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 JULY 28, 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 AOL Latin America, S.L., or
its registered assigns (the "HOLDER") is entitled, subject to the provisions of
this Warrant, to purchase from the Company One Hundred Thousand (100,000) fully
paid and non-assessable shares of Common Stock (as defined below) at a price per
share equal to $21.42 (the "EXERCISE Price").
The term "COMMON STOCK" means the Common Stock, par value $.01
per share, of the Company as constituted on July 28, 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
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surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and 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
Launch Date and expiring 5:00 p.m., eastern time, on the tenth anniversary of
the Launch Date (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 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. As used herein, "LAUNCH DATE" means the first date on
which the Portuguese-language AOL Proprietary Service is operational and
commercially available in Brazil.
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
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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 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
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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 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
(other than a re-incorporation merger) 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 the
Holder of this 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)
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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, 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. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when telecopied, delivered personally or 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.
10. 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 Florida without giving effect to principles or policies of
conflicts of laws thereof. The Company and the Holder hereby submit to the
jurisdiction of the federal and state
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courts located in Palm Beach County Florida and the Southern District of Florida
in connection with any dispute related to this Warrant or any transaction or any
other matter contemplated hereby (to the extent legally permissible).
11. CONVERSION. In lieu of exercising this Warrant or any portion
hereof, at any time, the Holder hereof shall have the right to convert this
Warrant or any portion hereof into Warrant Shares by executing and delivering to
the Company at its principal office the written Notice of Conversion in the form
attached hereto as ANNEX C, specifying the portion of the Warrant to be
converted, and accompanied by this Warrant. The number of shares of Warrant
Shares to be issued to Holder upon such conversion shall be computed using the
following formula:
X=(P)(Y)(A-B)/A
where X = the number of shares of Common Stock to be issued
to the Holder for the portion of the Warrant being
converted.
P = the portion of the Warrant being converted
expressed as a decimal fraction.
Y = the total number of Warrant Shares
issuable upon exercise of the Warrant in full.
A = the fair market value of one Warrant
Share, which means the average closing sale
price of one share of Common Stock during
the five trading days immediately prior to
the date the Notice of Conversion is
received by the Company, as reported in the
principal market for such securities or, if
no such market exists, the fair market value
of one share of Common Stock as determined
in good faith by the Company's Board of
Directors.
B = the Exercise Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately
canceled. This Warrant or any portion hereof shall be deemed to have been
converted immediately prior to the close of business on the date of its
surrender for conversion as provided above, and the person entitled to receive
the Warrant Shares issuable upon such conversion shall be treated for all
purposes as the holder of such shares of record as of the close of business on
such date. As promptly as practicable after such date, the Company shall issue
and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of full Warrant Shares issuable upon such
conversion. If the Warrant shall be converted for less than the total number of
Warrant Shares then issuable upon conversion, promptly after surrender of the
Warrant upon such conversion, the Company will execute and deliver a new
warrant, dated the date hereof, evidencing the right of the Holder to the
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balance of the Warrant Shares purchasable hereunder upon the same terms and
conditions set forth herein.
[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:/S/ W. XXXXXX XXXXXXX
-------------------------------------------
W. Xxxxxx Xxxxxxx
Senior Vice President
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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
_________________________________________________
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_________________________________________________________________________
_________________________________________________________________________
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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ANNEX C
NOTICE OF CONVERSION
TO: Big Entertainment, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, XX 00000
1. The undersigned hereby elects to acquire _______________ Warrant Shares of
Big Entertainment, Inc. pursuant to the terms of the attached Warrant, by
conversion of _________ percent (_____%) of the Warrant.
2. Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:
____________________________________________________
(Name)
____________________________________________________
(Address)
_________________________ ____________________________________________________
(Date) (Name of Warrant Holder)
By:_________________________________________________
Title:______________________________________________
(Title and signature of authorized person)
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