EXHIBIT 10.6
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EXECUTION COPY
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS WARRANT SHALL NOT
CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
COMMON STOCK PURCHASE WARRANT
No. W2
To Purchase Shares of $.01 Par Value Common Stock of
HOLLYWOOD.COM, INC.
THIS CERTIFIES that, for value received, WESTGATE INTERNATIONAL, L.P.
(the "INVESTOR") is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to 5:00 p.m. New York City Time on August 22, 2003 (the "TERMINATION DATE"), but
not thereafter, to subscribe for and purchase from HOLLYWOOD.COM, INC., a
Florida corporation (the "COMPANY"), 30,000 shares of Common Stock of the
Company (the "WARRANT SHARES"). The "EXERCISE PRICE" is $10.00. The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is being issued in
connection with the Common Stock Investment Agreement (the "INVESTMENT
AGREEMENT") and the Registration Rights Agreement, each dated August 22, 2000
and entered into between the Company and the Investor. Capitalized terms used
herein and not otherwise defined shall have the meaning ascribed thereto in the
Investment Agreement.
1. Title of Warrant. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder
are transferable, in whole or in respect of the right to purchase any
part of the 30,000 Warrant Shares, at the office or agency of the
Company by the holder hereof in person or by duly authorized attorney,
upon surrender of this Warrant together with (a) the Assignment Form
annexed hereto properly endorsed, and (b) any other documentation
reasonably necessary to satisfy the Company that such transfer is in
compliance with all applicable securities laws.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights
represented by this Warrant will, upon exercise of the rights
represented by this Warrant and payment of the Exercise Price as set
forth herein will be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue or otherwise specified
herein).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this Warrant may be made
at any time or times, in whole or in part before the close of business
on the Termination Date, or such earlier date on which this Warrant may
terminate as provided in paragraph 11 below, by the surrender on any
business day of this Warrant and the Notice of Exercise annexed hereto
duly completed and executed, at the principal office of the Company (or
such other office or agency of the Company as it may designate by
notice in writing to the registered holder hereof at the address of
such holder appearing on the books of the Company), together with
delivery to the Company by such holder of all certifications or
documentation reasonably necessary to establish, to the satisfaction of
the Company, that any such exercise has been undertaken in compliance
with all applicable federal and state securities laws, and upon payment
of the full Exercise Price of the shares thereby purchased; whereupon
the holder of this Warrant shall be entitled to receive a certificate
for the number of shares of Common Stock so purchased. Certificates for
shares purchased hereunder shall be delivered to the holder hereof
within three (3) Trading Days after the date on which this Warrant
shall have been exercised as aforesaid. Payment of the Exercise Price
of the shares shall be by certified check or cashier's check or by wire
transfer (of same day funds) to an account designated by the Company in
an amount equal to the Exercise Price multiplied by the number of
shares being purchased.
(b) In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares
for which this Warrant is exercised and/or surrendered, and the
Company, at its expense, shall within three (3) Trading Days issue and
deliver to or upon the order of the Warrant holder a new Warrant of
like tenor in the name of Warrant holder or as Warrant holder (upon
payment by Warrant holder of any applicable transfer taxes) may
request, reflecting such adjusted Warrant Shares.
All exercises will be deemed to occur as of the date of the Notice of
Exercise, and certificates for shares of Common Stock purchased
hereunder to the holder hereof within three (3) Trading Days after the
date on which this Warrant shall have been exercised as aforesaid. The
Warrant holder may withdraw its Notice of Exercise under Section 3(a)
or 3(b) at any time thereafter if the Company fails to timely deliver
the applicable certificates to the Warrant holder as provided in this
Agreement.
(c) In lieu of delivering physical certificates representing the Common
Stock issuable upon exercise, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Warrant
Holder, the Company shall use its best efforts to cause its transfer
agent to electronically transmit the Common Stock issuable upon
exercise to the Warrant Holder by crediting the account of Warrant
Holder's prime broker with DTC through its Deposit Withdrawal Agent
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Commission ("DWAC") system. The time periods for delivery described in
the immediately preceding paragraph shall apply to the electronic
transmittals described herein.
