-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QhFMDegrj/DoSMn32BnMQl6u+tWeUXPNhlP3HaIKeu3aHMAxCJ8hcqcI9Cc6i048 p/8/TS/bvjF6lmCbPb2+DA== 0000950144-06-000815.txt : 20060206 0000950144-06-000815.hdr.sgml : 20060206 20060206084756 ACCESSION NUMBER: 0000950144-06-000815 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060118 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060206 DATE AS OF CHANGE: 20060206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOLLYWOOD MEDIA CORP CENTRAL INDEX KEY: 0000912544 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 650385686 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14332 FILM NUMBER: 06579951 BUSINESS ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5619988000 MAIL ADDRESS: STREET 1: 2255 GLADES RD STREET 2: STE 237 W CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: HOLLYWOOD COM INC DATE OF NAME CHANGE: 20000511 FORMER COMPANY: FORMER CONFORMED NAME: BIG ENTERTAINMENT INC DATE OF NAME CHANGE: 19930924 8-K 1 g99426e8vk.htm HOLLYWOOD MEDIA CORP. Hollywood Media Corp.
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)   February 6, 2006 (January 18, 2006)
 
HOLLYWOOD MEDIA CORP.
 
(Exact Name of Registrant as Specified in its Charter)
         
Florida   1-14332   65-0385686
         
(State or Other Jurisdiction
of Incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)
     
2255 Glades Road, Suite 221A, Boca Raton, Florida   33431
     
(Address of Principal Executive Office)   (Zip Code)
Registrant’s telephone number, including area code   (561) 998-8000
 
Not Applicable
 
(Former Name or Former Address, If Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement.
The registrant, Hollywood Media Corp. (“Hollywood Media”), and its newly formed, indirect wholly-owned subsidiary Hollywood Fan Sites, Inc. (“Hollywood Fan Sites”), recently entered into two separate asset purchase agreements pursuant to which Hollywood Fan Sites acquired the rights to certain celebrity fan websites and related assets, as further described below. Hollywood Fan Sites will host these websites in a celebrity fan site section being created on Hollywood Media’s movie and entertainment website www.hollywood.com, which Hollywood Media expects will bring additional unique users to Hollywood.com while increasing available advertising inventory.
Asset Purchase Agreement with Prosperity Plus, Inc.
     On January 31, 2006, Hollywood Media and Hollywood Fan Sites entered into a definitive asset purchase agreement with Prosperity Plus, Inc. (“Prosperity Plus”) and its sole shareholder for the acquisition by Hollywood Fan Sites of all right, title and interest of Prosperity Plus in all of its assets related to its celebrity fan websites, including approximately 31 owned URLs and 17 hosted URLs.
     The aggregate purchase price paid by Hollywood Fan Sites for the websites and related assets was (i) $100,000 in cash and (ii) $300,000 paid by the issuance of 69,349 unregistered shares of common stock of Hollywood Media, based on the closing date fair market value calculation set forth in the asset purchase agreement.
     The foregoing description of the asset purchase agreement does not purport to be complete and is qualified in its entirety by reference to that certain Asset Purchase Agreement, dated January 31, 2006, by and among Hollywood Media Corp., Hollywood Fan Sites, Inc., Prosperity Plus, Inc. and the sole shareholder of Prosperity Plus, Inc., filed as Exhibit 10.1 hereto.
Asset Purchase Agreement with eFanGuide, Inc.
     On January 18, 2006, Hollywood Media and Hollywood Fan Sites entered into a definitive asset purchase agreement with eFanGuide, Inc. (“eFanGuide”) and each of its shareholders for the acquisition by Hollywood Fan Sites of all right, title and interest of eFanGuide in all of its assets related to its celebrity fan websites, including approximately 120 owned URLs and 5 hosted URLs.
     The aggregate purchase price paid by Hollywood Fan Sites for the websites and related assets was $216,500 paid by the issuance of 50,930 unregistered shares of common stock of Hollywood Media, based on the closing date fair market value calculation set forth in the asset purchase agreement.
     In addition, Hollywood Fan Sites entered into a three-year employment agreement with Mr. Rajiv Doshi, the President of eFanGuide. Pursuant to the terms of this employment agreement, Mr. Doshi will serve as the Director of Internet Operations for Hollywood Fan Sites at an annual salary of $80,000. On the date of his employment agreement, Mr. Doshi was also

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issued 16,114 shares of common stock of Hollywood Media under its 2004 Stock Incentive Plan. Mr. Doshi will also be entitled to receive a cash bonus equal to five percent (5%) of the net profit, if any, generated by Hollywood Fan Sites during each fiscal quarter of Hollywood Media during the term of the employment agreement, as well as other incentive and discretionary bonuses.
     The foregoing description of the asset purchase agreement and related transactions does not purport to be complete and is qualified in its entirety by reference to the following documents filed as exhibits to this Form 8-K report: (i) that certain Asset Purchase Agreement, dated January 18, 2006, by and among Hollywood Media Corp., Hollywood Fan Sites, Inc., eFanGuide, Inc. and each of the shareholders of eFanGuide, Inc., filed as Exhibit 10.2 hereto; and (ii) that certain Employment Agreement, dated January 18, 2006, by and among Hollywood Fan Sites, Inc. and Mr. Rajiv Doshi, filed as Exhibit 10.3 hereto.
Statements in this Form 8-K may be “forward-looking statements” within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties including, but not limited to, the need to manage our growth and integrate new businesses, our ability to realize anticipated revenues and cost efficiencies, our ability to develop strategic relationships, our ability to compete with other media, data and Internet companies, technology risks, the volatility of our stock price, and other risks and factors described in Hollywood Media’s filings with the Securities and Exchange Commission, including its Form 10-K for 2004 as amended. Such forward-looking statements speak only as of the date on which they are made.
SECTION 2 – FINANCIAL INFORMATION
Item 2.01 Completion of Acquisition or Disposition of Assets.
     The information regarding Hollywood Media’s acquisition of certain assets under the following captions set forth in Item 1.01 above is incorporated by reference: “Asset Purchase Agreement with Prosperity Plus, Inc.” and “Asset Purchase Agreement with eFanGuide, Inc.”
SECTION 3 — SECURITIES AND TRADING MARKETS
Item 3.02 Unregistered Sales of Equity Securities.
     The information regarding the issuance of unregistered shares of common stock of Hollywood Media under the following captions set forth in Item 1.01 above is incorporated by reference: “Asset Purchase Agreement with Prosperity Plus, Inc.” and “Asset Purchase Agreement with eFanGuide, Inc.”
     The securities described above were issued without registration under the Securities Act of 1933 by reason of the exemption from registration afforded by the provisions of Section 4(2) thereof and/or Regulation D thereunder, based upon investment representations to Hollywood Media relating thereto.

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SECTION 9 — FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits.
     (c) Exhibits.
          10.1   Asset Purchase Agreement, dated January 31, 2006, by and among Hollywood Media Corp., Hollywood Fan Sites, Inc., Prosperity Plus, Inc. and the sole shareholder of Prosperity Plus, Inc.
          10.2   Asset Purchase Agreement, dated January 18, 2006, by and among Hollywood Media Corp., Hollywood Fan Sites, Inc., eFanGuide, Inc. and each of the shareholders of eFanGuide, Inc.
          10.3   Employment Agreement, dated January 18, 2006, by and among Hollywood Fan Sites, Inc. and Mr. Rajiv Doshi.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  HOLLYWOOD MEDIA CORP.
 
 
  By:   /s/ Mitchell Rubenstein    
    Mitchell Rubenstein   
    Chief Executive Officer   
 
Date: February 6, 2006

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EX-10.1 2 g99426exv10w1.htm ASSET PURCHASE AGREEMENT - PROSPERITY PLUS, INC. Asset Purchase Agreement - Prosperity Plus, Inc.
 

EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
     This ASSET PURCHASE AGREEMENT, dated as of January 31, 2006 (this “Agreement”), is entered into by and between HOLLYWOOD MEDIA CORP., a Florida corporation (“HMC”), HOLLYWOOD FAN SITES, INC., a Delaware corporation and an indirect wholly-owned subsidiary of HMC (“Buyer”), PROSPERITY PLUS, INC., a California corporation (“Seller”), and Mr. Jacob Cheng, as the sole stockholder of the Seller (the “Stockholder”).
     WHEREAS, Seller is the registered owner or the website host of the Domain Names (as hereinafter defined);
     WHEREAS, upon the terms and subject to the conditions hereinafter set forth, Seller desires to sell, assign and transfer to Buyer, and Buyer desires to purchase and acquire from Seller, all of Seller’s right, title and interest in the Domain Names and certain other assets of Seller related to the Domain Names; and
     NOW THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1 Defined Terms. In addition to terms defined elsewhere in this Agreement, the following terms when utilized in this Agreement, unless the context otherwise requires, shall have the meanings indicated, which meanings shall be equally applicable to both the singular and plural forms of such terms:
     “Affiliated Group” means any affiliated group within the meaning of Section 1504 of the Code, or any consolidated, combined, unitary or similar group defined under a similar provision of state, local or foreign law.
     “Authority” means any governmental, regulatory or administrative body, agency, commission, board, arbitrator or authority, any court or judicial authority, any public, private or industry regulatory authority, whether international, national, federal, state or local.
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Lien” shall mean any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement or other real estate declaration, covenant, condition, restriction or servitude, transfer restriction under any shareholder or similar agreement, or encumbrance.

 


 

     “Person” means any corporation, partnership, joint venture, limited liability company, organization, entity, Authority or natural person.
     “Registrar” means Network Solutions, GoDaddy.com, Inc. or other applicable domain name registrar.
     “Tax” or “Taxes” shall mean all taxes, charges, fees, imposts, levies or other assessments by any Authority, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, and all interest, penalties, fines, additions to tax or other amounts imposed by any Authority which relate in any way to the assessment of collection of any taxes or the filing of any Tax Return, and shall include any transferee or successor liability in respect of taxes (whether by contract or otherwise) and any liability in respect of any tax as a result of being a member of any Affiliated Group, including any consolidated, combined, unitary or similar group.
     “Tax Return” means any return (including any consolidated, combined or unitary return in which Seller is, or was, included or includible), declaration, report, claim for refund, separate election or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
ARTICLE II
ACQUISITION AND TRANSFER OF ASSETS
     Section 2.1. Assets to be Acquired. Upon the terms and subject to the conditions hereinafter set forth, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller (the “Acquisition”), free and clear of all Liens, all right, title and interest of Seller in, to and under all of the following assets, properties, rights, contracts, claims, operations and business of Seller (collectively, the “Assets”) (but excluding the Excluded Assets, as defined in Section 2.2 below), whether or not appearing on the books of Seller:
     (a) all of the Internet domain names owned by the Seller located at the URLs listed on Schedule A attached hereto (collectively, the “Owned Domain Names”);
     (b) all right, ownership and interest of the Seller in the Internet domain names hosted by the Seller located at the URLs listed on Schedule B attached hereto (collectively, the “Hosted Domain Names” and, together with the Owned Domain Names, the “Domain Names”);

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     (c) all trademarks, logos, copyrights, patents, trade names, other intellectual property, and other rights, including any and all registrations and applications for registration of such rights for the Domain Names;
     (d) all of Sellers’ rights relating to the existing Domain Name registration(s) with the Registrar;
     (e) all contracts of Seller related to the Domain Names; and
     (f) all goodwill relating to the foregoing Assets.
     Section 2.2. Excluded Assets. Notwithstanding anything in Section 2.1 to the contrary, the parties hereto expressly agree that Seller is not hereunder selling, assigning, transferring, conveying or delivering to Buyer, and Buyer is not purchasing, acquiring or accepting, the following assets, rights and properties (collectively, the “Excluded Assets”):
     (a) any claim, right or interest in or to any refund for federal, state or local franchise, income or other taxes or fees of any nature whatsoever for periods on or prior to the Closing Date (as defined in Section 10.1 below) and any interest (or similar amount) thereon;
     (b) any of Seller’s corporate books and records of internal proceedings or tax records, and any books and records that Seller is required by law to retain (the “Corporate Records”); provided, that Buyer shall have access to the same to the extent permitted by Section 11.2 below;
     (c) any employment, consulting or similar agreements; and
     (d) any lease for personal or real property.
     Section 2.3. Assumed and Excluded Liabilities.
     (a) Except with respect to any of the liabilities set forth on Schedule C attached hereto, Buyer shall not assume or be bound by any obligations, liabilities (including without limitation, liabilities in respect of Taxes, “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) or any other pension plans or employee benefit arrangements) or commitments of Seller or any of its affiliates of any kind, character or description, whether absolute, accrued, known, unknown, asserted, unasserted, due or to become due, contingent or otherwise (“Liabilities”), in connection with the Assets or otherwise.
     (b) Any ad valorem Taxes relating to a period straddling the Closing Date shall be prorated to the Closing Date, and the portion allocable to the period prior to the Closing Date shall be promptly paid or reimbursed by Seller, and the portion allocable to the period after the Closing Date shall be promptly paid or reimbursed by Buyer. All other Liabilities of Seller shall remain the sole responsibility of Seller.

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ARTICLE III
CONSIDERATION
     Section 3.1. Amount and Form of Consideration. As consideration for the transfer of the Assets (the “Consideration”), on the Closing Date Buyer shall:
     (a) pay to Seller a cash amount equal to one hundred thousand dollars ($100,000) by wire transfer of immediately available funds or such other payment method agreed upon by the parties; and
     (b) cause HMC to issue to Seller that number of unregistered shares of common stock of HMC (the “Shares”) equal to the quotient of (i) Three Hundred Thousand Dollars ($300,000) divided by (ii) the Fair Market Value (as defined below) of the common stock of HMC. For the purposes hereof, “Fair Market Value” means the average closing sales price of the common stock of HMC on the ten trading days prior to the Closing Date 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 stock as reported by the National Quotations Bureau Incorporated or similar organization for the ten trading days prior to the closing date of the Agreement; provided, that if none of the calculation methods set forth above are applicable, then Fair Market Value shall be determined in good faith by the Board of Directors of HMC. The Shares shall be available for sale, through one or more market makers or other registered broker/dealer designated by HMC, in accordance with Rule 144 promulgated under the Securities Act of 1933, as amended, at any time following the one (1) year anniversary date of the Closing Date.
     Section 3.2. Allocation of Purchase Price. The Consideration and other relevant items shall be allocated among the Assets acquired hereunder by Buyer in accordance with the requirements of Section 1060 of the Code. Buyer shall provide Seller with a draft of such allocation within ninety (90) days after the Closing Date. Seller shall notify Buyer within thirty (30) days of receipt of such draft allocation of any objection Seller may have thereto. Seller and Buyer agree to resolve any disagreement with respect to such allocation in good faith consistent herewith. Seller and Buyer each agree to report and file all Tax Returns (including amended Tax Returns and claims for refund) consistent with such allocation, and shall take no position contrary thereto or inconsistent therewith (including, without limitation, in any audits or examinations by any taxing authority or any other proceedings). Seller and Buyer shall cooperate in the filing of any forms (including Form 8594) with respect to such allocation, including any amendments to such forms required with respect to any adjustment to the Consideration, pursuant to this Agreement. Notwithstanding any other provisions of this Agreement, the foregoing agreement shall survive the Closing Date without limitation.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE STOCKHOLDER
Seller and the Stockholder hereby represent and warrant to HMC and Buyer, as of the date hereof and through the Closing Date, as follows:
     Section 4.1. Organization. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
     Section 4.2. Authorization of Agreement. Seller and the Stockholder have full right, power, legal capacity and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by Seller and/or Stockholder in connection with the consummation of the transactions contemplated by this Agreement (all such other agreements, documents, instruments and certificates are hereafter collectively referred to as the “Seller Documents”) and to perform fully their respective obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and each of the Seller Documents have been duly and validly authorized and approved by the Board of Directors and all of the stockholders of Seller and by all other necessary corporate action on behalf of Seller. This Agreement has been, and on or prior to the Closing each of the Seller Documents will be, duly and validly executed and delivered by Seller and the Stockholder and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the Seller Documents when so executed and delivered will constitute, the legal, valid and binding obligation of Seller and the Stockholder, enforceable against Seller and the Stockholder in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
     Section 4.3. Consents and Approvals; No Violations. (a) No filing with, notification to or consent, authorization, waiver, approval, order, franchise, license, certificate or permit (collectively, “Permits”) of, any Authority is necessary for Seller’s or the Stockholder’s execution, delivery or performance of this Agreement or any of the Seller Documents or the consummation by Seller and the Stockholder of the transactions contemplated by this Agreement and the Seller Documents.
     (b) None of the execution and delivery by Seller and the Stockholder of this Agreement and the Seller Documents, the consummation of the transactions contemplated hereby or thereby or compliance by Seller or the Stockholder with any of the provisions hereof or thereof will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of Seller, (ii) violate any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award (each, an “Order”) or statute, rule or regulation of any Authority by which Seller, the Stockholder or any of their respective properties or assets are

