Exhibit 10.1

 

Transaction Agreement

 

This Transaction Agreement (this “Agreement”) is entered into as of August 8,
2013 (the “Effective Date”) by and among Key Brand Entertainment Inc., a
Delaware corporation (the “Company”), Theatre Direct NY, Inc., a Delaware
corporation (“Theatre Direct” and, together with the Company, the “KB Parties”),
and Hollywood Media Corp., a Florida corporation (“HMC”). The Company, Theatre
Direct and HMC are collectively referred to herein as the “Parties”.

 

WHEREAS, HMC and the Company are parties to that certain Stock Purchase
Agreement, dated as of December 22, 2009 (as amended, the “SPA”), pursuant to
which the Company acquired from HMC all of the issued and outstanding shares of
capital stock of Theatre Direct (the “Hollywood Acquisition”);

 

WHEREAS, Theatre Direct and HMC are parties to that certain Warrant to purchase
shares of common stock of Theatre Direct issued as of December 15, 2010 pursuant
to the SPA (as amended by that certain Amendment dated as of December 31, 2012,
the “Warrant”);

 

WHEREAS, the Company, Theatre Direct and HMC also are parties to that certain
Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010
(as amended, the “Credit Agreement”), pursuant to which HMC made a loan to the
Company (the “Loan”) in the initial principal amount of $8,500,000 in connection
with the payment of consideration for the closing of the Hollywood Acquisition;
and

 

WHEREAS, the Parties wish to set forth herein the terms under which (i) the Loan
will be prepaid in full by the Company and (ii) the Warrant will be redeemed and
cancelled by Theatre Direct, in each case on the Effective Date.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties hereby agree
as follows:

 

1. Prepayment of the Loan. Notwithstanding anything to the contrary in Section
2.7 of the Credit Agreement, the Company and HMC agree that the Company shall
prepay the Loan in full, without premium or penalty, on the Effective Date. Such
prepayment shall be accompanied by accrued but unpaid interest on the principal
amount being prepaid to (but not including) the Effective Date. Payment of such
principal and interest shall be made by wire transfer of immediately available
funds to the account of HMC specified in a payoff letter in the form of Exhibit
A hereto (the “Payoff Letter”), which letter shall be executed and delivered by
HMC and the Company as of the Effective Date.

 

2. Redemption of the Warrant. Notwithstanding anything to the contrary in the
Warrant (including, without limitation, Section 11(A)), Theatre Direct and HMC
agree that Theatre Direct shall redeem the Warrant, in whole and not in part, on
the Effective Date in exchange for the payment by Theatre Direct of the amount
of $2,750,000 (the “Redemption Price”). The Redemption Price shall be payable by
Theatre Direct by wire transfer of immediately available funds to the “Account”
of HMC set forth in Exhibit B hereto and, upon payment in full of such amount,
the Warrant shall automatically be cancelled (and HMC shall surrender the
Warrant to Theatre Direct for cancellation) and HMC shall have no further rights
under the Warrant. HMC hereby waives the right to receive prior written,
telephonic or facsimile notice in connection with the redemption of the Warrant
pursuant to the terms of the Warrant.

 

 

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3. Expenses. The Parties agree that notwithstanding anything to the contrary in
the SPA, the Credit Agreement or the Warrant, each Party shall be responsible
for all costs, fees and expenses whatsoever (including, without limitation, all
legal fees and expenses) incurred by such Party in connection with the
preparation, negotiation, execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby.

 

4. Further Assurances. Each Party agrees to take such further actions, and to
execute and deliver such further instruments and other documents, as any other
Party may reasonably request (and at the sole cost and expense of such other
Party) to evidence the consummation of the transactions contemplated hereby.

 

5. Representations and Warranties of the Parties.

 

(a) The KB Parties jointly and severally represent and warrant to HMC that
(i) this Agreement has been duly authorized, executed and delivered by the KB
Parties, (ii) the execution, delivery and performance of this Agreement by the
KB Parties will not violate the certificate of incorporation and by-laws of the
KB Parties or any contract or other agreement to which either of the KB Parties
is a party, (iii) this Agreement, when so executed and delivered, will
constitute a legal, valid and binding obligation of the KB Parties enforceable
against them in accordance with its terms and (iv) no term sheet, letter of
intent or other agreement has been entered into, no written offer has been
received by and no investment banker has been engaged or retained by the KB
Parties or any of their affiliates, with respect to or in connection with, any
merger or consolidation of either of the KB Parties with another entity, or any
transfer, sale or disposition by either of the KB Parties of the equity or
assets of the KB Parties to a third party.

 

(b) HMC represents and warrants to the KB Parties that (i) this Agreement has
been duly authorized, executed and delivered by HMC, (ii) the execution,
delivery and performance of this Agreement by HMC will not violate the articles
of incorporation and by-laws of HMC or any contract or other agreement to which
HMC is a party and (iii) this Agreement, when so executed and delivered, will
constitute a legal, valid and binding obligation of HMC enforceable against it
in accordance with its terms.

 

(c) Each of the Parties acknowledges that it has been advised by counsel in
relation to this Agreement, is not relying on any representations of the other
Parties other than those set forth in this Agreement, and has had ample time to
investigate all facts that may be material in deciding whether to enter into
this Agreement, and that there are no facts which, if known, would have caused
such Party not to enter into this Agreement.

 

 

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6. No Other Earnout Amounts. HMC acknowledges and agrees that upon the
prepayment of the Loan on the Effective Date as contemplated hereby and upon the
terms set forth in the Payoff Letter, all of the earnout amounts payable by the
Company to HMC under the SPA during the Earnout Period (as defined in the SPA)
shall have been paid in full.

 

7. Entire Agreement; Amendments and Waivers. This Agreement represents the
entire understanding and agreement between the KB Parties and HMC with respect
to the subject matter hereof and supersedes all prior agreements and
understandings (whether written or oral) between the KB Parties and HMC relating
to such subject matter. This Agreement can be amended, supplemented or modified,
and any provision hereof can be waived, only by written instrument making
specific reference to this Agreement signed by the Party against whom
enforcement of any such amendment, supplement, modification or waiver is sought.

 

8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and performed in such State without giving effect to the choice of law
principles of such State that would require or permit the application of the
laws of another jurisdiction.

 

9. Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury
Trial. The Parties hereby irrevocably submit to the exclusive jurisdiction of
any federal or state court located within the borough of Manhattan of the City,
County and State of New York over any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby. The Parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the Parties agrees that a judgment in any
such dispute may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT.

 

10. Counterparts; Effectiveness. This Agreement may be executed in multiple
counterparts and by facsimile or other electronic means (including PDF), each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
This Agreement shall become effective, and the obligations set forth herein
binding, when each Party shall have received counterparts hereof signed by the
other Parties.

 

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the Parties as of
the Effective Date.

 

 

  KEY BRAND ENTERTAINMENT INC.           By:  /s/ John Gore     Name: John Gore
Title:   Chief Executive Officer               THEATRE DIRECT NY, INC.          
    By: /s/ John Gore     Name: John Gore
Title:   Chief Executive Officer               HOLLYWOOD MEDIA CORP.            
  By: /s/ Mitchell Rubenstein     Name: Mitchell Rubenstein
Title:   Chairman and CEO

 

Signature Page to Transaction Agreement

 

 

EXHIBIT A

 

FORM OF PAYOFF LETTER

 

Hollywood Media Corp.

301 E. Yamato Road, Suite 2199

Boca Raton, Florida 33431

 

July 31, 2013

 

Key Brand Entertainment Inc.
729 Seventh Avenue, 7th Floor
New York, New York 10019

 

Re:Payoff of Indebtedness

 

Ladies and Gentlemen:

 

Reference is made to that certain Second Lien Credit, Security and Pledge
Agreement, dated as of December 15, 2010 (as amended by that certain Amendment
No. 1, dated as of April 22, 2012, and as further amended by that certain
Amendment No. 2, dated as of December 31, 2012, as further amended, amended and
restated, modified or otherwise supplemented from time to time (the “Credit
Agreement”)) (together with any documents and/or agreements executed in
connection therewith, including any Fundamental Documents, and as the same have
been amended, amended and restated, supplemented or otherwise modified from time
to time, collectively, the “Debt Documents”), by and among Key Brand
Entertainment Inc., a Delaware corporation (the “Borrower”), Theatre Direct NY,
Inc., a Delaware corporation (the “Company”) and Hollywood Media Corp., a
Florida corporation (the “Lender”). Capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement. Upon the Lender’s receipt of (a) this letter agreement duly executed
by the Borrower and the Company and (b) wire transfer in Dollars in immediately
available funds of $13,851,866.10 (the “Scheduled Amount”), the calculation of
which is set forth on the attached Exhibit A, on August 6, 2013 (the “Scheduled
Date”) to the account described below (provided, that if the Scheduled Amount is
received after the Scheduled Date, a per diem amount of $4,936.11 shall be added
to the Scheduled Amount (the Scheduled Amount plus any per diem amounts,
collectively, the “Payoff Amount”)), the Lender agrees that, effective
immediately upon receipt of the Payoff Amount and without any further action:

 

(i) all of the outstanding debts, liabilities, earnout amounts and obligations
(including, without limitation, any Obligations) owing by any of the Credit
Parties or Theatre Direct Companies to the Lender or otherwise under the Credit
Agreement or any other Debt Documents shall be satisfied and discharged in full,
and the Credit Parties and Theatre Direct Companies shall be released from any
and all liability therefor; provided that the satisfaction and discharge and
releases pursuant to this letter agreement shall have no effect with respect to
the redemption of the Warrant, which is addressed pursuant to that certain
Transaction Agreement dated as of the date hereof among, inter alios, the
parties hereto;

 

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(ii) the Credit Agreement and all other Debt Documents shall terminate, and be
of no further force or effect, and all commitments of the Lender to make or
permit to remain outstanding any loans or indebtedness under any of the Debt
Documents shall terminate, and Lender shall be released from any and all
obligations, covenants, agreements and liabilities under the Credit Agreement
and all other Debt Documents, and Lender shall not have any further obligation
to make any Loans under the Credit Agreement;

 

(iii) all security interests, encumbrances and other liens (including, without
limitation, any Liens) granted to or held by the Lender for its own benefit or
otherwise in any assets or property of the Credit Parties or Theatre Direct
Companies (including, without limitation, in any Collateral or Pledged
Collateral) shall be irrevocably satisfied, released and discharged;

 

(iv) the Lender authorizes the filing of (by any Credit Party or any financial
institution that may provide a loan to Borrower (the “New Lender”) or any of
their respective designees or other advisers or representatives), and shall
promptly execute and deliver on the Scheduled Date and from time to time
thereafter to any Credit Party, the New Lender or any of their respective
designees or other advisers or representatives, at the Borrower’s sole cost and
expense, any UCC termination statements (including, without limitation, the
UCC-3 financing statements attached as Exhibit B hereto), lien releases and
other release documents (if applicable, in recordable form) that are reasonably
necessary to release and terminate of record the security interests,
encumbrances or other liens described in clause (iii) above or that are
otherwise reasonably requested by any Credit Party or the New Lender to evidence
or effectuate the agreements herein (including, without limitation, in
clause (iii) above); and

 

(v) if requested by any Credit Party, deliver to the Borrower or the New Lender,
or such other persons as Credit Party shall otherwise designate, any original
collateral (including, without limitation, any stock certificates and any powers
executed in connection therewith to the extent in the Lender’s possession) to
evidence or effectuate the agreement in clause (iii) above.

 

The Payoff Amount shall be paid by wire transfer to the following account:

 

Bank Name:       Contact:       ABA Routing No.:       Account No.:      
Account Name:       Contact:       Re:  

 

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The Lender hereby waives the right to receive any prior written, telephonic or
facsimile notice in connection with any prepayment of the Loan and any other
Obligations under the Credit Agreement and other Debt Documents.

 

The Lender agrees that it shall be responsible for any and all costs, fees and
expenses whatsoever (including, without limitation, any and all legal fees and
expenses) incurred by it in connection with the preparation, negotiation,
execution, delivery and performance of the terms of this letter agreement, and
none of the Credit Parties or any Theatre Direct Company shall be required to
reimburse the Lender for any such costs, fees or expenses.

 

This letter agreement shall be construed in accordance with and governed by the
laws of the State of New York without regard to any principle of conflicts of
law or other rule of law that could require the application of the law of any
other jurisdiction. This letter agreement may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement. Delivery of the signature pages to this letter
agreement by telecopy or electronic format (including PDF) shall be effective as
delivery of a manually executed counterpart hereof. The undersigned parties have
signed below to indicate their consent to be bound by the terms and conditions
of this letter agreement. This letter may be relied upon by any Credit Party or
any New Lender.

 

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  Sincerely,           HOLLYWOOD MEDIA CORP.,   as Lender           By:       
Name: Mitchell Rubenstein
Title:   Chairman & CEO

 

ACKNOWLEDGED AND AGREED:                                 KEY BRAND ENTERTAINMENT
INC.,         on behalf of itself and the other Credit Parties and Theatre
Direct Companies                           By:             Name: John Gore      
    Title:   Chief Executive Officer                                 THEATRE
DIRECT NY, INC.                                 By:             Name: John Gore
          Title:   Chief Executive Officer                    

 

 

 

 

Exhibit A

(Calculation of Payoff Amount)

 

Notes #1 & #2:

 

If received on August 6, 2013:   Principal: $13,669,230.00     Interest:
$182,636.10     Total: $13,851,866.10     Per Diem: $4,936.11