EXHIBIT 4.8
EQUITY WARRANT AGREEMENT
dated as of February 4, 2002
for
WARRANTS TO PURCHASE
UP TO 16,985,000 SHARES OF COMMON STOCK
EXPIRING FEBRUARY 4, 2009
between
USA NETWORKS, INC.
and
THE BANK OF NEW YORK, as
Equity Warrant Agent
TABLE OF CONTENTS
PAGE
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ARTICLE 1. Definitions............................................................................. 1
ARTICLE 2. Issuance of Equity Warrants and Execution and Delivery of Equity Warrant Certificates... 2
2.1. Issuance of Equity Warrants............................................................. 2
2.2. Form and Execution of Equity Warrant Certificates....................................... 2
2.3. Issuance and Delivery of Equity Warrant Certificates.................................... 3
2.4. Temporary Equity Warrant Certificates................................................... 4
2.5. Payment of Taxes........................................................................ 4
ARTICLE 3. Duration and Exercise of Equity Warrants................................................ 4
3.1. Exercise Price.......................................................................... 4
3.2. Duration of Equity Warrants............................................................. 4
3.3. Exercise of Equity Warrants............................................................. 5
ARTICLE 4. Adjustments of Number of Shares......................................................... 5
4.1. Adjustments............................................................................. 5
4.2. Statement on Warrants................................................................... 8
4.3. Cash Payments in Lieu of Fractional Shares.............................................. 8
4.4. Notices to Warrantholders............................................................... 8
ARTICLE 5. Other Provisions Relating to Rights of Holders of Equity Warrants....................... 9
5.1. No Rights as Holder of Common Stock Conferred by Equity Warrants or Equity Warrant
Certificates............................................................................ 9
5.2. Lost, Stolen, Destroyed or Mutilated Equity Warrant Certificates........................ 9
5.3. Holders of Equity Warrants May Enforce Rights........................................... 9
5.4. Consolidation or Merger or Sale of Assets............................................... 9
ARTICLE 6. Exchange and Transfer of Equity Warrants................................................ 10
6.1. Equity Warrant Register; Exchange and Transfer of Equity Warrants....................... 10
6.2. Treatment of Holders of Equity Warrants................................................. 11
6.3. Cancellation of Equity Warrant Certificates............................................. 11
ARTICLE 7. Concerning the Equity Warrant Agent..................................................... 11
7.1. Equity Warrant Agent.................................................................... 11
7.2. Conditions of Equity Warrant Agent's Obligations........................................ 12
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7.3. Compliance with Applicable Laws......................................................... 14
7.4. Resignation and Appointment of Successor................................................ 14
ARTICLE 8. Miscellaneous........................................................................... 15
8.1. Amendment............................................................................... 15
8.2. Notices and Demands to the Company and Equity Warrant Agent............................. 15
8.3. Addresses for Notices................................................................... 15
8.4. Governing Law........................................................................... 16
8.5. Governmental Approvals.................................................................. 16
8.6. Reservation of Shares of Common Stock................................................... 16
8.7. Covenant Regarding Shares of Common Stock............................................... 16
8.8. Persons Having Rights Under Agreement................................................... 16
8.9. Delivery of Prospectus.................................................................. 17
8.10. Headings................................................................................ 17
8.11. Counterparts............................................................................ 17
8.12. Inspection of Agreement................................................................. 17
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THIS
EQUITY WARRANT AGREEMENT (the "AGREEMENT"), dated as of
February 4, 2002, between USA Networks, Inc., a Delaware corporation (the
"COMPANY"), and Bank of
New York, a
New York corporation, as warrant agent (the
"EQUITY WARRANT AGENT").
WHEREAS, pursuant to the Amended and Restated Agreement and Plan
of Recapitalization and Merger, by and among the Company, Expedia, Inc.
("EXPEDIA"), Taipei, Inc. ("TAIPEI"), Microsoft Corporation, and Microsoft
E-Holdings, Inc., dated as of July 15, 2001, the Class B Common Stock of
Expedia, if issued, will be converted into the right to receive certain of the
Company's equity securities (the "USA EQUITY SECURITIES") in the merger of
Taipei with and into Expedia;
WHEREAS, the USA Equity Securities include warrants (the "EQUITY
WARRANTS" or, individually, an "EQUITY WARRANT") representing the right to
purchase shares of the common stock, par value $.01 per share, of the Company
(the "COMMON STOCK"), such Equity Warrants to be evidenced by certificates
herein called the "EQUITY WARRANT CERTIFICATES";
WHEREAS, the Company desires the Equity Warrant Agent to assist
the Company in connection with the issuance, exchange, cancellation, replacement
and exercise of the Equity Warrants, and in this Agreement wishes to set forth,
among other things, the terms and conditions on which the Equity Warrants may be
issued, exchanged, cancelled, replaced and exercised; and
WHEREAS, the Company has duly authorized the execution and
delivery of this Agreement to provide for the issuance of Equity Warrants to be
exercisable at such times and for such prices, and to have such other
provisions, as shall be fixed as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
"CLOSING PRICE" for each Trading Day shall be the last reported
sales price regular way, during regular trading hours, or, in case no such
reported sales takes place on such day, the average of the closing bid and asked
prices regular way, during regular trading hours, for such day, in each case on
The Nasdaq Stock Market or, if not listed or quoted on such market, on the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if not listed or admitted to trading on a
national securities exchange, the last sale price regular way for the Common
Stock as published by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or if such last sale price is not so published by
NASDAQ or if no such sale takes place on such day, the mean between the closing
bid and asked prices for the Common Stock as published by NASDAQ. If the Common
Stock is not publicly held or so listed or publicly traded, "Closing Price"
shall mean the Fair Market Value per share as determined in good faith by the
Board of Directors of the Company or, if such determination cannot be made, by a
nationally recognized independent investment banking firm selected in good faith
by the Board of Directors of the Company.
"COMMON STOCK" shall have the meaning set forth in the recitals
hereto.
"CURRENT MARKET PRICE" shall have the meaning set forth in
Section 4.1(d).
"EQUITY WARRANT REGISTER" shall have the meaning set forth in
Section 6.1.
"EXERCISE DATE" shall have the meaning set forth in 3.3(a).
"EXERCISE PRICE" shall have the meaning set forth in Section 3.1.
"EXPIRATION DATE" means 5:00 p.m.
New York City time on February
4, 2009.
"FAIR MARKET VALUE" means the amount that a willing buyer would
pay a willing seller in an arm's length transaction.
"FORMED, SURVIVING OR ACQUIRING CORPORATION" shall have the
meaning set forth in Section 5.4.
"HOLDER" means the person or persons in whose name such Equity
Warrant Certificate shall then be registered as set forth in the Equity Warrant
Register to be maintained by the Equity Warrant Agent pursuant to Section 6.1
for that purpose.
