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4/2/18
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4.1
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Form of
Placement Agent Warrant
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10-K
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4/2/18
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4.2
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Consulting
Agreement dated September 6, 2017 by and between Spartan Capital
Securities, LLC and Bright Mountain Media, Inc.
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Filed
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M&A
Advisory Agreement dated September 6, 2017 by and between Spartan
Capital Securities, LLC and Bright Mountain Media,
Inc.
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Filed
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Date:
October 3, 2018
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Bright
Mountain Media, Inc.
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By: /s/
W. Kip Speyer
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W. Kip
Speyer, Chief Executive Officer
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CONSULTING AGREEMENT
This
Consulting Agreement (the “
Agreement
”) is made as of
September 6, 2017 between
Spartan
Capital Securities, LLC
(the “
Consultant
”), and
Bright Mountain Media, Inc.
(the
“
Company
”). The
Company and the Consultant are collectively herein referred to as
the “
Parties
.”
WITNESSETH
WHEREAS, the
Consultant is a broker-dealer, licensed by and in good standing
with the Financial Industry Regulatory Authority, Inc.
(“
FINRA
”).
WHEREAS, the
Parties are parties to that certain Consulting Agreement dated
April 14, 2017 (the “
Prior
Agreement
”), the term of which expires on October 7,
2017.
WHEREAS, the
Consultant is desirous of providing the Company with certain
advisory services on terms and conditions hereinafter set
forth;
WHEREAS, the
Consultant has been engaged to serve as placement agent with
respect to a “$1,000,000 minimum/$4,000,000 maximum”
private offering of the Company’s securities consisting of
shares of its common stock and common stock purchase warrants (the
“
Units
”)
pursuant to a Placement Agent Agreement of even date herewith (the
“
Private
Placement
”);
NOW,
THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the Parties agree as
follows:
1.
Term
. With the exception of the
confidentiality terms and obligations, this Agreement shall be
effective as of the closing date of the sale of at least $4,000,000
of Units in the Private Placement (the “
Effective Date
”) and shall
continue in effect for sixty (60) months. On the Effective Date,
the Prior Agreement shall terminate. The Parties acknowledge that
the Consultant is not due any compensation or reimbursement under
the Prior Agreement.
2.1
Services
.
During the term of this Agreement, the Consultant will stand ready
to provide, as the Company shall reasonably request, consulting
services related to general corporate matters, including, but not
limited to (i) advice and input with respect to raising capital,
(ii) identifying suitable personnel for management and Board
positions, (iii) developing corporate structure and finance
strategies, (iv) assisting the Company with strategic
introductions, (v) assisting management with enhancing corporate
and shareholder value, and (vi) introducing the Company to
potential investors (collectively, the “
Advisory Services
”).
3.1
Initial
Fee
. The Company shall pay an initial fee of $200,000, which
shall be payable on the Effective Date in consideration of the
termination of the Prior Agreement.
3.2
Monthly
Fee.
The Company shall pay an additional fee of $300,000 on
the Effective Date which shall represent the prepayment of a fee of
$5,000 per month for the 60 month term of this Agreement within
five (5) business days from.
3.3
Stock
Compensation.
The
Company shall issue 1,000,000 shares of its Common Stock (the
“
Shares
”)
to Consultant within five (5) business days from the Effective
Date, which Shares shall be fully paid and non-assessable.
The Shares will be “restricted securities” as that term
is defined in the Securities Act of 1933, as amended (the
“
Securities
Act
”). The Shares are being acquired by the Consultant
solely for its account for investment and not with a view to, or
for resale in connection with, any distribution. The Consultant
does not intend to dispose of all or any part of the Shares except
in compliance with the provisions of the Securities Act and
applicable state securities laws and understands that the Shares
are being issued pursuant to a specific exemption under the
provisions of the Securities Act, which exemption depends, among
other things, upon the compliance with the provisions of the
Securities Act
. The
Company agrees to register the Shares for public resale under the
resale registration statement filed by the Company with the
Securities and Exchange Commission with respect to the registration
of the shares of the Company’s Common Stock underlying the
warrants issued to investors in the Private
Placement.
3.5
Out-of-pocket
expenses
. Following the Effective Date, the Consultant shall
be reimbursed for reasonable out-of-pocket expenses incurred in
connection with the Consultant’s performance of Advisory
Services. All such expenses must be approved in advance and in
writing by the Company prior to the Consultant incurring such
expenses.
