EXHIBIT 10.1
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT is made as of the 29th day of
September 2000, by and between Hollywood.com, Inc. (the "COMPANY"), a
corporation organized under the laws of the State of Florida, and the purchasers
whose names are set forth on Annex I hereto (the "PURCHASERS"). Certain
capitalized terms used herein and not otherwise defined shall have the meaning
set forth in Section 11.
IN CONSIDERATION of the foregoing premises, the mutual
benefits to be gained by the performance thereof and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged and accepted, and in reliance upon the representations, warranties
and agreements of the parties contained in this Agreement, the parties hereto
hereby agree as follows:
SECTION 1. Sale of the Shares.
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On the Closing Date and effective as of the Closing (each as
defined in Section 2 below), upon the terms and subject to the conditions of
this Agreement, each Purchaser shall buy, and the Company shall issue and sell
to such Purchaser the number of shares of common stock, par value $0.01 per
share (the "COMMON STOCK") set forth next to each such Purchaser's name on Annex
I hereto at a purchase price per Share equal to $5.75 and the number of shares
of Common Stock set forth next to each such Purchaser's name on Annex II hereto
at at a purchase price per Share equal to $6.00. The shares of Common Stock of
the Company to be purchased by the Purchasers hereunder shall be referred to
herein as the "SHARES".
SECTION 2. Delivery of the Shares at the Closing.
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The closing of the issuance and sale of the Shares (the
"CLOSING") shall occur on the date that is the second Business Day following the
satisfaction or waiver of all the conditions set forth in Section 8, at the
offices of Paul, Weiss, Rifkind, Wharton & Garrison located at 1285 Avenue of
the Americas, New York, NY 10019, unless another time or place is agreed to by
the parties. The date upon which the Closing shall occur shall be referred to
herein as the "CLOSING DATE".
At the Closing, the Company shall deliver to each Purchaser
one or more stock certificates registered in the name of such Purchaser, or in
such nominee name(s) as may be designated by such Purchaser in writing,
representing the number of Shares purchased by such Purchaser as provided in
Section 1 above and bearing an appropriate legend referring to the fact that the
Shares were sold in reliance upon the exemption from registration under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "SECURITIES ACT"), provided by Section 4(2) thereof and Rule 506
thereunder. The Company will promptly substitute one or more replacement
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certificates without the legend at such time as such Shares are resold pursuant
to and in accordance with the Registration Statement (as defined below).
SECTION 3. Representations and Warranties of the Company.
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The Company hereby represents and warrants to each Purchaser,
as of the date hereof and as of the Closing Date, as follows:
3.1 Organization and Qualification; Material Adverse
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Effect.
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(a) The Company is a corporation duly incorporated
and existing in good standing under the Laws of the State of Florida and has the
requisite corporate power and authority to own its properties and to carry on
its business as now being conducted and as proposed to be conducted. Schedule
3.1(a) hereto is a true and complete list of all direct and indirect
subsidiaries of the Company (the "SUBSIDIARIES") with the percentage ownership
of the Company in each such Subsidiaries. Other than as set forth on Schedule
3.1(a), the Company does not own any equity or other interest in any other
Person. Each Subsidiary is duly incorporated and existing in good standing under
the Laws of its jurisdiction of incorporation and has the requisite power and
authority to own its properties and to carry on its business as now being
conducted and as proposed to be conducted.
(b) The Company and each of its Subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a Material Adverse Effect. For purposes of
this Agreement, "MATERIAL ADVERSE EFFECT" shall mean any material adverse
effect(s) on the business, operations, properties, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
3.2 Authorization; Enforcement.
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The Company has all requisite corporate power and authority to
enter into and perform this Agreement and to issue the Shares in accordance with
the terms hereof. The execution and delivery of this Agreement by the Company
and the consummation by it of the transactions contemplated hereunder have been
duly authorized by all necessary corporate action, and no further consent or
authorization of the Company or its Board of Directors (or any committee or
subcommittee thereof) or stockholders is required. This Agreement has been duly
executed and delivered by the Company. This Agreement constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar Laws
relating to, or affecting generally the enforcement of creditors' rights and
remedies or by other equitable principles of general application. The Shares
have been duly authorized and, upon issuance thereof and payment therefor in
accordance with the terms of this Agreement, will be validly issued, fully paid
and non-assessable, free and clear of any and all Liens.
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Capitalization.
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(a) As of the date hereof, the authorized capital
stock of the Company consists of (i) 100,000,000 shares of Common Stock, of
which as of the date hereof, 24,158,570 shares are issued and outstanding,
3,100,000 shares are issuable and reserved for issuance pursuant to the
Company's stock option and purchase plans and no more than 4,051,713 shares are
issuable and reserved for issuance pursuant to securities exercisable or
exchangeable for, or convertible into, shares of Common Stock and (ii) 1,000,000
shares of preferred stock, of which as of the date hereof, no shares are issued
and outstanding. All of such outstanding shares have been, or upon issuance will
be, validly issued, fully paid and nonassessable.
