EXHIBIT 10.7
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BIG ENTERTAINMENT, INC.
(A Florida Corporation)
SUBSCRIPTION AGREEMENT
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COMPLETE, SIGN AND RETURN TWO COPIES TO:
Big Entertainment, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000 Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
THE INFORMATION AVAILABLE TO YOU IN CONNECTION WITH THIS
SUBSCRIPTION AGREEMENT MAY CONSTITUTE MATERIAL NON-PUBLIC INFORMATION ABOUT BIG
ENTERTAINMENT, INC. (THE "COMPANY"). FEDERAL AND STATE SECURITIES LAWS PROHIBIT
TRADING IN ANY SECURITIES OF THE COMPANY WHILE IN POSSESSION OF MATERIAL
NON-PUBLIC INFORMATION ABOUT THE COMPANY.
YOUR RECEIPT OF THIS SUBSCRIPTION AGREEMENT CONSTITUTES YOUR
AGREEMENT (A) TO MAINTAIN THE CONFIDENTIALITY OF THE INFORMATION CONTAINED
HEREIN OR RECEIVED IN CONNECTION HEREWITH, WHETHER WRITTEN OR ORAL, (B) NOT TO
REPRODUCE OR DISTRIBUTE ANY COPIES OF THIS SUBSCRIPTION AGREEMENT OR THE
INFORMATION CONTAINED HEREIN OR RECEIVED IN CONNECTION HEREWITH, IN WHOLE OR IN
PART, AND (C) TO RETURN THIS AGREEMENT AND ANY RELATED MATERIALS TO THE COMPANY
AT ITS ADDRESS ON THE COVER HEREOF IF YOU DECIDE NOT TO SUBSCRIBE FOR THE
SECURITIES DESCRIBED HEREIN OR IF THE COMPANY DECIDES TO TERMINATE OR REJECT THE
SUBSCRIPTION DESCRIBED HEREIN.
THE SECURITIES SUBSCRIBED FOR HEREIN HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS. THE SUBSCRIBER HEREIN, BY PURCHASING SUCH SECURITIES, AGREES FOR THE
BENEFIT OF BIG ENTERTAINMENT, INC. (THE "COMPANY") THAT SUCH SECURITIES MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE REGISTERED
UNDER SUCH ACT AND REGISTERED UNDER ANY APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE BASED ON AN OPINION OF
THE SUBSCRIBER'S COUNSEL TO SUCH EFFECT IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY.
THE SUBSCRIBER, BY PURCHASING THE SECURITIES SUBSCRIBED FOR
HEREIN, ACKNOWLEDGES AND AGREES THAT THE COMPANY, ITS AFFILIATES AND THE
COMPANY'S AND ITS AFFILIATES' DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND
REPRESENTATIVES HAVE NOT MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE VALUE OF THE SECURITIES.
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SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (this "SUBSCRIPTION AGREEMENT"), dated
as of May __, 1999, by and between the person or entity identified as the
subscriber on the signature page hereof (the "SUBSCRIBER") and BIG
ENTERTAINMENT, INC. a Florida corporation (the "COMPANY").
1. SUBSCRIPTION AND ACCEPTANCE.
1.1 SUBSCRIPTION; PURCHASE PRICE. The Subscriber hereby irrevocably
subscribes for and agrees to purchase (i) the number of shares (the "SHARES") of
common stock, par value $.01 per share, of the Company (the "COMMON STOCK")
indicated on the signature page of this Subscription Agreement, which shall be
validly issued, fully paid and nonassessable, and (ii) a five-year Warrant
exercisable to purchase shares of the Common Stock in an amount equal to
one-third of the number of the Shares (the "WARRANT" and, together with the
shares of the Common Stock purchasable upon the exercise thereof and the Shares,
the "SECURITIES"), upon the terms and subject to the conditions set forth
herein. The aggregate purchase price for the Securities shall be equal to the
product of (a) $__ times (b) the number of the Shares.
