REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May
1, 2001, is entered into among HOLLYWOOD MEDIA CORP., a Florida corporation (the
"Company"), SOCIETE GENERALE, a bank organized under the laws of France ("SG"),
and VELOCITY INVESTMENT PARTNERS, a company organized under the laws of the
Cayman Islands ("Velocity") (SG and Velocity, together, the "Purchasers").
WHEREAS, the Company and the Purchasers have entered into that certain
Securities Purchase Agreement (the "Securities Purchase Agreement"), dated as of
April 25, 2001, pursuant to which the Company has agreed to issue and sell to
the Purchasers an aggregate of (i) 942,362 shares of its Common Stock (the
"Common Shares"), (ii) "A" warrants to purchase up to 451,086 shares of its
Common Stock and (iii) "B" warrants to acquire up to 1,098,129 shares of its
Common Stock (the "A" and "B" warrants together, the "Warrants"); and
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Purchasers' agreement to enter into the Securities Purchase Agreement, the
Company has agreed to provide each Purchaser with certain registration rights
with respect to the Common Stock. "Common Stock" means the Company's Common
Stock, par value $0.01 per share;
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties, covenants and agreements contained herein and in
the Securities Purchase Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Capitalized terms used herein and defined in
the Securities Purchase Agreement shall have the same respective meanings herein
as are ascribed to them therein. In addition, the following terms shall have the
meanings ascribed to them below:
"Purchasers" shall mean the Purchasers referenced in the preamble, and,
unless the context otherwise requires, shall include each such Purchaser for so
long as it owns any Registrable Securities and any assignee or transferee of the
Common Shares, the Warrants, the Warrant Shares or the Registrable Securities to
which the registration rights conferred by this Agreement have been transferred
in compliance with this Agreement and that is the registered holder of the
Common Shares, the Warrants, the Warrant Shares or the Registrable Securities,
as the case may be.
"Registrable Securities" means all of the Common Shares, the Warrant
Shares and any other securities of the Company that are issued or issuable upon
the exercise of the Warrants (the "Common Securities") until (i) a registration
statement under the Securities Act covering the offer and sale of the Common
Securities has been declared effective by the Commission and the Common
Securities have been disposed of pursuant to such effective registration
statement, (ii) the Common Securities are sold under circumstances in which all
of the applicable conditions of Rule 144 (or any similar provision then in
force) under the Securities Act ("Rule 144") are met, (iii) such Common
Securities have been otherwise transferred and the Company has delivered a new
certificate or other evidence of ownership for the Common Securities not bearing
a restrictive legend or (iv) such time as, in the opinion of counsel to the
Company, which counsel shall be reasonably acceptable to each Purchaser, such
Common Securities may be sold without any time, volume or manner limitation
pursuant to Rule 144(k) (or any similar provision then in effect) under the
Securities Act.
"Registration Statement" means the registration statement filed by the
Company pursuant to Section 2.1(a) and any additional registration statement
filed by the Company pursuant to Section 2.1(b).
