UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
Information to be included in Statements Filed Pursuant To Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)
(Amendment No. 3)
VALUEVISION INTERNATIONAL, INC.
-----------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value
-----------------------------------------------------
(Title of Class of Securities)
92047K107
-----------------------------------------------------
(CUSIP Number)
Richard Cotton, Esq.
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, New York 10112
(212) 664-4444
-------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 16, 2000
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box. /_/
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
CUSIP No. 92047K107 13D/A Page 2 of 57
1. NAME OR REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
GE CAPITAL EQUITY INVESTMENTS, INC.
06-1468495
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /_/
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS:
Not applicable.
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 16,013,918
WITH
9. SOLE DISPOSITIVE POWER
-0-
10. SHARED DISPOSITIVE POWER
16,013,918
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,013,918
-3-
<PAGE>
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
/X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
36.4%
14. TYPE OF REPORTING PERSON
CO
*See Instructions Before Filling Out!
-4-
<PAGE>
CUSIP No. 92047K107 13D/A Page 5 of 57
1. NAME OR REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
NATIONAL BROADCASTING COMPANY, INC.
14-1682529
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /_/
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS:
See Item 3.
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 16,013,918
WITH
9. SOLE DISPOSITIVE POWER
3,450,000
10. SHARED DISPOSITIVE POWER
16,013,918
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,463,918
-5-
<PAGE>
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
41.0%
14. TYPE OF REPORTING PERSON
CO
*See Instructions Before Filling Out!
-6-
<PAGE>
CUSIP No. 92047K107 13D/A Page 7 of 57
1. NAME OR REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
GENERAL ELECTRIC CAPITAL CORPORATION
13-1500700
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /_/
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS:
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
New York
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 16,013,918
WITH
9. SOLE DISPOSITIVE POWER
-0-
10. SHARED DISPOSITIVE POWER
16,013,918
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,013,918
-7-
<PAGE>
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
36.4%
14. TYPE OF REPORTING PERSON
CO
*See Instructions Before Filling Out!
-8-
<PAGE>
CUSIP No. 92047K107 13D/A Page 9 of 57
1. NAME OR REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
GENERAL ELECTRIC CAPITAL SERVICES, INC.
06-1109503
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /_/
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS*:
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY Disclaimed (see 11 below)
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON -0-
WITH
9. SOLE DISPOSITIVE POWER
Disclaimed (see 11 below)
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Beneficial Ownership of all Shares disclaimed by General Electric
Capital Services, Inc.
-9-
<PAGE>
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
Not applicable (see 11 above)
14. TYPE OF REPORTING PERSON
CO
*See Instructions Before Filling Out!
-10-
<PAGE>
CUSIP No. 92047K107 13D/A Page 11 of 57
1. NAME OR REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
GENERAL ELECTRIC COMPANY
14-0689340
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /_/
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS:
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
New York
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY Disclaimed (see 11 below)
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON -0-
WITH
9. SOLE DISPOSITIVE POWER
Disclaimed (see 11 below)
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Beneficial Ownership of all Shares disclaimed by General Electric
Capital Services, Inc.
-11-
<PAGE>
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
Not applicable (see 11 above)
14. TYPE OF REPORTING PERSON
CO
*See Instructions Before Filling Out!
-12-
<PAGE>
CUSIP No. 92047K107 13D/A Page 13 of 57
1. NAME OR REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
NATIONAL BROADCASTING COMPANY HOLDING, INC.
13-3448662
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /_/
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS:
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/_/
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
New York
NUMBER OF 7. SOLE VOTING POWER
SHARES
BENEFICIALLY Disclaimed (see 11 below)
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON -0-
WITH
9. SOLE DISPOSITIVE POWER
Disclaimed (see 11 below)
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Beneficial Ownership of all Shares disclaimed by National
Broadcasting Company Holding, Inc.
-13-
<PAGE>
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
Not applicable (see 11 above)
14. TYPE OF REPORTING PERSON
CO
*See Instructions Before Filling Out!
-14-
<PAGE>
CUSIP No. 92047K107 13D/A Page 15 of 57
This Amendment No. 3 (this "Amendment") amends the Schedule 13D
filed on April 26, 1999, as amended by Amendment No. 1 filed on June 3, 1999
and Amendment No. 2 filed on July 6, 1999 (as so amended, the "Schedule
13D"), which relates to shares of common stock, par value $0.01 per share, of
ValueVision, International, Inc., a Minnesota corporation. Capitalized terms
used herein but not defined shall have the meaning attributed to them in the
Schedule 13D.
Item 2. Identity and Background.
As of the date hereof, the name, business address, principal
occupation or employment, and citizenship of each director and executive
officer of NBC and GE are set forth on Schedules B and E, respectively,
attached hereto.
Item 3. Source and Amount of Funds or Other Consideration.
NBC and the Company have entered into a Trademark License Agreement
(the "License Agreement") dated as of November 16, 2000, pursuant to which
NBC granted the Company a license to the NBC name and trademark for use in
connection with the Company's home shopping television network and related
website (the "License"). The term of the License is 10 years ending
November 16, 2010, subject to early termination under certain specified
circumstances.
In consideration for the License, the Company granted NBC warrants
(the "Branding Warrants") to purchase 6,000,000 shares of Common Stock at a
price of $17.375 per share, subject to adjustment in certain circumstances
set forth in the Branding Warrants. 2,000,000 Branding Warrants are
immediately exercisable, 2,000,000 will become exercisable on November 16,
2001, and the remaining 2,000,000 will become exercisable on November 16,
2002. Each Branding Warrant is exercisable for a period of six years after
it initially becomes exercisable.
Notwithstanding the six-year exercise period, the Company has the
right to terminate early any unexercised Branding Warrants, if the Company
terminates the License Agreement early for any of the following reasons:
1. A material, uncured breach of the License Agreement by NBC such that the
Company could reasonably claim a rescission of the License has occurred.
2. Certain bankruptcy events relating to NBC.
-15-
<PAGE>
3. The failure of NBC and the Company, using all good faith efforts, to
agree upon the trademarks, service marks, logos, corporate names, trade
names and/or domain names for the Company and its services within 90
days after November 16, 2000.
Other than as set forth above, the Company has no early termination
rights with respect to the Branding Warrants.
In addition, as further consideration for the License, the Company
agreed to immediately accelerate the vesting of 1,125,000 previously unvested
warrants that were issued to NBC pursuant to the Distribution and Marketing
Agreement, dated as of March 8, 1999, between NBC and the Company (the
"Distribution Warrants"). As a result, all such Distribution Warrants are
exercisable as of November 16, 2000.
The information set forth in response to this Item 3 is qualified
in its entirety by reference to the Warrant Certificate (attached hereto as
Exhibit 12) and Warrant Purchase Agreement (attached hereto as Exhibit 13),
which are expressly incorporated herein by reference.
Item 5. Interest in Securities of the Issuer.
The responses of the Reporting Persons on Rows (11) through (13) of
the cover pages of this Amendment are incorporated herein by reference. As
of the date of this filing, GECEI, NBC, and GE Capital, by virtue of its
ownership of all of the Common Stock of GECEI, may be deemed to have joint
beneficial ownership of (i) 10,674,418 shares of outstanding Common Stock of
the Company, and (ii) 5,339,500 shares of Common Stock issuable upon the
conversion of 5,339,500 shares of outstanding Preferred Stock. In addition,
NBC beneficially owns the Distributor Warrant, which is currently exercisable
for 1,450,000 shares of Common Stock, and the Branding Warrants, which are
currently exercisable for 2,000,000 shares of Common Stock (which securities do
not include the 4,000,000 additional shares of Common Stock subject to the
Branding Warrants for which the Branding Warrants are not yet exercisable).
According to the Company's Form 10-Q filed on September 14, 2000, as of
September 12, 2000, the Company had 38,633,902 shares of Common Stock issued
and outstanding (including 10,674,418 outstanding shares of Common Stock
beneficially owned by the Reporting Persons on such date). Accordingly, as
of the date hereof NBC may be deemed to have beneficial ownership of 41.0% of
the outstanding shares of Common Stock, assuming (i) issuance of 5,339,500
shares of Common Stock upon conversion of the Preferred Shares, (ii) the
exercise of the Distributor Warrant with respect to 1,450,000 shares of Common
Stock, and (iii) the exercise of the Branding Warrants with respect to 2,000,000
shares of Common Stock (which securities do not include the 4,000,000 additional
-16-
<PAGE>
shares of Common Stock subject to the Branding Warrants for which the Branding
Warrants are not yet exercisable). As of the date hereof, GECEI and GE Capital,
by virtue of its ownership of all the Common Stock of GECEI, may be deemed to
have joint beneficial ownership of 36.4% of the outstanding shares of Common
Stock, assuming the issuance of 5,339,500 shares of Common Stock upon conversion
of the Preferred Shares.
