Exhibit 10.8
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES REPRESENTED HEREBY UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
No. 1 Warrant to Purchase 567,952 Shares of
Common Stock (subject to adjustment)
WARRANT TO PURCHASE COMMON STOCK
of
TV FILME, INC.
Void after September 28, 1997
This certifies that, for value received, Warburg, ▇▇▇▇▇▇ Investors,
L.P. or registered assigns ("Holder") is entitled, subject to the terms set
forth below, to purchase from TV Filme, Inc. (the "Company"), a Delaware
corporation, 567,952 shares of Common Stock, $0.01 par value, of the Company
(the "Common Stock") as constituted on the date of consummation of the
initial public offering of shares of Common Stock (the "Warrant Issue Date"),
upon surrender hereof, at the principal office of the Company referred to
herein, with the subscription form attached hereto duly executed, and
simultaneous payment therefor in lawful money of the United States or
otherwise as hereinafter provided, at the Exercise Price as set forth in
Section 2 hereof. The number and Exercise Price of such shares of Common
Stock are subject to adjustment as provided herein. The term "Warrant" as
used herein shall include this Warrant, which is one of a series of warrants
issued for the Common Stock of the Company, and any warrants delivered in
substitution or exchange therefor as provided herein. This Warrant is issued
in connection with the reorganization of ITSA-Intercontinental
Telecomunicacoes S.A. ("ITSA"), as a wholly-owned subsidiary of the Company,
in substitution for the option granted to the Holder on March 28, 1996,
pursuant to the Second Addendum to the Investment Agreement of such date by
and among the shareholders of ITSA and certain other parties
1. Term of Warrant. Subject to the terms and conditions set forth herein,
this Warrant shall be exercisable, in whole or in part, during the term
commencing on the Warrant Issue Date and ending at 5:00 p.m., Eastern standard
time, on September 28, 1997, and shall be void thereafter.
2. Exercise Price. The Exercise Price at which this Warrant may be
exercised shall be $6.52 per share of Common Stock, as adjusted from time to
time pursuant to Section 11 hereof.
3. Exercise of Warrant.
(a) Payment of Exercise Price. The purchase rights represented by
this Warrant are exercisable by the Holder in whole or in part, but not for less
than 100 shares at a
time (or such lesser number of shares which may then constitute the maximum
number purchasable; such number being subject to adjustment as provided in
Section 11 hereof), at any time, or from time to time, during the term hereof as
described in Section 1 above, by the surrender of this Warrant and the Notice of
Exercise attached hereto, duly completed and executed on behalf of the Holder,
at the office of the Company (or such other office or agency of the Company as
it may designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company) upon payment (i) in cash or by certified
or bank check or other check acceptable to the Company, (ii) by cancellation by
the Holder of indebtedness of the Company to the Holder, or (iii) by a
combination of (i) and (ii), of the purchase price of the shares to be
purchased.
(b) Issuance of Shares. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive the
shares of Common Stock issuable upon such exercise shall be treated for all
purposes as the holder of record of such shares as of the close of business on
such date. As promptly as practicable on or after such date and in any event
within ten (10) days thereafter, the Company at its expense shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of shares issuable upon such exercise. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
(c) Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value (as defined below) of one share of Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant, or
the portion thereof being canceled, by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Notice of
Exercise, in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following formula:
Y(A-B)
X = ------
A
Where X = the number of shares of Common Stock to be
issued to the Holder
Y = the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, under the portion of
the Warrant being canceled (at the date of such
calculation)
A = the fair market value of one share of the Common
Stock (at the date of such calculation)
B = the Exercise Price (as adjusted to the date of
such calculation)
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For purposes of the above calculation, "fair market value" of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that (i) where no public market exists for the Common
Stock at the time of such exercise, the Holder may request a valuation of the
Common Stock to be performed by an independent valuation firm selected by the
Holder, at the sole cost and expense of the Holder, which valuation shall be
binding upon the Holder and the Company in determining "fair market value," and
(ii) where a public market exists for the Common Stock at the time of such
exercise, the "fair market value" per share shall be the average of the closing
bid and asked prices of the Common Stock quoted in the Over-The-Counter-Market
Summary or the last reported sale price of the Common Stock or the closing price
quoted on the Nasdaq National Market System or on any exchange on which the
Common Stock is listed, whichever is applicable, as published in The Wall Street
Journal for the five (5) trading days prior to the date of determination of fair
market value. Notwithstanding the foregoing, in the event the Warrant is
exercised in connection with the Company's initial public offering of Common
Stock, the "fair market value" per share shall be the per share offering price
to the public in the Company's initial public offering.