(b) As of the date hereof, except as contemplated
by this Agreement or as disclosed in Schedule 3.3(b), (i) no shares of the
Company's capital stock are subject to preemptive rights or any other similar
rights or any Liens suffered or permitted by the Company, (ii) there are no
outstanding debt securities, (iii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue shares of capital stock of the Company or any of
its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act, (v) there are no outstanding
securities of the Company or any of its Subsidiaries which contain any
redemption or similar provisions and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
Common Stock as required by this Agreement, (vii) the Company does not have any
stock appreciation rights or "phantom stock" plans or agreements or any similar
plan or agreement, (viii) the Company and its Subsidiaries have no securities
convertible into or exercisable for Common Stock at a floating price or
resettable price and (ix) there are no preemptive rights or other rights to
subscribe for or purchase with respect to the issuance or sale of the Shares by
the Company pursuant to this Agreement.
(c) The Company has furnished to the Purchasers
true and correct copies of the Company's Articles of Incorporation, as amended
and as in effect on the date hereof (the "ARTICLES OF INCORPORATION"), and the
Company's By-laws, as in effect on the date hereof (the "BY-LAWS").
(d) The shares of capital stock or other equity
interests of each Subsidiary that are issued and outstanding have been duly
authorized and validly issued, are fully paid and non-assessable and the shares
of capital stock or other equity interests of each Subsidiary owned by the
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Company as provided on Schedule 3.1(a) are free and clear of any Liens.
3.3 No Conflicts.
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(a) The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereunder will not (i) result in a violation of the
Articles of Incorporation or the By-laws, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both reasonably could
be expected to become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a
party or by which any of their respective properties or assets are bound or
affected or (iii) result in a violation of Law applicable to the Company or any
of its Subsidiaries or by which any of their respective properties or assets are
bound or affected.
(b) Neither the Company nor any of its
Subsidiaries is in violation of any term of, or in default under, (i) its
Articles of Incorporation or By-laws or other organizational documents,
respectively, (ii) any material contract, agreement, mortgage, indebtedness,
indenture or other instrument to which it is a party or by which its properties
or assets are bound or affected or (iii) any Laws applicable to the Company or
any of its Subsidiaries or by which any of their respective properties are bound
or affected.
(c) Except as specifically contemplated by this
Agreement and as required under the Securities Act, the Company is not required
to obtain any consent, authorization or order of, or make any filing or
registration with, any Governmental Body or other Person in order for it to
execute, deliver or perform any of its obligations under, or contemplated by,
this Agreement in accordance with the terms hereof. Except as disclosed in
Schedule 3.4(c), all consents, authorizations or orders of, and filings and
registrations with, any Governmental Body or other Person which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof. The Company complies with and is not in
violation of the listing requirements of the Principal Market (as defined below)
and no notice of any non-compliance or violation has been received in the
previous 12 months. Without limiting the generality of the foregoing, no
approval by the shareholders of the Company shall be required under applicable
Law for the issuance and sale of the Shares as provided pursuant to this
Agreement.
3.4 Principal Market. The principal market for the
Common Stock is, and for the forseeable future is anticipated to be, The Nasdaq
Stock Market (the "PRINCIPAL MARKET").
3.5 SEC Documents; Financial Statements; No Undisclosed
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Liabilities.
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(a) Since December 31, 1997, the Company has
timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the U.S. Securities and Exchange Commission (the
"SEC") pursuant to the reporting requirements of the Securities Exchange Act of
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1934, as amended, and the rules and regulations promulgated thereunder (the
"EXCHANGE ACT") (all of the foregoing filed prior to the date hereof and
financial statements and schedules thereto being hereinafter referred to as the
"SEC DOCUMENTS"). As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) As of their respective dates, the financial
statements of the Company included in the SEC Documents complied in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with U.S. generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position, results of operations, statements of
cash flows and statements of stockholders' equity of the Company and its
Subsidiaries on a consolidated basis for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Neither the
Company nor any of its Subsidiaries or any of their officers, directors,
employees or agents have provided the Purchasers with any material, nonpublic
information which was not publicly disclosed prior to the date provided.
(c) As of the date of the most recent consolidated
balance sheet included in the Company's financial statements (the "BALANCE SHEET
DATE"), except as set forth in Schedule 3.8 or the SEC Documents filed at least
five Business Days prior to the date hereof, neither the Company nor any of its
Subsidiaries had any indebtedness, liability, loss, damage or deficiency (the
"LIABILITIES"), whether or not covered by insurance, that would reasonably be
expected to have a Material Adverse Effect and that was not expressly set forth
in the Company's financial statements and notes thereto. Since the Balance Sheet
Date, except as set forth in Schedule 3.8 or the SEC Documents filed at least
five Business Days prior to the date hereof, neither the Company nor any of its
Subsidiaries has incurred any Liability, whether or not covered by insurance,
other than Liabilities incurred in the ordinary course of business consistent
with past practice.
3.6 Absence of Certain Changes.
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Except as disclosed in Schedule 3.7 or in the SEC Documents
filed at least five Business Days prior to the date hereof, since the Balance
Sheet Date, no event, liability, development or circumstances has occurred and
there has been no adverse change or adverse development in the business,
properties, assets, operations, financial condition, liability or results of
operations of the Company or its Subsidiaries which either has had or is
reasonably likely to have a Material Adverse Effect or which would be required
to be disclosed in an SEC registration statement for the Common Stock. The
Company has not taken any steps, and does not currently expect to take any
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steps, to seek protection pursuant to any applicable bankruptcy Laws. Neither
the Company nor any of its Subsidiaries has any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings.
