UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
SCHEDULE 13D/A
(AMENDMENT No. 2)
Under the Securities Exchange Act of 1934
HOLLYWOOD MEDIA CORP.
(Name of Issuer)
Common Stock, Par Value $.01 per share
(Title of Class of Securities)
089144109
(CUSIP Number)
Sumner M. Redstone
National Amusements, Inc.
200 Elm Street
Dedham, Massachusetts 02026
Telephone: (781) 461-1600
with a copy to:
Michael D. Fricklas, Esq.
Viacom Inc.
1515 Broadway
New York, New York 10036
Telephone: (212) 258-6000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
July 24, 2002
(Date of Event which Requires Filing of this Statement)
--------------------------------------------------------
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this
statement / /.
Page 1 of 15 Pages
Page 2 of 15 Pages
CUSIP No. 089144109
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
VIACOM INC.
- -----------------------------------------------------------------
I.R.S No. 04-2949533
- -----------------------------------------------------------------
(2) Check the Appropriate Box if a Member of Group (See
Instructions)
/ / (a)
- -----------------------------------------------------------------
/ / (b)
- -----------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------
(4) Sources of Funds (See Instructions) N/A
- -----------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e).
- -----------------------------------------------------------------
(6) Citizenship or Place of Organization Delaware
- -----------------------------------------------------------------
Number of (7) Sole Voting Power
Shares -----------------------------------------
Beneficially (8) Shared Voting Power 8,877,660*
Owned by ---------------------------------------------
Each (9) Sole Dispositive Power
Reporting ---------------------------------------------
Person (10) Shared Dispositive Power 8,877,660*
With
- -----------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting
8,877,660*
- -----------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
- -----------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 30.5%**
- -----------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
- -----------------------------------------------------------------
*Includes 262,973 shares underlying currently exercisable
warrants.
**Based on full exercise of warrants.
Page 3 of 15 Pages
CUSIP No. 089144109
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
NAIRI, INC.
- -----------------------------------------------------------------
I.R.S No. 04-3446887
- -----------------------------------------------------------------
(2) Check the Appropriate Box if a Member of Group (See
Instructions)
/ / (a)
- -----------------------------------------------------------------
/ / (b)
- -----------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------
(4) Sources of Funds (See Instructions) N/A
- -----------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e).
- -----------------------------------------------------------------
(6) Citizenship or Place of Organization Delaware
- -----------------------------------------------------------------
Number of (7) Sole Voting Power
Shares -----------------------------------------
Beneficially (8) Shared Voting Power 8,877,660*
Owned by ---------------------------------------------
Each (9) Sole Dispositive Power
Reporting ---------------------------------------------
Person (10) Shared Dispositive Power 8,877,660*
With
- -----------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting
8,877,660*
- -----------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
- -----------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 30.5%**
- -----------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
- -----------------------------------------------------------------
*Includes 262,973 shares underlying currently exercisable
warrants.
**Based on full exercise of warrants.
Page 4 of 15 Pages
CUSIP No. 089144109
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
NATIONAL AMUSEMENTS, INC.
- -----------------------------------------------------------------
I.R.S No. 04-2261332
- -----------------------------------------------------------------
(2) Check the Appropriate Box if a Member of Group (See
Instructions)
/ / (a)
- -----------------------------------------------------------------
/ / (b)
- -----------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------
(4) Sources of Funds (See Instructions) N/A
- -----------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e).
- -----------------------------------------------------------------
(6) Citizenship or Place of Organization Maryland
- -----------------------------------------------------------------
Number of (7) Sole Voting Power
Shares -----------------------------------------
Beneficially (8) Shared Voting Power 8,877,660*
Owned by ---------------------------------------------
Each (9) Sole Dispositive Power
Reporting ---------------------------------------------
Person (10) Shared Dispositive Power 8,877,660*
With
- -----------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting
8,877,660*
- -----------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
- -----------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 30.5%**
- -----------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
- -----------------------------------------------------------------
*Includes 262,973 shares underlying currently exercisable
warrants.
**Based on full exercise of warrants.
Page 5 of 15 Pages
CUSIP No. 089144109
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SUMNER M. REDSTONE
- -----------------------------------------------------------------
S.S. No.
- -----------------------------------------------------------------
(2) Check the Appropriate Box if a Member of Group (See
Instructions)
/ / (a)
- -----------------------------------------------------------------
/ / (b)
- -----------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------
(4) Sources of Funds (See Instructions) N/A
- -----------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e).
- -----------------------------------------------------------------
(6) Citizenship or Place of Organization United States
- -----------------------------------------------------------------
Number of (7) Sole Voting Power
Shares -----------------------------------------
Beneficially (8) Shared Voting Power 8,877,660*
Owned by ---------------------------------------------
Each (9) Sole Dispositive Power
Reporting ---------------------------------------------
Person (10) Shared Dispositive Power 8,877,660*
With
- -----------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting
8,877,660*
- -----------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
- -----------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 30.5%**
- -----------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) IN
- -----------------------------------------------------------------
*Includes 262,973 shares underlying currently exercisable
warrants.
**Based on full exercise of warrants.
Page 6 of 15 Pages
This Amendment No. 2 is filed by Viacom Inc.,
NAIRI, Inc., National Amusements, Inc. and Mr. Sumner M.
Redstone (collectively, the "Reporting Persons") and amends and
supplements the Statement on Schedule 13D originally filed with
the Securities and Exchange Commission ("SEC") on May 15, 2000,
as amended by Amendment No. 1 filed with the SEC on February 13,
2001, with respect to the Common Stock, par value $.01 per share
(the "Common Shares"), of Hollywood Media Corp. ( "Hollywood" or
the "Issuer") as follows:
Item 2. Identity and Background.
------------------------
Item 2 is amended and restated in its entirety as follows:
This statement is filed by Viacom Inc. ("Viacom"),
NAIRI, Inc. ("NAIRI"), National Amusements, Inc. ("NAI") and Mr.
Sumner M. Redstone (collectively, the "Reporting Persons").
Viacom, a Delaware corporation, has its principal
executive offices at 1515 Broadway, New York, New York 10036 and
is a diversified entertainment and communications company. At
April 30, 2002, approximately 68% of Viacom's voting Class A
Common Stock, par value $.01 per share, and approximately 11% (on
a combined basis) of Viacom's Class A Common Stock and non-voting
Class B Common Stock, par value $.01 per share, was owned by
NAIRI.
NAIRI, a Delaware corporation, has its principal office
at 200 Elm Street, Dedham, Massachusetts 02026 and is a company
owning and operating movie theaters in the United States whose
main asset is its shares of Viacom Class A Common Stock and Class
B Common Stock. 100% of the issued and outstanding stock of
NAIRI is owned by NAI.
NAI, a Maryland corporation, has its principal office
at 200 Elm Street, Dedham, Massachusetts 02026. NAI's principal
businesses are owning and operating movie theaters in the United
States, United Kingdom and South America and holding the common
stock of NAIRI. Sumner M. Redstone is the beneficial owner of
approximately 83% of the issued and outstanding shares of capital
stock of NAI as voting trustee of various trusts.
Sumner M. Redstone is an individual whose business
address is c/o National Amusements, Inc., 200 Elm Street, Dedham,
Massachusetts 02026. Mr. Redstone's principal occupation is
Chairman of the Board and Chief Executive Officer of NAI,
Chairman and President of NAIRI, and Chairman of the Board and
Chief Executive Officer of Viacom.
The executive officers and directors of Viacom, NAIRI
and NAI, as of July 24, 2002, are set forth on Schedules I
through III attached hereto, containing the following information
with respect to each such person:
(a) Name;
(b) Residence or business address; and
(c) Present principal occupation or employment and the
name, principal business and address of any
corporation or other organization in which such
employment is conducted.
Page 7 of 15 Pages
During the last five years, none of the Reporting
Persons or any person named in any of Schedules I through VI
attached hereto has been (a) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (b) a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
Except for Jan Leschly, who is a Danish citizen, each
person identified on Schedules I through III attached hereto is a
citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
Item 3 is amended and supplemented as follows:
In May 2001, Viacom and the Issuer entered into a
Securities Purchase Agreement dated as of April 25, 2001 (the
"Securities Purchase Agreement") pursuant to which, among other
things, Viacom received from the Issuer 310,425 Common Shares and
two warrants for Common Shares, more fully described in Item 4
below, in exchange for a $1.4 million payment. Simultaneously,
Viacom made a $1.6 million prepayment of existing future cash
advertising and promotion commitments to the Company.
Item 4. Purpose of Transaction.
-----------------------
Item 4 is amended and restated in its entirety as
follows:
The Issuer's Common Shares were acquired by Viacom pursuant
to the merger of CBS Corporation ("CBS"), immediate prior owner
of the Common Shares, with and into Viacom on May 4, 2000.
Viacom acquired warrants from the Issuer that entitle it to
purchase up to 100,000 Common Shares at an exercise price of
$7.819 per share. The warrants, which were issued to Viacom on
September 18, 2000 pursuant to an agreement between Viacom and
the Issuer, are exercisable from such date through September 18,
2003.
In May 2001 Viacom (i) acquired 310,425 Common Shares at
$4.51 per share pursuant to the Securities Purchase Agreement;
(ii) received an immediately exercisable warrant for 162,973
Common Shares with an expiration date of May 2006, and an
exercise price of $6.44, that was adjusted down to $4.51 on April
30, 2002 ("Warrant A"); and (iii) received a warrant for up to
439,251 Common Shares ("Warrant B") to be issued at certain
specified times in the event that the market price of the
Issuer's Common Shares dropped below specified levels. The
310,425 Common Shares and all of the Common Shares underlying
Warrant A and Warrant B were registered by the Issuer pursuant to
a Registration Rights Agreement between Viacom and the Issuer,
dated as of May 1, 2002 (the "Registration Rights Agreement").
In December 2001, Hollywood issued 220,402 Common Shares to
Viacom pursuant to Warrant B, and an additional 14,928 Common
Shares in lieu of cash owed to Viacom by Hollywood pursuant to
the Registration Rights Agreement.
On July 24, 2002, Hollywood issued an additional 218,009
Common Shares to Viacom pursuant to Warrant B. No further Common
Shares are issuable to Viacom pursuant to Warrant B.
Page 8 of 15 Pages
The Reporting Persons have no current plan or proposal which
relates to, or would result in, any of the actions enumerated in
subparagraphs (a) through (j) of Item 4 of Schedule 13D, other
than as set forth herein; however, the Reporting Persons may, at
any time and from time to time, purchase additional Common Shares
of the Issuer and may dispose of any and all Common Shares of the
Issuer held by them.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
Item 5 is amended and restated in its entirety to read
as follows:
(a) and (b) Viacom is currently the beneficial owner, with
shared dispositive and voting power, of 8,877,660 Common
Shares, or approximately 30.5%, of the Issuer's issued and
outstanding Common Shares, including 262,973 Common Shares
underlying currently exercisable warrants (based on the
number of Common Shares that were reported by the Issuer to
be issued and outstanding as of May 9, 2002, plus the Common
Shares issued to Viacom on July 24, 2002, and assuming the
exercise of all the warrants referred to above and such
underlying shares to be issued and outstanding for purposes
of this calculation).
NAIRI is currently the beneficial owner, with shared
dispositive and voting power, of 8,877,660 Common Shares, or
approximately 30.5%, of the Issuer's issued and outstanding
Common Shares, including 262,973 Common Shares underlying
currently exercisable warrants (based on the number of
Common Shares that were reported by the Issuer to be issued
and outstanding as of May 9, 2002, plus the Common Shares
issued to Viacom on July 24, 2002, and assuming the
exercise of all the warrants referred to above and such
underlying shares to be issued and outstanding for purposes
of this calculation).
NAI is currently the beneficial owner, with shared
dispositive and voting power, of 8,877,660 Common Shares, or
approximately 30.5%, of the Issuer's issued and outstanding
Common Shares, including 262,973 Common Shares underlying
currently exercisable warrants (based on the number of
Common Shares that were reported by the Issuer to be issued
and outstanding as of May 9, 2002, plus the Common Shares
issued to Viacom on July 24, 2002, and assuming the
exercise of all the warrants referred to above and such
underlying shares to be issued and outstanding for purposes
of this calculation).
As a result of his stock ownership in NAI, Mr. Sumner M.
Redstone is deemed the beneficial owner of 8,877,660 Common
Shares, or approximately 30.5%, of the Issuer's issued and
outstanding Common Shares, including 262,973 Common Shares
underlying currently exercisable warrants (based on the
number of Common Shares that were reported by the Issuer to
be issued and outstanding as of May 9, 2002, plus the Common
Shares issued to Viacom on July 24, 2002, and assuming the
exercise of all the warrants referred to above and such
underlying shares to be issued and outstanding for purposes
of this calculation).
(c) As described in Item 4 above, on July 24, 2002,
Hollywood issued 218,009 Common Shares to Viacom pursuant to
Warrant B.
(d) None.
(e) N/A
Page 9 of 15 Pages
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
-------------------------------------------------------
Item 6 is amended and restated in its entirety to read
as follows:
Except for the Securities Purchase Agreement, the
Registration Rights Agreement, Warrant A and Warrant B described
in Items 3 and 4 above, none of the Reporting Persons has entered
into, or amended any existing, agreement with respect to the
Common Shares or other securities of the Issuer since the prior
statement on Schedule 13D, or any amendment thereto, that was
filed by certain of the Reporting Persons or any predecessor
thereof. Viacom, as successor by merger to CBS, has assumed all
rights and obligations of CBS.
The information set forth under Item 4 above is
incorporated by reference. The descriptions of the Securities
Purchase Agreement, the Registration Rights Agreement, Warrant A
and Warrant B herein do not purport to be complete and are
qualified in their entirety by reference to the agreements
attached hereto as Exhibits 2, 3, 4 and 5.
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 1 Joint Filing Agreement among Viacom Inc., NAIRI, Inc.,
National Amusements, Inc. and Sumner M. Redstone.
Exhibit 2 Securities Purchase Agreement between Hollywood Media
Corp. and Viacom Inc., dated as of April 25, 2001.
Exhibit 3 Registration Rights Agreement between Hollywood Media
Corp. and Viacom Inc., dated as of May 1, 2001.
Exhibit 4 Common Stock Warrant Certificate W-A-3 dated May 1,
2001 issued by Hollywood Media Corp. to Viacom Inc.
Exhibit 5 Common Stock Adjustment Warrant Certificate W-B-3 dated
May 1, 2001 issued by Hollywood Media Corp. to Viacom
Inc.
Page 10 of 15 Pages
Signatures
-------------
After reasonable inquiry and to the best of our knowledge
and belief, we certify that the information set forth in this
statement is true, complete and correct.
July 29, 2002
VIACOM INC.
By: /s/Michael D. Fricklas
-------------------------
Michael D. Fricklas
Executive Vice President,
General Counsel and
Secretary
NAIRI, Inc.
By: /s/ Sumner M. Redstone
---------------------
Sumner M. Redstone
Chairman and President
NATIONAL AMUSEMENTS, INC.
By: /s/ Sumner M. Redstone
------------------------
Sumner M. Redstone,
Chairman and Chief
Executive
Officer
/s/ Sumner M. Redstone
-----------------------
Sumner M. Redstone,
Individually
Page 11 of 15 Pages
SCHEDULE I
----------------
Name, business address, and present
principal occupation or employment of
the directors and executive officers of
VIACOM INC.
-----------------
I:A DIRECTORS
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION
AND ADDRESS OF EMPLOYMENT
- -------------------------- -------------------------------
David Andelman Attorney
Lourie and Cutler Lourie and Cutler
60 State Street 60 State Street
Boston, MA 02109 Boston, MA 02109
George S. Abrams Attorney
Winer & Abrams Winer & Abrams
60 State Street 60 State Street
Boston, MA 02109 Boston, MA 02109
George H. Conrades Chairman and Chief Executive
AKAMAI Technologies Officer of
500 Technology Square AKAMAI Technologies
Cambridge, MA 02139 AKAMAI Technologies
500 Technology Square
Cambridge, MA 02139
Philippe P. Dauman Co-Chairman and CEO of DND
DND Capital Partners, LLC Capital Partners LLC
9 West 57th St. DND Capital Partners, LLC
New York, N.Y. 10019 9 West 57th St.
New York, N.Y. 10019
William H. Gray III President and Chief Executive
The College Fund/UNCF Officer of The College
8260 Willow Oaks Corporate Fund/UNCF
Drive The College Fund/UNCF
Fairfax, VA 22031 8260 Willow Oaks Corporate
Drive
Fairfax, VA 22031
Mel Karmazin President & Chief Operating
Viacom Inc. Officer
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Jan Leschly Chairman and CEO
Care Capital LLC Care Capital LLC
Princeton Overlook 1 Care Capital LLC
100 Overlook Center and Princeton Overlook 1
Route, 100 Overlook Center and Route,
Suite 102 Suite 102
Princeton, NJ 08540 Princeton, NJ 08540
David T. McLaughlin Chairman and Chief Executive
Orion Safety Products Officer of
46 Newport road Orion Safety Products
New London, NH 03257 Orion Safety Products
46 Newport Road
New London, NH 03257
Page 12 of 15 Pages
SCHEDULE I
(Continued)
VIACOM INC.
-----------
I:A DIRECTORS (CONTINUED)
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION
AND ADDRESS OF EMPLOYMENT
- ---------------------------- -------------------------------
Ken Miller Independent Financial Advisor
c/o Paul, Weiss, Rifkind, c/o Paul, Weiss, Rifkind,
Wharton & Garrison Wharton & Garrison
1285 Avenue of the Americas 1285 Avenue of the Americas
New York, N.Y. 10019 New York, N.Y. 10019
Leslie Moonves President and Chief Executive
Viacom Inc. Officer of CBS Television
1515 Broadway CBS Television
New York, NY 10036 7800 Beverly Blvd.
Los Angeles, CA 90036
Brent D. Redstone Director of National
c/o Showtime Networks Inc. Amusements, Inc.
1633 Broadway National Amusements, Inc.
New York, NY 10019 200 Elm Street
Dedham, MA 02026
Shari Redstone President of National
National Amusements, Inc. Amusements, Inc. and Executive
200 Elm Street Vice President of NAIRI, Inc.
Dedham, MA 02026 National Amusements, Inc.