The term "TRADING DAY" means (x) if the Common Stock is listed on the
New York Stock Exchange or the American Stock Exchange, a day on which
there is trading on such stock exchange, or (y) if the Common Stock is
not listed on either of such stock exchanges but sale prices of the
Common Stock are reported on Nasdaq National Market or another
automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock
are reported, or (z) if the foregoing provisions are inapplicable, a
day on which quotations are reported by National Quotation Bureau
Incorporated.
(d) If, on the six (6) month anniversary of the date a registration
statement covering the Warrant Shares was declared effective by the
Securities and Exchange Commission, the Investors continue to
beneficially own at least 75% of the aggregate number of "Initial
Shares" and Adjustment Shares purchased under the Investment Agreement,
net of any short position by the Investors with respect to the Common
Stock, then the Exercise Price automatically and permanently shall be
reduced to $8.84, subject to continuing adjustment as provided in this
Warrant. To cause the Exercise Price to be reduced in accordance with
the previous sentence, the Investors shall send the Company written
notice within 10 Trading Days after such 6 month anniversary,
certifying that the condition in the previous sentence has been
satisfied.
4. Optional Redemption of Warrants. At any time after the Effective Date,
if the closing bid price for the Common Stock on the Principal Market
exceeds 200% of the Exercise Price for a period of ten (10) consecutive
Trading Days, the Company may elect, upon forty (40) trading days'
prior written notice to all but not fewer than all the Warrant Holders
(the "WARRANT REDEMPTION NOTICE"), to force the redemption of all but
not less than all the Warrants at the redemption price of $.01 per
underlying Warrant Share; provided there shall be no such redemption on
the fortieth (40th) trading day after the Warrant Holders receive the
Warrant Redemption Notice (the "WARRANT REDEMPTION DATE") unless on
each of the forty (40) trading days prior to the Warrant Redemption
Date there shall have been Effective Registration. Nothing shall
prohibit the Warrant holders from exercising the Warrants after
receiving the Warrant Redemption Notice but before the Warrant
Redemption Date.
5. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant.
6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without
charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the holder of this Warrant
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or in such name or names as may be directed by the holder of this
Warrant; provided, however, that in the event certificates for shares
of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly
executed by the holder hereof; and provided further, that the Company
shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance of any Warrant
certificates or any certificates for the Warrant Shares other than the
issuance of a Warrant Certificate to the Investor in connection with
the Investor's surrender of a Warrant Certificate upon the exercise of
less than all of the Warrants evidenced thereby, and the Company shall
not be required to issue or deliver such certificates unless or until
the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
7. Closing of Books. The Company will at no time close its shareholder
books or records in any manner which interferes with the timely
exercise of this Warrant.
8. No Rights as Shareholder until Exercise. Subject to Section 13 of this
Warrant and the provisions of any other written agreement between the
Company and the Investor, the Investor shall not be entitled to vote or
receive dividends or be deemed the holder of Warrant Shares or any
other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Investor, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification
of stock, change of par value, or change of stock to no par value,
consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised as provided herein.
However, at the time of the exercise of this Warrant pursuant to
Section 3 hereof, the Warrant Shares so purchased hereunder shall be
deemed to be issued to such holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall
have been exercised.
9. Assignment and Transfer of Warrant. This Warrant may be assigned in
whole or in part by the surrender of this Warrant and the Assignment
Form annexed hereto duly executed at the office of the Company (or such
other office or agency of the Company as it may designate by notice in
writing to the registered holder hereof at the address of such holder
appearing on the books of the Company); provided, however,
that this Warrant may not be resold or otherwise transferred
except (i) in a transaction registered under the Securities Act of
1933, as amended (the "ACT"), or (ii) in a transaction pursuant to an
exemption, if available, from registration under the Act and whereby,
if requested by the Company, an opinion of counsel reasonably
satisfactory to the Company is obtained by the holder of this Warrant
to the effect that the transaction is so exempt.
