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 the earliest event reported) August 28, 2012
HOLLYWOOD MEDIA CORP.
(Exact Name of Registrant as Specified in Its Charter)
| Florida | 1-14332 | 65-0385686 |
| (State or Other Jurisdiction | (Commission File | (IRS Employer |
| of Incorporation) | Number) | Identification No.) |
| 2255 Glades Road, Suite 221A, | ||
| Boca Raton, Florida | 33431 | |
| (Address of Principal Executive Offices) | (Zip Code) |
| (561) 998-8000 |
(Registrant’s Telephone Number, Including Area Code)
| 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:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
SECTION 1 - Registrant’s Business and Operations
| Item 1.01 | Entry into a Material Definitive Agreement. |
Sale by Hollywood Media Corp. of its Minority Interest in Project Hollywood LLC (which owns the Baseline StudioSystems business)
On August 28, 2012, Hollywood Media Corp. (“Hollywood Media”) entered into an Assignment and Assumption of Membership Interest and Waiver (the “Assignment”) with Baseline Holdings LLC (“Baseline Holdings”), Project Hollywood LLC (“Project Hollywood”), Mitchell Rubenstein (“Mr. Rubenstein”) and Laurie S. Silvers (“Ms. Silvers”). Baseline Holdings is wholly-owned by Mr. Rubenstein, the Chairman and Chief Executive Officer of Hollywood Media, and Ms. Silvers, the Vice-Chairman, President and Secretary of Hollywood Media. As described below, the Assignment and the transactions contemplated by the Assignment were approved by a Special Committee of Hollywood Media’s Board of Directors consisting of two of Hollywood Media’s independent directors (the “Special Committee”).
Pursuant to the Assignment, Hollywood Media assigned to Baseline Holdings all of Hollywood Media’s membership interest in Project Hollywood in exchange for total consideration of $1,800,000.00 (the “Project Hollywood Purchase Price”). The Project Hollywood Purchase Price has been paid as follows: (1) $1,230,500.00 in cash (which has been paid by Baseline Holdings to Hollywood Media), (2) Mr. Rubenstein waived his right to receive any future principal and interest owed by Key Brand Entertainment Inc. (“Key Brand”) to Hollywood Media pursuant to the $8.5 million credit agreement between Key Brand and Hollywood Media (the “Theatre Direct Credit Agreement”) (as of August 28, 2012, Mr. Rubenstein had the right to receive 4.76% of the principal, or $404,600.00, and interest on account of the Theatre Direct Credit Agreement), and (3) Ms. Silvers waived her right to receive any future principal and interest owed by Key Brand to Hollywood Media under the Theatre Direct Credit Agreement (as of August 28, 2012, Ms. Silvers has the right to receive 1.94% of the principal, or $164,900.00, and interest on account of the Theatre Direct Credit Agreement). Hollywood Media acquired its membership interest in Project Hollywood on October 27, 2011 for $1,250,000.00.
As a result of the waivers of Mr. Rubenstein and Ms. Silvers described in the preceding paragraph, after August 28, 2012, Hollywood Media will retain all payments of principal and interest made by Key Brand under the Theatre Direct Credit Agreement. As of August 28, 2012, the principal balance due under the Theatre Direct Credit Agreement was $8,500,000.00. The loan under the Theatre Direct Credit Agreement matures on December 15, 2015 and interest payments under the Theatre Direct Credit Agreement are due quarterly at a rate of 12% per annum. Mr. Rubenstein and Ms. Silvers informed the Special Committee that if Key Brand defaults on its obligation to make principal and interest payments under the Theatre Direct Credit Agreement, then, within ninety days after the date Mr. Rubenstein and Ms. Silvers receive notice of such default, Mr. Rubenstein and Ms. Silvers will pay Hollywood Media an amount equal to the amount Hollywood Media would have received as a result of the waivers of Mr. Rubenstein and Ms. Silvers described in the preceding paragraph had Key Brand not defaulted under the Theatre Direct Credit Agreement.