200 Elm Street
Dedham, MA 02026
Sumner M. Redstone Chairman & CEO, National
Viacom Inc. Amusements, Inc.;
1515 Broadway Chairman & Chief Executive
New York, NY 10036 Officer
Viacom Inc.
1515 Broadway
New York, NY 10036
Fredric V. Salerno Vice Chairman and CFO, Verizon
Verizon Communications Communications
1095 Avenue of the Americas Verizon Communications
New York, NY 10036 1095 Avenue of the Americas
New York, NY 10036
William Schwartz Counsel
Cadwalader Wickersham & Taft Cadwalader Wickersham & Taft
100 Maiden Lane 100 Maiden Lane
New York, N.Y. 10038 New York, N.Y. 10038
Ivan Seidenberg President and Chief Executive
Verizon Communications Officer of Verizon
1095 Avenue of the Americas Communications
New York, NY 10036 Verizon Communications
1095 Avenue of the Americas
New York, NY 10036
Patty Stonesifer Co-Chair and President of
Bill and Melinda Gates Bill and Melinda Gates
Foundation Foundation
1551 Eastlake Ave. East Bill and Melinda Gates
Seattle, WA 98102 Foundation
1551 Eastlake Ave. East
Seattle, WA 98102
Robert D. Walter Chairman and Chief Executive
Cardinal Health, Inc. Officer of Cardinal Health,
7000 Cardinal Place Inc.
Dublin, OH 43017 Cardinal Health, Inc.
7000 Cardinal Place
Dublin, OH 43017
Page 13 of 15 Pages
SCHEDULE I
(continued)
VIACOM INC.
--------------
I:B EXECUTIVE OFFICERS:
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION AND
ADDRESS OF EMPLOYMENT
- ----------------------------- --------------------------------
Sumner M. Redstone Chairman & CEO, National
Viacom Inc. Amusements, Inc.;
1515 Broadway Chairman & Chief Executive
New York, NY 10036 Officer
Viacom Inc.
1515 Broadway
New York, NY 10036
Mel Karmazin President & Chief Operating
Viacom Inc. Officer
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Richard J. Bressler Sr. EVP, Chief Financial Officer
Viacom Inc. Viacom Inc.
1515 Broadway 1515 Broadway
New York, NY 10 New York, NY 10036
Michael D. Fricklas EVP, General Counsel and
Viacom Inc. Secretary
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Carl D. Folta Senior Vice President, Corporate
Viacom Inc. Relations
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Carol Melton Senior Vice President, Government
Viacom Inc. Relations
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
William A. Roskin Sr. VP, Human Resources and
Viacom Inc. Administration
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Martin M. Shea Senior Vice President, Investor
Viacom Inc. Relations
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Robert G. Freedline Vice President and Treasurer
Viacom Inc. Viacom Inc.
1515 Broadway 1515 Broadway
New York, N.Y. 10036 New York, N.Y. 10036
Susan C. Gordon Vice President, Controller &
Viacom Inc. Chief Accounting Officer
1515 Broadway Viacom Inc.
New York, NY 10036 1515 Broadway
New York, NY 10036
Page 14 of 15 Pages
SCHEDULE II
-----------------
Name, business address, and present
principal occupation or employment of
the directors and executive officers of
NAIRI, Inc.
--------------
II:A DIRECTORS
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION AND
ADDRESS OF EMPLOYMENT
- -------------------------- ---------------------------------
Sumner M. Redstone Chairman & CEO, National Amusements,
Viacom Inc. Inc.;
1515 Broadway Chairman & Chief Executive Officer
New York, NY 10036 Viacom Inc.
1515 Broadway
New York, NY 10036
Shari Redstone President of National Amusements,
National Amusements, Inc. Inc. and Executive Vice President of
200 Elm Street NAIRI, Inc.
Dedham, MA 02026 National Amusements, Inc.
200 Elm Street
Dedham, MA 02026
George S. Abrams Attorney
Winer & Abrams Winer & Abrams
60 State Street 60 State Street
Boston, MA 02109 Boston, MA 02109
David Andelman Attorney
Lourie and Cutler Lourie and Cutler
60 State Street 60 State Street
Boston, MA 02109 Boston, MA 02109
Philippe P. Dauman Co-Chairman and CEO of DND Capital
DND Capital Partners, LLC Partners LLC
9 West 57th St. DND Capital Partners, LLC
New York, N.Y. 10019 9 West 57th St.
New York, N.Y. 10019
Brent D. Redstone Director of National Amusements, Inc.
c/o Showtime Networks Inc. National Amusements, Inc.
1633 Broadway 200 Elm Street
New York, NY 10019 Dedham, MA 02026
II:B Executive Officers
Name and Business Address Present Principal Occupation and
Address of Employment
- ------------------------ --------------------------------
Sumner M. Redstone See schedule II:A
See schedule II:A
Shari Redstone See schedule II:A
See schedule II:A
Jerome Magner VP and Treasurer of National Amusements,
National Amusements, Inc. Inc., and NAIRI, Inc.
200 Elm Street National Amusements, Inc.
Dedham, MA 02026 200 Elm Street
Dedham, MA 02026
Richard Sherman Vice President of National Amusements,
National Amusements, Inc. Inc. and NAIRI, Inc.
200 Elm Street National Amusements, Inc.
Dedham, MA 02026 200 Elm Street
Dedham, MA 02026
Tilly Berman Secretary of National Amusements, Inc. and
National Amusements, Inc. NAIRI, Inc.
200 Elm Street National Amusements, Inc.
Dedham, MA 02026 200 Elm Street
Dedham, MA 02026
Page 15 of 15 Pages
SCHEDULE III
-----------------------
Name, business address, and present
principal occupation or employment of
the directors and executive officers of
NATIONAL AMUSEMENTS, INC
----------------------------
III:A DIRECTORS
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION AND
ADDRESS OF EMPLOYMENT
- -------------------------- ---------------------------------
Sumner M. Redstone See schedule II:A
See schedule II:A
Shari Redstone See schedule II:A
See schedule II:A
George S. Abrams See schedule II:A
See schedule II:A
David Andelman See schedule II:A
See schedule II:A
Philippe P. Dauman See schedule II:A
See schedule II:A
Brent D. Redstone See schedule II:A
See schedule II:A
II: B EXECUTIVE OFFICERS
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION AND
ADDRESS OF EMPLOYMENT
- ------------------------ ---------------------------------
Sumner M. Redstone See schedule II:A
See schedule II:A
Shari Redstone See schedule II:A
See schedule II:A
Jerome Magner See schedule II:B
See schedule II:B
Richard Sherman See schedule II:B
See schedule II:B
Tilly Berman See schedule II:B
See schedule II:B
Exhibit 1
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule
13D, dated May 15, 2000 (the "Schedule 13D"), with respect to the
Common Stock, par value $.01 per share, of Hollywood Media Corp.
(formerly named Hollywood.com, Inc.) is, and any amendments
executed by us shall be, filed on behalf of each of us pursuant
to and in accordance with the provisions of Rule 13d-1(k) under
the Securities Exchange Act of 1934, as amended, and that this
Agreement shall be included as an exhibit to the Schedule 13D and
each such amendment. Each of the undersigned agrees to be
responsible for the timely filing of the Schedule 13D and any
amendments thereto, and for the completeness and accuracy of the
information concerning itself contained therein. This agreement
may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the 13TH day of February, 2001.
VIACOM INC.
By: /s/ Michael D. Fricklas
Michael D. Fricklas
Executive Vice President
General Counsel and Secretary
NAIRI, INC.
By: /s/ Sumner M. Redstone
Sumner M. Redstone
Chairman and President
NATIONAL AMUSEMENTS, INC.
By: /s/ Sumner M. Redstone
Sumner M. Redstone
Chairman and
Chief Executive Officer
By: /s/ Sumner M. Redstone
Sumner M. Redstone
Individually
===========================================================
SECURITIES PURCHASE AGREEMENT
BETWEEN
HOLLYWOOD MEDIA CORP.
AND
VIACOM INC.
DATED AS OF
APRIL 25, 2001
===========================================================
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as
of April 25, 2001, between HOLLYWOOD MEDIA CORP., a Florida
corporation (the "Company") and VIACOM INC., a Delaware
corporation ("Viacom" or the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue and sell in the
aggregate (a) 310,425 shares (the "Common Shares") of the
Company's Common Stock (the "Common Stock"), (b) warrants to
purchase up to 162,973 shares of Common Stock pursuant to the
terms set forth in the "A" Warrant, the form of which is annexed
hereto as Exhibit A, and (c) warrants to acquire up to 439,251
shares of Common Stock pursuant to the terms set forth in the
"B" Warrant, the form of which is annexed hereto as Exhibit B
(the "A" Warrant and the "B" Warrant, collectively, the
"Warrants") on a private placement basis pursuant to an exemption
from registration under Section 4(2) of the Securities Act of
1933, as amended, and the Purchaser desires to purchase the
Common Shares and the Warrants, on the terms and subject to the
conditions set forth herein; and
WHEREAS, the registered holders of the Common Shares and the
Warrants will have registration rights with respect to such
Common Shares and shares of Common Stock and/or, if applicable,
other securities issuable upon exercise of the Warrants (such
shares of Common Stock and/or, if applicable, other securities,
the "Warrant Shares") pursuant to the terms of the Registration
Rights Agreement between the Company and the Purchaser (the
"Registration Rights Agreement").
NOW THEREFORE, in consideration of the premises,
representations, warranties, covenants and agreements contained
herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINITIONS. The following terms shall
have the following respective meanings:
"Affiliate" of a Person means another Person that directly
or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first-
mentioned Person. The term "control" (including the terms
"controlling," "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise.
"Call Period" has the meaning set forth in Section 2.03.
"Capital Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents
(however designated) of corporate stock, including each class of
common stock and preferred stock, of such Person.
"Closing" has the meaning set forth in Section 2.02.
"Commission" means the United States Securities and Exchange
Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Authority" means any federal or state
government or political subdivision thereof and any agency or
other entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Material Adverse Effect" has the meaning set forth in
Section 3.01.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company, Governmental
Authority or other entity of any kind.
"Redemption Date" has the meaning set forth in Section 2.03.
"Redemption Price" has the meaning ascribed to such term in
Section 2.03.
"Redemption Right" has the meaning set forth in Section
2.03.
"Reset Period" means the 20 Trading Day intervals beginning
on each of October 30, 2001, January 30, 2002, April 30, 2002 and
July 30, 2002, or in the event that a registration statement has
not been declared effective with respect to the resale of the
shares of Common Stock underlying the Warrants by October 30,
2001, then the 20 Trading Day intervals beginning on the one
month, four month, seven month and ten month anniversaries of
such date that a registration statement with respect to the
resale of the shares of the Common Stock underlying the Warrants
has been declared effective.
"SEC Reports" means the Company's Annual Report on Form 10-K
for the year ended December 31, 2000.
"Securities Act" means the Securities Act of 1933, as
amended.
"Trading Day" means any day on which the principal market on
which the Common Stock trades is open.
"Transaction Documents" means, collectively, this Agreement,
the Registration Rights Agreement and the Warrants.
"United States" has the meaning ascribed to such term in
Rule 902(p) of Regulation S under the Securities Act.
"U.S. Person" has the meaning ascribed to such term in Rule
902(o) of Regulation S under the Securities Act.
ARTICLE II
SALE AND PURCHASE
SECTION 2.01. AGREEMENT TO SELL AND TO PURCHASE; PURCHASE PRICE.
On the terms and subject to the conditions set forth in this
Agreement, the Company hereby agrees to issue and sell to the
Purchaser, and the Purchaser, hereby agrees to purchase from the
Company, the number of Common Shares set forth opposite the
Purchaser's name on Annex A at the purchase price set forth
opposite the Purchaser's name on Annex A, payable in immediately
available funds to the Company (such purchase price with respect
to any Purchaser, the "Purchase Price").
Section 2.02. CLOSING. The closing of the sale and
purchase of the Common Shares and the Warrants (the "Closing")
shall be deemed to take place as of May 1, 2001. At the Closing,
the following closing transactions shall take place, each of which
shall be deemed to occur simultaneously with the Closing:
(i) the Company shall execute, issue and deliver to the Purchaser
certificates evidencing the Common Shares deliverable to the
Purchaser as set forth on Annex A in such denominations as the
Purchaser shall reasonably request; (ii) the Company shall
execute, issue and deliver to the Purchaser the "A" Warrant and
"B" Warrant to purchase shares of Common Stock deliverable to the
Purchaser as set forth on Annex A; (iii) the Purchaser shall pay
the Purchase Price by wire transfer as set forth on Annex A to
the account designated by the Company in writing prior to the
Closing; (iv) the Company and the Purchaser shall execute and
deliver the Registration Rights Agreement; (v) the Company shall
deliver to the Purchaser a certificate executed by the Secretary
of the Company, signing in such capacity, dated the date of the
Closing (A) certifying that attached thereto are true and
complete copies of the resolutions duly adopted by the Board of
Directors of the Company authorizing the execution and delivery
of the Transaction Documents and the consummation of the
transactions contemplated thereby (including, without limitation,
the issuance and sale of the Common Shares and the Warrants and
the reservation and issuance of the Warrant Shares upon exercise
of the Warrants), which authorization shall be in full force and
effect on and as of the date of such certificate, (B) certifying
and attesting to the office, incumbency, due authority and
specimen signatures of each Person who executed any Transaction
Document for or on behalf of the Company and (C) certifying as to
the accuracy of the representations and warranties of the Company
contained in the Transaction Documents; and (vi) W. Robert
Shearer, Senior Vice President and General Counsel to the
Company, shall deliver to the Purchaser an opinion, dated the
date of the Closing and addressed to the Purchaser, covering
customary matters.
Section 2.03. REDEMPTION (a) The Company shall have the
right (the "Redemption Right") from the first Trading Day of each
Reset Period until the fifth Trading Day of each such Reset Period
(the "Call Period") to give notice to repurchase, all, or less than
all, of the Common Shares owned by the Purchaser at $5.637 per
share (the "Redemption Price"). The Company may exercise its
Redemption Right only if shares of Common Stock are issuable
pursuant to the "B" Warrant in respect of such Reset Period as of
the date of delivery of the notice of redemption.
(b) In order to exercise its Redemption Right, the Company
shall deliver to the Purchaser a notice of redemption setting forth the
date of redemption, which shall be five (5) Trading Days from the
date of the notice (the "Redemption Date") and shall be within
the period specified in Section 2.03(a) above that the Redemption
Right may be effected. Any such notice of redemption shall be
irrevocable. The Company shall pay the Redemption Price to the
Purchaser, in cash, on the Redemption Date. Notwithstanding the
receipt of such notice of redemption, the Purchaser shall be
entitled to sell shares of Common Stock at any time prior to the
Redemption Date.
(c) In addition to the foregoing, if (i) the Company fails
to have a registration statement declared effective with respect to
the resale of the shares of Common Stock underlying the Warrants
within eight (8) months of the date of Closing; (ii) the Company
has failed to timely deliver any Warrant Shares to the Purchaser
pursuant to an effective exercise of the Warrants, and upon
receipt of notice of the failure to deliver the Warrant Shares,
has not delivered such shares within five (5) days of receiving
such notice; or (iii) the Company has failed to remove a
restrictive legend from any security within 15 days of when such
legend may be removed pursuant to Section 5.02 hereof, then the
Purchaser may demand that the Company repurchase all, or less
than all, of the Common Shares owned by the Purchaser at $5.637
per share, which amount shall be paid within five (5) Trading
Days from when a Purchaser demands such redemption.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchaser to purchase the
Common Shares and the Warrants, the Company hereby represents and
warrants to the Purchaser that on and as of the date hereof:
Section 3.01. ORGANIZATION AND STANDING. The Company and each
of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and has all requisite corporate power and
authority, and all authorizations, licenses, permits and
certifications necessary for it to own its properties and assets
and to carry on its business as it is now being conducted (and,
to the extent described therein, as described in the SEC Reports)
and proposed to be conducted. The Company and each of its
subsidiaries is duly qualified to transact business and is in
good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of its businesses
makes such qualification necessary, except where the failure to
so qualify or be in good standing would not have a material
adverse effect on the business, assets, operations, properties,
condition (financial or otherwise) or prospects of the Company
and its subsidiaries, taken as a whole, or any adverse effect on
the Company's ability to consummate the transactions contemplated
by, or to execute, deliver and perform its obligations under,
each of the Transaction Documents (a "Material Adverse Effect").
Section 3.02. SECURITIES OF THE COMPANY. The authorized
Capital Stock of the Company consists of one hundred million shares
of Common Stock and one million shares of preferred stock; as of
March 31, 2001, 25,161,532 shares of common stock and no shares
of preferred stock were outstanding and 1,450,000 shares of
Common Stock were reserved for issuance upon exercise of
outstanding warrants. Except as set forth in the SEC Reports,
the Company has no other authorized, issued or outstanding equity
securities or securities containing any equity features, or any
other securities convertible into, exchangeable for or entitling
any person to otherwise acquire any other securities of the
Company containing any equity features. The Company has no stock
option, incentive or similar plan other than the (1) 1993 Stock
Option Plan under which 3,150,000 shares of Common Stock may be
issued, (2) the Directors Plan, under which 100,000 shares of
Common Stock may be issued, and (3) the 2000 Stock Incentive Plan
under which 1,250,000 shares of Common Stock may be issued. All
of the outstanding shares of Capital Stock of the Company have
been duly and validly authorized and issued, and are fully paid
and nonassessable. The Common Shares and the Warrants and all of
the Warrant Shares have been duly and validly authorized. When
issued against payment therefor as provided in this Agreement,
the Common Shares and the Warrants will be validly issued, fully
paid and nonassessable, free and clear of all preemptive rights,
claims, liens, charges, encumbrances and security interests of
any nature whatsoever, and will constitute valid and enforceable
obligations of the Company, enforceable against the Company in
accordance with their respective terms (subject to the effects of
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and general principles of equity). When issued upon
exercise of the Warrants (assuming payment of the exercise price
therefor), the Warrant Shares will be validly issued, fully paid
and nonassessable, free and clear of all preemptive rights,
claims, liens, charges, encumbrances and security interests of
any nature whatsoever. A sufficient number of shares of Common
Stock has been duly reserved and will remain available for
issuance upon exercise of the Warrants. Except as set forth in
Schedule 3.02, this Section 3.02 and the SEC Reports, there are
no outstanding options, warrants, conversion rights, subscription
rights, preemptive rights, rights of first refusal or other
rights or agreements of any nature outstanding to subscribe for
or to purchase any shares of Capital Stock of the Company or any
other securities of the Company of any kind binding on the
Company. Except as set forth in Schedule 3.02, neither the
issuance of the Common Shares or the Warrants nor the issuance of
the Warrant Shares is subject to any preemptive rights, rights of
first refusal or other similar limitation. Except as otherwise
required by law, there are no restrictions upon the voting or
transfer of any shares of the Company's Capital Stock pursuant to
the Company's Certificate of Incorporation, bylaws or other
documents. Except as provided herein or in the other Transaction
Documents, there are no agreements or other obligations
(contingent or otherwise) that may require the Company to
repurchase or otherwise acquire any shares of its Capital Stock.