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bound, (iii) conflict with, violate, result in the breach or termination of, or (with or without due notice or the lapse of time or both) constitute a default or give rise to any “takeback” right or right of termination or acceleration or right to increase the obligations under or otherwise modify any of the terms, conditions or provisions of any note, bond, mortgage, Permit, indenture, contract, agreement or other instrument or obligation to which Seller or the Stockholder is a party, or by which Seller, the Stockholder or any of their respective properties or assets are or may be bound, or (iv) result in the creation of any Lien upon any of the Assets.
     (c) There has been no claim, action or proceeding of any kind at any time (including, without limitation, any claim letter to Seller, the Stockholder or any of their respective affiliates or any complaint or objection to the Registrar or any long distance carrier) asserting that any of the Domain Names or any of the Assets violate any law, regulation, or order of any government body or any rights of any third party, including without limitation any copyright, patent, trademark, or other intellectual property rights.
     Section 4.4. Title to Assets. Seller has good and marketable title to all of the Assets, free and clear of all Liens. Upon the sale, assignment, transfer and conveyance of the Assets to Buyer hereunder, there will be vested in Buyer good and marketable title to such Assets, free and clear of all Liens.
     Section 4.5. Domain Names.
     (a) The Domain Names were registered with the Registrar as of the dates set forth on Schedule A attached hereto and, at all times since such dates, said registrations have been in effect and all registration fees have been duly paid.
     (b) Except as set forth on Schedule A attached hereto, at all times since the Domain Names were registered, Seller has been the sole owner of the Domain Name and no other party has had, or claimed to have, any right, claim, lien or other interest in or to the Domain Name.
     (c) Seller has been the sole owner of each of the Assets at all times since each such Asset was created or otherwise came into being and no other party has had, or claimed to have, any right, claim, lien or other interest in any of the Related Assets.
     Section 4.6. Title to Stock. All of the issued and outstanding shares of the capital stock of Seller are owned by the Stockholder, are duly authorized, validly issued, fully paid and nonassessable, are free of all Liens, and have been issued in compliance with all applicable securities laws. There are no outstanding (a) options or warrants to acquire shares of capital stock of Seller or (b) any other securities that are convertible into, or exchangeable for, capital stock of Seller.
     Section 4.7. Brokers. No broker, finder or investment banker is entitled to any brokerage fee, finder’s fee or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or the Stockholder.

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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF HMC AND BUYER
HMC and Buyer each represent and warrant to Seller, as of the date hereof and through the Closing Date, as follows:
     Section 5.1. Organization. HMC is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
     Section 5.2. Authorization of Agreement. HMC and Buyer each have full corporate power and authority to execute and deliver this Agreement and to perform fully their respective obligations hereunder. The execution, delivery and performance by HMC and Buyer of this Agreement have been duly authorized by the respective Boards of Directors of HMC and Buyer and by all other necessary corporate action on the part of HMC and Buyer. This Agreement has been duly and validly executed and delivered by each of HMC and Buyer and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes the legal, valid and binding obligation of each of HMC and Buyer, enforceable against each of HMC and Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
     Section 5.3. Consents and Approvals; No Violations.
     (a) Except for filings, notifications, authorizations, consents and approvals as may be required under federal and state securities or blue sky laws, no filing with, notification to or Permit of, any Authority is necessary for HMC’s or Buyer’s execution, delivery or performance of this Agreement or the consummation by HMC and Buyer of the transactions contemplated by this Agreement.
     (b) None of the execution and delivery by HMC or Buyer of this Agreement, the consummation of the transactions contemplated hereby or compliance by HMC and Buyer with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of HMC or Buyer, (ii) to the best of HMC’s and Buyer’s knowledge, violate any Order or statute, rule or regulation of any Authority by which HMC, Buyer or any of their respective properties or assets are bound, or (iii) conflict with, violate, result in the breach or termination of, or (with or without due notice or the lapse of time or both) constitute a default or give rise to any “takeback” right or right of termination or acceleration or right to increase the obligations under or modify any of the terms, conditions or provisions of any note, bond, mortgage, license, franchise, Permit, indenture, agreement or other instrument or

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obligation to which HMC or Buyer is a party, or by which HMC, Buyer or any of their respective properties or assets is or may be bound.
     Section 5.4. Brokers. No broker, finder or investment banker is entitled to any brokerage fee, finder’s fee or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of HMC or Buyer.
ARTICLE VI
COVENANTS OF SELLER AND THE STOCKHOLDER
     Section 6.1. Public Announcements. Seller and the Stockholder agree that they shall not issue any press release or make any public statement, announcement or filing concerning this Agreement or any aspect of the transactions contemplated hereby, except as may be required by applicable law or with the prior consent of HMC and Buyer. Seller and the Stockholder agree that they shall not issue any such release or make any such statement, announcement or filing required by applicable law except after prior consultation with an prior written approval of Buyer, which approval shall not be unreasonably withheld.
     Section 6.2. Consents. Seller and the Stockholder shall use their diligent, good faith efforts to obtain, at the earliest practicable date, all consents and approvals required to consummate the transactions contemplated by this Agreement. Seller and the Stockholder agree to execute and deliver such instruments and promptly take such other actions as may reasonably be required to consummate the transactions contemplated hereby in accordance with the terms hereof.
     Section 6.3. Taxable Transaction. Seller and the Stockholder agree to treat this transaction as a fully taxable transaction for Tax purposes and shall not take any actions inconsistent with such treatment.
     Section 6.4. Non-Competition and Non-Solicitation. During the Restricted Period, each of the Seller and the Stockholder agrees not to, directly or indirectly, alone or as a partner, officer, director, employee, consultant, agent, independent contractor, member or stockholder of any Person, engage in any business activity in the Restricted Area which is directly or indirectly in competition with the products or services being developed, manufactured, marketed, sold or otherwise provided by the Business or business plans of Buyer or its affiliates or which is directly or indirectly detrimental to the Business; provided, however, that the record or beneficial ownership by Seller or the Stockholder of an aggregate of five percent (5%) or less of the outstanding publicly traded capital stock of any Person for investment purposes shall not be deemed to be in violation of this Section 6.4 so long as the neither Seller nor the Stockholder is an officer, director, employee or consultant of such Person. Seller and the Stockholder further agree that, during the Restricted Period, they shall not in any capacity, either separately, jointly or in association with others, directly or indirectly do any of the following: (a) employ or seek to employ any Person or agent who is then employed or retained by Buyer or its affiliates (or who was so employed or retained at any time within the two (2) years prior to the date Seller or the Stockholder employs or seeks to employ such Person); (b) solicit, induce, or influence any

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proprietor, partner, stockholder, lender, director, officer, employee, joint venturer, investor, consultant, agent, lessor, supplier, customer or any other Person which has a business relationship with Buyer or its affiliates, at any time during the Restricted Period, to discontinue or reduce or modify the extent of such relationship with Buyer or its affiliates; and (c) submit, solicit, encourage or discuss any proposal, plan or offer to acquire an interest in any of Buyer’s or its affiliates’ identified potential acquisition candidates. For purposes of this Section 6.4: (i) “Business” shall mean the hosting of celebrity fan web sites on the Internet; (ii) “Restricted Period” shall mean five (5) years after the date of this Agreement; and (iii) “Restricted Area” shall mean North America and the United Kingdom. This provision shall inure to the benefit of, be enforceable by and be binding upon the parties hereto and their respective successors and assigns.
     Section 6.5 Notice of Breaches of Representations and Warranties. Seller shall immediately notify HMC and Buyer in writing of any claim, action or proceeding involving the actual or alleged breach of any of the representations and warranties of Seller set forth in Article IV or elsewhere in this Agreement and provide whatever information, documents and other cooperation may be reasonably requested by HMC or Buyer; provided, that such notice shall not relieve Seller of any of its indemnification obligations set forth in this Agreement.
ARTICLE VII
COVENANTS OF HMC AND BUYER
     Section 7.1. Taxable Transaction. HMC and Buyer agree to treat this transaction as a fully taxable transaction for Tax purposes and shall not take any actions inconsistent with such treatment.
     Section 7.2. Further Actions. HMC and Buyer agree to execute and deliver such instruments and take such other actions as may reasonably be required to consummate the transactions contemplated hereby in accordance with the terms hereof.
ARTICLE VIII
CONDITIONS PRECEDENT TO HMC’S AND BUYER’S OBLIGATIONS
     Section 8.1. Conditions. The obligation of HMC and Buyer to consummate the Acquisition on the Closing Date is subject to the satisfaction of the following conditions (any or all of which may be waived by HMC and Buyer, in their sole discretion, in whole or in part, to the extent permitted by applicable law):
     (a) each of the representations and warranties of Seller contained herein shall be true and correct in all material respects on and as of the Closing Date;
     (b) (i) no judicial, administrative or arbitral action, suit, proceeding (public or private), claim or governmental proceeding (each, a “Legal Proceeding”) shall have been instituted or threatened or claim or demand made against Seller, the Stockholder, HMC or Buyer seeking to restrain or prohibit or to obtain damages with respect to the consummation of the transactions contemplated by this Agreement and (ii) there shall not be in effect any Order of an

-9-


 

Authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement;
     (c) Buyer or Seller shall have received all third-party consents and approvals and all necessary Authority approvals;
     (d) Buyer shall have received a certificate of the Secretary of Seller, dated the Closing Date, setting forth resolutions of the Board of Directors and of the stockholders authorizing the execution and delivery of this Agreement and the Seller Documents hereunder and the consummation of the transactions contemplated hereby and thereby, and certifying that such resolutions were duly adopted and have not been rescinded or amended as of the Closing Date; and
     (e) Seller shall have executed and delivered to Buyer (i) all documents to be delivered at the Closing in accordance with the terms of this Agreement and (ii) such other documents and instruments as Buyer may reasonably request and which Seller can obtain with reasonable commercial efforts in order to consummate the transactions contemplated by this Agreement.
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS
     Section 9.1 Conditions. The obligation of Seller to consummate the Acquisition on the Closing Date is subject to the satisfaction of the following conditions (any or all of which may be waived by Seller, at the sole option of Seller, in whole or in part to the extent permitted by applicable law):
     (a) each of the representations and warranties of HMC and Buyer contained herein shall be true and correct in all material respects on and as of the Closing Date; and
     (b) HMC and Buyer shall have executed and delivered to Seller (i) all documents to be delivered at the Closing in accordance with the terms of this Agreement, and (ii) such other documents and instruments as Seller may reasonably request and which HMC and Buyer can obtain with reasonable commercial efforts in order to consummate the transactions contemplated by this Agreement.
ARTICLE X
THE CLOSING
     Section 10.1 Closing Date. Except as hereinafter provided, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Buyer, or such other place as mutually agreed upon in writing by the parties, at 10:00 a.m. on January 31, 2006 or such other time and place as Seller, HMC and Buyer may mutually agree in writing. The date on which the Closing of the Acquisition occurs is referred to herein as the “Closing Date.”

-10-


 

     Section 10.2 Proceedings at the Closing. All proceedings to be taken and all documents to be executed and delivered by Seller and the Stockholder in connection with the Closing shall be reasonably satisfactory in form and substance to Buyer and its counsel. All proceedings to be taken and all documents to be executed and delivered by HMC and Buyer in connection with the Closing shall be reasonably satisfactory in form and substance to Seller and its counsel. All proceedings to be taken and all documents to be executed and delivered by both parties at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed taken nor any documents executed or delivered until all have been taken and delivered.
     Section 10.3 Deliveries by Seller to HMC and Buyer. At the Closing, Seller shall deliver, or shall cause to be delivered, to HMC and Buyer the following:
     (a) a bill of sale and assignment agreement in the form attached as Exhibit I hereto (the “Bill of Sale and Assignment Agreement”) duly executed by Seller;
     (b) for each Domain Name to be assigned to Buyer as part of the Assets, a registrant name change agreement duly executed by Seller, or such other procedure or agreements as required by the Registrar to effectuate the assignment referenced above;
     (c) all other assignments and other instruments or documents as shall be reasonably necessary in the judgment of Buyer to evidence the sale, assignment, transfer and conveyance by Seller to Buyer of the Assets in accordance with the terms hereof, free and clear of all Liens;
     (d) copies of all approvals and consents referred to in Section 8.1(c) above; and
     (e) the certified resolutions of the Board of Directors and shareholders of Seller referred to in Section 8.1(d) above.
     Section 10.4 Deliveries by Buyer to Seller. At the Closing, HMC and Buyer shall deliver to Seller the Consideration in accordance with Section 3.1 above.
ARTICLE XI
ADDITIONAL POST-CLOSING COVENANTS
     Section 11.1 Domain Name Transfers and Usage.
     (a) Upon receipt of the registrant name change agreements from Seller in accordance with Section 10.3(b) above, Buyer shall countersign each registrant name change agreement and forward them to the Registrar. If the Registrar does not effect the transfers of the Domain Names to Buyer upon the initial filings of the registrant name change agreements, then Seller shall use its best efforts to resolve as quickly as possible with Buyer and the Registrar any problems affecting such transfers, including, without limitation, promptly executing and filing such additional or revised documents as may be requested by the Registrar or as may otherwise be necessary or appropriate to effect such transfers (including, without limitation, any such documents required by any change in the procedures of the Registrar or the long distance

-11-


 

carriers). Immediately upon Buyer’s receipt of email or written confirmation from the Registrar that it has transferred the Domain Names to Buyer, Buyer shall so notify Seller in writing.
     (b) Seller and the Stockholder each covenant that, at all times on or after the Closing Date, Seller and the Stockholder will not make any further use of any kind of the Assets, including the Domain Names.
     Section 11.2 Further Assurances by Seller. From time to time after the Closing Date, Seller will, at the request of HMC or Buyer, execute and deliver such other and further instruments of sale, assignment, transfer and conveyance and take such other and further actions as Buyer may reasonably request in order to make all the benefits of the rights of Seller included in the Assets available to Buyer, to vest in Buyer and put Buyer in possession of the Assets and to transfer to Buyer any contracts and rights of Seller relating to the Assets and to assure to Buyer the benefits thereof and effectuate fully the purposes of this Agreement.
     Section 11.3 Preservation of Corporate Records. Seller shall preserve and keep the Corporate Records for a period of seven years from the Closing Date and shall make such Corporate Records and personnel, if any, of Seller available to Buyer as Buyer may reasonably require (a) in connection with, among other things, any insurance claims by, Legal Proceedings against or governmental investigations of Buyer or (b) in order to enable Buyer to comply with its obligations under the Code, any other applicable statute with respect to taxation, this Agreement and each other agreement, document or instrument contemplated hereby. If Seller wishes to destroy such Corporate Records after such seven year period, then Seller shall first give ninety (90) days prior written notice to Buyer and Buyer shall have the right at its option and expense, upon prior written notice given to Seller within that ninety (90) day period, to take possession of the Corporate Records within one hundred eighty (180) days after the date of such notice.
     Section 11.4 Confidentiality. From and after the Closing Date, none of Seller, any of its employees or the Stockholder shall divulge, furnish or make available to any person any knowledge or information with respect to the Assets or Buyer (other than in the regular course and in furtherance of the Buyer’s business) which is, or which Seller is advised or has reason to believe is, confidential (including, but not limited to, information relating to any marketing, financial or personnel matters in connection with the Assets).
ARTICLE XII
INDEMNIFICATION
     Section 12.1 Indemnification.
     (a) Seller and the Stockholder agree to jointly and severally indemnify and hold HMC, Buyer and their respective subsidiaries, advisors, agents, employees, directors, officers and stockholders harmless from and against any and all losses, liabilities, obligations, judgments, damages, deficiencies, costs, penalties and expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively, “Losses”) based upon, attributable to or resulting from:

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     (i) (A) any misrepresentation or breach of warranty on the part of Seller or the Stockholder under this Agreement or any of the Seller Documents or (B) any breach of covenant or other agreement on the part of Seller or the Stockholder under this Agreement, or any of the Seller Documents;
     (ii) any Liabilities of Seller not expressly assumed by Buyer under the terms of this Agreement, including, without limitation:
          (A) any liabilities and obligations arising out of or based upon the conduct of the business of Seller prior to the Closing Date;
          (B) any claims for any injury to person or property attributable to any services rendered by Seller prior to the Closing Date, regardless of whether such claims are asserted prior to or after the Closing;
          (C) any claims by any employee or former employee of Seller arising out of the employment or termination of employment of the employee or former employee on or prior to the Closing Date or as a result of the transactions contemplated by this Agreement; and
          (D) any third party claims with respect to occurrences or events that occurred on or prior to the Closing Date and relate to Seller, its employees or the Assets;
     (iii) any liabilities and obligations, based in any way on agreements, arrangements or understandings made by or on behalf of Seller or the Stockholder, for any brokerage fees, finder’s fees, commissions or like payments in respect of the transactions contemplated by this Agreement;
     (iv) any costs incurred by Buyer in connection with any claims or disputes arising from the requirements of any applicable bulk sales laws; and
     (v) all actions, suits, proceedings, demands, assessments, judgments, costs, penalties and expenses, including reasonable attorneys’ fees, incident to the foregoing.
     (b) HMC and Buyer agree to jointly and severally indemnify and hold Seller and the Stockholder harmless from and against any and all Losses attributable to or resulting from:
     (i) (A) any misrepresentation or breach of warranty on the part of HMC or Buyer under this Agreement or (B) any breach of covenant or other agreement on the part of HMC or Buyer under this Agreement;
     (ii) to the extent Buyer is not indemnified with respect thereto under Section 12.1(a), any claims that arise from Buyer’s ownership or operation of the Assets subsequent to the Closing Date;
     (iii) any liabilities and obligations, based in any way on agreements, arrangements or understandings made by or on behalf of HMC or Buyer, for any

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brokerage fees, finder’s fees, commissions or like payments in respect of the transactions contemplated by this Agreement; and
     (iv) all actions, suits, proceedings, demands, assessments, judgments, costs, penalties and expenses, including reasonable attorneys’ fees, incident to the foregoing.
     Section 12.2 Procedures for Indemnification. Whenever a claim shall arise for indemnification under Section 12.1 above, with the exception of claims for litigation expenses in respect of a litigation as to which a notice of claim, as provided below in this Section 12.2, has previously been given, which expenses shall be funded on an ongoing basis, the party entitled to indemnification (the “Indemnified Party”) shall promptly notify the party from whom indemnification is sought (the “Indemnifying Party”) of such claim and, when known, the facts constituting the basis for such claim; provided, however, that in the event of any claim for indemnification hereunder resulting from or in connection with any claim or Legal Proceeding by a third party, the Indemnified Party shall give such notice thereof to the Indemnifying Party not later than ten (10) business days prior to the time any response to the asserted claim is required, if possible, and in any event within five (5) business days following receipt of notice thereof. Notwithstanding anything in the preceding sentence to the contrary, the failure of any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability for indemnification it may have if and to the extent that the Indemnifying Party shall not have been prejudiced by such omission. In the event of any such claim for indemnification resulting from or in connection with a claim or Legal Proceeding by a third party, the Indemnifying Party may, at its sole cost and expense, assume the defense thereof; provided, however, that the Indemnifying Party shall first have agreed in writing that it does not and will not contest its responsibility for indemnifying the Indemnified Party in respect of Losses attributable to such claim or Legal Proceeding; and, provided further, that Seller shall not be entitled to assume the defense of any claim or Legal Proceeding against Buyer for Taxes with respect to a period ending after the Closing Date. If an Indemnifying Party assumes the defense of any such claim or Legal Proceeding, the Indemnifying Party shall be entitled to select counsel and take all steps necessary in the defense thereof; provided, however, that no settlement shall be made without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld (and if the Indemnified Party shall withhold its consent to any monetary settlement proposed by the Indemnifying Party and which the other party to the action has indicated it is prepared to accept, the Indemnified Party shall in no event be deemed for purposes of this Agreement, to have suffered Losses in connection with such claim or proceeding in excess of the proposed amount of such settlement); provided, further, that the Indemnified Party may, at its own expense, participate in any such proceeding with the counsel of its choice without any right of control thereof. So long as the Indemnifying Party is in good faith defending such claim or Legal Proceeding, the Indemnified Party shall not compromise or settle such claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. If the Indemnifying Party does not assume the defense of any such claim or Legal Proceeding in accordance with the terms hereof, the Indemnified Party may defend (and, in the case of any claim or Legal Proceeding against Buyer for Taxes with respect to a period ending after the Closing Date, shall defend) against such claim or Legal Proceeding in such manner as it may deem appropriate, including, but not limited to, settling such claim or litigation (after giving prior written notice of the same to the Indemnifying Party and obtaining the prior written consent of the Indemnifying Party, which consent shall not be unreasonably

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withheld) on such terms as the Indemnified Party may deem appropriate, and the Indemnifying Party will promptly indemnify the Indemnified Party in accordance with the provisions of this Section 12.2; provided, however, that if the Indemnified Party does not obtain the prior written consent of the Indemnifying Party to any such settlement, and such written consent is not unreasonably withheld by the Indemnifying Party, the Indemnified Party shall not be entitled to indemnification hereunder from such Indemnifying Party with respect to the claim settled. Notwithstanding anything in this Section 12.2 to the contrary, if, in any claim or Legal Proceeding with respect to which the Indemnified Party has given the notice required under this Section 12.2, (i) the Indemnifying Party shall not have promptly employed counsel reasonably satisfactory to the Indemnified Party or (ii) such Indemnified Party shall have reasonably concluded, based upon the opinion of its outside legal counsel, that there may be one or more legal defenses available to it that are different from or additional to those available to the Indemnifying Party, then in either event (x) the Indemnified Party may participate in any such proceeding with the counsel of its choice, the expense for which shall be borne by the Indemnifying Party (but in no event shall the Indemnifying Party be required to pay the fees and expenses of more than one counsel employed by the Indemnified Party with respect to such claim or proceeding) and (y) the Indemnifying Party shall not have the right to direct the defense of any such action on behalf of the Indemnified Party. All payments by the Indemnifying Party pursuant to this Article XII shall be in cash and in immediately available funds.
     Section 12.3 Determination of Damages and Related Matters. (a) For purposes of indemnification under Sections 12.1(a)(i)(A) and 12.1(b)(i)(A), any breach of any representation or warranty shall be deemed to constitute a breach of such representation or warranty notwithstanding any limitation or qualification as to materiality set forth in such representation or warranty on the scope, accuracy or completeness thereto, it being the intention of the parties hereto that, each Indemnified Party shall be indemnified and held harmless from and against any and all Losses arising out of or based upon or with respect to the failure of any such representation or warranty to be true, correct and complete in any respect.
     (b) To the extent any payment under this Article XII cannot properly be treated as an adjustment to the Consideration for Tax purposes, then any such amount shall be increased to take account of any net Tax cost incurred by the Indemnified Party by reason of the receipt of any indemnity payment (grossed-up for such increase). Any payment to an Indemnified Party pursuant to this Article XII shall be reduced to take account of any net Tax benefit actually realized by the Indemnified Party in respect of the taxable year in which such Loss is incurred or paid and, with respect to a Tax benefit arising in a year subsequent to the year in which the Loss is paid or incurred, the Indemnified Party shall pay to the Indemnifying Party the amount of such Tax benefit (including, as relevant, any member of its Affiliated Group) when such Tax benefit is actually realized. In computing the amount of any such Tax cost or Tax benefit, the Indemnified Party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified loss, liability, claim, damage or expense.

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ARTICLE XIII
MISCELLANEOUS
     Section 13.1 Survival of Representations and Warranties. HMC, Buyer, Seller and the Stockholder hereby agree that the representations and warranties contained in this Agreement, as supplemented or modified by any amendments to the Schedules hereto made on or prior to the Closing Date, shall survive the execution and delivery of this Agreement and shall further survive the Closing hereunder for a period of three years from the Closing Date, regardless of any investigation made by the parties hereto.
     Section 13.2 Entire Agreement. This Agreement (together with its Schedules and Exhibits) contains, and is intended as, a complete statement of, all of the terms and the arrangements between the parties hereto with respect to the matters provided for herein, and supersedes any previous agreements and understandings among the parties hereto with respect to those matters.
     Section 13.3 Applicable Law; Arbitration. (a) This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York without regard to conflict of law rules thereof.
     (b) All disputes between the parties hereto concerning this Agreement or which would otherwise require or allow resort to any court or other governmental dispute resolution forum shall be settled by binding arbitration held in New York City, New York in accordance with the rules of the American Arbitration Association (the “Rules”) and by one (1) arbitrator appointed in accordance with the Rules. THE PARTIES HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE THAT, IN AGREEING TO SUBMIT SUCH DISPUTES AND/OR CLAIMS TO ARBITRATION, EACH PARTY GIVES UP THE RIGHT TO HAVE THE DISPUTE(S) OR CLAIMS(S) HEARD IN A COURT OF LAW BY A JUDGE OR JURY. However, nothing herein shall in any way limit either party’s statutory rights and/or remedies, all of which are reserved and may be alleged in the arbitration process. Moreover, nothing herein shall restrict any resort to any statutory agency charged with enforcing any of either party’s statutory rights and/or remedies; provided, however, that the review of any such agency’s actions shall be had before the arbitrators as discussed above and not before a judge or jury. By signing this Agreement, each of the parties understands that each party may not have a jury decide any dispute or claim, but that any such dispute or claim shall be decided only by the arbitrators. The arbitrator shall issue a written decision, including the arbitrator’s written findings and conclusions upon which any award is based. Each party shall bear its own costs and expense of such arbitration. Any such award shall be final and binding on the parties thereto, and may be entered in any court having competent jurisdiction.
     Section 13.4 Construction. The table of contents, captions and headings in this Agreement are for reference purposes only and shall be given no effect in the construction and interpretation of this Agreement. No provision of this Agreement shall be construed against either party because such party drafted or caused to be drafted such provision. Each provision of this Agreement shall be construed as if such provision were proposed by both Buyer and Seller.

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     Section 13.5 Expenses. Each of HMC, Buyer, Seller and the Stockholder shall bear their own expenses (including, without limitation, all fees and expenses of financial institutions, accountants, legal counsel, brokers, investment bankers and other advisors), incurred in connection with the negotiation, preparation, execution, review, delivery and performance of this Agreement, each of the other documents and instruments executed in connection with or contemplated by this Agreement or related hereto, and the consummation of the transactions contemplated hereby and thereby.
     Section 13.6 Notices. Any notice, request, instruction or other communication to be given under this Agreement or otherwise in connection with the Acquisition shall be in writing and shall be delivered by hand or prepaid telecopy, or sent, postage prepaid, by registered, certified or express mail, or reputable overnight courier service and shall be deemed given when so delivered by hand or telecopied, or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service) to a party at the following address (or at such other address as such party may have specified by notice given to the other party pursuant to this provision):
             
 
  If to Seller or        
 
  the Stockholder, at:   Prosperity Plus, Inc.
 
      3306 Delta Avenue
 
      Rosemead, CA 91770
 
      Attention: Mr. Jacob Cheng
 
      Facsimile: (626) 628-3869
 
 
  and if to HMC          
    or the Buyer, at:     c/o Hollywood Media Corp.
          2255 Glades Road, Suite 221A
          Boca Raton, FL 33431
 
        Attention:  Mitchell Rubenstein  
 
          Chief Executive Officer  
 
        Facsimile: (561) 998-2974  
 
 
  with a copy to:     Hollywood Media Corp.
 
        2255 Glades Road, Suite 221A
 
        Boca Raton, FL 33431
 
        Attention: Legal Department
 
        Facsimile: (561) 998-2974
     Section 13.7 Severability. If any provision of this Agreement, or the application of such provision to HMC, Buyer, Seller, the Stockholder or any Person or circumstance, shall be held invalid, then the remainder of this Agreement, or the application of such provision to persons, entities or circumstances other than those as to which it is held invalid, shall not be affected thereby.
     Section 13.8 Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns, heirs and legal representatives. Nothing in this Agreement shall create or be deemed to create

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any third party beneficiary rights in any Person not party to this Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without such required consent shall be void; provided, however, that HMC or Buyer may assign this Agreement without such consent (a) to any of its affiliates or (b) in connection with any merger, consolidation, any sale of all or substantially all of Buyer’s assets or any transaction in which more than fifty percent (50%) of Buyer’s voting securities are transferred.
     Section 13.9 Amendments. This Agreement may be amended, supplemented or modified only pursuant to a written instrument making specific reference to this Agreement signed by each of the parties hereto.
     Section 13.10 Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instruments signed by the party charged with such waiver or estoppel. No written waiver shall be deemed a continuing waiver unless specifically stated therein, and the written waiver shall operate only as to the specific term or condition waived, and not for the future or as to any other act than that specifically waived. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.
     Section 13.11 Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties agree that this Agreement may be considered signed when the signature of a party is delivered by facsimile transmission, and such facsimile signature(s) shall be treated in all respects as having the same effect as an original signature.
[SIGNATURES TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the date and year first above written.
             
    HOLLYWOOD MEDIA CORP.    
 
           
    /s/ Mitchell Rubenstein    
         
 
  Name:   Mitchell Rubenstein    
 
  Title:   Chairman and Chief Executive Officer    
 
           
    HOLLYWOOD FAN SITES, INC.    
 
           
    /s/ Mitchell Rubenstein    
         
 
  Name:   Mitchell Rubenstein    
 
  Title:   Chairman and Chief Executive Officer    
             
    PROSPERITY PLUS, INC.    
 
