THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND, AS OF THE DATE OF ORIGINAL
ISSUANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE, ANY UNDERLYING
SECURITIES) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED
IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE OR ANY SECURITIES ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (A) TO HOLLYWOOD
MEDIA CORP. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO RULE 144
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT. THE HOLDER OF THIS CERTIFICATE AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY OR ANY SECURITY ISSUED UPON CONVERSION HEREOF IS
TRANSFERRED (UNLESS SUCH SECURITY IS TRANSFERRED PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY PROPOSED TRANSFER PURSUANT TO
CLAUSES (B), (C) OR (D) ABOVE, THE COMPANY MAY REQUIRE THAT THE TRANSFEROR
FURNISH IT WITH AN OPINION OF COUNSEL CONFIRMING THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE RESPECTIVE MEANINGS ASSIGNED
TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
COMMON STOCK ADJUSTMENT WARRANT
to Purchase Shares of Common Stock of
HOLLYWOOD MEDIA CORP.
Certificate No. W-B-1
-----
THIS IS TO CERTIFY THAT SOCIETE GENERALE, or its registered
assigns, is entitled to purchase, subject to the terms and conditions set forth
herein, in whole or in part, from HOLLYWOOD MEDIA CORP., a Florida corporation
(the "Company"), at any time in accordance with the terms and conditions set
forth in Section 1(a), up to a maximum of 658,878 shares of Common Stock, par
value $0.01 as set forth in Section 1(b) of the Company (the "Common Stock"). A
portion of the purchase price paid to the Company on the date of original
issuance of this Warrant shall be allocable to the payment of the par value of
any shares of Common Stock issued upon exercise of this Warrant, and
accordingly, no additional exercise price shall be payable upon exercise of this
Warrant. Each exercise made hereunder must be for a minimum of the lesser of (x)
one thousand (1,000) shares of Common Stock and (y) the entire remaining number
of shares of Common Stock covered by this Warrant. All capitalized terms used
herein without definition shall have the respective meanings assigned thereto in
the Securities Purchase Agreement, dated as of April 25, 2001 (the "Securities
Purchase Agreement"), entered into among the Company and the Purchasers named
therein.
SECTION 1. (a) (a) Exercise of Warrant. The registered holder
of this Warrant (the "Holder") may elect to exercise this Warrant effective as
of the last day of each twenty (20) Trading Day period beginning on each of
October 30, 2001, January 30, 2002, April 30, 2002 and July 30, 2002 (each an
"Exercise Period"), as it shall elect, by delivering to the Company a written
notice of the Holder's election to exercise this Warrant in substantially the
form of Annex A hereto (the "Exercise Notice"), which notice shall be delivered
on or before the later of (i) fifteen (15) Trading Days immediately following
the expiration of each Exercise Period or (ii) five (5) Trading Days after
receipt of a notice from the Company of the Holder's failure to provide the
notice in clause (i), and shall specify the number of shares of Common Stock to
be acquired (which shall be the number of shares determined by Section 1(b)
below for each Exercise Period). Such Exercise Notice may be delivered by
facsimile transmission. Notwithstanding the preceding sentence, if a
registration statement has not been declared effective with respect to the
resale of the shares of Common Stock underlying this Warrant by October 30, 2001
then the four Exercise Periods shall be delayed until one month, four months,
seven months and ten months, respectively, after a registration statement has
been declared effective and the first twenty (20) Trading Days of each monthly
period beginning on October 30, 2001 until such time that a registration
statement has been declared effective shall each be deemed an additional
Exercise Period. A Holder may only exercise this Warrant one time during any
given Exercise Period. In connection with the exercise of this Warrant, the
Company shall maintain a record to reflect the number of shares issued to each
Holder pursuant to each exercise of this Warrant. Subject to applicable law, in
the event the Holder may resell shares of Common Stock acquired upon exercise of
this Warrant without restriction pursuant to an effective registration statement
or otherwise, the Company shall cause the transfer agent with respect to its
Common Stock, which transfer agent is participating in the Depositary Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST") program, to
electronically transmit the shares of Common Stock issuable to the Holder upon
exercise of this Warrant by crediting the account of the Holder's prime broker
with DTC through DTC's Deposit Withdrawal Agent Commission ("DWAC") system,
within three (3) business days after exercise of this Warrant by the Holder. In
the event the Holder otherwise elects in writing, however, or such shares of
Common Stock can not be resold without restriction, the Company shall, as
promptly as practicable and in any event within three (3) business days after
exercise of this Warrant by the Holder, cause the transfer agent to deliver to
the Holder a stock certificate or certificates representing the aggregate number
of shares of Common Stock issuable to the Holder as a result of such exercise.