3.7 Absence of Litigation.
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There is no action, suit, proceeding, inquiry or investigation
before or by any Governmental Body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company, the
Common Stock or any of the Subsidiaries or any of the Company's or the
Subsidiaries' officers or directors in their capacities as such, (i) except as
set forth in Schedule 3.8 or the SEC documents filed at least five Business Days
prior to the date hereof and (ii) except which individually and in the
aggregate, respectively, would be reasonably likely to result in liability to
the Company of less than $50,000 and $100,000, respectively.
3.8 No General Solicitation; No Integrated Offerings.
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(a) Neither the Company, nor any of its
affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Shares.
(b) Neither the Company, nor any of its
affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause any offering of the
Shares to the Purchasers to be integrated with prior offerings by the Company
for purposes of the Securities Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of
the Principal Market, nor will the Company, any of its affiliates or any Person
acting on its or their behalf take any action or steps in the future that would
cause any offering of the Shares to be integrated with other offerings.
3.9 Employee Relations.
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Neither the Company nor any of its Subsidiaries is involved in
any labor dispute nor, to the knowledge of the Company or any of its
Subsidiaries, is any such dispute threatened. Neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement. The Company and
its Subsidiaries are not the subject of any union organizing campaign and, to
the knowledge of the Company and its Subsidiaries, no such campaign is
threatened. No executive officer (as defined in Rule 501(f) of the Securities
Act) whose departure would be adverse to the Company or any of its Subsidiaries
has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer's employment with the Company.
3.10 Intellectual Property Rights.
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The Company and its Subsidiaries own or possess adequate
rights or licenses to use all trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights,
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inventions, licenses, approvals, governmental authorizations, trade secrets and
rights (the "INTELLECTUAL PROPERTY RIGHTS") necessary to conduct their
respective businesses as now conducted and as proposed to be conducted. The
Company and its Subsidiaries do not have any knowledge of any infringement by
the Company or its Subsidiaries of Intellectual Property Rights of any other
Person. Except as set forth on Schedule 3.11, there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or any of its Subsidiaries regarding
Intellectual Property Rights or other infringement. The Company and its
Subsidiaries believe they have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property Rights.
3.11 Environmental Laws.
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The Company and its Subsidiaries (i) are in compliance with
all applicable Laws relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all material terms
and conditions of any such permits, licenses or approvals.
3.12 Title to Property.
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The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all Liens and defects
except such as are described in Schedule 3.13. Any personal and real property
and facilities held under lease by the Company or any of its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and facilities by the Company and its Subsidiaries.
3.13 Insurance.
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The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company reasonably believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged.
3.14 Regulatory Permits.
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The Company and its Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate Governmental
Bodies, necessary to conduct their respective businesses, and neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificates, authorizations or
permits.
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Internal Accounting Controls.
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The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.15 Tax Status; Transfer Taxes.
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(a) The Company and each of its Subsidiaries has
made or filed all United States federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject (unless and only to the extent that the Company and each of its
Subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith by appropriate proceedings and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction and the Company is not aware of any basis
for any such claim.
(b) On the Closing Date, all transfer taxes (other
than income taxes) which are required to be paid in connection with the sale and
transfer of the Shares to the Purchasers hereunder will be, or will have been,
fully paid or provided for by the Company and all applicable Laws imposing such
taxes will be or will have been fully complied with.
3.16 Certain Transactions.
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Except as set forth on Schedule 3.18 and in the SEC Documents
filed at least five Business Days prior to the date hereof, and other than the
grant of stock options disclosed on Schedule 3.3(b), none of the officers,
directors or employees of the Company or any of its Subsidiaries is presently a
party to any material transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
material contract, material agreement or other material arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director or employee has a substantial interest or is an officer, director,
trustee or partner.
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Application of Takeover Protections.
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The Company and its Board of Directors have taken all
necessary action, if any, in order to render inapplicable anti-takeover
provisions contained in the Company's Articles of Incorporation or By-Laws or
Florida law which is or could become applicable to the Purchasers as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company's issuance of the Common Stock and the Purchasers' ownership of
Common Stock.
3.17 Rights Plan.
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Other than the Rights Agreement dated as of August 23, 1996
and most recently amended as of October 1, 1999 (the "PLAN"), neither the
Company nor any of its Subsidiaries has adopted a shareholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of Common
Stock or a change in control of the Company. The Company confirms that no
provision of the Plan will, under any present or future circumstances, delay,
prevent or interfere with the performance of any of the Company's obligations
under this Agreement and the Plan will not be "triggered" by such performance.
3.18 Investment Company.
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None of the Company and its Subsidiaries is an investment
company required to be registered as such under the Investment Company Act of
1940, as amended, and the rules and regulations promulgated thereunder. 3.19
Form S-3.
The Company meets the eligibility requirements of instruction
IB1 of Form S-3 under the Securities Act for primary offerings.
3.20 Brokers.
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Except for its obligations to Wasserstein Perella & Co., Inc.,
the Company has taken no action which would give rise to any claim by any person
for brokerage commissions, finder's fees or similar payments by the Company or
the Purchasers relating to this Agreement or the transactions contemplated
hereunder. All obligations to Wasserstein Perella & Co., Inc. are the exclusive
responsibility of the Company.
SECTION 4. Representations and Warranties of the Purchasers.
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Each Purchaser hereby represents and warrants for itself and
not for any other Purchaser, as of the date hereof and as of the Closing Date,
as follows:
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4.1 Authorization; Enforcement.
