General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D General Statement of Beneficial Ownership 55 236K
2: EX-1 Joint Filing Agreement 1 7K
3: EX-2 Investment Agreement 44 147K
4: EX-3 Distribution Marketing Agreement 24 77K
5: EX-4 Investment Warrant 22 64K
6: EX-5 Distributor Warrant 29 84K
7: EX-6 Performance Distributor Warrant 29 87K
8: EX-7 Certificate of Designation 26 82K
9: EX-8 Shareholder Agreement 36 105K
10: EX-9 Registration Statement 25 78K
11: EX-10 Power of Attorney G.E. Co. 2 10K
12: EX-11 Power of Attorney G.E. Capital 2 9K
Exhibit 6
NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THE SECURITIES REPRESENTED HEREBY
HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF A SHAREHOLDER AGREEMENT, DATED AS OF APRIL 14,
1999, AMONG VALUEVISION INTERNATIONAL, INC., GE CAPITAL EQUITY
INVESTMENTS, INC. AND NATIONAL BROADCASTING COMPANY, INC.
THE RESTATED ARTICLES OF INCORPORATION OF THE COMPANY (AS DEFINED
BELOW), AS AMENDED, PROVIDE THAT, EXCEPT AS OTHERWISE PROVIDED BY LAW,
SHARES OF STOCK IN THE COMPANY SHALL NOT BE TRANSFERRED TO "ALIENS"
UNLESS, AFTER GIVING EFFECT TO SUCH TRANSFER, THE AGGREGATE NUMBER OF
SHARES OF STOCK OWNED BY OR FOR THE ACCOUNT OF "ALIENS" WILL NOT EXCEED
20% OF THE NUMBER OF SHARES OF OUTSTANDING STOCK OF THE COMPANY, AND
THE AGGREGATE VOTING POWER OF SUCH SHARES WILL NOT EXCEED 20% OF THE
AGGREGATE VOTING POWER OF ALL OUTSTANDING SHARES OF VOTING STOCK OF THE
COMPANY. NOT MORE THAN 20% OF THE AGGREGATE VOTING POWER OF ALL SHARES
OUTSTANDING ENTITLED TO VOTE MAY BE VOTED BY OR FOR THE ACCOUNT OF
"ALIENS." IF, NOTWITHSTANDING SUCH RESTRICTION ON TRANSFERS TO
"ALIENS," THE AGGREGATE NUMBER OF SHARES OF STOCK OWNED BY OR FOR THE
ACCOUNT OF "ALIENS" EXCEEDS 20% OF THE NUMBER OF SHARES OF OUTSTANDING
STOCK OF THE COMPANY OR IF THE AGGREGATE VOTING POWER OF SUCH SHARES
EXCEEDS 20% OF THE AGGREGATE VOTING POWER OF ALL OUTSTANDING SHARES OF
VOTING STOCK OF THE COMPANY, THE COMPANY HAS THE RIGHT TO REDEEM SHARES
OF ALL CLASSES OF CAPITAL STOCK, AT THEIR THEN FAIR MARKET VALUE, ON A
PRO RATA BASIS, OWNED BY OR FOR THE ACCOUNT OF ALL "ALIENS" IN ORDER TO
REDUCE THE NUMBER OF SHARES AND/OR PERCENTAGE OF VOTING POWER HELD BY
OR FOR THE ACCOUNT OF "ALIENS" TO THE MAXIMUM NUMBER OR PERCENTAGE
ALLOWED UNDER THE RESTATED ARTICLES OF INCORPORATION, AS AMENDED, OR AS
OTHERWISE REQUIRED BY APPLICABLE FEDERAL LAW. AS USED HEREIN, "ALIENS"
MEANS ALIENS AND THEIR REPRESENTATIVES, FOREIGN GOVERNMENTS AND THEIR
REPRESENTATIVES, AND CORPORATIONS ORGANIZED UNDER THE LAW OF A FOREIGN
COUNTRY, AND THEIR REPRESENTATIVES. THE COMPANY WILL FURNISH TO ANY
SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF THE
DESIGNATIONS, PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF THE
SHARES OF EACH CLASS OR SERIES AUTHORIZED TO BE ISSUED, SO FAR AS THEY
HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE BOARD TO DETERMINE THE
RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES OR SERIES.
Additional Warrants
No. W-___ ________ Warrants
FORM OF
COMMON STOCK PURCHASE WARRANTS
Exercisable commencing ,
Void after Expiration Time (as defined herein)
ValueVision International, Inc., a Minnesota corporation (the
"Company"), hereby certifies that, for value received, National Broadcasting
Company, Inc., a Delaware corporation (the "Initial Holder" or "NBC"), or
registered assigns (in either case, the "Warrantholder"), is the owner of ( )
Warrants (as defined below), each of which entitles the Warrantholder to
purchase from the Company one fully paid, duly authorized and nonassessable
share of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock") at any time or from time to time subject to the terms set forth herein,
commencing on , (the "Issue Date") and continuing up to the Expiration Time (as
defined herein) at a per share exercise price determined according to the terms
and subject to the conditions set forth in this certificate (the "Warrant
Certificate"). The number of shares of Common Stock issuable upon exercise of
each such Warrant and the exercise price per share of Common Stock are subject
to adjustment from time to time pursuant to the provisions of Sections 8 and 9
of this Warrant Certificate. The Warrants evidenced by this Warrant Certificate
(the "Warrants") are being issued pursuant to a Distribution and Marketing
Agreement, dated as of March 8, 1999 (as it may be amended, supplemented or
otherwise modified from time to time, the "Distribution Agreement"), by and
between the Company and the Initial Holder.
Section 1. Definitions. As used in this Warrant Certificate, the
following terms shall have the meanings set forth below:
"Additional Warrants" shall have the meaning set forth in the
Distribution Agreement and shall include the Warrants hereunder.
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or is
under common control with, such Person. As used in this definition,
"control" (including its correlative meanings, "controlled by" and
"under common
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Additional Warrants
control with") shall mean the possession, directly or indirectly, of
power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
"Articles of Incorporation" shall mean the Articles of
Incorporation of the Company, as amended from time to time.