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10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant or stock certificate
representing the Warrant Shares, and in case of loss, theft or
destruction, of indemnity reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
12. Effect of Certain Events. If at any time while this Warrant or any
portion thereof is outstanding and unexpired there shall be (i) a sale
or conveyance of all or substantially all of the Company's assets or
(ii) a transaction (by merger or otherwise) in which more than 50% of
the voting power of the Company is disposed of (collectively, a "SALE
OR MERGER TRANSACTION"), in which the consideration to be received by
the Company or its shareholders consists solely of cash, and in case
the Company shall at any time effect a Sale or Merger Transaction in
which the consideration to be received by the Company or its
shareholders consists in part of consideration other than cash, the
holder of this Warrant shall have the right thereafter to purchase, by
exercise of this Warrant and payment of the aggregate Exercise Price in
effect immediately prior to such action, the kind and amount of shares
and other securities and property which it would have owned or have
been entitled to receive after the happening of such transaction had
this Warrant been exercised immediately prior thereto, subject to
further adjustment as provided in Section 13. Notwithstanding the
above, a Sale or Merger Transaction shall not be deemed to occur in the
event the Company is the acquiring entity in connection with an
acquisition by the Company.
13. Adjustments of Exercise Price and Number of Warrant Shares.
The number of and kind of securities purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Subdivisions, Combinations and other Issuances. If the Company shall at
any time after the date hereof but prior to the expiration of this
Warrant subdivide its outstanding securities as to which purchase
rights under this Warrant exist, by split-up, spin-off, or otherwise,
or combine its outstanding securities as to which purchase rights under
this Warrant exist, the number of Warrant Shares as to which this
Warrant is exercisable as of the date of such subdivision, split-up,
spin-off or combination shall forthwith be proportionately increased in
the case of a subdivision, or proportionately decreased in the case of
a combination. Appropriate proportional adjustments (decrease in the
case of subdivision, increase in the case of combination) shall also be
made to the Exercise Price payable per share, so that the aggregate
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Exercise Price payable for the total number of Warrant Shares
purchasable under this Warrant as of such date shall remain the same as
it would have been before such subdivision or combination.
(b) Stock Dividend. If at any time after the date hereof the Company
declares a dividend or other distribution on Common Stock payable in
Common Stock or other securities or rights convertible into Common
Stock ("COMMON STOCK EQUIVALENTS") without payment of any consideration
by holders of Common Stock for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon exercise or conversion thereof), then the number of
shares of Common Stock for which this Warrant may be exercised shall be
increased as of the record date (or the date of such dividend
distribution if no record date is set) for determining which holders of
Common Stock shall be entitled to receive such dividends, in proportion
to the increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities
convertible into Common Stock) of Common Stock as a result of such
dividend, and the Exercise Price shall be proportionately reduced so
that the aggregate Exercise Price for all the Warrant Shares issuable
hereunder immediately after the record date (or on the date of such
distribution, if applicable), for such dividend shall equal the
aggregate Exercise Price so payable immediately before such record date
(or on the date of such distribution, if applicable).