The Purchaser has all requisite corporate power and authority
to enter into and perform this Agreement and to purchase the Shares in
accordance with the terms hereof. The execution and delivery of this Agreement
by the Purchaser and the consummation by it of the transactions contemplated
hereunder have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by the Purchaser. This Agreement
constitutes the valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar Laws relating to, or
affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
4.2 No Conflicts.
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(a) The execution, delivery and performance of
this Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereunder will not (i) result in a violation of the
organizational documents of the Purchaser, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both reasonably could
be expected to become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Purchaser is a party or by which any of its
properties or assets are bound or affected or (iii) result in a violation of any
Law applicable to the Purchaser or by which any of its properties or assets are
bound or affected.
(b) Except as specifically contemplated by this
Agreement and as required under the Securities Act, the Purchaser is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any Governmental Body in order for it to execute, deliver or
perform any of its obligations under, or contemplated by, this Agreement in
accordance with the terms hereof.
4.3 Sophisticated Investor.
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The Purchaser is an "accredited investor" within the meaning
of Rule 501(a) of Regulation D. The Purchaser acknowledges that it understands
that the Company is subject to the periodic reporting requirements of the
Exchange Act and has reviewed and received copies of any SEC Document that it
has requested.
4.4 Ability to Bear Risk of Investment.
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The Purchaser acknowledges that the purchase of the Shares
contemplated hereunder is a speculative investment and involves a high degree of
risks. The Purchaser is able to bear the economic risks of that investment and,
at the present time, is able to afford a complete loss of such investment.
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4.5 Intent.
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The Purchaser is acquiring the number of Shares set forth in
Section 1 above in the ordinary course of its business and for its own account
and with no intention of distributing any of such Shares, or any arrangement or
understanding with any other persons regarding the distribution of such Shares,
within the meaning of Section 2(11) of the Securities Act, in violation of the
Securities Act. The Purchaser will not directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act. 4.6 Restricted Shares.
The Purchaser understands and acknowledges that the Shares
have not been and will not as of the time issued be registered under the
Securities Act and that they will be issued in reliance upon exemptions from the
registration requirements of the Securities Act and thus cannot be resold unless
they are included in an effective registration statement filed under the
Securities or unless an exemption from registration is available for such
resale.
SECTION 5. Survival of Representations, Warranties and
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Agreements.
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Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchasers of the Shares being purchased and the payment
therefor.
SECTION 6. Registration of the Shares; Compliance with the
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Securities Act.
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6.1 Registration of the Shares.
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(a) The Company shall file with the SEC no later
than on the 30th day from, but not including, the date hereof (the "REQUIRED
FILING DATE") a registration statement on Form S-3 registering the Shares for
resale by the Purchasers from time to time on the Principal Market or the
facilities of any national securities exchange on which the Company's Common
Stock is then traded or in privately-negotiated transactions (the "REGISTRATION
STATEMENT"). The Company shall use its best efforts to cause the Registration
Statement to become or to be declared effective by the SEC as soon as
practicable after its filing and, in no event later than the 60th day from, but
not including, the date hereof; provided, however, that if the SEC decides to
review the Registration Statement, such date shall automatically be extended to
the 120th day from, but not including, the date hereof (such required
effectiveness date as may be so extended, the "REQUIRED EFFECTIVE DATE").
(b) The Company's best efforts shall include but
will not be limited to, promptly responding to all comments received from the
staff of the SEC. If the SEC notifies the Company that the Registration
Statement will receive no review from the SEC, the Company shall cause the
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Registration Statement to be declared effective by the SEC within five Business
Days after the day of the receipt of such notification from the SEC.
(c) Once the Registration Statement is declared
effective, the Company shall use its best efforts to keep such Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of this Agreement and in conformity with the
requirements of the Securities Act and the policies, rules and regulations of
the SEC as announced from time to time, for a period of at least two years (as
extended pursuant to Section 6.6) following the date the Registration Statement
has become effective or such shorter period as will terminate when all the
Shares covered by the Registration Statement have been resold pursuant thereto
(the "REGISTRATION PERIOD").
6.2 Delayed Registration.
--------------------
If the Registration Statement has not been filed on or prior
to the Required Filing Date or declared effective by the SEC on or prior to the
Required Effective Date, the Company shall pay to each Purchaser, as stipulated
damages intended by the parties to compensate such Purchaser for the incremental
costs and investment risks associated with holding any of the Shares as
restricted securities, a fee (the "LATE REGISTRATION FEE") for each day of such
delay equal to 0.0333% of the purchase price to be paid by such Purchaser for
all the Shares to be purchased by such Purchaser as set forth in Annex I hereto.
The Company shall pay to each Purchaser the Late Registration Fee in cash on the
earlier of (i) the end of each 30-day period of such delay or (ii) the filing of
the Registration Statement or the notification by the SEC to the Company that
the Registration Statement has become effective, whichever is applicable.
