Warrant to Purchase Shares - Hollywood.com Inc. and CBS Corp.
THIS WARRANT AND THE WARRANT SHARES ISSUABLE UPON THE
EXERCISE HEREOF (THE "WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED SECURITIES"
WITHIN THE MEANING OF RULE 144 UNDER THE ACT. THE WARRANT SHARES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED, EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) IN COMPLIANCE WITH THE
RESALE LIMITATIONS OF RULE 144 UNDER THE ACT, OR (iii) PURSUANT TO AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUBJECT TO AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, STATING THAT SUCH REGISTRATION IS NOT REQUIRED AS
TO SAID SALE, OFFER OR TRANSFER.
THE WARRANT SHARES ARE SUBJECT TO AN AGREEMENT
BETWEEN THE COMPANY AND THE HOLDER DATED JANUARY 3, 2000, REGARDING THE SALE,
ASSIGNMENT AND TRANSFER OF THE WARRANT SHARES. A COPY OF SUCH AGREEMENT IS
AVAILABLE, WITHOUT CHARGE, FROM THE SECRETARY OF THE COMPANY.
January 3, 2000 Number of Shares: 1,178,892
HOLLYWOOD.COM, INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
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FOR VALUE RECEIVED, HOLLYWOOD.COM, INC., a Florida corporation (the
"Company"), hereby certifies that CBS CORPORATION, a Pennsylvania corporation
("CBS") is entitled, upon the terms and subject to the conditions contained
herein, to purchase from the Company One million, one hundred seventy-eight
thousand eight hundred and ninety-two (1,178,892) duly issued, fully paid and
non-assessable shares of Common Stock (as defined below) of the Company, subject
to adjustment, as provided herein, at the exercise price (the "Exercise Price")
set forth in Section 1.1 of that certain Stock Purchase Agreement dated August
26, 1999, between CBS and the Company (the "Stock Purchase Agreement").
The term "Common Stock" means the Common Stock, par value $.01 per
share, of the Company as constituted on the date hereof. The number of shares of
Common Stock to be received upon the exercise of this Warrant shall be subject
to adjustment from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time, are
hereinafter referred to as "Warrant Shares."
1. Exercise of Warrant. This Warrant may be exercised, in whole or in
part, at any time prior to the earlier of (i) the second anniversary of the date
hereof and (ii) the consummation by the Company of its first underwritten,
registered public offering of Common Stock next following the date hereof. This
Warrant will terminate and be of no further force and effect upon the earlier of
the dates set forth in clause (i) and (ii) above. This Warrant shall be deemed
duly and properly exercised only upon
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presentation and surrender by the holder hereof to the Company at its principal
offices (which offices on the date hereof are situated at 2255 Glades Road,
Suite 237W, Boca Raton, Florida 33431), or at the office of the Company's
transfer agent for the Common Stock (which transfer agent on the date hereof is
the American Stock Transfer and Trust Company and whose principal offices are
situated at 40 Wall Street, New York, NY 10005), with the Warrant Exercise Form
attached hereto properly completed signed and dated, and together with payment
in full of the Exercise Price specified in Section 1.1 of the Stock Purchase
Agreement. Upon presentation and surrender of the Warrant together with payment
in full of the Exercise Price as aforesaid, CBS shall be deemed to be the holder
of record of the Warrant Shares issuable upon such exercise, notwithstanding
that the transfer books of the Company may then be closed or that certificates
representing such Warrant Shares may not then be actually delivered to CBS. The
Company shall pay any and all documentary, stamp or similar issue or transfer
taxes payable in respect of the issuance or delivery of Warrant Shares upon
exercise of this Warrant. Certificates for the Warrant Shares purchased upon
exercise of this Warrant shall be delivered to CBS or its permitted assignee
(pursuant to Section 12) within a reasonable time, not exceeding 10 days after
said exercise.
2. Reservation of Shares. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant, all Warrant Shares and
other shares of capital stock of the Company from time to time issuable upon
exercise of this Warrant. All such shares shall be duly authorized and, when
issued upon such exercise, shall be validly issued, fully paid and
non-assessable and free and clear of all preemptive rights, taxes, liens and
other charges. The Company will take all actions as may be necessary to assure
that the Warrant Shares issuable upon exercise hereof may be issued without
violation of any applicable law or regulation, or of any requirement of any
domestic securities exchange upon which any capital stock of the Company may
then be listed or admitted to unlisted trading privileges (including, without
limitation, obtaining any requisite approval of the Company's stockholders).
3. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issuable upon the exercise of this Warrant, but the
Company shall pay CBS an amount equal to the fair market value of such
fractional share in lieu of each fraction of a share otherwise so issuable as
determined by the Board of Directors in good faith.
4. Exchange of Warrants. This Warrant is exchangeable, without expense,
at the option of CBS, upon presentation and surrender hereof to the Company or
the transfer agent for the Common Stock for Warrants of smaller denominations,
entitling CBS to purchase in the aggregate the same number of Warrant Shares
purchasable upon the exercise of this Warrant.
5. Intentionally omitted.
6. Anti-Dilution Provisions
6.1 Adjustment for Recapitalization. If the Company shall at
any time subdivide its outstanding shares of Common Stock by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of Common Stock to its shareholders, the number of
shares of Common Stock subject to this Warrant immediately prior to such
subdivision shall be proportionately increased. If the Company shall at any time
combine the outstanding shares of Common Stock by recapitalization,
reclassification or other combination thereof, the number of shares of Common
Stock subject to this Warrant immediately prior to such combination shall be
proportionately decreased. Any such adjustments pursuant to this Section 6.1
shall be effective at the close of business on the effective date of such
subdivision or combination or, if any adjustment is the result of a stock
dividend or distribution, then the effective date for such adjustment shall be
the record date established by the Company therefor.
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6.2 Adjustment for Reorganization, Consolidation, Merger, Etc.
(a) In case of any capital reorganization of the
Company (or any other corporation, the securities of which are at the time
receivable upon the exercise of this Warrant) after the date hereof or in case
after the date hereof the Company (or any such other corporation) shall
consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, in each such case,
CBS thereafter shall be entitled to receive upon the exercise of this Warrant
the kind and amount of securities, cash or other property which it would have
owned or been entitled to receive immediately after consummation of such capital
reorganization, consolidation, merger or conveyance had this Warrant been
exercised immediately prior to the effective time of such capital
reorganization, consolidation, merger or conveyance, and, in any such case, if
necessary, appropriate adjustment shall be made in the application of the
provisions of this Section 6.2 with respect to the relative rights and interests
thereafter of CBS to the end that such provisions thereafter shall
correspondingly be made applicable, as nearly as reasonably may be practicable,
in relation to any shares of capital stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.
(b) If the Company shall consolidate with or merge
into another corporation, and shall not be the surviving corporation, or shall
convey all or substantially all of its assets to another corporation, then, and
in each such case, the Company, as a condition of the closing of such
transaction, shall require that the surviving corporation or the corporation
that shall have received substantially all of the Company's assets, expressly
assume the obligations of the Company under this Warrant in a form reasonably
satisfactory to CBS.
6.3 No Impairment. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, issuance
or sale of securities, sale of assets or any other voluntary action, willfully
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of CBS against impairment. Without
limiting the generality of the foregoing, while this Warrant is outstanding, the
Company will not permit the par value, if any, of the Warrant Shares to be
greater than the amount payable therefor upon such exercise.
6.4 Certificate as to Adjustments. In each case of an
adjustment in the number of Warrant Shares receivable upon the exercise of this
Warrant, the Company, at its expense, will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate executed by
the chief financial officer of the Company setting forth such adjustment and
showing in reasonable detail the facts upon which such adjustment is based. The
Company will forthwith mail a copy of each such certificate to CBS at the
address set forth in Section 11 hereof. The failure of CBS to object in writing
to such certificate of adjustment within 10 days after receipt thereof shall
constitute approval thereof by CBS.
6.5 Certain Other Distributions. If at any time Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive any dividend or other distribution of:
(a) cash (other than a cash distribution or dividend
payable out of earnings or earned surplus legally available for the payment of
dividends under the laws of the jurisdiction of incorporation of the Company);
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(b) any evidences of its indebtedness, any shares of
the Company's capital stock or any other property of any nature whatsoever; or
(c) any warrants or other rights to subscribe for or
purchase any evidences of the Company's indebtedness, any shares of its capital
stock or any other securities or property of any nature whatsoever, then, and in
each such case, if this Warrant remains outstanding, the Company shall mail or
cause to be mailed to CBS a notice specifying the date on which a record is to
be taken for the purpose of such dividend or distribution, and stating the
amount and character of such dividend, distribution or right. Such notice shall
be mailed at least 15 days prior to the date therein specified and the Warrant
may be exercised prior to said date during the term of the Warrant.