The stock certificate or certificates representing shares of Common Stock so
delivered shall be in such denominations as may be specified in the Exercise
Notice and shall be registered in the name of the Holder or, subject to
compliance with Section 7.03 below, such other name or names as shall be
designated in such Exercise Notice.
2
(b) Number of Warrant Shares. The number of Warrant Shares
that will be issued upon the first exercise of this shall be:
($5.18643 - Reset Price)
- ---------------------------- X 465,638 (less any shares redeemed by the Company
Reset Price under Section 2.03(a) of the Securities Purchase
Agreement)
The number of Warrant Shares that will be issued upon each
subsequent exercise of this Warrant during shall be:
[lower of {$5.18643 or Prior Reset Price}] -Reset Price
- ----------------------------------------------------------- X 465,638, plus any shares issued upon
Re set Price exercise of this Warrant during any prior
Reset Period (less any shares redeemed by
the Company under Section 2.03(a) of the
Securities Purchase Agreement).
'"Reset Price" means for each Exercise Period, the lowest
Average Price during the twenty consecutive Trading Days that comprise such
Reset Period.
"Prior Reset Price" means the lowest Reset Price of any
Exercise Period preceding the Exercise Period in question.
"Average Price" means the average of the ten (10) lowest
closing sale prices of the Common Stock as reported by Bloomberg L.P. during the
twenty (20) consecutive Trading Days preceding the determination date, it being
understood that there is one Average Price for each Trading Day of each Exercise
Period. Notwithstanding the preceding sentence, in no event shall the Average
Price be less than $2.15. Promptly after determining the Reset Price during each
Exercise Period, the Company shall deliver its written calculations to the
Holders.
(c) Notwithstanding any other provision of this Warrant, this
Warrant shall expire immediately if, at any time after a registration statement
with respect to the shares of Common Stock underlying this Warrant has been
declared effective, and provided that such registration statement remains
effective, the Common Stock traded higher than $9.02 for either (i) thirty (30)
consecutive Trading Days subsequent to such effectiveness; or (ii) thirty-five
(35) out of forty (40) consecutive Trading Days subsequent to such effectiveness
provided that the average daily trading volume during such 30 or 35 Trading Day
period, as applicable, is at least 30,000 shares of Common Stock, as reported by
Bloomberg L.P. Notwithstanding the forgoing, this Warrant shall not expire
pursuant to this Section 1(c) if (i) the Company has breached, in any material
respect, any of the covenants contained in the Securities Purchase Agreement,
the Registration Rights Agreement or this Warrant; (ii) the Company has failed
to timely deliver to the Holder any shares issuuable upon exercise of this
Warrant or the "A" Warrant pursuant to an effective exercise of such Warrants
3
and upon receipt of notice of the failure to deliver such shares, has not
delivered the shares within five (5) days of receiving such notice, or (iii) the
Company has failed to remove a restrictive legend from any shares issued upon an
effective exercise of this Warrant or the "A" Warrant within fifteen (15) days
of when such legend may be removed pursuant to Section 5.02 of the Securities
Purchase Agreement.
(d) Shares of Common Stock shall be deemed to have been issued
and the Holder or, subject to compliance with Section 7.03 below, any other
Person so designated to be named therein shall be deemed to have become a Holder
of record of such shares, including, to the extent permitted by law, the right
to vote such shares or to consent or to receive notice as a stockholder, as of
the last day of each Exercise Period.
(e) All shares of Common Stock issuable upon the exercise of
this Warrant shall, be duly and validly issued, fully paid and nonassessable and
free and clear of any liens (unless created by or through the Holder of this
Warrant). The Company shall not be required to issue a fractional share of
Common Stock upon exercise of this Warrant. As to any fraction of a share that
the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the applicable Market Price determined in
accordance with the foregoing.
