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 4
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
THE DATE HEREOF (THE "SHAREHOLDER AGREEMENT"), 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
Warrant
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.
No. W-1 Warrant
COMMON STOCK PURCHASE WARRANT
Exercisable commencing April 15, 1999
Void after Expiration Time (as defined herein)
ValueVision International, Inc., a Minnesota corporation (the
"Company"), hereby certifies that, for value received, GE Capital Equity
Investments, Inc., a Delaware corporation (the "Initial Holder"), or registered
assigns (in either case, the "Warrantholder"), is the owner of a Warrant (as
defined below), which entitles the Warrantholder to purchase from time to time
from the Company a number of fully paid, duly authorized and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock") up to (i) that number of shares that result in the Restricted Parties
(as defined below), at each time this Warrant is exercised, Beneficially Owning
(as defined below) 39.9% of the then Adjusted Outstanding Common Stock (as
defined below) minus (ii) the aggregate number of shares of Common Stock
directly or indirectly sold, transferred or otherwise disposed of by all
Restricted Parties (excluding any such sale, transfer or other disposition to
any other Restricted Party) prior to and including the date of exercise (making
equitable adjustments for any conversions, reclassifications, reorganizations,
stock dividends, stock splits, reverse splits and similar events which occur
with respect to the Common Stock). This Warrant may be exercised at any time
and from time to time from and after April 15, 1999 (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 Warrant
evidenced by this Warrant Certificate (the "Warrant") is being issued pursuant
to an Investment Agreement, dated as of March 8, 1999 (as it may be amended,
supplemented or otherwise modified
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Warrant
from time to time, the "Investment 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:
"Adjusted Outstanding Common Stock" shall mean, at any time
this Warrant is exercised for the purchase of shares of Common Stock,
the total number of shares of outstanding Common Stock at such time;
provided that for purposes of such calculation (a) all shares of
Common Stock issuable upon conversion of the then outstanding
Preferred Stock shall be considered outstanding, (b) all shares of
Common Stock issuable upon exercise of the outstanding Initial
Distributor Warrants (whether such Initial Distributor Warrants are
vested or unvested) shall be considered outstanding, (c) to the extent
that Bonus Distributor Warrants have been issued and are outstanding
(and only to such extent), all shares of Common Stock issuable upon
the exercise of such issued and outstanding Bonus Distributor Warrants
(whether such Bonus Distributor Warrants are vested or unvested) shall
be considered outstanding and (d) all shares of Common Stock purchased
pursuant to such exercise of this Warrant (but not any shares of
Common Stock which may be purchased upon subsequent exercises of this
Warrant) shall be considered outstanding.
"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 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 conditions); provided,
however, that a Person shall not be deemed to "Beneficially Own" any
shares of Common Stock which are issuable (but have not yet
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Warrant
been issued) upon exercise of this Warrant or which are issuable upon
exercise of any Bonus Distributor Warrants unless and until such Bonus
Distributor 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 Bonus
Distributor Warrants, whether or not they are vested or unvested.
"Board of Directors" shall mean the board of directors of the
Company.
"Bonus Distributor Warrants" shall mean certain warrants
issued by the Company to NBC or its designee at agreed upon times,
subject to the satisfaction of certain conditions contained therein
and in the Distribution Agreement, which warrants may be exercised by
the holder thereof to purchase Common Stock in accordance with the
terms therein.
"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.
"Certificate of Designation" shall mean the Certificate of
Designation of the Preferred Stock, dated as of April 15, 1999,
executed and filed with the Secretary of State of the State of
Minnesota.
"Common Stock" shall have the meaning set forth in the
preamble hereto.
"Company" shall have the meaning set forth in the preamble
hereto.
"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.
"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
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Warrant
interests of any Person that is not a corporation, partnership or
limited liability company.
"Exercise Price" shall have the meaning set forth in Section
8 hereof.
"Expiration Date" shall mean the fifth anniversary of the
Issue Date.
"Expiration Time" shall mean 5:00 P.M., New York City time,
on the Expiration Date.
"Fractional Warrant Share" shall mean any fraction of a whole
share of Common Stock issued, or issuable upon, exercise of the
Warrant.
"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 Distributor Warrants" shall mean certain warrants to
purchase 1,450,000 shares of Common Stock issued immediately by the
Company to NBC or its designee pursuant to the Distribution Agreement,
which warrants may be exercised by the holder thereof in accordance
with the terms therein.
"Initial Holder" shall have the meaning set forth in the
preamble hereto.
"Investment Agreement" shall have the meaning set forth in
the preamble hereto.
"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
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Warrant
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 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 mean National Broadcasting Company, Inc., a
Delaware corporation and Affiliate of the Initial Holder.
"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,
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Warrant
combination or subdivision) 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.
"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
issued pursuant to the Certificate of Designation.
"Regular Dividends" shall mean regular quarterly dividends
not in excess of 1% of the aggregate Market Price for the shares of
capital stock receiving such dividends as of the Business Day prior to
the declaration of such dividends.
"Restricted Party" shall have the meaning set forth in the
Shareholder Agreement.
"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 April 15, 1999 between the Company and the Initial
Purchaser, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
"Stated Value" shall mean the stated liquidation value of the
Preferred Stock as set forth in the Certificate of Designation.
"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.
"Warrant" shall have the meaning set forth in the preamble
hereto.
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Warrant
"Warrant Certificate" shall have the meaning set forth in the
preamble hereto.
"Warrant Market Price" shall mean (a) in the case of Section
8(a) hereof, the greater of (i) the average of the closing prices of a
share of Common Stock for the 45 consecutive Trading Days ending on
the Trading Day immediately prior to the day on which the Election to
Exercise is delivered and (ii) the average of the closing prices of a
share of Common Stock for the 150 consecutive Trading Days ending on
the Trading Day immediately prior to the day on which the Election to
Exercise is delivered or (b) in the case of Section 8(b) hereof, the
average of the closing prices of a share of Common Stock for the 45
consecutive Trading Days ending on the Trading Day immediately prior
to the day on which the Election to Exercise is delivered; provided
that if during such 45 or 150 consecutive Trading Day period (the
"valuation period"), as applicable, there shall occur a record date
for determining holders of Common Stock entitled to receive a dividend
or distribution on the Common Stock, the amounts determined pursuant
to clauses (a)(i), (a)(ii) and/or (a)(iii) above, as applicable, shall
be reduced by subtracting the amount obtained by multiplying (a) the
value of such dividend or distribution per share of Common Stock by
(b) a fraction (i) the numerator of which shall be the number of
Trading Days from the beginning of such valuation period to and
including the record date for such dividend or distribution (but in no
event more than 30 days) and (ii) the denominator of which shall be
the number of Trading Days in such valuation period. For purposes of
the definition of Warrant Market Price, the "closing price" of a share
of Common Stock shall refer to the closing price quoted on Nasdaq or,
if shares of Common Stock are not quoted on Nasdaq, the closing price
shall be computed in accordance with the procedure set forth for such
contingency in the definition of "Market Price."
"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 this Warrant.
"Warrantholder" shall have the meaning set forth in the
preamble hereto.
Section 2. Transferability.
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Warrant
2.1 Registration. This Warrant 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 Warrant.
2.2 Transfer. This Warrant may not be directly or indirectly sold,
transferred or otherwise disposed of at any time except to one or more
Restricted Parties. Any such permitted 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 to the Person
entitled thereto.
Section 3. Exchange of Warrant Certificate.
This Warrant Certificate may be exchanged for another certificate of
like tenor entitling the Warrantholder to purchase a like aggregate number of
Warrant Shares as the certificate 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 as so requested.
Section 4. Term of Warrant; Exercise of Warrant.
4.1 Duration of Warrant. On the terms and subject to the conditions
set forth in this Warrant Certificate, the Warrantholder or any Affiliate
thereof may exercise this Warrant, in whole or in part, at any time and from
time to time after the Issue Date and before the Expiration Time. At the
Expiration Time, this Warrant shall become void, and all rights hereunder 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 or any Affiliate thereof may exercise
this Warrant, in whole or in part, by presentation to the Company of the
attached Election to Exercise (the "Election to Exercise") duly filled in and
signed,
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Warrant
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 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.
(b) On the terms and subject to the conditions set forth in
this Warrant Certificate, upon such presentation of an Election to Exercise 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
and/or an Affiliate thereof, as applicable, a certificate or certificates (in
such name or names of the Warrantholder and/or the Affiliate(s) thereof, as
specified in the Election to Exercise) 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. Upon each exercise of this Warrant, the Company shall
record in its books the number of shares of Common Stock purchased by the
Warrantholder and/or such Affiliate(s).
(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 an
Election to Exercise was presented 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 this Warrant
shall be subject to the following conditions:
(a) The shareholders of the Company shall have approved this
Warrant as provided for in the Investment Agreement; and
(b) After taking into account the number of Warrant Shares
issuable upon such exercise, the Restricted Parties in the aggregate
shall Beneficially Own no more than (i) 39.9% of the then Adjusted
Outstanding Common Stock minus (ii) the aggregate number of shares of
Common Stock directly or indirectly sold, transferred or otherwise
disposed of by all Restricted Parties (excluding any such sale,
transfer or other disposition to any other Restricted Party) prior to
and including the date of exercise (making equitable adjustments for
any conversions, reclassifications,
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Warrant
reorganizations, stock dividends, stock splits, reverse splits and
similar events which occur with respect to the Common Stock).
(c) The purchase of the Warrant Shares issuable upon such
exercise shall not be prohibited under applicable law.
4.4 Termination of Warrant. This Warrant shall automatically
terminate if:
(a) At the Shareholders Meeting (as defined in the
Shareholder Agreement), the shareholders of the Company shall fail to
approve this Warrant as provided in Section 4.3(a); or
(b) A Replacement Warrant (as defined in the Investment
Agreement) is issued pursuant to Section 2.4 of the Investment
Agreement.
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
this Warrant 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 holder 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 this Warrant Certificate is lost, stolen, mutilated or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant
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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 Warrant 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. The Warrant Certificate 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 Certificate, 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 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 shall be required for issuance or delivery upon full exercise of this
Warrant. 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.
Section 8. Exercise Price.
The price per share (the "Exercise Price") at which Warrant
Shares shall be purchasable upon the exercise of this Warrant shall be
calculated as follows:
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Warrant
(a) Exercise Prior to Second Anniversary. If the
Warrantholder elects to purchase Warrant Shares prior to the second
anniversary of the Issue Date, the Exercise Price shall be equal to
the greater of (i) the Warrant Market Price and (ii) $12.00 (as
reduced by the excess of the fair market value of the aggregate amount
of dividends and other distributions declared per share of Common
Stock over the aggregate Regular Dividends declared per share of
Common Stock after the date hereof and having a record date prior to
the date of exercise), in each case making equitable adjustments for
any conversions, reclassifications, reorganizations, stock dividends,
stock splits, reverse splits and similar events which occur with
respect to the Common Stock.
(b) Exercise on or after Second Anniversary. If the
Warrantholder elects to purchase Warrant Shares on or after the second
anniversary of the Issue Date, the Exercise Price shall be equal to
the greater of (i) the Warrant Market Price and (ii) $15.00 (as
reduced by the excess of the fair market value of the aggregate amount
of dividends and other distributions declared per share of Common
Stock over the aggregate Regular Dividends declared per share of
Common Stock after the date hereof and having a record date prior to
the date of exercise), in each case making equitable adjustments for
any conversions, reclassifications, reorganizations, stock dividends,
stock splits, reverse splits and similar events which occur with
respect to the Common Stock.
Section 9. Certain Events.
9.1 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 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
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Warrant
(iii) of any reclassification of shares of Common
Stock (other than a subdivision or combination of outstanding shares
of Common Stock), 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;
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.
9.2 Section 305.
The Company shall be entitled, but not required, to make such
reductions in the Exercise Price 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.
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Warrant
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 Certificate shall be modified,
without payment of any additional consideration therefor, so as to provide that
upon exercise of this Warrant 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
this Warrant 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 Certificate 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 this Warrant, 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 this Warrant might have been
exercised immediately prior to such Organic Change.
Section 10. Fractional Interests.
The Company shall not be required to issue Fractional Warrant
Shares on the exercise of this Warrant. 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 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.
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Warrant
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 this Warrant 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 this Warrant 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 any Warrantholder.
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Warrant
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 any other Warrant issued hereunder may be
modified or amended or the provisions hereof waived with the written consent of
the Company and Warrantholder's possessing in excess of 50% of the aggregate
number of shares of Common Stock then receivable upon full exercise of this
Warrant 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 is a
Warrantholder, 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
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Warrant
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 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.
- 18 -
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.
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Warrant
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first written above.
VALUEVISION INTERNATIONAL, INC.
By: /s/ Gene McCaffery
-------------------------------------
Name: Gene McCaffery
Title: Chief Executive Officer
Warrant
ELECTION TO EXERCISE
(To be executed upon exercise of Warrant)
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 the aggregate $________ Exercise Price in full.
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 of Warrantholder (or Affiliate):
-------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
Soc. Sec. #:
---------------------------
Signature:**
-----------------------------
---------
* The Warrant Certificate contains restrictions on the sale and other
transfer of the Warrant evidenced by such Warrant Certificate.
** The above signature should 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.
Warrant
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)
A Warrant to purchase Warrant Shares of the Company pursuant to the terms and
conditions therein, evidenced by the within Warrant Certificate hereby
irrevocably constituting and appointing ________________ Attorney to transfer
said Warrant 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.
Dates Referenced Herein and Documents Incorporated by Reference
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