7. Restrictions on Warrant Shares. The Warrant Shares may not be
offered, sold, transferred or otherwise disposed of unless such transactions are
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and any applicable state securities laws, or unless such transactions are
effected pursuant to available exemptions from such registration, provided that
CBS delivers to the Company an opinion of counsel satisfactory to the Company
confirming the availability of such exemption.
8. Legend.
8.1 Unless the Warrant Shares have been registered under the
Securities Act, upon exercise of this Warrant and the issuance of any of the
Warrant Shares, all certificates representing such securities shall bear on the
face thereof substantially the following legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT") AND ARE "RESTRICTED
SECURITIES" WITHIN THE MEANING OF RULE 144 UNDER THE ACT.
THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED, EXCEPT (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, (ii) IN COMPLIANCE WITH
THE RESALE LIMITATIONS OF RULE 144 UNDER THE ACT, OR (iii)
PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER
THE ACT AND SUBJECT TO AN OPINION OF COUNSEL, SATISFACTORY TO
THE COMPANY, STATING THAT SUCH REGISTRATION IS NOT REQUIRED AS
TO SAID SALE, OFFER OR TRANSFER.
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8.2 As may be required by that certain Investors' Rights
Agreement of even date herewith by and between CBS and the Company, all
certificates representing the Warrant Shares shall bear on the face thereof
substantially the following legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO AN AGREEMENT BETWEEN THE COMPANY
AND CBS DATED AS OF AUGUST 26, 1999, REGARDING THE SALE,
ASSIGNMENT AND TRANSFER OF THESE SECURITIES. COPIES OF SUCH
AGREEMENT ARE AVAILABLE, WITHOUT CHARGE, FROM THE SECRETARY OF
THE COMPANY.
9. No Rights or Liabilities as Stockholder. This Warrant does not by
itself entitle CBS to any voting rights or other rights as a stockholder of the
Company. In the absence of affirmative action by CBS to purchase Warrant Shares
upon exercise of this Warrant, no provisions of this Warrant, and no enumeration
herein of the rights or privileges of CBS shall, by itself, cause CBS to be a
stockholder of the Company for any purpose.
10. Amendment; Waiver. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and CBS. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon CBS and the Company.
11. Notices. All notices required hereunder shall be in writing and
shall be deemed given when telegraphed, delivered personally or within two days
after mailing when mailed by certified or registered mail, return receipt
requested, as follows:
if to the Company, to:
Hollywood.com, Inc.
2255 Glades Road, Suite 237 W
Boca Raton, FL 33431-7383
Attention: Mitchell Rubenstein, Chief Executive Officer
with a copy to:
Hollywood.com, Inc.
2255 Glades Road, Suite 237 W
Boca Raton, FL 33431-7383
Attention: W. Robert Shearer, General Counsel
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with a copy (which shall not constitute notice
pursuant to this Section 11) to:
Greenberg Traurig
The MetLife Building
200 Park Avenue
New York, NY 10166
Attention: Clifford E. Neimeth, Esq.
if to CBS, to:
CBS Corporation
51 West 52nd Street
New York, NY 10019
Attention: Fredric G. Reynolds, Executive Vice President and
Chief Financial Officer
with a copy to:
CBS Corporation
51 West 52nd Street
New York, NY 10019
Attention: Louis J. Briskman, Executive Vice President
and General Counsel
12. Assignment. This Warrant, and the rights of CBS hereunder, are not
assignable by CBS except to a subsidiary of CBS; provided that such subsidiary
is an affiliate of CBS (within the meaning of Rule 12b-2 under the Exchange Act)
that owns interests in multiple Internet businesses. Any attempted assignment in
violation of this Section 12 shall be null and void.
13. Lost or Destroyed Certificate. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification or the posting of bond, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
14. Applicable Law. This Warrant shall be governed in all respects by
the laws of the State of New York as such laws are applied to agreements between
New York residents entered into and to be performed entirely in New York.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
Hollywood.com, Inc.
By: /s/ W. Robert Shearer
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W. Robert Shearer
Senior Vice President
and General Counsel
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise its right under the
attached Warrant to purchase ____________ shares of Common Stock of
Hollywood.com, Inc., a Florida corporation, and hereby tenders
________________________ constituting full payment of the Exercise Price of the
attached Warrant.
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Signature
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Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
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Name_________________________________________________________
(Please typewrite or print in block letters)
Address_______________________________________________________
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