(c) Other Distributions. If at any time after the date hereof the Company
distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares
of its capital stock, any evidence of indebtedness or any of its assets
(other than Common Stock), then the number of Warrant Shares for which
this Warrant is exercisable shall be increased to equal: (i) the number
of Warrant Shares for which this Warrant is exercisable immediately
prior to such event, (ii) multiplied by a fraction, (A) the numerator
of which shall be the Fair Market Value (as defined below) per share of
Common Stock on the record date for the dividend or distribution, and
(B) the denominator of which shall be the Fair Market Value per share
of Common Stock on the record date for the dividend or distribution
minus the amount allocable to one share of Common Stock of the value
(as jointly determined in good faith by the Board of Directors of the
Company and the Warrant Holder) of any and all such evidences of
indebtedness, shares of capital stock, other securities or property, so
distributed. For purposes of this Warrant, "FAIR MARKET VALUE" shall
equal the 10 Trading Day average closing trading price of the Common
Stock on the Principal Market for the 10 Trading Days preceding the
date of determination or, if the Common Stock is not listed or admitted
to trading on any Principal Market, the average of the closing bid and
asked prices on the over-the-counter market as furnished by any New
York Stock Exchange member firm reasonably selected from time to time
by the Company for that purpose and reasonably acceptable to the
Holder, or, if the Common Stock is not listed or admitted to trading on
the Principal Market or traded over-the-counter and the average price
cannot be determined as contemplated above, the Fair Market Value of
the Common Stock shall be as reasonably determined in good faith by the
Company's Board of Directors with the concurrence of the Holder. The
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Exercise Price shall be reduced to equal: (i) the Exercise Price in
effect immediately before the occurrence of any event (ii) multiplied
by a fraction, (A) the numerator of which is the number of Warrant
Shares for which this Warrant is exercisable immediately before the
adjustment, and (B) the denominator of which is the number of Warrant
Shares for which this Warrant is exercisable immediately after the
adjustment.
(d) Merger, etc. If at any time after the date hereof there shall be a
merger or consolidation of the Company with or into or a transfer of
all or substantially all of the assets of the Company to another
entity, then the Warrant Holder shall be entitled to receive upon or
after such transfer, merger or consolidation becoming effective, and
upon payment of the Exercise Price then in effect, the number of shares
or other securities or property of the Company or of the successor
corporation resulting from such merger or consolidation, which would
have been received by Warrant Holder for the shares of stock subject to
this Warrant had this Warrant been exercised just prior to such
transfer, merger or consolidation becoming effective or to the
applicable record date thereof, as the case may be; the terms of this
Warrant automatically shall be applicable to the securities or property
receivable upon the exercise of this Warrant after consummation of such
merger or consolidation.
(e) Reclassification, etc. If at any time after the date hereof there shall
be a reorganization or reclassification of the securities as to which
purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Warrant
Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares or other securities
or property resulting from such reorganization or reclassification,
which would have been received by the Warrant Holder for the shares of
stock subject to this Warrant had this Warrant at such time been
exercised.
14. Voluntary Adjustment by the Company. The Company may at its option, at
any time during the term of this Warrant, reduce but not increase the
then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.
15. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise
of this Warrant or the Exercise Price is adjusted, the Company shall
promptly mail to the holder of this Warrant a notice setting forth the
number of Warrant Shares (and other securities or property) purchasable
upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding and exercisable, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the exercise of any
purchase rights under this Warrant. The Company further covenants that
its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates
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to execute and issue the necessary certificates for the Warrant Shares
upon the exercise of the purchase rights under this Warrant. The
Company will take all such reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any
requirements of the Nasdaq National Market or any domestic securities
exchange upon which the Common Stock may be listed.
17. 9.99% Limitation.
(1) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Investor upon
exercise pursuant to the terms hereof shall not exceed a number that, when added
to the total number of shares of Common Stock deemed beneficially owned by such
holder (other than by virtue of the ownership of securities or rights to acquire
securities (including the Warrant) that have limitations on the Investor's right
to convert, exercise or purchase similar to the limitation set forth herein (the
"EXCLUDED Shares")), together with all shares of Common Stock deemed
beneficially owned (not counting such affiliate's Excluded Shares) by the
holder's "affiliates" (as defined Rule 144 of the Act) ("AGGREGATION PARTIES")
that would be aggregated for purposes of determining whether a group under
Section 13(d) of the Securities Exchange Act of 1934, as amended, exists, would
exceed 9.99% of the total issued and outstanding shares of the Company's Common
Stock (the "RESTRICTED OWNERSHIP PERCENTAGE"). Each Holder shall have the right
(w) at any time and from time to time to reduce its Restricted Ownership
Percentage immediately upon notice to the Company and (x) at any time and from
time to time, to increase its Restricted Ownership Percentage immediately in the
event of the announcement as pending or planned of a Major Transaction (as such
term is defined in the Investment Agreement).