"Underwriter" means a securities dealer that purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1 Registration Requirements. The Company shall use its
commercially reasonable efforts to effect the registration of the Registrable
Securities (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or facilitate the
sale or distribution of all the Registrable Securities in the manner (including
manner of sale) and in all states reasonably requested by any Purchaser. Such
commercially reasonable efforts by the Company shall include the following:
(a) The Company will as expeditiously as possible, and in no
event later than June 29, 2001 (the "Filing Deadline"), prepare and file with
the Commission a registration statement (the "Registration Statement") on Form
S-3 (if use of such form is then available to the Company pursuant to the rules
of the Commission and, if not, on such other form promulgated by the Commission
for which the Company then qualifies and that counsel for the Company shall deem
appropriate and which form shall be available for the resale of the Registrable
Securities to be registered thereunder in accordance with the provisions of this
Agreement and in accordance with the intended method of distribution of such
Registrable Securities), and use its commercially reasonable efforts to cause
such filed Registration Statement to become effective by the Effectiveness
Deadline. The "Effectiveness Deadline" shall mean, as applicable, (i) in the
event such Registration Statement is not subject to review by the Commission,
five (5) business days after the date that the Company is first advised by the
Commission, whether orally or in writing, that such Registration Statement will
not be subject to review by the Commission and (ii) in the event such
Registration Statement shall be subject to review by the Commission, the earlier
of one hundred and twenty (120) days from the date of this Agreement or five (5)
business days after the date that the Company is first advised by the
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Commission, whether orally or in writing, that it has no further comments in
connection with its review of the Registration Statement. The Company will as
expeditiously as possible prepare and file with the Commission such amendments
and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective for a period of not less than: (i) in the case of a non-underwritten
offering of Registrable Securities, until there shall no longer be any
Registrable Securities or (ii) with respect to an underwritten offering of
Registrable Securities, ninety (90) days after the commencement of the
distribution of Registrable Securities covered by the Registration Statement
(but not before the expiration of the period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable), and the Company will
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by a Purchaser as set forth
in the Registration Statement.
(b) The number of Registrable Securities covered by the
initial Registration Statement shall equal 2,491,577 shares of Common Stock of
the Company. If at any time the initial Registration Statement is not sufficient
to cover all Registrable Securities the Company shall as expeditiously as
possible (and in no event more than forty-five (45) days from the date of the
event that results in such change) file a post-effective amendment to the
Registration Statement (or, if necessary file or cause to be filed a new or
additional Registration Statement) to reflect the registration of the offer and
resale of such additional or other securities and use its commercially
reasonable efforts to cause such post-effective amendment or new or additional
Registration Statement to become effective within one hundred and twenty (120)
days (or in the event such Registration Statement is not subject to review by
the Commission or, if subject to review by the Commission, five (5) business
days after the date that the Company is first advised by the Commission, whether
orally or in writing, that such Registration Statement will not be subject to
review by the Commission or that it has no further comments in connection with
its review of the Registration Statement) from the date of the event that
results in such change. In the event the filing of a new or additional
Registration Statement is required, references herein to the Registration
Statement shall also refer to such new or additional registration statement
(except that for purposes of Section 2.1(a) above, the Filing Deadline shall
refer to the end of the forty-five (45) day period referenced above and the
Effectiveness Deadline shall refer to the end of the one hundred and twenty
(120) day or shorter period (based upon completion of the Commission's review of
such Registration Statement) referenced above).
(c) The Company will, prior to filing the Registration
Statement or prospectus or any amendment or supplement thereto, furnish to each
Purchaser, its counsel, and each Underwriter, if any, of the Registrable
Securities covered by such Registration Statement copies of such Registration
Statement and prospectus or any amendment or supplement thereto as proposed to
be filed, together with exhibits thereto, as well as any comment letters
received from the Commission, which documents will be subject to review and
approval by the foregoing persons (such approval not to be unreasonably withheld
or delayed), and thereafter furnish to each Purchaser, its counsel and each
Underwriter, if any, such number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such Registration Statement (including each preliminary prospectus) and such
other documents or information, as any Purchaser, its counsel or each
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Underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities.
(d) The Company will use its commercially reasonable efforts
to (i) register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions in the United States as any
Purchaser may reasonably (in light of its intended plan of distribution) request
and (ii) if applicable, cause such Registrable Securities to be registered with
or approved by such other governmental agencies or authorities in the United
States as may be necessary by virtue of the business and operations of the
Company and do any and all other acts and things that may be reasonably
necessary or advisable to enable such Purchaser to consummate the disposition of
the Registrable Securities; provided that the Company will not be required to
(A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for the fulfillment of its obligation under
this paragraph (d), (B) subject itself to taxation in any such jurisdiction or
(C) consent or subject itself to general service of process in any such
jurisdiction.