The Special Committee unanimously approved the Assignment and determined that the transactions contemplated by the Assignment were advisable, fair to and in the best interests of Hollywood Media and its shareholders. In connection with approving the transactions contemplated by the Assignment, the Special Committee received a fairness opinion from a firm with experience in valuation work, which stated that as of August 28, 2012, based upon and subject to (and in reliance on) the assumptions made, matters considered and limits of such review, in each case as set forth in its opinion, the Project Hollywood Purchase Price was fair from a financial point of view to Hollywood Media.
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The foregoing summary of the Assignment and the transactions contemplated by the Assignment do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Assignment which is filed as Exhibit 10.1 hereto and is incorporated by reference into this Current Report on Form 8-K.
Buyout of Obligation of R&S Investments, LLC to Pay Earnout
On August 28, 2012, (1) Hollywood Media and R&S Investments, LLC (“R&S Investments”) entered into an Agreement (the “R&S Agreement”) regarding the Purchase Agreement dated as of August 21, 2008 between Hollywood Media and R&S Investments, as amended (the “R&S Purchase Agreement”), (2) Hollywood Media, Mr. Rubenstein and Ms. Silvers entered into a letter agreement regarding the R&S Agreement (the “Rubenstein Silvers Letter Agreement”), and (3) R&S Investments provided Hollywood Media with a letter regarding a contingent additional payment (the “R&S Letter”). R&S Investments is wholly-owned by Mr. Rubenstein and Ms. Silvers. As described below, the R&S Agreement and the Rubenstein Silvers Letter Agreement and the transactions contemplated by the R&S Agreement and the Rubenstein Silvers Letter Agreement were approved by the Special Committee.
Pursuant to the R&S Agreement, in exchange for R&S Investments paying Hollywood Media $2,950,000.00 in cash (the “Buyout Amount”), which payment has been made to Hollywood Media, R&S Investments fully satisfied all of its obligation to pay the purchase price under Section 3.1 of the R&S Purchase Agreement and any additional consideration or earnout payment under Section 3.3 of the R&S Purchase Agreement, and R&S Investments shall have no further obligations and/or liabilities (and Hollywood Media shall have no further rights and/or remedies) under Article III of the R&S Purchase Agreement or otherwise.
Pursuant to the Rubenstein Silvers Letter Agreement, Mr. Rubenstein agreed that that, in connection with the transaction consummated under the R&S Agreement and in addition to the Buyout Amount, the next $280,000.00 of the MovieTickets.com 5% Interest (as defined in the Amended and Restated Employment Agreement dated as of December 22, 2008, between Hollywood Media and Mr. Rubenstein, as amended (the “Rubenstein Employment Agreement”)) that would be distributed by Hollywood Media to Mr. Rubenstein pursuant to the Rubenstein Employment Agreement will be retained by Hollywood Media (and not paid to Mr. Rubenstein).
In addition, pursuant to the Rubenstein Silvers Letter Agreement, Ms. Silvers agreed that, in connection with the transaction consummated under the R&S Agreement and in addition to the Buyout Amount, the next $280,000.00 of the MovieTickets.com 5% Interest (as defined in the Amended and Restated Employment Agreement dated as of December 22, 2008, between Hollywood Media and Ms. Silvers, as amended (the “Silvers Employment Agreement”)) that would be distributed by Hollywood Media to Ms. Silvers pursuant to the Silvers Employment Agreement will be retained by Hollywood Media (and not paid to Ms. Silvers).
Pursuant to the R&S Letter, R&S Investments agreed that in the event of a sale of all the assets of Hollywood.com, LLC to one person or a group of persons not controlled, directly or indirectly, by Mr. Rubenstein and Ms. Silvers or their heirs, personal representatives or affiliates prior to August 31, 2015, R&S Investments shall pay to Hollywood Media $3,500,000.00 or, if less, the amount received by R&S Investments in connection with such transaction.
The Special Committee unanimously approved the R&S Agreement and the Rubenstein Silvers Letter Agreement and determined that the transactions contemplated by the R&S Agreement and the Rubenstein Silvers Letter Agreement were advisable, fair to and in the best interests of Hollywood Media and its shareholders. In connection with approving the transactions contemplated by the R&S Agreement and the Rubenstein Silvers Letter Agreement, the Special Committee received a fairness opinion from a firm with experience in valuation work, which stated that as of August 28, 2012, based upon and subject to (and in reliance on) the assumptions made, matters considered and limits of such review, in each case as set forth in its opinion, the Buyout Amount to be paid by R&S Investments was fair from a financial point of view to Hollywood Media.