1.2 ACCEPTANCE OR REJECTION OF SUBSCRIPTION. The Subscriber
understands and agrees that the Company reserves the right, exercisable in its
sole discretion, to accept or reject any subscription for the Securities in
whole or in part for any reason. Subscriptions need not be accepted in the order
received. The Company shall notify the Subscriber as soon as practicable if all
or part of the Subscriber's subscription is rejected. If the Subscriber's
subscription is accepted by the Company, the Company shall execute a copy of
this Subscription Agreement as executed and delivered to the Company by the
Subscriber and return the executed copy to the Subscriber. The Company also
shall deliver to the Subscriber a written notice (the "PURCHASE NOTICE") stating
the number of Shares that the Subscriber shall be entitled to purchase, the
number of shares of the Common Stock that the Subscriber shall be entitled to
purchase pursuant to the exercise of the Warrant, the aggregate purchase price
for the Securities, the date and time payment of the purchase price for the
Securities is required to be made and the payment instructions therefor.
1.3 CLOSING. The consummation of the purchase by the Subscriber and
sale by the Company of the Securities (the "CLOSING") shall take place at the
principal executive offices of the Company on the date and at the time set forth
in the Purchase Notice. At the Closing, the Company shall deliver to the
Subscriber a certificate representing the Shares and a certificate representing
the Warrant substantially in the form of EXHIBIT A attached hereto against
delivery by the Subscriber of payment of the purchase price for the Securities,
which shall be payable by wire transfer of immediately available funds to the
Company's account as set forth in the Purchase Notice.
2. SUBSCRIBER REPRESENTATIONS AND WARRANTIES. The Subscriber hereby
represents and warrants as follows:
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2.1 CAPACITY; POWER AND AUTHORITY. The Subscriber is either (i) an
individual who has reached the age of majority and is a citizen or resident and
domiciliary (not a temporary or transient resident) of the jurisdiction set
forth below the Subscriber's signature on the signature page hereof and has no
present intention of becoming a resident of any other jurisdiction or (ii) is an
entity duly organized and in good standing in its jurisdiction of organization.
The Subscriber has all legal right, power and authority to execute and deliver
this Subscription Agreement as evidenced by its signature on the signature page
hereof and this Subscription Agreement constitutes the Subscriber's valid and
binding obligation, enforceable against the Subscriber in accordance with its
terms.
2.2 NO CONFLICT. The execution and delivery of this Subscription
Agreement by the Subscriber and the consummation of the transactions
contemplated hereby does not and as of the Closing will not (i) violate any law
or regulation or judicial or regulatory order or decree or require any notice to
or filing with or authorization, consent or approval of any public body or
authority by which the Subscriber or any of its properties is bound, (ii) result
in a violation or breach of, or constitute a default under, any contractual
obligation to which the Subscriber is a party or by which the Subscriber or any
of its properties is bound or (iii) if the Subscriber is a partnership,
corporation, trust or other entity, violate its organizational or other
constitutive documents.
2.3 NO SHORT POSITION. The Subscriber has not entered into a short
position or similar arrangement with respect to any shares of the Common Stock
at any time from and after May 7, 1999 to and including the date hereof.
2.4 INVESTMENT REPRESENTATIONS AND WARRANTIES.
(a) The Subscriber has the financial ability to bear the economic
risk of an investment in the Securities, has adequate means of providing for its
current needs and personal contingencies, has no need for liquidity in such
investment in the Securities and could afford a complete loss of such
investment.
(b) The Subscriber has reviewed the merits of an investment in the
Securities with its own tax and legal counsel and with an investment advisor to
the extent the Subscriber deemed advisable, and confirms that an investment in
the Securities is suitable for it.
(c) The Subscriber has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of an
investment in the Securities.
(d) For a reasonable time prior to the date hereof, the Subscriber
has been given a full opportunity to ask questions of, and to receive answers
from, representatives of the Company concerning the terms and conditions of a
subscription for the Securities and the business and affairs of the Company and
such other information as it desired in order to evaluate the merits and risks
of an investment in the Securities and
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to verify the accuracy of the information received in response to any such
questions, and all such questions have been answered to the full satisfaction of
the Subscriber.