Item 7. Exhibits.
Exhibit 12. Warrant Certificate
Exhibit 13. Warrant Purchase Agreement
-17-
<PAGE>
CUSIP No. 92047K107 13D/A Page 15 of 57
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: November 28, 2000
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ Michael E. Pralle
-------------------------------
Michael E. Pralle, President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Michael E. Pralle
-------------------------------
Michael E. Pralle, Vice President
GENERAL ELECTRIC CAPITAL SERVICES, INC.
By: /s/ Michael E. Pralle
-------------------------------
Michael E. Pralle, Attorney-in-Fact
GENERAL ELECTRIC COMPANY
By: /s/ Michael E. Pralle
-------------------------------
Michael E. Pralle, Attorney-in-Fact
-18-
<PAGE>
NATIONAL BROADCASTING COMPANY, INC.
By: /s/ Mark Begor
-------------------------------
Mark Begor, Executive Vice President
NATIONAL BROADCASTING COMPANY HOLDING, INC.
By: /s/ Mark Begor
-------------------------------
Mark Begor, Treasurer
-19-
<PAGE>
CUSIP No. 92047K107 13D/A Page 1 of 57
SCHEDULE B TO SCHEDULE 13D
Filed by National Broadcasting Company, Inc.
National Broadcasting Company, Inc.
Directors and Executive Officers
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
Directors
S.S. Cathcart 222 Wisconsin Avenue
Retired Chairman, Illinois Suite 103
Tool Works Lake Forest, IL 60045
Andrea Jung Avon Products, Inc.
President and Chief Operating Officer 1345 Avenue of the Americas
Avon Products, Inc. New York, NY 10105
G.G. Michelson Federated Department Stores
Former Member of the Board of Directors 151 West 34th Street
Federated Department Stores New York, NY 10001
S. Nunn King & Spalding
Partner, King & Spalding 191 Peachtree Street, N.E.
Atlanta, GA 30303
J.D. Opie General Electric Company
Vice Chairman of the Board and Executive 3135 Easton Turnpike
Officer, General Electric Company Fairfield, CT 06431
R.S. Penske Penske Corporation
Chairman of the Board and President 13400 Outer Drive,
Penske West Corporation Detroit, MI 48239-4001
-1-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
F.H.T. Rhodes Cornell University
President Emeritus, Cornell University 3104 Snee Building
Ithaca, NY 14853
A.C. Sigler Champion International Corporation
Retired Chairman of the Board and CEO 1 Champion Plaza
and former Director, Champion Stamford, CT 06921
International Corp.
D.A. Warner III J.P. Morgan & Co., Inc. and
Chairman of the Board, President, and Morgan Guaranty Trust Co.
Chief Executive Officer, J.P. Morgan 60 Wall Street
& Co. Incorporated and Morgan Guaranty New York, NY 10260
Guaranty Trust Company
J.F. Welch, Jr. General Electric Company
Chairman of the Board and Chief 3135 Easton Turnpike
Executive Officer, General Electric Fairfield, CT 06431
Company
Executive Officers
John F. Welch Jr. National Broadcasting Company, Inc.
Chairman 3135 Easton Turnpike
Fairfield, CT 06431
Robert C. Wright National Broadcasting Company, Inc.
Chief Executive Officer & President 30 Rockefeller Plaza
New York, NY 10112
Mark Begor National Broadcasting Company, Inc.
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
William Bolster CNBC, Inc.
Executive Vice President 2200 Fletcher Avenue
Fort Lee, NJ 07024
-2-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
Richard Cotton National Broadcasting Company, Inc.
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Duncan Ebersol National Broadcasting Company, Inc.
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Randel A. Falco National Broadcasting Company, Inc.
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Andrew Lack National Broadcasting Company, Inc.
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Scott Sassa National Broadcasting Company, Inc.
Executive Vice President 3000 West Alameda Ave.
Burbank, CA 91523
Edward Scanlon National Broadcasting Company, Inc.
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Kassie Canter National Broadcasting Company, Inc.
Senior Vice President 30 Rockefeller Plaza
New York, NY 10112
Dennis D. Dammerman General Electric Company
Vice Chairman of the Board 3135 Easton Turnpike
Executive Officer, General Fairfield, CT 06431
Electric Company
Scott McNealy Sun Microsystems, Inc.
Chairman and 901 San Antonio Road
Chief Executive Officer, Palo Alto, CA 94303
Sun Microsystems, Inc.
-3-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
John Eck National Broadcasting Company
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Jay Ireland National Broadcasting Company
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Pamela Thomas-Graham National Broadcasting Company
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Martin Yudkovitz National Broadcasting Company
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
David Zaslav National Broadcasting Company
Executive Vice President 30 Rockefeller Plaza
New York, NY 10112
Each person listed above is a citizen of the United States of America except
Andrea Jung, who is a citizen of Canada.
-4-
<PAGE>
CUSIP No. 92047K107 13D/A Page 1 of 57
SCHEDULE E TO SCHEDULE 13D
Filed by General Electric Company
General Electric Company
Directors
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
J. I. Cash, Jr. Harvard Business School
Professor of Business Administration- Morgan Hall
Graduate School of Business Soldier's Field Road
Administration, Harvard University Boston, MA 02163
S. S. Cathcart 222 Wisconsin Avenue
Retired Chairman Suite 103
Illinois Tool Works Lake Forest, IL 60045
Dennis D. Dammerman General Electric Company
Vice Chairman of the Board and Executive 3135 Easton Turnpike
Officer, General Electric Company; Fairfield, CT 06431
Chairman, General Electric Capital
Services, Inc.
P. Fresco Fiat SpA
Chairman of The Board via Nizza 250
10126 Torino, Italy
A. M. Fudge Kraft Foods, Inc.
Executive Vice President 555 South Broadway
Tarrytown, NY 10591
C. X. Gonzalez Kimberly-Clark de Mexico, S.A. de
Chairman of the Board and Chief Executive C.V.
Officer Jose Luis Lagrange 103
Kimberly-Clark de Mexico, S.A. de C. V. Tercero Piso
Colonia Los Morales
Mexico, D. F. 11510, Mexico
-1-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
A. Jung Avon Products, Inc.
President and Chief Executive Officer 1345 Avenue of the Americas
Avon Products, Inc. New York, NY 10105
K. G. Langone Invemed Associates, Inc.
Chairman, President and Chief Executive 375 Park Avenue
Officer, Invemed Associates, Inc. New York, NY 10152
Scott G. McNealy Sun Microsystems, Inc.
Chairman, President and Chief Executive 901 San Antonio Road
Officer, Sun Microsystems, Inc. Palo Alto, CA 94303-4900
G. G. Michelson Federated Department Stores
Former Member of the Board of Directors 151 West 34th Street
Federated Department Stores New York, New York 10001
S. Nunn King & Spalding
Partner, King & Spalding 191 Peachtree Street, N.E.
Atlanta, Georgia 30303
R. S. Penske Penske Corporation
Chairman of the Board and President 13400 Outer Drive, West
Penske Corporation Detroit, MI 48239-4001
F.H.T. Rhodes Cornell University
President, Emeritus, Cornell University 3104 Snee Building
Ithaca, NY 14853
A. C. Sigler Champion International
Retired Chairman of The Board and CEO and Corporation
former Director, Champion International 1 Champion Plaza
Corporation Stamford, CT 06921
D. A. Warner III J. P. Morgan & Co., Inc. & Morgan
Chairman of the Board, President and Chief Guaranty Trust Co.
Executive Officer, J. P. Morgan & Co. 60 Wall Street
Incorporated and Morgan Guaranty Trust New York, New York 10260
Company
-2-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- -------------------------
J. F. Welch, Jr. General Electric Company
Chairman of the Board and Chief Executive 3135 Easton Turnpike
Officer, General Electric Company Fairfield, CT 06431
R. C. Wright National Broadcasting Company,
Vice Chairman of the Board and Executive Inc.
Officer, General Electric Company; 30 Rockefeller Plaza
President and Chief Executive Officer, New York, New York 10112
National Broadcasting Company, Inc.
Citizenship
------------
P. Fresco Italy
C. X. Gonzales Mexico
Andrea Jung Canada
All Others U.S.A.