(d) Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Common Stock or other securities
issuable upon the exercise of this Warrant; provided, however, that the Company
shall not be required to pay any tax or taxes that may be payable in respect of
any transfer involved in the issuance or delivery of any certificate for such
Common Stock or other securities.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the fair market value
(as defined in Section 3(c) hereof) of such share, less the Exercise Price,
multiplied by such fraction.
5. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and substance to the Company or, in
the case of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this Warrant, a new
Warrant of like tenor and amount.
6. Rights of Stockholders. Subject to Sections 9 and 11 of this Warrant,
the Holder shall not be entitled to vote or receive dividends or be deemed the
holder of Common Stock or any other securities of the Company that may at any
time be issuable on the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the Holder, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised as
provided herein.
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7. Transfer of Warrant.
(a) Warrant Register. The Company will maintain a register (the
"Warrant Register") containing the names, addresses and telecopier numbers of
the Holder or Holders. Any Holder of this Warrant or any portion thereof may
change its address as shown on the Warrant Register by written notice to the
Company requesting such a change. Except as otherwise expressly provided herein,
any notice or written communication required or permitted to be given to the
Holder may be delivered or given by certified or registered mail, return receipt
requested, to such Holder as shown on the Warrant Register and at the address
shown on the Warrant Register, or by telecopier, at the telecopier number shown
on the Warrant Register. Until this Warrant is transferred on the Warrant
Register of the Company, the Company may treat the Holder as shown on the
Warrant Register as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
(b) Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 7(a) above, issuing the Common Stock or other securities then
issuable upon the exercise of this Warrant, exchanging this Warrant, replacing
this Warrant or any or all of the foregoing. Thereafter, any such registration,
issuance, exchange or replacement, as the case may be, shall be made at the
office of such agent.
(c) Transferability and Negotiability of Warrant. This Warrant may
not be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company, if such are requested by the
Company). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement (by the
Holder executing this Assignment Form attached hereto) and delivery in the same
manner as negotiable instruments transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this
Warrant for exchange, properly endorsed on the Assignment Form and subject to
the provisions of this Warrant with respect to compliance with the Act, and with
the limitations on assignments and transfers contained in this Section 7, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holders
(on payment by the Holder of any applicable transfer taxes) may direct, for the
number of shares issuable upon the exercise hereof.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Common Stock to be issued upon
exercise hereof are being acquired solely for the Holder's own account and not
as a nominee for any other party, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Common Stock to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Act or any state securities laws. Upon exercise of this
Warrant, the Holder shall, if requested by the Company, confirm in writing, in a
form satisfactory to the
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Company, that the shares of Common Stock so purchased are being acquired solely
for the Holder's own account and not as a nominee for any other party, and not
with a view toward distribution or resale except under circumstances that will
not result in a violation of the Act or any state securities laws.
(ii) All shares of Common Stock issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form
(in addition to any legend required by state securities law):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO SUCH SECURITIES UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.
8. Reservation of Stock. The Company covenants that during the term this
Warrant is exercisable, the Company will reserve from its authorized and
unissued shares of Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the exercise of this Warrant and, from time to
time, will take all steps necessary to amend its Certificate of Incorporation
(the "Certificate") to provide sufficient reserves of shares of Common Stock
issuable upon exercise of this Warrant. The Company further covenants that all
shares that may be issued upon the exercise of rights represented by this
Warrant, upon exercise of the rights represented by this Warrant and payment of
the Exercise Price, all as set forth herein will be free from all taxes, liens
and charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously or otherwise specified herein). The Company
agrees that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
9. Notices.
(a) Notice of Adjustments to Exercise Price. Whenever the Exercise
Price or number of shares purchasable hereunder shall be adjusted pursuant to
Section 11 hereof, the Company shall issue a certificate signed by its Chief
Financial Officer setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the Exercise Price and number of shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed by first class mail, postage prepaid, to the Holder at
the last address of the Holder as shown on the Warrant Register and to be
telecopied to the Holder at the last telecopier number of the Holder as shown on
the Warrant Register. At the Holder's option, the Company shall confirm the
adjustment noted on the certificate by causing such adjustment to be computed by
an independent certified public accountant at the expense of the Company.