6.3 Restrictions on Resales After Effectiveness.
--------------------------------------------
If at any time after the Registration Statement has been
declared effective by the SEC (i) any Purchaser cannot, for reasons other than
due to the Purchaser's actions or omissions or the suspension of the
effectiveness of the Registration Statement described in Section 6.6, resell the
Shares into the public market for any period of more than 10 consecutive
Business Days or for any 30 Business Days in the aggregate during any period of
12 consecutive months, (ii) the Shares are not listed or included for quotation
on the Principal Market, the New York Stock Exchange or the American Stock
Exchange for any period of more than 10 consecutive Business Days or (iii) any
Purchaser cannot by reason of the suspension of the effectiveness of the
Registration Statement as described in Section 6.6 resell the Shares into the
public market for any period of more than 30 consecutive Business Days, the
Company shall pay to such Purchaser, as stipulated damages intended by the
parties to compensate such Purchaser for of the incremental costs and investment
risks associated with holding any of the Shares as restricted securities, a fee
(the "RESALE RESTRICTION FEE") for each day of such period equal to 0.0333% of
the purchase price paid by such Purchaser for all the Shares held by such
Purchaser on such day. The Company shall pay to such Purchaser the Resale
Restriction Fee in respect of each such 10 consecutive Business Day period or
such 30 Business Day period, as the case may be, in cash immediately following
the conclusion of any such 10 Business Day or 30 Business Day period. The
Registration Period regarding the effectiveness of the Registration Statement
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shall be extended by a number of days equal to the number of days in the periods
referred to above for which a Resale Restriction Fee is payable.
6.4 Registration Procedures.
------------------------
In connection with the Registration Statement, the Company
shall:
(a) upon the occurrence of any event that would
cause such Registration Statement or the prospectus contained therein (the
"PROSPECTUS") or any document incorporated therein by reference (i) to contain
an untrue statement of material fact or omit to state any material fact
necessary to make the statements therein not misleading or (ii) not to be
effective and usable for resale of any Shares during the Registration Period,
prepare a supplement or post-effective amendment to the Registration Statement
or related Prospectus or any document incorporated therein by reference or file
any other required document in order to cure such defects, and, if SEC review is
required, use its best efforts to cause such supplements or amendments to be
declared effective as soon as practicable;
(b) prepare and file with the SEC such amendments
and post-effective amendments to the Registration Statement as may be necessary
to keep such Registration Statement effective for the Registration Period; cause
the Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act, and
to comply fully with Rules 424, 430A and 462, as applicable, under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all the Shares covered by such
Registration Statement during the Registration Period in accordance with the
intended method or methods of distribution by the Purchasers thereof set forth
in such Registration Statement or supplement to the Prospectus;
(c) advise each Purchaser promptly and, if
requested by such Purchaser, confirm such advice in writing, (i) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective, (ii) of any request by
the SEC for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Shares for offering
or sale in any jurisdiction, or the initiation of any proceeding for any of the
preceding purposes and (iv) of the existence of any fact or the happening of any
event described in Section 6.4(a)(i);
(d) if the SEC issues a stop order suspending the
effectiveness of the Registration Statement, or any state securities commission
or other regulatory authority issues an order suspending the qualification or
exemption from qualification of the Shares under state securities or Blue Sky
laws, use its best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;
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<PAGE>
(e) furnish to each Purchaser, before filing with
the SEC, copies of the Registration Statement and the Prospectus included
therein or any amendments or supplements to such Registration Statement or
Prospectus, which documents will be subject to the review and comment of such
Purchasers in connection with such sale, if any, for a period of at least three
Business Days, and the Company will not file such Registration Statement or
Prospectus or any amendment or supplement to such Registration Statement or
Prospectus to which such Purchasers shall reasonably object within three
Business Days after the receipt thereof. A Purchaser shall be deemed to have
reasonably objected to such filing if the Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed, contains an
untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein not misleading or fails to comply with
the applicable requirements of the Securities Act;
(f) promptly after the filing with the SEC of any
document that is incorporated by reference into the Registration Statement or
Prospectus, provide copies of such document to each Purchaser and make the
Company's representatives available for discussion of such documents and other
customary due diligence matters as the Purchasers may reasonably request;
(g) make available, at reasonable times, for
inspection by each Purchaser and any attorney or accountant retained by such
Purchasers, all financial and other records, pertinent corporate documents of
the Company and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such Purchaser, attorney or
accountant in connection with the Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;
(h) if requested by any Purchaser, promptly
include in the Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such Purchaser may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Shares, and make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(i) furnish to each Purchaser in connection with
any sale, without charge, at least one copy of the Registration Statement, as
first filed with the SEC, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(j) deliver to each Purchaser without charge, as
many copies of the Prospectus and any amendment or supplement thereto as such
Purchaser reasonably may request; the Company hereby consents to the use (in
accordance with law) of the Prospectus and any amendment or supplement thereto
by each Purchaser in connection with the offering and the sale of the Shares
covered by the Prospectus or any amendment or supplement thereto;
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<PAGE>
(k) prior to any public offering of Shares,
cooperate with the Purchasers and their counsel in connection with the
registration and qualification of the Shares under the securities or Blue Sky
laws of such jurisdictions as the Purchasers may request and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Shares covered by the Registration Statement; provided,
however, that the Company shall not be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other than
as to matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(l) in connection with any resale of Shares that
will result in such securities no longer being restricted securities, cooperate
with the Purchasers to facilitate the timely preparation and delivery of
certificates representing the Shares to be sold and not bearing any restrictive
legends; and to register such Shares in such denominations and such names as the
Purchasers may request at least two Business Days prior to such resale;
(m) use its best efforts to cause the disposition
of the Shares covered by the Registration Statement to be registered with or
approved by such other Governmental Bodies as may be necessary to enable the
Purchasers to consummate the disposition of such Shares, subject to the proviso
contained in clause (j) above;
(n) make generally available to its security
holders, as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 of the Securities Act (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule 158
under the Securities Act); and
(o) provide promptly to each Purchaser and any
affiliated market maker thereof, upon request, each document filed with the SEC
pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act.