           
 
  By:   /s/ Jacob Cheng    
 
           
    Name:   Jacob Cheng
Title:    CEO
   
         
 
  THE STOCKHOLDER:    
 
       
 
  /s/ Jacob Cheng    
 
       
 
  Jacob Cheng    

 


 

Schedule A
Domain Names Owned
           
Domain Name   Registration Date   Prior Ownership Interests  
aliciasilverstonefan.com
  January 8, 2006   None  
allstarwebhost.com
  March 24, 2004   Domains by Proxy, Inc.  
allstarz.org
  April 19, 2000   Domains by Proxy, Inc.  
alyssamilano.ws
  August 1, 2005   None  
benaffleckfan.com
  September 30, 2002   AllStarz.org  
bradpittfan.com
  April 10, 2001   AllStarz.org  
britneypeople.com
  August 28, 2001   John Wolf  
comicbookfan.net
  January 8, 2006   None  
comicbookfans.net
  January 8, 2006   None  
csi-caps.com
  December 19, 2005   None  
elizabethtaylorfan.com
  January 8, 2006   None  
emusicfan.com
  October 12, 2002   AllStarz.org  
everythingshania.net
  November 22, 2001   John Wolf  
findingneverland.net
  November 9, 2004   John Wolf  
jessica-alba.org
  September 16, 2001   John Wolf  
kristinkreukweb.com
  June 24, 2005   John Wolf  
lyricsfan.com
  March 11, 2003   AllStarz.org  
marisa-tomei.org
  September 7, 2001   John Wolf  
mattdamonfan.com
  November 9, 2004   John Wolf  
mcconaugheyfan.com
  January 3, 2006   None  
nat-sanctuary.com
  August 9, 2001   None  
omnileonardo.com
  July 11, 2001   None  
penelope-cruz.net
  August 8, 2001   AllStarz.org  
sparkling-diamond.net
  December 19, 2005   None  
starbuzz.com
  July 23, 2002   Domains by Proxy, Inc.  
sweet-pie.net
  December 26, 2005   None  
tomcruisefan.com
  June 5, 2002   AllStarz.org  
tomhanksland.com
  September 19, 2001   John Wolf  
vgpalace.com
  November 8, 2001   AllStarz.org  
willferrell.org
  June 30, 2005   John Wolf  
xtinaxpression.com
  August 19, 2005   None  

 


 

Schedule B
Domain Names Hosted
         
Domain Name   Registration Date   Ownership Interests
activemb.com
  March 22, 2005   Rita (webmaster@bryanadamsonline.com)
christianslater.net
  April 17, 2004   Christian-Slater.com
christianslater.org
  April 17, 2004   Christian-Slater.com
christian-slater.com
  January 31, 2005   Rita (webmaster@bryanadamsonline.com)
christian-slater.net
  February 2, 2005   Rita (webmaster@bryanadamsonline.com)
christian-slater.org
  February 3, 2005   Rita Johansen
colin-farrell.net
  July 5, 2002   Creative Escape Productions
ellenpompeo.net
  July 22, 2005   Grasiani Tomelin
glamorous-smg.com
  October 26, 2003   Grasiani Tomelin
jenniferfan.com
  October 26, 2003   Grasiani Tomelin
johnnydeppfan.com
  September 30, 1998   johnnydeppfan.com
justin-chatwin.com
  July 5, 2005   Juan Guerra
justin-chatwin.net
  July 17, 2005   Rita Johansen
justin-chatwin.org
  July 17, 2005   Rita Johansen
katebeckinsalefan.com
  February 22, 2005   Grasiani Tomelin
kellybrianne.com
  March 21, 2005   Domains by Proxy, Inc.
tomcruiseforums.com
  September 5, 2004   Grasiani Tomelin

 


 

Schedule C
Assumed Liabilities
Buyer hereby agrees to assume and be bound by the obligations and liabilities of the Seller arising after the Closing Date in connection with the hosting agreement between the Seller and EV1Servers.net, with aggregate service fees of $1,197 per month, the terms of which can be found at the URL http://www.ev1servers.net/about/tos.asp; provided, that Seller (a) will retain and remain liable for any and all obligations and liabilities arising on or before the Closing Date with respect to the above referenced agreements and (b) shall be solely responsible for obtaining any consents required to permit the assignment of the above referenced agreements to Buyer.

 


 

Exhibit I
Form of Bill of Sale and Assignment Agreement
     BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Agreement”), dated as of January 31, 2006, by and between HOLLYWOOD FAN SITES, INC., a Delaware corporation (“Buyer”), and PROSPERITY PLUS, INC., a California corporation (“Seller”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Asset Purchase Agreement (as defined below).
     WHEREAS, Hollywood Media Corp., Buyer, Seller and the stockholder of Seller have entered into that certain Asset Purchase Agreement (the “Asset Purchase Agreement”), dated as of January 31, 2006, pursuant to which Seller has agreed to sell, assign and transfer to Buyer, and Buyer has agreed to purchase and acquire from Seller, the Assets (but excluding the Excluded Assets), free and clear of all Liens;
     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
     1. Seller does hereby sell, assign, transfer, convey and deliver to Buyer all of the right, title and interest of Seller in, to and under the Assets.
     2. Buyer hereby assumes all obligations and liabilities arising after the Closing Date under each of the assigned contracts listed on Schedule C attached to the Asset Purchase Agreement in respect of the period following such Closing Date. Buyer does not assume and shall not be bound by any other Liabilities of Seller, all of which shall remain the sole responsibility of Seller.
     3. This Agreement is in accordance with, and is subject to all of the representations, warranties, covenants and exclusions set forth in, the Asset Purchase Agreement.
     4. Seller will, at the request of Buyer, execute and deliver such other and further instruments of sale, assignment, transfer and conveyance and take such other and further actions as Buyer may reasonably request, with respect to the Assets, in order to make all the benefits and rights of Seller in the Assets available to Buyer, to vest in Buyer and put Buyer in possession of the Assets and to transfer to Buyer any contracts and rights of Seller relating to the Assets and to assure to Buyer the benefits thereof and effectuate fully the purposes of this Agreement.
     5. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns under the Asset Purchase Agreement. Except as expressly permitted under the Asset Purchase Agreement, no assignment of this Agreement or of any rights or obligations hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without such required consent shall be void.

 


 

     6. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or give to, any person, firm or corporation other than Buyer and Seller and their respective successors and permitted assigns, any remedy or claim under or by reason of this instrument or any term, covenant or condition hereof, and all the terms, covenants and conditions, promises and agreements in this instrument contained shall be for the sole and exclusive benefit of Buyer and Seller and their respective successors and permitted assigns.
     7. This Agreement may be amended, supplemented or modified, and any provision hereof may be waived, only pursuant to a written instrument making specific reference to this Agreement signed by each of the parties hereto.
     8. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
     9. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts to be made, executed, delivered and performed wholly in such state, but without regard to conflicts of law principles of such state. No provision of this Agreement shall be construed against either party because such party drafted or caused to be drafted such provision. Each provision of this Agreement shall be construed as if such provision were proposed by both Buyer and Seller.
To have and to hold the Assets unto Buyer, its successors and assigns forever.
IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date and year first above written.
             
    HOLLYWOOD FAN SITES, INC.  
 
           
 
  By:        
 
           
    Name:
    Title:
 
           
    PROSPERITY PLUS, INC.
 
           
 
  By:        
 
           
    Name:
    Title:

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EX-10.2 3 g99426exv10w2.htm ASSET PURCHASE AGREEMENT - EFANGUIDE, INC. Asset Purchase Agreement - eFanGuide, Inc.
 

EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
     This ASSET PURCHASE AGREEMENT, dated as of January 18, 2006 (this “Agreement”), is entered into by and between HOLLYWOOD MEDIA CORP., a Florida corporation (“HMC”), HOLLYWOOD FAN SITES, INC., a Delaware corporation and an indirect wholly-owned subsidiary of HMC (“Buyer”), EFANGUIDE, INC., a New York corporation (“Seller”), and the stockholders of Seller listed on the signature pages hereto (each, a “Stockholder,” and collectively, the “Stockholders”).
     WHEREAS, Seller is the registered owner or the website host of the Domain Names (as hereinafter defined);
     WHEREAS, upon the terms and subject to the conditions hereinafter set forth, Seller desires to sell, assign and transfer to Buyer, and Buyer desires to purchase and acquire from Seller, all of Seller’s right, title and interest in the Domain Names and certain other assets of Seller related to the Domain Names; and
     NOW THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1 Defined Terms. In addition to terms defined elsewhere in this Agreement, the following terms when utilized in this Agreement, unless the context otherwise requires, shall have the meanings indicated, which meanings shall be equally applicable to both the singular and plural forms of such terms:
     “Affiliated Group” means any affiliated group within the meaning of Section 1504 of the Code, or any consolidated, combined, unitary or similar group defined under a similar provision of state, local or foreign law.
     “Authority” means any governmental, regulatory or administrative body, agency, commission, board, arbitrator or authority, any court or judicial authority, any public, private or industry regulatory authority, whether international, national, federal, state or local.
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Lien” shall mean any lien, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement or other real estate declaration, covenant, condition, restriction or servitude, transfer restriction under any shareholder or similar agreement, or encumbrance.

 


 

     “Person” means any corporation, partnership, joint venture, limited liability company, organization, entity, Authority or natural person.
     “Registrar” means Network Solutions, GoDaddy.com, Inc. or other applicable domain name registrar.
     “Tax” or “Taxes” shall mean all taxes, charges, fees, imposts, levies or other assessments by any Authority, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, and all interest, penalties, fines, additions to tax or other amounts imposed by any Authority which relate in any way to the assessment of collection of any taxes or the filing of any Tax Return, and shall include any transferee or successor liability in respect of taxes (whether by contract or otherwise) and any liability in respect of any tax as a result of being a member of any Affiliated Group, including any consolidated, combined, unitary or similar group.
     “Tax Return” means any return (including any consolidated, combined or unitary return in which Seller is, or was, included or includible), declaration, report, claim for refund, separate election or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
ARTICLE II
ACQUISITION AND TRANSFER OF ASSETS
     Section 2.1. Assets to be Acquired. Upon the terms and subject to the conditions hereinafter set forth, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller (the “Acquisition”), free and clear of all Liens, all right, title and interest of Seller in, to and under all of the following assets, properties, rights, contracts, claims, operations and business of Seller (collectively, the “Assets”) (but excluding the Excluded Assets, as defined in Section 2.2 below), whether or not appearing on the books of Seller:
     (a) all of the Internet domain names owned by the Seller located at the URLs listed on Schedule A attached hereto (collectively, the “Owned Domain Names”);
     (b) all right, ownership and interest of the Seller in the Internet domain names hosted by the Seller located at the URLs listed on Schedule B attached hereto (collectively, the “Hosted Domain Names” and, together with the Owned Domain Names, the “Domain Names”);

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     (c) all trademarks, logos, copyrights, patents, trade names, other intellectual property, and other rights, including any and all registrations and applications for registration of such rights for the Domain Names;
     (d) all of Sellers’ rights relating to the existing Domain Name registration(s) with the Registrar;
     (e) all contracts of Seller related to the Domain Names;
     (f) all right, ownership and interest of the Seller in the approximately 48,000 confirmed email addresses of registered forum members on the Domain Names; and
     (g) all goodwill relating to the foregoing Assets.
     Section 2.2. Excluded Assets. Notwithstanding anything in Section 2.1 to the contrary, the parties hereto expressly agree that Seller is not hereunder selling, assigning, transferring, conveying or delivering to Buyer, and Buyer is not purchasing, acquiring or accepting, the following assets, rights and properties (collectively, the “Excluded Assets”):
     (a) any claim, right or interest in or to any refund for federal, state or local franchise, income or other taxes or fees of any nature whatsoever for periods on or prior to the Closing Date (as defined in Section 10.1 below) and any interest (or similar amount) thereon;
     (b) any of Seller’s corporate books and records of internal proceedings or tax records, and any books and records that Seller is required by law to retain (the “Corporate Records”); provided, that Buyer shall have access to the same to the extent permitted by Section 11.2 below;
     (c) any employment, consulting or similar agreements; and
     (d) any lease for personal or real property.
     Section 2.3. Assumed and Excluded Liabilities.
     (a) Except with respect to any of the liabilities set forth on Schedule C attached hereto, Buyer shall not assume or be bound by any obligations, liabilities (including without limitation, liabilities in respect of Taxes, “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) or any other pension plans or employee benefit arrangements) or commitments of Seller or any of its affiliates of any kind, character or description, whether absolute, accrued, known, unknown, asserted, unasserted, due or to become due, contingent or otherwise (“Liabilities”), in connection with the Assets or otherwise.
     (b) Any ad valorem Taxes relating to a period straddling the Closing Date shall be prorated to the Closing Date, and the portion allocable to the period prior to the Closing Date shall be promptly paid or reimbursed by Seller, and the portion allocable to the period after the Closing Date shall be promptly paid or reimbursed by Buyer. All other Liabilities of Seller shall remain the sole responsibility of Seller.

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ARTICLE III
CONSIDERATION
     Section 3.1. Amount and Form of Consideration. As consideration for the transfer of the Domain Names and the Related Assets (the “Consideration”), on the Closing Date Buyer shall cause HMC to issue to Seller that number of unregistered shares of common stock of HMC (the “Shares”) equal to the quotient of (a) Two Hundred Sixteen Thousand Five Hundred Dollars ($216,500) divided by (b) the Fair Market Value (as defined below) of the common stock of HMC. For the purposes hereof, “Fair Market Value” means the average closing sales price of the common stock of HMC on the ten trading days prior to the Closing Date 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 stock as reported by the National Quotations Bureau Incorporated or similar organization for the ten trading days prior to the closing date of the Agreement; provided, that if none of the calculation methods set forth above are applicable, then Fair Market Value shall be determined in good faith by the Board of Directors of HMC. The Shares shall be available for sale, through one or more market makers or other registered broker/dealer designated by HMC, in accordance with Rule 144 promulgated under the Securities Act of 1933, as amended, at any time following the one (1) year anniversary date of the Closing Date.
     Section 3.2. Allocation of Purchase Price. The Consideration and other relevant items shall be allocated among the Assets acquired hereunder by Buyer in accordance with the requirements of Section 1060 of the Code. Buyer shall provide Seller with a draft of such allocation within ninety (90) days after the Closing Date. Seller shall notify Buyer within thirty (30) days of receipt of such draft allocation of any objection Seller may have thereto. Seller and Buyer agree to resolve any disagreement with respect to such allocation in good faith consistent herewith. Seller and Buyer each agree to report and file all Tax Returns (including amended Tax Returns and claims for refund) consistent with such allocation, and shall take no position contrary thereto or inconsistent therewith (including, without limitation, in any audits or examinations by any taxing authority or any other proceedings). Seller and Buyer shall cooperate in the filing of any forms (including Form 8594) with respect to such allocation, including any amendments to such forms required with respect to any adjustment to the Consideration, pursuant to this Agreement. Notwithstanding any other provisions of this Agreement, the foregoing agreement shall survive the Closing Date without limitation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to HMC and Buyer, as of the date hereof and through the Closing Date, as follows:
     Section 4.1. Organization. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New York, and has all requisite corporate power

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and authority to own, lease and operate its properties and to carry on its business as now being conducted.
     Section 4.2. Authorization of Agreement. Seller has full corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by Seller in connection with the consummation of the transactions contemplated by this Agreement (all such other agreements, documents, instruments and certificates are hereafter collectively referred to as the “Seller Documents”) and to perform fully its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and each of the Seller Documents have been duly and validly authorized and approved by the Board of Directors and all of the Stockholders of Seller and by all other necessary corporate action on behalf of Seller. This Agreement has been, and on or prior to the Closing each of the Seller Documents will be, duly and validly executed and delivered by Seller and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the Seller Documents when so executed and delivered will constitute, the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
     Section 4.3. Consents and Approvals; No Violations. (a) No filing with, notification to or consent, authorization, waiver, approval, order, franchise, license, certificate or permit (collectively, “Permits”) of, any Authority is necessary for Seller’s execution, delivery or performance of this Agreement or any of the Seller Documents or the consummation by Seller of the transactions contemplated by this Agreement and the Seller Documents.
     (b) None of the execution and delivery by Seller of this Agreement and the Seller Documents, the consummation of the transactions contemplated hereby or thereby or compliance by Seller with any of the provisions hereof or thereof will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of Seller, (ii) violate any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award (each, an “Order”) or statute, rule or regulation of any Authority by which Seller or any of its properties or assets is bound, (iii) conflict with, violate, result in the breach or termination of, or (with or without due notice or the lapse of time or both) constitute a default or give rise to any “takeback” right or right of termination or acceleration or right to increase the obligations under or otherwise modify any of the terms, conditions or provisions of any note, bond, mortgage, Permit, indenture, contract, agreement or other instrument or obligation to which Seller is a party, or by which Seller or any of its properties or assets is or may be bound, or (iv) result in the creation of any Lien upon any of the Assets.
     (c) There has been no claim, action or proceeding of any kind at any time (including, without limitation, any claim letter to Seller or any affiliate of Seller or any complaint or objection to the Registrar or any long distance carrier) asserting that any of the Domain Name or any of the Assets violate any law, regulation, or order of any government body or any rights of