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(b) Notice of Certain Events. The Company shall give notice to the
Holder of the events specified in Section 11(f) in accordance therewith.
(c) Deemed Date of Receipt. All such notices, advices and
communications shall be deemed to have been received (i) in the case of personal
delivery, on the date of such delivery, (ii) in the case of mailing, on the
third business day following the date of such mailing, and (iii) in the case of
telecopier transmission, upon confirmation of receipt.
10. Amendments; Waivers.
(a) Amendments. This Warrant may not be amended except in writing
executed by the Company and the Holder.
(b) Waivers. No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
11. Anti-Dilution Provisions and Other Adjustments. In order to prevent
dilution of the rights granted hereunder, the Exercise Price shall be subject to
adjustment from time to time in accordance with this Section 11. Upon each
adjustment of the Exercise Price pursuant to this Section 11, whether upward or
downward, the Holder shall thereafter be entitled to acquire upon exercise, at
the Exercise Price resulting from such adjustment, the number of shares of the
Company's Common Stock obtainable by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of the Company's
Common Stock acquirable immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
(a) Adjustment for Issue or Sale of Common Stock at Less than
Exercise Price. Except as provided in Section 11(b) or 11(e) below, if and
whenever on or after the date of issuance hereof the Company shall issue or
sell, or shall in accordance with Sections 11(a)(1) through (9) be deemed to
have issued or sold, any shares of its Common Stock for a consideration per
share less than the Exercise Price in effect immediately prior to the time of
such issue or sale, then forthwith upon such issue or sale (the "Triggering
Transaction"), the Exercise Price shall, subject to subsections (1) through (9)
of this Section 11(a), be reduced to the Exercise Price (calculated to the
nearest cent) determined by dividing:
(i) an amount equal to the sum of (x) the product derived by
multiplying the Number of Common Shares Deemed Outstanding immediately prior to
such Triggering Transaction by the Exercise Price then in effect, plus (y) the
consideration, if any, received by the Company upon consummation of such
Triggering Transaction, by
(ii) an amount equal to the sum of (x) the Number of Common
Shares Deemed Outstanding immediately prior to such Triggering Transaction plus
(y) the number of shares of Common Stock issued (or deemed to be issued in
accordance with Sections 11(a)(1) through (9)) in connection with the Triggering
Transaction.
For purposes of this Section 11, the term "Number of Common Shares Deemed
Outstanding" at any given time shall mean the sum of (i) the number of shares of
the Company's Common Stock
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outstanding at such time plus (ii) the number of shares of the Company's Common
Stock deemed to be outstanding under Sections 11(a)(1) through (9) at such time.
For purposes of determining the adjusted Exercise Price under this Section
11(a), the following subsections (1) through (9) shall be applicable:
(1) In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase or any options for the purchase of, Common
Stock or any stock or other securities convertible into or exchangeable
for Common Stock (such rights or options being herein called "Options" and
such convertible or exchangeable stock or securities being herein called
"Convertible Securities"), whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which the Common Stock is
issuable upon exercise, conversion or exchange (determined by dividing (x)
the total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus the minimum aggregate
amount of additional consideration payable to the Company upon the
exercise of all such Options, plus, in the case of such Options which
relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (y)
the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities) shall be less than the Exercise Price in effect immediately
prior to the time of the granting of such Option, then the total maximum
amount of Common Stock issuable upon the exercise of such Options, or, in
the case of Options for Convertible Securities, upon the conversion or
exchange of such Convertible Securities, shall (as of the date of granting
of such Options) be deemed to be outstanding and to have been issued and
sold by the Company for such price per share. No adjustment of the
Exercise Price shall be made upon the actual issue of such shares of
Common Stock or such Convertible Securities upon exercise of such Options,
except as otherwise provide in subsection (3) below).
(2) In case the Company at any time shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which
Common Stock is issuable upon such conversion or exchange (determined by
dividing (x) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus
the minimum aggregate amount
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of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the total
maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall (as of the date of the
issue or sale of such Convertible Securities) be deemed to be outstanding
and to have been issued and sold by the Company for such price per share.