6.5 Registration Expenses.
----------------------
(a) All expenses incurred by the Company and
incident to the Company's performance of or compliance with this Agreement will
be borne by the Company, regardless of whether the Registration Statement
becomes effective, including without limitation: (i) all registration and filing
fees and expenses, (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws, (iii) all expenses of printing
(including printing of Prospectuses), messenger and delivery services and
telephone, (iv) all fees and disbursements of counsel for the Company, (v) all
application and filing fees in connection with listing the Shares on a national
securities exchange or automated quotation system pursuant to the requirements
hereof and (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
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<PAGE>
(b) The Company will not be responsible for any
underwriting discounts or selling commissions applicable to the sale of Shares
by the Purchasers.
(c) The Company will, in any event, bear its
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company.
(d) All reasonable fees and disbursements of not
more than one firm of counsel for the Purchasers acting in connection with this
Agreement and the Registration Statement shall be borne by the Company.
6.6 Covenants of the Purchasers.
----------------------------
In connection with the Registration Statement, each Purchaser
shall:
(a) not make any sale of the Shares under the
Registration Statement without complying with the prospectus delivery
requirements of the Securities Act;
(b) provide the Company with such information
required under the Securities Act and the Exchange Act as the Company may
reasonably request in connection with the registration of the Shares;
(c) acknowledge that there may be times when the
Company must suspend the use of the Prospectus until such time as an amendment
or supplement to the Registration Statement or Prospectus has been filed by the
Company and any such amendment to the Registration Statement is declared
effective by the SEC, or until such time as the Company has filed an appropriate
report with the SEC pursuant to the Exchange Act. Accordingly, upon receipt of
the notice referred to in Section 6.4(c)(iii) or any notice from the Company of
the existence of any fact of the kind described in Section 6.4(a)(i) hereof (in
each case, a "SUSPENSION NOTICE"), each Purchaser shall forthwith discontinue
disposition of the Shares pursuant to the Registration Statement until (i) such
Purchaser has received copies of the supplemented or amended Prospectus
contemplated by Section 6.4(a) hereof or (ii) such Purchaser is advised in
writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"). The
Registration Period regarding the effectiveness of the Registration Statement
shall be extended by a number of days equal to the number of days in the period
from and including the date of delivery of the Suspension Notice to the date of
delivery of the Recommencement Date.
(d) upon receiving a Suspension Notice, either (i)
destroy any Prospectuses, other than permanent file copies, then in its
possession which have been replaced by the Company with more recently dated
Prospectuses or (ii) deliver to the Company all copies, other than permanent
file copies, then in its possession of the Prospectus covering such Shares that
was current at the time of receipt of the Suspension Notice.
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<PAGE>
Indemnification.
---------------
6.1 Indemnification by the Company.
-------------------------------
The Company shall indemnify and hold harmless each Purchaser,
its directors, officers and each Person, if any, who controls such Purchaser
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), from and against any and all losses, claims, damages,
liabilities, judgments (including without limitation, any legal or other
expenses reasonably incurred in connection with investigating or defending any
matter, including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
Prospectus (or any amendment or supplement thereto) provided by the Company to
such Purchaser or any prospective purchaser of Shares, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
an untrue statement or omission or alleged untrue statement or omission that is
based upon information relating to any of the Purchasers furnished in writing to
the Company by such Purchaser expressly for use in the Registration Statement.
Notwithstanding the foregoing, the Company shall not be obligated to indemnify
hereunder if it is established by judicial decision that such losses, claims,
damages, liabilities or judgments were caused by untrue statements or omissions
or alleged untrue statements or omissions included in the Registration Statement
or Prospectus (or any amendment or supplement thereto) for which the Purchaser
had received the notice referred to in Section 6.4(c)(iii) or any notice from
the Company of the existence of any fact of the kind described in Section
6.4(a)(i) and following the receipt of which notice, it is established that such
Purchaser had failed to comply with its obligations under Section 6.6(c).
6.2 Indemnification by the Purchasers.
----------------------------------
Each Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company and its directors and officers, and each Person,
if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) the Company to the same extent as the foregoing
indemnity from the Company set forth in Section 7.1 above, but only with
reference to information relating to such Purchaser furnished in writing to the
Company by such Purchaser expressly for use in the Registration Statement. In no
event shall any Purchaser, its directors, officers or any Person who controls
such Purchaser be liable or responsible for any amount in excess of the amount
by which the total amount received by such Purchaser with respect to its resale
of Shares pursuant to the Registration Statement exceeds (i) the amount paid by
such Purchaser for such Shares and (ii) the amount of any damages that such
Purchaser, its directors, officers or any Person who controls such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
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<PAGE>
Indemnification Procedures.
--------------------------
(a) In case any action shall be commenced
involving any Person in respect of which indemnity may be sought pursuant to
Section 7.1 or Section 7.2 (the "INDEMNIFIED PARTY"), the indemnified party
shall promptly notify the Person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party shall assume the
defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and expenses
of such counsel, as incurred (except that in the case of any action in respect
of which indemnity may be sought pursuant to both Sections 7.1 and 7.2, a
Purchaser shall not be required to assume the defense of such action pursuant to
this Section 7.3, but may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided below,
shall be at the expense of the Purchaser). Any indemnified party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
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 (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Purchasers owning, beneficially or
otherwise, a majority of the Shares, in the case of the parties indemnified
pursuant to Section 7.1, and by the Company, in the case of parties indemnified
pursuant to Section 7.2.