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any third party, including without limitation any copyright, patent, trademark, or other intellectual property rights.
     Section 4.4. Title to Assets. Seller has good and marketable title to all of the Assets, free and clear of all Liens. Upon the sale, assignment, transfer and conveyance of the Assets to Buyer hereunder, there will be vested in Buyer good and marketable title to such Assets, free and clear of all Liens.
     Section 4.5. Domain Names.
     (a) The Domain Names were registered with the Registar as of the dates set forth on Schedule A attached hereto and, at all times since such dates, said registrations have been in effect and all registration fees have been duly paid.
     (b) Except as set forth on Schedule A attached hereto, at all times since the Domain Names were registered, Seller has been the sole owner of the Domain Name and no other party has had, or claimed to have, any right, claim, lien or other interest in or to the Domain Name.
     (c) Seller has been the sole owner of each of the Assets at all times since each such Asset was created or otherwise came into being and no other party has had, or claimed to have, any right, claim, lien or other interest in any of the Related Assets.
     Section 4.6. Brokers. No broker, finder or investment banker is entitled to any brokerage fee, finder’s fee or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF HMC AND BUYER
HMC and Buyer each represent and warrant to Seller, as of the date hereof and through the Closing Date, as follows:
     Section 5.1. Organization. HMC is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.
     Section 5.2. Authorization of Agreement. HMC and Buyer each have full corporate power and authority to execute and deliver this Agreement and to perform fully their respective obligations hereunder. The execution, delivery and performance by HMC and Buyer of this Agreement have been duly authorized by the respective Boards of Directors of HMC and Buyer and by all other necessary corporate action on the part of HMC and Buyer. This Agreement has been duly and validly executed and delivered by each of HMC and Buyer and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement

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constitutes the legal, valid and binding obligation of each of HMC and Buyer, enforceable against each of HMC and Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
     Section 5.3. Consents and Approvals; No Violations.
     (a) Except for filings, notifications, authorizations, consents and approvals as may be required under federal and state securities or blue sky laws, no filing with, notification to or Permit of, any Authority is necessary for HMC’s or Buyer’s execution, delivery or performance of this Agreement or the consummation by HMC and Buyer of the transactions contemplated by this Agreement.
     (b) None of the execution and delivery by HMC or Buyer of this Agreement, the consummation of the transactions contemplated hereby or compliance by HMC and Buyer with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of HMC or Buyer, (ii) to the best of HMC’s and Buyer’s knowledge, violate any Order or statute, rule or regulation of any Authority by which HMC, Buyer or any of their respective properties or assets are bound, or (iii) conflict with, violate, result in the breach or termination of, or (with or without due notice or the lapse of time or both) constitute a default or give rise to any “takeback” right or right of termination or acceleration or right to increase the obligations under or modify any of the terms, conditions or provisions of any note, bond, mortgage, license, franchise, Permit, indenture, agreement or other instrument or obligation to which HMC or Buyer is a party, or by which HMC, Buyer or any of their respective properties or assets is or may be bound.
     Section 5.4. Brokers. No broker, finder or investment banker is entitled to any brokerage fee, finder’s fee or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of HMC or Buyer.
ARTICLE VI
COVENANTS OF SELLER AND THE STOCKHOLDERS
     Section 6.1. Public Announcements. Seller and the Stockholders agree that they shall not issue any press release or make any public statement, announcement or filing concerning this Agreement or any aspect of the transactions contemplated hereby, except as may be required by applicable law or with the prior consent of HMC and Buyer. Seller and the Stockholders agree that they shall not issue any such release or make any such statement, announcement or filing required by applicable law except after prior consultation with an prior written approval of Buyer, which approval shall not be unreasonably withheld.
     Section 6.2. Consents. Seller and the Stockholders shall use their diligent, good faith efforts to obtain, at the earliest practicable date, all consents and approvals required to

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consummate the transactions contemplated by this Agreement. Seller and the Stockholders agrees to execute and deliver such instruments and promptly take such other actions as may reasonably be required to consummate the transactions contemplated hereby in accordance with the terms hereof.
     Section 6.3. Taxable Transaction. Seller and the Stockholders agree to treat this transaction as a fully taxable transaction for Tax purposes and shall not take any actions inconsistent with such treatment.
     Section 6.4. Non-Competition and Non-Solicitation. During the Restricted Period, the Seller and the Stockholders agrees not to, directly or indirectly, alone or as a partner, officer, director, employee, consultant, agent, independent contractor, member or stockholder of any Person, engage in any business activity in the Restricted Area which is directly or indirectly in competition with the products or services being developed, manufactured, marketed, sold or otherwise provided by the Business or business plans of Buyer or its affiliates or which is directly or indirectly detrimental to the Business; provided, however, that the record or beneficial ownership by Seller or any Stockholder of an aggregate of five percent (5%) or less of the outstanding publicly traded capital stock of any Person for investment purposes shall not be deemed to be in violation of this Section 6.4 so long as the neither Seller nor any Stockholder is an officer, director, employee or consultant of such Person. Seller and each Stockholder further agree that, during the Restricted Period, they shall not in any capacity, either separately, jointly or in association with others, directly or indirectly do any of the following: (a) employ or seek to employ any Person or agent who is then employed or retained by Buyer or its affiliates (or who was so employed or retained at any time within the two (2) years prior to the date Seller or any Stockholder employs or seeks to employ such Person); (b) solicit, induce, or influence any proprietor, partner, stockholder, lender, director, officer, employee, joint venturer, investor, consultant, agent, lessor, supplier, customer or any other Person which has a business relationship with Buyer or its affiliates, at any time during the Restricted Period, to discontinue or reduce or modify the extent of such relationship with Buyer or its affiliates; and (c) submit, solicit, encourage or discuss any proposal, plan or offer to acquire an interest in any of Buyer’s or its affiliates’ identified potential acquisition candidates. For purposes of this Section 6.4: (i) “Business” shall mean the hosting of celebrity fan web sites on the Internet; (ii) “Restricted Period” shall mean five (5) years after the date of this Agreement; and (iii) “Restricted Area” shall mean North America and the United Kingdom. This provision shall inure to the benefit of, be enforceable by and be binding upon the parties hereto and their respective successors and assigns.
     Section 6.5 Notice of Breaches of Representations and Warranties. Seller shall immediately notify HMC and Buyer in writing of any claim, action or proceeding involving the actual or alleged breach of any of the representations and warranties of Seller set forth in Article IV or elsewhere in this Agreement and provide whatever information, documents and other cooperation may be reasonably requested by HMC or Buyer; provided, that such notice shall not relieve Seller of any of its indemnification obligations set forth in this Agreement.

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ARTICLE VII
COVENANTS OF HMC AND BUYER
     Section 7.1. Taxable Transaction. HMC and Buyer agree to treat this transaction as a fully taxable transaction for Tax purposes and shall not take any actions inconsistent with such treatment.
     Section 7.2. Further Actions. HMC and Buyer agree to execute and deliver such instruments and take such other actions as may reasonably be required to consummate the transactions contemplated hereby in accordance with the terms hereof.
ARTICLE VIII
CONDITIONS PRECEDENT TO HMC’S AND BUYER’S OBLIGATIONS
     Section 8.1. Conditions. The obligation of HMC and Buyer to consummate the Acquisition on the Closing Date is subject to the satisfaction of the following conditions (any or all of which may be waived by HMC and Buyer, in their sole discretion, in whole or in part, to the extent permitted by applicable law):
     (a) each of the representations and warranties of Seller contained herein shall be true and correct in all material respects on and as of the Closing Date;
     (b) (i) no judicial, administrative or arbitral action, suit, proceeding (public or private), claim or governmental proceeding (each, a “Legal Proceeding”) shall have been instituted or threatened or claim or demand made against Seller, any Stockholder, HMC or Buyer seeking to restrain or prohibit or to obtain damages with respect to the consummation of the transactions contemplated by this Agreement and (ii) there shall not be in effect any Order of an Authority of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement;
     (c) Buyer or Seller shall have received all third-party consents and approvals and all necessary Authority approvals;
     (d) Buyer shall have received a certificate of the Secretary of Seller, dated the Closing Date, setting forth resolutions of the Board of Directors and of the Stockholders authorizing the execution and delivery of this Agreement and the Seller Documents hereunder and the consummation of the transactions contemplated hereby and thereby, and certifying that such resolutions were duly adopted and have not been rescinded or amended as of the Closing Date;
     (e) Seller shall have executed and delivered to Buyer (i) all documents to be delivered at the Closing in accordance with the terms of this Agreement and (ii) such other documents and instruments as Buyer may reasonably request and which Seller can obtain with reasonable commercial efforts in order to consummate the transactions contemplated by this Agreement; and

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     (f) Mr. Rajiv Doshi shall have executed and delivered to Buyer that certain Employment Agreement by and between HMC and Mr. Doshi, a copy of which is attached hereto as Exhibit I (the “Employment Agreement”).
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS
     Section 9.1 Conditions. The obligation of Seller to consummate the Acquisition on the Closing Date is subject to the satisfaction of the following conditions (any or all of which may be waived by Seller, at the sole option of Seller, in whole or in part to the extent permitted by applicable law):
     (a) each of the representations and warranties of HMC and Buyer contained herein shall be true and correct in all material respects on and as of the Closing Date; and
     (b) HMC and Buyer shall have executed and delivered to Seller (i) all documents to be delivered at the Closing in accordance with the terms of this Agreement, including but not limited to the Employment Agreement, and (ii) such other documents and instruments as Seller may reasonably request and which HMC and Buyer can obtain with reasonable commercial efforts in order to consummate the transactions contemplated by this Agreement.
ARTICLE X
THE CLOSING
     Section 10.1 Closing Date. Except as hereinafter provided, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Buyer, or such other place as mutually agreed upon in writing by the parties, at 10:00 a.m. on January 18, 2006 or such other time and place as Seller, HMC and Buyer may mutually agree in writing. The date on which the Closing of the Acquisition occurs is referred to herein as the “Closing Date.”
     Section 10.2 Proceedings at the Closing. All proceedings to be taken and all documents to be executed and delivered by Seller and the Stockholders in connection with the Closing shall be reasonably satisfactory in form and substance to Buyer and its counsel. All proceedings to be taken and all documents to be executed and delivered by HMC and Buyer in connection with the Closing shall be reasonably satisfactory in form and substance to Seller and its counsel. All proceedings to be taken and all documents to be executed and delivered by both parties at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed taken nor any documents executed or delivered until all have been taken and delivered.
     Section 10.3 Deliveries by Seller to HMC and Buyer. At the Closing, Seller shall deliver, or shall cause to be delivered, to HMC and Buyer the following:
     (a) a bill of sale and assignment agreement in the form attached as Exhibit II hereto (the “Bill of Sale and Assignment Agreement”) duly executed by Seller;

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     (b) for each Domain Name to be assigned to Buyer as part of the Assets, a registrant name change agreement duly executed by Seller, or such other procedure or agreements as required by the Registrar to effectuate the assignment referenced above;
     (c) all other assignments and other instruments or documents as shall be reasonably necessary in the judgment of Buyer to evidence the sale, assignment, transfer and conveyance by Seller to Buyer of the Assets in accordance with the terms hereof, free and clear of all Liens;
     (d) the Employment Agreement duly executed by Mr. Rajiv Doshi;
     (e) copies of all approvals and consents referred to in Section 8.1(c) above; and
     (f) the certified resolutions of the Board of Directors and shareholders of Seller referred to in Section 8.1(d) above.
     Section 10.4 Deliveries by Buyer to Seller. At the Closing, HMC and Buyer shall deliver to Seller the following:
     (a) the Consideration in accordance with Section 3.1 above; and
     (b) the Employment Agreement duly executed by HMC.
ARTICLE XI
ADDITIONAL POST-CLOSING COVENANTS
     Section 11.1 Domain Name Transfers and Usage.
     (a) Upon receipt of the registrant name change agreements from Seller in accordance with Section 10.3(b) above, Buyer shall countersign each registrant name change agreement and forward them to the Registrar. If the Registrar does not effect the transfers of the Domain Names to Buyer upon the initial filings of the registrant name change agreements, then Seller shall use its best efforts to resolve as quickly as possible with Buyer and the Registrar any problems affecting such transfers, including, without limitation, promptly executing and filing such additional or revised documents as may be requested by the Registrar or as may otherwise be necessary or appropriate to effect such transfers (including, without limitation, any such documents required by any change in the procedures of the Registrar or the long distance carriers). Immediately upon Buyer’s receipt of email or written confirmation from the Registrar that it has transferred the Domain Names to Buyer, Buyer shall so notify Seller in writing.
     (b) Seller and each of the Stockholders covenant that, at all times on or after the Closing Date, Seller and the Stockholders will not make any further use of any kind of the Assets, including the Domain Names, except as may be required under the terms of the Employment Agreement.
     Section 11.2 Further Assurances by Seller. From time to time after the Closing Date, Seller will, at the request of HMC or Buyer, execute and deliver such other and further

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instruments of sale, assignment, transfer and conveyance and take such other and further actions as Buyer may reasonably request in order to make all the benefits of the rights of Seller included in the Assets available to Buyer, to vest in Buyer and put Buyer in possession of the Assets and to transfer to Buyer any contracts and rights of Seller relating to the Assets and to assure to Buyer the benefits thereof and effectuate fully the purposes of this Agreement.
     Section 11.3 Preservation of Corporate Records. Seller shall preserve and keep the Corporate Records for a period of seven years from the Closing Date and shall make such Corporate Records and personnel, if any, of Seller available to Buyer as Buyer may reasonably require (a) in connection with, among other things, any insurance claims by, Legal Proceedings against or governmental investigations of Buyer or (b) in order to enable Buyer to comply with its obligations under the Code, any other applicable statute with respect to taxation, this Agreement and each other agreement, document or instrument contemplated hereby. If Seller wishes to destroy such Corporate Records after such seven year period, then Seller shall first give ninety (90) days prior written notice to Buyer and Buyer shall have the right at its option and expense, upon prior written notice given to Seller within that ninety (90) day period, to take possession of the Corporate Records within one hundred eighty (180) days after the date of such notice.
     Section 11.4 Confidentiality. From and after the Closing Date, none of Seller, any of its employees or the Stockholders shall divulge, furnish or make available to any person any knowledge or information with respect to the Assets or Buyer (other than in the regular course and in furtherance of the Buyer’s business) which is, or which Seller is advised or has reason to believe is, confidential (including, but not limited to, information relating to any marketing, financial or personnel matters in connection with the Assets).
ARTICLE XII
INDEMNIFICATION
     Section 12.1 Indemnification.
     (a) Seller and the Stockholders agree to jointly and severally indemnify and hold HMC, Buyer and their respective subsidiaries, advisors, agents, employees, directors, officers and stockholders harmless from and against any and all losses, liabilities, obligations, judgments, damages, deficiencies, costs, penalties and expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively, “Losses”) based upon, attributable to or resulting from:
     (i) (A) any misrepresentation or breach of warranty on the part of Seller or any Stockholder under this Agreement or any of the Seller Documents or (B) any breach of covenant or other agreement on the part of Seller or any Stockholder under this Agreement, or any of the Seller Documents;
     (ii) any Liabilities of Seller not expressly assumed by Buyer under the terms of this Agreement, including, without limitation:

-12-


 

     (A) any liabilities and obligations arising out of or based upon the conduct of the business of Seller prior to the Closing Date;
     (B) any claims for any injury to person or property attributable to any services rendered by Seller prior to the Closing Date, regardless of whether such claims are asserted prior to or after the Closing;
     (C) any claims by any employee or former employee of Seller arising out of the employment or termination of employment of the employee or former employee on or prior to the Closing Date or as a result of the transactions contemplated by this Agreement; and
     (D) any third party claims with respect to occurrences or events that occurred on or prior to the Closing Date and relate to Seller, its employees or the Assets;
     (iii) any liabilities and obligations, based in any way on agreements, arrangements or understandings made by or on behalf of Seller or the Stockholders, for any brokerage fees, finder’s fees, commissions or like payments in respect of the transactions contemplated by this Agreement;
     (iv) any costs incurred by Buyer in connection with any claims or disputes arising from the requirements of any applicable bulk sales laws; and
     (v) all actions, suits, proceedings, demands, assessments, judgments, costs, penalties and expenses, including reasonable attorneys’ fees, incident to the foregoing.
     (b) HMC and Buyer agree to jointly and severally indemnify and hold Seller and the Stockholders harmless from and against any and all Losses attributable to or resulting from:
     (i) (A) any misrepresentation or breach of warranty on the part of HMC or Buyer under this Agreement or (B) any breach of covenant or other agreement on the part of HMC or Buyer under this Agreement;
     (ii) to the extent Buyer is not indemnified with respect thereto under Section 12.1(a), any claims that arise from Buyer’s ownership or operation of the Assets subsequent to the Closing Date;
     (iii) any liabilities and obligations, based in any way on agreements, arrangements or understandings made by or on behalf of HMC or Buyer, for any brokerage fees, finder’s fees, commissions or like payments in respect of the transactions contemplated by this Agreement; and
     (iv) all actions, suits, proceedings, demands, assessments, judgments, costs, penalties and expenses, including reasonable attorneys’ fees, incident to the foregoing.
     Section 12.2 Procedures for Indemnification. Whenever a claim shall arise for indemnification under Section 12.1 above, with the exception of claims for litigation expenses in

-13-


 

respect of a litigation as to which a notice of claim, as provided below in this Section 12.2, has previously been given, which expenses shall be funded on an ongoing basis, the party entitled to indemnification (the “Indemnified Party”) shall promptly notify the party from whom indemnification is sought (the “Indemnifying Party”) of such claim and, when known, the facts constituting the basis for such claim; provided, however, that in the event of any claim for indemnification hereunder resulting from or in connection with any claim or Legal Proceeding by a third party, the Indemnified Party shall give such notice thereof to the Indemnifying Party not later than ten (10) business days prior to the time any response to the asserted claim is required, if possible, and in any event within five (5) business days following receipt of notice thereof. Notwithstanding anything in the preceding sentence to the contrary, the failure of any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability for indemnification it may have if and to the extent that the Indemnifying Party shall not have been prejudiced by such omission. In the event of any such claim for indemnification resulting from or in connection with a claim or Legal Proceeding by a third party, the Indemnifying Party may, at its sole cost and expense, assume the defense thereof; provided, however, that the Indemnifying Party shall first have agreed in writing that it does not and will not contest its responsibility for indemnifying the Indemnified Party in respect of Losses attributable to such claim or Legal Proceeding; and, provided further, that Seller shall not be entitled to assume the defense of any claim or Legal Proceeding against Buyer for Taxes with respect to a period ending after the Closing Date. If an Indemnifying Party assumes the defense of any such claim or Legal Proceeding, the Indemnifying Party shall be entitled to select counsel and take all steps necessary in the defense thereof; provided, however, that no settlement shall be made without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld (and if the Indemnified Party shall withhold its consent to any monetary settlement proposed by the Indemnifying Party and which the other party to the action has indicated it is prepared to accept, the Indemnified Party shall in no event be deemed for purposes of this Agreement, to have suffered Losses in connection with such claim or proceeding in excess of the proposed amount of such settlement); provided, further, that the Indemnified Party may, at its own expense, participate in any such proceeding with the counsel of its choice without any right of control thereof. So long as the Indemnifying Party is in good faith defending such claim or Legal Proceeding, the Indemnified Party shall not compromise or settle such claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. If the Indemnifying Party does not assume the defense of any such claim or Legal Proceeding in accordance with the terms hereof, the Indemnified Party may defend (and, in the case of any claim or Legal Proceeding against Buyer for Taxes with respect to a period ending after the Closing Date, shall defend) against such claim or Legal Proceeding in such manner as it may deem appropriate, including, but not limited to, settling such claim or litigation (after giving prior written notice of the same to the Indemnifying Party and obtaining the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld) on such terms as the Indemnified Party may deem appropriate, and the Indemnifying Party will promptly indemnify the Indemnified Party in accordance with the provisions of this Section 12.2; provided, however, that if the Indemnified Party does not obtain the prior written consent of the Indemnifying Party to any such settlement, and such written consent is not unreasonably withheld by the Indemnifying Party, the Indemnified Party shall not be entitled to indemnification hereunder from such Indemnifying Party with respect to the claim settled. Notwithstanding anything in this Section 12.2 to the contrary, if, in any claim or Legal

-14-


 

Proceeding with respect to which the Indemnified Party has given the notice required under this Section 12.2, (i) the Indemnifying Party shall not have promptly employed counsel reasonably satisfactory to the Indemnified Party or (ii) such Indemnified Party shall have reasonably concluded, based upon the opinion of its outside legal counsel, that there may be one or more legal defenses available to it that are different from or additional to those available to the Indemnifying Party, then in either event (x) the Indemnified Party may participate in any such proceeding with the counsel of its choice, the expense for which shall be borne by the Indemnifying Party (but in no event shall the Indemnifying Party be required to pay the fees and expenses of more than one counsel employed by the Indemnified Party with respect to such claim or proceeding) and (y) the Indemnifying Party shall not have the right to direct the defense of any such action on behalf of the Indemnified Party. All payments by the Indemnifying Party pursuant to this Article XII shall be in cash and in immediately available funds.
     Section 12.3 Determination of Damages and Related Matters. (a) For purposes of indemnification under Sections 12.1(a)(i)(A) and 12.1(b)(i)(A), any breach of any representation or warranty shall be deemed to constitute a breach of such representation or warranty notwithstanding any limitation or qualification as to materiality set forth in such representation or warranty on the scope, accuracy or completeness thereto, it being the intention of the parties hereto that, each Indemnified Party shall be indemnified and held harmless from and against any and all Losses arising out of or based upon or with respect to the failure of any such representation or warranty to be true, correct and complete in any respect.
     (b) To the extent any payment under this Article XII cannot properly be treated as an adjustment to the Consideration for Tax purposes, then any such amount shall be increased to take account of any net Tax cost incurred by the Indemnified Party by reason of the receipt of any indemnity payment (grossed-up for such increase). Any payment to an Indemnified Party pursuant to this Article XII shall be reduced to take account of any net Tax benefit actually realized by the Indemnified Party in respect of the taxable year in which such Loss is incurred or paid and, with respect to a Tax benefit arising in a year subsequent to the year in which the Loss is paid or incurred, the Indemnified Party shall pay to the Indemnifying Party the amount of such Tax benefit (including, as relevant, any member of its Affiliated Group) when such Tax benefit is actually realized. In computing the amount of any such Tax cost or Tax benefit, the Indemnified Party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified loss, liability, claim, damage or expense.
ARTICLE XIII
MISCELLANEOUS
     Section 13.1 Survival of Representations and Warranties. HMC, Buyer, Seller and the Stockholders hereby agree that the representations and warranties contained in this Agreement, as supplemented or modified by any amendments to the Schedules hereto made on or prior to the Closing Date, shall survive the execution and delivery of this Agreement and shall further survive the Closing hereunder for a period of three years from the Closing Date, regardless of any investigation made by the parties hereto.

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     Section 13.2 Entire Agreement. This Agreement (together with its Schedules and Exhibits) contains, and is intended as, a complete statement of, all of the terms and the arrangements between the parties hereto with respect to the matters provided for herein, and supersedes any previous agreements and understandings among the parties hereto with respect to those matters.
     Section 13.3 Applicable Law; Arbitration. (a) This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York without regard to conflict of law rules thereof.
     (b) All disputes between the parties hereto concerning this Agreement or which would otherwise require or allow resort to any court or other governmental dispute resolution forum shall be settled by binding arbitration held in New York City, New York in accordance with the rules of the American Arbitration Association (the “Rules”) and by one (1) arbitrator appointed in accordance with the Rules. THE PARTIES HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE THAT, IN AGREEING TO SUBMIT SUCH DISPUTES AND/OR CLAIMS TO ARBITRATION, EACH PARTY GIVES UP THE RIGHT TO HAVE THE DISPUTE(S) OR CLAIMS(S) HEARD IN A COURT OF LAW BY A JUDGE OR JURY. However, nothing herein shall in any way limit either party’s statutory rights and/or remedies, all of which are reserved and may be alleged in the arbitration process. Moreover, nothing herein shall restrict any resort to any statutory agency charged with enforcing any of either party’s statutory rights and/or remedies; provided, however, that the review of any such agency’s actions shall be had before the arbitrators as discussed above and not before a judge or jury. By signing this Agreement, each of the parties understands that each party may not have a jury decide any dispute or claim, but that any such dispute or claim shall be decided only by the arbitrators. The arbitrator shall issue a written decision, including the arbitrator’s written findings and conclusions upon which any award is based. Each party shall bear its own costs and expense of such arbitration. Any such award shall be final and binding on the parties thereto, and may be entered in any court having competent jurisdiction.
     Section 13.4 Construction. The table of contents, captions and headings in this Agreement are for reference purposes only and shall be given no effect in the construction and interpretation of this Agreement. No provision of this Agreement shall be construed against either party because such party drafted or caused to be drafted such provision. Each provision of this Agreement shall be construed as if such provision were proposed by both Buyer and Seller.
     Section 13.5 Expenses. Each of HMC, Buyer, Seller and the Stockholders shall bear their own expenses (including, without limitation, all fees and expenses of financial institutions, accountants, legal counsel, brokers, investment bankers and other advisors), incurred in connection with the negotiation, preparation, execution, review, delivery and performance of this Agreement, each of the other documents and instruments executed in connection with or contemplated by this Agreement or related hereto, and the consummation of the transactions contemplated hereby and thereby.
     Section 13.6 Notices. Any notice, request, instruction or other communication to be given under this Agreement or otherwise in connection with the Acquisition shall be in writing and shall be delivered by hand or prepaid telecopy, or sent, postage prepaid, by registered,

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certified or express mail, or reputable overnight courier service and shall be deemed given when so delivered by hand or telecopied, or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service) to a party at the following address (or at such other address as such party may have specified by notice given to the other party pursuant to this provision):
         
 
  If to the Seller or    
 
  the Stockholders at:   eFanGuide, Inc.
 
      560 S. Broadway, Suite #202
 
      Hicksville, NY 11801
 
      Facsimile: (516) 937-7506
 
       
 
  with a copy to:   Mark E. Gelfand, Esq.
 
      560 South Broadway
 
      Hicksville, NY 11801
 
      Facsimile: (516) 933-3128
 
       
 
  and if to HMC    
 
  or the Buyer, at:   c/o Hollywood Media Corp.
 
      2255 Glades Road, Suite 221A
 
      Boca Raton, FL 33431
 
      Attention: Mitchell Rubenstein
 
                          Chief Executive Officer
 
      Facsimile: (561) 998-2974
 
       
 
  with a copy to:   Hollywood Media Corp.
 
      2255 Glades Road, Suite 221A
 
      Boca Raton, FL 33431
 
      Attention: Legal Department
 
      Facsimile: (561) 998-2974
     Section 13.7 Severability. If any provision of this Agreement, or the application of such provision to HMC, Buyer, Seller, any Stockholder or any Person or circumstance, shall be held invalid, then the remainder of this Agreement, or the application of such provision to persons, entities or circumstances other than those as to which it is held invalid, shall not be affected thereby.
     Section 13.8 Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns, heirs and legal representatives. Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person not party to this Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without such required consent shall be void; provided, however, that HMC or Buyer may assign this Agreement without such consent (a) to any of its affiliates or (b) in connection with any merger, consolidation, any sale of all or substantially all of Buyer’s assets or

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any transaction in which more than fifty percent (50%) of Buyer’s voting securities are transferred.
     Section 13.9 Amendments. This Agreement may be amended, supplemented or modified only pursuant to a written instrument making specific reference to this Agreement signed by each of the parties hereto.
     Section 13.10 Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instruments signed by the party charged with such waiver or estoppel. No written waiver shall be deemed a continuing waiver unless specifically stated therein, and the written waiver shall operate only as to the specific term or condition waived, and not for the future or as to any other act than that specifically waived. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.
     Section 13.11 Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties agree that this Agreement may be considered signed when the signature of a party is delivered by facsimile transmission, and such facsimile signature(s) shall be treated in all respects as having the same effect as an original signature.
[SIGNATURES TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the date and year first above written.
     
 
  HOLLYWOOD MEDIA CORP.
 
   
 
  /s/ Mitchell Rubenstein
 
   
 
  Name:     Mitchell Rubenstein
 
  Title:     Chairman and Chief Executive Officer
 
   
 
  HOLLYWOOD FAN SITES, INC.
 
   
 
  /s/ Mitchell Rubenstein
 
   
 
  Name:     Mitchell Rubenstein
 
  Title:     Chairman and Chief Executive Officer
         
    EFANGUIDE, INC.
 