No adjustment of the Exercise Price shall be made upon the actual issue of
such Common Stock upon exercise of the rights to exchange or convert under
such Convertible Securities, except as otherwise provided in subsection
(3) below.
(3) If the purchase price provided for in any Options referred to in
subsection (1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subsection (1) or (2), or the rate at which any Convertible Securities
referred to in subsection (1) or (2) are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason
of provisions designed to protect against dilution of the type set forth
in Section 11(a) or 11(c)), the Exercise Price in effect at the time of
such change shall forthwith be readjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold. If the purchase price provided for
in any Option referred to in subsection (1) or the rate at which any
Convertible Securities referred to in subsection (1) or (2) are
convertible into or exchangeable for Common Stock, shall be reduced at any
time under or by reason of provisions with respect thereto designed to
protect against dilution, then in case of the delivery of Common Stock
upon the exercise of any such Option or upon conversion or exchange of any
such Convertible Security, the Exercise Price then in effect hereunder
shall forthwith be adjusted to such respective amount as would have been
obtained had such Option or Convertible Security never been issued as to
such Common Stock and had adjustments been made upon the issuance of the
shares of Common Stock delivered as aforesaid, but only if as a result of
such adjustment the Exercise Price then in effect hereunder is hereby
reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Exercise Price then in
effect hereunder shall forthwith be increased to the
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Exercise Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible Securities, to
the extent outstanding immediately prior to such expiration or
termination, never been issued.
(5) In case any Options shall be issued in connection with the issue or
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been
issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor shall be deemed to be the amount
received by the Company therefor. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company. In
case any shares of Common Stock, Options or Convertible Securities shall
be issued in connection with any merger in which the Company is the
surviving corporation, the amount of consideration thereof shall be deemed
to be the fair value of such portion of the net assets and business of the
non-surviving corporation as shall be attributed by the Board of Directors
of the Company in good faith to such Common Stock, Options or Convertible
Securities, as the case may be.
(7) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the
Company and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the purpose of this
Section 11(a).
(8) In case the Company shall declare a dividend or make any other
distribution upon the stock of the Company payable in Common Stock,
Options or Convertible Securities, then in such case any Common Stock,
Options or Convertible Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(9) For purposes of this Section 11(a), in case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling
them (x) to receive a dividend or other distribution payable in Common
Stock, Options or Convertible Securities, or
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(y) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(b) Dividends Not Paid out of Earnings or Earned Surplus. In the
event that the Company shall declare a dividend upon the Common Stock (other
than a dividend payable in Common Stock covered by Section 11(a)(8)) payable
otherwise than out of earnings or earned surplus, determined in accordance with
generally accepted accounting principles, including the making of appropriate
deductions for minority interests, if any, in subsidiaries (herein referred to
as "Liquidating Dividends"), then as soon as possible after the exercise of this
Warrant, the Company shall pay to the person exercising such Warrant an amount
equal to the aggregate value at the time of such exercise of all Liquidating
Dividends (including but not limited to the Common Stock which would have been
issued at the time of such earlier exercise and all other securities which would
have been issued with respect to such Common Stock by reason of stock splits,
stock dividends, mergers or reorganizations, or for any other reason). For the
purposes of this Section 11(b), a dividend other than in cash shall be
considered payable out of earnings or earned surplus only to the extent that
such earnings or earned surplus are charged an amount equal to the fair value of
such dividend as determined in good faith by the Board of Directors of the
Company.
(c) Subdivisions and Combinations. In the case the Company shall at
any time subdivide (rather than by means of a dividend payable in Common Stock
covered by Section 11(a)(8)), its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be appropriately reduced, and, conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased.