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The foregoing summary of the R&S Agreement, the Rubenstein Silvers Letter Agreement and the R&S Letter and the transactions contemplated by the R&S Agreement, the Rubenstein Silvers Letter Agreement and the R&S Letter do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the R&S Agreement, the Rubenstein Silvers Letter Agreement and the R&S Letter, each of which are respectively filed as Exhibits 10.2, 10.3 and 10.4 hereto and are incorporated by reference into this Current Report on Form 8-K.
SECTION 5 – Corporate Governance and Management
Item 5.02(e) Compensatory Arrangements of Certain Officers.
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the Assignment (and the transactions contemplated by the Assignment) and the Rubenstein Silvers Letter Agreement (and the transactions contemplated by the Rubenstein Silvers Letter Agreement) is hereby incorporated by reference into this Item 5.02(e).
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SECTION 9 - Financial Statements and Exhibits
| Item 9.01 | Financial Statements and Exhibits. |
| (a) | Financial Statements of Businesses Acquired. |
Not applicable.
| (b) | Pro Forma Financial Information. |
Not applicable.
| (c) | Shell Company Transactions. |
Not applicable.
| (d) | Exhibits. |
| Exhibit Number | Description |
| 10.1 | Assignment and Assumption of Membership Interest and Waiver dated as of August 28, 2012 among Hollywood Media Corp., Baseline Holdings LLC, Project Hollywood LLC, Mitchell Rubenstein and Laurie S. Silvers. |
| 10.2 | Agreement dated as of August 28, 2012 between Hollywood Media Corp. and R&S Investments, LLC. |
| 10.3 | Letter Agreement dated as of August 28, 2012 among Hollywood Media Corp., Mitchell Rubenstein and Laurie S. Silvers. |
| 10.4 | Letter dated as of August 28, 2012 from R&S Investments, LLC to Hollywood Media Corp. regarding a contingent additional payment. |
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SIGNATURE
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. | ||||
| Date: September 4, 2012 | ||||
| By: | /s/ Tammy G. Hedge | |||
| Name: | Tammy G. Hedge | |||
| Title: | Chief Financial Officer and Chief Accounting Officer | |||
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EXHIBIT INDEX
| Exhibit Number | Description |
| 10.1 | Assignment and Assumption of Membership Interest and Waiver dated as of August 28, 2012 among Hollywood Media Corp., Baseline Holdings LLC, Project Hollywood LLC, Mitchell Rubenstein and Laurie S. Silvers. |
| 10.2 | Agreement dated as of August 28, 2012 between Hollywood Media Corp. and R&S Investments, LLC. |
| 10.3 | Letter Agreement dated as of August 28, 2012 among Hollywood Media Corp., Mitchell Rubenstein and Laurie S. Silvers. |
| 10.4 | Letter dated as of August 28, 2012 from R&S Investments, LLC to Hollywood Media Corp. regarding a contingent additional payment. |
Exhibit 10.1
ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTEREST
(PROJECT HOLLYWOOD LLC) AND WAIVER
THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTEREST AND WAIVER (“Assignment”) is made as of August 28, 2012, by HOLLYWOOD MEDIA CORP., a Florida corporation (“Assignor”), in favor of BASELINE HOLDINGS LLC, a Delaware limited liability company (“Assignee”).
RECITALS:
A. PROJECT HOLLYWOOD LLC, a Delaware limited liability company (the “Company”) is a limited liability company formed and existing under the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq. Pursuant to the Amended and Restated Limited Liability Company Agreement of the Company dated as of December 1, 2011 (the “Company LLC Agreement”), Assignor is the owner of a membership interest in the Company and, as a “Class A Member” of the Company, holds 125 “Class A Units” of membership interest, each as defined in the Company LLC Agreement.