       
 
  By:   /s/ Rajiv Doshi
 
       
 
      Name: Rajiv Dosji
 
      Title: President
 
       
    THE STOCKHOLDERS:
 
       
    /s/ Dinesh Doshi
     
    Dinesh Doshi
 
       
    /s/ Veena Doshi
     
    Veena Doshi
 
       
    /s/ Rajiv Doshi
     
    Rajiv Doshi

 


 

Schedule A
Domain Names Owned
             
Domain Name   Registration Date   Prior Ownership Interests    
1039sweetchildren.net
  9/29/05        
98-degrees.org
  11/30/99        
aaliyah-fans.com
  10/10/04        
aboutnicole.com
  2/9/04        
adam-brody.com
  8/18/03        
all-hilary.com
  9/12/04        
alyson-hannigan.org
  9/8/00        
amber-benson.com
  8/26/02        
angela-randle.com
  7/11/05        
anne-hathaway.ws
  6/23/04        
ashantidaily.com
  5/30/02        
ashleyballard.net
  9/7/00        
avril-lavigne.ws
  8/5/02        
ben-affleck.net
  7/8/00        
bigbrotherlink.com
  5/6/02        
billie-piper.com
  8/27/99        
britneychat.net
  9/8/04        
britneygallery.org
  3/17/04        
britneyspears.org
  3/26/99        
britneyspearsforum.com
  3/14/01        
britneyspearsmedia.com
  8/30/03        
bsbfan.net
  1/7/00        
bsbguide.com
  3/23/04        
bsonetwork.com
  10/27/04        
cabrera-online.com
  1/16/05        
carrie-online.org
  6/20/05        
cassie-steele.net
  9/12/05        
ciarafans.net
  8/19/05        
christinaaguilera.to
  9/13/99        
colinhanks.net
  8/12/00        
colinland.net
  5/22/03        
dancersunlimited.org
  9/26/03        
david-duchovny.com
  7/30/01        
derek-jeter.org
  3/29/01        
dream-online.org
  5/10/01        
edushku.com
  1/9/01        
efanforum.com
  8/19/04        
efanguide.biz
  7/25/03        
efanguide.com
  8/31/99        
efanguide.info
  7/25/03        

 


 

             
Domain Name   Registration Date   Prior Ownership Interests    
efanguide.net
  4/1/00        
efanguide.org
  4/2/00        
efanguide.tv
  5/11/04        
efanguide.us
  10/8/02        
efanguide.ws
  7/24/02        
efanstore.com
  3/23/00        
efgchat.com
  3/25/00        
efgforum.com
  5/15/00        
efghost.com
  5/29/02        
efgmail.com
  3/23/00        
efgsearch.com
  5/31/01        
elijahfan.com
  2/3/02        
emmy-rossum.net
  6/23/04        
ethan-embry.com
  10/8/02        
ewan-mcgregor.net
  2/1/02        
ewanunlimited.net
  8/5/04        
fantasia-world.com
  8/10/04        
georgie-henley.com
  10/17/05        
gilmorememories.com
  11/9/05        
hansonmusic.com
  11/12/02        
hottigotti.org
  10/28/04        
idolonline.org
  7/28/02        
jamie-online.net
  1/17/05   Rajiv Doshi    
jennifergarnerfan.org
  1/28/03        
jessica-simpson.org
  10/6/99        
jessicaalba.net
  8/28/99        
jlovehewitt.com
  5/3/00        
johnny-depp.net
  12/31/99        
josh-hartnett.org
  2/28/01        
katherine-heigl.com
  4/6/00        
kclarkson.org
  9/5/02        
keira-knightley.org
  7/21/03        
kyliefans.net
  1/20/05   Rajiv Doshi    
lauren-graham.net
  10/3/01        
leonor-varela.org
  4/14/05        
lindsay-lohan.ws
  8/15/04        
lizzy-caplan.com
  4/3/05        
lucy-walsh.com
  3/30/05        
mandymoore.org
  6/25/99        
mandywillaford.com
  3/8/00        
marc-blucas.com
  2/27/00        
mariah-c.net
  10/17/05        
mercedesmcnabfan.com
  4/29/04        
meredith-monroe.com
  10/27/00        
michelle-trachtenberg.com
  1/10/01        

-21-


 

             
Domain Name   Registration Date   Prior Ownership Interests    
michellewilliamsfan.com
  1/11/01        
mjhonline.com
  5/28/02        
monica-keena.com
  8/20/00        
myaharrison.net
  4/15/04        
natalie-portman.org
  12/1/99        
nick-wechsler.com
  7/13/00        
nickflorez.org
  8/9/01        
nikki-reed.org
  9/12/04        
nsyncfan.org
  11/30/99        
officialsallymartin.com
  10/27/04        
only-urban.com
  8/29/05   Rajiv Doshi    
orlandobloomfans.com
  1/29/02        
pinkfans.com
  12/31/99        
potc-web.com
  10/2/04        
prettyrickyonline.net
  11/9/05        
rachelhurdwood.net
  6/10/05        
rihanna-place.org
  11/4/05        
sarahmichellegellarfan.com
  1/7/00        
scarlettjohanssonfan.com
  8/10/04        
seth-green.com
  10/27/04        
sethgreen.ws
  10/27/04        
sethgreenonline.com
  4/12/00        
shane-west.org
  6/12/02        
skeetulrichfan.com
  9/13/05        
taniaante.com
  7/7/00        
the-oc.org
  8/8/03        
thedegrassifiles.com
  11/14/04        
theocimages.com
  10/4/04        
tom-welling.org
  11/1/02        
troy-online.org
  10/28/04        
urbanz.org
  9/23/05        
utrl.net
  10/14/02        
vbeckham.net
  4/18/04        
westlife-news.com
  1/9/01        
worldofjustin.com
  9/23/05        

-22-


 

Schedule B
Domain Names Hosted
             
Domain Name   Registration Date   Ownership Interests    
absolutetrl.net
  2/26/01   Joe Snyder    
ashleesimpson.net
  1/17/03   Domains by Proxy, Inc.    
eric-west.com
  1/29/04   West Music    
idina-menzel.com
  6/28/04   Erin Taylor    
jaystever.com
  8/29/02   Janis Penka    

 


 

Schedule C
Assumed Liabilities
     Buyer hereby agrees to assume and be bound by the obligations and liabilities of the Seller arising after the Closing Date in connection with the following agreements:
     (1) The agreement between the Seller and Groupee, Inc. related to the community/forum services provided by Groupee, Inc. to the Seller with respect to the Domain Names, with service fees of $800 per month, the terms of which can be found at the URL http://admin.groupee.com/customer/hosting_tos.html;
     (2) The hosting agreements between the Seller and ThePlanet.com Internet Services, Inc., with aggregate service fees of $1,390 per month, the terms of which can be found at the URL http://www.insomnia365.com/legal/terms.html;
     (3) The hosting agreements between the Seller and HostRocket.com, Inc., with aggregate service fees of $15 per month, the terms of which can be found at the URL http://admin.hrwebservices.net/signupform.php; and
     (4) The hosting agreements between the Seller and EV1Servers.net, with aggregate service fees of $10 per month, the terms of which can be found at the URLs http://www.ev1servers.net/about/aup.asp and http://www.ev1servers.net/about/tos.asp;
provided, that Seller (a) will retain and remain liable for any and all obligations and liabilities arising on or before the Closing Date with respect to the above referenced agreements and (b) shall be solely responsible for obtaining any consents required to permit the assignment of the above referenced agreements to Buyer.

 


 

Exhibit I
Employment Agreement
See attached.

 


 

Exhibit II
Form of Bill of Sale and Assignment Agreement
     BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Agreement”), dated as of January 18, 2006, by and between HOLLYWOOD FAN SITES, INC., a Delaware corporation (“Buyer”), and EFANGUIDE, INC., a New York corporation (“Seller”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Asset Purchase Agreement (as defined below).
     WHEREAS, Hollywood Media Corp., Buyer, Seller and the stockholders of Seller have entered into that certain Asset Purchase Agreement (the “Asset Purchase Agreement”), dated as of January 18, 2006, pursuant to which Seller has agreed to sell, assign and transfer to Buyer, and Buyer has agreed to purchase and acquire from Seller, the Assets (but excluding the Excluded Assets), free and clear of all Liens;
     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
     1. Seller does hereby sell, assign, transfer, convey and deliver to Buyer all of the right, title and interest of Seller in, to and under the Assets, including.
     2. Buyer hereby assumes all obligations and liabilities arising after the Closing Date under each of the assigned contracts listed on Schedule C attached to the Asset Purchase Agreement in respect of the period following such Closing Date. Buyer does not assume and shall not be bound by any other Liabilities of Seller, all of which shall remain the sole responsibility of Seller.
     3. This Agreement is in accordance with, and is subject to all of the representations, warranties, covenants and exclusions set forth in, the Asset Purchase Agreement.
     4. Seller will, at the request of Buyer, execute and deliver such other and further instruments of sale, assignment, transfer and conveyance and take such other and further actions as Buyer may reasonably request, with respect to the Assets, in order to make all the benefits and rights of Seller in the Assets available to Buyer, to vest in Buyer and put Buyer in possession of the Assets and to transfer to Buyer any contracts and rights of Seller relating to the Assets and to assure to Buyer the benefits thereof and effectuate fully the purposes of this Agreement.
     5. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns under the Asset Purchase Agreement. Except as expressly permitted under the Asset Purchase Agreement, no assignment of this Agreement or of any rights or obligations hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without such required consent shall be void.

 


 

     6. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon, or give to, any person, firm or corporation other than Buyer and Seller and their respective successors and permitted assigns, any remedy or claim under or by reason of this instrument or any term, covenant or condition hereof, and all the terms, covenants and conditions, promises and agreements in this instrument contained shall be for the sole and exclusive benefit of Buyer and Seller and their respective successors and permitted assigns.
     7. This Agreement may be amended, supplemented or modified, and any provision hereof may be waived, only pursuant to a written instrument making specific reference to this Agreement signed by each of the parties hereto.
     8. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
     9. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts to be made, executed, delivered and performed wholly in such state, but without regard to conflicts of law principles of such state. No provision of this Agreement shall be construed against either party because such party drafted or caused to be drafted such provision. Each provision of this Agreement shall be construed as if such provision were proposed by both Buyer and Seller.
To have and to hold the Assets unto Buyer, its successors and assigns forever.
IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date and year first above written.
             
    HOLLYWOOD FAN SITES, INC.  
 
           
    By:    
 
     
 
 
   
    Name:    
    Title:    
 
           
    EFANGUIDE, INC.    
 
           
    By:    
 
           
    Name:    
    Title:    

-2-

EX-10.3 4 g99426exv10w3.htm ASSET PURCHASE AGREEMENT - RAJIV DOSHI Asset Purchase Agreement - Rajiv Doshi
 

EXHIBIT 10.3
EMPLOYMENT AGREEMENT
     THIS AGREEMENT (“Agreement”) is made and entered into as of this 18th day of January, 2006 (the “Effective Date”), by and between Hollywood Fan Sites, Inc., a Delaware corporation (the “Company”), and Mr. Rajiv Doshi, a New York resident (the “Employee”).
RECITALS
A.   The Company, an indirect wholly-owned subsidiary of Hollywood Media Corp., a Florida corporation (“HMC”), is in the business of hosting unofficial celebrity fan web sites;
B.   On or about the Effective Date, the Company, HMC, eFanGuide, Inc., a New York corporation (“eFanGuide”), and each of the stockholders of eFanGuide (including the Employee) entered into an asset purchase agreement pursuant (the “Asset Purchase Agreement”) to which the Company acquired certain assets of eFanGuide (the “Acquisition”), including the Internet domain names for certain celebrity fan web sites (collectively, the “Fan Sites”);
C.   Pursuant to the Asset Purchase Agreement, the Employee, as a stockholder of eFanGuide, shall receive shares of common stock of HMC as consideration for the Acquisition;
D.   The execution and delivery of this Agreement is an inducement to the Company and HMC to enter into the Asset Purchase Agreement and is a condition to the Company’s consummation of the Acquisition;
E.   The Employee is experienced in, and knowledgeable concerning, one or more aspects of the business of the Company and is able to render services to the Company that are of a special, unique, extraordinary and intellectual character concerning the Company’s business; and
F.   The Company and the Employee mutually desire to agree upon the terms of the Employee’s future employment with the Company and related matters as provided in this Agreement.
AGREEMENT
     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties agree as follows:
     1. Term and Employment Period. The Company shall employ the Employee, and the Employee shall serve the Company, on the terms and conditions set forth herein for the period commencing on and as of the Effective Date and shall terminate on the date three (3) years following the Effective Date (the “Term”), unless terminated earlier in accordance with the terms of this Agreement.
     2. Duties, Responsibilities and Authority of the Employee. During the Term, the Employee shall serve as the Director of Internet Operations for the Company, shall report to the President of the Company or such other officer of the Company or HMC designated by the President of the Company or the Chief Executive Officer of HMC (each, a “Supervisor”), and shall diligently and faithfully perform all duties and responsibilities as may be assigned to him from time to time by or upon the authority of Board of Directors of the Company or any Supervisor, in each case consistent with his position. Such

 


 

duties shall specifically include: (a) the duty to promptly report to the President of the Company any event or occurrence in the Company’s business that would reasonably be expected to be material to such business or HMC; and (b) the duty to obtain the written consent of the President of the Company or any Supervisor prior to the entry into any contract or arrangement by or on behalf of the Company or its business (i) involving any payment or series of payments by or to the Company of more than $500, whether in one or a series of transactions, or (ii) which is for a term of more than six months and is not cancelable by the Company on thirty (30) days’ or less prior written notice (without penalty or payment of any kind). The Employee shall at all times perform his duties and responsibilities under this Agreement and conduct the Company’s business in compliance with all applicable laws, rules, regulations or ordinances and in compliance with any judgments, order or decrees or other legal obligations binding on the Company or HMC. During the Term, the Employee shall devote all of the Employee’s working time to the performance of the services required under this Agreement and shall not engage in any other business matters.
     3. Compensation.
     (a) Base Salary. During the Term, the Employee shall be paid a base annual salary during the period he is employed hereunder at the annual rate of eighty thousand dollars ($80,000) (the “Base Salary”), with such Base Salary payable in installments consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes. The Employee shall be reviewed, at least annually, by the President of the Company or any Supervisor, and shall be considered for any appropriate merit increases to his Base Salary as part of such review process.
     (b) Grant of Stock.
          (i) On the Effective Date, HMC shall, in accordance with HMC’s 2004 Stock Incentive Plan (the “Plan”), grant to the Employee that number of shares of common stock of HMC (the “Shares”) equal to the quotient of (i) Sixty-Eight Thousand Five Hundred Dollars ($68,500) divided by (ii) the Fair Market Value (as defined in Section 3(b)(ii) below) of the common stock of HMC. As promptly as possible after the Effective Date, HMC shall cause American Stock Transfer & Trust Company, the transfer agent for the common stock of HMC (together with its successors and assigns, the “Transfer Agent”), to make a book entry record showing ownership for the Shares in the name of the Employee subject to the terms and conditions of this Agreement. The Shares shall be issued to the Employee from common stock reserved for issuance pursuant to the Plan as grants under such Plan.
          (ii) For the purposes hereof, “Fair Market Value” means the average closing sales price of the common stock of HMC on the ten trading days prior to the Closing Date 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 stock as reported by the National Quotations Bureau Incorporated or similar organization for the ten trading days prior to the closing date of the Agreement; provided, that if none of the calculation methods set forth above are applicable, then Fair Market Value shall be determined in good faith by the Board of Directors of HMC.
          (iii) Miscellaneous.
  (A)   The Employee represents that the Shares are being acquired for investment and that the Employee has no present intention to transfer, sell or otherwise dispose of the Shares, except in compliance with applicable securities laws, and the parties agree that the Shares are

Page 2


 

      being acquired in accordance with and subject to the terms, provisions and conditions of this Agreement. These agreements shall bind and inure to the benefit of the parties’ respective heirs, legal representatives, successors and assigns.
 
  (B)   The Employee understands that HMC will, and the Employee hereby authorizes HMC to, issue such instructions to the Transfer Agent as HMC may deem necessary or proper to comply with the intent and purposes of this Agreement. This paragraph shall be deemed to constitute the stock power contemplated by the Plan.
     (c) Bonuses. In addition to the Base Salary set forth above, during the Term the Employee shall have the right to receive additional cash bonuses as follows:
  (i)   Net Profit Bonus. The Employee shall be entitled to receive a cash bonus equal to five percent (5%) of the net profit generated by the Company during each of fiscal quarter of HMC, if any. Any net profit bonus earned by the Employee during a fiscal quarter shall be paid within thirty (30) days of the filing of HMC’s Quarterly Report on Form 10-Q for such fiscal quarter.
 
  (ii)   Unique User Bonus. At any time after the earlier of (A) the final implementation of the Fan Sites by the Company or (B) six (6) months from the Effective Date, the Employee shall be entitled to receive a $500 cash bonus for each month during which there is an increase in unique user traffic to www.hollywood.com of 250,000 or more over the previous month (as reported by the third party tracking tool utilized by Hollywood.com, Inc. to record such information, which is currently Hitbox) that is directly attributable to the Company or the Fan Sites. Any unique user bonus earned by the Employee during a month shall be paid within thirty (30) days of the Comscore/Media Metrix report for such month.
 
