Attached files
| file | filename |
|---|---|
| EX-10.3 - HOLLYWOOD MEDIA CORP | v205671_ex10-3.htm |
| EX-10.2 - HOLLYWOOD MEDIA CORP | v205671_ex10-2.htm |
| EX-10.1 - HOLLYWOOD MEDIA CORP | v205671_ex10-1.htm |
| EX-99.2 - HOLLYWOOD MEDIA CORP | v205671_ex99-2.htm |
| EX-99.1 - HOLLYWOOD MEDIA CORP | v205671_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
|
Date
of Report (Date of earliest event reported)
|
December 15,
2010
|
|
HOLLYWOOD
MEDIA CORP.
|
(Exact
Name of Registrant as Specified in its Charter)
|
Florida
|
1-14332
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65-0385686
|
|
(State or Other Jurisdiction
of Incorporation)
|
(Commission File Number)
|
(I.R.S. Employer
Identification No.)
|
|
2255
Glades Road, Suite 221A, Boca Raton, Florida
|
33431
|
|
(Address
of Principal Executive Office)
|
(Zip
Code)
|
|
Registrant’s telephone number,
including area code
|
(561)
998-8000
|
|
Not
Applicable
|
(Former
Name or Former Address, If Changed Since Last
Report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 – Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive
Agreement.
The
information in Item 2.01 below is hereby incorporated by reference into
this Item 1.01 to report Hollywood Media’s entry into the Credit Agreement,
the Intercreditor Agreement and the Warrant (as defined in Item 2.01
below).
Section
2 – Financial Information
Item
2.01 Completion of Acquisition or Disposition of
Assets.
On
December 15, 2010, Hollywood Media Corp. (“Hollywood Media”) closed the sale of
its Broadway Ticketing Division (the “Broadway Sale”), through the sale of all
of the outstanding capital stock of Theatre Direct NY, Inc. (“Theatre Direct”)
to Key Brand Entertainment Inc. (“Key Brand”), as contemplated by that certain
Stock Purchase Agreement, dated as of December 22, 2009, entered into between
Hollywood Media and Key Brand (as amended, the “Purchase
Agreement”). There are no material relationships among Hollywood
Media and Key Brand or any of their respective affiliates other than in respect
of the Purchase Agreement and the related ancillary agreements.
Pursuant
to the Purchase Agreement, at the closing of the Broadway Sale (i) Hollywood
Media received $20.5 million in cash (including $0.5 million pursuant
to the estimated working capital adjustment described in the Purchase
Agreement), (ii) Key Brand, Theatre Direct and Hollywood Media entered into that
certain Second Lien, Security and Pledge Agreement, dated as of December 15,
2010 (the “Credit Agreement”), pursuant to which Key Brand is obligated to pay
Hollywood Media $8.5 million at an interest rate of 12% per annum, which
loan matures on December 15, 2015 and is secured on a second lien basis by all
stock and assets of Theatre Direct and its subsidiaries (the “Loan”), (iii)
Theatre Direct issued Hollywood Media a warrant to purchase 5% of the
outstanding shares of common stock of Theatre Direct as of the closing date on a
fully diluted basis at an exercise price of $.01 per share (the “Warrant”) and
(iv) Key Brand assumed $1.6 million of liabilities associated with
employment agreements with certain employees of Theatre Direct. In
addition, Hollywood Media is entitled to receive earnout payments of up to $14.0
million contingent upon Theatre Direct and its subsidiaries achieving certain
revenue targets during the period from the closing date through the end of the
10th
full fiscal year of Theatre Direct following the closing date as set forth in
the Purchase Agreement.
In
connection with the Credit Agreement, Hollywood Media and Key Brand entered into
that certain Subordination and Intercreditor Agreement, dated December 15, 2010
(the “Intercreditor Agreement”), with JPMorgan Chase Bank, N.A., as
administrative agent for the senior secured lenders of Key Brand, which defines
the rights and obligations of the senior secured lenders and Hollywood Media as
subordinated lender, including, without limitation, the rights of payment and
the subordination of the security interests of Hollywood Media.
Hollywood
Media has also agreed to provide certain transition services to Key Brand and
Theatre Direct following the closing of the Broadway Sale.