4.
Confidential
Information
. The
Consultant
acknowledges and agrees that it will have access
to, or become acquainted with, Confidential Information of the
Company in the performance of its duties and obligations hereunder.
For purposes of this Agreement, “
Confidential Information
” shall
mean all confidential, proprietary, or trade secret information,
property, or material of the Company and any derivatives, portions,
or copies thereof, including, without limitation, information
resulting from or in any way related to (i) the business practices,
plans, intellectual property, proprietary information, formulae,
methods, practices, designs, know how, processes and procedures,
software, test results, financial information, sales, customers,
employees, suppliers, contracts, agreements or relationships of the
Company; and (ii) any other information or material that the
Company designates as Confidential Information. The Consultant
shall keep all Confidential Information in strict confidence and
shall not, at any time during or for five (5) years after the
expiration or earlier termination of this Agreement, without the
Company’s prior written consent, disclose, publish,
disseminate or otherwise make available, directly or indirectly,
any item of Confidential Information to anyone. The Consultant
shall use the Confidential Information only in connection with the
performance of the Advisory Services and for no other purpose.
Notwithstanding the obligations set forth above, the Consultant may
disclose Confidential Information to any of its employees,
consultants or subcontractors who need to receive the Confidential
Information in connection with the provision of the Advisory
Services, provided that the Consultant shall ensure that, prior to
disclosing the Confidential Information, each subcontractor,
consultant or employee to whom the Confidential Information is to
be disclosed is made aware of the obligations contained in this
Agreement and agrees to undertake, in a manner legally enforceable
by the Company, to adhere to such terms of this Agreement as if it
were a party to it. The Consultant
recognizes that its threatened breach or breach of
this
Section 4
will cause irreparable harm to the
Company that is inadequately compensable in damages and that, in
addition to other remedies that may be available at law or equity,
the Company is entitled to injunctive relief for such a threatened
or actual breach of this
Section
4
. Notwithstanding the above,
the Consultant shall not have any obligations of confidentiality
with respect to any portion of Confidential Information which (i)
was previously known to the Consultant prior to receipt from the
disclosing party, (ii) is now public knowledge, or becomes public
knowledge in the future, other than through acts or omissions of
the Consultant in violation of this
Section
4
, or (iii) is lawfully
obtained by the Consultant from sources independent of the
disclosing party who have a lawful right to disclose such
Confidential Information. The Consultant may disclose Confidential
Information to the extent such disclosure is reasonably necessary
in complying with applicable governmental laws, rules or
regulations or court orders.
5.
Publicity
. The Consultant shall
not refer to the existence of this Agreement in any press release,
advertising or other public statement, written or oral, without the
prior written consent of the Company, except as required by
applicable law or regulation.
6.
Ownership
. The Company shall
have complete and exclusive ownership of all work products, as well
as all materials (and all intellectual property rights in and to
all of the foregoing) (collectively, “
Work Product
”), produced by
Consultant under this Agreement. In furtherance of the foregoing,
the Consultant hereby irrevocably assigns to the Company all right,
title and interest in and to such Work Product. The Consultant
agrees to execute all documents deemed reasonably necessary by the
Company to evidence or perfect the foregoing
assignment.
7.
Patent Rights
. No right or
license, either expressed or implied, under any licensing
agreement, patent or proprietary right of the Company is granted
hereunder. Any information or technology, including but not limited
to data, products, processes, formulations, machinery and
apparatus, and uses thereof, which Consultant may develop, improve,
discover or invent as a result of the Services (the
“
Technology
”)
shall be considered to be “Work Product” and shall
become the property of the Company. The Consultant shall
immediately disclose any Technology to the Company. The Consultant
shall also execute any other documents reasonably requested by the
Company related to the Technology and the Work Product, including
documents necessary for patent or regulatory filings
and cooperate with the Company after the filing of
patent or regulatory documents for as long as necessary to vest the
rights to the Technology in the Company, including execution of
necessary documents in subsequent continuation,
continuation-in-part, divisional, international, and foreign patent
applications.
8.
Return of Materials
. Upon the
expiration or termination of this Agreement, whichever occurs
first, the Consultant shall transfer to the Company all Work
Product, Technology, work in progress, property, Confidential
Information and all other materials in the Consultant’s
possession or control that are the property of the
Company.