(b) The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with the indemnifying party's written consent or (ii) effected without
the indemnifying party's written consent if the settlement is entered into more
than 20 Business Days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
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<PAGE>
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
6.3 Contribution.
-------------
(a) To the extent that the indemnification
provided for in this Section 7 is unavailable to an indemnified party in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
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 losses, claims, damages, liabilities or judgments in such
proportion as is appropriate to reflect the relative fault of the Company, on
the one hand, and of the Purchasers, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. 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 the Company, on the one hand, or by the Purchasers, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
judgments referred to above shall be deemed to include, subject to the
limitations set forth in Section 7.3, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
(b) The Company and each Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 7.4
were determined by pro rata allocation (even if the Purchasers were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in Section 7.4(a). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in Section 7.4(a) 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 matter, including any action that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 7, no Purchaser, its directors,
its officers or any Person, if any, who controls such Purchaser shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total amount received by such Purchaser with respect to the sale of
Shares pursuant to the Registration Statement exceeds (i) the amount paid by
such Purchaser for such Shares and (ii) the amount of any damages which such
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. The Purchasers' obligations to contribute pursuant
to this Section 7.4 are several in proportion to the respective principal amount
of Shares held by each Purchaser hereunder and not joint.
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SECTION 7. Covenants.
----------
7.1 Current Public Information.
---------------------------
For so long as any Share is owned, beneficially or otherwise,
by any Purchaser, the Company shall, during any period in which it is subject to
Section 13 or 15 (d) of the Exchange Act, make all filings required thereby in a
timely manner in order to permit resales of such Shares pursuant to Rule 144.
7.2 Listing of the Shares.
On or before the 10th Business Day from the date hereof, the
Company shall secure the listing of the Shares upon the Principal Market and
each national securities exchange or automated quotation system, if any, upon
which the Common Stock is then listed (subject to official notice of issuance)
and, so long as any Purchaser owns any of the Shares, will maintain such listing
of the Shares. The Company shall use its best efforts to obtain and, so long as
any Purchaser owns any of the Shares, maintain the listing and trading of its
Common Stock on the Principal Market and shall comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the National Association of Securities Dealers, Inc. (the "NASD") and such
exchanges, as applicable. Until a Purchaser transfers, assigns or sells all of
the Shares owned by it, the Company will promptly provide to such Purchaser
copies of any notices it receives regarding the continued eligibility of the
Common Stock for listing on the Principal Market or other principal exchange or
quotation system on which the Common Stock is listed or traded.
7.3 No Integration.
---------------
The Company shall not make any offers or sales of any security
under circumstances that would cause the offering of the Shares hereunder to be
integrated with any other offering of securities by the Company (i) for the
purpose of any applicable stockholder approval provision or (ii) in a manner
that would require any registration of such offering under applicable securities
Laws.
SECTION 8. Closing Conditions.
-------------------
8.1 Conditions to the Obligation to Close of the
--------------------------------------------
Company.
--------
The Company's obligation to issue and sell the Shares to the
Purchasers at the Closing shall be subject to the fulfillment on or prior to the
Closing Date of the following conditions, any or all of which may be waived at
the option of the Company:
(a) The Company shall have received the full
amount of the purchase price for the Shares being purchased hereunder in
same-day funds.
(b) The representations and warranties of the
Purchasers contained in this Agreement shall be true and correct, in each case,
as of the date of this Agreement and as of the Closing Date with the same force
and effect as though made on and as of such dates, except to the extent such
representations and warranties speak only as of a
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specified date in which case such representations and warranties shall be true
and correct only as of such specified date.
(c) The Purchasers shall have performed or
complied in all material respects with their covenants and agreements contained
in this Agreement to be performed by them on or prior to the Closing Date.
(d) There shall not be in effect any Law
prohibiting, preventing or restricting the consummation of the transactions
contemplated by this Agreement. There shall not be any consent or approval
required from any Governmental Body or any other Person to consummate the
transactions contemplated hereunder, which shall not have been obtained. There
shall not be any threatened or pending proceeding seeking to prohibit, prevent
or restrict the consummation of the transactions contemplated by this Agreement
or seeking material damages with respect to the transactions contemplated
hereunder.
8.2 Conditions to the Obligation to Close of the
---------------------------------------------
Purchasers.
-----------
The Purchasers' obligation to purchase the Shares from the
Company at the Closing shall be subject to the fulfillment on or prior to the
Closing Date of the following conditions, any or all of which may be waived at
the option of the Purchasers:
(a) The Purchasers shall have received the full
number of Shares being purchased by them hereunder.
(b) The representations and warranties of the
Company contained in this Agreement shall be true and correct, in each case, as
of the date of this Agreement and as of the Closing Date with the same force and
effect as though made on and as of such dates, except to the extent such
representations and warranties speak only as of a specified date in which case
such representations and warranties shall be true and correct only as of such
specified date. The Company shall have delivered to the Purchasers a
certificate, dated the date of the Closing, to the foregoing effect.
(c) The Company shall have performed or complied
in all material respects with its covenants and agreements contained in this
Agreement to be performed by them on or prior to the Closing Date.
(d) There shall not be in effect any Law
prohibiting, preventing or restricting the consummation of the transactions
contemplated by this Agreement. There shall not be any consent or approval
required from any Governmental Body or any other Person to consummate the
transactions contemplated hereunder, which shall not have been obtained. There
shall not be any threatened or pending proceeding seeking to prohibit, prevent
or restrict the consummation of the transactions contemplated by this Agreement
or seeking material damages with respect to the transactions contemplated
hereunder.
