EXHIBIT 10.28
Form of
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of January 14,
2002, by and between Hollywood Media Corp., a Florida corporation ("HOLL"), and
Fountainhead Media Services, Inc., a California corporation ("FMS").
RECITALS
A. HOLL owns 2700 shares of common stock of Baseline Acquisitions Corp., a
Delaware corporation ("Newco") (all such shares of common stock, the "Common
Shares"), such Common Shares constituting 90% of the authorized capital stock of
Newco
B. Pursuant to the terms and conditions of that certain Transfer and
Shareholders Agreement of even date herewith (the "Transfer Agreement"), HOLL
and FMS are transferring certain assets to Newco in connection with a
transaction pursuant to Section 351 of the Internal Revenue Code of 1986, as
amended (the "Transaction").
C. In connection with the Transaction HOLL desires to sell to FMS and FMS
desires to purchase from HOLL 300 of the Common Shares (the "Purchased Stock").
D. It is a condition to the consummation of the Transaction that HOLL and
FMS shall enter into this Agreement to set forth certain agreements relating to
the purchase and sale of the Purchased Stock.
E. Terms used herein but not defined herein have the meanings set forth in
the Transfer Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, FMS and HOLL, intending to be
legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK
1.1 Purchase and Sale of Stock. In reliance upon the representations
and warranties of HOLL contained in Section 2 and of the representations
and warranties of FMS contained in Section 3, and subject to the terms and
conditions set forth herein, HOLL shall sell to FMS and FMS shall purchase
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from HOLL at the Closing (as defined in Section 1.2) the Purchased Stock in
consideration for the payment by FMS to HOLL of Two Million Dollars
($2,000,000.00) in the form set forth in Section 1.3.
1.2 The Closing. Except as hereinafter provided, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take
place at the offices of Newco, or such other place as mutually agreed upon
in writing by the parties, at 10:00 a.m. on the third business day
following the date on which each of the conditions specified in Section 7.1
and Section 8.1 (other than those as to which the parties agree will be
satisfied at the Closing) of the Transfer Agreement has been fulfilled (or
waived by the party entitled to waive that condition) or at such other time
and place as FMS and HOLL may mutually agree in writing. The date on which
the Closing of the Transaction occurs is referred to herein as the "Closing
Date." At the Closing HOLL shall deliver to FMS a certificate representing
the Purchased Stock.
1.3 Consideration. The aggregate consideration to be delivered on the
Closing Date by FMS to HOLL for the Purchased Stock shall consist of a
Secured Promissory Note in the amount of $2,000,000 payable to HOLL in the
form attached to the Transfer Agreement as Exhibit B secured by certain
pledged collateral as set forth in the Pledge Agreement in the form
attached to the Transfer Agreement as Exhibit C.
2. REPRESENTATIONS AND WARANTIES OF HOLL
HOLL represents and warrants to FMS as follows:
2.1 Organization. Newco is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. HOLL is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Florida and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted.
2.2 Authorization of Agreement. HOLL has full corporate power and
authority to execute and deliver this Agreement and each other agreement,
document, instrument or certificate contemplated by this Agreement or to be
executed by it in connection with the consummation of the transactions
contemplated hereby and thereby and to perform fully its obligations
hereunder and thereunder. The execution, delivery and performance by HOLL
of this Agreement has been duly authorized by the Board of Directors of
HOLL and by all other necessary corporate action on the part of HOLL. This
Agreement has been duly and validly executed and delivered by HOLL and
(assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes the legal, valid and
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binding obligation of HOLL enforceable against HOLL in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
2.3 Consents and Approvals; No Violations. Except for filings,
notifications, authorizations, consents and approvals as may be required
under federal and state securities or blue sky laws, no filing with,
notification to or consent, authorization, waiver, approval, order,
license, certificate or Permit of, any Government Body is necessary for
HOLL's execution, delivery or performance of this Agreement or the
consummation by HOLL of the transactions contemplated by this Agreement.