(e) The Company will promptly notify the Purchasers upon the
occurrence of any of the following events in respect of the Registration
Statement or related prospectus in respect of an offering of Registrable
Securities: (i) receipt of any request for additional information by the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus; (ii) the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that (or the Company otherwise becomes aware of any
statement included in the Registration Statement, related prospectus or
documents that is untrue in any material respect or that requires the making of
any changes in the Registration Statement, related prospectus or documents so
that), in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate (in which event the Company will promptly make
available to the Purchasers any such supplement or amendment to the Registration
Statement and, as applicable, the related prospectus).
(f) The Company will enter into customary agreements
(including, if applicable, an underwriting agreement in customary form and that
is reasonably satisfactory to the Company) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities (each Purchaser may, at its option, require that any or
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all of the representations, warranties and covenants of the Company to or for
the benefit of any applicable Underwriter also be made to and for the benefit of
such Purchaser).
(g) The Company will make available to such Purchaser (and
will deliver to its counsel) and each Underwriter, if any, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the Commission and
the Company, its counsel or auditors and will also make available, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, for inspection by each Purchaser, its counsel, any
Underwriter participating in any disposition pursuant to a Registration
Statement and any attorney, accountant or other professional retained by each
Purchaser or such Underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers
and employees to supply all information reasonably requested by any Inspectors
in connection with the Registration Statement. Records that the Company
determines, in good faith, to be confidential and that it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary in the reasonable opinion of the
Inspectors to avoid or correct a misstatement or omission in the Registration
Statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other process; provided that prior to any disclosure or release pursuant to
clause (ii), the Inspectors shall provide the Company with prompt notice of any
such request or requirement so that the Company may seek an appropriate
protective order or waive such Inspectors' obligation not to disclose such
Records; and, provided further, that if failing the entry of a protective order
or the waiver by the Company permitting the disclosure or release of such
Records, the Inspectors, upon written advice of counsel, are compelled to
disclose such Records, the Inspectors may disclose that portion of the Records
that counsel has advised the Inspectors that the Inspectors are compelled to
disclose. The Company may require, as a condition to the disclosure to any
Inspector of any confidential information, that such Inspector execute and
deliver to the Company a written agreement, in form and substance reasonably
satisfactory to the Company, pursuant to which such Inspector agrees to the
confidential treatment of such information as contemplated above. Each Purchaser
agrees that information obtained by it as a result of such inspections (not
including any information obtained from a third party who is not prohibited from
providing such information by a contractual, legal or fiduciary obligation to
the Company) shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company or its
Affiliates unless and until such information is made generally available to the
public. Each Purchaser further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to each Purchaser and to each
Underwriter, if any, a signed counterpart, addressed to each Purchaser and such
Underwriter, of (1) an opinion or opinions of counsel to the Company and (2) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as any
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Purchaser or the managing Underwriter therefor reasonably requests. The Company
agrees that, (x) upon effectiveness of the Registration Statement and (y) if
requested by Purchasers holding in the aggregate a majority of Registrable
Securities, upon the effectiveness of each amendment thereto subsequent to
effectiveness of the Registration Statement, whether by the filing of a
post-effective amendment thereto or the incorporation by reference of reports
subsequently filed with the Commission, it will cause to be delivered to the
Purchasers (i) if applicable and only to the extent permitted by the rules of
the AICPA, a comfort letter in customary form from its independent public
accountants and (ii) if applicable, an opinion of counsel to the Company,
covering customary matters, including a statement providing negative assurances
as to the absence of any untrue statement of a material fact or omission to
state any material fact required to be stated therein or necessary to make the
statements contained in the Registration Statement and in the case of the
related prospectus (as so amended), in light of circumstance in which they were
made, not misleading.
(i) The Company will comply with all applicable rules and
regulations of the Commission, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act, and will make
available to its security holders, as soon as reasonably practicable, an earning
statement covering a period of twelve (12) months, beginning within three (3)
months after the effective date of the Registration Statement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act.
(j) The Company will appoint the then existing transfer agent
and registrar for the Common Stock as its transfer agent and registrar for all
the Registrable Securities covered by the Registration Statement not later than
the effective date of the Registration Statement.