SECTION 2. Transfer, Division and Combination. Subject to
Section 7.03 hereof, transfer of this Warrant and all rights hereunder, in whole
or in part, shall be registered on the books of the Company, upon surrender of
this Warrant to the Company, together with a written assignment of this Warrant,
substantially in the form of Annex B hereto, duly executed by the Holder or its
agent or attorney. Upon such surrender, the Company shall, subject to Section
7.03 hereof, (a) execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in such instrument
of assignment, (b) issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned and (c) promptly cancel this Warrant.
SECTION 3. Antidilution Provisions.
3.01 Changes in Common Stock. In the event that at any time or
from time to time the Company shall, (i) pay a dividend or make a distribution
on its Common Stock in shares of Common Stock or other shares of capital stock
of the Company, (ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) increase or
decrease the number of shares of Common Stock outstanding by reclassification of
its Common Stock, then the number of shares of Common Stock issuable upon
exercise of this Warrant immediately after the happening of such event shall be
adjusted so that, after giving effect to such adjustment, the Holder of this
Warrant shall be entitled to receive the number of shares of Common Stock upon
exercise of this Warrant that the Holder would have been entitled to receive had
this Warrant been exercised immediately prior to the happening of such event
(or, in the case of a dividend or distribution of shares of Common Stock,
immediately prior to the record date therefor). An adjustment made pursuant to
this Section 3.01 shall become effective immediately after the distribution
date, retroactive to the record date therefor in the case of a dividend or
4
distribution in shares of Common Stock, and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
3.02 Cash Dividends and Other Distributions. In the event that
at any time or from time to time the Company shall distribute to holders of
Common Stock (i) any dividend or other distribution (including any dividend or
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of cash, evidences of its indebtedness,
shares of its capital stock or any other assets or securities or (ii) any
options, warrants, securities or other rights to subscribe for or purchase any
of the foregoing (other than (A) any dividend or distribution described in
Section 3.01, (B) any rights, options, warrants or securities described in
Section 3.03 or Section 3.04, and (C) any cash dividends or other cash
distributions made to holders of Common Stock from current or retained earnings,
provided that such dividends do not exceed $500,000 in any fiscal year), then
the number of shares of Common Stock that may be acquired upon exercise of this
Warrant immediately prior to such record date for any such distribution shall be
increased to a number determined by multiplying the number of shares of Common
Stock that may be acquired upon the exercise of this Warrant immediately prior
to such record date for any such distribution by a fraction, the numerator of
which shall be the Market Price per share of Common Stock as of such record date
and the denominator of which shall be such Market Price per share of Common
Stock less the sum of (x) the amount of cash, if any, distributed per share of
Common Stock and (y) the then fair value (as determined in good faith by the
Company's Board of Directors, whose determination shall be evidenced by a board
resolution that will be sent to Holders) of the portion, if any, of the
distribution applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants, options or
subscription or purchase rights. Such adjustments shall be made, and shall only
become effective, whenever any such distribution is made; provided, however,
that the Company is not required to make an adjustment pursuant to this Section
3.02 if at the time of such distribution the Company makes the same distribution
to Holders of Warrants as it makes to holders of Common Stock pro rata based on
the number of shares of Common Stock for which such Warrants are exercisable. No
adjustment shall be made pursuant to this Section 3.02 if such adjustment would
have the effect of decreasing the number of shares of Common Stock issuable upon
exercise of this Warrant.
3.03 Combination; Liquidation. (a) (a) Except as provided in
Section 3.03(b), in the event of a Combination (as hereinafter defined), the
Holder shall have the right to receive upon exercise of this Warrant the kind
and amount of shares of capital stock or other securities or property that the
Holder would have been entitled to receive upon completion of or as a result of
such Combination had such Warrant been exercised immediately prior to such event
or to the relevant record date for any such entitlement. Unless paragraph (b) is
applicable to a Combination, the Company shall provide, as a condition to such
Combination, that the surviving or acquiring Person (the "Successor Company") in
such Combination will enter into an agreement confirming the Holders' rights
pursuant to this Section 3.03(a) and providing for adjustments, that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 3. The provisions of this Section 3.03(a) shall similarly apply to
successive Combinations involving any Successor Company.
A "Combination" means an event in which the Company
consolidates with or merges with or into another Person.