(e) In making its decision to purchase the Securities herein
subscribed for, the Subscriber has relied solely upon independent investigations
made by it. It has received no representation or warranty from the Company or
any of its affiliates, employees or agents. In addition, it is not subscribing
pursuant hereto for any Securities as a result of or subsequent to (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees, including the Subscriber, had been
invited as a result of, subsequent to or pursuant to any of the foregoing.
(f) The Subscriber understands that the Securities have not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
or under any state securities laws in reliance upon specific exemptions from
registration under Section 4(2) of such act and Rule 506 thereunder and it
agrees that the Securities may not be offered, sold or otherwise disposed of
except in compliance with the Securities Act and any applicable state securities
laws. The Subscriber understands that the certificate or certificates
representing the Securities shall bear the following restrictive legend until
registered:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE DISPOSED OF UNLESS SUCH
OFFER, SALE OR OTHER DISPOSITION IS REGISTERED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE BASED ON AN OPINION OF COUNSEL
OF THE TRANSFEROR TO SUCH EFFECT IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER.
(g) The Subscriber understands that no U.S. or non-U.S. governmental
or quasi-governmental agency has made any finding or determination as to the
fairness of an investment in, or any recommendation or endorsement of, the
Securities.
(h) The Subscriber is acquiring the Securities herein subscribed for
in good faith solely for its own account and it is acquiring such Securities for
investment purposes only and not with a view to, or for, the resale,
distribution, subdivision or fractionalization thereof, or for the account, in
whole or in part, of others in violation of any federal or state securities
laws.
(i) The Subscriber has, and at the Closing will have, adequate
capital resources to purchase the Securities subscribed for herein.
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(j) Each representation and warranty of the Subscriber contained
herein and all information furnished by the Subscriber to the Company, including
the information furnished by the Subscriber in the Investment Suitability
Questionnaire in paragraph 3, is true, correct and complete in all respects.
3. INVESTMENT SUITABILITY QUESTIONNAIRE. In order for the Company to
offer and sell the Securities in compliance with federal and state securities
laws, THE FOLLOWING INFORMATION MUST BE OBTAINED REGARDING THE UNDERSIGNED
SUBSCRIBER'S INVESTOR STATUS. PLEASE CHECK EACH CATEGORY APPLICABLE TO THE
UNDERSIGNED SUBSCRIBER AS AN INVESTOR IN THE SECURITIES. YOU MUST CHECK AT LEAST
ONE CATEGORY TO SUBSCRIBE. The Subscriber shall be deemed to represent and
warrant that the substance of each section so checked is true and correct.
For purposes of determining whether the Subscriber is an "accredited
investor" under Regulation D of the Securities Act, please check ALL of the
applicable boxes below:
[ ] (1) The Subscriber is and at the Closing will be a director or an
executive officer of the Company holding the position of
_______________. (Rule 501(a)(4) and (f) under the Securities Act)
[ ] (2) The Subscriber has and at the Closing will have a net worth,
individually or jointly with the Subscriber's spouse, and inclusive
of the equity value in the Subscriber's home, home furnishings and
automobiles, of at least $1,000,000. (Rule 501(a)(5) under the
Securities Act)
[ ] (3) The Subscriber had an individual income1, not including the
income of the Subscriber's spouse (even if they are purchasing the
Securities with funds which are community property or as joint
tenants or tenants in common), in excess of $200,000 (or joint
income with the Subscriber's spouse in excess of $300,000) in each
of the two most recent years and at this time reasonably expects and
at the Closing will reasonably expect such individual income to
exceed that level in the current year. (Rule 501(a)(6) under the
Securities Act)
[ ] (4) The Subscriber is and at the Closing will be an "accredited
investor" within the meaning of clause __ (please complete) of Rule
501(a) under the Securities Act.
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(1)For this purpose, a person's income is the amount of that person's individual
adjusted gross income (as reported on a federal income tax return), increased by
the following amounts: (a) any deduction for depletion (Section 611 ET SEQ. of
the Internal Revenue Code of 1986 (the "CODE")), (b) any exclusion of interest
on tax-exempt municipal obligations (Section 103 of the Code) and (c) any losses
of a partnership allocated to the person (as reported on Schedule E of Form
1040).