"NON-ELECTING SHARE" shall have the meaning set forth in
Section 5.4.
"OFFICER'S CERTIFICATE" shall have the meaning set forth in
Section 7.2(e).
"PROSPECTUS" shall have the meaning set forth in Section 8.9.
"SALE TRANSACTION" shall have the meaning set forth in
Section 5.4.
"TIME OF DETERMINATION" shall have the meaning set forth in
Section 4.1(d).
"TRADING DAY" shall mean a day on which the securities exchange
utilized for the purpose of calculating the Closing Price shall be open for
business or, if the shares of Common Stock shall not be listed on such exchange
for such period, a day on which The Nasdaq Stock Market is open for business.
ARTICLE 2.
ISSUANCE OF EQUITY WARRANTS AND EXECUTION AND
DELIVERY OF EQUITY WARRANT CERTIFICATES
2.1. ISSUANCE OF EQUITY WARRANTS. Equity Warrants may be issued by the
Company from time to time, together with or separately from the other USA Equity
Securities.
2.2. FORM AND EXECUTION OF EQUITY WARRANT CERTIFICATES.
(a) The Equity Warrants shall be evidenced by the Equity Warrant
Certificates, which shall be in registered form and substantially in the form
set forth as Exhibit A
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attached hereto. Each Equity Warrant Certificate shall be dated the date it is
countersigned by the Equity Warrant Agent and may have such letters, numbers or
other marks of identification and such legends or endorsements printed,
lithographed or engraved thereon as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which the Equity Warrants may be listed, or to conform to
usage, as the officer of the Company executing the same may approve (his
execution thereof to be conclusive evidence of such approval). Each Equity
Warrant Certificate shall evidence one or more Equity Warrants.
(b) The Equity Warrant Certificates shall be signed in the name
and on behalf of the Company by its Chairman, its Vice Chairman, its Chief
Executive Officer, President or a Vice President (any reference to a Vice
President of the Company herein shall be deemed to include any Vice President of
the Company whether or not designated by a number or a word or words added
before or after the title "Vice President") under its corporate seal, and
attested by its Secretary or an Assistant Secretary. Such signatures may be
manual or facsimile signatures of the present or any future holder of any such
office and may be imprinted or otherwise reproduced on the Equity Warrant
Certificates. 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 Equity
Warrant Certificates.
(c) No Equity Warrant Certificate shall be valid for any
purpose, and no Equity Warrant evidenced thereby shall be deemed issued or
exercisable, until such Equity Warrant Certificate has been countersigned by the
manual or facsimile signature of the Equity Warrant Agent. Such signature by the
Equity Warrant Agent upon any Equity Warrant Certificate executed by the Company
shall be conclusive evidence that the Equity Warrant Certificate so
countersigned has been duly issued hereunder.
(d) In case any officer of the Company who shall have signed any
Equity Warrant Certificate either manually or by facsimile signature shall cease
to be such officer before the Equity Warrant Certificate so signed shall have
been countersigned and delivered by the Equity Warrant Agent, such Equity
Warrant Certificate nevertheless may be countersigned and delivered as though
the person who signed such Equity Warrant Certificate had not ceased to be such
officer of the Company; and any Equity Warrant Certificate may be signed on
behalf of the Company by such person as, at the actual date of the execution of
such Equity Warrant Certificate, shall be the proper officer of the Company,
although at the date of the execution of this Agreement such person was not such
an officer.
2.3. ISSUANCE AND DELIVERY OF EQUITY WARRANT CERTIFICATES. At any time
and from time to time after the execution and delivery of this Agreement, the
Company may deliver Equity Warrant Certificates executed by the Company to the
Equity Warrant Agent for countersignature. Except as provided in the following
sentence, the Equity Warrant Agent shall thereupon countersign and deliver such
Equity Warrant Certificates to or upon the written request of the Company.
Subsequent to the original issuance of an Equity Warrant Certificate evidencing
Equity Warrants, the Equity Warrant Agent shall countersign a new Equity Warrant
Certificate evidencing such Equity Warrants only if such Equity Warrant
Certificate is issued in
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exchange or substitution for one or more previously countersigned Equity Warrant
Certificates evidencing such Equity Warrants or in connection with their
transfer, as hereinafter provided.
2.4. TEMPORARY EQUITY WARRANT CERTIFICATES. Pending the preparation of
a definitive Equity Warrant Certificate, the Company may execute, and upon the
order of the Company the Equity Warrant Agent shall countersign and deliver,
temporary Equity Warrant Certificates that are printed, lithographed,
typewritten, mimeographed or otherwise produced, substantially of the tenor of
the definitive Equity Warrant Certificates in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officer executing such Equity Warrant Certificates may determine, as
evidenced by his execution of such Equity Warrant Certificates.
If temporary Equity Warrant Certificates are issued, the Company
will cause definitive Equity Warrant Certificates to be prepared without
unreasonable delay. After the preparation of definitive Equity Warrant
Certificates, the temporary Equity Warrant Certificates shall be exchangeable
for definitive Equity Warrant Certificates upon surrender of the temporary
Equity Warrant Certificates at the corporate trust office of the Equity Warrant
Agent. Upon surrender for cancellation of any one or more temporary Equity
Warrant Certificates, the Company shall execute and the Equity Warrant Agent
shall countersign and deliver in exchange therefor definitive Equity Warrant
Certificates representing the same aggregate number of Equity Warrants. Until so
exchanged, the temporary Equity Warrant Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Equity Warrant
Certificates.
2.5. PAYMENT OF TAXES. The Company will pay all stamp and other
duties, if any, to which this Agreement or the original issuance, or exercise,
of the Equity Warrants or Equity Warrant Certificates may be subject under the
laws of the United States of America or any state or locality; PROVIDED,
HOWEVER, that the Holder, and not the Company, shall be required to pay any
stamp or other tax or other governmental charge that may be imposed in
connection with any transfer involved in the issuance of the Common Stock where
the Holder designates the shares to be issued in a name other than the name of
the Holder; and in the event that any such transfer is involved, the Company
shall not be required to issue any Common Stock (and the purchase of the shares
of Common Stock issued upon the exercise of such Holder's Equity Warrant shall
not be deemed to have been consummated) until such tax or other charge shall
have been paid or it has been established to the Company's satisfaction that no
such tax or other charge is due.
ARTICLE 3.
DURATION AND EXERCISE OF EQUITY WARRANTS
3.1. EXERCISE PRICE. Each Equity Warrant shall entitle the Holder
thereof to purchase one share of Common Stock for $35.10 (the "EXERCISE PRICE"),
subject to the terms herein. The number of shares of Common Stock which shall be
purchasable upon the payment of the Exercise Price shall be subject to
adjustment pursuant to Article 4 hereof.
3.2. DURATION OF EQUITY WARRANTS. Each Equity Warrant may be
exercised at any time up to the Expiration Date. Each Equity Warrant not
exercised at or before the Expiration Date
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shall become void, and all rights of the Holder of such Equity Warrant
thereunder and under this Agreement shall cease.
3.3. EXERCISE OF EQUITY WARRANTS.
(a) The Holder of an Equity Warrant shall have the right, at its
option, to exercise such Equity Warrant and purchase one share of Common Stock
during the period referred to in Section 3.2, subject to adjustment pursuant to
Article 4 hereof. Except as may be provided in an Equity Warrant Certificate, an
Equity Warrant may be exercised by completing the form of election to purchase
set forth on the reverse side of the Equity Warrant Certificate, by duly
executing the same, and by delivering the same, together with payment in full of
the Exercise Price, in lawful money of the United States of America, in cash or
by certified or official bank check or by bank wire transfer, to the Equity
Warrant Agent. Except as may be provided in an Equity Warrant Certificate, the
date on which such Equity Warrant Certificate and payment are received by the
Equity Warrant Agent as aforesaid shall be deemed to be the date on which the
Equity Warrant is exercised and the relevant shares of Common Stock are issued
(the "EXERCISE DATE").
(b) Upon the exercise of an Equity Warrant, the Company shall,
as soon as practicable, issue, to or upon the order of the Holder of such Equity
Warrant, the shares of Common Stock to which such Holder is entitled, registered
in such name or names as may be directed by such Holder.
(c) Unless the Equity Warrant Agent and the Company agree
otherwise, the Equity Warrant Agent shall deposit all funds received by it in
payment of the Equity Warrant Price for Equity Warrants in the account of the
Company maintained with it for such purpose and shall advise the Company by
telephone by 5:00 P.M.,
New York City time, of each day on which a payment of
the Exercise Price for Equity Warrants is received of the amount so deposited in
its account. The Equity Warrant Agent shall promptly confirm such telephone
advice in writing to the Company.
(d) The Equity Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company of (i) the number of Equity Warrants
exercised as provided herein, (ii) the instructions of each Holder of such
Equity Warrants with respect to delivery of the Common Stock issued upon
exercise of such Equity Warrants to which such Holder is entitled upon such
exercise, and (iii) such other information as the Company shall reasonably
require. Such advice may be given by telephone to be confirmed in writing.
ARTICLE 4.
ADJUSTMENTS OF NUMBER OF SHARES
4.1. ADJUSTMENTS. The number of shares of Common Stock purchasable
upon the exercise of the Equity Warrants shall be subject to adjustment as
follows:
(a) In case the Company shall (A) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (B) subdivide its
outstanding shares of Common Stock into a greater number of shares, (C) combine
its outstanding shares of Common Stock into
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a smaller number of shares, or (D) issue by reclassification, recapitalization
or reorganization of its Common Stock any shares of capital stock of the
Company, then in each such case the number of shares of Common Stock issuable
upon exercise of an Equity Warrant shall be equitably adjusted so that the
Holder of any Equity Warrant thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock or other capital stock
of the Company which such Holder would have owned or been entitled to receive
immediately following such action had such Equity Warrant been exercised
immediately prior to the occurrence of such event. An adjustment made pursuant
to this subsection 4.1(a) shall become effective immediately after the record
date, in the case of a dividend or distribution, or immediately after the
effective date, in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this subsection 4.1(a), the
Holder of any Equity Warrant thereafter exercised shall become entitled to
receive shares of two or more classes of capital stock or shares of Common Stock
and other capital stock of the Company, the Board of Directors (whose
determination shall be in its good faith judgment and shall be described in a
statement filed by the Company with the Equity Warrant Agent) shall determine
the allocation of the Exercise Price between or among shares of such classes of
capital stock or shares of Common Stock and other capital stock.
(b) In case the Company shall issue options, rights or warrants
to holders of its outstanding shares of Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock or other securities convertible
or exchangeable for shares of Common Stock at a price per share of Common Stock
less than the Current Market Price (as determined pursuant to subsection (d) of
this Section 4.1) (other than pursuant to any stock option, restricted stock or
other incentive or benefit plan or stock ownership or purchase plan for the
benefit of employees, directors or officers or any dividend reinvestment plan of
the Company in effect at the time hereof or any other similar plan adopted or
implemented hereafter, it being agreed that none of the adjustments set forth in
this Section 4.1 shall apply to the issuance of stock, rights, warrants or other
property pursuant to such benefit plans), then the number of shares of Common
Stock issuable upon exercise of an Equity Warrant shall be adjusted so that it
shall equal the product obtained by multiplying the number of shares of Common
Stock issuable upon exercise of an Equity Warrant immediately prior to the date
of issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants (immediately prior to such issuance) plus
the number of additional shares of Common Stock offered for subscription or
purchase and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants
(immediately prior to such issuance) plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price. Such adjustment shall be made successively
whenever any rights or warrants are issued, and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such rights or warrants; PROVIDED, HOWEVER, in the event that all the
shares of Common Stock offered for subscription or purchase are not delivered
upon the exercise of such rights or warrants, upon the expiration of such rights
or warrants the number of shares of Common Stock issuable upon exercise of an
Equity Warrant shall be readjusted to the number of shares of Common Stock
issuable upon exercise of an Equity Warrant which would have been in effect had
the numerator and the denominator of the foregoing fraction and the resulting
adjustment been made based upon the number of shares of Common Stock actually
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delivered upon the exercise of such rights or warrants rather than upon the
number of shares of Common Stock offered for subscription or purchase. In
determining whether any security covered by this Section 4.1(b) entitles the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for the issuance of such options, rights, warrants or
convertible or exchangeable securities, plus the aggregate amount of additional
consideration (as set forth in the instruments relating thereto) to be received
by the Company upon the exercise, conversion or exchange of such securities, the
value of such consideration, if other than cash, to be determined by the Board
of Directors in its good faith judgment (whose determination shall be described
in a statement filed by the Company with the Equity Warrant Agent).
(c) In case the Company shall, by dividend or otherwise,
distribute to all holders of its outstanding Common Stock, evidences of its
indebtedness or assets (including securities and cash, but excluding any regular
periodic cash dividend of the Company and dividends or distributions payable in
stock for which adjustment is made pursuant to subsection (a) of this Section
4.1) or rights or warrants to subscribe for or purchase securities of the
Company (excluding those referred to in subsection (b) of this Section 4.1),
then in each such case the number of shares of Common Stock issuable upon
exercise of an Equity Warrant shall be adjusted so that the same shall equal the
product determined by multiplying the number of shares of Common Stock issuable
upon exercise of an Equity Warrant immediately prior to the record date of such
distribution by a fraction of which the numerator shall be the Current Market
Price as of the Time of Determination, and of which the denominator shall be
such Current Market Price less the Fair Market Value on such record date (as
determined by the Board of Directors in its good faith judgment, whose
determination shall be described in a statement filed by the Company with the
stock transfer or conversion agent, as appropriate) of the portion of the
capital stock or assets or the evidences of indebtedness or assets so
distributed to the holder of one share of Common Stock or of such subscription
rights or warrants applicable to one share of Common Stock. Such adjustment
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such distribution.
(d) For the purpose of any computation under subsections (b) and
(c) of this Section 4.1, the "CURRENT MARKET PRICE" per share of Common Stock on
any date shall be deemed to be the average of the daily Closing Prices for the
shorter of (A) 10 consecutive Trading Days ending on the day immediately
preceding the applicable Time of Determination or (B) the period commencing on
the date next succeeding the first public announcement of the issuance of such
rights or warrants or such distribution through such last day prior to the
applicable Time of Determination. For purposes of the foregoing, the term "TIME
OF DETERMINATION" shall mean the time and date of the record date for
determining stockholders entitled to receive the rights, warrants or
distributions referred to in Section 4.1(b) and (c).
(e) In any case in which this Section 4.1 shall require that an
adjustment in the amount of Common Stock or other property to be received by a
Holder upon exercise of an Equity Warrant be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the Holder of any Equity Warrant exercised after such
record date the Common Stock or other property issuable upon such exercise over
and above the shares of Common Stock issuable upon such exercise prior to such
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adjustment, 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 shares of Common Stock or other property, if any, upon
the occurrence of the event requiring such adjustment.
(f) No adjustment in the number of shares of Common Stock
issuable upon exercise of an Equity Warrant shall be required to be made
pursuant to this Section 4.1 unless such adjustment would require an increase or
decrease of at least 1% of such number; PROVIDED, HOWEVER, that any adjustments
which by reason of this subsection (f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 4.1(f) shall be made to the nearest cent or to
the nearest 1/1000th of a share, as the case may be. Except as set forth in
subsections 4.1(a), (b), and (c) above, the number of shares of Common Stock
issuable upon exercise of an Equity Warrant shall not be adjusted as a result of
the issuance of Common Stock, or any securities convertible into or exchangeable
for Common Stock or carrying the right to purchase any of the foregoing, in
exchange for cash, property or services.
4.2. STATEMENT ON WARRANTS. Irrespective of any adjustment in the
amount of Common Stock issued upon exercise of an Equity Warrant, Equity
Warrants theretofore or thereafter issued may continue to express the same
number and kind of shares as are stated in the Equity Warrants initially
issuable pursuant to this Agreement.
4.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES No fractional shares
or scrip representing fractions of shares of Common Stock shall be issued upon
exercise of the Equity Warrants. If more than one share of Equity Warrants shall
be exercised at one time by the same Holder, the number of full shares of Common
Stock issuable upon exercise thereof shall be computed on the basis of the
aggregate number of shares of Common Stock issuable. In lieu of any fractional
interest in a share of Common Stock which would otherwise be deliverable upon
the exercise of such Equity Warrants, the Company shall pay to the Holder of
such Equity Warrants an amount in cash (computed to the nearest cent) equal to
the Closing Price on the Exercise Date (or the next Trading Day if such date is
not a Trading Day) multiplied by the fractional interest that otherwise would
have been deliverable upon exercise of such Equity Warrants.
4.4. NOTICES TO WARRANTHOLDERS. (a) Upon any adjustment of the amount
of Common Stock issuable upon exercise of an Equity Warrant pursuant to Section
4.1 (but not for any fractional cumulation as described in Section 4.1(f)), the
Company within 30 days thereafter shall (i) cause to be filed with the Equity
Warrant Agent an Officer's Certificate (as defined hereinafter) setting forth
the amount of Common Stock issuable upon exercise of an Equity Warrant after
such adjustment and setting forth in reasonable detail the method of calculation
and the facts upon which such calculations are based, which certificate, absent
manifest error and any failure to comply with Section 4.1 (other than failures
that are de minimus in nature), shall be conclusive evidence of the correctness
of the matters set forth therein, and (ii) cause to be given to each of the
registered Holders at his address appearing on the Equity Warrant Register (as
defined hereinafter) written notice of such adjustments by first-class mail,
postage prepaid.
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ARTICLE 5.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
OF EQUITY WARRANTS
5.1. NO RIGHTS AS HOLDER OF COMMON STOCK CONFERRED BY EQUITY WARRANTS
OR EQUITY WARRANT CERTIFICATES. No Equity Warrant or Equity Warrant Certificate
shall entitle the Holder to any of the rights of a holder of Common Stock,
including, without limitation, voting, dividend or liquidation rights.
5.2. LOST, STOLEN, DESTROYED OR MUTILATED EQUITY WARRANT CERTIFICATES.
Upon receipt by the Company and the Equity Warrant Agent of evidence reasonably
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Equity Warrant Certificate and of indemnity (other than in
connection with any mutilated Equity Warrant certificates surrendered to the
Equity Warrant Agent for cancellation) reasonably satisfactory to them, the
Company shall execute, and the Equity Warrant Agent shall countersign and
deliver, in exchange for or in lieu of each lost, stolen, destroyed or mutilated
Equity Warrant Certificate, a new Equity Warrant Certificate evidencing a like
number of Equity Warrants of the same title. Upon the issuance of a new Equity
Warrant Certificate under this Section, the Company may require the payment of a
sum sufficient to cover any stamp or other tax or other governmental charge that
may be imposed in connection therewith and any other expenses (including the
fees and expenses of the Equity Warrant Agent) in connection therewith. Every
substitute Equity Warrant Certificate executed and delivered pursuant to this
Section in lieu of any lost, stolen or destroyed Equity Warrant Certificate
shall represent a contractual obligation of the Company, whether or not such
lost, stolen or destroyed Equity Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Equity Warrant Certificates,
duly executed and delivered hereunder, evidencing Equity Warrants of the same
title. The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement of
lost, stolen, destroyed or mutilated Equity Warrant Certificates.
5.3. HOLDERS OF EQUITY WARRANTS MAY ENFORCE RIGHTS. Notwithstanding
any of the provisions of this Agreement, any Holder may, without the consent of
the Equity Warrant Agent, enforce and may institute and maintain any suit,
action or proceeding against the Company suitable to enforce, or otherwise in
respect of his right to exercise his Equity Warrants as provided in the Equity
Warrants and in this Agreement.
5.4. CONSOLIDATION OR MERGER OR SALE OF ASSETS. For purposes of this
Section 5.4, a "SALE TRANSACTION" means any transaction or event, including any
merger, consolidation, sale of assets, tender or exchange offer,
reclassification, compulsory share exchange or liquidation, in which all or
substantially all outstanding shares of the Company's Common Stock are converted
into or exchanged for stock, other securities, cash or assets or following which
any remaining outstanding shares of Common Stock fail to meet the listing
standards imposed by each of the
New York Stock Exchange, the American Stock
Exchange and the Nasdaq National Market at the time of such transaction, but
shall not include any transaction the primary purpose of which is the
reincorporation of the Company in another U.S. jurisdiction so long as in such
transaction each Equity Warrant shall convert into an equity security of the
successor to the Company
-9-
having identical rights as the Equity Warrant. If a Sale Transaction occurs,
then lawful provision shall be made by the corporation formed by such Sale
Transaction or the corporation whose securities, cash or other property will
immediately after the Sale Transaction be owned, by virtue of such Sale
Transaction, by the holders of Common Stock immediately prior to the Sale
Transaction, or the corporation which shall have acquired such securities of the
Company (collectively the "FORMED, SURVIVING OR ACQUIRING CORPORATION"), as the
case may be, providing that each Equity Warrant then outstanding shall
thereafter be exercisable for the kind and amount of securities, cash or other
property receivable upon such Sale Transaction by a holder of the number of
shares of Common Stock that would have been received upon exercise of such
Equity Warrant immediately prior to such Sale Transaction assuming such holder
of Common Stock did not exercise his rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such Sale
Transaction (provided that, if the kind or amount of securities, cash or other
property receivable upon such Sale Transaction is not the same for each share of
Common Stock in respect of which such rights of election shall not have been
exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 5.4 the
kind and amount of securities, cash or other property receivable upon such Sale
Transaction for each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing Shares). At
the option of USA, in lieu of the foregoing, USA may require that in a Sale
Transaction each Holder of an Equity Warrant shall receive in exchange for each
such Equity Warrant a security of the Formed, Surviving or Acquiring Corporation
having substantially equivalent rights, other than as set forth in this Section
5.4, as the Equity Warrant. Notwithstanding anything to the contrary herein,
there will be no adjustments pursuant to Article 4 hereof in case of the
issuance of any shares of our stock in a Sale Transaction except as provided in
this Section 5.4. The provisions of this Section 5.4 shall similarly apply to
successive Sale Transactions; PROVIDED, HOWEVER, that in no event shall a Holder
of an Equity Warrant be entitled to more than one adjustment pursuant to this
Section 5.4 in respect of a series of related transactions.
ARTICLE 6.
EXCHANGE AND TRANSFER OF EQUITY WARRANTS
6.1. EQUITY WARRANT REGISTER; EXCHANGE AND TRANSFER OF EQUITY
WARRANTS. The Equity Warrant Agent shall maintain, at its corporate trust office
or at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ Services Department, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, a register (the "EQUITY WARRANT REGISTER") in which,
upon the issuance of Equity Warrants, and, subject to such reasonable
regulations as the Equity Warrant Agent may prescribe, it shall register Equity
Warrant Certificates and exchanges and transfers thereof. The Equity Warrant
Register shall be in written form or in any other form capable of being
converted into written form within a reasonable time.
Except as provided in the following sentence, upon surrender at
the corporate trust office of the Equity Warrant Agent or at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ Services Department, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Equity Warrant Certificates may be exchanged for one or more other Equity
Warrant Certificates evidencing the same aggregate number of Equity Warrants of
the same title, or may be transferred in whole or in part. A transfer shall be
registered and an appropriate entry made in the Equity Warrant Register upon
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surrender of an Equity Warrant Certificate to the Equity Warrant Agent at its
corporate trust office or at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ Services
Department, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ for transfer, properly
endorsed or accompanied by appropriate instruments of transfer and written
instructions for transfer, all in form satisfactory to the Company and the
Equity Warrant Agent. Whenever an Equity Warrant Certificate is surrendered for
exchange or transfer, the Equity Warrant Agent shall countersign and deliver to
the person or person entitled thereto one or more Equity Warrant Certificates
duly executed by the Company, as so requested. The Equity Warrant Agent shall
not be required to effect any exchange or transfer which will result in the
issuance of an Equity Warrant Certificate evidencing a fraction of an Equity
Warrant. All Equity Warrant Certificates issued upon any exchange or transfer of
an Equity Warrant Certificate shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Equity Warrant Certificate surrendered for such exchange or
transfer.
No service charge shall be made for any exchange or transfer of
Equity Warrants, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such exchange or transfer, in accordance with Section 2.5 hereof.
6.2. TREATMENT OF HOLDERS OF EQUITY WARRANTS. Every Holder of an
Equity Warrant, by accepting the Equity Warrant Certificate evidencing the same,
consents and agrees with the Company, the Equity Warrant Agent and with every
other Holder of Equity Warrants that the Company and the Equity Warrant Agent
may treat the record holder of an Equity Warrant Certificate as the absolute
owner of such Equity Warrant for all purposes and as the person entitled to
exercise the rights represented by such Equity Warrant.
6.3. CANCELLATION OF EQUITY WARRANT CERTIFICATES. In the event that
the Company shall purchase, redeem or otherwise acquire any Equity Warrants
after the issuance thereof, the Equity Warrant Certificate shall thereupon be
delivered to the Equity Warrant Agent and be canceled by it. The Equity Warrant
Agent shall also cancel any Equity Warrant Certificate (including any mutilated
Equity Warrant Certificate) delivered to it for exercise, in whole or in part,
or for exchange or transfer. Equity Warrant Certificates so canceled shall be
delivered by the Equity Warrant Agent to the Company from time to time, or
disposed of in accordance with the instructions of the Company.
ARTICLE 7.
CONCERNING THE EQUITY WARRANT AGENT
7.1. EQUITY WARRANT AGENT. The Company hereby appoints The Bank of
New
York as Equity Warrant Agent of the Company in respect of the Equity Warrants
upon the terms and subject to the conditions set forth herein; and The Bank of
New York hereby accepts such appointment. The Equity Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Equity Warrant
Certificates and hereby and such further powers and authority acceptable to it
to act on behalf of the Company as the Company may hereafter grant to or confer
upon it. All of the terms and provisions with respect to such powers and
authority
-11-
contained in the Equity Warrant Certificates are subject to and governed by the
terms and provisions hereof.
7.2. CONDITIONS OF EQUITY WARRANT AGENT'S OBLIGATIONS. The Equity
Warrant Agent accepts its obligations set forth herein upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Holders shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees to pay
the Equity Warrant Agent from time to time such compensation for its
services as the Company and the Equity Warrant shall agree in writing
and to reimburse the Equity Warrant Agent for reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Equity
Warrant Agent in connection with the services rendered hereunder by the
Equity Warrant Agent. The Company also agrees to indemnify the Equity
Warrant Agent for, and to hold it harmless against, any loss, liability
or expenses (including the reasonable costs and expense of defending
against any claim of liability) incurred without negligence or bad faith
on the part of the Equity Warrant Agent arising out of or in connection
with its appointment as Equity Warrant Agent hereunder.
(b) AGENT FOR THE COMPANY. In acting under this Agreement and in
connection with any Equity Warrant Certificate, the Equity Warrant Agent
is acting solely as agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any Holder.
(c) COUNSEL. The Equity Warrant Agent may consult with counsel
reasonably satisfactory to it, and the advice of such counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice of such counsel.
(d) DOCUMENTS. The Equity Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered
or omitted by it in reliance upon any notice, direction, consent,
certification, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or
signed by the proper parties.
(e) OFFICER'S CERTIFICATE. Whenever in the performance of its
duties hereunder the Equity Warrant Agent shall reasonably deem it
necessary that any fact or matter be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, the
Equity Warrant Agent may (unless other evidence in respect thereof be
herein specifically prescribed), in the absence of bad faith on its
part, rely upon a certificate signed by the Chairman, the Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the
Treasurer, and Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company (an "OFFICER'S CERTIFICATE") delivered by the
Company to the Equity Warrant Agent.
(f) ACTIONS THROUGH AGENTS. The Equity Warrant Agent may execute
and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder
-12-
either itself or by or through its attorneys or agents, provided,
however, that reasonable care shall be exercised in the selection and
continued employment of such attorneys and agents.
(g) CERTAIN TRANSACTIONS. The Equity Warrant Agent, and any
officer, director or employee thereof, may become the owner of, or
acquire interest in, any Equity Warrant, with the same rights that he,
she or it would have if it were not the Equity Warrant Agent, and, to
the extent permitted by applicable law, he, she or it may engage or be
interested in any financial or other transaction with the Company and
may serve on, or as depositary, trustee or agent for, any committee or
body of holders of any obligations of the Company as if it were not the
Equity Warrant Agent.
(h) NO LIABILITY FOR INTEREST. The Equity Warrant Agent shall
not be liable for interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Equity
Warrant Certificates, except as otherwise agreed with the Company.
(i) NO LIABILITY FOR INVALIDITY. The Equity Warrant Agent shall
incur no liability with respect to the validity of this Agreement
(except as to the due execution hereof by the Equity Warrant Agent) or
any Equity Warrant Certificate (except as to the countersignature
thereof by the Equity Warrant Agent).
(j) NO RESPONSIBILITY FOR COMPANY REPRESENTATIONS. The Equity
Warrant Agent shall not be responsible for any of the recitals or
representations contained herein (except as to such statements or
recitals as describe the Equity Warrant Agent or action taken or to be
taken by it) or in any Equity Warrant Certificate (except as to the
Equity Warrant Agent's countersignature on such Equity Warrant
Certificate), all of which recitals and representations are made solely
by the Company.
(k) NO IMPLIED OBLIGATIONS. The Equity Warrant Agent shall be
obligated to perform only such duties as are specifically set forth
herein, and no other duties or obligations shall be implied. The Equity
Warrant Agent shall not be under any obligation to take any action
hereunder that may subject it to any expense or liability, the payment
of which within a reasonable time is not, in its reasonable opinion,
assured to it. The Equity Warrant Agent shall not be accountable or
under any duty or responsibility for the use by the Company of any
Equity Warrant Certificate countersigned by the Equity Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the issuance or exercise
of Equity Warrants. The Equity Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance
of its covenants or agreements contained herein or in any Equity Warrant
Certificate or in case of the receipt of any written demand from a
Holder with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or
attempt to initiate any proceedings at law or otherwise or, except as
provided in Section 8.2 hereof, to make any demand upon the Company.
-13-
7.3. COMPLIANCE WITH APPLICABLE LAWS. The Equity Warrant Agent agrees
to comply with all applicable federal and state laws imposing obligations on it
in respect of the services rendered by it under this Agreement and in connection
with the Equity Warrants, including (but not limited to) the provisions of
United States federal income tax laws regarding information reporting and backup
withholding. The Equity Warrant Agent expressly assumes all liability for its
failure to comply with any such laws imposing obligations on it, including (but
not limited to) any liability for failure to comply with any applicable
provisions of United States federal income tax laws regarding information
reporting and backup withholding.
7.4. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the Holders of the
Equity Warrants, that there shall at all times be an Equity Warrant Agent
hereunder until all the Equity Warrants are no longer exercisable.
(b) The Equity Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective,
subject to the appointment of a successor Equity Warrant Agent and acceptance of
such appointment by such successor Equity Warrant Agent, as hereinafter
provided. The Equity Warrant Agent hereunder may be removed at any time by the
filing with it of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when it shall become effective. Such
resignation or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Equity Warrant Agent (which shall be a
banking institution organized under the laws of the United States of America, or
one of the states thereof and having an office or an agent's office in the
Borough of Manhattan, the City of
New York) and the acceptance of such
appointment by such successor Equity Warrant Agent. In the event a successor
Equity Warrant Agent has not been appointed and has not accepted its duties
within 90 days of the Equity Warrant Agent's notice of resignation, the Equity
Warrant Agent may apply to any court of competent jurisdiction for the
designation of a successor Equity Warrant Agent.
(c) In case at any time the Equity Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or make an assignment for the benefit of its creditors or
consent to the appointment of a receiver or custodian of all or any substantial
part of its property, or shall admit in writing its inability to pay or meet its
debts as they mature, or if a receiver or custodian of it or all or any
substantial part of its property shall be appointed, or if any public officer
shall have taken charge or control of the Equity Warrant Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Equity Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Equity Warrant Agent. Upon the appointment as aforesaid of a successor Equity
Warrant Agent and acceptance by the latter of such appointment, the Equity
Warrant Agent so superseded shall cease to be the Equity Warrant Agent
hereunder.
(d) Any successor Equity Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Equity Warrant Agent, without any further
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act, deed or conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such predecessor with like
effect as if originally named as Equity Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such successor
Equity Warrant Agent shall be entitled to receive all moneys, securities and
other property on deposit with or held by such predecessor, as Equity Warrant
Agent hereunder.
(e) Any corporation into which the Equity Warrant Agent
hereunder may be merged or converted or any corporation with which the Equity
Warrant Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Equity Warrant Agent shall be a party,
or any corporation to which the Equity Warrant Agent shall sell or otherwise
transfer all or substantially all of the assets and business of the Equity
Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Equity Warrant Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE 8.
MISCELLANEOUS
8.1. AMENDMENT.
(a) This Agreement and the Equity Warrants may be
amended by the Company and the Equity Warrant Agent, without the consent of the
Holders of Equity Warrants, for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective or inconsistent provision
contained herein or therein or in any other manner which the Company may deem to
be necessary or desirable and which will not materially and adversely affect the
interests of the Holders of the Equity Warrants.
(b) The Company and the Equity Warrant Agent may modify or amend
this Agreement and the Equity Warrant Certificates with the consent of the
Holders of not fewer than a majority in number of the then outstanding
unexercised Equity Warrants affected by such modification or amendment, for any
purpose; PROVIDED, HOWEVER, that no such modification or amendment that shortens
the period of time during which the Equity Warrants may be exercised, or
increases the per share Exercise Price, or otherwise materially and adversely
affects the exercise rights of the holders or reduces the percentage of holders
of outstanding Equity Warrants the consent of which is required for modification
or amendment of this Agreement or the Equity Warrants, may be made without the
consent of each Holder affected thereby.
8.2. NOTICES AND DEMANDS TO THE COMPANY AND EQUITY WARRANT AGENT. If
the Equity Warrant Agent shall receive any notice or demand addressed to the
Company by any Holder pursuant to the provisions of the Equity Warrant
Certificate, the Equity Warrant Agent shall promptly forward such notice or
demand to the Company.
8.3. ADDRESSES FOR NOTICES. Any communications from the Company to the
Equity Warrant Agent with respect to this Agreement shall be addressed to The
Bank of
New York, 385 Rifle Camp Road, Reorganization Services Department, 5th
Floor, West Paterson, New Jersey
-15-
07424; any communications from the Equity Warrant Agent to the Company with
respect to this Agreement shall be addressed to USA Networks, Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel; or such other
addresses as shall be specified in writing by the Equity Warrant Agent or by the
Company.
8.4. GOVERNING LAW. This Agreement and the Equity Warrants shall be
governed by the laws of the State of New York applicable to contracts made and
to be performed entirely within such state.
8.5. GOVERNMENTAL APPROVALS. The Company will from time to time use
all reasonable efforts to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and the national
securities exchange on which the Equity Warrants may be listed or authorized for
trading from time to time and filings under the United States federal and state
laws, which may be or become requisite in connection with the issuance, sale,
trading, transfer or delivery of the Equity Warrants, and the exercise of the
Equity Warrants.
8.6. RESERVATION OF SHARES OF COMMON STOCK. The Company covenants that
it will at all times reserve and keep available, free from preemptive rights
(other than such rights as do not affect the ownership of shares issued to a
Holder), out of the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury, or both, for
the purpose of effecting exercises of Equity Warrants, the full number of shares
of Common Stock deliverable upon the exercise of all outstanding Equity Warrants
not theretofore exercised and on or before taking any action that would cause an
adjustment resulting in an increase in the number of shares of Common Stock
deliverable upon exercise above the number thereof previously reserved and
available therefor, the Company shall take all such action so required. For
purposes of this Section 8.6, the number of shares of Common Stock which shall
be deliverable upon the exercise of all outstanding Equity Warrants shall be
computed as if at the time of computation all outstanding Equity Warrants were
held by a single holder. Before taking any action which would cause an
adjustment reducing the price per share of Common Stock issued upon exercise of
the Equity Warrants below the then par value (if any) of such shares of Common
Stock, the Company shall 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 non-assessable shares of Common Stock at such Exercise
Price.
8.7. COVENANT REGARDING SHARES OF COMMON STOCK. All shares of Common
Stock which may be delivered upon exercise of the Equity Warrants will upon
delivery be duly and validly issued and fully paid and non-assessable, free of
all liens and charges and not subject to any preemptive rights (other than
rights which do not affect the Holder's right to own the shares of Common Stock
to be issued), and prior to the Exercise Date the Company shall take any
corporate action necessary therefor. The issuance of all such shares of Common
Stock shall, to the extent permitted by law, be registered under the Securities
Act of 1933, as amended.
8.8. PERSONS HAVING RIGHTS UNDER AGREEMENT. Nothing in this Agreement
expressed or implied and nothing that may be inferred from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the Company, the Equity Warrant Agent and the
Holders any right, remedy or claim under or by reason of this
-16-
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof; and all covenants, conditions, stipulations, promises and agreements in
this Agreement contained shall be for the sole and exclusive benefit of the
Company and the Equity Warrant Agent and their successors and of the Holders of
Equity Warrant Certificates.
8.9. DELIVERY OF PROSPECTUS. The Company will furnish to the Equity
Warrant Agent sufficient copies of a prospectus or prospectuses relating to the
Common Stock deliverable upon exercise of any outstanding Equity Warrants (each
a "PROSPECTUS"), and the Equity Warrant Agent agrees to deliver to the Holder of
the Equity Warrant, prior to or concurrently with the delivery of the Common
Stock issued upon the exercise thereof, a copy of the Prospectus relating to
such Common Stock.
8.10. HEADINGS. The descriptive headings of the several Articles and
Sections and the Table of Contents of this Agreement are for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
8.11. COUNTERPARTS. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original; but all such counterparts shall
together constitute but one and the same instrument.
8.12. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Equity Warrant Agent, for inspection by the Holders of Equity Warrants.
-17-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the day and year first above written.
USA NETWORKS, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Senior Vice President
--------------------------------------
Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Title: Assistant Secretary
----------------------------
THE BANK OF NEW YORK
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Vice President
--------------------------------------
Attest: /s/ ▇▇▇▇ Sivertsin
---------------------------
Name: ▇▇▇▇ Sivertsin
----------------------------
Title: Vice President
----------------------------
-18-
EXHIBIT A
SPECIMEN
CUSIP
FACE
No. W __ Equity Warrants
EQUITY WARRANT CERTIFICATE
USA NETWORKS, INC.
This Warrant Certificate certifies that _________________________
_______________________________________________________________________________,
or registered assigns, is the registered Holder of Equity Warrants (the "Equity
Warrants") to purchase Common Stock, par value $0.01 per share, of USA Networks,
Inc., a Delaware corporation (the "Company"). Each Equity Warrant entitles the
Holder to purchase from the Company one fully paid and non-assessable share of
Common Stock, par value $0.01 per share, of the Company ("Common Stock") at any
time on or before 5:00 p.m. New York City time on February 4, 2009, at the
exercise price (the "Exercise Price") of $35.10 payable in lawful money of the
United States of America upon surrender of this Equity Warrant Certificate and
payment of the Exercise Price at the office or agency of the Warrant Agent in
the City of New York, the State of New York, upon such conditions set forth
herein and in the
Equity Warrant Agreement (as hereinafter defined). Payment of
the Exercise Price must be made in lawful money of the United States of America,
in cash or by certified check or bank draft or bank wire transfer payable to the
order of the Company. The number of Shares which may be purchasable upon
exercise of the Equity Warrants and the Exercise Price is each subject to
adjustment upon the occurrence of certain events set forth in the
Equity Warrant
Agreement.
By acceptance of this Equity Warrant Certificate, each Holder
agrees to be bound by the terms of the
Equity Warrant Agreement.
Reference is hereby made to the further provisions of this Equity
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place. Capitalized defined terms used herein have the same meaning as in the
Equity Warrant Agreement.
This Equity Warrant Certificate shall not be valid unless
countersigned by the Equity Warrant Agent, as such term is used in the
Equity
Warrant Agreement.
IN WITNESS WHEREOF, USA Networks, Inc. has caused this Equity
Warrant Certificate to be duly executed under its corporate seal.
USA NETWORKS, INC.
By: /s/
-------------------------------
Attest:
--------------------
Countersigned:
The Bank of New York, as Equity Warrant Agent
By
------------------------------------
Authorized Signature
-2-
REVERSE
EQUITY WARRANT CERTIFICATE
USA NETWORKS, INC.
The Equity Warrants evidenced by this Equity Warrant Certificate
are part of a duly authorized issue of Equity Warrants issued pursuant to a
Warrant Agreement dated as of February 4, 2002 (the "
Equity Warrant Agreement"),
duly executed and delivered by the Company to The Bank of New York (the "Equity
Warrant Agent"), which
Equity Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Equity Warrant Agent, the Company and the Holders
(the words "Holders" or "Holder" meaning the registered Holders or registered
Holder) of the Equity Warrants.
Equity Warrants may be exercised to purchase shares of Common
Stock of the Company, par value $.01 per share ("Common Stock") upon such terms
and conditions as are set forth in the
Equity Warrant Agreement at any time on
or before 5:00 p.m. New York City time on February 4, 2009, at the Exercise
Price set forth on the face hereof. The Holder of Equity Warrants evidenced by
this Equity Warrant Certificate may exercise them by surrendering the Equity
Warrant Certificate, with the form of election to purchase set forth hereon
properly completed and executed, together with payment of the Exercise Price at
the office of the Equity Warrant Agent in the City of New York in the State of
New York. In the event that upon any exercise of Equity Warrants evidenced
hereby the number of Equity Warrants exercised shall be less than the total
number of Equity Warrants evidenced hereby, there shall be issued to the Holder
hereof or his assignee a new Equity Warrant Certificate evidencing the number of
Equity Warrants not exercised. Nothing contained in the Equity Warrant Agreement
or in this Equity Warrant Certificate shall be construed as conferring upon the
Holders thereof the right to vote, to receive dividends or other distributions,
to exercise any preemptive right or to consent or to receive notice as
shareholders in respect of meetings of shareholders for the election of
Directors of the Company or any other matter, or any other rights whatsoever as
shareholders of the Company.
The Equity Warrant Agreement provides that upon the occurrence of
certain events, the number of shares of Common Stock issuable upon exercise of
an Equity Warrant may, subject to certain conditions, be adjusted.
Equity Warrant Certificates, when surrendered at the office of
the Equity Warrant Agent in the City of New York in the State of New York by the
registered Holder thereof in person or by a legal representative duly authorized
in writing or by registered mail, return receipt requested, may be exchanged, in
the manner and subject to the limitations provided in the Equity Warrant
Agreement, but without payment of any service charge, for another Equity Warrant
Certificate or Equity Warrant Certificates of like tenor evidencing in the
aggregate a like number of Equity Warrants and registered in the name of such
registered Holder.
Upon due presentment for registration of transfer of this Equity
Warrant Certificate at the office of the Equity Warrant Agent in the City of New
York in the State of New York or by registered mail, return receipt requested, a
new Equity Warrant Certificate or Equity Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Equity Warrants shall be issued to
the transferee(s) in exchange for this Equity Warrant Certificate, subject to
the limitations provided in the Equity Warrant Agreement, without charge except
for any tax or other governmental charge imposed in connection therewith.
The Company and the Equity Warrant Agent may deem and treat the
registered Holder(s) hereof as the absolute owner(s) of this Equity Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, and of any distribution
to the Holder(s) hereof, and for all other purposes, and neither the Company nor
the Equity Warrant Agent shall be affected by any notice (other than a duly
presented registration of transfer in accordance with the previous paragraph) to
the contrary and shall not be bound to recognize any equitable or other claim to
or interest in such Equity Warrant on the part of any other person.
-2-
USA NETWORKS, INC.
ELECTION TO PURCHASE
USA NETWORKS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by this Equity Warrant Certificate for ________ Equity
Warrants, and to purchase thereunder the shares of Common Stock (the "Shares")
provided for therein, and requests that certificates for the Shares be issued in
the name of:
(Please Print Name, Address and Social Security Number)
If said number of Equity Warrants to be exercised shall not be all of the Equity
Warrants evidenced by this Equity Warrant Certificate, the undersigned requests
that a new Equity Warrant Certificate for the balance of the Equity Warrants be
registered in the name of the undersigned or his Assignee as below indicated and
delivered to the address stated below:
Dated: ________________, 200_
Name of Equity Warrant Holder or
Assignee (Please Print):
------------------------------------------
Address:
-----------------------------------------------------------
Signature:
---------------------------------------------------------
(Signature must conform to name of Holder as specified on
the face of the Equity Warrant Certificate)
Signature Guaranteed:
----------------------------------
Signature of Guarantor
ASSIGNMENT
(To be executed by the registered Holder
if such Holder desires to transfer
Equity Warrants.)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
-----------------------------------------------------------
(Print name and address of transferee)
______ Equity Warrants, evidenced by this Equity Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ______________________________ Attorney, to transfer the
within Equity Warrant Certificate on the books of the Company, with full power
of substitution. If said number of Equity Warrants to be transferred shall not
be all of the Equity Warrants evidenced by this Equity Warrant Certificate, the
assignor and assignee agree that such Attorney shall submit this Equity Warrant
Certificate to the Company and request that New Equity Warrant Certificates for
the applicable number of Equity Warrants be registered in the names of the
undersigned as below indicated and delivered to the addresses below:
Dated:
Signature:
------------------------------- -------------------------------
(Insert Social Security or (Signature must conform to name
Identifying Number of of holder as specified on the face
Assignee) of the Equity Warrant Certificate)
Address of Assignor (if necessary):
------------------------------------
Address of Assignee (if necessary):
------------------------------------
Signature Guaranteed:
-------------------------------
Signature of Guarantor