(2) The Investor covenants at all times on each day (each such day
being referred to as a "COVENANT DAY") as follows: During the balance of such
Covenant Day and the succeeding sixty-one (61) days (the balance of such
Covenant Day and the succeeding 61 days being referred to as the "COVENANT
PERIOD") such Investor will not acquire shares of Common Stock pursuant to any
right (including the exercise of the Warrant) existing at the commencement of
the Covenant Period to the extent the number of shares so acquired by such
holder and its Aggregation Parties (ignoring all dispositions) would exceed:
(x) the Restricted Ownership Percentage of the total number of
shares of Common Stock outstanding at the commencement of the
Covenant Period,
minus
(y) the number of shares of Common Stock owned by such holder and
its Aggregation Parties at the commencement of the Covenant
Period.
A new and independent covenant will be deemed to be
given by the holder as of each moment of each Covenant Day. No
covenant will terminate, diminish or modify any other
covenant. The holder agrees to comply with each such covenant.
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This Section 17 controls in the case of any conflict with any
other provision of the Transaction Documents.
The Company's obligation to issue Warrant Shares
which would exceed such limits referred to in this Section 17
shall be suspended to the extent necessary until such time, if
any, as Warrant Shares may be issued in compliance with such
restrictions.
18. Compliance with Securities Laws. (a) The holder hereof acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if
not registered (or if no exemption from registration exists), will have
restrictions upon resale imposed by state and federal securities laws.
Each certificate representing the Warrant Shares issued to the Holder
upon exercise (if not registered or if no exemption from registration
exists) will bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS,
BASED ON AN OPINION LETTER OF COUNSEL SATISFACTORY TO THE COMPANY OR A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.
(b) Without limiting the Investor's right to transfer, assign or otherwise
convey the Warrant or Warrant Shares in compliance with all applicable
securities laws, the Investor of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired solely for the Investor's own
account and not as a nominee for any other party, and that the Investor
will not offer, sell or otherwise dispose of this Warrant or any
Warrant Shares to be issued upon exercise hereof except under
circumstances that will not result in a violation of applicable federal
and state securities laws. Upon exercise of this Warrant, the Investor
shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, appropriate investment representations and
warranties as those delineated in this Section 18, including without
limitation, that the Warrant Shares of Common Stock so purchased are
being acquired solely for the Investor's own account and not as a
nominee for any other party, for investment, and not with a view toward
distribution or resale.
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(c) Neither this Warrant nor any Share of Common Stock issued upon exercise
of this Warrant may be offered for sale or sold, or otherwise
transferred or sold in any transaction which would constitute a sale
thereof within the meaning of the Act, unless (i) such security has
been registered for sale under the Act and registered or qualified
under applicable state securities laws relating to the offer an sale of
securities, or (ii) exemptions from the registration requirements of
the Act and the registration or qualification requirements of all such
state securities laws are available and the Company shall have received
an opinion of counsel that the proposed sale or other disposition of
such securities may be effected without registration under the Act,
such counsel and such opinion to be satisfactory to the Company.
(d) Investor recognizes that investing in the Warrant and the Warrant
Shares involves a high degree of risk, and Investor is in a financial
position to hold the Warrant and the Warrant Shares indefinitely and is
able to bear the economic risk and withstand a complete loss of its
investment in the Warrant and the Warrant Shares. The Investor is a
sophisticated investor and is capable of evaluating the merits and
risks of investing in the Company. The Investor has had an opportunity
to discuss the Company's business, management and financial affairs
with the Company's management, has been given full and complete access
to information concerning the Company, and has utilized such access to
its satisfaction for the purpose of obtaining information or verifying
information and have had the opportunity to inspect the Company's
operation. Investor has had the opportunity to ask questions of, and
receive answers from, the management of the Company (and any person
acting on its behalf) concerning the Warrant and the Warrant Shares and
the agreements and transactions contemplated hereby, and to obtain any
additional information as Investor may have requested in making its
investment decision. The initial Investor in this Warrant is an
"accredited investor", as defined by Regulation D promulgated under the
Act.