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4. ADDITIONAL COVENANTS OF THE SUBSCRIBER.
4.1 NO SALE OR TRANSFER. The Subscriber hereby acknowledges and
agrees that it shall not, directly or indirectly, offer, sell or otherwise
dispose of the Securities (including by way of a pledge) unless registered
pursuant to an effective registration statement under the Securities Act and
registered pursuant to applicable state securities laws or unless an exemption
from such registration is available based on an opinion of counsel of the
transferor to such effect delivered to the Company prior to any such disposition
in form and substance satisfactory to the Company.
4.2 NOTICE. The Subscriber undertakes to (i) notify the Company
immediately of any change in any representation, warranty or other information
relating to the Subscriber set forth herein, including, but not limited to, the
Investment Suitability Questionnaire, (ii) supply the Company with such
additional information concerning the Subscriber as the Company deems necessary
or appropriate and (iii) execute and deliver to the Company, within five days
after receipt of a request therefor, such further designations, powers of
attorney and other instruments as the Company deems necessary or appropriate.
4.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties set forth above or in any other written statement or document
delivered by the Subscriber in connection with the subscription herein and the
transactions contemplated hereby shall survive the Closing.
4.4 INDEMNIFICATION. The Subscriber understands the meanings and
legal consequences of the representations, warranties and covenants of the
Subscriber contained in this Subscription Agreement and agrees to indemnify and
hold harmless the Company, its affiliates and their respective directors,
officers, employees, agents and other representatives from and against any and
all loss, damage or liability due to or arising out of a breach of any
representation, warranty or covenant of the Subscriber, whether contained in
this Subscription Agreement, including, but not limited to, the Investment
Suitability Questionnaire, or any other document delivered by the Subscriber in
connection with the subscription herein and the transactions contemplated
hereby, including, but not limited to, the registration and restrictions on
transfer of the Securities as contemplated by paragraph 5, or any failure by the
Subscriber to fulfill any covenants or agreements set forth herein or arising
out of the sale or distribution by the Subscriber of any Securities in violation
of the Securities Act or any other applicable state securities or "blue sky"
laws or pursuant to the registration contemplated by paragraph 5.
Notwithstanding any of the representations, warranties, acknowledgments or
agreements made herein by the Subscriber, the Subscriber does not thereby or in
any other manner waive any rights granted to the Subscriber under federal or
state securities laws.
4.5 INTERESTS OF CERTAIN PERSONS. The Subscriber hereby
acknowledges, agrees and accepts that certain potential subscribers may be
directors or executive officers of the Company and that such individuals may
have access to financial information about the Company, including, but not
limited to, business plans and
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projections, necessary to the performance of their services as officers of the
Company that was not generally available to the Subscriber or other subscribers
for the Securities.
5. REGISTRATION RIGHTS; COVENANT NOT TO SHORT STOCK.
5.1 REGISTRATION. The Company shall use its reasonable best efforts
to file a registration statement covering the Shares and the shares of the
Common Stock purchasable upon exercise of the Warrant under the Securities Act
within 45 days after the date of the Closing and shall use its reasonable best
efforts to cause the registration statement covering such shares to be declared
effective as soon as practicable. The Company shall use its reasonable best
efforts to maintain the effectiveness of such registration statement for the
lesser of two years from the date declared effective and such time as the shares
covered thereby have been resold. The Company shall pay any and all registration
expenses associated with such registration, other than any underwriting
discounts or commissions relating to any shares of the Common Stock subject to
such registration (which discounts and commissions shall be paid by the
Subscriber selling any such shares).
5.2 COVENANT NOT TO SHORT STOCK. The Subscriber shall not, without
the Company's prior written consent, enter into a short position or similar
arrangement with respect to any shares of the Common Stock at any time during
the period commencing on the date hereof and ending on the 90th day following
the date of the Closing.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS TO PERFORM THE CLOSING.
The obligations of the Company to issue and sell to the Subscriber the
Securities to be purchased by it as of the Closing shall be subject to the
fulfillment (or waiver by the Company) prior to or at the time of the Closing of
the following conditions:
(a) AGREEMENTS. This Subscription Agreement shall have been duly
authorized, executed and delivered by the Subscriber to the Company.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Subscriber in this Subscription Agreement shall be true
and correct as and when made on the date hereof and at the Closing as if made on
and as of the Closing.