9.
Indemnification
. Each party
shall defend, indemnify and hold the other party harmless in
accordance with the indemnification and other provisions set forth
in
Exhibit A
hereto, which provisions are incorporated herein by reference and
shall survive the termination or expiration of this
Agreement.
10.
Independent Contractor
. The
Consultant shall perform all of Consultant’s obligations
under this Agreement as an independent contractor and not as an
agent, employee or representative of the Company. The Consultant
shall not participate in any insurance programs or benefits
including, but not limited to, workers' compensation insurance,
disability insurance or any other employee benefits available to
the Company’s employees.
11.
Assignment
. This Agreement is
not assignable by the Consultant without the prior written consent
of the Company.
12.
Notices
. Any notice consent,
authorization of other communication to be given hereunder shall be
in writing and shall be deemed duly given and received when
delivered personally, when transmitted by fax, three days after
being mailed by first class mail, or one day after being sent by a
nationally recognized overnight delivery service, charges and
postage prepaid, properly addressed to the party to receive such
notice, as the following address or fax number (or such other
address or fax number as shall hereafter be specified by such party
by like notice):
a.
If to the Company,
to
:
b.
If to the
Consultant
:
Bright Mountain Media,
Inc.
Spartan Capital Securities,
LLC
6400 Congress Avenue, Suite
2050
45 Broadway
Boca Raton, Florida
33487
New York, New York
10006
Attn: W. Kip
Speyer
Attn: John Lowry
Telephone: (561)
998-2440
Telephone: (212)
293-0123
13.
Counterparts.
This Agreement
may be executed in one or more counterparts each of which shall for
all purposes be deemed to be an original and all of which shall
constitute one and the same instrument. Facsimile signatures shall
be treated as original signatures.
14.
Severability
. If for any reason
a court of competent jurisdiction finds any provision of this
Agreement, or portion thereof, to be unenforceable, the remainder
of this Agreement shall continue in full force and
effect.
15.
Relationship of Parties
.
Nothing in this Agreement is intended
or shall be deemed to constitute a partnership, agency,
employer-employee or joint venture relationship between the
Parties. No Party shall incur any debts or make any commitments for
the other, except to the extent, if at all, specifically provided
herein.
Waiver.
A waiver by either party of any of the
terms and conditions of this Agreement in any instance shall not be
deemed or construed to be a waiver of such term or condition for
the future, or of any subsequent breach hereof. All rights,
remedies, undertakings, obligations and agreements contained in
this Agreement shall be cumulative and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or
agreement of either party.
17.
Entire Agreement
. This
Agreement sets forth the entire agreement between the parties with
respect to the specific matters contained herein, and this
Agreement has no bearing or effect on any prior agreements entered
into by the Parties. This Agreement may be modified or amended only
in writing signed by the Parties. The descriptive headings of each
numbered section of this Agreement are for convenience only and are
not for use in the construction and/or interpretation of this
Agreement.
18.
Applicable Law
. This Agreement
shall be deemed to have been made in the State of New York and
shall be construed and governed in accordance with the laws of the
State of New York without regard to the conflicts of laws rules of
such jurisdiction. The parties hereby irrevocably consent to the
jurisdiction of the courts located in the State of New
York.
IN WITNESS WHEREOF
, the Parties have
caused their respective signature page to this Agreement to be duly
executed as of the date first written above.
Spartan Capital Securities,
LLC
Bright
Mountain Media, Inc.
