EXHIBIT 10.3
UNSECURED PROMISSORY NOTE
$1,928,137.64 New York, New York
May 20, 1999
FOR VALUE RECEIVED, the undersigned, BIG ENTERTAINMENT, INC., a Florida
corporation (together with its successors and assigns, the "Borrower"), hereby
promises to pay to the order of THE TIMES MIRROR COMPANY, a Delaware corporation
(together with its successors and assigns, the "Lender"), at the Lender's
offices at 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx (or such other place
as the Lender may designate in writing to the Borrower), the aggregate principal
sum of One million nine hundred twenty-eight thousand one hundred thirty-seven
dollars and 64 cents ($1,928,137.64), with interest, in lawful money of the
United States, upon the terms and subject to the conditions set forth herein.
This unsecured promissory note (the "Note") is the promissory note referred to
in Section 1.8(a)(i)(4) of the Agreement and Plan of Merger dated as of January
10, 1999, as amended as of May 14, 1999 (as so amended, the "Merger Agreement"),
by and among the Lender, the Borrower, Xxxxxxxxx.xxx, Inc. (formerly Hollywood
Online Inc.), a California corporation and a wholly owned subsidiary of the
lender ("HOL"), and Big Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of the Borrower.
1. PAYMENT AND PREPAYMENT.
(a) REPAYMENT OF PRINCIPAL. The Borrower shall repay the
principal amount of this Note in one lump sum on the earlier of (i) the first
anniversary of the date hereof or (ii) an Event of Default (as defined
hereinafter) and upon written notice when required under Section 2 hereof.
(b) PAYMENT OF INTEREST. The unpaid principal amount of this
Note shall accrue interest (computed on the basis of a 365-day year) until paid
in full at the prime rate from time to time in effect of Citibank, N.A.., New
York, New York (the "Prime Rate"), plus one percent (1%). Such interest shall be
paid quarterly in arrears on the last day of each June, September, December, and
March until payment of this Note in full.
(c) ADDITIONAL INTEREST. If payment of any amount due under
this Note shall be overdue, such overdue amount shall bear interest from and
after the due date, to and including the date when paid in full, at a rate equal
to the Prime Rate, plus two percent (2%); PROVIDED, HOWEVER, in no event shall
the overdue interest exceed the maximum interest rate provided by law.
(d) PREPAYMENT. Any amounts due under this Note may be prepaid
in whole or in part at any time without penalty or premium.
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(e) MANNER OF PAYMENT AND PREPAYMENT. Payments and prepayments
under this Note shall be applied first to interest accrued but unpaid and then
to principal. Payments and prepayments shall be made by certified or official
bank check payable to the order of the Lender, or in cash by wire transfer of
immediately available funds to an account designated in writing by the Lender to
the Borrower, or with respect to any payment or prepayment of principal only, by
delivery by the Borrower to the Lender of that number of shares of fully paid,
nonassessable Parent Common Stock equal to the Excess Share Amount (as defined
in the Merger Agreement) and the Preferred Stock Merger Consideration (as
defined in the Merger Agreement) that would have been deliverable to the Lender
under Section 1.9(a)(i)(1) of the Merger Agreement had this Note not been
delivered. If the due date of any required payment under this Note is not a
"business day" (for this purpose, any day other than a Saturday, Sunday or legal
holiday observed in the State of New York), such required payment shall be due
and payable on the immediately succeeding business day.
2. EVENTS OF DEFAULT. The occurrence and continuation of any one or
more of the following events shall constitute an event of default under this
Note ("Event of Default"):
(a) PAYMENT DEFAULT. The Borrower shall fail to make any required
payment of principal of or interest on this Note and such failure shall continue
for more than three business days after written notice from the Lender to the
Borrower thereof.
(b) SALE OF HOL. The Borrower shall sell or transfer more than a
majority of the voting power of HOL, or all or substantially all of the assets
of HOL in existence on the date of this Note, to any individual who or any
entity of any kind which is not an "affiliate" of the Borrower. (For purposes of
this clause (b), the term "affiliate" shall have the meaning assigned to such
term in Rule 405 under the Securities Act of 1933, as amended.)
(c) BANKRUPTCY DEFAULT. The Borrower shall (i) commence any case,
proceeding or other action under any existing or future law of any jurisdiction
relating to seeking to have an order for relief entered with respect to it or
its debts, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other such relief with respect to it or
its debts, or seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or substantially all of its assets (each of
the foregoing, a "Bankruptcy Action"); (ii) become the debtor named in any
Bankruptcy Action which results in the entry of an order for relief or any such
adjudication or appointment described in the immediately preceding clause (i),
or remains undismissed, undischarged or unbonded for a period of sixty (60)
days; or (iii) make a general assignment for the benefit of its creditors.
In each and every Event of Default under clause (a) or (b) of this
Section 3, the Lender may, without limiting any other rights it may have at law
or in equity, by written notice to the Borrower, declare the unpaid principal of
and interest on this Note due and payable, whereupon the same shall be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which the Borrower hereby expressly waives, and the
Lender may proceed to enforce payment of such principal and interest or any part
thereof in such manner as it may elect in its discretion. In each and every
Event of Default under clause (c) of this Section 3, the unpaid principal of and
interest on this Note shall be immediately due and payable without
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presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives, and the Lender may proceed to enforce payment of such
principal and interest or any part thereof in such manner as it may elect in its
discretion.
3. NOTICES. All notices, requests, demands or communications
required or permitted under this Note shall be given in accordance with the
provisions applicable to the giving of notices in the Merger Agreement.
4. WAIVERS; RIGHTS AND REMEDIES.
(a) WAIVERS. No failure, delay or course of dealing on the
part of the Lender in exercising any right, power or privilege under this Note
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude the simultaneous or later
exercise of any other right, power or privilege hereunder.
The Borrower hereby waives to the extent not prohibited by applicable
law (i) all presentments, demands for performance or notices of nonperformance
(except to the extent specifically required under Section 3); (ii) any
requirement of diligence or promptness on the part of the Lender to enforce its
rights under this Note; (iii) any and all notices of every kind and description
which may be required to be given by any law; and (iv) any defense of any kind
(other than payment) which it may now or hereafter have with respect to its
obligations under this Note.
(b) RIGHTS AND REMEDIES. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Lender may otherwise have.
5. INDEMNIFICATION. The Borrower shall pay and shall indemnify and
hold the Lender harmless against any and all costs and expenses, including
reasonable attorneys' fees and disbursements, actually incurred by the Lender
for the collection of this Note upon an Event of Default.
6. AMENDMENT. No amendment or other modification of this Note may be
made without the written consent of the Lender.
7. GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles or policies of conflicts of laws of such state.
BIG ENTERTAINMENT, INC.
/S/ XXXXXXXX XXXXXXXXXX
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Xxxxxxxx Xxxxxxxxxx
Chief Executive Officer
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