B. Assignor desires to assign to Assignee 100% of Assignor's membership interest in the Company, including without limitation (i) all capital of Assignor in the Company, (ii) all rights of Assignor to distributions and other payments under the Company LLC Agreement, and (iii) all rights, powers and privileges of Assignor as holder of the above-referenced Class A Units and otherwise under the Company LLC Agreement (collectively, the “Membership Interest”).
NOW, THEREFORE, in consideration of the foregoing premises, of the mutual covenants set forth in this Assignment, and of other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Assignor and Assignee agree as follows:
1. Assignment of Interest.
1.1 The Assignor owns, beneficially and of record, the Membership Interest free and clear of any lien or encumbrance (other than any lien or encumbrance imposed by the Company LLC Agreement). The Assignor has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and thereunder. The Assignor has duly executed and delivered this Agreement, which constitutes a valid and legally binding obligation of the Assignor, enforceable in accordance with its terms and conditions
1.2 For consideration consisting of One Million Eight Hundred Thousand Dollars ($1,800,000), payable as set forth on Schedule A (the “Purchase Price”), the receipt and sufficiency of which is hereby acknowledged, Assignor hereby absolutely and unconditionally assigns, transfers, conveys and delivers all of Assignor’s Membership Interest to Assignee, free and clear of any lien or encumbrance effective on August 28, 2012. Assignee hereby accepts the foregoing assignment of the Membership Interest and hereby assumes and agrees to be bound by all of the obligations and liabilities of Assignor with respect to the Membership Interest that arise out of or relate to events occurring on or after the date hereof.
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2. Withdrawal and Admission. By reason of the assignment of the Membership Interest effected pursuant to Section 1 above, (i) Assignee is hereby entitled to exercise all rights, powers and privileges and is hereby obligated to perform all of the duties and obligations which may hereinafter exist with respect to the Membership Interest and (ii) Assignor hereby fully and completely withdraws as a Member of the Company and Assignor shall not have any further rights, powers, privileges, duties and/or obligations with respect to the Membership Interest or any interest whatsoever in the Company or the business of the Company. The Company shall not dissolve as a result of the foregoing withdrawal (or any other event described in this Assignment); on the contrary, the business of the Company shall continue without any break or interruption in continuity. Assignor, Assignee and the Company hereby waive any right under the Company LLC Agreement to advance notice of the purchase of the Membership Interest as described herein or to participate in such purchase except as described herein, and the Company hereby consents to the purchase of the Membership Interest as described herein.
3. Release and Waiver
3.1 The Assignor hereby acknowledges and agrees that the Purchase Price constitutes the entire and full amount to which such Assignor is entitled in respect of its Membership Interest pursuant to the terms of this Agreement or otherwise. The Assignor hereby waives any claim or right that it may have to receive any amount greater than or in addition to the Purchase Price, whether pursuant to the Company LLC Agreement or otherwise.
3.2 For and in consideration of the Purchase Price and other valuable consideration, the Assignor, on behalf of itself, and its successors and assigns, and all persons claiming by, or through it, jointly and severally (the “Related Persons”), hereby unconditionally, irrevocably and forever: (i) waives any claims that it or any Related Person has or may have in the future against the Assignee, the Company and their respective Affiliates, directors, officers, members, managers, shareholders, successors, predecessors, assigns, principals, employees, agents, attorneys and representatives (collectively, the “Released Parties”) with respect to any matter relating to or arising out of any matter related to Assignor’s interest in the Company and/or status as a member of the Company; and (ii) releases, discharges and agrees to indemnify and hold harmless the Released Parties from any and all claims, demands, proceedings, agreements (express or implied) obligations, liabilities and causes of action whatsoever, whether known or unknown, whether arising under common law, in equity or under statute, which the Assignor or any Related Persons now has, has ever had or may hereafter have against the Released Parties relating to or arising out of any matter related to Assignor’s interest in the Company and/or status as a member of the Company
3.3 The Assignor hereby agrees that this Agreement shall be binding on the Assignor, all Related Persons, and all persons claiming any right, benefit, or interest with respect to the Assignor’s Membership Interest and shall inure to the benefit of the Released Parties and their successors and assigns.