By:
/s/ John
Lowry
By:
W. Kip Speyer
John
Lowry,
W. Kip
Speyer,
Chief
Executive Officer Chief Executive Officer
Page
[Insert Page Number]
of
1
EXHIBIT A
INDEMNIFICATION PROVISIONS
Bright
Mountain Media, Inc. (the “
Company
”) agrees to indemnify and
hold harmless Spartan Capital Securities, LLC (“
Consultant
”) and each of the other
Indemnified Parties (as hereinafter defined) from and against any
and all losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, and reasonable costs, expenses and
disbursements, and any and all actions, suits, proceedings and
investigations in respect thereof and reasonable legal and other
costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise (including,
without limitation, the reasonable costs, expenses and
disbursements, as and when incurred, of investigating, preparing,
pursing or defending any such action, suit, proceeding or
investigation (whether or not in connection with litigation in
which any Indemnified Party is a party)) (collectively,
“
Losses
”),
directly or indirectly, caused by, relating to, based upon, arising
out of, or in connection with, Consultant’s advisory services
to the Company, including, without limitation, any act or omission
by the Company in connection with its acceptance of or the
performance or non-performance of its obligations under the
Consulting Agreement dated as of September 6, 2017 between the
Company and Consultant to which these indemnification provisions
are attached and form a part (the “
Agreement
”), any breach by the
Company of any representation, warranty, covenant or agreement
contained in the Agreement (or in any instrument, document or
agreement relating thereto), or the enforcement by Consultant of
its rights under the Agreement or these indemnification provisions,
except to the extent that any such Losses are found in a final
judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily and directly from the
gross negligence or willful misconduct of an Indemnified Party. The
Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with the engagement
of Consultant by the Company or for any other reason, except to the
extent that any such liability is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to
have resulted primarily and directly from such Indemnified
Party’s gross negligence or willful misconduct.
The
Consultant agrees to indemnify and hold harmless the Company and
each of the other Indemnified Parties (as hereinafter defined) from
and against any and all Losses, directly or indirectly, caused by,
relating to, based upon, arising out of, or in connection with,
Consultant’s advisory services to the Company, including,
without limitation, any act or omission by Consultant in connection
with its acceptance of or the performance or non-performance of its
obligations under the Agreement, any breach by the Consultant of
any representation, warranty, covenant or agreement contained in
the Agreement (or in any instrument, document or agreement relating
thereto), or the enforcement by the Company of its rights under the
Agreement or these indemnification provisions, except to the extent
that any such Losses are found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have
resulted primarily and directly from the gross negligence or
willful misconduct of an Indemnified Party. The Company also agrees
that no Indemnified Party shall have any liability (whether direct
or indirect, in contract or tort or otherwise) to the Company for
or in connection with the engagement of Consultant by the Company
or for any other reason, except to the extent that any such
liability is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted
primarily and directly from such Indemnified Party’s gross
negligence or willful misconduct.
These
indemnification provisions shall extend to the following persons
(collectively, the “
Indemnified Parties
”). the
Consultant, the Company, and each of their respective present and
former affiliated entities, partners, employees, legal counsel,
agents and controlling persons (within the meaning of the federal
securities laws), and the officers, directors, partners,
stockholders, members, managers, employees, legal counsel, agents
and controlling persons of any of them. These indemnification
provisions shall be in addition to any liability which the
indemnifying party may otherwise have to any Indemnified
Party.
If any
action, suit, proceeding or investigation is commenced, as to which
an Indemnified Party proposes to demand indemnification, it shall
notify the indemnifying party with reasonable promptness;
provided
,
however
, that any
failure by an Indemnified Party to notify the indemnifying party
shall not relieve the indemnifying party from its obligations
hereunder unless the indemnifying party is prejudiced by such
failure. An Indemnified Party shall have the right to retain
counsel of its own choice to represent it, and the reasonable fees,
expenses and disbursements of such counsel shall be borne by the
indemnifying party. Any such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with
the indemnifying party and any counsel designated by the
indemnifying party. The indemnifying party shall be liable for any
settlement of any claim against any Indemnified Party made with the
indemnifying party’s written consent. The indemnifying party
shall not, without the prior written consent of Indemnified Party,
settle or compromise any claim, or permit a default or consent to
the entry of any judgment in respect thereof, unless such
settlement, compromise or consent (i) includes, as an unconditional
term thereof, the giving by the claimant to all of the Indemnified
Parties against whom it has made a claim of an unconditional
release from all liability in respect of such claim, and (ii) does
not contain any untrue factual or legal admission by or with
respect to an Indemnified Party or an untrue adverse statement with
respect to the character, professionalism, expertise or reputation
of any Indemnified Party or any action or inaction of any
Indemnified Party.