(d) Reorganization, Reclassification, Consolidation, Merger or Sale
of Assets. If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, cash or other property with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the holder of this Warrant shall have
the right to acquire and receive upon exercise of this Warrant such shares of
stock, securities, cash or other property issuable or payable (as part of the
reorganization, reclassification, consolidation, merger or sale) with respect to
or in exchange for such number of outstanding shares of the Company's Common
Stock as would have been received upon exercise of this Warrant at the Exercise
Price then in effect. The Company will not effect any such consolidation, merger
or sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument mailed or
delivered
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to the Holder at the last address of the Holder as shown on the Warrant
Register, the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the Holder
may be entitled to purchase. If a purchase, tender or exchange offer is made to
and accepted by the holders of more than 50% of the outstanding shares of Common
Stock of the Company, the Company shall not effect any consolidation, merger or
sale with the person having made such offer or with any Affiliate of such
person, unless prior to the consummation of such consolidation, merger or sale
the Holder shall have been given a reasonable opportunity to then elect to
receive upon the exercise of this Warrant the stock, securities or assets, as
the case may be, then issuable with respect to the Common Stock in accordance
with such offer. For purposes hereof, the term "Affiliate" with respect to any
given person shall mean any person controlling, controlled by or under common
control with the given person.
(e) No Adjustment for Exercise of Certain Options, Warrants, Etc.
The provisions of this Section 11 shall not apply to any Common Stock issued,
issuable or deemed outstanding under Sections 11(a)(1) through (9): (i) to any
person pursuant to any stock option, stock purchase or similar plan or
arrangement for the benefit of employees, consultants or directors of the
Company or its subsidiaries in any amount approved by the Board of Directors, or
(ii) pursuant to options, warrants and conversion rights in existence on the
date of issuance of this Warrant.
(f) Notices of Certain Events. In the event that:
(1) the Company shall declare any cash dividend upon its
Common Stock, or
(2) the Company shall declare any dividend upon its Common
Stock payable in capital stock or make any special dividend or other
distribution to the holders of its Common Stock, or
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any
class or other rights, or
(4) there shall be any capital reorganization or
reclassification of the capital stock of the Company, including any
subdivision or combination of its outstanding shares of Common
Stock, or consolidation or merger of the Company with, or sale of
all or substantially all of its assets to, another corporation, or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
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then, in connection with such event, the Company shall give to the Holder:
(i) at least ten days prior written notice of the date on
which the books of the Company shall close or a record
shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in
respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up; and
(ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, at least ten
days prior written notice of the date when the same
shall take place.
Such notice in accordance with the foregoing clause (i) shall also specify, in
the case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be. Each such written notice shall be given by first
class mail, postage prepaid, addressed to the Holder at the last address of the
Holder as shown on the Warrant Register, or telecopied to the Holder at the last
telecopier number of the Holder as shown on the Warrant Register.
(g) Grant, Issue or Sale of Options, Convertible Securities or
Rights. If at any time or from time to time on or after the date of issuance
hereof, the Company shall grant, issue or sell any Options, Convertible
Securities or rights to purchase property (the "Purchase Rights") pro rata to
the record holders of any class of Common Stock of the Company and such grants,
issuances or sales do not result in any adjustment of the Exercise Price under
Section 11(a) hereof (other than by reason of the fact that the issuance of such
shares was at an Exercise Price equal to or greater than the current Exercise
Price), then the Holder shall be entitled to acquire (within fifteen days after
the later to occur of the initial exercise date of such Purchase Rights or
receipt by the Holder of the notice concerning Purchase Rights to which the
Holder shall be entitled under Section 11(f)) and upon the terms applicable to
such Purchase Rights either:
(i) the aggregate Purchase Rights which the Holder could
have acquired if it had held the number of shares of
Common Stock acquirable upon exercise of this Warrant
immediately before the grant, issuance or sale
-12-
of such Purchase Rights; provided that if any Purchase
Rights were distributed to holders of Common Stock
without the payment of additional consideration by such
holders, corresponding Purchase Rights shall be
distributed to the exercising Holder as soon as possible
after such exercise and it shall not be necessary for
the exercising Holder specifically to request delivery
of such rights; or
(ii) in the event that any such Purchase Rights shall have
expired or shall expire prior to the end of said fifteen
day period, the number of shares of Common Stock or the
amount of property which such holder could have acquired
upon such exercise at the time or times at which the
Company granted, issued or sold such expired Purchase
Rights.