4. Miscellaneous.
4.1 The obligations of the parties hereto shall be continuing, absolute and unconditional and shall remain in full force and effect.
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4.2 Promptly upon request of any other party, each party hereto shall each execute and deliver such further assurances and take such further actions as may be reasonably required or appropriate to perfect the assignment and assumption of the Membership Interest and otherwise carry out the intent and purpose of this Assignment.
4.3 This Assignment shall be binding upon and inure to the benefit of Assignor, Assignee and their respective successors and assigns.
4.4 Any controversy or claim arising out of or relating to this Assignment, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, or any successor thereof, and judgment upon the award rendered by the Arbitrators may be entered in any Court having jurisdiction thereof. Venue of the arbitration shall in Palm Beach County, Florida. Any controversy or claim shall be submitted to three arbitrators selected from the panels of the Arbitrators of the American Arbitration Association. Each party shall bear the costs of its own counsel and presentation of evidence, and each party shall share equally the cost of such arbitration proceeding. Any award made hereunder may be docketed in a court of competent jurisdiction in Palm Beach County, Florida, and all parties hereby consent to the personal jurisdiction of such court for purposes of the enforcement of the arbitration award.
4.5 This Assignment may be executed in any number of counterparts which, when taken together, shall constitute a single binding instrument. Execution and delivery of this Assignment by facsimile, or by e-mail in the form of a scanned attachment, shall be sufficient for all purposes and shall be binding on any person who so executes.
5. Interpretation.
5.1 This Assignment shall be governed by and construed in accordance with the laws of the State of Delaware (without reference to conflict of laws principles).
5.2 Captions, numbering and headings of Sections in this Assignment are for convenience of reference only and shall not be considered in the interpretation of this Assignment.
5.3 Whenever required by the context, the singular shall include the plural, the neuter gender shall include the male gender and female gender, and vice versa.
5.4 No modification of this Assignment shall be valid or effective unless the same is in writing and signed by the parties hereto. No purported waiver of any of the provisions of this Assignment shall be valid or effective unless the same is in writing and signed by the party against whom it is sought to be enforced.
[signatures appear on following page]
IN WITNESS WHEREOF, Assignor, Assignee, and the Company have executed this Assignment as of the date first above written.
| ASSIGNOR: | |||
| HOLLYWOOD MEDIA CORP., | |||
| a Florida corporation | |||
| By : | /s/ Robert D. Epstein | ||
| Robert D. Epstein | |||
| Chairman, Special Committee of Directors, on behalf of Special Committee, as Authorized Representative of Hollywood Media Corp. | |||
| ASSIGNEE: | |||
| BASELINE HOLDINGS LLC, | |||
| a Delaware limited liability company | |||
| By: | /s/ Mitchell Rubenstein | ||
| Mitchell Rubenstein, member | |||
| By: | /s/ Laurie S. Silvers | ||
| Laurie S. Silvers, member | |||
| THE COMPANY: | |||
| PROJECT HOLLYWOOD LLC, | |||
| a Delaware limited liability company | |||
| (solely as to Section 2) | |||
| By: | Baseline Holdings LLC, Managing Member | ||
| By: | /s/ Mitchell Rubenstein | ||
| Name: Mitchell Rubenstein | |||
| Title: Managing Member | |||
| /s/ Mitchell Rubenstein | |||
| Mitchell Rubenstein | |||
| (solely as to Section 2(i) of attached Schedule A) | |||
| /s/ Laurie S. Silvers | |||
| Laurie S. Silvers | |||
| (solely as to Section 2(ii) of attached Schedule A) | |||
Signature Page - Assignment from Hollywood Media Corp. to Baseline Holdings LLC
SCHEDULE A
The Purchase Price shall be paid as follows:
| 1. | $1,230,500 in cash by Assignee to Assignor within two (2) business days following the date hereof; |
| 2. | $569,500 as follows: |
| i. | Mitchell Rubenstein, an equity holder of Assignee, hereby waives his right to receive any principal and interest received after the date of this Agreement by Assignor on account of the Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010, pursuant to which Key Brand Entertainment Inc. is obligated to pay to Assignor $8,500,000 of principal plus interest (the “Theatre Direct Credit Agreement”) (as of the date hereof, Mr. Rubenstein has the right to receive 4.76% of the principal, or $404,600, and interest on account of the Theatre Direct Credit Agreement); and |
| ii. | Laurie S. Silvers, an equity holder of Assignee, hereby waives her right to receive any principal and interest received after the date of this Agreement by Assignor on account of the Theatre Direct Credit Agreement (as of the date hereof, Ms. Silvers has the right to receive 1.94% of the principal, or $164,900, and interest on account of the Theatre Direct Credit Agreement). |
Exhibit 10.2
AGREEMENT
THIS AGREEMENT (this “Agreement”) is made and effective as of August 28, 2012 (the “Effective Date”), by and between R&S Investments, LLC, a Delaware limited liability company (“Purchaser”), and Hollywood Media Corp., a Florida corporation (“Hollywood Media”). Purchaser and Hollywood Media are each referred to in this Agreement as a “Party” and are collectively referred to in this Agreement as the “Parties”.