(c) PERFORMANCE. The Subscriber shall have duly performed and
complied in all respects with all agreements and conditions contained in this
Subscription Agreement required to be performed or complied with by the
Subscriber at or prior to the Closing .
(d) PAYMENT. The Subscriber shall have tendered payment for its
Securities at or before the Closing in accordance with the Purchase Notice.
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7. MISCELLANEOUS.
7.1 MODIFICATION. Neither this Subscription Agreement nor any
provisions hereof shall be waived, modified, discharged or terminated except by
an instrument in writing signed by the party against whom any waiver,
modifications, discharge or termination is sought.
7.2 NOTICES. Unless otherwise provided herein, notices which may or
are required to be given hereunder shall be delivered through a recognized
overnight delivery service, hand delivered or sent by tested facsimile, telegram
or telex transmission to the addressees at their addresses set forth herein or
to such other addresses as may be designated by either party hereto by notice
addressed to the Company in the case of the Subscriber and to the Subscriber in
the case of the Company.
7.3 BINDING EFFECT. Except as otherwise provided herein, this
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
7.4 ENTIRE AGREEMENT. This Subscription Agreement contains the
entire agreement of the parties in respect of the matters set forth herein.
7.5 ASSIGNABILITY. This Subscription Agreement is not transferable
or assignable.
7.6 APPLICABLE LAW. This Subscription Agreement shall be governed by
and construed in accordance with the substantive laws of the State of New York
without giving effect to principles or policies of conflicts of laws thereof.
The Company and the Subscriber hereby submit to the jurisdiction of the federal
and New York State Courts located in the Borough of Manhattan, New York, New
York in connection with any dispute related to this Subscription Agreement or
any transaction or any other matter contemplated hereby (to the extent legally
permissible).
7.7 COUNTERPARTS. This Subscription Agreement may be executed
through the use of separate signature pages or in any number of counterparts,
and each of such counterparts shall, for all purposes, constitute one agreement
binding on all the parties, notwithstanding that all parties are not signatories
to the same counterpart.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned by its execution hereof agrees
to be bound by this Subscription Agreement.
INDICATE BELOW IN WORDS AND AS A NUMERAL THE NUMBER OF SHARE TO BE SUBSCRIBED
FOR PURSUANT TO THIS SUBSCRIPTION:
__________________________________________ Shares
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Signature of the Subscriber
Name of the Subscriber (print): ____________________________
Address: ____________________________
____________________________
Social Security Number (or TIN): ____________________________
RETURN TWO SIGNED COPIES OF THIS SUBSCRIPTION AGREEMENT TO THE COMPANY AT ITS
ADDRESS ON THE COVER. ACCEPTANCE OF THIS SUBSCRIPTION MAY ONLY OCCUR AS PROVIDED
IN PARAGRAPH 1.2.
ACCEPTANCE
The terms of the foregoing, including the subscription described
therein, are agreed to and accepted on this ____ day of May 1999.
BIG ENTERTAINMENT, INC.
By:
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Xxxxxxxx Xxxxxxxxxx
Chief Executive Officer
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EXHIBIT A
FORM OF WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE DISPOSED OF UNLESS
REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
BASED ON AN OPINION OF COUNSEL OF THE HOLDER TO SUCH EFFECT IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER.
DATED AS OF MAY ___, 1999
BIG ENTERTAINMENT, INC.
(A FLORIDA CORPORATION)
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, BIG ENTERTAINMENT, INC., a Florida corporation
(the "COMPANY"), hereby certifies that _______________, or its registered
assigns (the "HOLDER") is entitled, subject to the provisions of this Warrant,
to purchase from the Company _____________ (_____) fully paid and non-assessable
shares of Common Stock (as defined below) at a price per share equal to $___
(the "EXERCISE PRICE").