-3-
<PAGE>
CUSIP No. 92047K107 13D/A Page 4 of 57
SCHEDULE E TO SCHEDULE 13D
Filed by General Electric Company
General Electric Company
Executive Officers
Name
Present Principal Occupation Present Business Address
----------------------------- ------------------------
J. F. Welch, Jr. General Electric Company
Chairman of the Board and Chief Executive 3135 Easton Turnpike
Officer, General Electric Company Fairfield, CT 06431
P. D. Ameen General Electric Company
Vice President and Comptroller 3135 Easton Turnpike
Fairfield, CT 06431
F. S. Blake General Electric Company
Senior Vice President-Corporate Business 3135 Easton Turnpike
Development Fairfield, CT 06431
J. R. Bunt General Electric Company
Vice President and Treasurer 3135 Easton Turnpike
Fairfield, CT 06431
W. J. Conaty General Electric Company
Senior Vice President -Human Resources 3135 Easton Turnpike
Fairfield, CT 06431
Dennis D. Dammerman General Electric Company
Vice Chairman of the Board and Executive 3135 Easton Turnpike
Officer, General Electric Company; Fairfield, CT 06431
Chairman, General Electric Capital
Services, Inc.
Scott C. Donnelly General Electric Company
Senior Vice President-Corporate Research P. O. Box 8
and Development Schenectady, NY 12301
-4-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
Matthew J. Espe General Electric Company
Senior Vice President-GE Lighting 3135 Easton Turnpike
Fairfield, CT 06431
B. W. Heineman, Jr. General Electric Company
Senior Vice President-General Counsel and 3135 Easton Turnpike
Secretary Fairfield, CT 06431
J. R. Immelt General Electric Company
Senior Vice President-GE Medical Systems P. O. Box 414
Milwaukee, WI 53201
L. R. Johnston General Electric Company
Senior Vice President -GE Appliances Appliance Park
Louisville, KY 40225
J. Krenicki, Jr. General Electric Company
Vice President-GE Transportation Systems 2901 East Lake Road
Erie, PA 16531
W. J McNerney, Jr. General Electric Company
Senior Vice President -GE Aircraft Engines 2901 East Lake Road
Erie, PA 16531
R. L. Nardelli General Electric Company
Senior Vice President -GE Power Systems 1 River Road
Schenectady, NY 12345
R. W. Nelson General Electric Company
Vice President -Corporate Financial 3135 Easton Turnpike
Planning and Analysis Fairfield, CT 06431
G. M. Reiner General Electric Company
Senior Vice President 1 Plastics Avenue
Chief Information Officer Pittsfield, MA 01201
K. S. Sherin General Electric Company
Senior Vice President-Finance and Chief 3135 Easton Turnpike
Financial Officer Fairfield, CT 06431
-5-
<PAGE>
Name
Present Principal Occupation Present Business Address
---------------------------- ------------------------
L. G. Trotter General Electric Company
Senior Vice President 41 Woodford Avenue
GE Industrial Systems Plainville, CT 06062
R. C. Wright National Broadcasting Company,
Vice Chairman of the Board and Executive Inc.
Officer, General Electric Company; 30 Rockefeller Plaza
President and Chief Executive Officer, New York, New York 10112
National Broadcasting Company, Inc.
Citizenship of All Executive Officers
-------------------------------------
U.S.A.
Exhibit 12. Warrant Certificate
NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THE SECURITIES REPRESENTED HEREBY
HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
OF A SHAREHOLDER AGREEMENT DATED AS OF APRIL 15, 1999, AMONG VALUEVISION
INTERNATIONAL, INC., GE CAPITAL EQUITY INVESTMENTS, INC. AND NATIONAL
BROADCASTING COMPANY, INC., AS THEREAFTER AMENDED FROM TIME TO TIME.
THE RESTATED ARTICLES OF INCORPORATION OF THE COMPANY (AS DEFINED BELOW),
AS AMENDED, PROVIDE THAT, EXCEPT AS OTHERWISE PROVIDED BY LAW, SHARES OF
STOCK IN THE COMPANY SHALL NOT BE TRANSFERRED TO "ALIENS" UNLESS,
AFTER GIVING EFFECT TO SUCH TRANSFER, THE AGGREGATE NUMBER OF SHARES OF
STOCKOWNED BY OR FOR THE ACCOUNT OF "ALIENS" WILL NOT EXCEED 20% OF THE
NUMBER OF SHARES OF OUTSTANDING STOCK OF THE COMPANY, AND THE AGGREGATE
VOTING POWER OF SUCH SHARES WILL NOT EXCEED 20% OF THE AGGREGATE VOTING
POWER OF ALL OUTSTANDING SHARES OF VOTING STOCK OF THE COMPANY. NOT MORE
THAN 20% OF THE AGGREGATE VOTING POWER OF ALL SHARES OUTSTANDING ENTITLED
TO VOTE MAY BE VOTED BY OR FOR THE ACCOUNT OF "ALIENS." IF,
NOTWITHSTANDING SUCH RESTRICTION ON TRANSFERS TO "ALIENS," THE AGGREGATE
NUMBER OF SHARES OF STOCK OWNED BY OR FOR THE ACCOUNT OF "ALIENS" EXCEEDS
20% OF THE NUMBER OF SHARES OF OUTSTANDING STOCK OF THE COMPANY OR IF THE
AGGREGATE VOTING POWER OF SUCH SHARES EXCEEDS 20% OF THE AGGREGATE
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VOTING POWER OF ALL OUTSTANDING SHARES OF VOTING STOCK OF THE COMPANY, THE
COMPANY HAS THE RIGHT TO REDEEM SHARES OF ALL CLASSES OF CAPITAL STOCK, AT
THEIR THEN FAIR MARKET VALUE, ON A PRO RATA BASIS, OWNED BY OR FOR THE
ACCOUNT OF ALL "ALIENS" IN ORDER TO REDUCE THE NUMBER OF SHARES AND/OR
PERCENTAGE OF VOTING POWER HELD BY OR FOR THE ACCOUNT OF "ALIENS" TO THE
MAXIMUM NUMBER OR PERCENTAGE ALLOWED UNDER THE RESTATED ARTICLES OF
INCORPORATION, AS AMENDED, OR AS OTHERWISE REQUIRED BY APPLICABLE FEDERAL
LAW. AS USED HEREIN, ALIENS" MEANS ALIENS AND THEIR REPRESENTATIVES,
FOREIGN GOVERNMENTS AND THEIR REPRESENTATIVES, AND CORPORATIONS ORGANIZED
UNDER THE LAW OF A FOREIGN COUNTRY, AND THEIR REPRESENTATIVES. THE
COMPANY WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE,
A FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND
RELATIVE RIGHTS OF THE SHARES OF EACH CLASS OR SERIES AUTHORIZED TO BE
ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE
BOARD TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT
CLASSES OR SERIES.
No. W- _ 6,000,000 Warrants
Date of Issuance: November 16, 2000
COMMON STOCK PURCHASE WARRANTS
------------------------------
Exercisable commencing November 16, 2000
Void after Expiration Time (as defined herein)
ValueVision International, Inc., a Minnesota corporation (the
"Company"), hereby certifies that, for value received, National Broadcasting
Company, Inc., a Delaware corporation (the "Initial Holder" or "NBC"), or
registered assigns (in either case, the "Warrantholder"), is the owner of six
million (6,000,000) Warrants (as defined below), each of which entitles the
Warrantholder to purchase from the Company one fully paid, duly authorized
and nonassessable share of Common Stock, par value $0.01 per share, of the
Company (the "Common Stock") at any time or from time to time subject to the
terms set forth herein, commencing on November 16, 2000 (the "Issue Date")
and continuing up to the Expiration Time (as defined herein) at a per share
exercise price determined according to the terms and subject to the
conditions set forth in this certificate (the "Warrant Certificate"). The
number of shares of Common Stock issuable upon exercise of each such Warrant
and the exercise price per share of Common Stock are subject to adjustment
from time to time pursuant to the provisions of Sections 8 and 9 of this
Warrant Certificate. The Warrants evidenced by this Warrant Certificate (the
"Warrants") are being issued pursuant to a Warrant Purchase Agreement, dated
as of November 16, 2000 (as it may be amended, supplemented or otherwise
modified from time to time, the "Warrant Purchase Agreement"), by and between
the Company and the Initial Holder.
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Section 1. Definitions. As used in this Warrant Certificate, the
following terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or is
under common control with, such Person. As used in this definition,
"control" (including its correlative meanings, "controlled by" and
"under common control with") shall mean the possession, directly or
indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise).
"Articles of Incorporation" shall mean the Articles of
Incorporation of the Company, as amended from time to time.
"Beneficially Own" shall have the meaning set forth in Rule 13d-3
under the Exchange Act, except that a Person shall be deemed to
"Beneficially Own" all securities that such Person has a right to
acquire, whether such right is exercisable immediately or only after the
passage of time (and without any additional condition), provided that a
Person shall not be deemed to "Beneficially Own" any shares of Common
Stock which are issuable upon exercise of any Additional Warrants unless
and until such Additional Warrants are actually issued and outstanding
(at which time such Person shall be deemed to Beneficially Own all
shares of Common Stock which are issuable upon exercise of such
Additional Warrants, whether or not they are vested or unvested)
"Board of Directors" shall mean the board of directors of the
Company.