RECITALS
A. Purchaser and Hollywood Media are parties to that certain Purchase Agreement dated as of August 21, 2008, as amended (the “Purchase Agreement”);
B. Pursuant to the Purchase Agreement, Hollywood Media sold, and Purchaser purchased, 100% of the membership interests (collectively, the “Purchased Interest”) in each of HOLLYWOOD.COM, LLC, a Delaware limited liability company, and Totally Hollywood TV, LLC, a Delaware limited liability company;
C. Upon the terms and subject to the conditions set forth in Section 3.3 of the Purchase Agreement, Purchaser may be obligated to pay Hollywood Media certain Additional Consideration (as such term is defined in the Purchase Agreement) in respect of the Purchased Interest; and
D. Upon the terms and subject to the conditions set forth in this Agreement, in exchange for Purchaser paying Hollywood Media Two Million Nine Hundred Fifty Thousand Dollars ($2,950,000.00) (the “Buyout Amount”), the Parties desire to terminate the Purchaser’s obligation to pay any Additional Consideration or Earnout Payment (each as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
1. Satisfaction of Obligation to Pay Additional Consideration. On the Effective Date, (i) Purchaser shall pay to Hollywood Media the Buyout Amount by wire transfer of immediately available funds into the account designated by Hollywood Media within two business days from the date hereof and (ii) upon execution of this Agreement, Purchaser shall have automatically and without further action completely and fully satisfied all of Purchaser’s obligations and/or liabilities under Article III of the Purchase Agreement (including Purchaser’s obligation to pay the Purchase Price under Section 3.1 of the Purchase Agreement and any Additional Consideration or Earnout Payment under Section 3.3 of the Purchase Agreement), and Purchaser shall have no further obligations and/or liabilities (and Hollywood Media shall no have further rights and/or remedies) under Article III of the Purchase Agreement or otherwise. For the avoidance of doubt, neither Purchaser nor any of Purchaser’s affiliates or successors will have any liability for payment or otherwise to Hollywood Media under the Purchase Agreement. Section 7.7 of the Purchase Agreement shall have no further force or effect.
2. Miscellaneous.
(a) Except as modified by this Agreement, the Purchase Agreement remains unaltered and in full force and effect. This Agreement constitutes the entire and final agreement among the Parties with respect to the subject matter hereof and there are no agreements, understandings, warranties or representations among the Parties with respect to the subject matter hereof except as set forth herein.
(b) Neither this Agreement nor any of the provisions hereof can be amended, changed, waived, discharged, or terminated, except by an instrument in writing signed by the Party or Parties against whom enforcement of the amendment, change, waiver, discharge, or termination is sought. No action taken pursuant to this Agreement, including any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any Party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
(c) Neither Party may assign, transfer or otherwise encumber this Agreement or their respective rights or obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without the prior written consent of the other Party. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Any corporation or other entity succeeding to the interests of Hollywood Media shall be treated as Hollywood Media hereunder. Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement except as expressly stated herein. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.
(d) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such State without giving effect to the choice of law principles of such state that would require or permit the application of the laws of another jurisdiction.
