EXHIBIT 4.15
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WARRANT AGREEMENT
BY AND BETWEEN
NATIONAL MEDIA CORPORATION
AND
VALUEVISION INTERNATIONAL, INC.
DATED AS OF JANUARY 5, 1998
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TABLE OF CONTENTS
Page
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SECTION 1. Warrant Certificates........................................................................1
SECTION 2. Execution of Warrant Certificates...........................................................1
SECTION 3. Warrant Register............................................................................1
SECTION 4. Registration of Transfers and Exchanges.....................................................1
SECTION 5. Warrants; Exercise of Warrants..............................................................2
SECTION 6. Payment of Taxes............................................................................3
SECTION 7. Mutilated or Missing Warrant Certificates...................................................3
SECTION 8. Reservation of Warrant Shares; Rights.......................................................3
SECTION 9. Obtaining Stock Exchange Listings...........................................................4
SECTION 10. Adjustment of Exercise Price and Number of Warrant Shares Issuable..........................4
SECTION 11. Fractional Interests.......................................................................13
SECTION 12. Notices to Warrant holders.................................................................13
SECTION 13. Notices to Company and ValueVision.........................................................14
SECTION 14. Supplements and Amendments.................................................................15
SECTION 15. Successors.................................................................................15
SECTION 16. Governing Law..............................................................................15
SECTION 17. Benefits of This Agreement.................................................................15
SECTION 18. Counterparts...............................................................................15
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THIS WARRANT AGREEMENT (the "Agreement") is dated as of
January 5, 1998 and entered into by and between NATIONAL MEDIA CORPORATION, a
Delaware corporation (the "Company"), and ValueVision International, Inc., a
Minnesota corporation ("ValueVision").
WHEREAS, the Company proposes to issue to ValueVision, or
its designee, Common Stock Warrants, as hereinafter described (the "Warrants"),
to purchase up to an aggregate of 250,000 shares of Common Stock, $.01 par value
per share, of the Company (the "Common Stock") (the Common Stock issuable on
exercise of the Warrants being referred to herein as the "Warrant Shares").
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Warrant Certificates. The certificates
evidencing the Warrants (the "Warrant Certificates") to be delivered pursuant to
this Agreement shall be in registered form only and shall be substantially in
the form set forth in Exhibit A attached hereto.
SECTION 2. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its President or a Vice President and by its Secretary or an Assistant
Secretary under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be delivered or disposed of he shall
have ceased to hold such office. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed
any of the Warrant Certificates shall cease to be such officer before the
Warrant Certificates so signed shall have been disposed of by the Company, such
Warrant Certificates nevertheless may be delivered or disposed of as though such
person had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Warrant Agreement any such person was not such officer.
SECTION 3. Warrant Register. The Company shall number and
register the Warrant Certificates in a register as they are issued.
SECTION 4. Registration of Transfers and Exchanges. The
Company shall from time to time register the transfer of any outstanding Warrant
Certificates in a Warrant register to be maintained by the Company upon
surrender of such Warrant Certificates accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, duly executed by
the registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be cancelled and
disposed of by the Company.
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The Warrant holders agree that each certificate
representing Warrant Shares will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS."
Warrant Certificates may be exchanged at the option of the
holder(s) thereof, when surrendered to the Company at its office for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants (in denominations representing a
multiple of 25,000 shares). Warrant Certificates surrendered for exchange shall
be cancelled and disposed of by the Company.
If, at the time of the surrender of any of the Warrants in
connection with any exercise, transfer, or exchange of any of the Warrants, the
Company may require, as a condition of allowing such exercise, transfer or
exchange that the holder or transferee of the Warrants, as the case may be,
furnish to the Company a written opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such exercise, transfer, or exchange may be
made without registration under the Securities Act of 1933, as amended (the
"Securities Act").
SECTION 5. Warrants; Exercise of Warrants. (a) Subject to
the terms of this Agreement, at any time after August 15, 1998, each holder of
the Warrants shall have the right, which may be exercised commencing at the
opening of business on the foregoing date and until 5:00 p.m., New York City
time, on January 5, 2003 (the "Exercise Period"), to receive from the Company
the number of fully paid and nonassessable Warrant Shares which the holder may
at the time be entitled to receive on exercise of such Warrants and payment to
the Company of the Exercise Price (as defined below) then in effect for such
Warrant Shares. Each Warrant not exercised prior to 5:00 p.m., New York City
time, on January 5, 2003 shall become null and void and all rights thereunder
and all rights in respect thereof under this Agreement shall cease as of such
time.
(b) A Warrant may be exercised by surrender to the Company
at its office designated for such purpose (the address of which is set forth in
Section 13 hereof) of the certificate or certificates evidencing the Warrants to
be exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by a bank or trust
company having an office or correspondent in the United States or a broker or
dealer which is a member of a registered securities exchange or the National
Association of Securities Dealers, Inc., and upon payment to the Company of the
exercise price (the "Exercise Price") which is set forth in the form of Warrant
Certificate attached hereto as Exhibit A, subject to adjustment pursuant to
Section 10, for the number of Warrant Shares in respect of which such Warrants
are then exercised. Payment of the aggregate Exercise Price shall be made (i) in
cash or by certified or official bank check payable to the order of the Company
or (ii) in the manner provided in Section 5(a).
Subject to the provisions of Section 6 hereof, upon such
surrender of Warrants and payment of the Exercise Price, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the holder and in such name or names as the Warrant holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the
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exercise of such Warrants together with cash as provided in Section 11;
provided, however, that if any capital reorganization or reclassification of
capital stock or consolidation, merger or lease or sale of assets is proposed to
be effected by the Company as described in subsection (m) of Section 10 hereof,
or a tender offer or an exchange offer for shares of Common Stock of the Company
shall be made, upon such surrender of Warrants and payment of the Exercise Price
as aforesaid, the Company shall, as soon as possible, but in any event not later
than two business days thereafter, issue and cause to be delivered the full
number of Warrant Shares issuable upon the exercise of such Warrants in the
manner described in this sentence together with cash as provided in Section 11.
Such certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such Warrant Shares as of the date of the surrender of such
Warrants and payment of the Exercise Price.
The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part and, in the event
that a certificate evidencing Warrants is exercised in respect of fewer than all
of the Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new certificate evidencing the remaining Warrant
or Warrants will be issued and delivered pursuant to the provisions of this
Section and of Section 2 hereof.
All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled and disposed of by the Company. The Company shall
keep copies of this Agreement and any notices given or received hereunder
available for inspection by the Warrant holders during normal business hours at
its office.
SECTION 6. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involving the issue of any Warrant Certificates or any certificates for Warrant
Shares in a name other than that of the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company shall
not be required to issue or deliver such Warrant Certificates 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 7. Mutilated or Missing Warrant Certificates. In
case any of the Warrant Certificates shall be mutilated, lost, stolen or
destroyed, the Company may in its discretion issue, in exchange and substitution
for and upon cancellation of the mutilated Warrant Certificate, or in lieu of
and substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also reasonably satisfactory to it. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
SECTION 8. Reservation of Warrant Shares; Rights. The
Company will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Common Stock or its
authorized and issued Common Stock held in its treasury, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants.
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The Company shall issue, together with each Warrant Share
issued upon exercise of a Warrant, one Right (as defined in the Merger
Agreement) (or other securities in lieu thereof), and any rights issued to
holders of Common Stock in addition thereto or in replacement therefor, whether
or not such rights shall be exercisable at such time, but only if such rights
are issued and outstanding and held by other holders of Common Stock at such
time and have not expired.
The Company or, if appointed, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will furnish such Transfer Agent a copy
of all notices of adjustments and certificates related thereto, transmitted to
each holder pursuant to Section 12 hereof.
Before taking any action which would cause an adjustment
pursuant to Section 10 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take any corporate action
which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
SECTION 9. Obtaining Stock Exchange Listings. The Company
shall from time to time take all action which may be necessary so that the
Warrant Shares, immediately upon their issuance upon the exercise of Warrants,
will be listed on the principal securities exchanges and markets within the
United States of America, if any, on which other shares of Common Stock are then
listed.
SECTION 10. Adjustment of Exercise Price and Number of
Warrant Shares Issuable. The Exercise Price and the number of Warrant Shares
issuable upon the exercise of each Warrant are subject to adjustment from time
to time upon the occurrence of the events enumerated in this Section 10. For
purposes of this Section 10, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any other stock of
the Company, however designated, that has the right (subject to any prior rights
of any class or series of preferred stock) to participate in any distribution of
the assets or earnings of the Company without limit as to per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into
a greater number of shares; or
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(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
then the Exercise Price in effect immediately prior to such action shall be
proportionately adjusted in accordance with the formula:
O
E' = E x ---
A
Where:
E'= the adjusted Exercise Price
E = the current Exercise Price
O = the number of shares of Common Stock outstanding prior to
such action
A = the number of shares of Common Stock outstanding
immediately after such action
In the case of a dividend or distribution the adjustment
shall become effective immediately after the record date for determination of
holders of shares of Common Stock entitled to receive such dividend or
distribution, and in the case of a subdivision or combination, the adjustment
shall become effective immediately after the effective date of such corporate
action.
If after an adjustment a holder of a Warrant upon exercise
of it may receive shares of two or more classes of capital stock of the Company,
the Company shall determine the allocation of the adjusted Exercise Price
between the classes of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class of capital stock shall thereafter
be subject to adjustment on terms comparable to those applicable to Common Stock
in this Section 10.
Such adjustment shall be made successively whenever any
event listed above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants
to all holders of its Common Stock entitling them at any time after the record
date mentioned below to purchase shares of Common Stock at a price per share
less than the Current Market Price (as defined in Section 10(f)) per share on
that record date, the Exercise Price shall be adjusted in accordance with the
formula:
N x P
O + -----
M
E' = E x ------------
O + N
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where:
E'= the adjusted Exercise Price.
E= the current Exercise Price.
O= the number of shares of Common Stock outstanding on the record date.
N= the number of additional shares of Common Stock issuable upon exercise
of the rights, options or warrants offered.
P= the exercise price per share of the additional shares issuable upon
exercise of the rights, options or warrants.
M= the Current Market Price per share of Common Stock on the record date.
The adjustment shall be made successively whenever any
such rights, options or warrants are issued and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive the rights, options or warrants. If at the end of the period during
which such rights, options or warrants are exercisable, (i) not all rights,
options or warrants shall have been exercised, or (ii) the exercise price per
share for which shares of Common Stock are issuable pursuant to such rights,
options or warrants shall be increased or decreased solely by virtue of
provisions therein contained for an automatic increase or decrease in such
exercise price per share upon the occurrence of a specified date or event, then,
the Exercise Price shall be immediately readjusted to what it would have been
if, in the case of clause (i) above, "N" in the above formula had been the
number of shares actually issued or, in the case of clause (ii) above, "P" in
the above formula had been the exercise price per share, as so increased or
decreased, as the case may be.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common
Stock any of its assets (including but not limited to cash), debt securities,
preferred stock, or any rights or warrants to purchase debt securities,
preferred stock, assets or other securities of the Company, the Exercise Price
shall be adjusted in accordance with the formula:
M - F
E' = E x -----
M
where:
E'= the adjusted Exercise Price.
E= the current Exercise Price.
M= the Current Market Price per share of Common Stock on the record date
mentioned below.
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F= the Fair Market Value (as defined in Section 10(f)) on the record date
of the assets, securities, rights or warrants applicable to one share
of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 10 or distributions of business
units of the Company covered by subsection (n) of this Section 10.
(d) Adjustment for Below Market Issuances of Common Stock.
If the Company issues shares of Common Stock for a
consideration per share less than the Current Market Price per share on the date
the Company fixes the offering price of such additional shares, the Exercise
Price shall be adjusted in accordance with the formula:
P
O + ---
M
E' = E x -----------
A
where:
E'= the adjusted Exercise Price.
E= the then current Exercise Price.
O= the number of shares outstanding immediately prior to the issuance of
such additional shares.
P= the aggregate consideration received for the issuance of such
additional shares.
M= the Current Market Price per share on the date of issuance of such
additional shares.
A= the number of shares outstanding immediately after the issuance of
such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (b)
and (c) of this Section 10,
(2) the exercise of the Warrants, or
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(3) Common Stock issued upon the exercise of rights or
warrants issued to the holders of Common Stock for which rights or
warrants an adjustment has been made pursuant to Section 10(b) or
Section 10(e),
No duplicative adjustment shall be made in the event of a right,
warrant or convertible or exchangeable security requiring an adjustment
hereunder and the subsequent exercise or conversion of such right, warrant or
convertible or exercisable security.
(e) Adjustment for Below Market Issuances of Convertible or
Exchangeable Securities.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 10) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the Current Market Price per share on the date of issuance
of such convertible or exchangeable securities, the Exercise Price shall be
adjusted in accordance with this formula:
P
O + ---
M
E' = E x --------
O + D
where:
E'= the adjusted Exercise Price.
E= the then current Exercise Price.
O= the number of shares outstanding immediately prior to the issuance of
such convertible or exchangeable securities.
P= the aggregate consideration received for the issuance of such
convertible or exchangeable securities.
M= the Current Market Price per share on the date of issuance of such
convertible or exchangeable securities.
D= the maximum number of shares deliverable upon conversion or in
exchange for such convertible or exchangeable securities at the
initial conversion or exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If (i) all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, or (ii) the exercise price per share for which shares of
Common Stock are issuable pursuant to such securities shall be increased or
decreased solely by virtue of provisions therein contained for an automatic
increase or decrease in such exercise price per share upon the occurrence of a
specified date or event, then the Exercise Price shall promptly be readjusted in
accordance with the formula in this Section 10(e) to
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the Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of, in the case of clause (i)
above, the actual number of shares of Common Stock issued upon conversion or
exchange of such securities or, in the case of clause (ii) above, the exercise
price per share, as so increased or decreased, as the case may be.
(f) Certain Definitions.
(1) Current Market Price.
In subsections (b), (c), (d) and (e) of this Section 10, the
current market price per share of Common Stock on any date is:
(i) if the Common Stock is not registered under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), then the Fair Market Value of the Common Stock based
upon the Fair Market Value of 100% of Company if sold as a
going concern and without regard to any discount for the lack
of liquidity or on the basis that the relevant shares of the
Common Stock do not constitute a majority or controlling
interest in Company and assuming, if applicable, the exercise
or conversion of all in-the-money warrants, convertible
securities, options or other rights to subscribe for or
purchase any additional shares of capital stock of Company or
securities convertible or exchangeable into such capital
stock; or
(ii) if the Common Stock is registered under the
Exchange Act, the average of the Quoted Prices of the Common
Stock for 20 consecutive trading days immediately preceding
the date in question. The "Quoted Price" of the Common Stock
is the last reported sales price of the Common Stock on the
New York Stock Exchange ("NYSE"), or if the Common Stock is
reported by Nasdaq National Market System, as reported by
Nasdaq National Market System, or if the Common Stock is
listed on a national securities exchange other than the NYSE,
the last reported sales price of the Common Stock on such
exchange (which shall be for consolidated trading if
applicable to such exchange), or if neither so reported or
listed, the last reported bid price of the Common Stock.
(2) Fair Market Value. Fair Market Value means the value
obtainable upon a sale in an arm's length transaction to a
third party under usual and normal circumstances, with neither
the buyer nor the seller under any compulsion to act, with
equity to both, as determined by the Board of Directors of the
Company (the "Board") in good faith; provided, however, that
if ValueVision shall dispute the Fair Market Value as
determined by the Board, ValueVision may undertake to have it
and the Company retain an Independent Expert. The
determination of Fair Market Value by the Independent Expert
shall be final, binding and conclusive on the Company and
ValueVision. All costs and expenses of the Independent Expert
shall be borne by ValueVision unless the determination of Fair
Market Value by the Independent Expert is more than 5% more
favorable to Company than the Fair Market Value determined by
the Board, in which event the cost of the Independent Expert
shall be shared equally by ValueVision and Company, or more
than 10% more favorable to Company than the Fair Market Value
determined by the Board, in which event the cost of the
Independent Expert shall be borne solely by Company.
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(3) Independent Expert. Independent Expert means an investment
banking firm reasonably agreeable to Company and ValueVision
who does not (and whose Affiliates do not) have a financial
interest in Company or any of its Affiliates.
(g) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d) and (e) of this Section 10, the following
shall apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that
in no case shall any deduction be made for any commissions, discounts
or other expenses incurred by the Company for any underwriting of the
issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for
a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the Fair Market Value thereof;
(3) in the case of the issuance of securities convertible into
or exchangeable for shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities at the date of such
issuance plus the additional consideration as of the date of such
issuance, if any, to be received by the Company upon the conversion or
exchange thereof (the consideration in each case to be determined in
the same manner as provided in clauses (1) and (2) of this subsection).
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment.
All calculations under this Section shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.
(i) When No Adjustment Required.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
No adjustment will be made for shares issued upon the exercise
of the Warrants, upon the conversion of the Demand Note, upon conversion of the
Series C Convertible Preferred Stock outstanding on the date hereof (or the
Series D Convertible Preferred Stock issuable in exchange therefore) or upon the
exercise of the 750,000 options owned by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as of the date hereof.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
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(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 12 hereof.
(k) Voluntary Reduction.
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 and if the
reduction is irrevocable during the period; provided, however, that in no event
may the Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail
to Warrant holders a notice of the reduction. The Company shall mail the notice
at least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period it will be in
effect.
A reduction of the Exercise Price does not change or adjust
the Exercise Price otherwise in effect for purposes of subsections (a), (b),
(c), (d) and (e) of this Section 10.
(l) Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to subsections (a), (b), (c),
(d) or (e) of this Section 10 and if the Company does not arrange for
Warrant holders to participate pursuant to subsection (i) of this
Section 10;
(2) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to subsection (m) of this
Section 10; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Warrant holders a notice stating the proposed record
date for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. The Company shall mail the notice at least 15
days before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
(m) Reorganization of Company.
If the Company effects a capital reorganization or
recapitalization of its capital stock or consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any person, then, as
a condition precedent to the consummation of such transaction, lawful and
adequate provisions shall be made whereby the Warrant holder shall thereafter
have the right to purchase and receive upon the basis and the terms and
conditions specified in this Agreement and in lieu of the shares of Common Stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, securities, cash or other
assets which the holder of a Warrant would have received immediately after the
reorganization, recapitalization, consolidation, merger, transfer or lease if
the holder had exercised such Warrant immediately before
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the effective date of the transaction, and in any case appropriate provision
shall be made with respect to the rights and interests of the holders thereof to
the end that the provisions hereof (including without limitation provisions for
adjustments of the number of shares of Common Stock purchasable and receivable
upon the exercise of the Warrants) shall thereafter be applicable, as nearly as
may be, in relation to any shares of stock, securities, cash or assets
thereafter deliverable upon the exercise thereof. The Company shall not effect
any such consolidation, merger, transfer or lease, unless, prior to the
consummation thereof, the corporation formed by or surviving any such
consolidation or merger if other than the Company, or the person to which such
sale or conveyance shall have been made, shall enter into and deliver to the
holders of Warrants at the last address thereof appearing on the books of the
Company, a supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section.
If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (m) applies, subsections (a), (b), (c), (d)
and (e) of this Section 10 do not apply.
(n) [Intentionally Omitted]
(o) When Issuance or Payment May Be Deferred.
In any case in which this Section 10 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 11; provided, however, that the Company shall deliver to
such holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's
right to receive such additional Warrant Shares, other capital stock and cash
upon the occurrence of the event requiring such adjustment.
(p) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 10, each Warrant outstanding prior to the making of the adjustment in
the Exercise Price shall thereafter evidence the right to receive upon payment
of the adjusted Exercise Price that number of shares of Common Stock (calculated
to the nearest hundredth) obtained from the following formula:
E
N' = N x ---
E'
where:
12
N'= the adjusted number of Warrant Shares issuable upon exercise of a
Warrant by payment of the adjusted Exercise Price.
N= the number or Warrant Shares previously issuable upon exercise of a
Warrant by payment of the Exercise Price immediately prior to
adjustment.
E'= the adjusted Exercise Price.
E= the Exercise Price immediately prior to adjustment.
(q) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 11. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 11,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Current Market Price (as
defined in Section 10(f)) on the day immediately preceding the date the Warrant
is presented for exercise, multiplied by such fraction.
SECTION 12. Notices to Warrant holders. Upon any adjustment of
the Exercise Price pursuant to Section 10, the Company shall promptly thereafter
(i) cause to be filed with the Secretary of the Company a certificate of the
Chief Operating Officer and Chief Financial Officer of the Company setting forth
the Exercise Price after such adjustment and setting forth in reasonable detail
the method of calculation and the facts upon which such calculations are based
and setting forth the number of Warrant Shares (or portion thereof) issuable
after such adjustment in the Exercise Price, upon exercise of a Warrant and
payment of the adjusted Exercise Price, which certificate shall, absent manifest
error, be conclusive evidence of the correctness of the matters set forth
therein, and (ii) cause to be given to each of the registered holders of the
Warrant Certificates at his address appearing on the Warrant register written
notice of such adjustments and a copy of such certificate by first-class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 12.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in
13
shares of Common Stock or distributions referred to in subsection (a)
of Section 10 hereof); or
(c) 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 conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
(e) the Company proposes to take any action (other than
actions of the character described in Section 10(a)) which would
require an adjustment of the Exercise Price pursuant to Section 10; or
(f) the Company proposes to participate in any transaction
described in either Section 10(m) or Section 10(n);
then the Company shall cause to be given to each of the registered holders of
the Warrant Certificates at his address appearing on the Warrant register, at
least 10 business days prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
by first-class mail, postage prepaid, a written notice stating (i) the date as
of which the holders of record of shares of Common Stock to be entitled to
receive any such rights, options, warrants or distribution are to be determined,
or (ii) the initial expiration date set forth in any tender offer or exchange
offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 12 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 13. Notices to Company and ValueVision. Any notice or
demand authorized by this Agreement to be given or made by the registered holder
of any Warrant Certificate to or on the Company shall be sufficiently given or
made when and if deposited in the mail, first class or registered, postage
prepaid, addressed to the office of the Company expressly designated by the
Company at its office for purposes of this Agreement (until the Warrant holders
are otherwise notified in accordance with this Section by the Company), as
follows:
14
if to the Company, initially at Eleven Penn Center, Suite
1100, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel and thereafter at such other address, notice of which
is given in accordance with the provisions of this Section 13, with a
copy to Klehr, Harrison, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq.
Any notice pursuant to this Agreement to be given by the
Company to the registered holder(s) of any Warrant Certificate shall be
sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until the Company is otherwise
notified in accordance with this Section by such holder) to such holder
at the following address:
if to a registered holder of any Warrant Certificate, at the
most current address given by such holder to the Company in accordance
with the provisions of this Section 13, which address initially is,
with respect to ValueVision, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General Counsel, with a copy to ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
SECTION 14. Supplements and Amendments. This Agreement
may be supplemented or amended from time to time subject to approval by the
parties hereto.
SECTION 15. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company shall bind and
inure to the benefit of its respective successors and assigns hereunder.
SECTION 16. Governing Law. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be construed in
accordance with the internal laws of said State.
SECTION 17. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Company and the registered holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company and the registered holders
of the Warrant Certificates.
SECTION 18. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
[Signature Page Follows]
15
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
NATIONAL MEDIA CORPORATION
By:
---------------------------------
Title:
VALUEVISION INTERNATIONAL, INC.
(OR ITS DESIGNEE)
By:
--------------------------------
Title:
S-1