"Business Day" shall mean any day, other than a Saturday, Sunday or
a day on which commercial banks in New York, New York are authorized or
obligated by law or executive order to close.
"Change in Control" shall mean any of the following: (i) a merger,
consolidation or other business combination or transaction to which the
Company is a party if the shareholders of the Company immediately prior
to the effective date of such merger, consolidation or other business
combination or transaction, as a result of such merger, consolidation or
other business combination or transaction, do not have Beneficial
Ownership of voting securities representing 50% or more of the Total
Current Voting Power of the surviving corporation following such merger,
consolidation or other business combination or transaction; (ii) an
acquisition by any Person (other than the Restricted Parties and their
Affiliates or any 13D Group to which any of them is a member) of
Beneficial Ownership of Voting Stock of the Company representing 25% or
more of the Total Current Voting Power of the Company, (iii) a sale of
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all or substantially all the consolidated assets of the Company to any
Person or Persons (other than Restricted Parties and their Affiliates or
any 13D Group to which any of them is a member); or (iv) a liquidation
or dissolution of the Company.
"Common Stock" shall have the meaning set forth in the preamble
hereto.
"Company" shall have the meaning set forth in the preamble hereto.
"Designated Entity" shall mean Home Shopping Network, Inc., QVC,
Inc., Shop-At-Home, Inc. or Paxson Communications Corporation and any of
their respective Affiliates.
"Election to Exercise" shall have the meaning set forth in Section
4.2(a) hereof.
"Equity Securities" shall mean, with respect to any Person, any and
all common stock, preferred stock, any other class of capital stock and
partnership or limited liability company interests of such Person or any
other similar interests of any Person that is not a corporation,
partnership or limited liability company.
"Exchange Act" shall mean the Securities Exchange act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exercise Price" shall have the meaning set forth in Section 8
hereof.
"Expiration Date" shall mean with respect to any Warrant
represented hereunder, the sixth anniversary of the vesting date (as set
forth in Schedule A hereto).
"Expiration Time" shall mean 5:00 P.M., New York City time, on the
Expiration Date.
"expired" shall mean, with respect to a Warrant issued hereunder,
that such Warrant has not been exercised prior to the Expiration Date
for such Warrant.
"Fractional Warrant Share" shall mean any fraction of a whole share
of Common Stock issued, or issuable upon, exercise of the Warrants.
"GE Capital" shall mean GE Capital Equity Investments, Inc., a
Delaware corporation, together with its successors by operation of law.
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"Governmental Entity" shall mean any federal, state or local
government or any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign.
"Independent Expert" shall mean an investment banking firm
mutually acceptable to the Company and the Warrantholder.
"Initial Holder" shall have the meaning set forth in the preamble
hereto.
"Issue Date" shall have the meaning set forth in the preamble
hereto.
"License Agreement" shall mean the Trademark License Agreement
dated the date hereof between NBC and the Company, as it may be amended,
supplemented or otherwise modified from time to time.
"License Agreement Termination Event" shall mean a termination of
the License Agreement (i) (A) as a result of a material breach of the
grant of License (as defined therein) by NBC such that the Company could
reasonably claim that a rescission of the License had occurred and (B)
the failure of NBC to cure such breach within thirty (30) days after
receiving written notice of such breach from the Company; provided,
however, that a termination by NBC pursuant to Section 9.2(a)(i), (ii),
(iii), (iv) and (v), or 9.3 (a), (b) or (c) of the License Agreement
shall not constitute a License Agreement Termination Event under any
circumstances; (ii) by NBC pursuant to Section 9.2(a)(vi) of the License
Agreement; or (iii) by the Company pursuant to Section 9.2(b)(i), (ii),
or (iii) of the License Agreement.
"Market Price" shall mean, with respect to a share of Common Stock
on any day, except as set forth below in the case that the shares of
Common Stock are not publicly held or listed, the average of the "quoted
prices" of the Common Stock for 30 consecutive Trading Days commencing
45 Trading Days before the date in question. The term "quoted prices"
of the Common Stock shall mean the last reported sale price on that day
or, in case no such reported sale takes place on such day, the average
of the last reported bid and asked prices, regular way, on that day, in
either case, as reported in the consolidated transaction reporting
system with respect to securities quoted on Nasdaq or, if the shares of
Common Stock are not quoted on Nasdaq, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not quoted on Nasdaq and not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices on
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such other nationally recognized quotation system then in use, or, if on
any such day the shares of Common Stock are not quoted on any such
quotation system, the average of the closing bid and asked prices as
furnished by a professional market maker selected by the Board of
Directors making a market in the shares of Common Stock.
Notwithstanding the foregoing, if the shares of Common Stock are not
publicly held or so listed, quoted or publicly traded, the "Market
Price" means the fair market value of a share of Common Stock, as
determined in good faith by the Board of Directors; provided, however,
that if the Warrantholder shall dispute the fair market value as
determined by the Board, the Warrantholder and the Company may retain an
Independent Expert. The determination of fair market value by the
Independent Expert shall be final, binding and conclusive on the Company
and the Warrantholder. All costs and expenses of the Independent Expert
shall be borne by the Warrantholder unless the determination of fair
market value is more favorable to such Warrantholder by 5% or more, in
which case, all such costs and expenses shall be borne by the Company.
"Nasdaq" shall mean The Nasdaq Stock Market's National Market.
"NBC" shall have the meaning set forth in the preamble hereto.
"Organic Change" shall mean, with respect to any Person, any
transaction (including without limitation any recapitalization, capital
reorganization or reclassification of any class or series of Equity
Securities, any consolidation of such Person with, or merger of such
Person into, any other Person, any merger of another Person into such
Person (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of capital
stock of such Person), and any sale or transfer or lease of all or
substantially all of the assets of such Person, but not including any
stock split, combination or subdivision which is the subject of Section
9.1(b)) pursuant to which any class or series of Equity Securities of
such Person is exchanged for, or converted into the right to receive
other securities, cash or other property.
"Person" shall mean any individual, firm, corporation, company,
limited liability company, association, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Preferred Stock" shall mean the Series A Redeemable Convertible
Preferred Stock, par value $0.01 per share, of the Company.
"Purchased Shares" shall have the meaning set forth in Section
9.1(e) hereof.
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"Record Date" shall have the meaning set forth in Section 9.1(a)
hereof.
"Reference Date" shall have the meaning set forth in Section 9.1(d)
hereof.
"Relevant Date" shall have the meaning set forth in Section 9.1(c)
hereof.
"Restricted Parties" shall mean each of (i) NBC, its Ultimate
Parent Entity (if any), each Subsidiary of NBC and each Subsidiary of
its Ultimate Parent Entity and (ii) any Affiliate of any Person that is
a Restricted Party if (and only if) such Restricted Party has the right
or power (acting alone or solely with other Restricted Parties) to
either cause such Affiliate to comply with or prevent such Affiliate
from not complying with all of the terms of this Agreement that are
applicable to Restricted Parties.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shareholder Agreement" shall mean the Shareholder Agreement, dated
as of April 15, 1999, among GE Capital, NBC and the Company, as
hereafter amended, restated or supplemented from time to time.
"Subsidiary" shall mean, as to any Person, a corporation,
partnership, limited liability company, joint venture or other entity of
which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly
or indirectly through one or more intermediaries (including, without
limitation, other Subsidiaries), or both, by such Person.
"13D Group" means any "group" (within the meaning of Section 13(d)
of the Exchange Act) formed for the purpose of acquiring, holding,
voting or disposing of Voting Stock.
"Total Current Voting Power" shall mean, with respect to any
corporation the total number of votes which may be cast in the election
of members of the Board of Directors of the corporation if all
securities entitled to vote in the election of such directors (excluding
shares of preferred stock that are entitled to elect directors only upon
the occurrence of customary events of default) are present and voted (it
being understood that the Preferred Stock will be included on an as
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converted basis in the calculation of Total Current Voting Power of the
Company).
"Trading Day" shall mean any day on which Nasdaq is open for
trading, or if the shares of Common Stock are not quoted on Nasdaq, any
day on which the principal national securities exchange or national
quotation system on which the shares of Common Stock are listed,
admitted to trading or quoted is open for trading, or if the shares of
Common Stock are not so listed, admitted to trading or quoted, any
Business Day.
"Ultimate Parent Entity" shall mean, with respect to any Person
(the "Subject Person"), the Person (if any) that (i) owns, directly or
indirectly through one or more intermediaries, or both, shares of stock
or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the board of
directors or other managers of the Subject Person and (ii) is not itself
a Subsidiary of any other Person or is a natural person.
"Voting Stock" shall mean shares of the Common Stock and Preferred
Stock and any other securities of the Company having the ordinary power
to vote in the election of members of the Board of Directors of the
Company.
"Warrant" shall have the meaning set forth in the preamble
hereto.