None of the execution and delivery by HOLL of this Agreement and the
consummation of the transactions contemplated hereby or compliance by HOLL
with any of the provisions hereof will (i) conflict with or result in any
breach of any provision of the Certificates or Articles of Incorporation or
By-laws of HOLL, (ii) to the best of HOLL's knowledge, violate any Order or
statute, rule or regulation of any Government Body by which HOLL or any of
its properties or assets are bound, or (iii) conflict with, violate, result
in the breach or termination of, or (with or without due notice or the
lapse of time or both) constitute a default or give rise to any "takeback"
right or right of termination or acceleration or right to increase the
obligations under or modify any of the terms, conditions or provisions of
any note, bond, mortgage, license, franchise, Permit, indenture, agreement
or other instrument or obligation to which HOLL is a party, or by which
HOLL or any of its properties or assets are or may be bound.
2.4 Authorized Capital Stock. The authorized capital stock of Newco
consists solely of 3,000 shares of common stock, of which, as of the date
hereof, 2700 shares of Common Stock were issued and outstanding. HOLL owns
the Common Shares beneficially and of record free and clear of all
mortgages, Liens, loans and other encumbrances of any kind whether written
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or oral. All of the outstanding shares of Newco Common Stock are duly
authorized and validly issued and outstanding, fully paid and
nonassessable. Except for the Common Shares referenced above, Newco has no
other authorized, issued or outstanding debt, equity securities or
securities containing any equity features, or any other securities
convertible into, exchangeable for or entitling any person to otherwise
acquire any other securities of Newco containing any equity features.
2.5 Valid Issuance of Securities. The Purchased Stock, when
transferred and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid
and nonassessable and free of restrictions on transfer other than
restrictions of transfer under this Agreement, the Transfer Agreement, the
Pledge Agreement and applicable state and federal securities laws, and will
be issued in compliance with all federal and state securities laws.
2.6 Brokers. No broker, finder or investment banker is entitled to any
brokerage fee, finder's fee or other fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of HOLL.
3. REPRESENTATIONS AND WARRANTIES OF FMS
FMS hereby represents and warrants to HOLL as follows:
3.1 Organization. FMS is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and
has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted.
3.2 Authorization of Agreement. FMS has full corporate power and
authority to execute and deliver this Agreement, the Promissory Note, the
Pledge Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by it in
connection with the consummation of the transactions contemplated hereby
and thereby and to perform fully its obligations hereunder and thereunder.
The execution, delivery and performance by FMS of this Agreement, the
Promissory Note and the Pledge Agreement have been duly authorized by the
Board of Directors of FMS and by all other necessary corporate action on
the part of FMS. Each of this Agreement, the Promissory Note and the Pledge
Agreement has been duly and validly executed and delivered by FMS and
(assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes the legal, valid and
binding obligation of FMS enforceable against FMS in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3.3 Consents and Approvals; No Violations. Except for filings,
notifications, authorizations, consents and approvals as may be required
under federal and state securities or blue sky laws, no filing with,
notification to or consent, authorization, waiver, approval, order,
license, certificate or Permit of, any Government Body is necessary for
FMS' execution, delivery or performance of this Agreement, the Promissory
Note or the Pledge Agreement or the consummation by FMS of the transactions
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contemplated by this Agreement. None of the execution and delivery by FMS
of this Agreement and the consummation of the transactions contemplated
hereby or compliance by FMS with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the Certificates
or Articles of Incorporation or By-laws of FMS, (ii) to the best of FMS'
knowledge, violate any Order or statute, rule or regulation of any
Government Body by which FMS or any of its properties or assets are bound,
or (iii) conflict with, violate, result in the breach or termination of, or
(with or without due notice or the lapse of time or both) constitute a
default or give rise to any "takeback" right or right of termination or
acceleration or right to increase the obligations under or modify any of
the terms, conditions or provisions of any note, bond, mortgage, license,
franchise, Permit, indenture, agreement or other instrument or obligation
to which FMS is a party, or by which FMS or any of its properties or assets
are or may be bound.