In
order to provide for just and equitable contribution, if a claim
for indemnification pursuant to these indemnification provisions is
made but it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that such
indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case,
then the indemnifying party shall contribute to the Losses to which
any Indemnified Party may be subject (i) in accordance with the
relative benefits received by the indemnifying par ty, on the one
hand, and the Indemnified Party, on the other hand, and (ii) if
(and only if) the allocation provided in clause (i) of this
sentence is not permitted by applicable law, in such proportion as
to reflect not only the relative benefits, but also the relative
fault of the indemnifying party, on the one hand, and the
Indemnified Party, on the other hand, in connection with the
statements, acts or omissions which resulted in such Losses as well
as any relevant equitable considerations. No person found liable
for a fraudulent misrepresentation shall be entitled to
indemnification or contribution from any person who is not also
found liable for fraudulent misrepresentation. The relative
benefits received (or anticipated to be received) by the
indemnifying party and its stockholders, subsidiaries and
affiliates shall be deemed to be equal to the aggregate
consideration payable or receivable by such parties in connection
with the transaction or transactions to which the Agreement.
Notwithstanding the foregoing, in no event shall the amount
contributed by all Indemnified Parties exceed the amount of fees
previously received by Consultant pursuant to the
Agreement.
Neither
termination nor completion of the engagement of Consultant referred
to above shall affect these indemnification provisions which shall
remain operative and in full force and effect. The indemnification
provisions shall be binding upon the Parties and their respective
successors and assigns and shall inure to the benefit of the
Indemnified Parties and their respective successors, assigns, heirs
and personal representatives.
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M&A ADVISORY AGREEMENT
This
M&A Advisory Agreement (the “
Agreement
”) is made as of
September 6, 2017 between
Spartan
Capital Securities, LLC
(the “
Consultant
”), and
Bright Mountain Media, Inc.
(the
“
Company
”). The
Company and the Consultant are collectively herein referred to as
the “
Parties
.”
WITNESSETH
WHEREAS, the
Consultant is a broker-dealer, licensed by and in good standing
with the Financial Industry Regulatory Authority, Inc.
(“
FINRA
”).
WHEREAS, the
Consultant is desirous of providing the Company with certain merger
and acquisition advisory services on terms and conditions
hereinafter set forth;
WHEREAS, the
Consultant has been engaged to serve as placement agent with
respect to a “$1,000,000 minimum/$4,000,000 maximum”
private offering of the Company’s securities consisting of
shares of its common stock and common stock purchase warrants (the
“
Units
”)
pursuant to a Placement Agent Agreement of even date herewith (the
“
Private
Placement
”);
NOW,
THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the Parties agree as
follows:
1.
Term
. With the exception of the
confidentiality terms and obligations, this Agreement shall be
effective as of the closing date of the sale of at least $4,000,000
of Units in the Private Placement (the “
Effective Date
”) and shall
continue in effect for sixty (60) months.
2.
Services
. During the term of
this Agreement, the Consultant will stand ready to provide, as the
Company shall reasonably request, consulting services related to
potential M&A transactions , including, but not limited to,
candidates, valuations and transaction terms and structures
(“
M&A Advisory
Services
”).
3.1
M&A Advisory Fee.
The
Company shall pay a fee for M&A Advisory Services in the amount
of $500,000 on the Effective Date.
3.2
Out-of-pocket
expenses
. Following the Effective Date, the Consultant shall
be reimbursed for reasonable out-of-pocket expenses incurred in
connection with the Consultant’s performance of M&A
Advisory Services. All such expenses must be approved in advance
and in writing by the Company prior to the Consultant incurring
such expenses.
4.
Confidential
Information
. The
Consultant
acknowledges and agrees that it will have access
to, or become acquainted with, Confidential Information of the
Company in the performance of its duties and obligations hereunder.