(h) Adjustment by Board of Directors. If any event occurs as to
which, in the opinion of the Board of Directors of the Company, the provisions
of this Section 11 are not strictly applicable, or if strictly applicable would
not fairly protect the rights of the Holder in accordance with the essential
intent and principles of such provisions, then the Board of Directors shall make
an adjustment in the application of such provisions, in accordance with such
essential intent and principles, so as to protect such rights as aforesaid, but
in no event shall any adjustment have the effect of increasing the Exercise
Price as otherwise determined pursuant to any of the provisions of this Section
11, except in the case of a combination of shares of a type contemplated in
Section 11(c) and then in no event to an amount greater than the Exercise Price
as adjusted pursuant to Section 11(c).
(i) No Dilution or Impairment. The Company will not, by amendment of
its Certificate or bylaws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance or any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate in order to protect the rights of the Holder against
dilution or other impairment.
12. Registration Rights If the Holder of this Warrant is a party to that
certain Registration Rights Agreement dated as of the date hereof (the
"Registration Rights Agreement"), such Holder shall be entitled to include any
shares of Common Stock received upon exercise of this Warrant (the "Warrant
Exercise Shares") with such Holder's Registrable Shares (as such term is defined
in the Registration Rights Agreement), and such Holder shall be entitled to the
same registration rights with respect to such Warrant Exercise Shares as such
Holder has with respect to such Holder's Registrable Shares pursuant to Section
1 of the Registration Rights Agreement, on the same terms and conditions as
those set forth in Section 1 of the Registration Rights
-13-
Agreement. The provisions of Section 1 of the Registration Rights Agreement are
hereby incorporated by reference and made a part of this Agreement.
13. Miscellaneous.
(a) Governing Law. This Warrant shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
(without reference to any principles of conflicts of laws).
(b) Binding Effect. The provisions of this Warrant shall be binding
upon the Company and its successors and assigns.
(c) Remedies. In the event of a breach by the Company of this
Warrant, the Holder shall be entitled to injunctive relief and specific
performance of its rights under this Warrant, in addition to all of its rights
granted by law, including, without limitation, recovery of damages. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach of this Warrant by the Company and hereby waives
the defense in any action for injunctive relief or specific performance that a
remedy at law would be adequate.
(d) Headings. The headings in this Warrant are for purposes of
convenience in reference only and shall not be deemed to constitute a part
hereof.
-14-
IN WITNESS WHEREOF, the undersigned have caused this Warrant to be
executed as of the 24th day of July, 1996.
WARBURG, ▇▇▇▇▇▇ INVESTORS, L.P.
By: Warburg, ▇▇▇▇▇▇ & Co., Inc.
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: General Partner
TV FILME, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ de Albuquerque
---------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Lins de Albuquerque
Title: President
-15-
NOTICE OF EXERCISE
(To be executed only upon exercise of Warrant)
To TV Filme, Inc.:
(1) The undersigned hereby elects to exercise the attached Warrant with
respect to _____ shares of Common Stock of TV Filme, Inc. pursuant to the terms
of the attached Warrant and (please check one of the following):
____ (a) tenders herewith payment of the purchase price for such
number of shares in full; or
____ (b) elects to receive shares equal to the value of the Warrant
with respect to such number of shares pursuant to Section 3(c)
thereof, in lieu of making payment of the purchase price.
(2) In exercising the Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued are being acquired
solely for the account of the undersigned and not as a nominee for any other
party, and that the undersigned will not sell, offer for sale, pledge,
hypothecate or otherwise dispose of any such shares of Common Stock, except
under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
________________________________________
(Name)
________________________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
________________________________________
(City, State, Zip Code)
(4) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
________________________________________
(Name)
Dated: ________________ By: ____________________________________
(Signature of Registered Owner)
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of the attached
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under such Warrant, with respect to the number of
shares of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint as Attorney ________________
to make such transfer on the books of TV Filme, Inc., maintained for the
purpose, with full power of substitution in the premises.
The undersigned also represents that, by assignment hereof, the Assignee
acknowledges that the Assignee will not sell, offer for sale, pledge,
hypothecate or otherwise dispose of the Warrant or any shares of Common Stock to
be issued upon exercise except under circumstances which will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of the Warrant,
the Assignee shall, if requested by the Company, confirm in writing in a form
satisfactory to the Company, that the shares of stock so purchased are not being
acquired with a view toward distribution or resale, except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any state securities laws.
________________________________________
(Signature of Registered Owner)
Dated: _____________ ________________________________________
(Name of Registered Owner)