Exhibit 10.2
WARRANT
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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 AUGUST 31, 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
Baseline II, Inc., or its registered assigns (the "Holder") is entitled, subject
to the provisions of this Warrant, to purchase from the Company Forty-Nine
Thousand Two Hundred Sixty-Two (49,262) fully paid and non-assessable shares of
Common Stock (as defined below) at a price per share equal to $18.27 (the
"Exercise Price").
The term "Common Stock" means the Common Stock, par value
$.01 per share, of the Company as constituted on August 31st , 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 third
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 market value shall, in any
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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 Common 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 or merge into another corporation or convey
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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, as to which the holders of record of Common Stock shall be
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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. Except in connection with
acting as a market maker with respect to the Common 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. RULE 144 REPORTING. From and after such time as the
Holder is eligible under Rule 144 to effect resales of the Warrant Shares
purchased hereunder, the Company hereby agrees to file with the SEC all periodic
and other reports required to be so filed by it under the Securities Act and the
Exchange Act and the rules and regulations thereunder (or, if the Company is not
then required to file such reports, it shall, as promptly as reasonably
practicable after the written request of Holder, make publicly available the
requisite "Rule 15c2-11 information" in respect of the Company so long as and
solely to the extent necessary to permit resales of Warrant Shares pursuant to
Rule 144).
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11. 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.
12. 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: /s/ Mitchell Rubenstein
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Mitchell Rubenstein
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:
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Signature
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Name
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Title
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Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Warrant)
Name
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(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:
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Signature
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Name
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Title
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