(e) For purposes of this Agreement, (a) the words “including”, “include” and “includes” shall be deemed to be followed by the words “without limitation”, (b) the word “or” is not exclusive (and shall be construed in the inclusive sense of “and/or”), (c) the words “herein,” “hereof,” “hereby,” “hereto” or “hereunder” refer to this Agreement as a whole, (d) each defined term used in this Agreement shall have a comparable meaning when used in its plural or singular form, and (e) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. To the extent any term or provision of this Agreement conflicts with any term or provision of the Purchase Agreement, the terms and provisions of this Agreement shall control.
(f) Each Party shall at any time and from time to time execute and deliver to the other Party such further instruments and agreements, and take such further action as the other Party may reasonably request, in each case further to effect the purposes of this Agreement and the transactions contemplated by this Agreement.
(g) The provisions of Sections 9.3, 9.7 and 9.8(d) and (e) of the Purchase Agreement are hereby incorporated by reference into this Agreement, mutatis mutandis, and shall be deemed to be a part of this Agreement as if restated in this Agreement in their entirety.
(h) Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, or any successor thereof, and judgment upon the award rendered by the Arbitrators may be entered in any Court having jurisdiction thereof. Venue of the arbitration shall in Palm Beach County, Florida. Any controversy or claim shall be submitted to three arbitrators selected from the panels of the Arbitrators of the American Arbitration Association. Each party shall bear the costs of its own counsel and presentation of evidence, and each party shall share equally the cost of such arbitration proceeding. Any award made hereunder may be docketed in a court of competent jurisdiction in Palm Beach County, Florida, and all parties hereby consent to the personal jurisdiction of such court for purposes of the enforcement of the arbitration award.
(i) This Agreement may be executed in any number of counterparts, each of which will be deemed an original document, but all of which will constitute a single document. A facsimile or email (in .pdf format) of any Party’s signature to this Agreement shall be treated as an original signature for all purposes of this Agreement and shall be fully effective to bind such Party to the terms of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| hollywood media: | ||
| hollywood media corp. | ||
| By: | /s/ Robert D. Epstein | |
| Name: | Robert D. Epstein | |
| Title: | Chairman, Special Committee of Directors, on behalf of Special Committee, as Authorized Representative of Hollywood Media Corp. | |
| PURCHASER: | ||
| R&S INVESTMENTS, LLC | ||
| By: | /s/ Mitchell Rubenstein | |
| Name: | Mitchell Rubenstein | |
| Title: | Managing Member | |
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Exhibit 10.3
HOLLYWOOD MEDIA CORP.
August 28, 2012
Mitchell Rubenstein
Laurie S. Silvers
| Re: | Agreement dated as of August 28, 2012 (the “R&S Agreement”) between Hollywood Media Corp., a Florida corporation (the “Company”) and R&S Investments, LLC, a Delaware limited liability company (“R&S Investments”) |
To Whom It May Concern:
Pursuant to the R&S Agreement, R&S Investments will pay to the Company $2,950,000.00 (the “Buyout Amount”) in exchange for the Company terminating R&S Investments’ obligation to pay additional consideration or earnout payments under that certain Purchase Agreement dated as of August 21, 2008 between the Company and R&S Investments, as amended (the “R&S Purchase Agreement”). R&S Investments is owned by Mitchell Rubenstein (“Mr. Rubenstein”) and Laurie S. Silvers (“Ms. Silvers”).
Mr. Rubenstein hereby agrees that, in connection with the transactions contemplated by the R&S Agreement and in addition to the Buyout Amount, the next $280,000.00 of the MovieTickets.com 5% Interest (as defined in that certain Amended and Restated Employment Agreement dated as of December 22, 2008, between the Company and Mr. Rubenstein, as amended (the “Rubenstein Employment Agreement”)) that would be distributed by the Company to Mr. Rubenstein pursuant to the Rubenstein Employment Agreement will be retained by the Company (and not paid to Mr. Rubenstein).