The
foregoing description of the Purchase Agreement is qualified in its entirety by
reference to the Stock Purchase Agreement, as amended, a copy of which is filed
as Annex A to Hollywood
Media’s definitive proxy statement filed with the Securities and Exchange
Commission on October 20, 2010 and incorporated by reference
herein. The foregoing summaries of the Credit Agreement, the
Intercreditor Agreement and the Warrant do not purport to be complete and are
qualified in their entirety by the Second Lien Credit, Security and Pledge
Agreement, the Subordination and Intercreditor Agreement and the Warrant, each
of which are respectively filed as Exhibits 10.1, 10.2 and 10.3 to this Current
Report on Form 8-K and are incorporated by reference herein.
2
Item
2.05 Costs Associated with Exit or Disposal
Activities.
As
previously disclosed in Hollywood Media’s Current Report on Form 8-K filed with
the SEC on December 29, 2009 (the “December 2009 8-K”), Hollywood Media’s board
of directors, following separate unanimous approval by the independent members
of Hollywood Media’s board of directors (meeting without the non-independent
members of Hollywood Media’s board of directors), unanimously approved the
Purchase Agreement and the transactions contemplated thereby, and on December
22, 2009, Hollywood Media entered into the Purchase Agreement with Key
Brand.
In
connection with the transactions contemplated by the Purchase Agreement,
Hollywood Media incurred (i) $415,000 in aggregate change of control payments to
two executives in Hollywood Media’s legal department, each of whom will
receive these payments in accordance with their retention agreements, with such
amounts payable at closing (provided that Hollywood Media deferred approximately
$100,000 of these payments for approximately one month by requiring the
continued employment of one of these executives during a one month transition
period), (ii) approximately $400,000 in severance payments payable by Hollywood
Media to 14 employees after a brief transition period; (iii) $250,000 in fees to
Peter J. Solomon Company for providing the fairness opinion to Hollywood Media’s
board of directors in connection with evaluating and approving the Purchase
Agreement and the transactions contemplated thereby, and (iv) $1.2 million in
legal fees in connection with preparing and negotiating the Purchase Agreement
and the related documents and preparing and filing the proxy statement relating
to the transactions contemplated by the Purchase Agreement.
In
addition, pursuant to employment agreements between Hollywood Media and Mitchell
Rubenstein, its Chairman and Chief Executive Officer, and Laurie S. Silvers, its
President and Secretary (which agreements, and the amendments to those
agreements, were described in Item 5.02(e) of the December 2009 8-K and are
incorporated by reference into this Item 2.05), Mr. Rubenstein and Ms. Silvers
were entitled to change of control payments of approximately $2.3 million and
$1.8 million, respectively, in connection with the transactions contemplated by
the Purchase Agreement. Mr. Rubenstein and Ms. Silvers agreed to
defer $0.8 million and $0.3 million, respectively, in change of control
payments that would otherwise be owed by Hollywood Media to them pursuant to
each of their employment agreements upon the consummation of the transactions
contemplated by the Purchase Agreement. Accordingly, at closing Hollywood Media
incurred $1.5 million in change of control payments to Mr. Rubenstein and $1.5
million in change of control payments to Ms. Silvers.
If Mr.
Rubenstein and Ms. Silvers continue to be employed by Hollywood Media on the
first anniversary of the consummation of the Broadway Sale pursuant
to the Purchase Agreement (or if such employment is terminated on
or before such date by Hollywood Media without “cause” or by Mr. Rubenstein or
Ms. Silvers for “good reason”), one-half of the deferred change of control
payments to Mr. Rubenstein and Ms. Silvers will be paid to them as payments are
received by Hollywood Media on the Loan, on a pro rata basis, and one-half of
such payments will paid to Mr. Rubenstein and Ms. Silvers as payments are
received by Hollywood Media on the first half of the earnout pursuant to the
Purchase Agreement, on a pro rata basis (as described in Item 5.02(e) of the
December 2009 8-K), resulting in future cash expenditures of Hollywood
Media.
Section
8 – Other Events
Item
8.01 Other Events.
On
December 16, 2010, Hollywood Media issued a press release announcing that it had
completed the sale of its Broadway Ticketing Division based in New York City,
through the sale of all of the outstanding capital stock of Theatre Direct by
Hollywood Media to Key Brand. A copy of the press release is filed as
Exhibit 99.1 hereto and is incorporated by reference into this Item
8.01.
3
Section
9 – Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
(b) Pro
forma financial information.