"Warrant Certificate" shall have the meaning set forth in
the preamble hereto.
"Warrant Purchase Agreement" shall have the meaning set
forth in the preamble hereto.
"Warrant Register" shall have meaning set forth in Section
2.2 hereof.
"Warrant Shares" shall mean the shares of Common Stock
issued, or issuable upon, exercise of the Warrants.
"Warrantholder" shall have the meaning set forth in the
preamble hereto.
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Section 2. Transferability.
2.1 Registration. The Warrants shall be issued only in
registered form. The Company agrees to maintain, at its office or agency,
books for the registration and transfer of the Warrants.
2.2 Transfer. Subject to the terms and conditions of
the Shareholder Agreement, the Warrants evidenced by this Warrant Certificate
may be sold or otherwise transferred at any time (except as such sale or
transfer may be restricted pursuant to the regulations of the Federal
Communications Commission, the Securities Act or any applicable state
securities laws) with the prior written consent of the Company, which consent
shall not be unreasonably withheld; provided, however, that the consent of
the Company shall not be deemed to have been unreasonably withheld if the
Company does not approve a transfer of such Warrants to any Designated
Entity. Any such sale or transfer shall be effected on the books of the
Company (the "Warrant Register") maintained at its principal executive
offices upon surrender of this Warrant Certificate for registration of
transfer duly endorsed by the Warrantholder or by its duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. Upon any registration of transfer, the
Company shall execute and deliver a new Warrant Certificate or Certificates
in appropriate denominations to the Person or Persons entitled thereto.
Section 3. Exchange of Warrant Certificate.
Any Warrant Certificate may be exchanged for another
certificate or certificates of like tenor entitling the Warrantholder to
purchase a like aggregate number of Warrant Shares as the certificate or
certificates surrendered then entitles such Warrantholder to purchase. Any
Warrantholder desiring to exchange a Warrant certificate shall make such
request in writing delivered to the Company, and shall surrender, properly
endorsed, the certificate evidencing the Warrant to be so exchanged.
Thereupon, the Company shall execute and deliver to the Person entitled
thereto a new Warrant Certificate or Certificates as so requested.
Section 4. Term of Warrants; Exercise of Warrants.
4.1 Vesting and Duration of Warrants. Subject to the terms and
conditions set forth in this Warrant Certificate, the Warrantholder may
exercise the Warrants evidenced hereby, in whole or in part, at any time and
from time to time after the Issue Date and before the Expiration Time of such
Warrants; provided, however, that the number of Warrants which the
Warrantholder will be entitled to exercise on any date will be equal to (a)
the sum of the Warrants vested on or prior to such date pursuant to the
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vesting schedule attached as Schedule A hereto minus (b) the sum of (i) the
total number of Warrants previously exercised hereunder and (ii) the total
number of Warrants which have Expired; provided, further, that (X) upon the
occurrence of a License Agreement Termination Event, notwithstanding the
vesting schedule set forth in Schedule A hereto, any unvested Warrants
hereunder as of such termination date shall cease to vest, but any Warrants
which have vested prior to such termination date shall continue to be
exercisable, subject to the provisions hereunder, (Y) upon a Change in
Control or termination of the License Agreement by the Company pursuant to
Section 9.2(b)(iv) thereof, notwithstanding the vesting schedule set forth in
Schedule A hereto, any unvested Warrants hereunder shall immediately vest and
become fully exercisable, subject to the provisions hereunder, and (Z) upon
the occurrence of a License Agreement Termination Event, all of the
unexercised Warrants hereunder, whether or not vested, shall terminate and
become void, and all rights hereunder with respect to such Warrants shall
thereupon cease. Any Warrant not exercised by the Expiration Time
applicable to such Warrant shall become void, and all rights hereunder with
respect to such Warrant shall thereupon cease.
4.2 Exercise of Warrant.
(a) On the terms and subject to the conditions set forth in this
Warrant Certificate, the Warrantholder may exercise the Warrants evidenced
hereby, in whole or in part, by presentation and surrender to the Company of
this Warrant Certificate together with the attached Election to Exercise (the
"Election to Exercise") duly filled in and signed, and accompanied by payment
to the Company of the Exercise Price for the number of Warrant Shares
specified in such Election to Exercise. Payment of the aggregate Exercise
Price (including payment made pursuant to a purchase under Section 9.3(a)
hereof) shall be made (i) in cash in an amount equal to the aggregate
Exercise Price; (ii) by certified or official bank check in an amount equal
to the aggregate Exercise Price; (iii) by the surrender (which surrender
shall be evidenced by cancellation of the number of Warrants represented by
any Warrant certificate presented in connection with a Cashless Exercise (as
defined below)) of a Warrant or Warrants (represented by one or more relevant
Warrant certificates), and without the payment of the Exercise Price in cash,
in return for the delivery to the surrendering holder of such number of
shares of Common Stock equal to the number of shares of Common Stock for
which such Warrant is exercisable as of the date of exercise (if the Exercise
Price were being paid in cash or certified or official bank check) reduced by
that number of shares of Common Stock equal to the quotient obtained by
dividing (x) the aggregate Exercise Price to be paid by (y) the Market Price
of one share of Common Stock on the Business Day which next precedes the day
of exercise of the Warrant; (iv) by the delivery of shares of Common Stock
having a value (as defined by the next sentence) equal to the aggregate
Exercise Price to be paid that are either held by the Holder or are acquired
in connection with such exercise, and without payment of the Exercise Price
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in cash; or (v) by any combination of the foregoing. Any share of Common
Stock delivered as payment of the Exercise Price in connection with an In-
Kind Exercise (as defined below) shall be deemed to have a value equal to the
Market Price of one share of Common Stock on the Business Day which next
precedes the day of exercise of the Warrant. An exercise of a Warrant in
accordance with clause (iii) is herein referred to as a "Cashless Exercise"
and an exercise of a Warrant in accordance with clause (iv) is herein
referred to as an "In-Kind Exercise."
(b) On the terms and subject to the conditions set forth in this
Warrant Certificate, upon such presentation of a duly executed Election to
Exercise and surrender of this Warrant Certificate and payment of such
aggregate Exercise Price as set forth in paragraph (a) hereof, the Company
shall promptly issue and cause to be delivered to the Warrantholder, or,
subject to Section 2 hereunder, to such Persons as the Warrantholder may
designate in writing, a certificate or certificates (in such name or names as
the Warrantholder may designate in writing) for the specified number of duly
authorized, fully paid and non-assessable Warrant Shares issuable upon
exercise, and shall deliver to the Warrantholder cash, as provided in Section
10 hereof, with respect to any Fractional Warrant Shares otherwise issuable
upon such surrender. In the event that the Warrants evidenced by this
Warrant Certificate are exercised in part prior to the Expiration Time
applicable to such Warrants, the Company shall issue and cause to be
delivered to the Warrantholder, or, subject to Section 2 hereunder, to such
Persons as the Warrantholder may designate in writing, a certificate or
certificates (in such name or names as the Warrantholder may designate in
writing) evidencing any remaining unexercised and un-Expired Warrants.
(c) Each Person in whose name any certificate for Warrant Shares
is issued shall for all purposes be deemed to have become the holder of
record of the Warrant Shares represented thereby on the first date on which
both the Warrant Certificate evidencing the respective Warrants was
surrendered, along with a duly executed Election to Exercise, and payment of
the Exercise Price and any applicable taxes was made, irrespective of date of
issue or delivery of such certificate.
4.3 Conditions to Exercise. Each exercise of the Warrants shall
be subject to the following conditions:
(a) Such exercise shall be consistent with the terms of
Section 4.1 hereof; and
(b) The purchase of the Warrant Shares issuable upon such exercise
shall not be prohibited under applicable law.
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Section 5. Payment of Taxes.
The Company shall pay any and all documentary, stamp or similar
issue or transfer taxes and other governmental charges that may be imposed
under the laws of the United States or any political subdivision or taxing
authority thereof or therein in respect of any issue or delivery of Warrant
Shares or of other securities or property deliverable upon exercise of the
Warrants evidenced by this Warrant Certificate or certificates representing
such shares or securities (other than income or withholding taxes imposed on
the Warrantholder); provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable with respect to any transfer
involving the issue of any Warrant Certificate or any certificates for
Warrant Shares in a name other than that of the registered holders thereof,
and the Company shall not be required to issue or deliver such Warrant
Certificate or certificates for Warrant Shares unless and until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
Section 6. Mutilated or Missing Warrant.