5
(b) In the event of (i) a Combination where consideration to
the holders of Common Stock in exchange for their shares is payable solely in
cash or (ii) the dissolution, liquidation or winding-up of the Company, the
Holder of this Warrant shall be entitled to receive, upon surrender of this
Warrant, such cash distributions on an equal basis with the holders of Common
Stock, as if this Warrant had been exercised immediately prior to such event.
In the event of any Combination described in this Section
3.03(b), the surviving or acquiring Person and, in the event of any dissolution,
liquidation or winding-up of the Company, the Company shall distribute as
promptly as practicable under the circumstances to the Holder upon surrender of
this Warrant, the funds, if any, necessary to pay the Holder the amounts to
which the Holder is entitled as described above.
(c) In the event of an adjustment pursuant to this Section 3
at any time prior to the end of the last Exercise Period, the per share prices
specified in Section 1(b) shall be equitably adjusted to reflect the
consideration paid in connection with such Combination or otherwise in keeping
with this Section 3.
3.04 Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges that resulted in
adjustments pursuant to this Section 3, if any such rights, options, warrants or
conversion or exchange privilege thereof shall not have been exercised, the
number of shares of Common Stock issuable upon the exercise of this Warrant
shall be readjusted pursuant to the applicable section of Section 3 as if (i)
the only shares of Common Stock issuable upon exercise of such rights, options,
warrants, conversion or exchange privileges were the shares of Common Stock, if
any, actually issued upon the exercise of such rights, options, warrants or
conversion or exchange privileges and (ii) shares of Common Stock actually
issued, if any, were issuable for the consideration actually received by the
Company upon such exercise plus the aggregate consideration, if any, actually
received by the Company for this issuance, sale or grant of all such rights,
options, warrants or conversion or exchange privileges whether or not exercised;
provided, however, that no such readjustment shall have the effect of decreasing
the number of shares of Common Stock issuable upon the exercise of this Warrant
below the number of shares of Common Stock issuable upon the exercise of this
Warrant immediately prior to any adjustment made therein on account of such
issuance, sale or grant of such rights, options, warrants or conversion or
exchange privileges.
3.05 Minimum Adjustment. The adjustments required by the
preceding sections of this Section 3 shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the number of shares of Common Stock issuable upon exercise of this Warrant
that would otherwise be required shall be made unless and until such adjustment
either by itself or with other adjustments not previously made increases or
decreases by at least 1% of the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 3 and not previously made, would result in
a minimum adjustment. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date of its
6
occurrence. In computing adjustments under this Section 3, fractional interests
in Common Stock shall be taken into account to the nearest one-tenth of a share.
3.06 Notice of Adjustment. Whenever the number of shares of
Common Stock and other property, if any, issuable upon exercise of the Warrants
is adjusted, as herein provided, the Company shall deliver to the Holder of this
Warrant a certificate setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated (including
a description of the basis on which (i) the Company's Board of Directors
determined the then fair value of any evidences of indebtedness, other
securities or property or warrants, options or other subscription or purchase
rights and (ii) the Market Price of the Common Stock was determined, to the
extent such determinations were required hereunder), and specifying the number
of shares of Common Stock issuable upon exercise of this Warrant after giving
effect to such adjustment.
3.07 Notice of Certain Transactions. In the event that the
Company shall propose to (a) pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other non-cash dividend or
distribution to the holders of its Common Stock, (b) offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) issue to the holders of its Common Stock any
(i) shares of Common Stock, (ii) rights, options or warrants entitling the
holders thereof to subscribe for shares of Common Stock or (iii) securities
convertible into, or exchangeable or exercisable for, shares of Common Stock (in
the case of (i), (ii) and (iii), if such issuance or adjustment would result in
an adjustment hereunder), (d) effect any capital reorganization,
reclassification, consolidation or merger, (e) effect the voluntary or
involuntary dissolution, liquidation or winding-up of the Company or (f) make a
tender offer or exchange offer with respect to the Common Stock, the Company
shall within five days after any such event send the Holder a notice of such
proposed action or offer unless the same is publicly announced. Such notice
shall, to the extent the same has not been publicly announced, specify the
record date for the purposes of such dividend, distribution or rights, or the
date such issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
shall, to the extent the same has not been publicly announced and if the same
would have any effect on the Common Stock and on the number of shares of Common
Stock, the number and kind of any other shares of stock and other property
issuable upon exercise of this Warrant (after giving effect to any adjustment
pursuant to Section 3 that will be required as a result of such action), specify
such effect. Such notice shall be given as promptly as possible and (x) in the
case of any action covered by clause (a) or (b) above, at least 10 days prior to
the record date for determining holders of the Common Stock for purposes of such
action or (y) in the case of any other such action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock, whichever shall be the earlier.