The term "COMMON STOCK" means the Common Stock, par value $.01 per
share, of the Company as constituted on May __, 1999 (the `BASE DATE"). The
number of shares of Common Stock purchasable upon the exercise of this Warrant
may be adjusted from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time as set
forth in this Warrant, are hereinafter referred to as the "WARRANT SHARES." The
term "COMPANY" means and includes the corporation named above as well as (i) any
immediate or more remote successor corporation resulting from the merger or
consolidation of such corporation (or any immediate or more remote successor
corporation of such corporation) with another corporation, or (ii) any
corporation to which such corporation (or any immediate or more remote successor
corporation of such corporation) has transferred its property or assets as an
entirety or substantially as an entirety.
Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification
or the posting of bond, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and
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deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation on the part of
the Company, whether or not this Warrant so lost, stolen, destroyed or mutilated
shall be at any time enforceable by anyone.
The Holder agrees with the Company that this Warrant is issued, and
all the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.
1. EXERCISE OF WARRANT.
1.1 EXERCISE GENERALLY. This Warrant may be exercised in whole or in
part, at any time, or from time to time during the period commencing on the date
hereof and expiring 5:00 p.m., eastern time, on the fifth anniversary of the
date hereof (the "EXPIRATION DATE") (or, if such day is a day on which banking
institutions in New York are authorized by law to close, then on the next
succeeding day that shall not be such a day) by presentation and surrender of
this Warrant to the Company at its principal office, or at the office of its
stock transfer agent, if any, with a copy of the Warrant Exercise Form marked as
Annex A attached hereto duly executed and accompanied by payment (either in cash
or by certified or official bank check, payable to the order of the Company) of
the Exercise Price for the number of Warrant Shares specified in such form and
with any appropriate instruments of transfer duly executed by the Holder or its
duly authorized attorney. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the Warrant Shares purchasable hereunder. Upon receipt by the
Company of this Warrant, together with the Exercise Price, at its office, or by
the stock transfer agent of the Company at the stock transfer agent's office, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the Warrant Shares issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such shares of shall not then be actually delivered to the Holder.
The Company shall pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.
2. RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
from time to time receivable upon exercise of this Warrant. All such shares
shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable and free of all preemptive rights.
3. FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant, but the
Company shall pay the Holder an amount equal to the fair market value of such
fractional share of Common Stock in lieu of each fraction of a share otherwise
called for upon any exercise of this Warrant, as determined by the Board of
Directors of the Company (which fair
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market value shall, in any event and for so long as the Common Stock is listed
for trading on any national securities exchange or quoted for trading through
any inter-dealer quotation system, be deemed to be the closing sales price of
the Common Stock on the date notice of exercise of this Warrant is given to the
Company as provided herein or, if such day is not a trading day, then such price
on the last trading day preceding the date of such notice).
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant
is exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with a copy of the
Assignment Form marked as Annex B attached hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant in the name of the assignee named in such instrument
of assignment and this Warrant shall promptly be canceled. This Warrant may be
divided or combined with other Warrants that carry the same rights upon
presentation hereof at the office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights as a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
6. ANTI-DILUTION PROVISIONS.
6.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any
time subdivide its outstanding shares of Common Stock by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of Common stock to its stockholders, the number of
Warrant Shares subject to this Warrant immediately prior to such subdivision
shall be proportionately increased and the Exercise Price shall be
proportionately decreased, and if the Company shall at any time combine the
outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of Warrant Shares subject to this Warrant
immediately prior to such combination shall be proportionately decreased and the
Exercise Price shall be proportionately increased. Any such adjustments pursuant
to this Section 6.1 shall be effective at the close of business on the effective
date of such subdivision or combination or if any adjustment is the result of a
stock dividend or distribution then the effective date of such adjustment based
thereon shall be the record date therefor.
6.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In
case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable on the exercise of this Warrant)
after the Base Date or in case after such date the Company (or any such other
corporation) shall consolidate with
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or merge into another corporation or convey all or substantially all of its
assets to another corporation, then, and in each such case, the Holder of this
Warrant upon the exercise thereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation, merger or conveyance, shall
be entitled to receive, in lieu of the securities and property receivable upon
the exercise of this Warrant prior to such consummation, the securities or
property to which such Holder would have been entitled upon such consummation if
such holder had exercised this Warrant immediately prior thereto; in each such
case, the terms of this Warrant shall be applicable to the securities or
property receivable upon the exercise of this Warrant after such consummation.