If any Warrant Certificate is lost, stolen, mutilated or destroyed,
the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, upon
receipt of a proper affidavit or other evidence reasonably satisfactory to
the Company (and surrender of any mutilated Warrant Certificate) and
indemnity in form and amount reasonably satisfactory to the Company in each
instance protecting the Company, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants as the Warrant Certificate so
lost, stolen, mutilated or destroyed. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall
be at any time enforceable by anyone. An applicant for such substitute
Warrant Certificate shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may prescribe. All
Warrant Certificates shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement of
lost, stolen, mutilated or destroyed Warrant Certificates, and shall preclude
any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement
of negotiable instruments or other securities without their surrender.
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Section 7. Reservation of Shares.
The Company hereby agrees that, at all times until all of the
Warrants issued hereunder (whether vested or unvested) have been exercised,
expired or canceled, there shall be reserved for issuance and delivery upon
exercise of this Warrant, free from preemptive rights, the number of shares
of authorized but unissued shares of Common Stock as may be required at such
time (adjusted from time to time for additional vesting of Warrants as well
as for cancellation of exercised or Expired Warrants) for issuance or
delivery upon exercise of the Warrants evidenced by this Warrant Certificate.
The Company further agrees that it will not, by amendment of its Articles of
Incorporation or through reorganization, consolidation, merger, dissolution
or sale or assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or conditions
to be observed or performed hereunder by the Company. Without limiting the
generality of the foregoing, the Company shall from time to time take all
such action that may be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock at the
Exercise Price as so adjusted.
Section 8. Exercise Price.
The price per share (the "Exercise Price") at which Warrant Shares
shall be purchasable upon the exercise of the Warrants evidenced by this
Warrant Certificate shall be $17.375, subject to adjustment pursuant to
Section 9 hereof.
Section 9. Adjustment of Exercise Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of
the Warrants evidenced by this Warrant Certificate and the Exercise Price
thereof shall be subject to adjustment from time to time after the date
hereof upon the happening of certain events, as follows:
9.1 Adjustments to Exercise Price. The Exercise Price shall be
subject to adjustment as follows:
(a) Stock Dividends. In case the Company shall, after the Issue
Date, pay a dividend or make a distribution on its Common Stock or on
any other class or series of capital stock of the Company which dividend
or distribution includes or is convertible (without the payment of any
consideration other than surrender of such convertible security) into
Common Stock, the Exercise Price in effect at the opening of business on
the day following the date fixed for determination of the holders of
Common Stock or capital stock entitled to such payment or distribution
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(the "Record Date") shall be reduced by multiplying such Exercise Price
by a fraction of which (A) the numerator shall be the number of shares
of Common Stock outstanding at the close of business on the Record Date
and (B) the denominator shall be the sum of such number of shares and
the total number of shares constituting or included in such dividend or
other distribution (or in the case of a dividend consisting of
securities convertible into Common Stock, the number of shares of Common
Stock into which such securities are convertible), such reduction to
become effective immediately after the opening of business on the day
following the Record Date; provided, however, that if any such dividend
or distribution is rescinded and not paid, then the Exercise Price
shall, as of the date when it is determined that such dividend or
distribution price will be rescinded, revert back to the Exercise Price
in effect prior to the adjustment made pursuant to this paragraph.
(b) Stock Splits and Reverse Splits. In case the Common Stock
shall be subdivided into a greater number of shares of Common Stock or
combined into a smaller number of shares of Common Stock, the Exercise
Price in effect at the opening of business on the day following the day
upon which such subdivision or combination becomes effective shall be
adjusted so that the holder of any Warrants thereafter surrendered for
purchase of shares of Common Stock shall be entitled to receive the
number of shares of Common Stock which such holder would have owned or
been entitled to receive after the happening of such events had such
Warrants been surrendered for exercise immediately prior to such event.
Such adjustment shall become effective at the close of business on the
day upon which such subdivision or combination becomes effective.
(c) Issuances Below Market. In case the Company shall issue or
sell (a) Common Stock, (b) rights, warrants or options entitling the
holders thereof to subscribe for or purchase shares of Common Stock or
(c) any security convertible into Common Stock, in each case at a price,
or having an exercise or conversion price, per share less than the then-
current Market Price per share of Common Stock on (x) the date of such
issuance or sale or (y) in the case of a dividend or distribution of
such rights, warrants, options or convertible securities to the holders
of Common Stock, the date fixed for determination of the holders of such
Common Stock entitled to such dividend or distribution (the date
specified in clause (x) or (y) being the "Relevant Date") (excluding any
issuance for which an appropriate and full adjustment has been made
pursuant to Section 9.1(a)), the Exercise Price shall be reduced by
multiplying the Exercise Price by a fraction of which (A) the numerator
shall be the number of shares of Common Stock outstanding at the open of
business on the Relevant Date plus the number of shares of Common Stock
which the aggregate consideration received or receivable (I) for the
total number of shares of Common Stock, rights, warrants or options or
convertible securities so issued or sold, and (II) upon the exercise or
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conversion of all such rights, warrants, options or securities, would
purchase at the then-current Market Price per share of Common Stock and
(B) the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the Relevant Date plus (without
duplication) the number of shares of Common Stock subject to all such
rights, warrants, options and convertible securities, such reduction of
the Exercise Price to be effective at the opening of business on the day
following the Relevant Date; provided, however, that if any such
dividend or distribution is rescinded and not paid, then the Exercise
Price shall, as of the date when it is determined that such dividend or
distribution will be rescinded, revert back to the Exercise Price in
effect prior to the adjustment made pursuant to this paragraph. The
issuance of any shares of Common Stock or other rights, warrants,
options or convertible securities pursuant to (a) any restricted stock
or stock option plan or program of the Company involving the grant of
options or rights solely to officers, directors, employees and/or
consultants of the Company or its Subsidiaries at below the then-current
Market Price per share of Common Stock (provided, that any such options
or rights were initially granted with an exercise or conversion price of
not less than 85% of the then-current Market Price per share of Common
Stock), (b) any option, warrant, right, or convertible security
outstanding as of the date hereof,(c) the terms of a firmly committed
bona fide underwritten public offering, or (d) any merger, acquisition,
consolidation, or similar transaction, shall not be deemed to constitute
an issuance or sale to which this Section 9.1(c) applies. Upon the
expiration unexercised of any rights, warrants, options or rights to
convert any convertible securities for which an adjustment has been made
pursuant to this Section 9.1(c), the adjustments shall forthwith be
reversed to effect such rate of conversion as would have been in effect
at the time of such expiration or termination had such rights, warrants,
options or rights to convertible securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(d) Special Dividends. Subject to the last sentence of this
paragraph (d), in case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of any class or series of capital stock, cash or
assets (including securities, but excluding any shares of Common Stock,
rights, warrants, options or convertible securities for which an
appropriate and full adjustment has been made pursuant to paragraph (a)
or (c) above), the Exercise Price in effect on the day immediately
preceding the date fixed for the payment of such distribution (the date
fixed for payment being referred to as the "Reference Date") shall be
reduced by multiplying such Exercise Price by a fraction of which the
numerator shall be the current Market Price per share of the Common
Stock on the Reference Date less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be
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mailed to the holders of the Warrants) on the Reference Date of the
portion of the evidences of indebtedness, shares of capital stock, cash
and assets so distributed applicable to one share of Common Stock, and
the denominator shall be such current Market Price per share of the
Common Stock, such reduction to become effective immediately prior to
the opening of business on the day following the Reference Date;
provided, however, that if such dividend or distribution is rescinded
and not paid, then the Exercise Price shall, as of the date when it is
determined that such dividend or distribution will be rescinded, revert
back to the Exercise Price in effect prior to the adjustment made
pursuant to this paragraph. If the Board of Directors determines the
fair market value of any distribution for purposes of this paragraph (d)
by reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider,
to the extent possible, the prices in such market over the same period
used in computing the current Market Price per share of Common Stock
pursuant to this Section 9.1. Notwithstanding the foregoing, if the
holders of a majority of the outstanding unexercised and un-Expired
Warrants (whether or not vested) shall dispute the fair market
determination of the Board of Directors, an Independent Expert shall be
selected to determine the fair market value of the Common Stock as of
the Reference Date, and such Independent Expert's determination shall be
final, binding and conclusive. All costs and expenses of such
Independent Expert shall be borne by the holders of the then outstanding
unexercised and un-Expired Warrants (whether or not vested) unless the
determination of fair market value is more favorable to such holders by
5% or more, in which case, all such costs and expenses shall be borne by
the Company. For purposes of this paragraph (d), any dividend or
distribution that also includes shares of Common Stock or rights,
warrants or options to subscribe for or purchase shares of Common Stock
shall be deemed to be (1) a dividend or distribution of the evidences of
indebtedness, cash, assets or shares of capital stock other than such
shares of Common Stock or rights, warrants, options or convertible
securities (making any Exercise Price reduction required by this
subparagraph (d)) immediately followed by (2) a dividend or distribution
of such shares of Common Stock or such rights, warrants, options or
convertible securities (making any further Exercise Price reduction
required by subparagraph (a) or (c) of this Section 9.1), except (A) the
Reference Date of such dividend or distribution as defined in this
subparagraph (d) shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution" and the "Relevant Date" within the meaning of
subparagraphs (a) and (c) of this Section 9.1 and (B) any shares of
Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of subparagraph (a) of this Section
9.1).