(k) The Company shall take all steps necessary to enable each
Purchaser to avail itself of the prospectus delivery mechanism set forth in Rule
153 (or successor thereto) under the Securities Act, if available.
(l) In connection with an underwritten offering, the Company
will cooperate, to the extent reasonably requested by the managing Underwriter
for the offering or a Purchaser, in customary efforts to sell the securities
under the offering, including, without limitation, participating in "road shows"
on a schedule as shall be reasonably satisfactory to, and not unduly burdensome
on, the Company; provided that the Company shall not be obligated to participate
in more than one such offering in any twelve (12) -month period and any such
participation by the Company shall be at the expense of the managing Underwriter
or the requesting Purchaser unless the Company shall also be offering securities
in such underwritten offering.
(m) The Company may require each Purchaser promptly to furnish
in writing to the Company such information regarding the intended methods of
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration, including, without limitation, all such
information as may be requested by the Commission or the NASD or any state
securities commission or similar authority. If a Purchaser fails to provide such
information requested in connection with such registration within ten (10)
business days after receiving such written request, then the Company may cease
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pursuit of such registration in respect of a Purchaser's Registrable Securities
until such information is provided.
(n) Each Purchaser agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
2.1(e) hereof, such Purchaser will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement until such
Purchaser's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.1(e)(iv) hereof, and, if so directed by the Company,
such Purchaser will deliver to the Company all copies, other than permanent file
copies then in such Purchaser's possession, of the most recent prospectus
covering the Registrable Securities at the time of receipt of such notice.
(o) Notwithstanding any other provision set forth in this
Agreement, no Purchaser may undertake to sell Registrable Securities by means of
an underwriten offering without the prior written consent of the Company, which
may be withheld by the Company in its sole discretion.
Section 2.2 Registration Expenses. In connection with registration
hereunder, the Company shall pay the following registration expenses incurred in
connection therewith (the "Registration Expenses"): (i) all registration and
filing fees, (ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of a single firm of counsel
retained by Company in connection with blue sky qualifications of the
Registrable Securities), (iii) printing expenses, (iv) the Company's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), (v) the fees and
expenses incurred in connection with the listing or quotation of the Registrable
Securities, (vi) fees and disbursements of counsel for the Company and customary
fees and expenses for independent certified public accountants retained by the
Company (including the expenses of any (A) opinion letters or costs associated
with delivery by counsel to the Company of an opinion letter or opinion letters
or (B) comfort letters or costs associated with the delivery by independent
certified public accountants of a comfort letter or comfort letters, in each
case required by or requested pursuant to Section 2.1(h) hereof), and (vii) the
fees and expenses of any special experts retained by the Company in connection
with such registration. The Company shall have no obligation to pay any
underwriting fees, discounts or commissions, or any transfer taxes attributable
to the sale of Registrable Securities, or the cost of any special audit required
by the Purchasers, such costs to be borne by the Purchasers.