  (iii)   Discretionary HMC Revenue Bonus. The President or any Supervisor may also award the Employee a discretionary cash bonus based on any net revenue generated by any other subsidiary or division of HMC if, in the sole discretion of the President or any Supervisor, the revenue was generated directly as a result of business opportunities referred to such subsidiary of division by the Employee.
     4. Place of Performance. Except for required travel on the Company’s business, the Employee shall be based at the Company’s offices in New York, New York or, as the Company may from time to time determine in its sole discretion, at such other location within a thirty-mile radius thereof.
     5. Vacation. The Employee shall be entitled to vacation accruable in accordance with HMC’s general vacation policy, commensurate with other employees of the Company, HMC or any other HMC Entity (as defined below), commensurate with other such employees holding similar titles. For purposes of this Agreement, HMC and its subsidiaries, together with any nonconsolidated businesses of HMC, including MovieTickets.com and Netco Partners, are referred to herein as the “HMC Entities” or individually as an “HMC Entity.”
     6. Employee Benefits. The Employee shall be eligible to participate in all employee benefit plans and benefit programs of the Company or HMC in effect during the Employment Period to the same

Page 3


 

extent as other active employees of the Company or HMC. The Company or HMC, as applicable, may, without notice, change, modify, amend, or terminate any employee benefit plans and benefit programs that may be in effect either on the Effective Date or as may be adopted later.
     7. Trade Secrets. The Employee acknowledges and agrees that, among the Employee’s duties for the Company, the Employee will be employed by the Company in a position that could provide him access to designs, plans, information, practice improvements, developments, ideas or discoveries, whether patentable or unpatentable, which afford the Company or HMC competitive advantages, and which the Company and HMC take steps to protect the confidentiality thereof (collectively hereinafter referred to as “Trade Secrets”). The Employee acknowledges that all Trade Secrets shall be and remain the sole and exclusive property of the Company. The Employee hereby assigns, and agrees to assign, to the Company all of the Employee’s right, title and interest in and to any and all Trade Secrets developed by the Employee in the scope of his employment by the Company.
                                             Employee’s Initials /s/ RD
     8. Copyrights. The Employee agrees that all right, title and interest in any and all copyrights, copyright registrations and copyrightable works that the Employee authors or creates in the scope of his employment with the Company shall be the sole and exclusive property of the Company, and agrees that such works comprise works made for hire. The Employee hereby assigns, and agrees to assign, all right, title and interest in any and all copyrights, copyright registrations and copyrightable works authored or created by the Employee in the scope of his employment by the Company.
                                             Employee’s Initials /s/ RD
     9. Non-Competition and Non-Solicitation.
     (a) Covenants Not to Compete. Except in connection with his performance of services for the Company or any other HMC Entity and/or to the extent otherwise expressly permitted herein, at all times while the Employee is employed by the Company or any other HMC Entity and for a period of (i) six (6) months immediately following termination of the Employee’s employment with the Company or any HMC Entity if such termination is without Cause (as defined in Section 12(b) below) or (ii) two (2) years immediately following termination of the Employee’s employment with the Company or any HMC Entity for Cause or in the event of termination of employment by the Employee for any reason, the Employee shall not, directly or indirectly, engage in or have any interest in, or assist or render services (whether or not for compensation, and whether as a director, officer, managing member, partner, shareholder, creditor, employee, agent, advisor or consultant) to or for any sole proprietorship, corporation, company, limited liability company, partnership, association, venture or business or any other person or entity (whether as an employee, officer, director, partner, shareholder, managing member, venturer, agent, security or equity holder, creditor, consultant or otherwise) that directly (or through any affiliated entity) competes or expects to compete with the Company’s business anywhere in the United States, Canada or Europe; provided, however, that this Section 9(a) shall not prohibit the Employee’s ownership, solely as an investment, of securities of any issuer that are registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Employee does not (A) directly or indirectly own (legally or beneficially) or control more than five percent (5%) of any class of capital stock or other equity of such issuer, or (B) control, acquire a controlling interest in or become a member of a group which exceeds such five percent (5%) ownership or exercises direct or indirect control of such issuer.

Page 4


 

For purposes hereof, the Company’s business shall mean the hosting unofficial celebrity fan web sites and any and all current businesses operated by the Company and its affiliates.
     (b) Covenant Not to Solicit or Interfere. Except in connection with his performance of services for the Company or any of its subsidiaries or affiliates, the Employee agrees during the Term and for a period of one (1) year immediately following termination of the Employee’s employment with the Company or any other HMC Entity, the Employee shall not interfere with the business of the Company or any other HMC Entity within the United States, Canada or Europe in any manner for the purpose of (A) hiring away any employees of the Company or any other HMC Entity, or (B) soliciting customers or business relationships of the Company or any other HMC Entity. Particularly, but without limitation, the Employee shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, sole proprietorship, association, venture or business or any other entity (I) solicit the termination of employment of, attempt to divert any employee, employ or attempt to employ or enter into a contractual arrangement with any employee or former employee of the Company or any other HMC Entity, unless such employee or former employee has not been employed by the Company or any other HMC Entity for a period in excess of one (1) year, and/or (II) call on or solicit any of the actual or targeted prospective customers and/or clients of the Company or any other HMC Entity on behalf of any person or entity in connection with any business that competes with the Company or any other HMC Entity, nor shall the Employee make known the names and addresses of such customers and/or clients or any information relating in any manner to the Company’s or any other HMC Entity’s trade or business relationships with such customers and/or clients, other than in connection with the performance of his employment duties for the Company or any other HMC Entity, nor shall the Employee divert or attempt to divert any business or customer of the Company or any other HMC Entity.
     (c) Blue Pencilling. In the event any provision of this Section 9 is held by an arbitrator or court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way. Without in any way limiting the generality of the preceding sentence, in the event the covenant not to compete contained herein and/or the non-solicitation covenant contained herein, in the view of a court or arbitrator asked to rule upon the issue, is deemed unenforceable by reason of covering too large an area, too long a period of time or too many business activities, then the same shall be deemed to cover only the largest area, the longest time period or the most business activities, as the case may be, which will not render it unenforceable (as determined by the court or arbitrator, as applicable).
     (d) It is expressly recognized and agreed that the covenants set forth in this Section 9 are for the purposes of restricting the activities of the Employee only to the extent necessary for the protection of the legitimate business interests of the Company and the HMC Entities, and the Company and the Employee agree that said covenants are reasonable for that purpose and that such covenants do not and will not preclude the Employee from engaging in activities sufficient for the purpose of earning a living.
     10. Proprietary Information. The Employee acknowledges and agrees that certain non-public information obtained by the Employee relating or pertaining to the Company’s businesses, projects, products, services, trade secrets, confidential information (including methods of operations and financial information), unpublished know-how (whether patented or unpatented) and other business information not easily accessible to other persons in the trade and which give the Company a competitive advantage and which the Company takes steps to keep confidential (collectively, the “Proprietary Information”), are proprietary in nature; provided, however, there shall be excluded from the meaning of Proprietary Information any information which is or becomes generally known within the industry through some non-confidential source other than the Employee. The Employee acknowledges that the Proprietary Information shall be considered by the Employee to be confidential, and the Employee covenants and

Page 5


 

agrees not publish, disclose or reveal (whether directly or indirectly) any part of the Proprietary Information to any entity or person or use the same for his/her own purposes or personal gain or the purposes of other, during the term of this Agreement or after its termination or expiration. Upon termination (voluntary or otherwise) of the Employee’s employment with the Company, the Employee will return to the Company all things belonging to the Company, and all documents, records, notebooks and tangible articles containing or embodying any Proprietary Information, including copies thereof, then in the Employee’s possession or control, whether prepared by the Employee or others, will be left with the Company.
                                             Employee’s Initials /s/ RD
     11. Remedies. The Employee acknowledges that the Employee’s services are of a special, unique, unusual, extraordinary and intellectual character with regard to the development of the Company’s businesses and that in the each and every breach or violation or threatened breach or violation by the Employee of any terms and conditions of this Agreement by the Employee (including but not limited to Sections 7, 8, 9 and 10 above), the Company’s remedies at law may be inadequate and that the Company, in addition to all other remedies available to it (including, without limitation, specific performance of the provisions hereof), shall be entitled to seek to enjoin the commencement or continuance thereof and may, with notice to the Employee, apply to any court of competent jurisdiction for entry of equitable relief, including, without limitation, an immediate restraining order or injunction without the necessity of posting bond.
                                              Employee’s Initials /s/ RD
     12. Termination.
     (a) Death or Disability. In the event the Employee dies or becomes disabled during the Employment Period, this Agreement shall terminate on the date on which death or disability occurs and the sole remaining obligations of the Company under this Agreement shall be to pay the Employee or the Employee’s named beneficiary or heirs any unpaid Base Salary or bonus amounts due the Employee for the period through and until the date of the Employee’s disability or death and any unreimbursed previously approved business expenses. For purposes of this Agreement, the Employee shall be considered “disabled” when, as the result of injury or sickness, the Employee has been wholly and continuously disabled and prevented from performing the Employee’s duties for ninety (90) consecutive days.
     (b) Cause. The Company may terminate the Employee’s employment and all of the Company’s obligations hereunder solely for Cause (as defined below), by written notice to the Employee particularizing the conduct constituting the Cause. In the event the Company invokes its right as described in this paragraph, and the Employee challenges the Company’s interpretation of the definition of cause, then such dispute shall be settled by binding arbitration in accordance with Section 13(g) below. For purposes of this Agreement, “Cause” shall be defined as (i) willful misconduct or intentional or continual failure to perform stated and material duties that is not remedied or cured by Employee within ten (10) days after receiving written notice particularizing the misconduct or failure to perform, (ii) a known breach of any fiduciary duty or duty of loyalty owed to the Company in the Employee’s capacity as an officer of the Company where that is not remedied or cured by Employee within ten (10) days after receiving written notice particularizing the breach, or (iii) if the Employee (A) is convicted of any felony or other lesser crime involving dishonesty, fraud, misrepresentation or other acts of moral turpitude or is incarcerated while awaiting trial for a period of thirty (30) days or longer, (B) purposefully engages in any conduct that gives rise to material liability of the Company or HMC under applicable

Page 6


 

laws, including, but not limited to, laws relating to discrimination and harassment in employment, unless pursuant to an instruction from the President or any Supervisor, or (C) publishes any remarks, comments or statements, whether written or oral, which disparage the Company or any HMC Entity, or any of their respective directors or officers. In the event the Company terminates this Agreement for Cause or in the event the Employee voluntarily resigns from the employment of the Company for any reason or by reason of disability or death, the Company shall no longer be obligated to make any further salary, bonus or other payments to the Employee except insofar as they have accrued as of the date the Employee’s employment terminates. Other than as expressly set forth hereinabove, upon any such termination, the Employee shall cease to have any future rights under this Agreement, including but not limited to Section 3 herein.
     (c) Other. The Company may terminate the Employee’s employment for reasons other than for Cause, in the sole discretion of the Company, by written notice to the Employee. In the event that this Agreement is terminated by the Company other than for Cause, death or disability, upon the Employee’s prior voluntary execution of a written release of any and all claims the Employee may assert against the Company or any HMC Entity, including without limitation any claims for lost wages or benefits, stock options, compensatory damages, punitive damages, attorneys’ fees, equitable relief or any other form of damages or relief (excluding claims for amounts which may be payable pursuant to this Agreement), which release shall be prepared by the Company, the Company shall be obligated to pay the Employee (which shall constitute the Company’s sole obligation hereunder) (i) any bonuses due and owing as calculated in accordance with Section 3(b) above as of the date of such termination and (ii) a cash payment equal to the Base Salary described in Section 3 for the shorter of (1) the remainder of the Employment Period and (2) six months after the date of such termination. Other than as expressly set forth hereinabove, upon any such termination, the Employee shall cease to have any further rights under this Agreement.
     13. General.
     (a) Notices. All notices, requests, consents and other communications, required or permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given when personally delivered or sent by registered or certified mail, return receipt requested or when sent by overnight delivery service, obtained signature for delivery, or by facsimile upon confirmation of successful transmission of the facsimile.
         
               If to the Employee at:
  Rajiv Doshi    
 
  560 S. Broadway, Suite #202    
 
  Hicksville, NY 11801    
 
  Facsimile: (516) 937-7506    
 
       
               with a copy to:
  Mark E. Gelfand, Esq.    
 
  560 South Broadway    
 
  Hicksville, NY 11801    
 
  Facsimile: (516) 933-3128    

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               and if to the Company, at:
  c/o Hollywood Media Corp.    
 
  2255 Glades Road, Suite 221A    
 
  Boca Raton, FL 33431    
 
  Attention:  Mitchell Rubenstein    
 
                           Chief Executive Officer    
 
  Facsimile: (561) 998-2974    
 
       
               with a copy to:
  Hollywood Media Corp.    
 
  2255 Glades Road, Suite 221A    
 
  Boca Raton, FL 33431    
 
  Attention:  Legal Department    
 
  Facsimile: (561) 998-2974    
     (b) Assignment. This Agreement shall inure to the benefit of, and shall be binding upon, the Company and its successors and assigns, including any person with which the Company may merge, consolidate or transfer all or substantially all of its assets. Insofar as the Employee is concerned, this Agreement, being personal, cannot be assigned.
     (c) Governing Law. The validity, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws.
     (d) Captions. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement
     (e) Entire Agreement. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements and understandings, oral or written, between the parties hereto with respect to the subject matter hereof.
     (f) Amendment. This Agreement may not be amended, modified, superseded, canceled, renewed or extended other than by written instrument executed by both of the parties hereto, or in the case of waiver, by the party waiving compliance.
     (g) Arbitration. Except as otherwise provided in Section 11 hereof, the Employee and the Company each agree that any and all disputes and claims arising out of or related to the Employee’s employment by the Company or the termination thereof, shall be submitted to binding arbitration in New York City, New York pursuant to the then-existing model employment dispute rules of the American Arbitration Association (“Rules”), before three (3) arbitrators to be selected pursuant to the then-existing Rules. THE EMPLOYEE AND THE COMPANY HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE THAT, IN AGREEING TO SUBMIT SUCH DISPUTES AND/OR CLAIMS TO ARBITRATION, EACH OF THE EMPLOYEE AND THE COMPANY GIVE UP THE RIGHT TO HAVE THE DISPUTE(S) OR CLAIMS(S) HEARD IN A COURT OF LAW BY A JUDGE OR JURY. However, nothing herein shall in any way limit either the Employee’s or the Company’s statutory rights and/or remedies, all of which are reserved and may be alleged in the arbitration process, and nothing herein shall in any way limit the Company’s rights under Section 11 hereof. Moreover, nothing herein shall restrict any resort to any statutory agency charged with enforcing any of the Employee’s or the Company’s statutory rights and/or remedies; however the review of any such agency’s actions shall be had before the arbitrators as discussed above and not before a judge or jury. By signing this Agreement, the Employee understands that the Employee may not have a jury decide any dispute or claim, but that

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any such dispute or claim shall be decided only by the arbitrators. The arbitrators shall issue a written decision, including the arbitrators’ written findings and conclusions upon which any award is based. Each party shall bear its own costs and expenses and an equal share of the arbitrators’ and administrative fees of arbitration, except that the arbitrators shall be authorized, in their discretion, to award fees and expenses to a prevailing party in the interests of justice.
     (h) Waiver. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or waiver of the breach of any other term or covenant contained in this Agreement.
     (i) Agents for the Company for this Agreement. The parties agree that the Employee shall not and is not permitted to take any action or make any decision for or on behalf of or in the name of the Company with respect to the Company’s exercise of its rights under or with respect to this Agreement.
     (j) Severability. Invalidity or unenforceability of any provision of this Agreement shall in no way affect the validity or enforceability of any other provisions.
     (k) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.
[Signatures to Follow]

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     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first above written.
     
 
  HOLLYWOOD FAN SITES, INC.
 
   
 
  /s/ Mitchell Rubenstein
 
   
 
  Name:     Mitchell Rubenstein
 
  Title:      Chairman and Chief Executive Officer
 
   
 
  HOLLYWOOD MEDIA CORP.
 
  (solely with respect to Section 3(b) above)
 
   
 
  /s/ Mitchell Rubenstein
 
   
 
  Name:     Mitchell Rubenstein
 
  Title:      Chairman and Chief Executive Officer
 
   
 
  THE EMPLOYEE:
 
   
 
  /s/ Rajiv Doshi
 
   
 
  Rajiv Doshi

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