For purposes of this Agreement, “
Confidential Information
” shall
mean all confidential, proprietary, or trade secret information,
property, or material of the Company and any derivatives, portions,
or copies thereof, including, without limitation, information
resulting from or in any way related to (i) the business practices,
plans, intellectual property, proprietary information, formulae,
methods, practices, designs, know how, processes and procedures,
software, test results, financial information, sales, customers,
employees, suppliers, contracts, agreements or relationships of the
Company; and (ii) any other information or material that the
Company designates as Confidential Information. The Consultant
shall keep all Confidential Information in strict confidence and
shall not, at any time during or for five (5) years after the
expiration or earlier termination of this Agreement, without the
Company’s prior written consent, disclose, publish,
disseminate or otherwise make available, directly or indirectly,
any item of Confidential Information to anyone. The Consultant
shall use the Confidential Information only in connection with the
performance of the M&A Advisory Services and for no other
purpose. Notwithstanding the obligations set forth above, the
Consultant may disclose Confidential Information to any of its
employees, consultants or subcontractors who need to receive the
Confidential Information in connection with the provision of the
M&A Advisory Services, provided that the Consultant shall
ensure that, prior to disclosing the Confidential Information, each
subcontractor, consultant or employee to whom the Confidential
Information is to be disclosed is made aware of the obligations
contained in this Agreement and agrees to undertake, in a manner
legally enforceable by the Company, to adhere to such terms of this
Agreement as if it were a party to it. The Consultant
recognizes that its threatened breach or breach of
this
Section 4
will cause irreparable harm to the
Company that is inadequately compensable in damages and that, in
addition to other remedies that may be available at law or equity,
the Company is entitled to injunctive relief for such a threatened
or actual breach of this
Section
4
. Notwithstanding the above,
the Consultant shall not have any obligations of confidentiality
with respect to any portion of Confidential Information which (i)
was previously known to the Consultant prior to receipt from the
disclosing party, (ii) is now public knowledge, or becomes public
knowledge in the future, other than through acts or omissions of
the Consultant in violation of this
Section
4
, or (iii) is lawfully
obtained by the Consultant from sources independent of the
disclosing party who have a lawful right to disclose such
Confidential Information. The Consultant may disclose Confidential
Information to the extent such disclosure is reasonably necessary
in complying with applicable governmental laws, rules or
regulations or court orders.
5.
Publicity
. The Consultant shall
not refer to the existence of this Agreement in any press release,
advertising or other public statement, written or oral, without the
prior written consent of the Company, except as required by
applicable law or regulation.
6.
Ownership
. The Company shall
have complete and exclusive ownership of all work products, as well
as all materials (and all intellectual property rights in and to
all of the foregoing) (collectively, “
Work Product
”), produced by
Consultant under this Agreement. In furtherance of the foregoing,
the Consultant hereby irrevocably assigns to the Company all right,
title and interest in and to such Work Product. The Consultant
agrees to execute all documents deemed reasonably necessary by the
Company to evidence or perfect the foregoing
assignment.
7.
Patent Rights
. No right or
license, either expressed or implied, under any licensing
agreement, patent or proprietary right of the Company is granted
hereunder. Any information or technology, including but not limited
to data, products, processes, formulations, machinery and
apparatus, and uses thereof, which Consultant may develop, improve,
discover or invent as a result of the Services (the
“
Technology
”)
shall be considered to be “Work Product” and shall
become the property of the Company. The Consultant shall
immediately disclose any Technology to the Company. The Consultant
shall also execute any other documents reasonably requested by the
Company related to the Technology and the Work Product, including
documents necessary for patent or regulatory filings
and cooperate with the Company after the filing of
patent or regulatory documents for as long as necessary to vest the
rights to the Technology in the Company, including execution of
necessary documents in subsequent continuation,
continuation-in-part, divisional, international, and foreign patent
applications.
8.
Return of Materials
. Upon the
expiration or termination of this Agreement, whichever occurs
first, the Consultant shall transfer to the Company all Work
Product, Technology, work in progress, property, Confidential
Information and all other materials in the Consultant’s
possession or control that are the property of the
Company.
9.
Indemnification
. Each party
shall defend, indemnify and hold the other party harmless in
accordance with the indemnification and other provisions set forth
in
Exhibit A
hereto, which provisions are incorporated herein by reference and
shall survive the termination or expiration of this
Agreement.
10.
Independent Contractor
. The
Consultant shall perform all of Consultant’s obligations
under this Agreement as an independent contractor and not as an
agent, employee or representative of the Company. The Consultant
shall not participate in any insurance programs or benefits
including, but not limited to, workers' compensation insurance,
disability insurance or any other employee benefits available to
the Company’s employees.
11.
Assignment
. This Agreement is
not assignable by the Consultant without the prior written consent
of the Company.
12.
Notices
. Any notice consent,
authorization of other communication to be given hereunder shall be
in writing and shall be deemed duly given and received when
delivered personally, when transmitted by fax, three days after
being mailed by first class mail, or one day after being sent by a
nationally recognized overnight delivery service, charges and
postage prepaid, properly addressed to the party to receive such
notice, as the following address or fax number (or such other
address or fax number as shall hereafter be specified by such party
by like notice):
a.
If to the Company,
to
:
b.