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(e) Minimum Adjustment Requirement. No adjustment shall be
required unless such adjustment would result in an increase or decrease
of at least 1% in the Exercise Price then subject to adjustment;
provided, however, that any adjustments that are not made by reason of
this Section 9.1(e) shall be carried forward and taken into account in
any subsequent adjustment. In case the Company shall at any time issue
shares of Common Stock by way of dividend on any stock of the Company or
subdivide or combine the outstanding shares of Common Stock, said 1%
specified in the preceding sentence (as theretofore increased or
decreased, if said amount shall have been adjusted in accordance with
the provisions of this Section 9.1(e)) shall forthwith be
proportionately increased in the case of such a combination or decreased
in the case of such a subdivision or stock dividend so as appropriately
to reflect the same. No adjustment to the Exercise Price shall be
required if the holders of the outstanding unexercised and unissued
Warrants (whether or not vested) receive the dividend or distribution
giving rise to such adjustment in respect of each such Warrant.
(f) Calculations. All calculations under this Section 9.1 shall
be made to the nearest $0.01.
(g) Other Reductions in Exercise Price. The Company from time to
time may reduce the Exercise Price by any amount for any period of time
if the period is at least 20 days, the reduction is irrevocable during
the period, subject to any conditions that the Board of Directors may
deem relevant, and the Board of Directors of the Company shall have made
a determination that such reduction would be in the best interest of the
Company, which determination shall be conclusive. Whenever the Exercise
Price is reduced pursuant to the preceding sentence, the Company shall
mail to the Warrantholder a notice of the reduction at least fifteen
days prior to the date the reduced Exercise Price takes effect, and such
notice shall state the reduced Exercise Price and the period it will be
in effect. If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
shareholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment in the number of
shares of Common Stock issuable upon exercise granted by this Section
9.1 or in the Exercise Price then in effect shall be required by reason
of the taking of such record.
(h) Exercise between Record and Payment Date. Anything in this
Section 9.1 to the contrary notwithstanding, in the event that a record
date is established for a dividend or distribution that gives rise to an
adjustment to the Exercise Price pursuant to this Section 9.1, if any
Warrant is exercised to purchase shares of Common Stock between such
record date and the date such dividend or distribution is paid then (x)
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the number of shares of Common Stock issued at the time of such exercise
will be determined by reference to the Exercise Price as in effect
without taking into account the adjustment resulting from such dividend
or distribution and (y) on the date that such dividend or distribution
is actually paid there shall be issued in respect of such exercise such
number of additional shares of Common Stock as is necessary to reflect
the Exercise Price in effect after taking into account the adjustment
resulting from the dividend or distribution.
(i) Certificate. Whenever an adjustment in the Exercise Price is
made as required or permitted by the provisions of this Section 9.1, the
Company shall promptly file a certificate of its chief financial officer
setting forth (A) the adjusted Exercise Price as provided in this
Section 9.1 and a brief statement of the facts requiring such adjustment
and the computation thereof and (B) the number of shares of Common Stock
(or portions thereof) purchasable upon exercise of a Warrant after such
adjustment in the Exercise Price in accordance with Section 9.2 hereof
and the record date therefor, and promptly after such filing shall mail
or cause to be mailed a notice of such adjustment to each Warrantholder
at his or her last address as the same appears on the Warrant Register.
Such certificate, in the absence of manifest error, shall be conclusive
and final evidence of the correctness of such adjustment. The Company
shall be entitled to rely upon such certificate, and shall be under no
duty or responsibility with respect to any such certificate except to
exhibit the same to any Warrantholder desiring inspection thereof.
(j) Notice. In case:
(i) the Company shall declare any dividend or any
distribution of any kind or character (whether in cash, securities or
other property) on or in respect of shares of Common Stock or to the
shareholders of the Company (in their capacity as such), excluding a
dividend payable in shares of Common Stock or any regular periodic cash
dividend paid out of current or retained earnings (as such terms are
used in generally accepted accounting principles); or
(ii) the Company shall authorize the granting to the holders
of shares of Common Stock of rights to subscribe for or purchase any
shares of capital stock or of any other right; or
(iii) of any reclassification of shares of Common Stock
(other than a subdivision or combination of outstanding shares of Common
Stock or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any shareholders
of the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
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(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be mailed to each Warrantholder, at its
last address as it shall appear upon the Warrant Register, at least 10
days prior to the applicable record date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or, if a record is not to be
taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and, if applicable, the date
as of which it is expected that holders of shares of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities or other property (including cash) deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give any such notice, or any
defect therein, shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.
(l) Section 305. Anything in this Section 9.1 to the contrary
notwithstanding, the Company shall be entitled, but not required, to
make such reductions in the Exercise Price, in addition to those
required by this Section 9.1, as it in its discretion shall determine to
be advisable, including, without limitation, in order that any dividend
in or distribution of shares of Common Stock or shares of capital stock
of any class other than Common Stock, subdivision, reclassification or
combination of shares of Common Stock, issuance of rights or warrants,
or any other transaction having a similar effect, shall not be treated
as a distribution of property by the Company to its shareholders under
Section 305 of the Internal Revenue Code of 1986, as amended, or any
successor provision and shall not be taxable to them.
9.2 Adjustments to Number of Warrant Shares.
Upon each adjustment of the Exercise Price pursuant to Section 9.1
hereof, the number of Warrant Shares purchasable upon exercise of a Warrant
outstanding prior to the effectiveness of such adjustment shall be adjusted
to the number, calculated to the nearest one-hundredth of a share, obtained
by (x) multiplying the number of Warrant Shares purchasable immediately prior
to such adjustment upon the exercise of a Warrant by the Exercise Price in
effect prior to such adjustment and (y) dividing the product so obtained by
the Exercise Price in effect after such adjustment of the Exercise Price.
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9.3 Organic Change.
(a) Company Survives. Upon the consummation of an Organic Change
(other than a transaction in which the Company is not the surviving entity),
lawful provision shall be made as part of the terms of such transaction
whereby the terms of the Warrant Certificates shall be modified, without
payment of any additional consideration therefor, so as to provide that upon
exercise of Warrants following the consummation of such Organic Change, the
Warrantholder shall have the right to purchase for the Exercise Price the
kind and amount of securities, cash and other property receivable upon such
Organic Change by a holder of the number of Warrant Shares into which such
Warrants might have been exercised immediately prior to such Organic Change.
Lawful provision also shall be made as part of the terms of the Organic
Change so that all other terms of the Warrant Certificates shall remain in
full force and effect following such an Organic Change. The provisions of
this Section 9.3(a) shall similarly apply to successive Organic Changes.
(b) Company Does Not Survive. The Company shall not enter into an
Organic Change that is a transaction in which the Company is not the
surviving entity unless lawful provision shall be made as part of the terms
of such transaction whereby the surviving entity shall issue new securities
to each Warrantholder, without payment of any additional consideration
therefor, with terms that provide that upon the exercise of the Warrants, the
Warrantholder shall have the right to purchase the kind and amount of
securities, cash and other property receivable upon such Organic Change by a
holder of the number of Warrant Shares into which such Warrants might have
been exercised immediately prior to such Organic Change.
9.4 Statement on Warrants. The form of Warrant Certificate need
not be changed because of any adjustment made pursuant to Section 8, Section
9.1 or Section 9.2 hereof, and Warrants issued after such adjustment may
state the same Exercise Price and the same number of Warrant Shares as are
stated in this Warrant Certificate.
Section 10. Fractional Interests.
The Company shall not be required to issue Fractional Warrant
Shares on the exercise of the Warrants evidenced by this Warrant Certificate.
If Fractional Warrant Shares totaling more than one Warrant Share in the
aggregate are presented for exercise at the same time by the Warrantholder,
the number of full Warrant Shares which shall be issuable upon exercise
thereof shall be computed on the basis of the aggregate number of Warrant
Shares so purchasable upon the exercise of the Warrants so presented. If any
Fractional Warrant Share would but for the provisions of this Section 10 be
issuable on the exercise of this Warrant (or specified portions thereof), the
Company shall pay an amount in cash equal to the fraction of a Warrant Share
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represented by such Fractional Warrant Share multiplied by the Market Price
on the day of such exercise.
Section 11. No Rights as Shareholder.
Nothing in this Warrant Certificate shall be construed as
conferring upon the Warrantholder or its transferees any rights as a
shareholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a shareholder with respect to any meeting of
shareholders for the election of directors of the Company or any other
matter.
Section 12. Cooperation; Validity of Warrant.