"Beneficially Own" shall have the meaning set forth in Rule 13d-3
under the Exchange Act, except that a Person shall be deemed to
"Beneficially Own" all securities that such Person has a right to
acquire, whether such right is exercisable immediately or only after
the passage of time (and without any additional condition), provided
that a Person shall not be deemed to "Beneficially Own" any shares of
Common Stock which are issuable upon exercise of any Additional
Warrants unless and until such Additional Warrants are actually issued
and outstanding (at which time such Person shall be deemed to
Beneficially Own all shares of Common Stock which are issuable upon
exercise of such Additional Warrants, whether or not they are vested or
unvested) and, provided further, except as expressly provided in this
Agreement no Person shall be deemed to "Beneficially Own" any
securities issuable upon exercise of the Purchase Warrant unless and
until the Shareholder Approval is obtained. In the event that the
Shareholder Approval is obtained, when calculating Beneficial Ownership
on any particular date after receipt of such Shareholder Approval, the
Purchase Warrant will be deemed to represent Beneficial Ownership of
the maximum number of shares of Common Stock that could be acquired
upon exercise of the Purchase Warrant on such date.
"Board of Directors" shall mean the board of directors of the
Company.
"Business Day" shall mean any day, other than a Saturday, Sunday or
a day on which commercial banks in New York, New York are authorized or
obligated by law or executive order to close.
"Change in Control" shall mean any of the following: (i) a merger,
consolidation or other business combination or transaction to which the
Company is a party if the shareholders of the Company immediately prior
to the effective date of such merger, consolidation or other business
combination or transaction, as a result of such merger, consolidation
or other business combination or transaction, do not have Beneficial
Ownership of voting securities representing 50% or more of the Total
Current Voting Power of the surviving corporation following such
merger, consolidation or other business combination or
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Additional Warrants
transaction; (ii) an acquisition by any Person (other than the
Restricted Parties and their Affiliates or any 13D Group to which any
of them is a member) of Beneficial Ownership of Voting Stock of the
Company representing 25% or more of the Total Current Voting Power of
the Company, (iii) a sale of all or substantially all the consolidated
assets of the Company to any Person or Persons (other than Restricted
Parties and their Affiliates or any 13D Group to which any of them is a
member); or (iv) a liquidation or dissolution of the Company.
"Common Stock" shall have the meaning set forth in the preamble
hereto.
"Company" shall have the meaning set forth in the preamble hereto.
"Designated Entity" shall mean Home Shopping Network, Inc., QVC,
Inc., Shop-At-Home, Inc. or Paxson Communications Corporation.
"Distribution Agreement" shall mean the Distribution and Marketing
Agreement dated as of March 8, 1999 between the Company and NBC
pursuant to which NBC has agreed to distribute certain programming of
the Company, as such agreement may be amended from time to time.
"Distribution Agreement Termination Event" shall mean a termination
of the Distribution Agreement by the Company (i) as a result of the
failure of NBC to achieve certain performance targets set forth in
Sections 8(a), (b) or (c) of the Distribution Agreement or (ii)
pursuant to the Company's right to so terminate under Section 10 of the
Distribution Agreement.
"Election to Exercise" shall have the meaning set forth in Section
4.2(a) hereof.
"Equity Securities" shall mean, with respect to any Person, any and
all common stock, preferred stock, any other class of capital stock and
partnership or limited liability company interests of such Person or
any other similar interests of any Person that is not a corporation,
partnership or limited liability company.
"Exchange Act" shall mean the Securities Exchange act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exercise Price" shall have the meaning set forth in Section 8
hereof.
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Additional Warrants
"Expiration Date" shall mean with respect to any Warrant
represented hereunder, the fifth anniversary of the vesting date (as
set forth in Section 4.1(a) hereof) of such Warrant.
"Expiration Time" shall mean 5:00 P.M., New York City time, on the
Expiration Date.
"Expired" shall mean, with respect to a Warrant issued hereunder,
that such Warrant has not been exercised prior to the Expiration Date
for such Warrant.
"Fractional Warrant Share" shall mean any fraction of a whole share
of Common Stock issued, or issuable upon, exercise of the Warrants.
"GE Capital" shall mean GE Capital Equity Investments, Inc., a
Delaware corporation, together with its successors by operation of law.
"Governmental Entity" shall mean any federal, state or local
government or any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign.
"Independent Expert" shall mean an investment banking firm mutually
acceptable to the Company and the Warrantholder.
"Initial Holder" shall have the meaning set forth in the preamble
hereto.
"Investment Agreement" shall mean the Investment Agreement, dated
as of March 8, 1999 (as it may be amended, supplemented or otherwise
modified from time to time), by and between the Company and GE Capital.
"Issue Date" shall have the meaning set forth in the preamble
hereto.
"Market Price" shall mean, with respect to a share of Common Stock
on any day, except as set forth below in the case that the shares of
Common Stock are not publicly held or listed, the average of the
"quoted prices" of the Common Stock for 30 consecutive Trading Days
commencing 45 Trading Days before the date in question. The term
"quoted prices" of the Common Stock shall mean the last reported sale
price on that day or, in case no such reported sale takes place on such
day, the average of the last reported bid and asked prices, regular
way, on that day, in either case, as reported in the consolidated
transaction reporting system with respect to securities quoted on
Nasdaq or, if the shares of Common Stock are not quoted on Nasdaq, as
reported
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Additional Warrants
in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or,
if the shares of Common Stock are not quoted on Nasdaq and not listed
or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices on such other nationally recognized quotation system then
in use, or, if on any such day the shares of Common Stock are not
quoted on any such quotation system, the average of the closing bid and
asked prices as furnished by a professional market maker selected by
the Board of Directors making a market in the shares of Common Stock.
Notwithstanding the foregoing, if the shares of Common Stock are not
publicly held or so listed, quoted or publicly traded, the "Market
Price" means the fair market value of a share of Common Stock, as
determined in good faith by the Board of Directors; provided, however,
that if the Warrantholder shall dispute the fair market value as
determined by the Board, the Warrantholder and the Company may retain
an Independent Expert. The determination of fair market value by the
Independent Expert shall be final, binding and conclusive on the
Company and the Warrantholder. All costs and expenses of the
Independent Expert shall be borne by the Warrantholder unless the
determination of fair market value is more favorable to such
Warrantholder by 5% or more, in which case, all such costs and expenses
shall be borne by the Company.
"Nasdaq" shall mean The Nasdaq Stock Market's National Market.
"NBC" shall have the meaning set forth in the preamble hereto.