6.3 NO DILUTION. The Company shall not, by amendment of its Articles
of Incorporation or through reorganization, consolidation, merger, dissolution,
issue or sale of securities, sale of assets or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but shall at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
while this Warrant is outstanding, the Company (a) shall not permit the par
value, if any, of the shares of Common Stock receivable upon the exercise of
this Warrant to be above the amount payable therefor upon such exercise and (b)
shall take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue or sell fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant.
6.4 NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive any dividend (other than a
cash dividend at the same rate as the rate of the last cash dividend theretofore
paid) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities, or
to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation; or
(c) of any voluntary dissolution, liquidation or winding up of the
Company,
then, and in each such case, the Company shall mail or cause to be mailed to
each holder of the Warrant at the time outstanding a notice specifying, as the
case may be, (i) the date on which a record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time, if any,
is to be fixed,
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as to which the holders of record of Common Stock shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up. Such notice shall be mailed at least 20
days prior to the date therein specified and the Warrant may be exercised prior
to said date during the term of the Warrant.
7. TRANSFER TO COMPLY WITH THE SECURITIES ACT. This Warrant and any
Warrant Shares may not be sold, transferred, pledged, hypothecated or otherwise
disposed of unless registered under the Securities Act and any applicable state
securities laws or pursuant to available exemptions from such registration,
provided that the transferor delivers to the Company an opinion of its counsel
satisfactory in form and substance to the Company confirming the availability of
such exemption.
8. LEGEND. Unless the Warrant Shares have been registered under the
Securities Act, upon exercise of this Warrant, all certificates representing the
Warrant Shares shall bear on the face thereof substantially the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THE SECURITIES ACT AND REGISTERED UNDER ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE BASED ON AN OPINION OF COUNSEL
OF THE HOLDER TO SUCH EFFECT IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER.
9. COVENANT NOT TO SHORT STOCK. The Holder shall not, without the
Company's prior written consent, enter into a short position or similar
arrangement with respect to any shares of the Common Stock at any time during
the 90-day period from and after the date of this Warrant.
10. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when telecopied, delivered personally or with three days
after mailing when mailed by certified or registered mail, return receipt
requested, to the Company at its principal office, or to the Holder at the
address set forth on the record books of the Company, or at such other address
of which the Company or the Holder has been advised by notice hereunder.
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11. APPLICABLE LAW. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the substantive laws of
the State of New York without giving effect to principles or policies of
conflicts of laws thereof. The Company and the Subscriber hereby submit to the
jurisdiction of the federal and New York State Courts located in the Borough of
Manhattan, New York, New York in connection with any dispute related to this
Warrant or any transaction or any other matter contemplated hereby (to the
extent legally permissible).
[SIGNATURE ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
on its behalf, in its corporate name, by its duly authorized officer, all as of
the day and year first above written.
BIG ENTERTAINMENT, INC.
By:
---------------------------------
Xxxxxxxx Xxxxxxxxxx
Chief Executive Officer
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ANNEX A
WARRANT EXERCISE FORM
THE UNDERSIGNED hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing _______ shares of Common Stock of Big
Entertainment, Inc., a Florida corporation, and hereby makes payment of
$_________ in payment therefor.
By:
-------------------------------------------
Signature
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Name
-------------------------------------
Title
-------------------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Warrant)
Name
--------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address
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Social Security or
Taxpayer Identification Number
-------------------------------------------------
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ANNEX B
ASSIGNMENT FORM
For value received, hereby sells, assigns, and transfers unto Name
The right to purchase Common Stock of Big Entertainment, inc., a Florida
corporation, represented by this Warrant to the extent of shares as to which
such right is exercisable and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the same on the books of the Company
with full power of substitution in the premises.
Dated:
-----------------------
By:
-----------------------------------
Signature
-----------------------------------
Name
-----------------------------------
Title
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