19. Miscellaneous.
(a) Issue Date; Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS
WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL RESPECTS AS
IF IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE HEREOF.
THIS WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE
COMPANY. THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT FOR MATTERS
ARISING UNDER THE ACT, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE
U.S. DISTRICT COURT SITTING IN THE STATE OF CITY OF NEW YORK IN THE
STATE OF NEW YORK IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS
WARRANT AND HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION BASED ON FORUM NON CONVENIENS, TO
THE BRINGING OF ANY SUCH PROCEEDING IN SUCH JURISDICTION. EACH PARTY
HEREBY AGREES THAT IF THE OTHER PARTY TO THIS WARRANT OBTAINS A
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JUDGMENT AGAINST IT IN SUCH A PROCEEDING, THE PARTY WHICH OBTAINED SUCH
JUDGMENT MAY ENFORCE SAME BY SUMMARY JUDGMENT IN THE COURTS OF ANY
COUNTRY HAVING JURISDICTION OVER THE PARTY AGAINST WHOM SUCH JUDGMENT
WAS OBTAINED, AND EACH PARTY HEREBY WAIVES ANY DEFENSES AVAILABLE TO IT
UNDER LOCAL LAW AND AGREES TO THE ENFORCEMENT OF SUCH A JUDGMENT. EACH
PARTY TO THIS WARRANT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY SUCH PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS IN
ACCORDANCE WITH THIS SECTION 19(C). NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.
(b) Modification and Waiver. This Warrant and any provisions hereof may be
changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is
sought. Any amendment effected in accordance with this paragraph shall
be binding upon the Investor, each future holder of this Warrant and
the Company. No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
(c) Notices. Any notice, request or other document required or permitted to
be given or delivered to the Investor or future holders hereof or the
Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid, to the Investor or each such holder
at its address as shown on the books of the Company or to the Company
at the address set forth in the Investment Agreement. All notices under
this Warrant shall be deemed to have been given when received.
A party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance with
the provisions of this Section 19(c).
(d) Severability. Whenever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant is held to be
invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Warrant in such
jurisdiction or affect the validity, legality or enforceability of any
provision in any other jurisdiction, but this Warrant shall be
reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained
herein.
11
(e) No Impairment. The Company will not, by amendment of its Articles of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order
to protect the rights of the Warrant Holder against impairment. Without
limiting the generality of the foregoing, the Company (a) will not
increase the par value of any Warrant Shares above the amount payable
therefor on such exercise, and (b) will take all such action as may be
reasonably necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares
on the exercise of this Warrant.
12
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated: August 22, 2000
HOLLYWOOD.COM, INC.
By: /s/ Mitchell Rubenstein
------------------------------------
Name: Mitchell Rubenstein
Title: Chairman and CEO
Agreed and Accepted
this 22nd day of August, 2000
WESTGATE INTERNATIONAL, L.P.
By: Elliott International Advisors, Inc., as Attorney-in-Fact
By: /s/ Paul E. Singer
--------------------------------
Name: Paul E. Singer
Title: President
13
NOTICE OF EXERCISE
To: HOLLYWOOD.COM, INC.
(1) The undersigned hereby elects to purchase ________ shares of Common Stock of
HOLLYWOOD.COM, INC. pursuant to the terms of the attached Warrant, and tenders
herewith payment of the Exercise Price in full, together with all applicable
transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
Other Name: ____________________
-----------------------------------
(Name)
- -------------------- -----------------------------------
(Date) (Signature)
-----------------------------------
(Address)
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant of Hollywood.com, Inc. and
all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
- ---------------------------------------------------------------.
- ---------------------------------------------------------------
Dated: ______________,
Holder's Signature: _____________________________
Holder's Address: _____________________________
-----------------------------
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.