"Organic Change" shall mean, with respect to any Person, any
transaction (including without limitation any recapitalization, capital
reorganization or reclassification of any class or series of Equity
Securities, any consolidation of such Person with, or merger of such
Person into, any other Person, any merger of another Person into such
Person (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding
shares of capital stock of such Person), and any sale or transfer or
lease of all or substantially all of the assets of such Person, but not
including any stock split, combination or subdivision which is the
subject of Section 9.1(b)) pursuant to which any class or series of
Equity Securities of such Person is exchanged for, or converted into
the right to receive other securities, cash or other property.
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Additional Warrants
"Person" shall mean any individual, firm, corporation, company,
limited liability company, association, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Preferred Stock" shall mean the Series A Redeemable Convertible
Preferred Stock, par value $0.01 per share, of the Company.
"Purchased Shares" shall have the meaning set forth in Section
9.1(e) hereof.
"Purchase Warrant" shall mean the Common Stock Purchase Warrant
(No. W-1) (and any replacement(s) thereof) exercisable for up to 39.9%
of the Common Stock of the Company issued to GE Capital pursuant to the
Investment Agreement.
"Record Date" shall have the meaning set forth in Section 9.1(a)
hereof.
"Reference Date" shall have the meaning set forth in Section 9.1(d)
hereof.
"Relevant Date" shall have the meaning set forth in Section 9.1(c)
hereof.
"Restricted Parties" shall mean each of (i) NBC, its Ultimate
Parent Entity (if any), each Subsidiary of NBC and each Subsidiary of
its Ultimate Parent Entity, (ii) GE Capital, its Ultimate Parent Entity
(if any), each Subsidiary of GE Capital and each Subsidiary of its
Ultimate Parent Entity and (iii) any Affiliate of any Person that is a
Restricted Party if (and only if) such Restricted Party has the right
or power (acting alone or solely with other Restricted Parties) to
either cause such Affiliate to comply with or prevent such Affiliate
from not complying with all of the terms of this Agreement that are
applicable to Restricted Parties.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shareholder Agreement" shall mean the Shareholder Agreement, dated
as of the date hereof, among GE Capital, NBC and the Company.
"Shareholder Approval" shall have the meaning ascribed to such term
in the Investment Agreement.
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Additional Warrants
"Subsidiary" shall mean, as to any Person, a corporation,
partnership, limited liability company, joint venture or other entity
of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned,
directly or indirectly through one or more intermediaries (including,
without limitation, other Subsidiaries), or both, by such Person.
"Term" shall mean the base or initial term of the Written
Commitment, excluding any renewal period or automatic extensions
thereunder.
"13D Group" means any "group" (within the meaning of Section 13(d)
of the Exchange Act) formed for the purpose of acquiring, holding,
voting or disposing of Voting Stock.
"Total Current Voting Power" shall mean, with respect to any
corporation the total number of votes which may be cast in the election
of members of the Board of Directors of the corporation if all
securities entitled to vote in the election of such directors
(excluding shares of preferred stock that are entitled to elect
directors only upon the occurrence of customary events of default) are
present and voted (it being understood that the Preferred Stock will be
included on an as converted basis in the calculation of Total Current
Voting Power of the Company).
"Trading Day" shall mean any day on which Nasdaq is open for
trading, or if the shares of Common Stock are not quoted on Nasdaq, any
day on which the principal national securities exchange or national
quotation system on which the shares of Common Stock are listed,
admitted to trading or quoted is open for trading, or if the shares of
Common Stock are not so listed, admitted to trading or quoted, any
Business Day.
"Ultimate Parent Entity" shall mean, with respect to any Person
(the "Subject Person"), the Person (if any) that (i) owns, directly or
indirectly through one or more intermediaries, or both, shares of stock
or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of the Subject Person and (ii) is
not itself a Subsidiary of any other Person or is a natural person.
"Voting Stock" shall mean shares of the Common Stock and Preferred
Stock and any other securities of the Company having the ordinary power
to vote in the election of members of the Board of Directors of the
Company.
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Additional Warrants
"VVTV" shall mean the home shopping television program service of
the Company presently known as "ValueVision Television" and any
successor home shopping or transactional television program services of
the Company.
"Warrant" shall have the meaning set forth in the preamble hereto.
"Warrant Cancellation Event" shall mean that on or prior to August
31, 1999, the Closing (as defined in the Investment Agreement) under
the Investment Agreement shall not have occurred or that Shareholder
Approval shall not have been obtained, as set forth in Section 9(a) or
9(b) of the Distribution Agreement.
"Warrant Certificate" shall have the meaning set forth in the
preamble hereto.
"Warrant Register" shall have meaning set forth in Section 2.2
hereof.
"Warrant Shares" shall mean the shares of Common Stock issued, or
issuable upon, exercise of the Warrants.
"Warrantholder" shall have the meaning set forth in the preamble
hereto.
"Written Commitment" shall mean the written commitment, dated ,
between NBC and , for the rollout of VVTV, a copy of which is attached
as Annex A hereto.
Section 2. Transferability.
2.1 Registration. The Warrants shall be issued only in registered
form. The Company agrees to maintain, at its office or agency, books for the
registration and transfer of the Warrants.
2.2 Transfer. Subject to the terms and conditions of the
Shareholder Agreement, the Warrants evidenced by this Warrant Certificate may be
sold or otherwise transferred at any time (except as such sale or transfer may
be restricted pursuant to the regulations of the Federal Communications
Commission, the Securities Act or any applicable state securities laws) with the
prior written consent of the Company, which consent shall not be unreasonably
withheld; provided, however, that the consent of the Company shall not be deemed
to have been unreasonably withheld if the Company does not approve a transfer of
such Warrants to any
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Additional Warrants
Designated Entity. Any such sale or transfer shall be effected on the books of
the Company (the "Warrant Register") maintained at its principal executive
offices upon surrender of this Warrant Certificate for registration of transfer
duly endorsed by the Warrantholder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver a new Warrant Certificate or Certificates in appropriate
denominations to the Person or Persons entitled thereto.
Section 3. Exchange of Warrant Certificate.
Any Warrant Certificate may be exchanged for another certificate or
certificates of like tenor entitling the Warrantholder to purchase a like
aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitles such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the
certificate evidencing the Warrant to be so exchanged. Thereupon, the Company
shall execute and deliver to the Person entitled thereto a new Warrant
Certificate or Certificates as so requested.
Section 4. Term of Warrants; Exercise of Warrants.
4.1 Vesting and Duration of Warrants.
(a) The Warrants shall vest in ( ) equal cumulative installments,
with the first installment vesting on the date of execution of the Written
Commitment, and the remaining ( ) installments vesting on each anniversary
thereof for the Term of the Written Commitment.
(b) Subject to the terms and conditions set forth in this Warrant
Certificate, the Warrantholder may exercise the Warrants evidenced hereby, in
whole or in part, at any time and from time to time after the Issue Date and
before the Expiration Time of such Warrants; provided, however, that the number
of Warrants which the Warrantholder will be entitled to exercise on any date
will be equal to (a) the sum of the Warrants vested on or prior to such date
pursuant to the terms of Section 4.1(a) hereof minus (b) the sum of (i) the
total number of Warrants previously exercised hereunder and (ii) the total
number of Warrants which have Expired; provided, further, that (X) upon the
occurrence of a Distribution Agreement Termination Event, notwithstanding the
vesting schedule set forth in Section 4.1(a) hereof, any unvested Warrants
hereunder as of such termination date shall cease to vest, but any Warrants
which have vested prior to such termination date shall continue to be
exercisable,
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Additional Warrants
subject to the provisions hereunder, (Y) upon a Change in Control,
notwithstanding the vesting schedule set forth in Section 4.1(a) hereof, any
unvested Warrants hereunder shall immediately vest and become fully exercisable,
subject to the provisions hereunder and (Z) upon the occurrence of a Warrant
Cancellation Event, notwithstanding the other provisions of this Warrant
Certificate, all of the unexercised Warrants hereunder, whether or not vested,
shall terminate and become void, and all rights hereunder with respect to such
Warrants shall thereupon cease. Any Warrant not exercised by the Expiration Time
applicable to such Warrant shall become void, and all rights hereunder with
respect to such Warrant shall thereupon cease.
4.2 Exercise of Warrant.
(a) On the terms and subject to the conditions set forth in this
Warrant Certificate, the Warrantholder may exercise the Warrants evidenced
hereby, in whole or in part, by presentation and surrender to the Company of
this Warrant Certificate together with the attached Election to Exercise (the
"Election to Exercise") duly filled in and signed, and accompanied by payment to
the Company of the Exercise Price for the number of Warrant Shares specified in
such Election to Exercise. Payment of the aggregate Exercise Price (including
payment made pursuant to a purchase under Section 9.3(a) hereof) shall be made
(i) in cash in an amount equal to the aggregate Exercise Price; (ii) by
certified or official bank check in an amount equal to the aggregate Exercise
Price or (iii) by any combination of the foregoing. In lieu of the above, the
Warrantholder may deliver an Election to Exercise that provides for a
recapitalization exchange of Warrants for Warrant Shares having an aggregate
value equal to the excess of (x) the aggregate value of the Warrant Shares to
which the Warrants so exercised relate (based on the determination of the Market
Price of the Common Stock as of such date) over (y) the aggregate Exercise Price
of such Warrants.
(b) On the terms and subject to the conditions set forth in this
Warrant Certificate, upon such presentation of a duly executed Election to
Exercise and surrender of this Warrant Certificate and payment of such aggregate
Exercise Price as set forth in paragraph (a) hereof, the Company shall promptly
issue and cause to be delivered to the Warrantholder, or, subject to Section 2
hereunder, to such Persons as the Warrantholder may designate in writing, a
certificate or certificates (in such name or names as the Warrantholder may
designate in writing) for the specified number of duly authorized, fully paid
and non-assessable Warrant Shares issuable upon exercise, and shall deliver to
the Warrantholder cash, as provided in Section 10 hereof, with respect to any
Fractional Warrant Shares otherwise issuable upon such surrender. In the event
that the Warrants evidenced by this Warrant Certificate are exercised in part
prior to the Expiration Time applicable to such Warrants, the Company
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Additional Warrants
shall issue and cause to be delivered to the Warrantholder, or, subject to
Section 2 hereunder, to such Persons as the Warrantholder may designate in
writing, a certificate or certificates (in such name or names as the
Warrantholder may designate in writing) evidencing any remaining unexercised and
un-Expired Warrants.
(c) Each Person in whose name any certificate for Warrant Shares is
issued shall for all purposes be deemed to have become the holder of record of
the Warrant Shares represented thereby on the first date on which both the
Warrant Certificate evidencing the respective Warrants was surrendered, along
with a duly executed Election to Exercise, and payment of the Exercise Price and
any applicable taxes was made, irrespective of date of issue or delivery of such
certificate.
4.3 Conditions to Exercise. Each exercise of the Warrants shall be
subject to the following conditions:
(a) Such exercise shall be consistent with the terms of Section 4.1
hereof; and
(b) The purchase of the Warrant Shares issuable upon such exercise
shall not be prohibited under applicable law.
Section 5. Payment of Taxes.
The Company shall pay any and all documentary, stamp or similar
issue or transfer taxes and other governmental charges that may be imposed under
the laws of the United States or any political subdivision or taxing authority
thereof or therein in respect of any issue or delivery of Warrant Shares or of
other securities or property deliverable upon exercise of the Warrants evidenced
by this Warrant Certificate or certificates representing such shares or
securities (other than income or withholding taxes imposed on the
Warrantholder); provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involving the
issue of any Warrant Certificate or any certificates for Warrant Shares in a
name other than that of the registered holders thereof, and the Company shall
not be required to issue or deliver such Warrant Certificate or certificates for
Warrant Shares unless and until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 6. Mutilated or Missing Warrant.
If any Warrant Certificate is lost, stolen, mutilated or destroyed,
the Company shall issue in exchange and
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Additional Warrants
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, upon receipt of a proper affidavit or other evidence reasonably
satisfactory to the Company (and surrender of any mutilated Warrant Certificate)
and indemnity in form and amount reasonably satisfactory to the Company in each
instance protecting the Company, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants as the Warrant Certificate so
lost, stolen, mutilated or destroyed. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at
any time enforceable by anyone. An applicant for such substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe. All Warrant
Certificates shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement of lost,
stolen, mutilated or destroyed Warrant Certificates, and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement of negotiable
instruments or other securities without their surrender.
Section 7. Reservation of Shares.
The Company hereby agrees that, at all times until all of the
Warrants issued hereunder (whether vested or unvested) have been exercised,
Expired or canceled, there shall be reserved for issuance and delivery upon
exercise of this Warrant, free from preemptive rights, the number of shares of
authorized but unissued shares of Common Stock as may be required at such time
(adjusted from time to time for additional vesting of Warrants as well as for
cancellation of exercised or Expired Warrants) for issuance or delivery upon
exercise of the Warrants evidenced by this Warrant Certificate. The Company
further agrees that it will not, by amendment of its Articles of Incorporation
or through reorganization, consolidation, merger, dissolution or sale or assets,
or by any other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by the Company. Without limiting the generality of the
foregoing, the Company shall from time to time take all such action that may be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at the Exercise Price as so adjusted.
13
Additional Warrants
Section 8. Exercise Price.
The price per share (the "Exercise Price") at which Warrant Shares
shall be purchasable upon the exercise of the Warrants evidenced by this Warrant
Certificate shall be $ , subject to adjustment pursuant to Section 9 hereof.
-----
Section 9. Adjustment of Exercise Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of
the Warrants evidenced by this Warrant Certificate and the Exercise Price
thereof shall be subject to adjustment from time to time after the date hereof
upon the happening of certain events, as follows:
9.1 Adjustments to Exercise Price. The Exercise Price shall be
subject to adjustment as follows:
(a) Stock Dividends. In case the Company shall, after the Issue
Date, pay a dividend or make a distribution on its Common Stock or on
any other class or series of capital stock of the Company which
dividend or distribution includes or is convertible (without the
payment of any consideration other than surrender of such convertible
security) into Common Stock, the Exercise Price in effect at the
opening of business on the day following the date fixed for
determination of the holders of Common Stock or capital stock entitled
to such payment or distribution (the "Record Date") shall be reduced by
multiplying such Exercise Price by a fraction of which (A) the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date and (B) the denominator shall
be the sum of such number of shares and the total number of shares
constituting or included in such dividend or other distribution (or in
the case of a dividend consisting of securities convertible into Common
Stock, the number of shares of Common Stock into which such securities
are convertible), such reduction to become effective immediately after
the opening of business on the day following the Record Date; provided,
however, that if any such dividend or distribution is rescinded and not
paid, then the Exercise Price shall, as of the date when it is
determined that such dividend or distribution price will be rescinded,
revert back to the Exercise Price in effect prior to the adjustment
made pursuant to this paragraph.
(b) Stock Splits and Reverse Splits. In case the Common Stock shall
be subdivided into a greater number of shares of Common Stock or
combined into a smaller number of shares of Common Stock, the Exercise
Price in effect at the opening of business on the day following the day
upon which
14
Additional Warrants
such subdivision or combination becomes effective shall be adjusted so
that the holder of any Warrants thereafter surrendered for purchase of
shares of Common Stock shall be entitled to receive the number of
shares of Common Stock which such holder would have owned or been
entitled to receive after the happening of such events had such
Warrants been surrendered for exercise immediately prior to such event.
Such adjustment shall become effective at the close of business on the
day upon which such subdivision or combination becomes effective.
(c) Issuances Below Market. In case the Company shall issue or sell
(a) Common Stock, (b) rights, warrants or options entitling the holders
thereof to subscribe for or purchase shares of Common Stock or (c) any
security convertible into Common Stock, in each case at a price, or
having an exercise or conversion price, per share less than the
then-current Market Price per share of Common Stock on (x) the date of
such issuance or sale or (y) in the case of a dividend or distribution
of such rights, warrants, options or convertible securities to the
holders of Common Stock, the date fixed for determination of the
holders of such Common Stock entitled to such dividend or distribution
(the date specified in clause (x) or (y) being the "Relevant Date")
(excluding any issuance for which an appropriate and full adjustment
has been made pursuant to Section 9.1(a)), the Exercise Price shall be
reduced by multiplying the Exercise Price by a fraction of which (A)
the numerator shall be the number of shares of Common Stock outstanding
at the open of business on the Relevant Date plus the number of shares
of Common Stock which the aggregate consideration received or
receivable (I) for the total number of shares of Common Stock, rights,
warrants or options or convertible securities so issued or sold, and
(II) upon the exercise or conversion of all such rights, warrants,
options or securities, would purchase at the then-current Market Price
per share of Common Stock and (B) the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the
Relevant Date plus (without duplication) the number of shares of Common
Stock subject to all such rights, warrants, options and convertible
securities, such reduction of the Exercise Price to be effective at the
opening of business on the day following the Relevant Date; provided,
however, that if any such dividend or distribution is rescinded and not
paid, then the Exercise Price shall, as of the date when it is
determined that such dividend or distribution will be rescinded, revert
back to the Exercise Price in effect prior to the adjustment made
pursuant to this paragraph. The issuance of any shares of Common Stock
or other rights, warrants, options or convertible securities pursuant
to (a) any restricted stock or stock option plan or program of the
Company involving the grant of options or rights solely to officers,
directors,
15
Additional Warrants
employees and/or consultants of the Company or its Subsidiaries at
below the then-current Market Price per share of Common Stock
(provided, that any such options or rights were initially granted with
an exercise or conversion price of not less than 85% of the
then-current Market Price per share of Common Stock), (b) any option,
warrant, right, or convertible security outstanding as of the date
hereof,(c) the terms of a firmly committed bona fide underwritten
public offering, or (d) any merger, acquisition, consolidation, or
similar transaction, shall not be deemed to constitute an issuance or
sale to which this Section 9.1(c) applies. Upon the expiration
unexercised of any rights, warrants, options or rights to convert any
convertible securities for which an adjustment has been made pursuant
to this Section 9.1(c), the adjustments shall forthwith be reversed to
effect such rate of conversion as would have been in effect at the time
of such expiration or termination had such rights, warrants, options or
rights to convertible securities, to the extent outstanding immediately
prior to such expiration or termination, never been issued.
(d) Special Dividends. Subject to the last sentence of this
paragraph (d), in case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of any class or series of capital stock, cash or
assets (including securities, but excluding any shares of Common Stock,
rights, warrants, options or convertible securities for which an
appropriate and full adjustment has been made pursuant to paragraph (a)
or (c) above), the Exercise Price in effect on the day immediately
preceding the date fixed for the payment of such distribution (the date
fixed for payment being referred to as the "Reference Date") shall be
reduced by multiplying such Exercise Price by a fraction of which the
numerator shall be the current Market Price per share of the Common
Stock on the Reference Date less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be
mailed to the holders of the Warrants) on the Reference Date of the
portion of the evidences of indebtedness, shares of capital stock, cash
and assets so distributed applicable to one share of Common Stock, and
the denominator shall be such current Market Price per share of the
Common Stock, such reduction to become effective immediately prior to
the opening of business on the day following the Reference Date;
provided, however, that if such dividend or distribution is rescinded
and not paid, then the Exercise Price shall, as of the date when it is
determined that such dividend or distribution will be rescinded, revert
back to the Exercise Price in effect prior to the adjustment made
pursuant to this paragraph. If the Board of Directors determines the
fair market value of any distribution for purposes of this
16
Additional Warrants
paragraph (d) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so
consider, to the extent possible, the prices in such market over the
same period used in computing the current Market Price per share of
Common Stock pursuant to this Section 9.1. Notwithstanding the
foregoing, if the holders of a majority of the outstanding unexercised
and un-Expired Warrants (whether or not vested) shall dispute the fair
market determination of the Board of Directors, an Independent Expert
shall be selected to determine the fair market value of the Common
Stock as of the Reference Date, and such Independent Expert's
determination shall be final, binding and conclusive. All costs and
expenses of such Independent Expert shall be borne by the holders of
the then outstanding unexercised and un-Expired Warrants (whether or
not vested) unless the determination of fair market value is more
favorable to such holders by 5% or more, in which case, all such costs
and expenses shall be borne by the Company. For purposes of this
paragraph (d), any dividend or distribution that also includes shares
of Common Stock or rights, warrants or options to subscribe for or
purchase shares of Common Stock shall be deemed to be (1) a dividend or
distribution of the evidences of indebtedness, cash, assets or shares
of capital stock other than such shares of Common Stock or rights,
warrants, options or convertible securities (making any Exercise Price
reduction required by this subparagraph (d)) immediately followed by
(2) a dividend or distribution of such shares of Common Stock or such
rights, warrants, options or convertible securities (making any further
Exercise Price reduction required by subparagraph (a) or (c) of this
Section 9.1), except (A) the Reference Date of such dividend or
distribution as defined in this subparagraph (d) shall be substituted
as "the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution" and the "Relevant Date"
within the meaning of subparagraphs (a) and (c) of this Section 9.1 and
(B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business
on the date fixed for such determination" within the meaning of
subparagraph (a) of this Section 9.1).
(e) Minimum Adjustment Requirement. No adjustment shall be required
unless such adjustment would result in an increase or decrease of at
least 1% in the Exercise Price then subject to adjustment; provided,
however, that any adjustments that are not made by reason of this
Section 9.1(e) shall be carried forward and taken into account in any
subsequent adjustment. In case the Company shall at any time issue
shares of Common Stock by way of dividend on any stock of the Company
or subdivide or combine the outstanding shares of Common Stock, said 1%
specified in the preceding
17
Additional Warrants
sentence (as theretofore increased or decreased, if said amount shall
have been adjusted in accordance with the provisions of this Section
9.1(e)) shall forthwith be proportionately increased in the case of
such a combination or decreased in the case of such a subdivision or
stock dividend so as appropriately to reflect the same. No adjustment
to the Exercise Price shall be required if the holders of the
outstanding unexercised and unissued Warrants (whether or not vested)
receive the dividend or distribution giving rise to such adjustment in
respect of each such Warrant.
(f) Calculations. All calculations under this Section 9.1 shall be
made to the nearest $0.01.
(g) Other Reductions in Exercise Price. The Company from time to
time may reduce the Exercise Price by any amount for any period of time
if the period is at least 20 days, the reduction is irrevocable during
the period, subject to any conditions that the Board of Directors may
deem relevant, and the Board of Directors of the Company shall have
made a determination that such reduction would be in the best interest
of the Company, which determination shall be conclusive. Whenever the
Exercise Price is reduced pursuant to the preceding sentence, the
Company shall mail to the Warrantholder a notice of the reduction at
least fifteen days prior to the date the reduced Exercise Price takes
effect, and such notice shall state the reduced Exercise Price and the
period it will be in effect. If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution, and shall thereafter and
before the distribution to shareholders thereof legally abandon its
plan to pay or deliver such dividend or distribution, then thereafter
no adjustment in the number of shares of Common Stock issuable upon
exercise granted by this Section 9.1 or in the Exercise Price then in
effect shall be required by reason of the taking of such record.
(i) Exercise between Record and Payment Date. Anything in this
Section 9.1 to the contrary notwithstanding, in the event that a record
date is established for a dividend or distribution that gives rise to
an adjustment to the Exercise Price pursuant to this Section 9.1, if
any Warrant is exercised to purchase shares of Common Stock between
such record date and the date such dividend or distribution is paid
then (x) the number of shares of Common Stock issued at the time of
such exercise will be determined by reference to the Exercise Price as
in effect without taking into account the adjustment resulting from
such dividend or distribution and (y) on the date that such dividend or
distribution is actually paid there shall be issued in respect of such
exercise such number of
18
Additional Warrants
additional shares of Common Stock as is necessary to reflect the
Exercise Price in effect after taking into account the adjustment
resulting from the dividend or distribution.
(j) Certificate. Whenever an adjustment in the Exercise Price is
made as required or permitted by the provisions of this Section 9.1,
the Company shall promptly file a certificate of its chief financial
officer setting forth (A) the adjusted Exercise Price as provided in
this Section 9.1 and a brief statement of the facts requiring such
adjustment and the computation thereof and (B) the number of shares of
Common Stock (or portions thereof) purchasable upon exercise of a
Warrant after such adjustment in the Exercise Price in accordance with
Section 9.2 hereof and the record date therefor, and promptly after
such filing shall mail or cause to be mailed a notice of such
adjustment to each Warrantholder at his or her last address as the same
appears on the Warrant Register. Such certificate, in the absence of
manifest error, shall be conclusive and final evidence of the
correctness of such adjustment. The Company shall be entitled to rely
upon such certificate, and shall be under no duty or responsibility
with respect to any such certificate except to exhibit the same to any
Warrantholder desiring inspection thereof.
(k) Notice. In case:
(i) the Company shall declare any dividend or any distribution
of any kind or character (whether in cash, securities or other
property) on or in respect of shares of Common Stock or to the
shareholders of the Company (in their capacity as such), excluding a
dividend payable in shares of Common Stock or any regular periodic cash
dividend paid out of current or retained earnings (as such terms are
used in generally accepted accounting principles); or
(ii) the Company shall authorize the granting to the holders of
shares of Common Stock of rights to subscribe for or purchase any
shares of capital stock or of any other right; or
(iii) of any reclassification of shares of Common Stock (other
than a subdivision or combination of outstanding shares of Common Stock
or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders of the
Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
19
Additional Warrants
then the Company shall cause to be mailed to the Warrantholder, at
their last addresses as they shall appear upon the Warrant Register, at
least 10 days prior to the applicable record date hereinafter
specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or, if a
record is not to be taken, the date as of which the holders of shares
of Common Stock of record to be entitled to such dividend, distribution
or rights are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and, if
applicable, the date as of which it is expected that holders of shares
of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property (including cash)
deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give any
such notice, or any defect therein, shall not affect the validity of
the proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
(m) Section 305. Anything in this Section 9.1 to the contrary
notwithstanding, the Company shall be entitled, but not required, to
make such reductions in the Exercise Price, in addition to those
required by this Section 9.1, as it in its discretion shall determine
to be advisable, including, without limitation, in order that any
dividend in or distribution of shares of Common Stock or shares of
capital stock of any class other than Common Stock, subdivision,
reclassification or combination of shares of Common Stock, issuance of
rights or warrants, or any other transaction having a similar effect,
shall not be treated as a distribution of property by the Company to
its shareholders under Section 305 of the Internal Revenue Code of
1986, as amended, or any successor provision and shall not be taxable
to them.
9.2 Adjustments to Number of Warrant Shares.
Upon each adjustment of the Exercise Price pursuant to Section
9.1 hereof, the number of Warrant Shares purchasable upon exercise of a Warrant
outstanding prior to the effectiveness of such adjustment shall be adjusted to
the number, calculated to the nearest one-hundredth of a share, obtained by (x)
multiplying the number of Warrant Shares purchasable immediately prior to such
adjustment upon the exercise of a Warrant by the Exercise Price in effect prior
to such adjustment and (y) dividing the product so obtained by the Exercise
Price in effect after such adjustment of the Exercise Price.
20
Additional Warrants
9.3 Organic Change.
(a) Company Survives. Upon the consummation of an Organic
Change (other than a transaction in which the Company is not the surviving
entity), lawful provision shall be made as part of the terms of such transaction
whereby the terms of the Warrant Certificates shall be modified, without payment
of any additional consideration therefor, so as to provide that upon exercise of
Warrants following the consummation of such Organic Change, the Warrantholder
shall have the right to purchase for the Exercise Price the kind and amount of
securities, cash and other property receivable upon such Organic Change by a
holder of the number of Warrant Shares into which such Warrants might have been
exercised immediately prior to such Organic Change. Lawful provision also shall
be made as part of the terms of the Organic Change so that all other terms of
the Warrant Certificates shall remain in full force and effect following such an
Organic Change. The provisions of this Section 9.3(a) shall similarly apply to
successive Organic Changes.
(b) Company Does Not Survive. The Company shall not enter into
an Organic Change that is a transaction in which the Company is not the
surviving entity unless lawful provision shall be made as part of the terms of
such transaction whereby the surviving entity shall issue new securities to each
Warrantholder, without payment of any additional consideration therefor, with
terms that provide that upon the exercise of the Warrants, the Warrantholder
shall have the right to purchase the kind and amount of securities, cash and
other property receivable upon such Organic Change by a holder of the number of
Warrant Shares into which such Warrants might have been exercised immediately
prior to such Organic Change.
9.4 Statement on Warrants. The form of Warrant Certificate need
not be changed because of any adjustment made pursuant to Section 8, Section 9.1
or Section 9.2 hereof, and Warrants issued after such adjustment may state the
same Exercise Price and the same number of Warrant Shares as are stated in this
Warrant Certificate.
Section 10. Fractional Interests.
The Company shall not be required to issue Fractional Warrant
Shares on the exercise of the Warrants evidenced by this Warrant Certificate. If
Fractional Warrant Shares totaling more than one Warrant Share in the aggregate
is presented for exercise at the same time by the Warrantholder, the number of
full Warrant Shares which shall be issuable upon exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares so purchasable
upon the exercise of the Warrants so presented. If any Fractional Warrant Share
would but for the provisions of
21
Additional Warrants
this Section 10 be issuable on the exercise of this Warrant (or specified
portions thereof), the Company shall pay an amount in cash equal to the fraction
of a Warrant Share represented by such Fractional Warrant Share multiplied by
the Market Price on the day of such exercise.
Section 11. No Rights as Shareholder.
Nothing in this Warrant Certificate shall be construed as
conferring upon the Warrantholder or its transferees any rights as a shareholder
of the Company, including the right to vote, receive dividends, consent or
receive notices as a shareholder with respect to any meeting of shareholders for
the election of directors of the Company or any other matter.
Section 12. Cooperation; Validity of Warrant.
The Company shall use its reasonable best efforts to obtain all
such authorizations, exemptions or consents from any Governmental Entity having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant. In addition, upon the request of Warrantholder,
the Company will at any time during the period this Warrant is outstanding
acknowledge in writing, in form satisfactory to Warrantholder, the continuing
validity of this Warrant and the obligations of the Company hereunder.
Section 13. Listing on Nasdaq or Securities Exchange.
The Company shall use its reasonable best efforts to list any
shares of Common Stock issuable upon exercise of the Warrants evidenced by this
Warrant Certificate on Nasdaq or on such other national securities exchange on
which shares of Common Stock are then listed. The Company will at its expense
cause all shares of Common Stock issued upon the exercise of the Warrants
evidenced by this Warrant Certificate to be listed at the time of such issuance
on Nasdaq and/or such other securities exchange shares of Common Stock are then
listed on and shall maintain such listing.
Section 14. Covenant Regarding Consent.
The Company hereby covenants to use its reasonable best efforts
upon the request of the Warrantholder to seek any waivers or consents, or to
take any other action required, to effectuate the exercise of this Warrant by
such Warrantholder.
22
Additional Warrants
Section 15. Limitation on Liability.
No provision hereof, in the absence of action by the
Warrantholder to receive shares of Common Stock, and no enumeration herein of
the rights or privileges of the Warrantholder, shall give rise to any liability
of the Warrantholder for any value subsequently assigned to the Common Stock or
as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
Section 16. Nonwaiver and Expenses.
No course of dealing or any delay or failure to exercise any
right hereunder on the part of the Warrantholder or the Company shall operate as
a waiver of such right or otherwise prejudice the Warrantholder's, or the
Company's, as the case may be, rights, powers or remedies.
Section 17. Amendment.
This Warrant and all other Warrants issued hereunder may be
modified or amended or the provisions hereof waived with the written consent of
the Company and holders of Warrants exercisable for in excess of 50% of the
aggregate number of shares of Common Stock then receivable upon exercise of all
Warrants whether or not then exercisable; provided that no such Warrant may be
modified or amended in a manner which is materially adverse to the Initial
Holder or any of its successors or assigns, so long as such Person holds any
Warrants or Warrant Shares, without the prior written consent of such Person.
Section 18. Successors.
All the covenants and provisions of this Warrant Certificate by
or for the benefit of the Company or the Warrantholder shall bind and inure to
the benefit of their respective successors and permitted assigns hereunder.
Section 19. Governing Law; Choice of Forum, Etc.
The validity, construction and performance of this Warrant
Certificate shall be governed by and interpreted in accordance with, the laws of
New York. The parties hereto agree that the appropriate forum for any disputes
arising out of this Warrant Certificate solely between or among any or all of
the Company, on the one hand, and the Initial Holder and/or any Person who has
become a Warrantholder, on the other, shall be any state or U.S. federal court
sitting within the County of New York, New York or County of Hennepin,
Minnesota, and the parties
23
Additional Warrants
hereto irrevocably consent to the jurisdiction of such courts, and agree to
comply with all requirements necessary to give such courts jurisdiction. The
parties hereto further agree that the parties will not bring suit with respect
to any disputes, except as expressly set forth below, arising out of this
Warrant Certificate for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, if to (i) the Company, at ValueVision International, Inc., 6740
Shady Oak Road, Eden Prairie, MN 55344-3433, Attention: General Counsel, Fax:
(612) 947-0188, or at such other address specified by the Company in writing to
the other parties, with a copy to Latham & Watkins, 633 West Fifth Street, Suite
4000, Los Angeles, CA 90071, Attention: Michael W. Sturrock, Fax: (213) 891-8763
and (ii) any Warrantholder, at the address of such Warrantholder specified in
the Warrant Register. The foregoing shall not limit the rights of any party
hereto to serve process in an other manner permitted by the law or to obtain
execution of judgment in any other jurisdiction. The parties further agree, to
the extent permitted by law, that final and unappealable judgment against any of
them in any action or proceeding contemplated above shall be conclusive and may
be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and the amount of indebtedness. The parties
agree to waive any and all rights that they may have to a jury trial with
respect to disputes arising out of this Agreement.
Section 20. Enforcement.
The parties agree that irreparable damage would occur in the
event that any of the provisions of this Warrant were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Warrant and to enforce specifically the
terms and provisions of this Warrant.
Section 21. Benefits of this Agreement.
Nothing in this Warrant Certificate shall be construed to give
to any Person other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant Certificate, and this
Warrant Certificate shall be for the sole and exclusive benefit of the Company
and the Warrantholder.
24
Additional Warrants
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first written above.
VALUEVISION INTERNATIONAL, INC.
By:
------------------------------
Name:
Title:
25
Additional Warrants
ELECTION TO EXERCISE
(To be executed upon exercise of Warrants)
To ValueVision International, Inc.:
The undersigned hereby irrevocably elects to exercise the right
represented by the within Warrant Certificate for, and to acquire thereunder,
_____ Warrant Shares, as provided for therein, and tenders herewith [payment of]
[pursuant to a recapitalization exchange, of securities with a value equal to]
the $________ Exercise Price in full in the form of [COMPLETE WHERE APPLICABLE]:
[ ] cash or a certified or official bank check in the amount of
$_______ ; and/or
[ ] exchange of _____ Warrants for ____ Warrant Shares (such
Warrant Shares have an aggregate value equal to the excess of
(x) the aggregate value of the ____ Warrant Shares to which the
Warrants hereby exercised relate (based on the determination of
the Market Price pursuant to the Warrant Certificate) over (y)
the aggregate Exercise Price of the ___ Warrants exercised
hereby);
For a total Exercise Price of $_________.
If the value of the shares of the Company securities exchanged herewith
exceeds the value of the Exercise Price applied to such delivery, then the
Company shall reissue certificates representing such securities in the amounts
necessary to preserve the value of such securities not applied to the exercise
of the Warrants pursuant to this Election to Exercise.
26
Please issue a certificate or certificates for such Warrant Shares in the name
of, and pay any cash for any Fractional Warrant Shares to (please print name,
address and social security or other identifying number)*:
Name:
----------------------------------------------------------------------
Address:
----------------------------------------------------------------------
----------------------------------------------------------------------
Soc. Sec. #:
------------------------------
AND, if such number of Warrant Shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be issued
in the name of the undersigned for the balance remaining of the Warrant Shares
purchasable thereunder rounded up to the next higher whole number of Warrant
Shares.
Signature:**
-----------------------------------
---------
* The Warrant Certificate contains restrictions on the sale and other
transfer of the Warrants evidenced by such Warrant Certificate.
** The above signature must correspond exactly with the name on the face
of this Warrant Certificate or with the name of the assignee appearing
in the assignment form below.
27
ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Name and Address of Assignee must be Printed or Typewritten)
Warrants to purchase ____ Warrant Shares of the Company, evidenced by the within
Warrant Certificate hereby irrevocably constituting and appointing
________________ Attorney to transfer said Warrants on the books of the Company,
with full power of substitution in the premises.
Dated: ,
------------- ----
---------------------------------------
Signature of Registered Holder*
---------------------------------------
Signature Guaranteed: Signature of Guarantor
*The above signature must correspond exactly with the name on the face of this
Warrant Certificate.
28
Additional Warrants
Annex A
[Attach Written Commitment]
29
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
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This ‘SC 13D’ Filing | | Date | | First | | Last | | | Other Filings |
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| | |
| | 8/31/99 | | 9 |
Filed on: | | 4/26/99 |
| | 4/14/99 | | 1 |
| | 3/8/99 | | 2 | | 5 | | | 8-K |
| List all Filings |
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