3.4 Investor Representations. The Purchased Stock received by FMS
pursuant to this Agreement will be acquired for FMS' own account and not
with a view to or in connection with the sale or distribution of any part
thereof except for distributions to the shareholders of FMS.
3.5 Exemption from Registration. FMS understands that the Purchased
Stock received by FMS pursuant to this Agreement will not be registered
under the Securities Act on the ground that the transfer provided for in
this Agreement is exempt from registration under the Securities Act, and
that the reliance of HOLL on such exemption is predicated in part on FMS'
representations set forth in this Agreement. The certificates representing
the Purchased Stock issued to FMS pursuant to this Agreement will bear an
appropriate legend reflecting such exempt issuance without registration.
3.6 Knowledge and Information. FMS has been furnished with and has had
access to such information related to Newco as FMS considered necessary to
make an informed decision and determination with respect to the acquisition
of the Purchased Stock.
3.7 Brokers. No broker, finder or investment banker is entitled to any
brokerage fee, finder's fee or other fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of FMS.
4. MISCELLANEOUS
4.1 Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
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4.2 Entire Agreement. This Agreement (including the Exhibits and
attachment hereto) contains, and is intended as, a complete statement of,
all of the terms and the arrangements between the parties hereto with
respect to the matters provided for herein, and supersedes any previous
agreements and understandings among the parties hereto with respect to
those matters.
4.3 Governing Law; Construction. This Agreement and all agreements
related thereto shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts to be made, executed,
delivered and performed wholly in such state, but without regard to
conflicts of law principles of such state. The table of contents, captions
and headings in this Agreement are for reference purposes only and shall be
given no effect in the construction and interpretation of this Agreement.
No provision of this Agreement shall be construed against either party
because such party drafted or caused to be drafted such provision. Each
provision of this Agreement shall be construed as if such provision were
proposed by both HOLL and FMS.
4.4 Expenses. Each of the parties shall bear its own expenses
(including, without limitation, all fees and expenses of financial
institutions, accountants, legal counsel, brokers, investment bankers and
other advisors), incurred in connection with the negotiation, preparation,
execution, review, delivery and performance of this Agreement, each of the
other documents and instruments executed in connection with or contemplated
by this Agreement or related hereto, and the consummation of the
transactions contemplated hereby and thereby.
4.5 Notices. Any notice, request, instruction or other communication
to be given under this Agreement shall be in writing and shall be delivered
by hand or prepaid telecopy, or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall
be deemed given when so delivered by hand or telecopied, or if mailed,
three days after mailing (one business day in the case of express mail or
overnight courier service) to a party at the addresses for such party set
forth in the Transfer Agreement (or at such other address as such party may
have specified by notice given to the other party pursuant to this
provision).
4.6 Severability. If any provision of this Agreement, or the
application of such provision to HOLL, FMS, or any Person or circumstance,
shall be held invalid, then the remainder of this Agreement, or the
application of such provision to persons, entities or circumstances other
than those as to which it is held invalid, shall not be affected thereby.
4.7 Binding Effect; No Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall create or
be deemed to create any third party beneficiary rights in any Person not
party to this Agreement. Except as expressly permitted below, no assignment
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of this Agreement or of any rights or obligations hereunder may be made by
either party (by operation of law or otherwise) without the prior written
consent of the other party hereto and any attempted assignment without such
required consent shall be void.
4.8 Amendments. This Agreement may be amended, supplemented or
modified, and any provision hereof may be waived, only pursuant to a
written instrument making specific reference to this Agreement signed by
each of the parties hereto.
4.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
FOUNTAINHEAD MEDIA SERVICES, INC.
By: _____________________________
Rafi Gordon
Chief Executive Officer
HOLLYWOOD MEDIA CORP.
By: _____________________________
Mitchell Rubenstein
Chairman of the Board
and Chief Executive Officer
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