ARTICLE III
PAYMENTS BY THE COMPANY
Section 3.1 Payments by the Company. In the event the Registration
Statement is not filed by the Filing Deadline or declared effective by the
Effectiveness Deadline (or after the Registration Statement has been declared
effective by the Commission, sales of all the Registrable Securities (including
any Registrable Securities required to be registered pursuant to Section 2.1(b)
hereof) cannot be made pursuant to the Registration Statement (by reason of a
stop order, the Company's failure to update the Registration Statement, the need
to file and have declared effective a post-effective amendment or any other
reason outside the control of the Purchasers), then the Company will make
payments to the Purchasers in such amounts and at such times as shall be
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determined pursuant to this Section 3.1 as partial relief for the damages to the
Purchasers by reason of any such delay in or reduction of its ability to resell
the Registrable Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity). The Company shall pay to each Purchaser
pro rata based on their relative ownership of Registrable Securities an amount
equal to (i) $63,750 times (ii) the sum of: (A) the number of months (prorated
per day for partial months) following the Filing Deadline that the Registration
Statement is not filed pursuant to Section 2.1(a) or following the Effectiveness
Deadline that the Registration Statement is not declared effective by the
Commission, as the case may be, plus (B) the number of months (prorated per day
for partial months) following the Effectiveness Deadline that sales cannot be
made pursuant to the Registration Statement after the Registration Statement has
been declared effective for more than 10 days in any 365-day period. Such
amounts shall be paid in cash.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
Section 4.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Purchaser, its partners, Affiliates, officers,
directors, employees and duly authorized agents, and each Person or entity, if
any, who controls a Purchaser within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person or entity (collectively, the "Controlling Persons"), from and against any
loss, claim, damage, liability, reasonable attorneys' fees, costs or expenses
and costs and expenses of investigating and defending any such claim
(collectively, "Damages"), joint or several, and any action in respect thereof
to which each Purchaser, its partners, Affiliates, officers, directors,
employees and duly authorized agents, and any such Controlling Person may become
subject under the Securities Act or otherwise, insofar as such Damages (or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or prospectus relating to the Registrable Securities or
any preliminary prospectus, or arises out of, or are based upon, any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of any prospectus or
preliminary prospectus, in light of the circumstances in which they were made)
not misleading, except insofar as the same are based upon information furnished
in writing to the Company by each Purchaser or an Underwriter expressly for use
therein, and shall reimburse each Purchaser, its partners, Affiliates, officers,
directors, employees and duly authorized agents, and each such Controlling
Person for any reasonable legal and other expenses reasonably incurred by such
Purchaser, its partners, Affiliates, officers, directors, employees and duly
authorized agents, or any such Controlling Person in investigating or defending
or preparing to defend against any such Damages or proceedings as such expenses
are incurred; provided, however, that the Company shall not be liable to such
Purchaser to the extent that any such Damages arise out of or are based upon an
untrue statement or omission made in any preliminary prospectus if (i) such
Purchaser failed to send or deliver a copy of the final prospectus with or prior
to the delivery of written confirmation of the sale by such Purchaser to the
Person asserting the claim from which such Damages arise and (ii) the final
prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission; provided further, however, that
the Company shall not be liable in any such case to the extent that any such
Damages arise out of or are based upon an untrue statement or alleged untrue
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statement or omission or alleged omission in any prospectus if (x) such untrue
statement or omission or alleged omission is corrected in an amendment or
supplement to such prospectus and (y) having previously been furnished by or on
behalf of the Company with copies of such prospectus as so amended or
supplemented, a Purchaser thereafter fails to deliver such prospectus as so
amended or supplemented prior to or concurrently with the sale of a Registrable
Security to the Person asserting the claim from which such Damages arise. The
Company also agrees to indemnify any Underwriters of the Registrable Securities,
their officers and directors and each Person or entity who controls such
Underwriters on customary terms.
Section 4.2 Indemnification by the Purchasers. Each Purchaser,
severally and not jointly, agrees to indemnify and hold harmless the Company,
its partners, Affiliates, officers, directors, employees and duly authorized
agents and each Person or entity, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
together with the partners, Affiliates, officers, directors, employees and duly
authorized agents of such controlling Person, to the same extent as the
foregoing indemnity from the Company to the Purchasers, but only with reference
to information related to each Purchaser or its plan of distribution furnished
in writing by such Purchaser or on its behalf expressly for use in any
registration statement or prospectus relating to the Registrable Securities, or
any amendment or supplement thereto, or any preliminary prospectus; provided
that the maximum amount for which any Purchaser shall be liable under this
indemnity shall not exceed the net proceeds received by such Purchaser from the
sale of the Registrable Securities, pursuant to the registration statement in
question, less any amounts previously paid by such Purchaser to purchase
Registrable Securities. In case any action or proceeding shall be brought
against the Company or its partners, Affiliates, officers, directors, employees
or duly authorized agents or any such controlling Person or its partners,
Affiliates, officers, directors, employees or duly authorized agents, in respect
of which indemnity may be sought against such Purchaser, Purchaser shall have
the rights and duties given to the Company, and the Company or its partners,
Affiliates, officers, directors, employees or duly authorized agents, or such
controlling Person, or its partners, Affiliates, officers, directors, employees
or duly authorized agents, shall have the comparable rights and duties given to
the Purchasers by Section 4.1. The Purchasers also agree, severally and not
jointly, to indemnify and hold harmless any Underwriters of the Registrable
Securities with reference to the same information as to which each Purchaser
agrees to indemnify the Company referenced above, their officers and directors
and each Person who controls such Underwriters on customary terms. The Company
shall be entitled to receive indemnities on customary terms from Underwriters,
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as provided above, with
respect to information so furnished in writing by such persons specifically for
inclusion in any prospectus or the Registration Statement.
