TRANSITION SERVICES AGREEMENT
Exhibit 10.2
THIS TRANSITION SERVICES AGREEMENT is entered into as of August 21, 2008 (this
“Agreement”), between Hollywood Media Corp., a Florida corporation (the “Service
Provider”), Xxxxxxxxx.xxx, LLC, a Delaware limited liability company (‘Xxxxxxxxx.xxx), Totally
Hollywood TV, LLC, a Delaware limited liability company (“Totally Hollywood” and,
collectively with Xxxxxxxxx.xxx, the “Service Receiver”).
Recitals
A. Pursuant to a Purchase Agreement dated August 21, 2008 (the “Purchase Agreement”)
between Service Provider and R&S Investments, LLC, a Delaware limited liability company
(“Purchaser”), Purchaser purchased the Service Receiver.
B. To provide for an efficient and orderly transition of ownership and management of the
Service Receiver from the Service Provider to Purchaser, the parties hereto deem it to be
appropriate and in the best interests of the Service Provider and the Service Receiver that the
Service Provider provide certain services to the Service Receiver on the terms and conditions set
forth herein.
C. This Agreement is the Transition Services Agreement referred to in the Purchase Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and the respective representations,
warranties, covenants and agreements contained herein, and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Definitions
(a) In this Agreement, the following terms shall have the following meanings.
“Commencement Date” means the date on which the Service Provider shall commence
the provision of the Services which shall be the date hereof.
“Services” means the services set forth on Schedule A hereto to be
provided by the Service Provider to the Service Receiver.
“Term” shall have the meaning given in Section 5 hereof.
(b) All capitalized terms used herein but not otherwise defined shall have the meanings given
them in the Purchase Agreement.
Section 2. Services
(a) Subject to the terms and conditions of this Agreement, the Service Provider shall provide
to the Service Receiver throughout the Term accounting, billing, ad sales support,
payroll processing, legal, and information technology support services (the
“Services”) to the extent requested by Service Receiver.
(b) Except as otherwise agreed in writing by the parties hereto, the Services shall be
provided in substantially the same manner, at substantially the same levels and on substantially
the same time schedules as such Services were undertaken by the Service Provider prior to the
Commencement Date.
Section 3. Payment
(a) In consideration for the provision of Services by the Service Provider, the Service
Receiver shall pay to the Service Provider an amount equal to (i) the actual out of pocket costs
relating to the provision of the Services, (ii) a pro rata portion of the incremental expenses
directly relating to the provision of Services by any of Service Provider’s employees who assist in
providing such Services (such expenses include, but are not limited to salary, including fringe
benefits), with such pro rata portion determined based upon the time spent in connection with
providing Services, (iii) with respect to servers (and other equipment, if any) utilized by the
Companies that are located on any third party premises, the applicable rent related to the use of
such premises for the housing of such servers (and such other equipment), and (iv) with respect to
the inclusion of Service Receiver as additional insured on Service Provider’s health, workers’
compensation, media liability, and property and casualty insurance policies, the allocable portion
of the costs to Service Receiver under such policies.
(b) Within twenty-one (21) days following the last day of each calendar month, the Service
Provider shall provide to the Service Receiver an invoice for the preceding month’s Services, which
shall include (i) the Services provided by the Service Provider to the Service Receiver for such
month and (ii) the charges for such Services (as determined in accordance with this Agreement).
The amount stated in such invoices shall be paid by the Service Receiver in full within ten (10)
business days of the invoices being issued to the account designated by the Service Provider in
such invoice, unless disputed by the Service Receiver.
Section 4. Dispute Resolution
Any controversy or claim arising out of, or relating to this Agreement, or the breach thereof,
shall be settled by arbitration as governed by and interpreted under the laws of the State of
Florida, administered by the American Arbitration Association in accordance with it’s Commercial
Arbitration Rules, determined by one arbitrator. The situs of said arbitration shall be Palm Beach
County, Florida. Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
Section 5. Term and Termination and Effects of Termination. This Agreement shall become effective
on the Commencement Date and, except as otherwise specifically provided in attached Schedule
A, shall terminate on the date that is fifteen (15) months from the date hereof, but may be
terminated earlier (such time period is hereinafter referred to as the “Term”):
(a) Upon the mutual written agreement of the parties; and
(b) By either party by written notice to the other party if the other party commits a material
breach of any of the terms or conditions of this Agreement and, if such breach may be
cured, the breaching party fails to remedy the breach within thirty (30) days of receiving
such notice.
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(c) By Service Receiver, with respect to this entire Agreement or with respect to one or more
of the Services provided by Service Provider under this Agreement, at any time upon ten (10) days
written notice to the Service Provider.
Upon termination or expiration of the Term, the Service Receiver shall pay to the Service Provider
all monies due to the Service Provider in respect of Services provided prior to such termination or
expiration, together with the balance of all costs payable by the Service Receiver to the Service
Provider.
Section 6. Indemnification
(a) The Service Receiver hereby agrees to indemnify and hold the Service Provider harmless
from and against any and all claims, actions, suits, losses, demands, costs and expenses (including
reasonable attorneys’ fees) (collectively, “Losses”) of every kind, nature, or description
(i) brought by a third party in connection with the provision of Services hereunder, except to the
extent that such Losses arise from the willful misconduct or gross negligence of the Service
Provider, and (ii) arising out of or resulting from any breach of any covenant or agreement of the
Service Receiver in this Agreement.