The
unaudited pro forma financial statements filed as Exhibit 99.2 hereto are
incorporated herein by reference. The unaudited pro forma condensed consolidated
balance sheet and statements of operations filed in Exhibit 99.2 herewith
are presented for illustrative purposes only to show the effect of the Broadway
Sale, as a discontinued operation, on the historical financial position and
results of operations of Hollywood Media. The unaudited pro forma condensed
consolidated balance sheet as of September 30, 2010, has been prepared to
reflect the Broadway Sale as if it had taken place on September 30, 2010, and is
not necessarily indicative of the financial position of Hollywood Media had such
sale occurred on that date. The unaudited pro forma condensed consolidated
statements of operations for the nine months ended September 30, 2010 and
2009 and the fiscal years ended December 31, 2009, 2008, and 2007 have been
prepared assuming that the Broadway Sale occurred as of January 1 of each such
year and are not necessarily indicative of the results of operations for future
periods or the results that actually would have been realized if such sale had
occurred as of January 1 of each such year. The unaudited pro forma financial
statements are based on certain assumptions and adjustments described in the
notes to the unaudited pro forma financial statements and should be read in
conjunction with the financial statements and related notes filed in Hollywood
Media’s Form 10-Q for the quarter ended September 30, 2010 and Form 10-K
for the year ended December 31, 2009.
(d) Exhibits.
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Exhibit Number
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Description
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2.1
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Stock
Purchase Agreement, dated as of December 22, 2009 (as amended), by and
between Hollywood Media Corp. and Key Brand Entertainment Inc.(1)(2)
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|
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10.1
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Second
Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010,
by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc. and
Hollywood Media Corp.(2)
|
|
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10.2
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Subordination
and Intercreditor Agreement, dated as of December 15, 2010, by and among
JPMorgan Chase Bank, N.A., Hollywood Media Corp. and Key Brand
Entertainment Inc.
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|
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10.3
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Warrant
to Purchase Shares of Common Stock of Theatre Direct NY, Inc. dated
December 15, 2010
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|
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99.1
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Press
Release of Hollywood Media Corp., dated December 16,
2010
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|
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99.2
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Unaudited
Pro Forma Condensed Consolidated Balance Sheet of Hollywood Media Corp. as
of September 30, 2010; Unaudited Pro Forma Condensed Consolidated
Statements of Operations of Hollywood Media Corp. for the Nine Months
Ended September 30, 2010 and 2009 and the Fiscal Years Ended December 31,
2009, 2008 and 2007.
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(1)
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Incorporated
by reference from Annex A to Hollywood Media’s Definitive Proxy Statement
filed on October 20, 2010 for the Special Meeting of Stockholders held on
December 10, 2010.
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4
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(2)
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Certain
exhibits and schedules have been omitted, and Hollywood Media agrees to
furnish supplementally a copy of any omitted exhibit or schedule to the
Securities and Exchange Commission upon
request.
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5
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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HOLLYWOOD
MEDIA CORP.
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||
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By:
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/s/ Mitchell Rubenstein
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Mitchell
Rubenstein
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||
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Chief
Executive Officer
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||
Date: December
16, 2010
6
Exhibit
Index
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Exhibit Number
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Description
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2.1
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Stock
Purchase Agreement, dated as of December 22, 2009 (as amended), by and
between Hollywood Media Corp. and Key Brand Entertainment Inc.(1)(2)
|
|
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10.1
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Second
Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010,
by and among Key Brand Entertainment Inc., Theatre Direct NY, Inc. and
Hollywood Media Corp.(2)
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|
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10.2
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Subordination
and Intercreditor Agreement, dated as of December 15, 2010, by and among
JPMorgan Chase Bank, N.A., Hollywood Media Corp. and Key Brand
Entertainment Inc.
|
|
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10.3
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Warrant
to Purchase Shares of Common Stock of Theatre Direct NY, Inc. dated
December 15, 2010
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|
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99.1
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Press
Release of Hollywood Media Corp., dated December 16,
2010
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|
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99.2
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Unaudited
Pro Forma Condensed Consolidated Balance Sheet of Hollywood Media Corp. as
of September 30, 2010; Unaudited Pro Forma Condensed Consolidated
Statements of Operations of Hollywood Media Corp. for the Nine Months
Ended September 30, 2010 and 2009 and the Fiscal Years Ended December 31,
2009, 2008 and
2007.
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(1)
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Incorporated
by reference from Annex A to Hollywood Media’s Definitive Proxy Statement
filed on October 20, 2010 for the Special Meeting of Stockholders held on
December 10, 2010.
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(2)
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Certain
exhibits and schedules have been omitted, and Hollywood Media agrees to
furnish supplementally a copy of any omitted exhibit or schedule to the
Securities and Exchange Commission upon
request.
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7