If to the
Consultant
:
Bright Mountain Media,
Inc.
Spartan Capital Securities,
LLC
6400 Congress Avenue, Suite
2050
45 Broadway
Boca Raton, Florida
33487
New York, New York
10006
Attn: W. Kip
Speyer
Attn: John Lowry
Telephone: (561)
998-2440
Telephone: (212)
293-0123
13.
Counterparts.
This Agreement
may be executed in one or more counterparts each of which shall for
all purposes be deemed to be an original and all of which shall
constitute one and the same instrument. Facsimile signatures shall
be treated as original signatures.
14.
Severability
. If for any reason
a court of competent jurisdiction finds any provision of this
Agreement, or portion thereof, to be unenforceable, the remainder
of this Agreement shall continue in full force and
effect.
15.
Relationship of Parties
.
Nothing in this Agreement is intended
or shall be deemed to constitute a partnership, agency,
employer-employee or joint venture relationship between the
Parties. No Party shall incur any debts or make any commitments for
the other, except to the extent, if at all, specifically provided
herein.
Waiver.
A waiver by either party of any of the
terms and conditions of this Agreement in any instance shall not be
deemed or construed to be a waiver of such term or condition for
the future, or of any subsequent breach hereof. All rights,
remedies, undertakings, obligations and agreements contained in
this Agreement shall be cumulative and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or
agreement of either party.
17.
Entire Agreement
. This
Agreement sets forth the entire agreement between the parties with
respect to the specific matters contained herein, and this
Agreement has no bearing or effect on any prior agreements entered
into by the Parties. This Agreement may be modified or amended only
in writing signed by the Parties. The descriptive headings of each
numbered section of this Agreement are for convenience only and are
not for use in the construction and/or interpretation of this
Agreement.
18.
Applicable Law
. This Agreement
shall be deemed to have been made in the State of New York and
shall be construed and governed in accordance with the laws of the
State of New York without regard to the conflicts of laws rules of
such jurisdiction. The parties hereby irrevocably consent to the
jurisdiction of the courts located in the State of New
York.
IN WITNESS WHEREOF
, the Parties have
caused their respective signature page to this Agreement to be duly
executed as of the date first written above.
Spartan Capital Securities,
LLC
Bright
Mountain Media, Inc.
By:
/s/ John
Lowry
By:
/s/ W. Kip Speyer
John
Lowry,
W. Kip
Speyer,
Chief
Executive Officer Chief Executive Officer
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EXHIBIT A
INDEMNIFICATION PROVISIONS
Bright
Mountain Media, Inc. (the “
Company
”) agrees to indemnify and
hold harmless Spartan Capital Securities, LLC (“
Consultant
”) and each of the other
Indemnified Parties (as hereinafter defined) from and against any
and all losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, and reasonable costs, expenses and
disbursements, and any and all actions, suits, proceedings and
investigations in respect thereof and reasonable legal and other
costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise (including,
without limitation, the reasonable costs, expenses and
disbursements, as and when incurred, of investigating, preparing,
pursing or defending any such action, suit, proceeding or
investigation (whether or not in connection with litigation in
which any Indemnified Party is a party)) (collectively,
“
Losses
”),
directly or indirectly, caused by, relating to, based upon, arising
out of, or in connection with, Consultant’s advisory services
to the Company, including, without limitation, any act or omission
by the Company in connection with its acceptance of or the
performance or non-performance of its obligations under the M&A
Advisory Agreement dated as of September 6, 2017 between the
Company and Consultant to which these indemnification provisions
are attached and form a part (the “
Agreement
”), any breach by the
Company of any representation, warranty, covenant or agreement
contained in the Agreement (or in any instrument, document or
agreement relating thereto), or the enforcement by Consultant of
its rights under the Agreement or these indemnification provisions,
except to the extent that any such Losses are found in a final
judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily and directly from the
gross negligence or willful misconduct of an Indemnified Party. The
Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with the engagement
of Consultant by the Company or for any other reason, except to the
extent that any such liability is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to
have resulted primarily and directly from such Indemnified
Party’s gross negligence or willful misconduct.
The
Consultant agrees to indemnify and hold harmless the Company and
each of the other Indemnified Parties (as hereinafter defined) from
and against any and all Losses, directly or indirectly, caused by,
relating to, based upon, arising out of, or in connection with,
Consultant’s advisory services to the Company, including,
without limitation, any act or omission by Consultant in connection
with its acceptance of or the performance or non-performance of its
obligations under the Agreement, any breach by the Consultant of
any representation, warranty, covenant or agreement contained in
the Agreement (or in any instrument, document or agreement relating
thereto), or the enforcement by the Company of its rights under the
Agreement or these indemnification provisions, except to the extent
that any such Losses are found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have
resulted primarily and directly from the gross negligence or
willful misconduct of an Indemnified Party. The Company also agrees
that no Indemnified Party shall have any liability (whether direct
or indirect, in contract or tort or otherwise) to the Company for
or in connection with the engagement of Consultant by the Company
or for any other reason, except to the extent that any such
liability is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted
primarily and directly from such Indemnified Party’s gross
negligence or willful misconduct.
These
indemnification provisions shall extend to the following persons
(collectively, the “
Indemnified Parties
”). the
Consultant, the Company, and each of their respective present and
former affiliated entities, partners, employees, legal counsel,
agents and controlling persons (within the meaning of the federal
securities laws), and the officers, directors, partners,
stockholders, members, managers, employees, legal counsel, agents
and controlling persons of any of them. These indemnification
provisions shall be in addition to any liability which the
indemnifying party may otherwise have to any Indemnified
Party.
If any
action, suit, proceeding or investigation is commenced, as to which
an Indemnified Party proposes to demand indemnification, it shall
notify the indemnifying party with reasonable promptness;
provided
,
however
, that any
failure by an Indemnified Party to notify the indemnifying party
shall not relieve the indemnifying party from its obligations
hereunder unless the indemnifying party is prejudiced by such
failure. An Indemnified Party shall have the right to retain
counsel of its own choice to represent it, and the reasonable fees,
expenses and disbursements of such counsel shall be borne by the
indemnifying party. Any such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with
the indemnifying party and any counsel designated by the
indemnifying party. The indemnifying party shall be liable for any
settlement of any claim against any Indemnified Party made with the
indemnifying party’s written consent. The indemnifying party
shall not, without the prior written consent of Indemnified Party,
settle or compromise any claim, or permit a default or consent to
the entry of any judgment in respect thereof, unless such
settlement, compromise or consent (i) includes, as an unconditional
term thereof, the giving by the claimant to all of the Indemnified
Parties against whom it has made a claim of an unconditional
release from all liability in respect of such claim, and (ii) does
not contain any untrue factual or legal admission by or with
respect to an Indemnified Party or an untrue adverse statement with
respect to the character, professionalism, expertise or reputation
of any Indemnified Party or any action or inaction of any
Indemnified Party.
In
order to provide for just and equitable contribution, if a claim
for indemnification pursuant to these indemnification provisions is
made but it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that such
indemnification may not be enforced in such case, even though the
express provisions hereof provide for indemnification in such case,
then the indemnifying party shall contribute to the Losses to which
any Indemnified Party may be subject (i) in accordance with the
relative benefits received by the indemnifying par ty, on the one
hand, and the Indemnified Party, on the other hand, and (ii) if
(and only if) the allocation provided in clause (i) of this
sentence is not permitted by applicable law, in such proportion as
to reflect not only the relative benefits, but also the relative
fault of the indemnifying party, on the one hand, and the
Indemnified Party, on the other hand, in connection with the
statements, acts or omissions which resulted in such Losses as well
as any relevant equitable considerations. No person found liable
for a fraudulent misrepresentation shall be entitled to
indemnification or contribution from any person who is not also
found liable for fraudulent misrepresentation. The relative
benefits received (or anticipated to be received) by the
indemnifying party and its stockholders, subsidiaries and
affiliates shall be deemed to be equal to the aggregate
consideration payable or receivable by such parties in connection
with the transaction or transactions to which the Agreement.
Notwithstanding the foregoing, in no event shall the amount
contributed by all Indemnified Parties exceed the amount of fees
previously received by Consultant pursuant to the
Agreement.
Neither
termination nor completion of the engagement of Consultant referred
to above shall affect these indemnification provisions which shall
remain operative and in full force and effect. The indemnification
provisions shall be binding upon the Parties and their respective
successors and assigns and shall inure to the benefit of the
Indemnified Parties and their respective successors, assigns, heirs
and personal representatives.
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