(b) The Service Provider hereby agrees to indemnify and hold the Service Receiver harmless
from and against any and all Losses of every kind, nature, or description (i) brought by a third
party in connection with the provision of Services hereunder to the extent that such Losses arise
from the willful misconduct or gross negligence of the Service Provider, and (ii) arising out of or
resulting from any breach of any covenant or agreement of the Service Provider in this Agreement.
Section 7. Notices
Any notice, request, demand, waiver, consent, approval or other communication which is
required or permitted hereunder shall be in writing and shall be deemed given: (a) on the date
established by the sender as having been delivered personally; (b) on the date delivered by a
private courier as established by the sender by evidence obtained from the courier; (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal business hours of the
recipient, if not, then on the next business day; or (d) on the fifth Business Day after the date
mailed, by certified or registered mail, return receipt requested, postage prepaid. Such
communications, to be valid, must be addressed as follows:
| If to the Service Receiver, to: Xxxxxxxxx.xxx, LLC c/o Xxxxxxxx Xxxxxxxxxx 0000 Xxxxxx Xxxx, Xxxxx 000X Xxxx Xxxxx, Xxxxxxx 00000 Facsimile: (000) 000-0000 |
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| With a required copy to: Holland & Knight LLP 000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxx, Xxxxxxx 00000 Attention: Xxxxxx X. Xxxx, Esq. Facsimile Number: (000) 000-0000 If to the Service Provider, to: Hollywood Media Corp. 0000 Xxxxxx Xxxx, Xxxxx 000X Xxxx Xxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxx, Esq. Facsimile: (000) 000-0000 With a required copy to: Xxxxx & Xxxxxxx LLP 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Xxxxx, Xxxxxxx 00000 Attention: Xxxxxx Xxxxxxx, Esq. Facsimile: (000) 000-0000 |
or to such other address or to the attention of such person or persons as the recipient party has
specified by prior written notice to the sending party (or in the case of counsel, to such other
readily ascertainable business address as such counsel may hereafter maintain). If more than one
method for sending notice as set forth above is used, the earliest notice date established as set
forth above shall control.
Section 8. Miscellaneous
(a) Severability. Any provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
(b) Counterparts. This Agreement may be executed in counterparts, and any party hereto may
execute any such counterpart, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto. The parties agree that the delivery of this
Agreement may be effected by means of an exchange of facsimile signatures.
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(c) Entire Agreement; In Writing. This Agreement (including, without limitation, Schedule
A hereto) sets forth the entire understanding of the parties hereto with respect to the
transactions contemplated by this Agreement. Any and all previous agreements and
understandings between or among the parties regarding the subject matter hereof, whether
written or oral, are superseded by this Agreement. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(d) Governing Law. This Agreement shall be governed by and interpreted and enforced in
accordance with the Laws of the State of Florida, without giving effect to any choice of Law or
conflict of Laws rules or provisions (whether of the State of Florida or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction other than the State of Florida.
(e) Assignment. This Agreement may not be assigned by either party hereto without the prior
written consent of the other party; provided that: (i) without such consent, the Service
Receiver may transfer or assign this Agreement, in whole or in part or from time to time, to one or
more of its Affiliates; and (ii) without such consent, either party may assign this Agreement to
any person that succeeds to substantially all of the business of such party.
(f) Waiver. No failure or delay by any party in exercising any right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or privilege. To the
maximum extent permitted by Law: (i) no waiver that may be given by a party shall be applicable
except in the specific instance for which it was given; and (ii) no notice to or demand on one
party shall be deemed to be a waiver of any obligation of such party or the right of the party
giving such notice or demand to take further action without notice or demand.
(g) Benefit. No provision of this Agreement is intended to confer upon any Person other than
the parties hereto and their respective executors, heirs, personal representatives, successors and
assigns any rights or remedies hereunder.
(h) Relationship of the Parties. The parties hereto are independent contractors and neither
party is an employee, partner or joint venturer of the other. Under no circumstances shall any of
the employees of a party hereto be deemed to be employees of the other party for any purpose.
Neither party shall have the right to bind the other to any agreement with a third party nor to
represent itself as a partner or joint venturer of the other
(i) Severability. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity or enforceability of such provision in any other jurisdiction.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date first above written.
| XXXXXXXXX.XXX, LLC |
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| By: | /s/ Xxxxxxxx Xxxxxxxxxx | |||
| Name: | Xxxxxxxx Xxxxxxxxxx | |||
| Title: | Chief Executive Officer | |||
| HOLLYWOOD MEDIA CORP. |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Chairman, Special Committee of Directors, on behalf of Special Committee, as Authorized Representative of Hollywood Media Corp. | |||
| TOTALLY HOLLYWOOD TV, LLC |
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| By: | /s/ Xxxxxxx Xxxxxxxxxx | |||
| Name: | Xxxxxxxx Xxxxxxxxxx | |||
| Title: | Chief Executive Officer | |||
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