Notwithstanding anything contained herein to the contrary, the Company shall not
provide to the Holder any material non-public information in order to satisfy
its obligations pursuant to this Section 3.09.
3.08 Adjustment to Warrant Certificate. This Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Section 3, and any Warrant issued after such adjustment may state the same
number of shares of Common Stock issuable upon exercise of the Warrant as are
7
stated in this Warrant. The Company, however, may at any time in its sole
discretion make any change in the form of this Warrant that it may deem
appropriate to give effect to such adjustments and that does not affect the
substance of this Warrant, and any Warrant thereafter issued or countersigned,
whether in exchange or substitution for this Warrant or otherwise, may be in the
form as so changed.
SECTION 4. Taking of Record; Stock and Warrant Transfer Books.
In the case of all dividends or other distributions by the Company to the
holders of its Common Stock with respect to which any provision hereof refers to
the taking of a record of such holders, the Company shall in each such case take
such a record as of the close of business on a business day.
SECTION 5. Expenses, Transfer Taxes and Other Charges. The
Company shall pay any and all expenses (other than transfer taxes) and other
charges, including all costs associated with the preparation, issue and delivery
of stock or warrant certificates, that are incurred in respect of the issuance
or delivery of shares of Common Stock upon exercise of this Warrant pursuant to
Section 1 hereof or in connection with any division or combination of this
Warrant pursuant to Section 2 hereof. The Company shall not, however, be
required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in a name other than that in
which this Warrant is registered, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Company the
amount of any such tax, or has established, to the satisfaction of the Company,
that such tax has been paid.
SECTION 6. No Voting Rights. This Warrant shall not entitle
the Holder to any voting or other rights as a stockholder of the Company.
SECTION 7. Miscellaneous.
7.01 Office of Company. So long as any of this Warrant remains
outstanding, the Company shall maintain an office in the United States of
America where this Warrant may be presented for exercise, transfer, division or
combination as in this Warrant provided. Such office shall be at: 2255 Glades
Road, Suite 237W Boca Raton, Florida, or at the office of such registrar and
transfer agent as the Company may from time to time designate, unless and until
the Company shall designate and maintain some other office for such purposes and
give notice thereof to all Holders.
7.02 Notices Generally. Any notices and other communications
pursuant to the provisions hereof shall be sent in accordance with Section 7.03
of the Securities Purchase Agreement.
7.03 Restrictions on Transferability; Restriction on Exercise.
(A) (A) This Warrant and the shares of Common Stock issuable upon conversion of
this Warrant shall be transferable only in a transaction that is in compliance
with the provisions of the Securities Act and applicable state securities or
"blue sky" laws, and the Holder and each of its successors and assigns shall be
bound by the provisions of this Section 7.03. In the event this Warrant is not
registered under the Securities Act and applicable state securities or "blue
sky" laws, the Company may condition the sale, transfer or other disposition of
this Warrant (or any interest herein) upon receipt of a legal opinion, in form
and substance, and by counsel, reasonably acceptable to the Company, to the
8
effect that such sale, transfer or other disposition is being made pursuant to
an exemption from, or in a transaction not subject to, any registration
requirement under the Securities Act and applicable state securities or "blue
sky" laws. No opinion shall be required to exercise this Warrant. In the event
the shares of Common Stock or other securities issuable upon the exercise of
this Warrant are not registered under the Securities Act and applicable state
securities or "blue sky" laws, the Company may condition the sale, transfer or
other disposition of such shares or other securities (or any interest herein)
upon receipt of a legal opinion, in form and substance, and by counsel,
reasonably acceptable to the Company, to the effect that such sale, transfer or
other disposition is being made pursuant to an exemption from, or in a
transaction not subject to, any registration requirement under the Securities
Act and applicable state securities or "blue sky" laws.