Section 4.3 Conduct of Indemnification Proceedings. Promptly after
receipt by any person or entity in respect of which indemnity may be sought
pursuant to Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim
or the commencement of any action, the Indemnified Party shall, if a claim in
respect thereof is to be made against the Person against whom such indemnity may
be sought (an "Indemnifying Party"), notify the Indemnifying Party in writing of
the claim or the commencement of such action; in the event an Indemnified Party
shall fail to give such notice as provided in this Section 4.3 and the
Indemnifying Party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
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failure to give such notice, the indemnification provided for in Section 4.1 or
4.2 shall be reduced to the extent of any actual prejudice resulting from such
failure to so notify the Indemnifying Party; provided, that the failure to
notify the Indemnifying Party shall not relieve it from any liability that it
may have to an Indemnified Party otherwise than under Section 4.1 or 4.2. If any
such claim or action shall be brought against an Indemnified Party, the
Indemnifying Party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified Indemnifying Party, to
assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party. After notice from the Indemnifying Party to the Indemnified
Party of its election to assume the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation; provided that
the Indemnified Party shall have the right to employ separate counsel to
represent the Indemnified Party and its controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
the Company and such Indemnified Party, representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest between them, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding. Whether or not the defense of any claim or action
is assumed by an Indemnifying Party, such Indemnifying Party will not be subject
to any liability for any settlement made without its consent, which consent will
not be unreasonably withheld.
Section 4.4 Contribution. If the indemnification provided for in this
Article IV is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages (i) as between the Company and the
Purchasers, on the one hand, and the Underwriters, on the other hand, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Purchasers, on the one hand, and the Underwriters, on the other
hand, from the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
the Purchasers, on the one hand, and of the Underwriters, on the other hand, in
connection with the statements or omissions that resulted in such Damages, as
well as any other relevant equitable considerations, and (ii) as between the
Company, on the one hand, and the Purchasers, on the other hand, in such
proportion as is appropriate to reflect the relative fault of the Company and of
the Purchasers in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
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Company and the Purchasers, on the one hand, and the Underwriters, on the other
hand, shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Purchasers bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and the Purchasers, on the one hand, and of the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Purchasers or by the Underwriters.
The relative fault of the Company, on the one hand, and of the Purchasers, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and the Purchasers shall in no event be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of each Purchaser were offered to the public (less
underwriting discounts and commissions) less the amount paid by the Purchasers
to the Company for the Common Shares and the Warrants exceeds the amount of any
damages that any Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
Section 5.1 Term. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate on such date as there shall be
no Registrable Securities; provided, however, that the provisions of Article IV
hereof shall survive any termination of this Agreement.
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Section 5.2 Rule 144. The Company covenants that it will file all
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such further action as registered holders of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable the Purchasers to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commission. If at any time the Company is
not required to file such reports, it will, upon the reasonable request of any
registered holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144, within
the limitations of the exemption provided thereby. Upon the request of such
Purchaser, the Company will deliver to such Purchaser a written statement as to
whether it has complied with such requirements.