Section 3.03. AUTHORIZATION; ENFORCEABILITY. The Company has
the corporate power and authority to execute, deliver and perform
the terms and provisions of each of the Transaction Documents to
be executed, delivered or performed by it and has taken all
necessary corporate action to authorize the execution, delivery
and performance by it of, and the consummation of the
transactions contemplated by, the Transaction Documents. No
other corporate proceeding on the part of the Company is
necessary, and no consent of any shareholder of the Company is
required, for the valid execution and delivery by the Company of
the Transaction Documents, and the performance and consummation
by the Company of the transactions contemplated by the
Transaction Documents to be performed by the Company. The
Company has duly executed and delivered, or concurrently herewith
is executing and delivering, each of the Transaction Documents.
Assuming the due execution of this Agreement and the Registration
Rights Agreement by the Purchaser, this Agreement, the
Registration Rights Agreement, the Common Stock and the Warrants
constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with each of their
respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law).
Section 3.04. NO VIOLATION; CONSENTS.
(a) The execution, delivery and performance by the Company of
the Transaction Documents and the consummation of the
transactions contemplated thereby to be performed by the Company
do not and will not (i) contravene the applicable provisions of
any law, statute, rule, regulation, order, writ, injunction,
judgment or decree of any court or Governmental Authority to or
by which the Company or any of its subsidiaries or any of its
respective property or assets is bound, (ii) violate, result in a
breach of or constitute (with due notice or lapse of time or
both) a default or give rise to an event of acceleration under
any contract, lease, loan or credit agreement, mortgage, security
agreement, trust indenture or other agreement or instrument to
which the Company is a party or by which it or any of its
subsidiaries is bound or to which any of its respective
properties or assets is subject, nor result in the creation or
imposition of any lien, security interest, charge or encumbrance
of any kind upon any of the properties, assets or Capital Stock
of the Company or any of its subsidiaries, or (iii) violate any
provision of the organizational and other governing documents of
the Company or any of its subsidiaries.
(b) No consent, approval, authorization or order of,
or filing or registration with, any court or Governmental Authority
or other Person is required to be obtained or made by the Company
for the execution, delivery and performance of the Transaction
Documents or the consummation of any of the transactions
contemplated thereby (other than the registration of the resale
of the Common Shares and the Warrant Shares with the Commission
and pursuant to any state "blue sky" laws as contemplated by the
Registration Rights Agreement), except for those consents or
authorizations previously obtained and those filings previously
made.
Section 3.05. SECURITIES ACT REPRESENTATIONS. The Company has
not offered or sold and will not offer or sell any shares of its
Capital Stock (including any shares of Common Stock or any
warrants) in this offering other than the Common Shares and the
Warrants. Assuming the accuracy of the Purchaser's
representations pursuant to Section 4.02 hereof, the sale of the
Common Shares and the Warrants hereunder is, and the issuance of
the Warrant Shares upon exercise of the Warrants will be, exempt
from the registration requirements of the Securities Act.
Neither the Company, nor any of its Affiliates, or, to its
knowledge, any Person acting on its or their behalf has engaged
in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of the Common Shares, Warrants
or Warrant Shares. Neither the Company, nor any of its
Affiliates, nor to its knowledge, any Person acting on its or
their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security
other than pursuant to this Agreement under circumstances that
would require registration under the Securities Act of the Common
Shares or Warrants to be issued under this Agreement. The
Company is eligible to use Form S-3 under the Securities Act to
file the Registration Statement (as defined in the Registration
Rights Agreement). The Company has not provided the Purchaser
with any material non-public information that, according to
applicable law, rule or regulation, should have been disclosed
publicly by the Company.
Section 3.06. SOLVENCY; NO DEFAULT. (a) The Company is,
and upon giving effect to the transactions contemplated hereby
to be performed by it as of the Closing will be, Solvent.
"Solvent" means that, as of the date of determination,
(i) the then fair saleable value of the assets of
the Company (on a consolidated basis) exceeds the then total
amount (on a consolidated basis) of its debts and other
liabilities, (including any guarantees and other contingent,
subordinated, unmatured or unliquidated liabilities whether or
not reduced to judgment, disputed or undisputed, secured or
unsecured), (ii) the Company has sufficient funds and cash flow
to pay its liability on its existing debts as they become
absolute and matured, (iii) final judgments against the Company
in pending or, to the Company's knowledge, threatened actions for
money damages will not be rendered at a time when, or in an
amount such that, the Company will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into
account (a) the maximum reasonable amount of such judgments in
any such actions (other than amounts that would be remote), (b)
the earliest reasonable time at which such judgments would be
rendered and (c) any reasonably expected insurance recovery with
respect thereto), and (iv) the Company does not have unreasonably
small capital with which to engage in its present business.
(b) The Company is not, and immediately after the
consummation of the transactions contemplated hereby to be performed
by the Company will not be, in default of (whether upon the passage of
time, the giving of notice or both) its organizational and other
governing documents, or any provision of any security issued by
the Company, or of any agreement, instrument or other undertaking
to which the Company is a party or by which it or any of its
property or assets is bound, or the applicable provisions of any
law, statute, rule, regulation, order, writ, injunction, judgment
or decree of any court or Governmental Authority to or by which
the Company or any of its property or assets is bound, which
default or violation, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
Section 3.07. NO BROKERS. No broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, placement or
similar fee or other commission in connection with the
transactions contemplated hereby based on any agreement,
arrangement or understanding with the Company.
Section 3.08. SEC REPORTS; FINANCIAL CONDITION; NO
ADVERSE CHANGES. (a) The audited consolidated financial
statements of the Company and the related notes thereto
as of December 31, 2000 reported on by Arthur Andersen LLP,
independent accountants, copies of which have heretofore
been furnished to the Purchaser and are publicly available,
present fairly the financial condition, results of operations
and cash flows of the Company (on a consolidated basis)
at such date and for the periods set forth therein
(such audited consolidated financial statements,
collectively, the "Financial Statements"). The Financial
Statements, including the related schedules and notes thereto (if
any), have been prepared in accordance with generally accepted
accounting principles as set forth in the opinions and
pronouncements of the Accounting Principles Board of American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board as in
effect on the date of filing of such documents with the
Commission, applied on a consistent basis (except for changes
concurred in by the Company's independent public accountants)
unless otherwise expressly stated therein. Except as disclosed
in the SEC Reports, during the period from January 1, 2001 to and
including the date hereof, there has been no sale, transfer or
other disposition by the Company of any material part of the
business, property or securities of the Company and no purchase
or other acquisition of any business, property or securities by
the Company material in relation to the financial condition of
the Company.
(b) Except as are fully reflected or reserved against
in the inancial Statements and the notes thereto, there are no
liabilities or obligations with respect to the Company or any of
its subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) that,
either individually or in the aggregate, after taking into
account (a) the maximum reasonable amount of any liability that
may arise on account of any litigation or any other contingent
liability or obligation (other than amounts that would be
remote), (b) the earliest reasonable time at which any such
liability or obligation may become due and (c) any reasonably
expected insurance recovery with respect thereto, could
reasonably be expected to have a Material Adverse Effect.
(c) Since December 31, 2000, except as set forth in the SEC
Reports, there has been no development or event, nor any
prospective development or event known to the Company or any of
its subsidiaries, or any litigation, proceeding or other action
seeking an injunction or other restraining order, damages or
other relief from a court or administrative agency of competent
jurisdiction pending, threatened or, to the knowledge of the
Company, contemplated, or any action of any Governmental
Authority, that has had or could reasonably be expected to have a
Material Adverse Effect.
Section 3.09. USE OF PROCEEDS; FEDERAL REGULATIONS.
No part of the net proceeds from the sale of the Common Shares
and the Warrants will be used in a manner that would violate the
provisions of Regulation T, U or X of the Board of Governors of
the Federal Reserve System. The Company will not use such
proceeds other than for or in connection with general working
capital.
Section 3.10. SUBSIDIARIES. As of the date hereof, the Company
has no subsidiaries other than those listed on Schedule 3.10
hereto.
Section 3.11. NO INTEGRATED OFFERING. Neither the Company
nor any of its Affiliates, nor to its knowledge any Person acting on
its behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security under
circumstances that would require registration under the
Securities Act of the offer and sale of the Common Shares and
Warrants.
Section 3.12. NO LITIGATION. Except as set forth on
Schedule 3.12, no litigation or claim (including those for unpaid
taxes), or environmental proceeding against the Company or any of its
subsidiaries is pending, threatened or, to the Company's best
knowledge, contemplated that, if determined adversely, would
(after taking into consideration any reasonably expected
insurance recovery with respect thereto) have a Material Adverse
Effect on the Company.
Section 3.13. ENVIRONMENTAL MATTERS. The Company and each of
its subsidiaries is in compliance in all material respects with
all applicable state and federal environmental laws, and no event
or condition has occurred that may interfere in any material
respect with the compliance by the Company or any of its
subsidiaries with any environmental law or that may give rise to
any liability under any environmental law that, individually or
in the aggregate, would have a Material Adverse Effect.
Section 3.14. INTELLECTUAL PROPERTY. The Company (and/or
its subsidiaries) owns or has licenses to use certain patents,
copyrights and trademarks ("intellectual property") associated
with its business. The Company and its subsidiaries have all
intellectual property rights that are needed to conduct the
business of the Company and its subsidiaries as it is now being
conducted as disclosed in the SEC Reports. The intellectual
property rights that the Company (and/or its subsidiaries) owns
are valid and enforceable. The use of such intellectual property
by the Company (and/or its subsidiaries') does not infringe upon
or conflict with any right of any third party in any material
respect, and neither the Company nor any of its subsidiaries has
received notice, written or otherwise, of any such infringement
or conflict. Except as set forth in the SEC Reports, the Company
has no knowledge of any infringement of its (and/or its
subsidiaries) intellectual property by any third party in any
material respect.
Section 3.15. INSURANCE. The Company and each of its
subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts
as management of the Company believes to be prudent and customary
in the businesses in which the Company and its subsidiaries are
engaged. The Company has no reason to believe that it and its
subsidiaries will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.
Section 3.16. RELATED PARTY TRANSACTIONS. Except as set
forth in the SEC Reports and the transactions contemplated by this
Agreement, none of the officers, directors, employees or 5% or
greater shareholders of the Company is presently a party to any
transaction with the Company or any of its subsidiaries (other
than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of
real or personal property to or from, or the advances of money or
otherwise requiring payments to or from any such officer,
director, employee or shareholder or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in
which any such officer, director, employee or shareholder has a
substantial interest or is an officer, director, trustee or
partner.
Section 3.17. PERMITS. The Company and each of its
subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted
(collectively, the "Company Permits"), and there
is no action pending or, to the knowledge of the Company,
threatened regarding suspension or cancellation of any of the
Company Permits except for such Company Permits the failure of
which to possess, or the cancellation or suspension of which,
would not, individually or in the aggregate, have a Material
Adverse Effect. To the best of its knowledge neither the Company
nor any of its subsidiaries is in material conflict with, or in
material default or material violation of, any of the Company
Permits.
Section 3.18. INTERNAL ACCOUNTING CONTROLS. The Company and
each of its subsidiaries maintain a system of internal accounting
controls sufficient, in the judgment of the Company's board of
directors, to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization
and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
Section 3.19. TAX RETURNS. The Company has filed or caused
to be filed all Federal tax returns and all material state and local
tax returns required to have been filed by it and has paid or
caused to be paid all taxes shown to be due and payable by it on
such returns or on any assessments received by it, except any
such tax, the validity or amount of which is being contested in
good faith by appropriate proceedings and as to which the Company
has set aside on its books adequate reserves with respect thereto
in accordance with generally accepted accounting principles.
Neither the Company nor its subsidiaries has received any tax
assessment, notice of audit, notice of proposed adjustment or
deficiency notice from any taxing authority.
Section 3.20. DISCLOSURE. The statements contained in the
SEC Reports and the schedules, certificates and exhibits furnished to
the Purchaser by or on behalf of the Company in connection
herewith do not contain any untrue statement of a material fact
and do not omit to state any material fact necessary to make the
statements herein or therein not misleading in light of the
circumstances under which they were made. The SEC Reports
contain all material information concerning the Company required
to be set forth therein, and no event or circumstance has
occurred or exists since December 31, 2000, that would require
the Company to disclose such event or circumstance in order to
make the statements in the SEC Reports not misleading as of the
date of the Closing but that has not been so disclosed. The
Company hereby acknowledges that the Purchaser is and will be
relying on the SEC Reports and the Company's representations,
warranties and covenants contained herein in making an investment
decision with respect to the Common Shares and the Warrants and
will be relying thereon (together with future reports filed with
the Commission) in connection with any transfer of Common Shares,
Warrants and Warrant Shares or any acquisition of Warrant Shares
upon exercise of the Warrants.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER
The Purchaser hereby acknowledges, represents, warrants and
covenants, to the Company as follows:
Section 4.01. AUTHORIZATION; ENFORCEABILITY; NO VIOLATIONS.
(a) The Purchaser is duly organized, validly existing and in
good standing under the laws of its jurisdiction, has all
requisite power and authority to execute, deliver and perform the
terms and provisions of this Agreement and the Registration
Rights Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement
and the Registration Rights Agreement and to consummate the
transactions contemplated hereby and thereby to be performed by
it.
(b) The execution, delivery and performance by the Purchaser
of this Agreement and the Registration Rights Agreement and the
consummation by the Purchaser of the transactions contemplated
hereby and thereby to be performed by it do not and will not
violate any provision of (i) the Purchaser's organizational
documents or (ii) any law, statute, rule, regulation, order,
writ, injunction, judgment or decree to which the Purchaser is
subject. The Purchaser has duly executed and delivered this
Agreement and has executed and delivered, or concurrently
herewith is executing and delivering, the Registration Rights
Agreement. Assuming the due execution hereof and thereof by the
Company, each of this Agreement and the Registration Rights
Agreement constitutes the legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law).
Section 4.02. SECURITIES ACT REPRESENTATIONS; LEGENDS.
(a) The Purchaser understands that: (i) the offering and sale
of the Common Shares and the Warrants to be issued and sold
hereunder is intended to be exempt from the registration
requirements of the Securities Act; (ii) neither the Common
Shares or the Warrants nor the Warrant Shares have been
registered under the Securities Act or any other applicable
securities laws and such securities may be resold only if
registered under the Securities Act and any other applicable
securities laws or if an exemption from such registration
requirements is available; and (iii) the Company is required to
register any resale of the Common Shares, the Warrants or the
Warrant Shares under the Securities Act and any other applicable
securities laws only to the extent provided in the Registration
Rights Agreement.
(b) The Common Shares and the Warrants to be acquired by the
Purchaser pursuant to this Agreement and the Warrant Shares
issuable upon exercise of the Warrants are being acquired for its
own account, for investment purposes, and not with a view to, or
for sale in connection with, any distribution thereof (other than
the resale of Common Shares and Warrant Shares pursuant to an
effective registration statement as contemplated by the
Registration Rights Agreement) in violation of the Securities Act
or any other securities laws that may be applicable.
(c) The Purchaser (i) has sufficient knowledge and experience
in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Common Shares and
the Warrants and is capable of bearing the economic risks of such
investment, including a complete loss of its investment in the
Common Shares and the Warrants; (ii) believes that its investment
in the Common Shares and the Warrants are suitable for it based
upon its objectives and financial needs, and the Purchaser has
adequate means for providing for its current financial needs and
business contingencies and has no present need for liquidity of
investment with respect to the Common Shares and the Warrants;
(iii) has no present plan, intention or understanding and has
made no arrangement to sell the Common Shares, the Warrants or
the Warrant Shares at any predetermined time or for any
predetermined price; (iv) has not purchased, sold or entered into
any put option, short position or similar arrangement with
respect to the Common Stock, and will not, for so long as it owns
any Common Shares, Warrants or Warrant Shares, purchase, sell or
enter into any such put option, short position or similar
arrangement in any manner that violates the provisions of the
Securities Act or the Exchange Act.
(d) No oral or written statements or representations have
been made to the Purchaser by or on behalf of the Company in
connection with the offering and sale of the Common Shares and
the Warrants hereunder other than those set forth in the SEC
Reports, or as set forth herein or in the other Transaction
Documents, and the Purchaser is not subscribing for the Common
Shares and the Warrants as a result of, or in response to, any
advertisement, article, notice or other communication published
in any newspaper, magazine or similar media or broadcast over
television or radio, or presented at any seminar or meeting.
(e) The Purchaser acknowledges that the Securities Act
restricts the transferability of securities, such as the Common
Shares, Warrants and Warrant Shares, issued in reliance upon the
exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereunder, and that, subject to
Section 5.02 hereof, the certificates representing the Common
Shares, the Warrants and the Warrant Shares will bear a legend in
substantially the following form, by which the Purchaser and each
subsequent holder of such securities will be bound:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND AS OF
THE DATE OF ORIGINAL ISSUANCE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE, ANY UNDERLYING SECURITIES) HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH SECURITIES LAWS. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE OR ANY SECURITIES
ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (A) TO HOLLYWOOD
MEDIA CORP. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT. THE HOLDER OF THIS CERTIFICATE AGREES THAT
IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY OR ANY SECURITY
ISSUED UPON CONVERSION HEREOF IS TRANSFERRED (UNLESS SUCH
SECURITY IS TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY PROPOSED TRANSFER
PURSUANT TO CLAUSES (B), (C) OR (D) ABOVE, THE COMPANY MAY
REQUIRE THAT THE TRANSFEROR FURNISH IT WITH AN OPINION OF COUNSEL
CONFIRMING THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
RESPECTIVE MEANINGS ASSIGNED TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
SECTION 4.03. NO BROKERS. No broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, placement or
similar fee or other commission in connection with the
transactions contemplated hereby based on any agreement,
arrangement or understanding with the Purchaser.
Section 4.04. RIGHT OF FIRST REFUSAL. The Purchaser
covenants, acknowledges and agrees that the Common Shares and the
Warrant Shares are subject to the terms and conditions of the
Company's Right of First Refusal as set forth in Section 2 of the
Investor's Rights Agreement dated as of January 3, 2000 between
the Company and Purchaser.
ARTICLE V
COVENANTS
SECTION 5.01. LIMITATION ON ISSUANCE OF SECURITIES.
(a) The Company will not make any offer to sell, solicit any
offer to buy, agree to sell or sell any security or right to
acquire any security, except at such time and in such manner so
as not to cause the loss of any of the exemptions for the offer
and sale of the Common Shares or the Warrants hereunder and for
the issuance of the Warrant Shares upon exercise of the Warrants
from the registration requirements under the Securities Act or
under the securities or "blue sky" laws of any jurisdiction in
which such offer, sale or issuance is made.
(b) In addition to the foregoing limitation on the issue of
securities, for a period commencing on the date of the Closing
and ending four (4) months after a registration statement
relating to the resale of the Common Shares and Warrant Shares is
declared effective, without obtaining the prior written consent
of the Purchaser, the Company will not (1) issue a floating
convertible or similar security that provides for a minimum
conversion price less than $4.5099 or (2) issue common stock or
securities convertible into common stock in a capital raising
transaction at a price that is less than 90% of the then existing
Market Price at the time of issuance. For purposes of the
foregoing "Market Price" means the lesser of (i) the ten (10) day
average closing price preceding the closing or (ii) the closing
price on the closing date of such transaction. Notwithstanding
the foregoing, the Company shall be able to issue any such
securities in connection with strategic transactions to a
strategic investor.
Section 5.02. TRANSFER RESTRICTIONS; DELIVERY OF WARRANT SHARES.
(a) The Purchaser acknowledges that any proposed offer, sale,
pledge or other transfer of Common Shares, Warrants or Warrant
Shares prior to the date that is two (2) years from the Closing
(or such other date as may be required pursuant to Rule 144 under
the Securities Act (or similar successor provision) as in effect
from time to time), in the absence of registration under the
Securities Act, is limited. Accordingly, prior to such passage
of time or such registration, the Common Shares, the Warrants or
the Warrant Shares may be offered, sold, pledged or otherwise
transferred only (i) to the Company, (ii) in an offshore
transaction in accordance with Rule 904 under the Securities Act,
(iii) pursuant to any other exemption from registration provided
by the Securities Act, (iv) pursuant to Rule 144 under the
Securities Act or (v) pursuant to an effective registration
statement under the Securities Act; in the case of any transfer
pursuant to clause (ii), (iii) or (iv), the Company shall be
entitled to receive an opinion of the selling Purchaser's
counsel, in form and substance reasonably satisfactory to the
Company, to the effect that registration is not required in
connection with such disposition. Any Common Shares or Warrants
sold to the Company may not be reissued or resold.
(b) The Company agrees to issue certificates representing
the Common Shares, Warrants or Warrant Shares without the legend
referenced in Section 5.02(a) above at such time as (i) the
holder thereof is permitted to dispose of such Common Shares,
Warrants or Warrant Shares pursuant to Rule 144 (k) under the
Securities Act (to the extent applicable), (ii) such Common
Shares, Warrants or Warrant Shares are sold to a purchaser or
Purchaser who (in the opinion of counsel to the seller or the
purchaser(s), in form and substance reasonably satisfactory to
the Company) are able to dispose of such securities publicly
without registration under the Act and such legend is no longer
required to be included on the certificates representing the
Common Shares, Warrants or Warrant Shares or (iii) such Common
Shares, Warrants or Warrant Shares are sold or are available for
resale pursuant to an effective registration statement under the
Securities Act.
(c) In the alternative to physical delivery of certificates
for Warrant Shares, if delivery of the Warrant Shares pursuant to any
conversion thereunder may be effectuated by electronic book-entry
through The Depositary Trust Company ("DTC"), delivery of Warrant
Shares pursuant to such conversion shall, if requested by the
Purchaser (or holder of Warrant Shares), settle by book-entry
transfer through DTC by the third trading day following the date
of exercise of the Warrants pursuant to the terms thereof, as
appropriate. The parties agree to coordinate with DTC to
accomplish this objective.
Section 5.03. RULES 144; CURRENT INFORMATION. For so long as
any Common Shares, Warrants or Warrant Shares are outstanding,
the Company will (i) cause its Common Stock to continue to be
registered under Section 12 of the Exchange Act, file all reports
required to be filed by it under the Securities Act and the
Exchange Act and will take such further actions as any Purchaser
may reasonably request, all to the extent required from time to
time to enable a Purchaser to sell Common Shares, Warrants and
Warrant Shares without registration under the Securities Act
pursuant to the safe harbors and exemptions provided by Rule 144
under the Securities Act (to the extent applicable), as such Rule
may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission, and (ii) furnish
the Purchaser with all reports, proxy statements and registration
statements that the Company files with the Commission or
distributes to its securityholders pursuant to the Securities Act
and the Exchange Act at the times of such filings and
distributions (unless such documents are available electronically
from the Commission or elsewhere without charge and within a
period reasonably contemporaneous with the filing thereof with
the Commission, in which case such documents need not be provided
to any Purchaser). Upon the request of a Purchaser, the Company
will deliver to the Purchaser a written statement as to whether
it has complied with the foregoing requirements.
Section 5.04. RESERVATION OF WARRANT SHARES. The Company shall
at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued shares of Common Stock
or its issued shares of Common Stock held in its treasury, or
both, sufficient shares of Common Stock to provide for the
issuance of the Warrant Shares in an amount equal to the balance
of the Warrant Shares not then yet issued.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. INDEMNIFICATION. In consideration of the
Purchaser's execution and delivery of this Agreement, the
Registration Rights Agreement and in addition to all of the
Company's other obligations under the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless the
Purchaser and all of its partners, officers, directors,
employees, members and any of the foregoing persons' agents or
other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this
Agreement) (collectively, the "Indemnitees") from and against any
and all losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any
such Indemnitee is a party to the action or which indemnification
hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of any cause of
action, suit or claim brought or made against such Indemnitee by
a third party and arising out of or resulting from the breach by
the Company of any representation, warranty or covenant in the
Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby. Notwithstanding the
foregoing, Indemnified Liabilities shall not include any
liability of any Indemnitee to the extent arising out of such
Indemnitee's breach of the Transaction Documents, willful
misconduct or fraudulent action(s). To the extent that the
foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law. Except as otherwise
set forth herein, the mechanics and procedures with respect to
the rights and obligations under this Article VI shall be the
same as those set forth in Section 4 of the Registration Rights
Agreement, including, without limitation, those procedures with
respect to the settlement of claims and Company's right to assume
the defense of claims.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. PRESS RELEASES AND DISCLOSURE. No party hereto
shall issue any press release or make any other public disclosure
related to this Agreement or any of the transactions contemplated
hereby without the prior written approval of the other party
hereto, except as may be necessary or appropriate in the opinion
of the party seeking to make disclosure to comply with the
requirements of applicable law or stock exchange rules. If any
such press release or public disclosure is so required, the party
making such disclosure shall consult with the other party prior
to making such disclosure, and the parties shall use all
reasonable efforts, acting in good faith, to agree upon a text
for such disclosure that is satisfactory to all parties.
Section 7.02. NOTICES. All notices, demands, requests,
consents, approvals or other communications required or permitted
to be given hereunder or that are given with respect to this
Agreement shall be in writing and shall be personally served or
deposited in the mail, registered or certified, return receipt
requested, postage prepaid or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery,
telegram, telex or facsimile, addressed as set forth below, or to
such other address as such party shall have specified most
recently by written notice: (i) if to the Company, to: Hollywood
Media Corp., 2255 Glades Rd., Ste. 237W, Boca Raton, Florida,
Attention: Mitchell Rubenstein, Chairman and CEO, Facsimile No.:
(561) 998-2974, with copies (which shall not constitute notice)
to: Hollywood Media Corp., 2255 Glades Rd., Ste. 237W, Boca
Raton, Florida, Attention: W. Robert Shearer, Senior Vice
President and General Counsel, Facsimile No.: (561) 998-2974;
and (ii) if to the Purchaser at the address of the Purchaser set
forth on Annex A. Notice shall be deemed given on the date of
service or transmission if personally served or transmitted by
telegram, telex or facsimile. Notice otherwise sent as provided
herein shall be deemed given on the third business day following
the date mailed or on the next business day following delivery of
such notice to a reputable air courier service.
Section 7.03. ENTIRE AGREEMENT. This Agreement (together with
the other Transaction Documents and all other documents delivered
pursuant hereto and thereto) constitutes the entire agreement of
the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions
between the parties, whether oral or written, with respect to the
subject matter hereof.
Section 7.04. AMENDMENT AND WAIVER. This Agreement may not
be amended, modified, supplemented, restated or waived except by a
writing executed by the party against which such amendment,
modification or waiver is sought to been enforced. Waivers may
be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or
provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement
or provision herein contained. No waiver or extension of time
for performance of any obligations or acts shall be deemed a
waiver or extension of the time for performance of any other
obligations or acts.
Section 7.05. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement and the rights, duties and obligations hereunder may
not be assigned or delegated by the Company or any Purchaser
without the prior written consent of the other parties hereto;
provided that the Purchaser may assign or delegate its rights,
duties and obligations hereunder to any Affiliate of the
Purchaser. Except as provided in the preceding sentence, any
purported assignment or delegation of rights, duties or
obligations hereunder made without the prior written consent of
the other party hereto shall be void and of no effect. This
Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of each of the parties and their
respective successors and permitted assigns. This Agreement is
not intended to confer any rights or benefits on any Persons
other than as set forth above.
Section 7.06. SEVERABILITY. This Agreement shall be deemed
severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as
a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be
valid and enforceable.
Section 7.07. FURTHER ASSURANCES. Each party hereto, upon the
request of any other party hereto, shall do all such further acts
and execute, acknowledge and deliver all such further instruments
and documents as may be necessary or desirable to carry out the
transactions contemplated by this Agreement.
Section 7.08. TITLES AND HEADINGS. Titles, captions and
headings of the sections of this Agreement are for convenience of
reference only and shall not affect the construction of any
provision of this Agreement.
Section 7.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, INTERPRETED UNDER, AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
Section 7.10. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, all of
which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.
HOLLYWOOD MEDIA CORP.
By: /s/ Mitchell Rubenstein
-------------------------
Name: Mitchell Rubenstein
Title: CEO
VIACOM INC.
By: /s/ Richard J. Bressler
-------------------------
Name:
Title:
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of May 1, 2001, is entered into between HOLLYWOOD MEDIA CORP.,
a Florida corporation (the "Company") and VIACOM INC., a Delaware
corporation ("Viacom" or the "Purchaser").
WHEREAS, the Company and the Purchaser have entered into
that certain Securities Purchase Agreement (the "Securities
Purchase Agreement"), dated as of April 25, 2001, pursuant to
which the Company has agreed to issue and sell to the Purchaser
an aggregate of (i) 310,425 shares of its Common Stock (the
"Common Shares"), (ii) "A" warrants to purchase up to 162,973
shares of its Common Stock and (iii) "B" warrants to acquire up
to 439,251 shares of its Common Stock (the "A" and "B" warrants
together, the "Warrants"); and
WHEREAS, pursuant to the terms of, and in partial
consideration for, the Purchaser's agreement to enter into the
Securities Purchase Agreement, the Company has agreed to provide
the Purchaser with certain registration rights with respect to
the Common Stock. "Common Stock" means the Company's Common
Stock, par value $0.01 per share;
NOW, THEREFORE, in consideration of the foregoing premises,
the representations, warranties, covenants and agreements
contained herein and in the Securities Purchase Agreement and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. Capitalized terms used herein and
defined in the Securities Purchase Agreement shall have the same
respective meanings herein as are ascribed to them therein. In
addition, the following terms shall have the meanings ascribed to
them below:
"Purchaser" shall mean the Purchaser referenced in the
preamble, and, unless the context otherwise requires, shall
include the Purchaser for so long as it owns any Registrable
Securities and any assignee or transferee of the Common Shares,
the Warrants, the Warrant Shares or the Registrable Securities to
which the registration rights conferred by this Agreement have
been transferred in compliance with this Agreement and that is
the registered holder of the Common Shares, the Warrants, the
Warrant Shares or the Registrable Securities, as the case may be.
"Registrable Securities" means all of the Common Shares, the
Warrant Shares and any other securities of the Company that are
issued or issuable upon the exercise of the Warrants (the "Common
Securities") until (i) a registration statement under the
Securities Act covering the offer and sale of the Common
Securities has been declared effective by the Commission and the
Common Securities have been disposed of pursuant to such
effective registration statement, (ii) the Common Securities are
sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provision then in force)
under the Securities Act ("Rule 144") are met, (iii) such Common
Securities have been otherwise transferred and the Company has
delivered a new certificate or other evidence of ownership for
the Common Securities not bearing a restrictive legend or (iv)
such time as, in the opinion of counsel to the Company, which
counsel shall be reasonably acceptable to the Purchaser, such
Common Securities may be sold without any time, volume or manner
limitation pursuant to Rule 144(k) (or any similar provision then
in effect) under the Securities Act.
"Registration Statement" means the registration statement
filed by the Company pursuant to Section 2.1(a) and any
additional registration statement filed by the Company pursuant
to Section 2.1(b).
"Underwriter" means a securities dealer that purchases any
Registrable Securities as principal in an underwritten offering
and not as part of such dealer's market-making activities.
"Warrant Shares" means the shares of Common Stock issuable
upon exercise of the Warrants.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1 Registration Requirements. The Company shall use
its commercially reasonable efforts to effect the registration of
the Registrable Securities (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or
facilitate the sale or distribution of all the Registrable
Securities in the manner (including manner of sale) and in all
states reasonably requested by any Purchaser. Such commercially
reasonable efforts by the Company shall include the following:
(a) The Company will as expeditiously as possible, and in no
event later than June 29, 2001 (the "Filing Deadline"), prepare
and file with the Commission a registration statement (the
"Registration Statement") on Form S-3 (if use of such form is
then available to the Company pursuant to the rules of the
Commission and, if not, on such other form promulgated by the
Commission for which the Company then qualifies and that counsel
for the Company shall deem appropriate and which form shall be
available for the resale of the Registrable Securities to be
registered thereunder in accordance with the provisions of this
Agreement and in accordance with the intended method of
distribution of such Registrable Securities), and use its
commercially reasonable efforts to cause such filed Registration
Statement to become effective by the Effectiveness Deadline. The
"Effectiveness Deadline" shall mean, as applicable, (i) in the
event such Registration Statement is not subject to review by the
Commission, five (5) business days after the date that the
Company is first advised by the Commission, whether orally or in
writing, that such Registration Statement will not be subject to
review by the Commission and (ii) in the event such Registration
Statement shall be subject to review by the Commission, the
earlier of one hundred and twenty (120) days from the date of
this Agreement or five (5) business days after the date that the
Company is first advised by the Commission, whether orally or in
writing, that it has no further comments in connection with its
review of the Registration Statement. The Company will as
expeditiously as possible prepare and file with the Commission
such amendments and supplements to the Registration Statement and
the prospectus used in connection therewith as may be necessary
to keep the Registration Statement effective for a period of not
less than: (i) in the case of a non-underwritten offering of
Registrable Securities, until there shall no longer be any
Registrable Securities or (ii) with respect to an underwritten
offering of Registrable Securities, ninety (90) days after the
commencement of the distribution of Registrable Securities
covered by the Registration Statement (but not before the
expiration of the period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable), and the
Company will comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the
intended methods of disposition by a Purchaser as set forth in
the Registration Statement.
(b) The number of Registrable Securities covered by the
initial Registration Statement shall equal 912,649 shares of
Common Stock of the Company. If at any time the initial
Registration Statement is not sufficient to cover all Registrable
Securities the Company shall as expeditiously as possible (and
in no event more than forty-five (45) days from the date of
the event that results in such change) file a post-effective
amendment to the Registration Statement (or, if necessary file
or cause to be filed a new or additional Registration Statement)
to reflect the registration of the offer and resale of such
additional or other securities and use its commercially reasonable
efforts to cause such post-effective amendment or new or additional
Registration Statement to become effective within one hundred and
twenty (120) days (or in the event such Registration Statement
is not subject to review by the Commission or, if subject to review
by the Commission, five (5) business days after the date that the
Company is first advised by the Commission, whether orally or in
writing, that such Registration Statement will not be subject to
review by the Commission or that it has no further comments in
connection with its review of the Registration Statement) from
the date of the event that results in such change. In the event
the filing of a new or additional Registration Statement is
required, references herein to the Registration Statement shall
also refer to such new or additional registration statement
(except that for purposes of Section 2.1(a) above, the Filing
Deadline shall refer to the end of the forty-five (45) day period
referenced above and the Effectiveness Deadline shall refer to
the end of the one hundred and twenty (120) day or shorter period
(based upon completion of the Commission's review of such
Registration Statement) referenced above).
(c) The Company will, prior to filing the Registration
Statement or prospectus or any amendment or supplement thereto,
furnish to the Purchaser, its counsel, and each Underwriter,
if any, of the Registrable Securities covered by such
Registration Statement copies of such Registration Statement and
prospectus or any amendment or supplement thereto as proposed
to be filed, together with exhibits thereto, as well as any comment
letters received from the Commission, which documents will be subject
to review and approval by the foregoing persons (such approval not to
be unreasonably withheld or delayed), and thereafter furnish to the
Purchaser, its counsel and each Underwriter, if any, such number
of copies of such Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus
included in such Registration Statement (including each
preliminary prospectus) and such other documents or information,
as the Purchaser, its counsel or each Underwriter may reasonably
request in order to facilitate the disposition of the Registrable
Securities.