(B) Notwithstanding any other provision of this Warrant, as of
any date prior to the Expiration Date, the aggregate number of shares of Common
Stock into which this Warrant, together with any other shares of Common Stock
then beneficially owned (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended) by the Holder and its affiliates (excluding shares of
Common Stock otherwise deemed beneficially owned as a result of the
convertibility of the Notes and held by the Holder or its affiliates), shall not
exceed 4.9% of the total outstanding shares of Common Stock as of such date (the
"4.9% Limitation"). In addition, notwithstanding any other provision of this
Warrant, during any consecutive 61-day period the Holder (together with its
affiliates) may not (x) exercise this Warrant into a number of shares of Common
Stock exceeding 9.9% of the Company's issued and outstanding shares of Common
Stock as of the first of such 61-day period or sell shares of Common Stock
(whether acquired upon exercise of this Warrant or otherwise in excess of 9.9%
of the Company's issued and outstanding shares of Common Stock as of the first
day of such 61-day period). The foregoing limitations or exercise of this
Warrant may not be waived, modified or amended. The Company shall have no
obligation to monitor compliance with the foregoing limitation. If any shares to
be issued upon the exercise of this Warrant would cause the Holder to hold
greater than 4.9% of the total outstanding Common Stock then the Company agrees
not to issue such shares until such time that such Holder can take delivery of
such shares.
7.04 Assignment. This Warrant and the rights, duties and
obligations hereunder may not be assigned or delegated by the Company or any
Holder without the prior written consent of the other party, which consent shall
not be unreasonably withheld. Nothwithstanding the foregoing, no consent shall
be required for a transfer by a Holder to any of its Affiliates.
7.05 Saturdays, Sundays or Holidays. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or legal holiday then such action may
be taken or such right may be exercised on the next succeeding day.
7.06 Governing Law. This Warrant shall be governed by, and
construed in accordance with, the law of the State of New York without giving
effect to conflicts of law principles thereof.
7.07 Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Common Stock,
and no mere enumeration herein of the rights or privileges of the Holder, shall
9
give rise to any liability of the Holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by the Company,
by any creditor of the Company or any other Person
10
IN WITNESS WHEREOF, the Company has duly executed this
Warrant.
Dated: May 1, 2001
HOLLYWOOD MEDIA CORP.
By
-----------------------------------------
Name:
Title:
11
Annex A
-------
ELECTION TO EXERCISE
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant, to receive ______ shares of Common Stock of
Hollywood Media Corp. in accordance with the terms of this Warrant.
The undersigned requests that [certificates for such shares in
denominations of ________ be registered in the name of ________________ whose
address is ________________ and that such shares be delivered to
__________________, whose address is __________________]. [Such shares be
delivered to [the undersigned] [other person] electronically through DTC].
The undersigned represents and warrants that the number of
shares of Common Stock to be received pursuant to this Election to Exercise,
together with the shares of Common Stock beneficially owned by the undersigned
(and its affiliates) on the date of this Election to Purchase do not exceed 4.9%
of the outstanding shares of Common Stock of the Company (as set forth in the
Company's most recent filing with the Securities and Exchange Commission unless
the Company shall notify the Holder that a greater or lesser number of shares is
outstanding).
Capitalized terms used but not defined herein shall have the
respective meanings ascribed to them in the Warrant to which Election to
Exercise is attached.
[Name of Holder]
By:
-----------------------------------------
Name:
Title:
NOTE: The above signature(s) must
correspond with the name written
upon the face of this Warrant in
every particular, without
alteration or enlargement or any
change whatever.
Date:
----------
Annex B
-------
ASSIGNMENT
----------
(To be signed only upon assignment of this Warrant)
FOR VALUE RECEIVED, hereby sells, assigns and transfers unto whose
address is and whose social security number or other identifying number is , the
within Warrant, together with all right, title and interest represented thereby,
and does hereby irrevocably constitute and appoint , attorney, to transfer said
Warrant on the books of the within-named Company, with full power of
substitution in the premises.
By:
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Name:
Title:
NOTE: The above signature(s) must
correspond with the name written
upon the face of this Warrant in
every particular, without
alteration or enlargement or any
change whatever.
Date: