ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

 

 

ASSET PURCHASE AGREEMENT

HOLLYWOOD MEDIA CORP.,

SHOWTIMES.COM, INC.,

BRETT WEST

and

WEST WORLD MEDIA, LLC

Dated as of August 24, 2007

 

 

ARTICLE I						DEFINITIONS			1
			1.1			Certain Definitions			1
			1.2			Terms Defined Elsewhere in this Agreement			7
			1.3			Other Definitional and Interpretive Matters			8
ARTICLE II						PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES			9
			2.1			Purchase and Sale of Assets			9
			2.2			Excluded Assets			11
			2.3			Assumption of Liabilities			12
			2.4			Excluded Liabilities			12
			2.5			Further Conveyances and Assumptions			13
			2.6			Bulk Sales Laws			13
			2.7			Total Consideration Allocation			13
ARTICLE III						CONSIDERATION			14
			3.1			Consideration			14
			3.2			Payment of Cash Consideration			14
			3.3			Cash Consideration Adjustment			14
ARTICLE IV						CLOSING			16
			4.1			Closing Date			16
			4.2			Seller Closing Deliverables			16
			4.3			Purchaser Closing Deliverables			17
ARTICLE V						REPRESENTATIONS AND WARRANTIES OF SELLER			17
			5.1			Organization and Good Standing			17
			5.2			Authorization of Agreement			18
			5.3			Conflicts; Consents of Third Parties			18
			5.4			Financial Statements			18
			5.5			No Undisclosed Liabilities			19
			5.6			Title to Purchased Assets			19
			5.7			Real Property			20
			5.8			Tangible Personal Property			20
			5.9			Intellectual Property			20
			5.10			Compliance with Laws			21
			5.11			Material Contracts			21

			5.12			Employee Benefit Plans			22
			5.13			Litigation			23
			5.14			Subsidiaries			23
			5.15			Financial Advisors			23
			5.16			Taxes			24
			5.17			No Other Representations or Warranties; Schedules			25
ARTICLE VI						REPRESENTATIONS AND WARRANTIES OF PURCHASER			25
			6.1			Organization and Good Standing			25
			6.2			Authorization of Agreement			25
			6.3			Conflicts; Consents of Third Parties			26
			6.4			Litigation			26
			6.5			Financial Advisors			26
			6.6			Solvency			27
			6.7			No Knowledge of Breach			27
			6.8			Condition of the Business			27
ARTICLE VII						COVENANTS			27
			7.1			Public Announcements			27
			7.2			Government Bodies			28
			7.3			Confidentiality			28
			7.4			Preservation of Records			29
			7.5			Use of Name			29
			7.6			Ridgefield Lease Guarantee			29
			7.7			Mail; Collection of Receivables			30
ARTICLE VIII						EMPLOYEES AND EMPLOYEE BENEFITS			31
			8.1			Employment			31
			8.2			Employee Benefits			32
ARTICLE IX						[Intentionally Omitted.]			33
ARTICLE X						SURVIVAL; INDEMNIFICATION			33
			10.1			Survival of Representations, Warranties and Covenants			33
			10.2			Indemnification by Seller			33
			10.3			Indemnification by Purchaser			33
			10.4			Indemnification by West			34

			10.5			Procedures			34
			10.6			Limits on Indemnification			36
			10.7			Excluded Liabilities			37
ARTICLE XI						MISCELLANEOUS			37
			11.1			Payment of Sales, Use or Similar Taxes			37
			11.2			Expenses			37
			11.3			Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury Trial			38
			11.4			Entire Agreement; Amendments and Waivers			38
			11.5			Governing Law			38
			11.6			Notices			39
			11.7			Severability			39
			11.8			Binding Effect; Assignment			39
			11.9			Guarantees of Obligations			40
			11.10			Non-Recourse			40
			11.11			Counterparts			40

Exhibits

A		Form of Bill of Sale
B		Form of Assignment and Assumption Agreement
C		Form of Non-Competition and Non-Solicitation Agreement
D		Form of Content License Agreement
E		Form of Transition Services Agreement
F		Termination of Employment Agreement
G		Form of Joint Press Release

Schedules

Schedule 1.1(a)		Excluded Contracts
Schedule 1.1(b)		Excluded Software
Schedule 1.1(c)		Knowledge of Seller
Schedule 1.1(d)		Accounts Receivable Adjustment
Schedule 1.1(e)		Purchased Intellectual Property
Schedule 2.1(g)		Purchased Internet Domain Names
Schedule 2.2		Excluded Assets
Schedule 2.7		Consideration Allocation
Schedule 5.3(a)		Conflicts
Schedule 5.3(b)		Third Party Consents
Schedule 5.4(a)		Financial Statements
Schedule 5.4(b)		GAAP Matters
Schedule 5.5		Undisclosed Liabilities
Schedule 5.6(b)		Title to Purchased Assets
Schedule 5.7		Real Property Leases
Schedule 5.8		Personal Property Leases
Schedule 5.9(b)		Intellectual Property Licensing
Schedule 5.9(c)		Intellectual Property Default
Schedule 5.9(d)		Intellectual Property Infringement
Schedule 5.9(e)		Software
Schedule 5.10		Compliance with Laws
Schedule 5.11(a)		Material Contracts
Schedule 5.12(a)		Employee Benefit Plans
Schedule 5.12(c)		Suits and Proceedings Relating to Parent Benefit Plans
Schedule 5.12(e)		Compliance with Employment Laws
Schedule 5.12(f)		Former Employees
Schedule 5.13		Litigation
Schedule 5.15		Seller’s Financial Advisors
Schedule 5.16(a)		Tax Returns
Schedule 5.16(b)		Filed Tax Returns
Schedule 5.16(c)		Audits
Schedule 5.16(g)		Tax Sharing Agreements
Schedule 6.3(a)		Conflicts
Schedule 6.5		Purchaser’s Financial Advisors
Schedule 7.5(a)		Purchased Marks
Schedule 7.5(b)		Restricted Marks
Schedule 8.1(b)		Severance Policies

ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT (this “ Agreement ”), dated as of August 24, 2007, is entered into by and among HOLLYWOOD MEDIA CORP., a Florida corporation (“ Parent ”), SHOWTIMES.COM, INC., a Delaware corporation (“ Seller ”), BRETT WEST (“ West ”) and WEST WORLD MEDIA, LLC, a Delaware limited liability company (“ Purchaser ”).

WITNESSETH:

     WHEREAS, Seller presently conducts the Business;

     WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to acquire and assume from Seller, all of the Purchased Assets and Assumed Liabilities, all as more specifically provided herein; and

     WHEREAS, certain terms used in this Agreement are defined in Section 1.1 ;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

          1.1 Certain Definitions .

     For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1 :

     “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

     “ Business ” means Parent’s business known as the “Source” business, as conducted by Sellers in the United States on January 11, 2007, which Source Business is comprised of three related lines of business: CinemaSource, EventSource, ExhibitorAds and Front Row Marketing. CinemaSource compiles movie showtimes data from movie theaters and supplies such data to its customers through licensing agreements under which the data is displayed by its customers in newspapers, on websites and through cell phone services. EventSource similarly compiles and syndicates detailed information on local and community events in numerous cities, including concerts and live music, sporting events, festivals, fairs and shows, touring companies, community playhouses and dinner theaters. ExhibitorAds and Front Row Marketing prepare traditional newspaper display advertisements integrating movie showtimes information on behalf of movie exhibitors and provides movie exhibitors with website-hosting services as well as email newsletters and printed materials for distribution to moviegoers. The “Business” excludes all business conducted by the Excluded Subsidiaries.

     “ Business Day ” means any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized to close.

     “ Closing Working Capital ” means the Net Working Capital as of the end of business on the Closing Date.

     “ Code ” means the Internal Revenue Code of 1986, as amended.

     “ Contract ” means any written or oral contract, agreement, indenture, note, bond, mortgage, loan, instrument, lease or license.

     “ Documents ” means all files, documents, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies, customer and supplier lists, regulatory filings, operating data and plans, technical documentation (design specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user manuals, training materials, release notes, working papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web pages, etc.), and other similar materials related exclusively to the Business and the Purchased Assets, in each case whether or not in electronic form; provided that “ Documents ” shall not include duplicate copies of such Documents retained by Seller or its Affiliates subject to the obligations relating to the use and disclosure thereof set forth in this Agreement. In the event any Documents are used by any other business of the Seller or Parent, copies thereof shall be provided to Purchaser, provided that Seller may redact those portions of such copies not related to the Business prior to providing such copies to Purchaser.

     “ Employee ” means all employees who are employed by Seller on the Closing Date immediately prior to the Closing.

     “ Excluded Contracts ” means the Contracts listed on Schedule 1.1(a) .

     “ Excluded Intellectual Property ” means all Intellectual Property that is not Purchased Intellectual Property.

     “ Excluded Receivables ” means those accounts receivable of Seller that are 90 days or more past due as of the Closing Date.

     “ Excluded Software ” means all Software owned by Seller and used in the Business that is not Purchased Software, as set forth on Schedule 1.1(b) , it being understood and agreed that any Software that is owned by Parent or any current or former Affiliate of Parent (other than Seller) shall not be Purchased Software. For the avoidance of doubt, all Software owned by the Excluded Subsidiaries (including without limitation Software used in the plasma display business of the Excluded Subsidiaries) shall be Excluded Software.

     “ Excluded Subsidiaries ” means, collectively, Cinemasource UK Limited, an entity organized under the laws of the United Kingdom, and each of its Subsidiaries.

     “ Former Employees ” means the former employees of Seller who are no longer employed by Seller on the Closing Date.

     “ Furniture and Equipment ” means all furniture, fixtures, furnishings, equipment, vehicles, leasehold improvements, and other tangible personal property owned by Seller, including all artwork, desks, chairs, tables, Hardware, copiers, telephone lines and numbers, telecopy machines and other telecommunication equipment, cubicles and miscellaneous office furnishings and supplies.

     “ GAAP ” means generally accepted accounting principles in the United States.

     “ Governmental Body ” means any government or governmental or regulatory body thereof, or political subdivision thereof, whether foreign, federal, state or local, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private).

     “ Hardware ” means any and all computer and computer-related hardware, including, but not limited to, computers, file servers, facsimile servers, scanners, color printers, laser printers and networks.

     “ Indebtedness ” of any Person means, without duplication, (i) the principal amount of, and accreted value and accrued and unpaid interest in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable and other accrued current liabilities); (iii) all obligations of the type referred to in clauses (i) through (ii) of any Persons the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise; and (iv) all obligations of the type referred to in clauses (i) through (iii) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person). Notwithstanding the foregoing, Indebtedness does not include lease obligations capitalized in accordance with GAAP.

     “ Intellectual Property ” means all of the following: (i) patents and applications therefor (along with all patents issuing thereon), including continuations, divisionals, continuations-in-part, reissues, reexaminations and extensions thereof; (ii) trademarks, service marks, trade names, service names, brand names, trade dress rights, logos and corporate names, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof (collectively, “ Marks ”); (iii) copyrights and registrations and applications therefor, copyrightable works of authorship and mask work rights; (iv) trade secrets; and (v) internet domain names.

     “ Intellectual Property Licenses ” means (i) any grant by Seller to a third Person of any right relating to or under the Purchased Intellectual Property; and (ii) any grant to Seller of any right relating to or under any third Person’s Intellectual Property which is used exclusively in the Business.

     “ IRS ” means the United States Internal Revenue Service and, to the extent relevant, the United States Department of Treasury.

     “ Knowledge of Seller ” means the knowledge, as to a specified fact or event, of those Persons identified on Schedule 1.1(c) .

     “ Law ” means any federal, state, local law, statute, code, ordinance, rule or regulation.

     “ Legal Proceeding ” means any judicial, administrative or arbitral actions, suits or proceedings (public or private) by or before a Governmental Body.

     “ Liability ” means any debt, liability or obligation (whether absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due).

     “ Lien ” means any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, right of first offer, easement, servitude or transfer restriction.

     “ Material Adverse Effect ” means any change, event, circumstance or effect, individually or when aggregated with other changes, events, circumstances or effects that is materially adverse to the Business, financial condition or results of operations of the Business (taken as a whole), it being understood that none of the following alone or in combination shall be deemed in and of itself to constitute a Material Adverse Effect: (i) the effect of any changes in the United States or foreign economies or securities or financial markets in general; (ii) the effect of any change that generally affects any industry in which the Business operates; (iii) the effect of any change arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions, whether arising before, on or after the date hereof; (iv) the effect of any action or failure to act of Purchaser, West or any of their respective Affiliates with respect to the transactions contemplated hereby or with respect to the Business (including any breach of this Agreement or the Confidentiality Agreements by Purchaser, West or any of their respective Affiliates); (v) any matter of which Purchaser, West or any of their respective Affiliates has knowledge on or before the date hereof; (vi) the effect of any changes in applicable Laws or in generally accepted accounting principles or any other applicable accounting standards, or changes in general legal, regulatory or political conditions; (vii) the failure of Seller to meet any of its internal projections (including any projections provided to Purchaser, West or any of their respective Affiliates); (viii) any action taken by Parent or Seller as contemplated or permitted by this Agreement or with Purchaser’s and West’s consent; and (ix) any effect pertaining to the negotiation, execution, announcement, pendency or performance of this Agreement or the consummation of the transactions contemplated hereby, including (1) the impact thereof on relationships, contractual or otherwise, with employees, customers, suppliers, distributors or partners and (2) any resulting shortfalls or declines in revenue, margins or profitability.

     “ Net Working Capital ” means the current assets of Seller included in the Purchased Assets, reduced by the current liabilities (including deferred revenues) included in the Assumed Liabilities of the Business, in each case as determined in accordance with GAAP consistent with

past practice. For purposes of determining the Net Working Capital, the accounts receivable portion of the Seller’s Closing Date Balance Sheet shall be adjusted as described on Schedule 1.1(d) . For avoidance of doubt, it is understood and agreed that prepaid revenues shall be deemed current liabilities for purposes of determining Net Working Capital.

     “ Order ” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Body.

     “ Ordinary Course of Business ” means the ordinary and usual course of normal day-to-day operations of the Business, as conducted by Seller.

     “ Parent Benefit Plan ” means any “employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) sponsored by Parent for the benefit of any Employee.

     “ Past Due Receivables ” means those accounts receivable of Seller that are 61 or more days past due but less than 90 days past due as of the Closing Date.

     “ Permits ” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Body.

     “ Permitted Exceptions ” means (i) all defects, exceptions, restrictions, easements, rights of way and such other imperfections in title, charges, easements, restrictions and encumbrances disclosed in policies of title insurance; (ii) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings; (iii) mechanics’, landlords’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the Ordinary Course of Business; (iv) zoning, entitlement and other land use and environmental regulations by any Governmental Body; (v) title of a lessor under a capital or operating lease; and (vi) such other imperfections in title, charges, easements, restrictions and encumbrances which do not materially interfere with the operation of the Business.

     “ Person ” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

     “ Plasma Capital Expenditures ” means the aggregate amount of all capital expenditures made by Seller on or after January 20, 2007 and before the Closing Date in respect of the plasma display business of Seller.

     “ Products ” means any and all movie brochures and similar tangible products developed, manufactured, marketed or sold by the Business.

     “ Purchased Contracts ” means, other than the Excluded Contracts, all (i) Contracts to which Seller is a party or by which the Purchased Assets are bound that relate exclusively to the Business, and (ii) information technology Contracts to which Parent or any of its Affiliates is a party, but only to the extent they relate to the Business (other than (a) any Contracts relating to Software offered by Great Plains Software Inc. or under the Great Plains or Microsoft Dynamics

brand names and (b) any Contracts relating to Software used by the Excluded Subsidiaries (including, without limitation, Software used in the plasma display business of the Excluded Subsidiaries)), in each case if they are assignable in relevant part without impairing the rights of Parent or its Affiliates thereunder and to the extent such assignment would not require the consent of, or the payment of consideration to, the counterparty thereto.

     “ Purchased Intellectual Property ” means (i) all Intellectual Property owned by Seller and used exclusively in the Business as set forth on Schedule 1.1(e) , but with respect to the internet domain names, only those listed on Schedule 2.1(g) ; and (ii) certain domain names owned by Parent or its Affiliates, as set forth on Schedule 2.1(g) .

     “ Purchased Software ” means all Software owned by Seller and used exclusively in the Business.

     “ Seller’s Transaction Expenses ” means all out-of-pocket expenses incurred by Seller to third parties in connection with the transaction contemplated by this Agreement.

     “ Software ” means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; and (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise.

     “ Subsidiary ” means any Person of which a majority of the outstanding share capital, voting securities or other voting equity interests are owned, directly or indirectly, by Seller, except for the Excluded Subsidiaries.

     “ Target Working Capital ” means $375,000 less the Plasma Capital Expenditures.

     “ Tax ” or “ Taxes ” means any and all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and other Tax Authority charges of any kind whatsoever, including any liability therefor as a transferee (including under Section 6901 of the Code), as a result of Treasury Regulation Section 1.1502-6, or any similar provision of state, local, or foreign Law, or as a result of any Tax sharing or similar agreement, together with all interest, penalties, fines, additions to tax or additional amounts imposed by any Taxing Authority.

     “ Taxing Authority ” means the IRS and any other Governmental Body responsible for the administration of any Tax.

     “ Tax Return ” means any return, report or statement required to be filed with respect to any Tax (including any attachments thereto, and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated Tax, and including, where permitted or required, combined, consolidated or unitary returns for any group of entities that includes Seller or any of its Affiliates.

     “ Transfer Documents ” means the Bill of Sale and the Assignment and Assumption Agreement.

          1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have meanings set forth in the sections indicated:

Term		Section
Agreement		Preamble
Assignment and Assumption Agreement		4.2(b)
Assumed Liabilities		2.3
Balance Sheet		5.4(a)
Balance Sheet Date		5.4(a)
Balance Sheet Liabilities		5.5
Bill of Sale		4.2(a)
Cash Consideration		3.1
Closing		4.1
Closing Date		4.1
Closing Statement		3.3(a)
COBRA		5.12(d)
Confidentiality Agreements		7.3(a)
Content License Agreement		4.2(e)
Credit Agreement		7.3(a)
ERISA		1.1 (in Parent Benefit Plan definition)
Excluded Assets		2.2
Excluded Liabilities		2.4
Final Working Capital		3.3(e)
Financial Statements		5.4(a)
Indemnified Party		10.5(a)
Indemnifying Party		10.5(a)
Independent Accountant		3.3(c)
Lenders		7.3(a)
Losses		10.2
Marks		1.1 (in Intellectual Property definition)
Material Contracts		5.11(a)
Non-Competition and Non-Solicitation Agreement		4.2(c)
Parent		Preamble
Plainfield		7.3(a)
Personal Property Leases		5.8
Purchased Assets		2.1
Purchased Marks		7.5
Purchaser		Preamble
Purchaser Documents		6.2
Purchaser Indemnified Parties		10.2
Real Property Lease		5.7

Term		Section
Restricted Marks		7.5
Retained Marks		7.5
Ridgefield Lease Guarantee		7.6
Seller		Preamble
Seller Documents		5.2
Seller Indemnified Parties		10.3
Standard Procedure		8.1(c)
Surviving Claims		10.1
Termination of Employment		4.3(f)
Agreement
Third Party Claim		10.5(a)
Total Consideration		3.1
Transferred Employees		8.1(a)
Transition Services Agreement		4.2(f)
WARN Act		8.2(e)
West		Preamble

          1.3 Other Definitional and Interpretive Matters .

          (a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

      Calculation of Time Period . When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

      Dollars . Any reference in this Agreement to $ shall mean U.S. dollars.

      Exhibits/Schedules . The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any matter or item disclosed on one Schedule shall be deemed to have been disclosed on each other Schedule with respect to other representations and warranties relating to such matter or item to the extent there is a cross-reference to such other Schedules or to the extent that it is reasonably apparent from such disclosure that it is relevant to other representations and warranties contained therein. Disclosure of any item on any Schedule shall not constitute an admission that such item or matter is material or would have a Material Adverse Effect. The Seller may, at its option, include in the Schedules items that are not material in order to avoid any misunderstanding, and such inclusion, or any references to dollar amounts, shall not be deemed to be an acknowledgement or representation that such items are material, to establish any standard of materiality or to define further the meaning of such terms for purposes of this Agreement. No disclosure on a Schedule relating to a possible breach or violation of any Contract, Law or Order shall be construed as an admission that a breach or violation exists or has actually occurred. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

      Gender and Number . Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

      Headings . The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

      Herein . The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

      Including . The word “including” or any variation thereof means (unless the context of its usage otherwise requires) “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

      Reflected On or Set Forth In . An item arising with respect to a specific representation or warranty shall be deemed to be “reflected on” or “set forth in” a balance sheet or financial statements, to the extent any such phrase appears in such representation or warranty, if (a) there is a reserve, accrual or other similar item underlying a number on such balance sheet or financial statements that related to the subject matter of such representation, (b) such item is otherwise specifically set forth on the balance sheet or financial statements or (c) such item is reflected on the balance sheet or financial statements and is specifically set forth in the notes thereto.

          (b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

          2.1 Purchase and Sale of Assets . On the terms and subject to the conditions set forth in this Agreement, at the Closing Purchaser shall purchase, acquire and accept from Seller, and Seller shall sell, transfer, assign, convey and deliver to Purchaser, all of Seller’s right, title and interest in, to and under the Purchased Assets. “Purchased Assets” means all of the assets of Seller, other than the Excluded Assets, as of the Closing, including the following:

          (a) all rights and benefits of Seller under the Purchased Contracts;

          (b) all accounts receivable of Seller other than the Excluded Receivables;

          (c) all inventory and supplies of Seller used, held for use, useful or maintained by the Seller for the Business and located in Ridgefield, CT;

          (d) all deposits (including customer deposits and security deposits for rent, electricity, telephone or otherwise) and prepaid charges and expenses, including any prepaid rent, of Seller related to any Purchased Assets;

          (e) all rights and benefits of Seller under each Real Property Lease, together with all improvements, fixtures and other appurtenances thereto and rights in respect thereof;

          (f) all Furniture and Equipment;

          (g) all Purchased Intellectual Property, but with respect to internet domain names, only those listed on Schedule 2.1(g) ;

          (h) any copies of personnel files pertaining to any Transferred Employee or (to the extent available) Former Employee;

          (i) all Documents, including Documents relating to Products, services, marketing, advertising, promotional materials, Purchased Intellectual Property, and all files, customer files and documents (including credit information), supplier lists, records, literature and correspondence;

          (j) to the extent transferable, all Permits used by Seller in the Business;

          (k) all rights of Seller under non-disclosure or confidentiality, non-compete or non-solicitation agreements with Employees and Former Employees to which Seller is a party to the extent relating to the Business or the Purchased Assets;

          (l) all rights of Seller under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors to the extent relating to Products sold, or services provided, to Seller or to the extent affecting any Purchased Assets;

          (m) all claims or causes of actions of Seller against third parties to the extent related to the Business or the Purchased Assets, including claims and causes of action for infringement of Purchased Intellectual Property (whether or not heretofore asserted), but excluding (i) any claims of Seller against Parent or any of Parent’s direct or indirect subsidiaries or MovieTickets.com, Inc. or any of their respective directors and officers (A) arising under this Agreement or any other Seller Document or (B) related to the Business or a Purchased Asset prior to the date hereof and (ii) any claims under Seller’s insurance policies for damage to Purchased Assets;

          (n) all goodwill (including the goodwill associated with the Purchased Intellectual Property) and other intangible assets (including any rights of Seller to use the telephone and facsimile numbers used in the Business) associated with the Business; and

          (o) Purchased Software.

          2.2 Excluded Assets . Nothing herein contained shall be deemed to sell, transfer, assign or convey the Excluded Assets to Purchaser, and Seller shall retain all right, title and interest to, in and under the Excluded Assets. “ Excluded Assets ” means the following assets, properties, interests and rights of Seller:

          (a) any equity or indebtedness of the Excluded Subsidiaries, and their respective businesses, assets, liabilities and operations;

          (b) the Excluded Contracts;

          (c) all cash, cash equivalents, bank deposits or similar cash items;

          (d) all minute books, organizational documents, stock registers and such other books and records as pertain to ownership, organization or existence of Seller, and duplicate copies of such records as are necessary to enable Seller to file Tax Returns and reports;

          (e) all Excluded Intellectual Property, including, but not limited to, all internet domain names of the Seller and its Affiliates, except for the internet domain names listed on Schedule 2.1(g) ;

          (f) any (i) books and records that Seller is required by Law to retain; provided , however , that Purchaser shall have the right to make copies of any portions of such retained books and records that relate to the Business or any of the Purchased Assets; (ii) information management systems of Seller, other than those used exclusively in the Business; and (iii) documents relating to proposals to acquire the Business by Persons other than Purchaser and its Affiliates;

          (g) any claim, right or interest of Seller in or to any refund, rebate, abatement or other recovery for Taxes of Seller, except for any refund, rebate, abatement or other recovery for Taxes allocated to Purchaser in Sections 2.3(e) and 11.1 , together with any interest due thereon or penalty rebate arising therefrom;

          (h) all insurance policies or rights to proceeds thereof relating to the assets, properties, business and operations of Seller, including claims under Seller’s insurance policies for damage to Purchased Assets;

          (i) any claims of Seller against Parent or any of Parent’s direct or indirect subsidiaries or MovieTickets.com, Inc. or any of their respective directors and officers (A) arising under this Agreement or any other Seller Document or (B) related to the Business or a Purchased Asset prior to the date hereof and any claims under Seller’s insurance policies for damage to Purchased Assets;

          (j) all Tax Returns and financial statements of Seller and the Business and all records (including working papers) related thereto;

          (k) all of Seller’s causes of action, claims, credits, demands or rights of set-off against third parties, to the extent related to any Excluded Assets;

          (l) all rights that accrue to Seller under this Agreement;

          (m) the Excluded Software;

          (n) the Excluded Receivables;

          (o) all intercompany accounts and receivables owed by Parent or any of its Subsidiaries to Seller as of the Closing Date; and

          (p) any other Excluded Assets listed on Schedule 2.2 .

          2.3 Assumption of Liabilities . At the Closing Purchaser shall assume, effective as of the Closing, and shall timely perform, pay and discharge in accordance with their respective terms, all Liabilities of Seller, other than the Excluded Liabilities, (collectively, the “ Assumed Liabilities ”), including without limitation the following Liabilities:

          (a) Liabilities of Seller under the Purchased Contracts;

          (b) Liabilities arising from the sale of Products in the Ordinary Course of Business pursuant to product warranties, product returns and rebates;

          (c) Liabilities constituting, or arising in connection with, accounts payable existing on the Closing Date (including, for the avoidance of doubt, (i) invoiced accounts payable and (ii) accrued but uninvoiced accounts payable);

          (d) all Liabilities with respect to the Business, the Purchased Assets, the Employees and the Former Employees, including with respect to (i) the employment or performance of services, or termination of employment or services by Seller of any individual, or (ii) workers’ compensation claims against Seller, irrespective of whether such claims are made prior to or after the Closing; and

          (e) Liabilities for property Taxes relating to the Purchased Assets for all taxable periods (or portions thereof) beginning after the Closing Date and with respect to periods that include the Closing Date property Taxes allocated to the period beginning after the Closing Date, based on the number of days in the period beginning after the Closing Date to the total number of days in the period.

          2.4 Excluded Liabilities . Purchaser will not assume or be liable for any Excluded Liabilities. “ Excluded Liabilities ” means the following Liabilities:

          (a) all Liabilities arising out of Excluded Assets;

          (b) except as otherwise provided in Sections 2.3(e) and 11.1 , all Liabilities of Parent, Seller and their Affiliates for Taxes;

          (c) For avoidance of doubt, Liabilities of Seller, if any, arising under or in connection with the Parent Benefit Plans except as specifically set forth in Article VIII or to the extent accrued on the Closing Date Balance Sheet;

          (d) Liabilities in respect of Seller’s Transaction Expenses;

          (e) Liabilities or obligations of Seller under this Agreement;

          (f) Liabilities or obligations arising from the operations of Seller after the Closing, including any Liabilities or obligations based on acts or omissions of Seller occurring after the Closing; provided , however , that an Assumed Liability shall not pursuant to this Section 2.4(f) become an Excluded Liability by virtue of any act or omission of Seller after the Closing in connection with the enforcement of its rights (including mitigation of Losses), or the performance of its obligations, under this Agreement (including under Section 2.3 ) or any other Seller Documents, including the Transition Services Agreement (as defined below);

          (g) all intercompany accounts and receivables owed by Seller to Parent or any of its Subsidiaries as of the Closing Date; and

          (h) Liabilities in respect of any Indebtedness outstanding as of the Closing Date, other than leases that are included in the Purchased Assets.

          2.5 Further Conveyances and Assumptions . From time to time following the Closing, Seller and Purchaser shall execute, acknowledge and deliver all such further conveyances, notices, assumptions, releases and acquittances and such other instruments, and shall take such further actions, as may be reasonably necessary or appropriate to assure fully to Purchaser and its successors or assigns all of the rights, titles and interests intended to be conveyed to Purchaser under this Agreement and the Transfer Documents, and to assure fully to Seller and its Affiliates and successors and assigns the assumption of the liabilities and obligations intended to be assumed by Purchaser under this Agreement and the Transfer Documents, and to otherwise make effective the transactions contemplated hereby and thereby.

          2.6 Bulk Sales Laws . Purchaser hereby waives compliance by Seller with the requirements and provisions of any “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Purchaser.

          2.7 Total Consideration Allocation . Seller and Purchaser shall allocate the Total Consideration in accordance with Section 1060 of the Code and the Treasury Regulations issued thereunder, as specified on Schedule 2.7 . Any adjustments to the Total Consideration shall result in an adjustment to Allocation in accordance with Section 1060 of the Code and the Treasury Regulations issued thereunder. The Allocation, as so adjusted, shall be binding on the parties for all purposes. Purchaser and Seller shall prepare and timely file Form 8594 (Asset Acquisition Statement under Section 1060 of the Code) including any required amendments or supplements thereto, which shall reflect and be consistent with the Allocation and any adjustments thereto. Neither Purchaser nor Seller shall, nor shall they permit their respective Affiliates to, take any position inconsistent with the Form 8594, as appropriately adjusted.

ARTICLE III

CONSIDERATION

          3.1 Consideration . The aggregate consideration for the Purchased Assets shall be (a) an amount in cash equal to $23,000,000 (the “ Cash Consideration ”), subject to adjustment as provided in Section 3.3 , and (b) the assumption of the Assumed Liabilities (collectively, the “ Total Consideration ”).

          3.2 Payment of Cash Consideration . On the Closing Date, Purchaser shall pay the Cash Consideration to Seller by wire transfer of immediately available funds into an account or accounts designated in writing by Seller.

          3.3 Cash Consideration Adjustment .

          (a) As promptly as practicable, but no later than ninety (90) days after the Closing Date, Seller shall cause to be prepared and delivered to Purchaser the Closing Statement (as defined below) and a certificate based on such Closing Statement setting forth Seller’s calculation of Closing Working Capital. The closing statement (the “ Closing Statement ”) shall present the Closing Working Capital. The preparation of the Closing Statement shall be for the sole purpose of determining the difference between the Target Working Capital and the Final Working Capital (as defined below) and for calculating the payment to be made pursuant to Section 3.3(e) below.

          (b) If Purchaser disagrees with Seller’s calculation of Closing Working Capital delivered pursuant to Section 3.3(a) , Purchaser may, within thirty (30) days after delivery of the Closing Statement, deliver a notice to Seller stating that Purchaser disagrees with such calculation and specifying in reasonable detail those items or amounts as to which Purchaser disagrees and the basis therefore and reasonable documentation and evidence of such basis. A failure by Purchaser to object within the ten (10) day period described above shall be deemed a waiver by Purchaser of any future objection. Purchaser shall be deemed to have agreed with all other items and amounts contained in the Closing Statement and the calculation of Closing Working Capital delivered pursuant to Section 3.3(a) .

          (c) If a notice of disagreement shall be duly delivered pursuant to Section 3.3(b) , Purchaser and Seller shall, during the fifteen (15) days following such delivery, use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Working Capital. If during such period, Purchaser and Seller are unable to reach such agreement, they shall promptly thereafter cause BDO Seidman, LLP or such other independent accounting firm they mutually agree to select, as the case may be (the “ ÄIndependent Accountant ”), to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital (it being understood that in making such calculation, the Independent Accountant shall be functioning as an expert and not as an arbitrator). Each of Purchaser and Seller agrees that it shall not engage, or agree to engage, the Independent Accountant to perform any services other than as the Independent Accountant pursuant hereto until the Closing Statement and Final Working Capital have been finally determined pursuant to this Section 3.3 . Each party agrees to execute, if requested by the

Independent Accountant, a reasonable engagement letter. Purchaser and Seller shall cooperate with the Independent Accountant and promptly provide all documents and information requested by the Independent Accountant. The Independent Accountant shall select as a resolution the position of either Seller or Purchaser for each item of disagreement. In making such calculation, the Independent Accountant shall consider only those items or amounts in the Closing Statement and the calculation of Closing Working Capital as to which Purchaser has disagreed as permitted in its notice of disagreement duly delivered pursuant to Section 3.3(b) . The Independent Accountant shall deliver to Purchaser and Seller, as promptly as practicable (but in any case no later than thirty (30) days from the date of engagement of the Independent Accountant), a report setting forth its calculation of Closing Working Capital, including the basis for and explanation of any difference from the Closing Statement. Such report shall be final and binding upon Purchaser and Seller, shall be deemed a final arbitration award that is binding on Purchaser and Seller, and neither Purchaser nor Seller shall seek further recourse to courts or other tribunals, other than to enforce such report. Judgment may be entered to enforce such report in any court of competent jurisdiction. The Independent Accountant will determine the allocation of the cost of its review and report based on the inverse of the percentage its determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Independent Accountant. For example, should the items in dispute total in amount to $1,000 and the Independent Accountant awards $600 in favor of the Seller’s position, 60% of the costs of its review would be borne by Purchaser and 40% of the costs would be borne by the Seller.

          (d) Purchaser and Seller shall, and shall cause their respective representatives to, cooperate and assist in the preparation of the Closing Statement and the calculation of Closing Working Capital and in the conduct of the review referred to in this Section 3.3 , including the making available to the extent necessary of books, records, work papers and personnel.

          (e) If the Final Working Capital exceeds Target Working Capital as of the Closing Date, Purchaser shall pay to Seller, in the manner and with interest provided in Section 3.3(f) , the amount of such excess as an adjustment to the Cash Consideration and, if Target Working Capital exceeds Final Working Capital, Seller shall pay to Purchaser, the amount of such excess as an adjustment to the Cash Consideration, in the manner and with interest provided in Section 3.3(f) . “ Final Working Capital ” means Closing Working Capital (i) as shown in Seller’s calculation delivered pursuant to Section 3.3(a) if no notice of disagreement with respect thereto is duly delivered pursuant to Section 3.3(b) ; or (ii) if such a notice of disagreement is delivered, (A) as agreed by Purchaser and Seller pursuant to Section 3.3(c) or (B) in the absence of such agreement, as shown in the Independent Accountant’s calculation delivered pursuant to Section 3.3(c) ; provided , however , that in no event shall Final Working Capital be more than Seller’s calculation of Closing Working Capital delivered pursuant to Section 3.3(a) or less than Purchaser’s calculation of Closing Working Capital delivered pursuant to Section 3.3(b) .

          (f) Any payment pursuant to Section 3.3(e) shall be made at a mutually convenient time and place within five (5) Business Days after Final Working Capital has been determined by wire transfer by Purchaser or Seller, as the case may be, of immediately available funds to the account of such other party as may be designated in writing by such other party. The amount of any payment to be made pursuant to this Section 3.3 shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the rate of interest published from time to time by The Wall Street Journal Eastern Edition as the

“prime rate” at large U.S. money center banks during the period from the Closing Date to the date of such payment. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.

ARTICLE IV

CLOSING

          4.1 Closing Date . The consummation of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities provided for in Article II hereof (the “ Closing ”) shall take place at the offices of Sonnenschein Nath & Rosenthal LLP located at 1221 Avenue of the Americas, New York, New York 10020 (or at such other place as the parties may designate in writing) at 10:00 a.m. (New York City time) on the date hereof (the “ Closing Date ”), unless another time, date or place is agreed to in writing by the parties hereto.

          4.2 Seller Closing Deliverables . On the Closing Date, the following shall be delivered to Purchaser:

          (a) Seller shall deliver, or cause to be delivered, a duly executed bill of sale in the form attached as Exhibit A hereto (the “ Bill of Sale ”);

          (b) Seller shall deliver, or cause to be delivered, a duly executed counterpart to an assignment and assumption agreement in the form attached as Exhibit B hereto (the “ Assignment and Assumption Agreement ”);

          (c) Parent and Seller shall deliver, or cause to be delivered, duly executed counterparts to a non-competition and non-solicitation agreement in the form attached as Exhibit C hereto (the “ Non-Competition and Non-Solicitation Agreement ”);

          (d) Parent shall deliver, or cause to be delivered, a duly executed counterpart to a content license agreement in the form attached as Exhibit D hereto (the “ Content License Agreement ”);

          (e) Parent shall deliver, or cause to be delivered, a duly executed counterpart to a transition services agreement in the form attached as Exhibit E hereto (the “ Transition Services Agreement ”);

          (f) Parent and Seller shall deliver, or cause to be delivered, duly executed counterparts to an agreement terminating that certain Employment Agreement, dated March 30, 2006, by and among Seller, Parent and Brett West, in the form attached as Exhibit F hereto (the “ Termination of Employment Agreement ”);

          (g) Seller shall deliver, or cause to be delivered, assignment and assumption agreements in respect of (i) the Licensing Agreement, dated as of December 21, 2001, by and among AOL Online, Inc., Seller, Broadway.com, Inc. and Hollywood.com Inc., as amended, and (ii) the Lease by and between CH Realty Corp, LLC and Seller, dated as of July 22, 2002, as amended by the lease extension agreement dated as of September 21, 2004; and

          (h) Seller shall deliver to Purchaser an executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification).

          4.3 Purchaser Closing Deliverables . On the Closing Date, in addition to payment of the Total Consideration pursuant to Section 3.2 , the following shall be delivered to Seller and/or Parent, as the case may be:

          (a) Purchaser shall deliver, or cause to be delivered, to Parent and Seller evidence of the wire transfers referred to in Section 3.2 ;

          (b) Purchaser shall deliver, or cause to be delivered, to Seller a duly executed counterpart to the Assignment and Assumption Agreement;

          (c) Purchaser shall deliver, or cause to be delivered, to Parent a duly executed counterpart of each of Purchaser, West and Hugh Kinsman to the Non-Competition and Non-Solicitation Agreement;

          (d) Purchaser shall deliver, or cause to be delivered, to Parent a duly executed counterpart to the Content License Agreement;

    &