Section 5.3 Restrictions or Sale by the Company and Others. If, and to
the extent, reasonably requested by the managing Underwriter or Underwriters in
the case of an underwritten public offering, that includes Registrable
Securities as contemplated by Section 2.1, the Company shall use commercially
reasonable efforts to cause its Affiliates to agree not to effect any public
sale or distribution of any securities similar to those being registered in
accordance with Section 2.1 hereof, or any securities convertible into or
exchangeable or exercisable for such securities during the thirty (30) days
prior to, and during the period beginning on the effective date of the
Registation Statement (except as part of the Registration Statement) until all
of the Registrable Securities offered thereunder have been sold pursuant to such
underwritten public offering, provided, however, that such period shall not
exceed one hundred and eighty (180) days following the effective date of the
Registration Statement.
Section 5.4 Amendment and Modification. Any provision of this Agreement
may be waived, provided that such waiver is set forth in a writing executed by
the party against whom the enforcement of such waiver is sought. The provisions
of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of the registered holders of a majority of the then outstanding
Registrable Securities (for the purposes of determining whether the consent of
such holders have been obtained, the registered holder of Warrants shall be
deemed to hold the underlying Registrable Securities issuable upon exercise
thereof (notwithstanding any limitation on exercise). Notwithstanding the
foregoing, the waiver of any provision hereof with respect to a matter that
relates exclusively to the rights of registered holders of Registrable
Securities whose securities are being resold pursuant to a Registration
Statement and does not directly or indirectly affect the rights of other holders
of Registrable Securities may be given by holders of a majority of the
Registrable Securities being so resold; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence. No course of dealing
between or among any Persons having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any Person under or by reason of this Agreement.
Section 5.5 Successors and Assigns; Entire Agreement. This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns; provided,
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however, that the benefits and right contemplated hereunder to be provided to
any holder of the Common Shares, the Warrants, the Warrant Shares or the
Registrable Securities shall be limited to the registered holder thereof. This
Agreement and the rights, duties and obligations hereunder may not be assigned
or delegated by the Company or any Purchaser without the prior written consent
of the other parties hereto, which shall not be unreasonably withheld.
Notwithstanding the foregoing, no consent shall be required for a Purchaser to
assign its interest to any of its Affiliates. This Agreement, together with the
Securities Purchase Agreement and the Warrants sets forth the entire agreement
and understanding between the parties as to the subject matter hereof and
thereof and merges and supersedes all prior discussions, agreements and
understandings (written or oral) of any and every nature between them with
respect to such subject matter.
Section 5.6 Separability. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
Section 5.7 Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder or
that are given with respect to this Agreement shall be in writing and shall be
personally served or deposited in the mail, registered or certified, return
receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below, or to such other address as such
party shall have specified most recently by written notice: (i) if to the
Company, to: Hollywood Media Corp., 2255 Glades Rd., Ste. 237W, Boca Raton,
Florida 33431, Attention: Mitchell Rubenstein, Chairman and CEO, Facsimile No.:
(561) 998-2974, with copies (which shall not constitute notice) to: Hollywood
Media Corp., 2255 Glades Rd., Ste. 237W, Boca Raton, Florida 33431, Attention:
W. Robert Shearer, Facsimile No.; (561) 998-2974 and (ii) if to the Purchasers
at the addresses for notices set forth in Annex A to the Securities Purchase
Agreement. Notice shall be deemed given on the date of service or transmission
if personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given on the third business
day following the date mailed or on the next business day following delivery of
such notice by a reputable air courier service.
Section 5.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
Section 5.9 Headings. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
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Section 5.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original instrument, and
all of which together shall constitute one and the same instrument.
Section 5.11 Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by the other party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
Section 5.12 Remedies. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
including monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
HOLLYWOOD MEDIA CORP.
By:
------------------------------
Name:
Title:
SOCIETE GENERALE
By:
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Name:
Title:
VELOCITY INVESTMENT PARTNERS LTD.
By:
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Name:
Title:
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