(e) The staff of the SEC shall have declared the
Registration Statement effective and shall not have issued any stop-order or
suspension thereof.
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(f) The Common Stock shall continue to be quoted
on the Principal Market and trading of the Common Stock shall not be suspended
by the SEC or the NASD.
(g) The Purchasers shall have received an opinion
of W. Robert Shearer, Senior Vice President and General Counsel to the Company
in customary form concerning the issuance and the Shares.
The obligation of each Purchaser hereunder are expressly not
conditioned on the purchase by any or all of the other Purchasers of the Shares
that they have agreed to purchase from the Company.
SECTION 9. Use of Proceeds.
----------------
The Company shall use the proceeds from the sale of the Shares
to the Purchasers hereunder for general corporate purposes.
SECTION 10. Certain Definitions.
-------------------
As used in this Agreement, the following terms have the
following meaning:
"AFFILIATE" of any Person shall have the meaning set forth in
Rule 144(a)(1) of the Exchange Act.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which the Principal Market is not open for trading.
"GOVERNMENTAL BODY" shall mean any court, arbitral body,
government, department, commission, board, bureau, agency, official or other
instrumentality of any domestic or foreign national, federal, state, provincial,
local or supranational government or body or any political subdivision thereof.
"LAWS" shall mean any domestic or foreign national, federal,
state, provincial, local or supranational law, rule, regulation, order, judgment
or decree (including the rules and regulations of the Principal Market).
"LIEN" shall mean any security interest, lien, claim, pledge,
option, right of first refusal, charge or other encumbrance of any nature
whatsoever.
"PERSON" shall mean any person, individual, corporation,
partnership, trust or other non-governmental entity or any Governmental Body,
whether domestic or foreign, national, federal, state, provincial, local,
supranational or otherwise.
SECTION 11. Notices.
--------
All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
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express courier postage prepaid, and shall be deemed given when so mailed and
shall be delivered as addressed as follows:
(a) if to the Company, to:
Hollywood.com, Inc.
2255 Glades Road, Suite 237 West
Boca Raton, Florida 33431
Attention: CEO
with a copy to:
Hollywood.com, Inc.
2255 Glades Road, Suite 237 West
Boca Raton, Florida 33431
Attention: General Counsel
or to such other Person at such other place as the Company
shall designate to the Purchaser in writing; and
(b) if to any Purchaser, at the address set forth
for such Purchaser on Annex I hereto, or at such other address or addresses as
may have been furnished to the Company in writing.
SECTION 12. Amendments.
----------
This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Purchasers.
SECTION 13. Headings.
--------
The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
SECTION 14. Severability.
------------
In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
SECTION 15. Governing Law.
-------------
This Agreement shall be governed in all respects and construed
by the laws of the State of New York as applied to contracts entered into solely
between residents of, and to be performed entirely within such State.
-23-
<PAGE>
Counterparts.
------------
This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
HOLLYWOOD.COM, INC.
By: /s/Mitchell Rubenstein
Name: Mitchell Rubenstein
Title: Chairman and Chief Executive Officer
-24-
<PAGE>
U.S. TRUST COMPANY OF NEW YORK,
AS AGENT
By:/s/Richard L. Bayles
Name: Richard L. Bayles
Title: Managing Director
JOSEPH STEIN, JR. IRA
By:/s/Joseph Stein
Name: Joseph Stein, Jr.
PAUL KAGAN
By:/s/Paul Kagan
FRED B. TARTER
By:/s/Fred B. Tarter
MITCHELL RUBENSTEIN
By:/s/Mitchell Rubenstein
-25-
<PAGE>
GRANITE CAPITAL, LLC,
AS GENERAL PARTNER
By:/s/Walter Harrison
Name: Walter F. Harrison III
Title: Managing Member
-26-
<PAGE>
ANNEX I
PURCHASERS
Name and Address: Number of Shares Purchased:
---------------- ---------------------------
US Trust Company of New 402,087
York, as Agent
114 West 47th Street
New York, NY 10036
Telephone: 212-852-1697
Facsimile: 212-852-1020
Atten.: John Rendianaro
Joseph Stein, Jr. IRA 6,609
960 Park Avenue, Apt. 8W
New York, NY 10028
Telephone: 212-249-7164
Facsimile: 212-772-8999
Atten: Joseph Stein, Jr.
Paul Kagan 86,956
25849 Hatton Road
Carmel, CA 93923
Telephone: 831-624-3778
Facsimile: 831-624-3619
Atten.: Paul Kagan
Fred B. Tarter 26,087
578 Westport Turnpike
Fairfield, CT 06430
Telephone: 212-476-0660
Facsimile: 212-679-3816
Atten.: Fred B. Tarter
Granite Capital, LP 86,956
126 East 56th Street, 25th Floor
New York, NY 10022
Telephone: 212-407-3346
Facsimile: 212-407-3450
Atten.: Walter Harrison
<PAGE>
ANNEX II
PURCHASERS
Name and Address: Number of Shares Purchased:
---------------- ---------------------------
Mitchell Rubenstein 125,001
Hollywood.com, Inc.
2255 Glades Road
Suite 237W
Boca Raton, FL 33431-7383
Telephone: 561-998-8000, ext. 216
Facsimile: 561-998-2974