(d) The Company will use its commercially reasonable efforts
to (i) register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions in the
United States as any Purchaser may reasonably (in light of its
intended plan of distribution) request and (ii) if applicable,
cause such Registrable Securities to be registered with or
approved by such other governmental agencies or authorities in
the United States as may be necessary by virtue of the business
and operations of the Company and do any and all other acts and
things that may be reasonably necessary or advisable to enable
such Purchaser to consummate the disposition of the Registrable
Securities; provided that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for the
fulfillment of its obligation under this paragraph (d), (B)
subject itself to taxation in any such jurisdiction or (C)
consent or subject itself to general service of process in any
such jurisdiction.
(e) The Company will promptly notify the Purchaser upon the
occurrence of any of the following events in respect of the
Registration Statement or related prospectus in respect of an
offering of Registrable Securities: (i) receipt of any request
for additional information by the Commission or any other federal
or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus;
(ii) the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the
happening of any event that makes any statement made in the
Registration Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or
documents so that (or the Company otherwise becomes aware of any
statement included in the Registration Statement, related
prospectus or documents that is untrue in any material respect or
that requires the making of any changes in the Registration
Statement, related prospectus or documents so that), in the case
of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related
prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and (v) the Company's reasonable determination that a
post-effective amendment to the Registration Statement would be
appropriate (in which event the Company will promptly make
available to the Purchaser any such supplement or amendment to
the Registration Statement and, as applicable, the related
prospectus).
(f) The Company will enter into customary agreements
(including, if applicable, an underwriting agreement in customary
form and that is reasonably satisfactory to the Company) and take
such other actions as are reasonably required in order to expedite
or facilitate the disposition of the Registrable Securities (the
Purchaser may, at its option, require that any or all of the
representations, warranties and covenants of the Company to or
for the benefit of any applicable Underwriter also be made to and
for the benefit of the Purchaser).
(g) The Company will make available to the Purchaser (and
will deliver to its counsel) and each Underwriter, if any, subject
to restrictions imposed by the United States federal government or
any agency or instrumentality thereof, copies of all
correspondence between the Commission and the Company, its
counsel or auditors and will also make available, subject to
restrictions imposed by the United States federal government or
any agency or instrumentality thereof, for inspection by the
Purchaser, its counsel, any Underwriter participating in any
disposition pursuant to a Registration Statement and any
attorney, accountant or other professional retained by the
Purchaser or such Underwriter (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause the Company's officers
and employees to supply all information reasonably requested by
any Inspectors in connection with the Registration Statement.
Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the
disclosure of such Records is necessary in the reasonable opinion
of the Inspectors to avoid or correct a misstatement or omission
in the Registration Statement or (ii) the disclosure or release
of such Records is requested or required pursuant to oral
questions, interrogatories, requests for information or documents
or a subpoena or other order from a court of competent
jurisdiction or other process; provided that prior to any
disclosure or release pursuant to clause (ii), the Inspectors
shall provide the Company with prompt notice of any such request
or requirement so that the Company may seek an appropriate
protective order or waive such Inspectors' obligation not to
disclose such Records; and, provided further, that if failing the
entry of a protective order or the waiver by the Company
permitting the disclosure or release of such Records, the
Inspectors, upon written advice of counsel, are compelled to
disclose such Records, the Inspectors may disclose that portion
of the Records that counsel has advised the Inspectors that the
Inspectors are compelled to disclose. The Company may require,
as a condition to the disclosure to any Inspector of any
confidential information, that such Inspector execute and deliver
to the Company a written agreement, in form and substance
reasonably satisfactory to the Company, pursuant to which such
Inspector agrees to the confidential treatment of such
information as contemplated above. The Purchaser agrees that
information obtained by it as a result of such inspections (not
including any information obtained from a third party who is not
prohibited from providing such information by a contractual,
legal or fiduciary obligation to the Company) shall be deemed
confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company or its
Affiliates unless and until such information is made generally
available to the public. The Purchaser further agrees that it
will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give notice to the Company and
allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to the Purchaser and to each
Underwriter, if any, a signed counterpart, addressed to the
Purchaser and such Underwriter, of (1) an opinion or opinions of
counsel to the Company and (2) a comfort letter or comfort
letters from the Company's independent public accountants, each
in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case
may be, as any Purchaser or the managing Underwriter therefor
reasonably requests. The Company agrees that, (x) upon
effectiveness of the Registration Statement and (y) if requested
by the Purchaser, upon the effectiveness of each amendment
thereto subsequent to effectiveness of the Registration
Statement, whether by the filing of a post-effective amendment
thereto or the incorporation by reference of reports subsequently
filed with the Commission, it will cause to be delivered to the
Purchaser (i) if applicable and only to the extent permitted by
the rules of the AICPA, a comfort letter in customary form from
its independent public accountants and (ii) if applicable, an
opinion of counsel to the Company, covering customary matters,
including a statement providing negative assurances as to the
absence of any untrue statement of a material fact or omission to
state any material fact required to be stated therein or
necessary to make the statements contained in the Registration
Statement and in the case of the related prospectus (as so
amended), in light of circumstance in which they were made, not
misleading.
(i) The Company will comply with all applicable rules and
regulations of the Commission, including, without limitation,
compliance with applicable reporting requirements under the
Exchange Act, and will make available to its security holders, as
soon as reasonably practicable, an earning statement covering a
period of twelve (12) months, beginning within three (3) months
after the effective date of the Registration Statement, which
earning statement shall satisfy the provisions of Section 11(a)
of the Securities Act.
(j) The Company will appoint the then existing transfer agent
and registrar for the Common Stock as its transfer agent and
registrar for all the Registrable Securities covered by the
Registration Statement not later than the effective date of the
Registration Statement.
(k) The Company shall take all steps necessary to enable the
Purchaser to avail itself of the prospectus delivery mechanism
set forth in Rule 153 (or successor thereto) under the Securities
Act, if available.
(l) In connection with an underwritten offering, the Company
will cooperate, to the extent reasonably requested by the
managing Underwriter for the offering or a Purchaser, in
customary efforts to sell the securities under the offering,
including, without limitation, participating in "road shows" on a
schedule as shall be reasonably satisfactory to, and not unduly
burdensome on, the Company; provided that the Company shall not
be obligated to participate in more than one such offering in any
twelve (12) -month period and any such participation by the
Company shall be at the expense of the managing Underwriter or
the requesting Purchaser unless the Company shall also be
offering securities in such underwritten offering.
(m) The Company may require the Purchaser promptly to furnish
in writing to the Company such information regarding the intended
methods of distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other
information as may be legally required in connection with such
registration, including, without limitation, all such information
as may be requested by the Commission or the NASD or any state
securities commission or similar authority. If a Purchaser fails
to provide such information requested in connection with such
registration within ten (10) business days after receiving such
written request, then the Company may cease pursuit of such
registration in respect of the Purchaser's Registrable Securities
until such information is provided.
(n) The Purchaser agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described
in Section 2.1(e) hereof, such Purchaser will forthwith
discontinue disposition of Registrable Securities pursuant to the
Registration Statement until such Purchaser's receipt of the
copies of the supplemented or amended prospectus contemplated by
Section 2.1(e)(iv) hereof, and, if so directed by the Company,
the Purchaser will deliver to the Company all copies, other than
permanent file copies then in the Purchaser's possession, of the
most recent prospectus covering the Registrable Securities at the
time of receipt of such notice.
(o) Notwithstanding any other provision set forth in this
Agreement, the Purchaser may not undertake to sell Registrable
Securities by means of an underwriten offering without the prior
written consent of the Company, which may be withheld by the
Company in its sole discretion.
[(p) The Purchaser may sell or transfer any and all
Registrable Securities held by it pursuant to the Registration
Statement required to be prepared and filed by the Company or any
other registration pursuant to this Agreement, notwithstanding
any other restrictions on such sales and transfers set forth in
any other agreement between the Purchaser and the Company
including without limitation the Investor Rights Agreement dated
January 3, 2000.]
SECTION 2.2 Registration Expenses. In connection with
registration hereunder, the Company shall pay the following
registration expenses incurred in connection therewith (the
"Registration Expenses"): (i) all registration and filing fees,
(ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of a single
firm of counsel retained by Company in connection with blue sky
qualifications of the Registrable Securities), (iii) printing
expenses, (iv) the Company's internal expenses (including,
without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees
and expenses incurred in connection with the listing or quotation
of the Registrable Securities, (vi) fees and disbursements of
counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company
(including the expenses of any (A) opinion letters or costs
associated with delivery by counsel to the Company of an opinion
letter or opinion letters or (B) comfort letters or costs
associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters, in each case
required by or requested pursuant to Section 2.1(h) hereof), and
(vii) the fees and expenses of any special experts retained by
the Company in connection with such registration. The Company
shall have no obligation to pay any underwriting fees, discounts
or commissions, or any transfer taxes attributable to the sale of
Registrable Securities, or the cost of any special audit required
by the Purchaser, such costs to be borne by the Purchaser.
ARTICLE III
PAYMENTS BY THE COMPANY
SECTION 3.1 Payments by the Company. In the event the
Registration Statement is not filed by the Filing Deadline or
declared effective by the Effectiveness Deadline (or after the
Registration Statement has been declared effective by the
Commission, sales of all the Registrable Securities (including
any Registrable Securities required to be registered pursuant to
Section 2.1(b) hereof) cannot be made pursuant to the
Registration Statement (by reason of a stop order, the Company's
failure to update the Registration Statement, the need to file
and have declared effective a post-effective amendment or any
other reason outside the control of the Purchaser), then the
Company will make payments to the Purchaser in such amounts and
at such times as shall be determined pursuant to this Section 3.1
as partial relief for the damages to the Purchaser by reason of
any such delay in or reduction of its ability to resell the
Registrable Securities (which remedy shall not be exclusive of
any other remedies available at law or in equity). The Company
shall pay the Purchaser an amount equal to (i) $19,500 times (ii)
the sum of: (A) the number of months (prorated per day for
partial months) following the Filing Deadline that the
Registration Statement is not filed pursuant to Section 2.1(a) or
following the Effectiveness Deadline that the Registration
Statement is not declared effective by the Commission, as the
case may be, plus (B) the number of months (prorated per day for
partial months) following the Effectiveness Deadline that sales
cannot be made pursuant to the Registration Statement after the
Registration Statement has been declared effective for more than
10 days in any 365-day period. Such amounts shall be paid in
cash.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1 Indemnification by the Company. The Company
agrees to indemnify and hold harmless the Purchaser, its
partners, Affiliates, officers, directors, employees and duly
authorized agents, and each Person or entity, if any, who
controls the Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with
the partners, Affiliates, officers, directors, employees and duly
authorized agents of such controlling Person or entity
(collectively, the "Controlling Persons"), from and against any
loss, claim, damage, liability, reasonable attorneys' fees, costs
or expenses and costs and expenses of investigating and defending
any such claim (collectively, "Damages"), joint or several, and
any action in respect thereof to which the Purchaser, its
partners, Affiliates, officers, directors, employees and duly
authorized agents, and any such Controlling Person may become
subject under the Securities Act or otherwise, insofar as such
Damages (or proceedings in respect thereof) arise out of, or are
based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or
prospectus relating to the Registrable Securities or any
preliminary prospectus, or arises out of, or are based upon, any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein (in the case of any prospectus or preliminary prospectus,
in light of the circumstances in which they were made) not
misleading, except insofar as the same are based upon information
furnished in writing to the Company by the Purchaser or an
Underwriter expressly for use therein, and shall reimburse the
Purchaser, its partners, Affiliates, officers, directors,
employees and duly authorized agents, and each such Controlling
Person for any reasonable legal and other expenses reasonably
incurred by the Purchaser, its partners, Affiliates, officers,
directors, employees and duly authorized agents, or any such
Controlling Person in investigating or defending or preparing to
defend against any such Damages or proceedings as such expenses
are incurred; provided, however, that the Company shall not be
liable to the Purchaser to the extent that any such Damages arise
out of or are based upon an untrue statement or omission made in
any preliminary prospectus if (i) the Purchaser failed to send or
deliver a copy of the final prospectus with or prior to the
delivery of written confirmation of the sale by the Purchaser to
the Person asserting the claim from which such Damages arise and
(ii) the final prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged
omission; provided further, however, that the Company shall not
be liable in any such case to the extent that any such Damages
arise out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission in any
prospectus if (x) such untrue statement or omission or alleged
omission is corrected in an amendment or supplement to such
prospectus and (y) having previously been furnished by or on
behalf of the Company with copies of such prospectus as so
amended or supplemented, the Purchaser thereafter fails to
deliver such prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the
Person asserting the claim from which such Damages arise. The
Company also agrees to indemnify any Underwriters of the
Registrable Securities, their officers and directors and each
Person or entity who controls such Underwriters on customary
terms.
SECTION 4.2 Indemnification by the Purchaser. The Purchaser,
agrees to indemnify and hold harmless the Company, its partners,
Affiliates, officers, directors, employees and duly authorized
agents and each Person or entity, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, together with the partners,
Affiliates, officers, directors, employees and duly authorized
agents of such controlling Person, to the same extent as the
foregoing indemnity from the Company to the Purchaser, but only
with reference to information related to the Purchaser or its
plan of distribution furnished in writing by the Purchaser or on
its behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary prospectus;
provided that the maximum amount for which any Purchaser shall be
liable under this indemnity shall not exceed the net proceeds
received by such Purchaser from the sale of the Registrable
Securities, pursuant to the registration statement in question,
less any amounts previously paid by the Purchaser to purchase
Registrable Securities. In case any action or proceeding shall
be brought against the Company or its partners, Affiliates,
officers, directors, employees or duly authorized agents or any
such controlling Person or its partners, Affiliates, officers,
directors, employees or duly authorized agents, in respect of
which indemnity may be sought against the Purchaser, the
Purchaser shall have the rights and duties given to the Company,
and the Company or its partners, Affiliates, officers, directors,
employees or duly authorized agents, or such controlling Person,
or its partners, Affiliates, officers, directors, employees or
duly authorized agents, shall have the comparable rights and
duties given to the Purchaser by Section 4.1. The Purchaser also
agrees to indemnify and hold harmless any Underwriters of the
Registrable Securities with reference to the same information as
to which the Purchaser agrees to indemnify the Company referenced
above, their officers and directors and each Person who controls
such Underwriters on customary terms. The Company shall be
entitled to receive indemnities on customary terms from
Underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, to the same extent as provided above, with respect
to information so furnished in writing by such persons
specifically for inclusion in any prospectus or the Registration
Statement.
SECTION 4.3 Conduct of Indemnification Proceedings.
Promptly after receipt by any person or entity in respect of which
indemnity may be sought pursuant to Section 4.1 or 4.2 (an
"Indemnified Party") of notice of any claim or the commencement
of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such
indemnity may be sought (an "Indemnifying Party"), notify the
Indemnifying Party in writing of the claim or the commencement of
such action; in the event an Indemnified Party shall fail to give
such notice as provided in this Section 4.3 and the Indemnifying
Party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was materially
prejudiced by the failure to give such notice, the
indemnification provided for in Section 4.1 or 4.2 shall be
reduced to the extent of any actual prejudice resulting from such
failure to so notify the Indemnifying Party; provided, that the
failure to notify the Indemnifying Party shall not relieve it
from any liability that it may have to an Indemnified Party
otherwise than under Section 4.1 or 4.2. If any such claim or
action shall be brought against an Indemnified Party, the
Indemnifying Party shall be entitled to participate therein, and,
to the extent that it wishes, jointly with any other similarly
notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After
notice from the Indemnifying Party to the Indemnified Party of
its election to assume the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party
for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided that the
Indemnified Party shall have the right to employ separate counsel
to represent the Indemnified Party and its controlling persons
who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party
against the Indemnifying Party, but the fees and expenses of such
counsel shall be for the account of such Indemnified Party unless
(i) the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of the Company and such Indemnified Party,
representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest
between them, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such claim or action
or separate but substantially similar or related claims or
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified
Parties or for fees and expenses that are not reasonable. No
Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any claim or
pending or threatened proceeding in respect of which the
Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party unless
such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or
proceeding. Whether or not the defense of any claim or action is
assumed by an Indemnifying Party, such Indemnifying Party will
not be subject to any liability for any settlement made without
its consent, which consent will not be unreasonably withheld.
SECTION 4.4 Contribution. If the indemnification provided
for in this Article IV is unavailable to the Indemnified Parties in
respect of any Damages referred to herein, then each Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified
Party as a result of such Damages (i) as between the Company and
the Purchaser, on the one hand, and the Underwriters, on the
other hand, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Purchaser, on
the one hand, and the Underwriters, on the other hand, from the
offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits but also
the relative fault of the Company and the Purchaser, on the one
hand, and of the Underwriters, on the other hand, in connection
with the statements or omissions that resulted in such Damages,
as well as any other relevant equitable considerations, and (ii)
as between the Company, on the one hand, and the Purchaser, on
the other hand, in such proportion as is appropriate to reflect
the relative fault of the Company and of the Purchaser in
connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits
received by the Company and the Purchaser, on the one hand, and
the Underwriters, on the other hand, shall be deemed to be in the
same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting
expenses) received by the Company and the Purchaser bear to the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the prospectus. The relative fault of the Company and
the Purchaser, on the one hand, and of the Underwriters, on the
other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and
the Purchaser or by the Underwriters. The relative fault of the
Company, on the one hand, and of the Purchaser, on the other
hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 4.4
were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as
a result of the Damages referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no Underwriter shall be required
to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities underwritten by
it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and the
Purchaser shall in no event be required to contribute any amount
in excess of the amount by which the total price at which the
Registrable Securities of the Purchaser were offered to the
public (less underwriting discounts and commissions) less the
amount paid by the Purchaser to the Company for the Common
Shares, the Warrants and the Warrant Shares exceeds the amount of
any damages that the Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Term. The registration rights provided to the
holders of Registrable Securities hereunder shall terminate on
such date as there shall be no Registrable Securities; provided,
however, that the provisions of Article IV hereof shall survive
any termination of this Agreement.
SECTION 5.2 Rule 144. The Company covenants that it will
file all reports required to be filed by it under the Securities Act
and the Exchange Act and that it will take such further action as
registered holders of Registrable Securities may reasonably
request, all to the extent required from time to time to enable
the Purchaser to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, as such Rule may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted
by the Commission. If at any time the Company is not required to
file such reports, it will, upon the reasonable request of any
registered holder of Registrable Securities, make publicly
available other information so long as necessary to permit sales
pursuant to Rule 144, within the limitations of the exemption
provided thereby. Upon the request of such Purchaser, the
Company will deliver to such Purchaser a written statement as to
whether it has complied with such requirements.
SECTION 5.3 Restrictions or Sale by the Company and
Others. If, and to the extent, reasonably requested by the managing
Underwriter or Underwriters in the case of an underwritten public
offering, that includes Registrable Securities as contemplated by
Section 2.1, the Company shall use commercially reasonable
efforts to cause its Affiliates to agree not to effect any public
sale or distribution of any securities similar to those being
registered in accordance with Section 2.1 hereof, or any
securities convertible into or exchangeable or exercisable for
such securities during the thirty (30) days prior to, and during
the period beginning on the effective date of the Registation
Statement (except as part of the Registration Statement) until
all of the Registrable Securities offered thereunder have been
sold pursuant to such underwritten public offering, provided,
however, that such period shall not exceed one hundred and eighty
(180) days following the effective date of the Registration
Statement.
SECTION 5.4 Amendment and Modification. Any provision of
this Agreement may be waived, provided that such waiver is set forth
in a writing executed by the party against whom the enforcement
of such waiver is sought. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company
has obtained the written consent of the Purchaser. No course of
dealing between or among any Persons having any interest in this
Agreement will be deemed effective to modify, amend or discharge
any part of this Agreement or any rights or obligations of any
Person under or by reason of this Agreement.
SECTION 5.5 Successors and Assigns; Entire Agreement.
This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that the
benefits and right contemplated hereunder to be provided to any
holder of the Common Shares, the Warrants, the Warrant Shares or
the Registrable Securities shall be limited to the registered
holder thereof. This Agreement and the rights, duties and
obligations hereunder may not be assigned or delegated by the
Company or the Purchaser without the prior written consent of the
other parties hereto, which shall not be unreasonably withheld.
Notwithstanding the foregoing, no consent shall be required for
the Purchaser to assign its interest to any of its Affiliates.
This Agreement, together with the Securities Purchase Agreement
and the Warrants sets forth the entire agreement and
understanding between the parties as to the subject matter hereof
and thereof and merges and supersedes all prior discussions,
agreements and understandings (written or oral) of any and every
nature between them with respect to such subject matter.
SECTION 5.6 Separability. In the event that any provision
of this Agreement or the application of any provision hereof is
declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, the remainder of this Agreement
shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that
provision held invalid shall substantially impair the benefits of
the remaining portions of this Agreement.
SECTION 5.7 Notices. All notices, demands, requests,
consents, approvals or other communications required or permitted
to be given hereunder or that are given with respect to this
Agreement shall be in writing and shall be personally served or
deposited in the mail, registered or certified, return receipt
requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery,
telegram, telex or facsimile, addressed as set forth below, or to
such other address as such party shall have specified most
recently by written notice: (i) if to the Company, to: Hollywood
Media Corp., 2255 Glades Rd., Ste. 237W, Boca Raton, Florida
33431, Attention: Mitchell Rubenstein, Chairman and CEO,
Facsimile No.: (561) 998-2974, with copies (which shall not
constitute notice) to: Hollywood Media Corp., 2255 Glades Rd.,
Ste. 237W, Boca Raton, Florida 33431, Attention: W. Robert
Shearer, Facsimile No.; (561) 998-2974 and (ii) if to the
Purchaser at the addresses for notices set forth in Annex A to
the Securities Purchase Agreement. Notice shall be deemed given
on the date of service or transmission if personally served or
transmitted by telegram, telex or facsimile. Notice otherwise
sent as provided herein shall be deemed given on the third
business day following the date mailed or on the next business
day following delivery of such notice by a reputable air courier
service.
SECTION 5.8 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, INTERPRETED UNDER, AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 5.9 Headings. The headings in this Agreement are
for convenience of reference only and shall not constitute a part of
this Agreement, nor shall they affect their meaning, construction
or effect.
SECTION 5.10 Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed to be an original
instrument, and all of which together shall constitute one and
the same instrument.
SECTION 5.11 Further Assurances. Each party shall cooperate
and take such action as may be reasonably requested by the other
party in order to carry out the provisions and purposes of this
Agreement and the transactions contemplated hereby.
SECTION 5.12 Remedies. In the event of a breach or a
threatened breach by any party to this Agreement of its
obligations under this Agreement, any party injured or to be
injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in
this Agreement and granted by law. The parties agree that the
provisions of this Agreement shall be specifically enforceable,
it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be
inadequate compensation for any loss and that any defense or
objection in any action for specific performance or injunctive
relief that a remedy at law would be adequate is waived.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.
HOLLYWOOD MEDIA CORP.
By: /s/ Mitchell Rubenstein
----------------------
Name: Mitchell Rubenstein
Title: CEO
VIACOM INC.
By: /s/ Richard J. Bressler
-----------------------
Name:
Title:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND, AS OF THE
DATE OF ORIGINAL ISSUANCE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE, ANY UNDERLYING SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR
ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND SUCH SECURITIES LAWS. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE OR ANY SECURITIES ISSUABLE UPON
THE EXERCISE HEREOF MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (A) TO HOLLYWOOD MEDIA CORP.
(THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO RULE
144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (E)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT. THE HOLDER OF THIS CERTIFICATE AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY OR ANY SECURITY
ISSUED UPON EXERCISE HEREOF IS TRANSFERRED (UNLESS SUCH SECURITY
IS TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY PROPOSED TRANSFER PURSUANT
TO CLAUSES (B), (C) OR (D) ABOVE, THE COMPANY MAY REQUIRE THAT
THE TRANSFEROR FURNISH IT WITH AN OPINION OF COUNSEL CONFIRMING
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION" AND "UNITED STATES" HAVE THE RESPECTIVE MEANINGS
ASSIGNED TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
WARRANT
to Purchase Shares of Common Stock of
HOLLYWOOD MEDIA CORP.
Certificate No. W-A-3
-----
THIS IS TO CERTIFY THAT, VIACOM INC., or its registered
assigns, is entitled to purchase in whole or in part from time to
time from HOLLYWOOD MEDIA CORP., a Florida corporation (the
"Company"), at any time up to 5:00 p.m., New York time, on May 1,
2006 (the "Expiration Date"), 162,973 shares of Common Stock, par
value $0.01, of the Company (the "Common Stock") at a purchase
price of $6.44 per share of Common Stock (the "Exercise Price",
as adjusted from time to time pursuant to Sections 2 and 4
below), subject to the terms and conditions herein. Each
exercise made hereunder must be for a minimum of the lesser of
(x) one thousand (1,000) shares of Common Stock and (y) the
entire remaining number of shares of Common Stock covered by this
Warrant. All capitalized terms used herein without definition
shall have the respective meanings assigned thereto in the
Securities Purchase Agreement, dated as of April 25, 2001 (the
"Securities Purchase Agreement"), entered into between the
Company and Viacom Inc.
SECTION 1. Exercise of Warrant. (a) At any time
until 5:00 p.m., New York time, on the Expiration Date, the
registered holder of this Warrant (the "Holder") may exercise
this Warrant, on one or more occasions, in whole or in part,
by delivering to the Company, (a) a written notice of the
Holder's election to exercise this Warrant in substantially
the form of Annex A hereto, which notice
(the "Exercise Notice") shall specify the number of shares
of Common Stock to be purchased and may be delivered by
facsimile transmission, (b) a certified or bank check or
checks payable to the Company, or by wire transfer of
immediately available funds, in an aggregate amount equal to the
aggregate Exercise Price for the number of shares of Common Stock
as to which this Warrant is being exercised (unless the Holder
elects to effect a Cashless Exercise (as hereinafter defined)
pursuant to this Section 1) and (c) this Warrant. Subject to
applicable law, in the event the Holder may resell shares of
Common Stock acquired upon exercise of this Warrant without
restriction pursuant to an effective registration statement or
otherwise, the Company shall cause the transfer agent with
respect to its Common Stock, which transfer agent is
participating in the Depositary Trust Company ("DTC") Fast
Automated Securities Transfer ("FAST") program, to electronically
transmit the shares of Common Stock issuable to the Holder upon
exercise of this Warrant by crediting the account of the Holder's
prime broker with DTC through DTC's Deposit Withdrawal Agent
Commission ("DWAC") system, within three (3) business days after
exercise of this Warrant by the Holder. In the event the Holder
otherwise elects in writing, however, or such shares of Common
Stock can not be resold without restriction, the Company shall,
as promptly as practicable and in any event within three (3)
business days after exercise of this Warrant by the Holder, cause
the transfer agent to deliver to the Holder a stock certificate
or certificates representing the aggregate number of shares of
Common Stock issuable to the Holder as a result of such exercise.
The stock certificate or certificates representing shares of
Common Stock so delivered shall be in such denominations as may
be specified in the Exercise Notice and shall be registered in
the name of the Holder or, subject to compliance with Section
9.03 below, such other name or names as shall be designated in
such Exercise Notice.
(b) Shares of Common Stock shall be deemed to have been
issued and the Holder or, subject to compliance with Section 9.03
below, any other Person so designated to be named therein shall
be deemed to have become a Holder of record of such shares,
including, to the extent permitted by law, the right to vote such
shares or to consent or to receive notice as a stockholder, as of
the date of the date of receipt of the Exercise Notice; provided
that the payment of the Exercise Price is received by the Company
within twenty-four hours of receipt of the Exercise Notice and
this Warrant is received by the Company within three (3) business
days of receipt of the Exercise Notice. If this Warrant shall
have been exercised only in part, the Company shall, at the time
of delivery of shares of Common Stock, execute and deliver to the
Holder a new Warrant evidencing the rights of the Holder to
purchase the shares of Common Stock represented by the
unexercised portion of this Warrant, which new Warrant shall in
all other respects be identical to this Warrant, or, if the
Company elects, it shall make appropriate notation on this
Warrant and the same returned to the Holder.
(c) Upon exercise of this Warrant, in whole or in part, the
Holder may elect, only at such time as there shall not be an
effective registration statement covering the resale of shares of
Common Stock to be issued upon exercise of this Warrant, to
receive a reduced number of shares of Common Stock in lieu of
tendering the Exercise Price in cash ("Cashless Exercise"). In
such case, the number of shares of Common Stock to be issued to
the Holder shall be computed using the following formula:
X = Y(A-B)
A
where: X = the number of shares of Common Stock to be
issued to the Holder;
Y = the number of shares of Common Stock for which an
election to exercise under this Warrant has been made;
A = The Market Price (as hereinafter defined) of one
share of Common Stock on the trading day immediately
prior to the date that the Exercise Notice is duly
surrendered to the Company for full or partial
exercise; and
B = the Exercise Price.
The "Market Price" per share of Common Stock or any
other security at any date means (i) the average closing sale
price for such security for the five (5) consecutive trading days
immediately prior to (but excluding) the date of determination on
The Nasdaq Stock Market, Inc., or such other U.S. national
securities exchange, as reported by The Nasdaq Stock Market, Inc.
or, if not so reported by The Nasdaq Stock Market, Inc., the
average of the high bid and low asked quotations for one share of
such security as reported by the National Quotations Bureau
Incorporated or similar organization for such five consecutive
trading days, (ii) if the closing price for such security cannot
be calculated in the manner specified in clause (i) at the
relevant time, the fair market value of one share of such
security as of the date of determination as determined in good
faith by the Board of Directors of the Company.
(d) All shares of Common Stock issuable upon the exercise of
this Warrant shall, upon payment therefor in accordance herewith,
be duly and validly issued, fully paid and nonassessable and free
and clear of any liens (unless created by or through the Holder
of this Warrant). The Company shall not be required to issue a
fractional share of Common Stock upon exercise of this Warrant.
As to any fraction of a share that the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such fraction in an amount equal to
the same fraction of the applicable Market Price determined in
accordance with the foregoing.
SECTION 2. Reset Adjustments.
(a) If on January 30, 2002, the Purchaser holds at least
75% of the Common Shares issued to it pursuant to the Securities
Purchase Agreement and 75% of any shares of Common Stock, if any,
issued upon exercise of the Purchaser's "B" Warrant (in each
case, net of any sales of Common Stock sold short by the
Purchaser), then the Exercise Price shall be reset to $5.37.
(b) If on April 30, 2002, the Purchaser holds at least
75% of the Common Shares issued to it pursuant to the Securities
Purchase Agreement and 75% of any shares of Common Stock, if any,
issued upon exercise of the Purchaser's "B" Warrant (in each
case, net of any sales of Common Stock sold short by the
Purchaser) then the Exercise Price shall be reset to $4.51.
(c) Within twenty (20) Trading Days of each of
January 30, 2002 and April 30, 2002, if the Purchaser is
entitled to a reset under this Section 2, the Purchaser
shall deliver to the Company a certificate signed by an
officer of the Purchaser certifying (i) the number of
shares of Common Shares and shares of Common Stock issued
upon the exercise of such Purchaser's "B" Warrant held by
the Purchaser as of January 30, 2002 and April 30, 2002, as
applicable, and (ii) the Purchaser's short position, if any, with
respect to the Common Stock as of January 30, 2002 and April 30,
2002, as applicable. Any shares redeemed pursuant to Section
2.02(a) of the Securities Purchase Agreement shall not be
included in any calculation under this Section 2.
(d) Each of the reset Exercise Prices set forth in
Sections 2(a) and (b) shall be adjusted consistent with the
principals set forth in Section 4 herein.
SECTION 3. Transfer, Division and Combination. Subject
to Section 9.03 hereof, transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books
of the Company, upon surrender of this Warrant to the Company,
together with a written assignment of this Warrant, substantially
in the form of Annex B hereto, duly executed by the Holder or its
agent or attorney. Upon such surrender, the Company shall,
subject to Section 9.03 hereof, (a) execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment,
(b) issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned and (c) promptly cancel this
Warrant.
SECTION 4. Antidilution Provisions.
4.01 Changes in Common Stock. In the event that at any
time or from time to time the Company shall, (i) pay a dividend or
make a distribution on its Common Stock in shares of Common Stock
or other shares of capital stock of the Company, (ii) subdivide its
outstanding shares of Common Stock into a larger number of shares
of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock or (iv)
increase or decrease the number of shares of Common Stock
outstanding by reclassification of its Common Stock, then the
number of shares of Common Stock issuable upon exercise of this
Warrant immediately after the happening of such event shall be
adjusted so that, after giving effect to such adjustment, the
Holder of this Warrant shall be entitled to receive the number of
shares of Common Stock upon exercise of this Warrant that the
Holder would have been entitled to receive had this Warrant been
exercised immediately prior to the happening of such event (or,
in the case of a dividend or distribution of shares of Common
Stock, immediately prior to the record date therefor). An
adjustment made pursuant to this Section 4.01 shall become
effective immediately after the distribution date, retroactive to
the record date therefor in the case of a dividend or
distribution in shares of Common Stock, and shall become
effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
4.02 Cash Dividends and Other Distributions. In the event
that at any time or from time to time the Company shall distribute
to holders of Common Stock (i) any dividend or other distribution
(including any dividend or distribution made in connection with a
consolidation or merger in which the Company is the surviving
corporation) of cash, evidences of its indebtedness, shares of
its capital stock or any other assets or securities or (ii) any
options, warrants, securities or other rights to subscribe for or
purchase any of the foregoing (other than (A) any dividend or
distribution described in Section 4.01, (B) any rights, options,
warrants or securities described in Section 4.03 or Section 4.04
and (C) any cash dividends or other cash distributions made to
holders of Common Stock from current or retained earnings,
provided that such dividends do not exceed $500,000 in any fiscal
year), then the number of shares of Common Stock that may be
acquired upon exercise of this Warrant immediately prior to such
record date for any such distribution shall be increased to a
number determined by multiplying the number of shares of Common
Stock that may be acquired upon the exercise of this Warrant
immediately prior to such record date for any such distribution
by a fraction, the numerator of which shall be the Market Price
per share of Common Stock as of such record date and the
denominator of which shall be such Market Price per share of
Common Stock less the sum of (x) the amount of cash, if any,
distributed per share of Common Stock and (y) the then fair value
(as determined in good faith by the Company's Board of Directors,
whose determination shall be evidenced by a board resolution that
will be sent to Holders) of the portion, if any, of the
distribution applicable to one share of Common Stock consisting
of evidences of indebtedness, shares of stock, securities, other
property, warrants, options or subscription or purchase rights;
and the Exercise Price shall be decreased to an amount determined
by dividing the Exercise Price immediately prior to such record
date by the above fraction. Such adjustments shall be made, and
shall only become effective, whenever any such distribution is
made; provided, however, that the Company is not required to make
an adjustment pursuant to this Section 4.02 if at the time of
such distribution the Company makes the same distribution to
Holders of Warrants as it makes to holders of Common Stock pro
rata based on the number of shares of Common Stock for which such
Warrants are exercisable. No adjustment shall be made pursuant
to this Section 4.02 if such adjustment would have the effect of
decreasing the number of shares of Common Stock issuable upon
exercise of this Warrant or increasing the Exercise Price.
4.03 Issuance of Common Stock. In the event that at any
time or from time to time the Company shall (other than (i) upon the
exercise, exchange or conversion of any securities of the Company
that are exercisable or exchangeable for, or convertible into,
shares of Common Stock and that are outstanding as of the date of
the issuance of this Warrant (the "Initial Issuance Date"), or
(ii) upon the exercise of stock options granted under or pursuant
to any stock option plan of the Company that has been approved by
its Board of Directors), issue shares of Common Stock for a
consideration per share that is less than the lesser of the then
effective Exercise Price or the Market Price per share of Common
Stock on the date of issuance, the number of shares of Common
Stock that may be acquired upon the exercise of this Warrant
immediately after such issuance shall be increased by multiplying
the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such issuance by a fraction,
the numerator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on the date of such issuance
plus (B) the number of additional shares of Common Stock to be
issued and the denominator of which shall be the sum of (X) the
number of shares of Common Stock outstanding on the date of such
issuance plus (Y) the number of shares of Common Stock that the
aggregate offering price of the total number of shares of Common
Stock so to be issued would purchase at the lesser of the then
effective Exercise Price or such Market Price. In the event of
any such adjustment, the Exercise Price shall be decreased to an
amount determined by dividing the Exercise Price immediately
prior to such issuance by the aforementioned fraction. Such
adjustment shall be made, and shall only become effective,
whenever such shares are issued. No adjustment shall be made
pursuant to this Section 4.03 if such adjustment would have the
effect of decreasing the number of shares of Common Stock
issuable upon exercise of this Warrant or increasing the Exercise
Price. In case the consideration for any shares of Common Stock
may be paid in whole or in part in a form other than cash, the
value of such consideration shall be as determined in good faith
by the Board of Directors of the Company. Such adjustment shall
be made successively whenever the date of such issuance is fixed.
