Secured Promissory Note - Hollywood Media Corp. and Fountainhead Media Services Inc.
SECURED
PROMISSORY NOTE
$2,000,000 January 14, 2002
FOR VALUE RECEIVED, the undersigned Fountainhead Media Services, Inc., a
California corporation (the "Borrower"), hereby promises to pay to the order of
Hollywood Media Corp., a Florida corporation (the "Company") at its offices, in
lawful money of the United States of America, the principal amount of two
million dollars ($2,000,000). The Borrower agrees to pay interest in like money
at such offices on the unpaid principal amount hereof from time to time
outstanding at a variable interest rate equal to the Prime Rate (as defined
below) per annum. Interest shall accrue hereunder on the unpaid principal amount
hereof on each day during the period from and including the date of this Note to
but excluding the date this Note is paid in full. "Prime Rate" shall mean the
prime commercial lending rate of Citibank, N.A., New York, New York as quoted on
the first business day of each calendar month. Principal and interest hereunder
shall be paid by Borrower quarterly on the dates set forth on Schedule I hereto
in an amount equal to the greater of (1) the amounts set forth on Schedule I
hereto and (2) fifty percent (50%) of the gross cash distributions made to
Borrower or Borrower's designee for the most recently completed calendar quarter
in respect of Borrower's equity interest in Baseline Acquisitions Corp.
This Note is subject to optional prepayment in whole or in part at any time
without premium or penalty. If any payment hereunder is due on a Saturday,
Sunday or other day on which commercial banks in New York, New York are
authorized or required to close, then such payment shall be due on the next
succeeding business day.
Reference is hereby made to the Pledge Agreement of even date herewith made
by the Borrower in favor of the Company (the "Pledge Agreement").
The following shall constitute "Events of Default" under the terms of this
Note:
(i) default in payment when due and payable, upon acceleration or
otherwise, of principal of, or interest on, this Note; and
(ii) default by the Borrower in any of its obligations under the
Pledge Agreement; and
(iii) voluntary termination by Rafi Gordon and Alex Amin of their
employment with Baseline, Inc. other than for "good reason" as defined in
the Employment Agreements between Baseline, Inc. and each of them dated as
of the date hereof.
<PAGE>
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable by the Company.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
FOUNTAINHEAD MEDIA SERVICES, INC.
By: __________________________________
Name: ________________________________
Title: _________________________________
<PAGE>
Face amount of Note $ 2,000,000.00
Date 1/1/02
Term 5 years
Payable Interest only, quarterly in arrears for 6 months
Principal and Interest quarterly on a 8 year Ammo basis ($79,827.80)
Interest Prime 5.50%
Ammortization as follows
Date Payment Principal Interest Principal balance
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5/15/02 $ -- $ -- $27,500.00 $ 2,027,500.00
8/14/02 $ -- $ -- $27,878.13 $ 2,055,378.13
11/14/02 $ 27,500.00 $ -- $27,500.00 $ 2,055,378.13
2/14/03 $ 27,500.00 $ -- $27,500.00 $ 2,055,378.13
5/14/03 $ 79,827.80 $ 52,327.80 $27,500.00 $ 2,003,050.33
8/14/03 $ 79,827.80 $ 53,047.31 $26,780.49 $ 1,950,003.01
11/14/03 $ 79,827.80 $ 53,776.71 $26,051.09 $ 1,896,226.30
2/14/04 $ 79,827.80 $ 54,516.14 $25,311.66 $ 1,841,710.15
5/14/04 $ 79,827.80 $ 55,265.73 $24,562.07 $ 1,786,444.42
8/14/04 $ 79,827.80 $ 56,025.64 $23,802.16 $ 1,730,418.78
11/14/04 $ 79,827.80 $ 56,795.99 $23,031.81 $ 1,673,622.78
2/14/05 $ 79,827.80 $ 57,576.94 $22,250.86 $ 1,616,045.84
5/14/05 $ 79,827.80 $ 58,368.62 $21,459.18 $ 1,557,677.22
8/14/05 $ 79,827.80 $ 59,171.19 $20,656.61 $ 1,498,506.02
11/14/05 $ 79,827.80 $ 59,984.79 $19,843.01 $ 1,438,521.23
2/14/06 $ 79,827.80 $ 60,809.58 $19,018.22 $ 1,377,711.64
5/14/06 $ 79,827.80 $ 61,645.71 $18,182.09 $ 1,316,065.93
8/14/06 $ 79,827.80 $ 62,493.34 $17,334.46 $ 1,253,572.59
11/14/06 $ 79,827.80 $ 63,352.63 $16,475.17 $ 1,190,219.95
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$1,205,824.05 $1,190,219.95 $15,604.10 Balloon payment
==================================================
$2,458,241.11 $2,055,378.13 $458,241.11