Ms. Silvers hereby agrees that, in connection with the transactions contemplated by the R&S Agreement and in addition to the Buyout Amount, the next $280,000.00 of the MovieTickets.com 5% Interest (as defined in that certain Amended and Restated Employment Agreement dated as of December 22, 2008, between the Company and Ms. Silvers, as amended (the “Silvers Employment Agreement”)) that would be distributed by the Company to Ms. Silvers pursuant to the Silvers Employment Agreement will be retained by the Company (and not paid to Ms. Silvers).
Except as otherwise specifically set forth in this letter, all provisions of the R&S Agreement, the Rubenstein Employment Agreement and the Silvers Employment Agreement that are not amended or modified by this letter shall remain in full force and effect. This letter may be amended or modified only by an instrument in writing duly executed by the Company, Mr. Rubenstein and Ms. Silvers. This letter is binding upon, inures to the benefit of and is enforceable by the Company, Mr. Rubenstein and Ms. Silvers and the heirs, successors and assigns of the Company, Mr. Rubenstein and Ms. Silvers.
This letter shall be governed and construed in accordance with the laws of the State of Florida Any controversy or claim arising out of or relating to this letter, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, or any successor thereof, and judgment upon the award rendered by the Arbitrators may be entered in any Court having jurisdiction thereof. Venue of the arbitration shall in Palm Beach County, Florida. Any controversy or claim shall be submitted to three arbitrators selected from the panels of the Arbitrators of the American Arbitration Association. Each party shall bear the costs of its own counsel and presentation of evidence, and each party shall share equally the cost of such arbitration proceeding. Any award made hereunder may be docketed in a court of competent jurisdiction in Palm Beach County, Florida, and all parties hereby consent to the personal jurisdiction of such court for purposes of the enforcement of the arbitration award. This letter may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed an original.
Please acknowledge your agreement to the foregoing by sending to the Company an executed counterpart of this letter.
| Sincerely, | ||
| Hollywood Media Corp. | ||
| By: | /s/ Robert D. Epstein | |
| Name: | Robert D. Epstein | |
| Title: |
Chairman, Special Committee of Directors, on behalf of Special Committee, as Authorized Representative of Hollywood Media Corp. | |
| ACKNOWLEDGED AND AGREED | |
| TO AS OF AUGUST 28, 2012: | |
| /s/ Mitchell Rubenstein | |
| Mitchell Rubenstein | |
| /s/ Laurie S. Silvers | |
| Laurie S. Silvers |
Exhibit 10.4
R&S Investments, LLC
| August 28, 2012 |
Hollywood Media Corp.
2255 Glades Road, Suite 221A
Boca Raton, FL 33431
Re: Contingent Additional Payment
In the event of a "Change of Control" (as defined in the following two sentences) with respect to Hollywood.com, LLC ("Hollywood.com") prior to August 31, 2015, R&S Investments, LLC ("R&S Investments") shall pay to Hollywood Media Corp. ("Hollywood Media") the "Contingent Additional Payment" (as hereinafter defined). A "Change of Control" with respect to Hollywood.com means the consummation of a sale of all the assets of Hollywood.com to one person or a group of persons not controlled by, directly or indirectly, Mitchell Rubenstein ("Rubenstein") and Laurie S. Silvers ("Silvers") or their heirs, personal representatives or affiliates. For this purpose, an entity shall be considered to be controlled by Rubenstein and Silvers if they own, directly or through tiers of ownership, 50% or more of the total equity interests in such entity (as determined by either fair market value or voting power) immediately after the transfer of assets. The Contingent Additional Payment will be Three Million Five Hundred Thousand Dollars ($3,500,000) or, if less, the amount received by R&S Investments in connection with the Change of Control. For the avoidance of doubt, Hollywood.com and Totally Hollywood TV, LLC shall have no liability for, and the assets of Hollywood.com and Totally Hollywood TV, LLC and membership interests therein shall not otherwise be subject to, the contingent obligation described in this letter. There is no guaranty or assurance that a Change of Control will occur prior to August 31, 2015, and R&S Investments shall have no obligation to seek a Change of Control.
| Very truly yours, | |||
| R&S Investments, LLC | |||
| By: | /s/ Mitchell Rubenstein | ||
| Mitchell Rubenstein | |||
| Managing Member | |||