4.04 Issuance of Convertible Securities. In the event that
at any time or from time to time the Company shall issue rights,
options or warrants to acquire, or securities convertible or
exchangeable into, Common Stock (other than the issuance by the
Company of stock options under or pursuant to any stock option
plan of the Company that has been approved by its Board of
Directors) entitling the holders thereof to acquire shares of
Common Stock at an exercise or conversion price per share that
(when aggregated, as applicable, with the price or other
consideration received for any such rights, options or warrants
exercisable for Common Stock or for such securities convertible
or exchangeable into Common Stock) for consideration per share
that is less than the lesser of the then effective Exercise Price
or Market Price on the date of issuance of such Common Stock, the
number of shares of Common Stock that may be acquired upon
exercise of this Warrant immediately after such issuance shall be
increased by multiplying the number of shares of Common Stock
that may be acquired upon exercise of this Warrant immediately
prior to such issuance by a fraction, the numerator of which
shall be the sum of (A) the number of shares of Common Stock
outstanding on the date of such issuance plus (B) the number of
additional shares of Common Stock to be issued (or into which the
convertible or exchangeable securities so to be issued are
initially convertible), and the denominator of which shall be the
sum of (X) the number of shares of Common Stock outstanding on
the date of such issuance plus (Y) the number of shares of Common
Stock that the aggregate offering price of the total number of
shares of Common Stock so to be issued (or the aggregate issue
price of the convertible or exchangeable securities so to be
issued) would purchase at the lesser of the then Effective
Exercise Price or such Market Price on the date of issuance of
such convertible securities. In the event of any such
adjustment, the Exercise Price shall be decreased to a number
determined by dividing the Exercise Price immediately prior to
such issuance by the aforementioned fraction. Such adjustment
shall be made, and shall only become effective, whenever such
rights, options, warrants or securities are issued. No
adjustment shall be made pursuant to this Section 4.04 if such
adjustment would have the effect of decreasing the number of
shares of Common Stock issuable upon exercise of this Warrant or
increasing the Exercise Price. In case the price for such
securities may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board
of Directors of the Company. Such adjustment shall be made
successively whenever the date of such issuance is fixed.
4.05 Combination; Liquidation. (a) Except as provided in
Section 4.05(b), in the event of a Combination (as hereinafter
defined), the Holder shall have the right to receive upon exercise
of this Warrant the kind and amount of shares of capital stock or
other securities or property that the Holder would have been entitled
to receive upon completion of or as a result of such Combination
had such Warrant been exercised immediately prior to such event
or to the relevant record date for any such entitlement. Unless
paragraph (b) is applicable to a Combination, the Company shall
provide, as a condition to such Combination, that the surviving
or acquiring Person (the "Successor Company") in such Combination
will enter into an agreement confirming the Holders' rights
pursuant to this Section 4.05(a) and providing for adjustments,
that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of
this Section 4.05(a) shall similarly apply to successive
Combinations involving any Successor Company.
A "Combination" means an event in which the Company
consolidates with or merges with or into another Person.
(b) In the event of (i) a Combination where
consideration to the holders of Common Stock in exchange for
their shares is payable solely in cash or (ii) the dissolution,
liquidation or winding-up of the Company, the Holder of this
Warrant shall be entitled to receive, upon surrender of this
Warrant, such cash distributions on an equal basis with the
holders of Common Stock, as if this Warrant had been exercised
immediately prior to such event, less the product of the Exercise
Price times the number of shares of Common Stock with respect to
which this Warrant was then exercisable.
In the event of any Combination described in this
Section 4.05(b), the surviving or acquiring Person and, in the
event of any dissolution, liquidation or winding-up of the
Company, the Company shall distribute as promptly as practicable
under the circumstances to the Holder upon surrender of this
Warrant, the funds, if any, necessary to pay the Holder the
amounts to which the Holder is entitled as described above.
4.06 Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges
that resulted in adjustments pursuant to this Section 4, if
any thereof shall not have been exercised, the number of shares
of Common Stock issuable upon the exercise of this Warrant shall
be readjusted pursuant to the applicable section of Section 4 as
if (i) the only shares of Common Stock issuable upon exercise
of such rights, options, warrants, conversion or exchange privileges
were the shares of Common Stock, if any, actually issued upon the
exercise of such rights, options, warrants or conversion or
exchange privileges and (ii) shares of Common Stock actually
issued, if any, were issuable for the consideration actually
received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for this
issuance, sale or grant of all such rights, options, warrants or
conversion or exchange privileges whether or not exercised and
the Exercise Price shall be readjusted inversely; provided,
however, that no such readjustment shall have the effect of
decreasing the number of shares of Common Stock issuable upon the
exercise of this Warrant below the number of shares of Common
Stock issuable upon the exercise of this Warrant, or increasing
the Exercise Price to an amount below the Exercise Price in
effect, immediately prior to any adjustment made therein on
account of such issuance, sale or grant of such rights, options,
warrants or conversion or exchange privileges.
4.07 Minimum Adjustment. The adjustments required by the
preceding sections of this Section 4 shall be made whenever and
as often as any specified event requiring an adjustment shall
occur, except that no adjustment of the Exercise Price or the
number of shares of Common Stock issuable upon exercise of this
Warrant that would otherwise be required shall be made unless and
until such adjustment either by itself or with other adjustments
not previously made increases or decreases by at least 1% the
Exercise Price or the number of shares of Common Stock issuable
upon exercise of this Warrant immediately prior to the making of
such adjustment. Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as
soon as such adjustment, together with other adjustments required
by this Section 4 and not previously made, would result in a
minimum adjustment. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of
business on the date of its occurrence. In computing adjustments
under this Section 4, fractional interests in Common Stock shall
be taken into account to the nearest one-tenth of a share.
4.08 Notice of Adjustment. Whenever the Exercise Price or
the number of shares of Common Stock and other property, if any,
issuable upon exercise of the Warrants is adjusted, as herein
provided, the Company shall deliver to the Holder of this Warrant
a certificate setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment
was calculated (including a description of the basis on which (i)
the Company's Board of Directors determined the then fair value
of any evidences of indebtedness, other securities or property or
warrants, options or other subscription or purchase rights and
(ii) the Market Price of the Common Stock was determined, to the
extent such determinations were required hereunder), and
specifying the Exercise Price and the number of shares of Common
Stock issuable upon exercise of this Warrant after giving effect
to such adjustment.
4.09 Notice of Certain Transactions. In the event that the
Company shall propose to (a) pay any dividend payable in
securities of any class to the holders of its Common Stock or to
make any other non-cash dividend or distribution to the holders
of its Common Stock, (b) offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or
any other securities, rights or options, (c) issue to the holders
of its Common Stock any (i) shares of Common Stock, (ii) rights,
options or warrants entitling the holders thereof to subscribe
for shares of Common Stock or (iii) securities convertible into,
or exchangeable or exercisable for, shares of Common Stock (in
the case of (i), (ii) and (iii), if such issuance or adjustment
would result in an adjustment hereunder), (d) effect any capital
reorganization, reclassification, consolidation or merger, (e)
effect the voluntary or involuntary dissolution, liquidation or
winding-up of the Company or (f) make a tender offer or exchange
offer with respect to the Common Stock, the Company shall within
five (5) days after any such event send the Holder a notice of
such proposed action or offer unless the same is publicly
announced. Such notice shall, to the extent the same has not
been publicly announced, specify the record date for the purposes
of such dividend, distribution or rights, or the date such
issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be
fixed, and shall, to the extent the same has not been publicly
announced and if the same would have any effect on the Common
Stock and on the number of shares of Common Stock, the number and
kind of any other shares of stock and other property issuable
upon exercise of this Warrant and the Exercise Price (after
giving effect to any adjustment pursuant to Section 4 that will
be required as a result of such action), specify such effect.
Such notice shall be given as promptly as possible and (x) in the
case of any action covered by clause (a) or (b) above, at least
10 days prior to the record date for determining holders of the
Common Stock for purposes of such action or (y) in the case of
any other such action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever
shall be the earlier. Notwithstanding anything contained herein
to the contrary, the Company shall not provide to the Holder any
material non-public information in order to satisfy its
obligations pursuant to this Section 4.09.
4.10 Adjustment to Warrant Certificate. This Warrant
Certificate need not be changed because of any adjustment made
pursuant to this Section 4, and any Warrant issued after such
adjustment may state the same Exercise Price and the same number
of shares of Common Stock issuable upon exercise of the Warrant
as are stated in this Warrant. The Company, however, may at any
time in its sole discretion make any change in the form of this
Warrant that it may deem appropriate to give effect to such
adjustments and that does not affect the substance of this Warrant,
and any Warrant thereafter issued or countersigned, whether in exchange
or substitution for this Warrant or otherwise, may be in the form
as so changed.
SECTION 5. [Intentionally Omitted]
SECTION 6. Taking of Record; Stock and Warrant Transfer
Books. In the case of all dividends or other distributions by
the Company to the holders of its Common Stock with respect to
which any provision hereof refers to the taking of a record of
such holders, the Company shall in each such case take such a
record as of the close of business on a business day.
SECTION 7. Expenses, Transfer Taxes and Other Charges.
The Company shall pay any and all expenses (other than transfer
taxes) and other charges, including all costs associated with the
preparation, issue and delivery of stock or warrant certificates,
that are incurred in respect of the issuance or delivery of
shares of Common Stock upon exercise of this Warrant pursuant to
Section 1 hereof or in connection with any division or
combination of this Warrant pursuant to Section 3 hereof. The
Company shall not, however, be required to pay any tax that may
be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in
which this Warrant is registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue
has paid to the Company the amount of any such tax, or has
established, to the satisfaction of the Company, that such tax
has been paid.
SECTION 8. No Voting Rights. This Warrant shall not
entitle the Holder to any voting or other rights as a stockholder
of the Company.
SECTION 9. Miscellaneous.
9.01 Office of Company. So long as any of this Warrant
remains outstanding, the Company shall maintain an office in the
United States of America where this Warrant may be presented
for exercise, transfer, division or combination as in this Warrant
provided. Such office shall be at 2255 Glades Road, Suite 237W
Boca Raton, Florida or at the office of such registrar and
transfer agent as the Company may from time to time designate,
unless and until the Company shall designate and maintain some
other office for such purposes and give notice thereof to all
Holders.
9.02 Notices Generally. Any notices and other communications
pursuant to the provisions hereof shall be sent in accordance
with Section 7.03 of the Securities Purchase Agreement.
9.03 Restrictions on Transferability; Restriction on Exercise.
(A) This Warrant and the shares of Common Stock issuable upon
exercise of this Warrant shall be transferable only in a
transaction that is in compliance with the provisions of the
Securities Act and applicable state securities or "blue sky"
laws, and the Holder and each of its successors and assigns shall
be bound by the provisions of this Section 9.03. In the event
this Warrant is not registered under the Securities Act and
applicable state securities or "blue sky" laws, the Company may
condition the sale, transfer or other disposition of this Warrant
(or any interest herein) upon receipt of a legal opinion, in form
and substance, and by counsel, reasonably acceptable to the
Company, to the effect that such sale, transfer or other
disposition is being made pursuant to an exemption from, or in a
transaction not subject to, any registration requirement under
the Securities Act and applicable state securities or "blue sky"
laws. No opinion shall be required to exercise this Warrant. In
the event the shares of Common Stock or other securities issuable
upon the exercise of this Warrant are not registered under the
Securities Act and applicable state securities or "blue sky"
laws, the Company may condition the sale, transfer or other
disposition of such shares or other securities (or any interest
herein) upon receipt of a legal opinion, in form and substance,
and by counsel, reasonably acceptable to the Company, to the
effect that such sale, transfer or other disposition is being
made pursuant to an exemption from, or in a transaction not
subject to, any registration requirement under the Securities Act
and applicable state securities or "blue sky" laws.
9.04 Assignment. This Warrant and the rights, duties and
obligations hereunder may not be assigned or delegated by the
Company or any Holder may not assign its rights hereunder,
without the prior written consent of the other party, which
consent shall not be unreasonably withheld. Notwithstanding the
foregoing, no consent shall be required for a transfer by a
Holder to any of its Affiliates.
9.05 Saturdays, Sundays or Holidays. If the last appointed
day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or legal
holiday, then such action may be taken or such right may be
exercised on the next succeeding day.
9.06 Governing Law. This Warrant shall be governed by, and
construed in accordance with, the law of the State of New York
without giving effect to conflicts of law principles thereof.
9.07 Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the
Holder for the Exercise Price or as a stockholder of the Company,
whether such liability is asserted by the Company, by any
creditor of the Company or any other Person.
IN WITNESS WHEREOF, the Company has duly executed this
Warrant.
Dated May 1, 2001
HOLLYWOOD MEDIA CORP.
By /s/ Mitchell Rubenstein
------------------------------
Name: Mitchell Rubenstein
Title: CEO
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND, AS OF THE
DATE OF ORIGINAL ISSUANCE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE, ANY UNDERLYING SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR
ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND SUCH SECURITIES LAWS. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE OR ANY SECURITIES ISSUABLE UPON
THE CONVERSION HEREOF MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED OTHER THAN (A) TO HOLLYWOOD MEDIA CORP.
(THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO RULE
144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (E)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT. THE HOLDER OF THIS CERTIFICATE AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY OR ANY SECURITY
ISSUED UPON CONVERSION HEREOF IS TRANSFERRED (UNLESS SUCH
SECURITY IS TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY PROPOSED TRANSFER
PURSUANT TO CLAUSES (B), (C) OR (D) ABOVE, THE COMPANY MAY
REQUIRE THAT THE TRANSFEROR FURNISH IT WITH AN OPINION OF COUNSEL
CONFIRMING THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
RESPECTIVE MEANINGS ASSIGNED TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
COMMON STOCK ADJUSTMENT WARRANT
to Purchase Shares of Common Stock of
HOLLYWOOD MEDIA CORP.
Certificate No. W-B-3
-------
THIS IS TO CERTIFY THAT VIACOM INC., or its registered
assigns, is entitled to purchase, subject to the terms and
conditions set forth herein, in whole or in part, from HOLLYWOOD
MEDIA CORP., a Florida corporation (the "Company"), at any time
in accordance with the terms and conditions set forth in
Section 1(a), up to a maximum of 439,251 shares of Common Stock,
par value $0.01 as set forth in Section 1(b) of the Company (the
"Common Stock"). A portion of the purchase price paid to the
Company on the date of original issuance of this Warrant shall be
allocable to the payment of the par value of any shares of Common
Stock issued upon exercise of this Warrant, and accordingly, no
additional exercise price shall be payable upon exercise of this
Warrant. Each exercise made hereunder must be for a minimum of
the lesser of (x) one thousand (1,000) shares of Common Stock and
(y) the entire remaining number of shares of Common Stock covered
by this Warrant. All capitalized terms used herein without
definition shall have the respective meanings assigned thereto in
the Securities Purchase Agreement, dated as of April 25, 2001
(the "Securities Purchase Agreement"), entered into between the
Company and the Purchaser named therein.
SECTION 1. (a) Exercise of Warrant. The registered
holder of this Warrant (the "Holder") may elect to exercise this
Warrant effective as of the last day of each twenty (20) Trading
Day period beginning on each of October 30, 2001, January 30, 2002,
April 30, 2002 and July 30, 2002 (each an "Exercise Period"), as
it shall elect, by delivering to the Company a written notice of
the Holder's election to exercise this Warrant in substantially
the form of Annex A hereto (the "Exercise Notice"), which notice
shall be delivered on or before the later of (i) fifteen (15)
Trading Days immediately following the expiration of each Exercise
Period or (ii) five (5) Trading Days after receipt of a notice from
the Company of the Holder's failure to provide the notice in clause
(i), and shall specify the number of shares of Common Stock to be
acquired (which shall be the number of shares determined by
Section 1(b) below for each Exercise Period). Such Exercise
Notice may be delivered by facsimile transmission.
Notwithstanding the preceding sentence, if a registration
statement has not been declared effective with respect to the
resale of the shares of Common Stock underlying this Warrant by
October 30, 2001 then the four Exercise Periods shall be delayed
until one month, four months, seven months and ten months,
respectively, after a registration statement has been declared
effective and the first twenty (20) Trading Days of each monthly
period beginning on October 30, 2001 until such time that a
registration statement has been declared effective shall each be
deemed an additional Exercise Period. A Holder may only exercise
this Warrant one time during any given Exercise Period. In
connection with the exercise of this Warrant, the Company shall
maintain a record to reflect the number of shares issued to each
Holder pursuant to each exercise of this Warrant. Subject to
applicable law, in the event the Holder may resell shares of
Common Stock acquired upon exercise of this Warrant without
restriction pursuant to an effective registration statement or
otherwise, the Company shall cause the transfer agent with
respect to its Common Stock, which transfer agent is
participating in the Depositary Trust Company ("DTC") Fast
Automated Securities Transfer ("FAST") program, to electronically
transmit the shares of Common Stock issuable to the Holder upon
exercise of this Warrant by crediting the account of the Holder's
prime broker with DTC through DTC's Deposit Withdrawal Agent
Commission ("DWAC") system, within three (3) business days after
exercise of this Warrant by the Holder. In the event the Holder
otherwise elects in writing, however, or such shares of Common
Stock can not be resold without restriction, the Company shall,
as promptly as practicable and in any event within three (3)
business days after exercise of this Warrant by the Holder, cause
the transfer agent to deliver to the Holder a stock certificate
or certificates representing the aggregate number of shares of
Common Stock issuable to the Holder as a result of such exercise.
The stock certificate or certificates representing shares of
Common Stock so delivered shall be in such denominations as may
be specified in the Exercise Notice and shall be registered in
the name of the Holder or, subject to compliance with Section
7.03 below, such other name or names as shall be designated in
such Exercise Notice.
(b) Number of Warrant Shares. The number of Warrant Shares that
will be issued upon the first exercise of this Warrant shall be:
($5.18643 - Reset Price) X 310,425 (less any shares
- ------------------------ redeemed by the Company under
Reset Price Section 2.03(a) of the Securities
Purchase Agreement)
The number of Warrant Shares that will be issued upon
each subsequent exercise of this Warrant during shall be:
[lower of {$5.18643 or Prior
Reset Price}] -Reset Price X 310,425, plus any shares
- ------------------------------- issued upon exercise of
Reset Price this Warrant during any
prior Reset Period (less
any shares redeemed by the
Company under Section
2.03(a) of the Securities
Purchase Agreement).
'"Reset Price" means for each Exercise Period, the
lowest Average Price during the twenty consecutive Trading Days
that comprise such Reset Period.
"Prior Reset Price" means the lowest Reset Price of any
Exercise Period preceding the Exercise Period in question.
"Average Price" means the average of the ten (10)
lowest closing sale prices of the Common Stock as reported by
Bloomberg L.P. during the twenty (20) consecutive Trading Days
preceding the determination date, it being understood that there
is one Average Price for each Trading Day of each Exercise
Period. Notwithstanding the preceding sentence, in no event
shall the Average Price be less than $2.15. Promptly after
determining the Reset Price during each Exercise Period, the
Company shall deliver its written calculations to the Holders.
(c) Notwithstanding any other provision of this Warrant, this
Warrant shall expire immediately if, at any time after a
registration statement with respect to the shares of Common Stock
underlying this Warrant has been declared effective, and provided
that such registration statement remains effective, the Common
Stock traded higher than $9.02 for either (i) thirty (30)
consecutive Trading Days subsequent to such effectiveness; or
(ii) thirty-five (35) out of forty (40) consecutive Trading Days
subsequent to such effectiveness provided that the average daily
trading volume during such 30 or 35 Trading Day period, as
applicable, is at least 30,000 shares of Common Stock, as
reported by Bloomberg L.P. Notwithstanding the forgoing, this
Warrant shall not expire pursuant to this Section 1(c) if (i) the
Company has breached, in any material respect, any of the
covenants contained in the Securities Purchase Agreement, the
Registration Rights Agreement or this Warrant; (ii) the Company
has failed to timely deliver to the Holder any shares issuable
upon exercise of this Warrant or the "A" Warrant pursuant to an
effective exercise of such Warrants and upon receipt of notice of
the failure to deliver such shares, has not delivered the shares
within five (5) days of receiving such notice, or (iii) the
Company has failed to remove a restrictive legend from any shares
issued upon an effective exercise of this Warrant or the "A"
Warrant within fifteen (15) days of when such legend may be
removed pursuant to Section 5.02 of the Securities Purchase
Agreement.
(d) Shares of Common Stock shall be deemed to have been issued
and the Holder or, subject to compliance with Section 7.03 below,
any other Person so designated to be named therein shall be
deemed to have become a Holder of record of such shares,
including, to the extent permitted by law, the right to vote such
shares or to consent or to receive notice as a stockholder, as of
the last day of each Exercise Period.
(e) All shares of Common Stock issuable upon the exercise of
this Warrant shall, be duly and validly issued, fully paid and
nonassessable and free and clear of any liens (unless created by
or through the Holder of this Warrant). The Company shall not be
required to issue a fractional share of Common Stock upon
exercise of this Warrant. As to any fraction of a share that the
Holder would otherwise be entitled to purchase upon such
exercise, the Company shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the
applicable Market Price determined in accordance with the
foregoing.
SECTION 2. Transfer, Division and Combination. Subject
to Section 7.03 hereof, transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books
of the Company, upon surrender of this Warrant to the Company,
together with a written assignment of this Warrant, substantially
in the form of Annex B hereto, duly executed by the Holder or its
agent or attorney. Upon such surrender, the Company shall,
subject to Section 7.03 hereof, (a) execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and
in the denominations specified in such instrument of assignment,
(b) issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned and (c) promptly cancel this
Warrant.
SECTION 3. Antidilution Provisions.
3.01 Changes in Common Stock. In the event that at any
time or from time to time the Company shall, (i) pay a dividend or
make a distribution on its Common Stock in shares of Common Stock
or other shares of capital stock of the Company, (ii) subdivide
its outstanding shares of Common Stock into a larger number of
shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or
(iv) increase or decrease the number of shares of Common Stock
outstanding by reclassification of its Common Stock, then the
number of shares of Common Stock issuable upon exercise of this
Warrant immediately after the happening of such event shall be
adjusted so that, after giving effect to such adjustment, the
Holder of this Warrant shall be entitled to receive the number of
shares of Common Stock upon exercise of this Warrant that the
Holder would have been entitled to receive had this Warrant been
exercised immediately prior to the happening of such event (or,
in the case of a dividend or distribution of shares of Common
Stock, immediately prior to the record date therefor). An
adjustment made pursuant to this Section 3.01 shall become
effective immediately after the distribution date, retroactive to
the record date therefor in the case of a dividend or
distribution in shares of Common Stock, and shall become
effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
3.02 Cash Dividends and Other Distributions. In the
event that at any time or from time to time the Company shall
distribute to holders of Common Stock (i) any dividend or other
distribution (including any dividend or distribution made in
connection with a consolidation or merger in which the Company is
the surviving corporation) of cash, evidences of its
indebtedness, shares of its capital stock or any other assets or
securities or (ii) any options, warrants, securities or other
rights to subscribe for or purchase any of the foregoing (other
than (A) any dividend or distribution described in Section 3.01,
(B) any rights, options, warrants or securities described in
Section 3.03 or Section 3.04, and (C) any cash dividends or other
cash distributions made to holders of Common Stock from current
or retained earnings, provided that such dividends do not exceed
$500,000 in any fiscal year), then the number of shares of Common
Stock that may be acquired upon exercise of this Warrant
immediately prior to such record date for any such distribution
shall be increased to a number determined by multiplying the
number of shares of Common Stock that may be acquired upon the
exercise of this Warrant immediately prior to such record date
for any such distribution by a fraction, the numerator of which
shall be the Market Price per share of Common Stock as of such
record date and the denominator of which shall be such Market
Price per share of Common Stock less the sum of (x) the amount of
cash, if any, distributed per share of Common Stock and (y) the
then fair value (as determined in good faith by the Company's
Board of Directors, whose determination shall be evidenced by a
board resolution that will be sent to Holders) of the portion, if
any, of the distribution applicable to one share of Common Stock
consisting of evidences of indebtedness, shares of stock,
securities, other property, warrants, options or subscription or
purchase rights. Such adjustments shall be made, and shall only
become effective, whenever any such distribution is made;
provided, however, that the Company is not required to make an
adjustment pursuant to this Section 3.02 if at the time of such
distribution the Company makes the same distribution to Holders
of Warrants as it makes to holders of Common Stock pro rata based
on the number of shares of Common Stock for which such Warrants
are exercisable. No adjustment shall be made pursuant to this
Section 3.02 if such adjustment would have the effect of
decreasing the number of shares of Common Stock issuable upon
exercise of this Warrant.
3.03 Combination; Liquidation. Except as provided
in Section 3.03(b), in the event of a Combination (as hereinafter
defined), the Holder shall have the right to receive upon exercise
of this Warrant the kind and amount of shares of capital stock or
other securities or property that the Holder would have been
entitled to receive upon completion of or as a result of such
Combination had such Warrant been exercised immediately prior
to such event or to the relevant record date for any such
entitlement. Unless paragraph (b) is applicable to a Combination,
the Company shall provide, as a condition to such Combination,
that the surviving or acquiring Person (the "Successor Company")
in such Combination will enter into an agreement confirming the
Holders' rights pursuant to this Section 3.03(a) and providing
for adjustments, that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 3.
The provisions of this Section 3.03(a) shall similarly apply to
successive Combinations involving any Successor Company. In the
event of an adjustment pursuant to this Section 3 at any time
prior to the end of the last Exercise Period, the per share
prices specified in Section 1(b) shall be equitably adjusted
to reflect the consideration paid in connection with such
Combination or otherwise in keeping with this Section 3.
A "Combination" means an event in which the Company
consolidates with or merges with or into another Person.
(b) In the event of (i) a Combination where consideration to
the holders of Common Stock in exchange for their shares is payable
solely in cash or (ii) the dissolution, liquidation or winding-up
of the Company, the Holder of this Warrant shall be entitled to
receive, upon surrender of this Warrant, such cash distributions
on an equal basis with the holders of Common Stock, as if this
Warrant had been exercised immediately prior to such event.
In the event of any Combination described in this Section
3.03(b), the surviving or acquiring Person and, in the event of
any dissolution, liquidation or winding-up of the Company, the
Company shall distribute as promptly as practicable under the
circumstances to the Holder upon surrender of this Warrant, the
funds, if any, necessary to pay the Holder the amounts to which
the Holder is entitled as described above.
3.04 Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges
that resulted in adjustments pursuant to this Section 3, if any
such rights, options, warrants or conversion or exchange
privilege thereof shall not have been exercised, the number of
shares of Common Stock issuable upon the exercise of this Warrant
shall be readjusted pursuant to the applicable section of Section
3 as if (i) the only shares of Common Stock issuable upon
exercise of such rights, options, warrants, conversion or
exchange privileges were the shares of Common Stock, if any,
actually issued upon the exercise of such rights, options,
warrants or conversion or exchange privileges and (ii) shares of
Common Stock actually issued, if any, were issuable for the
consideration actually received by the Company upon such exercise
plus the aggregate consideration, if any, actually received by
the Company for this issuance, sale or grant of all such rights,
options, warrants or conversion or exchange privileges whether or
not exercised; provided, however, that no such readjustment shall
have the effect of decreasing the number of shares of Common
Stock issuable upon the exercise of this Warrant below the number
of shares of Common Stock issuable upon the exercise of this
Warrant immediately prior to any adjustment made therein on
account of such issuance, sale or grant of such rights, options,
warrants or conversion or exchange privileges.
3.05 Minimum Adjustment. The adjustments required by the
preceding sections of this Section 3 shall be made whenever and
as often as any specified event requiring an adjustment shall
occur, except that no adjustment of the number of shares of
Common Stock issuable upon exercise of this Warrant that would
otherwise be required shall be made unless and until such
adjustment either by itself or with other adjustments not
previously made increases or decreases by at least 1% of the
number of shares of Common Stock issuable upon exercise of this
Warrant immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount
shall be carried forward and made as soon as such adjustment,
together with other adjustments required by this Section 3 and
not previously made, would result in a minimum adjustment. For
the purpose of any adjustment, any specified event shall be
deemed to have occurred at the close of business on the date of
its occurrence. In computing adjustments under this Section 3,
fractional interests in Common Stock shall be taken into account
to the nearest one-tenth of a share.
3.06 Notice of Adjustment. Whenever the number of
shares of Common Stock and other property, if any, issuable upon
exercise of the Warrants is adjusted, as herein provided, the
Company shall deliver to the Holder of this Warrant a certificate
setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated
(including a description of the basis on which (i) the Company's
Board of Directors determined the then fair value of any evidences
of indebtedness, other securities or property or warrants, options
or other subscription or purchase rights and (ii) the Market
Price of the Common Stock was determined, to the extent such
determinations were required hereunder), and specifying the
number of shares of Common Stock issuable upon exercise of this
Warrant after giving effect to such adjustment.
3.07 Notice of Certain Transactions.In the event that the
Company shall propose to (a) pay any dividend payable in
securities of any class to the holders of its Common Stock or to
make any other non-cash dividend or distribution to the holders
of its Common Stock, (b) offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or
any other securities, rights or options, (c) issue to the holders
of its Common Stock any (i) shares of Common Stock, (ii) rights,
options or warrants entitling the holders thereof to subscribe
for shares of Common Stock or (iii) securities convertible into,
or exchangeable or exercisable for, shares of Common Stock (in
the case of (i), (ii) and (iii), if such issuance or adjustment
would result in an adjustment hereunder), (d) effect any capital
reorganization, reclassification, consolidation or merger, (e)
effect the voluntary or involuntary dissolution, liquidation or
winding-up of the Company or (f) make a tender offer or exchange
offer with respect to the Common Stock, the Company shall send
the Holder a notice of such proposed action or offer within the
time periods specified below. Such notice shall, to the extent
the same has not been publicly announced, specify the record date
for the purposes of such dividend, distribution or rights, or the
date such issuance or event is to take place and the date of
participation therein by the holders of Common Stock, if any such
date is to be fixed, and shall, to the extent the same has not
been publicly announced and if the same would have any effect on
the Common Stock and on the number of shares of Common Stock, the
number and kind of any other shares of stock and other property
issuable upon exercise of this Warrant (after giving effect to
any adjustment pursuant to Section 3 that will be required as a
result of such action), specify such effect. Such notice shall
be given as promptly as possible and (x) in the case of any
action covered by clause (a) or (b) above, at least 10 days prior
to the record date for determining holders of the Common Stock
for purposes of such action or (y) in the case of any other such
action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of Common Stock, whichever shall be the earlier.
Notwithstanding anything contained herein to the contrary, the
Company shall not provide to the Holder any material non-public
information in order to satisfy its obligations pursuant to this
Section 3.07.
3.08 Adjustment to Warrant Certificate. This Warrant
Certificate need not be changed because of any adjustment made
pursuant to this Section 3, and any Warrant issued after such
adjustment may state the same number of shares of Common Stock
issuable upon exercise of the Warrant as are stated in this
Warrant. The Company, however, may at any time in its sole
discretion make any change in the form of this Warrant that it
may deem appropriate to give effect to such adjustments and that
does not affect the substance of this Warrant, and any Warrant
thereafter issued or countersigned, whether in exchange or
substitution for this Warrant or otherwise, may be in the form as
so changed.
SECTION 4. Taking of Record; Stock and Warrant Transfer
Books. In the case of all dividends or other distributions by
the Company to the holders of its Common Stock with respect to
which any provision hereof refers to the taking of a record of
such holders, the Company shall in each such case take such a
record as of the close of business on a business day.
SECTION 5. Expenses, Transfer Taxes and Other Charges.
The Company shall pay any and all expenses (other than transfer
taxes) and other charges, including all costs associated with the
preparation, issue and delivery of stock or warrant certificates,
that are incurred in respect of the issuance or delivery of
shares of Common Stock upon exercise of this Warrant pursuant to
Section 1 hereof or in connection with any division or
combination of this Warrant pursuant to Section 2 hereof. The
Company shall not, however, be required to pay any tax that may
be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in
which this Warrant is registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue
has paid to the Company the amount of any such tax, or has
established, to the satisfaction of the Company, that such tax
has been paid.
SECTION 6. No Voting Rights. This Warrant shall not entitle
the Holder to any voting or other rights as a stockholder of the
Company.
SECTION 7. Miscellaneous.
7.01 Office of Company. So long as any of this Warrant
remains outstanding, the Company shall maintain an office in the
United States of America where this Warrant may be presented for
exercise, transfer, division or combination as in this Warrant
provided. Such office shall be at: 2255 Glades Road, Suite 237W
Boca Raton, Florida, or at the office of such registrar and
transfer agent as the Company may from time to time designate,
unless and until the Company shall designate and maintain some
other office for such purposes and give notice thereof to all
Holders.
7.02 Notices Generally. Any notices and other
communications pursuant to the provisions hereof shall be sent in
accordance with Section 7.03 of the Securities Purchase
Agreement.
7.03 Restrictions on Transferability; Restriction on
Exercise. (A) This Warrant and the shares of Common Stock issuable
upon conversion of this Warrant shall be transferable only in a
transaction that is in compliance with the provisions of the
Securities Act and applicable state securities or "blue sky"
laws, and the Holder and each of its successors and assigns shall
be bound by the provisions of this Section 7.03. In the event
this Warrant is not registered under the Securities Act and
applicable state securities or "blue sky" laws, the Company may
condition the sale, transfer or other disposition of this Warrant
(or any interest herein) upon receipt of a legal opinion, in form
and substance, and by counsel, reasonably acceptable to the
Company, to the effect that such sale, transfer or other
disposition is being made pursuant to an exemption from, or in a
transaction not subject to, any registration requirement under
the Securities Act and applicable state securities or "blue sky"
laws. No opinion shall be required to exercise this Warrant. In
the event the shares of Common Stock or other securities issuable
upon the exercise of this Warrant are not registered under the
Securities Act and applicable state securities or "blue sky"
laws, the Company may condition the sale, transfer or other
disposition of such shares or other securities (or any interest
herein) upon receipt of a legal opinion, in form and substance,
and by counsel, reasonably acceptable to the Company, to the
effect that such sale, transfer or other disposition is being
made pursuant to an exemption from, or in a transaction not
subject to, any registration requirement under the Securities Act
and applicable state securities or "blue sky" laws.
7.04 Assignment. This Warrant and the rights, duties
and obligations hereunder may not be assigned or delegated by the
Company or any Holder without the prior written consent of the
other party, which consent shall not be unreasonably withheld.
Nothwithstanding the foregoing, no consent shall be required for
a transfer by a Holder to any of its Affiliates.
7.05 Saturdays, Sundays or Holidays. If the last or
appointed day for the taking of any action or the expiration of
any right required or granted herein shall be a Saturday, Sunday
or legal holiday then such action may be taken or such right may
be exercised on the next succeeding day.
7.06 Governing Law. This Warrant shall be governed by, and
construed in accordance with, the law of the State of New York
without giving effect to conflicts of law principles thereof.
7.07 Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the
Holder for the Exercise Price or as a stockholder of the Company,
whether such liability is asserted by the Company, by any
creditor of the Company or any other Person.
IN WITNESS WHEREOF, the Company has duly executed this
Warrant.
Dated: May 1, 2001
HOLLYWOOD MEDIA CORP.
By /s/ Mitchell Rubenstein
------------------------
Name: Mitchell Rubenstein
Title: CEO