The Company shall use its reasonable best efforts to obtain all
such authorizations, exemptions or consents from any Governmental Entity
having jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant. In addition, upon the request of
Warrantholder, the Company will at any time during the period this Warrant is
outstanding acknowledge in writing, in form satisfactory to Warrantholder,
the continuing validity of this Warrant and the obligations of the Company
hereunder.
Section 13. Listing on Nasdaq or Securities Exchange.
The Company shall list any shares of Common Stock issuable upon
exercise of the Warrants evidenced by this Warrant Certificate in accordance
with and as required by Section 5(l) of the Registration Rights Agreement
dated as of April 15, 1999 by and among the Company, NBC and GE Capital, as
amended from time to time thereafter.
Section 14. Covenant Regarding Consent.
The Company hereby covenants to use its reasonable best efforts
upon the request of the Warrantholder to seek any waivers or consents, or to
take any other action required, to effectuate the exercise of this Warrant by
such Warrantholder.
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Section 15. Limitation on Liability.
No provision hereof, in the absence of action by the Warrantholder
to receive shares of Common Stock, and no enumeration herein of the rights or
privileges of the Warrantholder, shall give rise to any liability of the
Warrantholder for any value subsequently assigned to the Common Stock or as a
shareholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
Section 16. Nonwaiver and Expenses.
No course of dealing or any delay or failure to exercise any right
hereunder on the part of the Warrantholder or the Company shall operate as a
waiver of such right or otherwise prejudice the Warrantholder's, or the
Company's, as the case may be, rights, powers or remedies.
Section 17. Amendment.
This Warrant and all other Warrants issued hereunder may be
modified or amended or the provisions hereof waived with the written consent
of the Company and holders of Warrants exercisable for in excess of 50% of
the aggregate number of shares of Common Stock then receivable upon exercise
of all Warrants whether or not then exercisable; provided that no such
Warrant may be modified or amended in a manner which is materially adverse to
the Initial Holder or any of its successors or assigns, so long as such
Person holds any Warrants or Warrant Shares, without the prior written
consent of such Person.
Section 18. Successors.
All the covenants and provisions of this Warrant Certificate by or
for the benefit of the Company or the Warrantholder shall bind and inure to
the benefit of their respective successors and permitted assigns hereunder.
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Section 19. Governing Law; Choice of Forum, Etc.
The validity, construction and performance of this Warrant Certificate
shall be governed by and interpreted in accordance with, the laws of New
York. The parties hereto agree that the appropriate forum for any disputes
arising out of this Warrant Certificate solely between or among any or all of
the Company, on the one hand, and the Initial Holder and/or any Person who
has become a Warrantholder, on the other, shall be any state or U.S. federal
court sitting within the County of New York, New York or County of Hennepin,
Minnesota, and the parties hereto irrevocably consent to the jurisdiction of
such courts, and agree to comply with all requirements necessary to give such
courts jurisdiction. The parties hereto further agree that the parties will
not bring suit with respect to any disputes, except as expressly set forth
below, arising out of this Warrant Certificate for the execution or
enforcement of judgment, in any jurisdiction other than the above specified
courts. Each of the parties hereto irrevocably consents to the service of
process in any action or proceeding hereunder by the mailing of copies
thereof by registered or certified airmail, postage prepaid, if to (i) the
Company, at ValueVision International, Inc., 6740 Shady Oak Road, Eden
Prairie, MN 55344-3433, Attention: General Counsel, Fax: (612) 947-0188, or
at such other address specified by the Company in writing to the other
parties, with a copy to Faegre & Benson LLP, 2200 Wells Fargo Center, 90
South Seventh Street, Minneapolis, Minnesota 55402, Attention: Andrew G.
Humphrey, Fax: (612) 336-3026 and (ii) any Warrantholder, at the address of
such Warrantholder specified in the Warrant Register. The foregoing shall
not limit the rights of any party hereto to serve process in an other manner
permitted by the law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by law,
that final and unappealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States by suit on the
judgment, a certified or exemplified copy of which shall be conclusive
evidence of the fact and the amount of indebtedness. The parties agree to
waive any and all rights that they may have to a jury trial with respect to
disputes arising out of this Agreement.
Section 20. Enforcement.
The parties agree that irreparable damage would occur in the event
that any of the provisions of this Warrant were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Warrant and to enforce specifically the terms and
provisions of this Warrant.
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Section 21. Benefits of this Agreement.
Nothing in this Warrant Certificate shall be construed to give to
any Person other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant Certificate, and this
Warrant Certificate shall be for the sole and exclusive benefit of the
Company and the Warrantholder.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first written above.
VALUEVISION INTERNATIONAL, INC.
By:
-----------------------------
Name:
Title:
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ELECTION TO EXERCISE
(To be executed upon exercise of Warrants)
To [___________________]:
The undersigned hereby irrevocably elects to exercise the right
represented by the within Warrant Certificate for, and to acquire thereunder,
_____ Warrant Shares, as provided for therein, and tenders herewith [payment
of] [pursuant to a Cashless Exercise or In-Kind Exercise of securities with
a value equal to] the $________ Exercise Price in full in the form of
[COMPLETE WHERE APPLICABLE]:
[ ] cash or a certified or official bank check in the amount of
$_______ ; and/or
[ ] exchange of _____ Warrants for ____ Warrant Shares; and/or
[ ] exchange of _____ shares of Common Stock for ______ Warrant
Shares; or
[ ] cash or a certified or official bank check in the amount of
$______ and/or ___ shares of Common Stock, to be exchanged for
one (1) Warrant Share, such Warrant Shares then to be
exchanged for such number of Warrant Shares as are
exchangeable pursuant to an In-Kind Exercise (such In-Kind
Exercises to be repeated until the undersigned shall be
entitled to receive ____ Warrant Shares).
For a total Exercise Price of $_________.
If the value of the shares of the Company securities exchanged herewith
exceeds the value of the Exercise Price applied to such delivery, then the
Company shall reissue certificates representing such securities in the
amounts necessary to preserve the value of such securities not applied to the
exercise of the Warrants pursuant to this Election to Exercise.
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Please issue a certificate or certificates for such Warrant Shares in the
name of, and pay any cash for any Fractional Warrant Shares to (please print
name, address and social security or other identifying number)*:
Name: _______________
Address: __________________________________________________________________
------------------------------------------------------------------
Soc. Sec. #:
AND, if such number of Warrant Shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be
issued in the name of the undersigned for the balance remaining of the
Warrant Shares purchasable thereunder rounded up to the next higher whole
number of Warrant Shares.
Signature:**--------------------------------
---------
* The Warrant Certificate contains restrictions on the sale and other
transfer of the Warrants evidenced by such Warrant Certificate.
** The above signature will correspond exactly with the name on the face of
this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
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ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Name and Address of Assignee must be Printed or Typewritten)
Warrants to purchase ____ Warrant Shares of the Company, evidenced by the
within Warrant Certificate hereby irrevocably constituting and appointing
________________ Attorney to transfer said Warrants on the books of the
Company, with full power of substitution in the premises.
Dated: _____________, ____
---------------------------------
Signature of Registered Holder*
Signature Guaranteed: ---------------------------------
Signature of Guarantor
*The above signature must correspond exactly with the name on the face of
this Warrant Certificate.
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SCHEDULE A
SCHEDULE OF VESTING
Date Warrants Vesting on Date
November 16, 2000 2,000,000
November 16, 2001 2,000,000
November 16, 2002 2,000,000
M1:686294.03
Exhibit 13. Warrant Purchase Agreement
WARRANT PURCHASE AGREEMENT
This Warrant Purchase Agreement (the "Warrant Purchase Agreement"
or the "Agreement") is made and entered into as of November 16, 2000 (the
"Effective Date") by and between ValueVision International, Inc., a Minnesota
corporation (the "Company"), and National Broadcasting Company, Inc., a
Delaware corporation ("NBC" or the "Holder").
1. Issuance of Warrants. As consideration for the execution by NBC of
the Trademark License Agreement dated as of the date hereof (the "License
Agreement") between NBC and the Company, the Company hereby agrees to issue
to NBC six million (6,000,000) warrants (the "Warrants"), each of which
entitles the Holder to purchase from the Company one fully paid, duly
authorized and nonassessable share of common stock, par value $.01 per share,
of the Company (the "Common Stock"), subject to the terms and conditions set
forth in the warrant certificate, a form of which is attached this agreement
as Exhibit A (the "Warrant Certificate"). At the closing of the transactions
contemplated by this Agreement (the "Closing"), the Company shall deliver the
Warrant Certificate to NBC. The Closing shall take place simultaneously with
the closing of the transactions contemplated by the License Agreement (the
"Closing Date").
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to NBC as of the date hereof as follows:
2.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Minnesota and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its businesses as they
are now being conducted. The Company is duly licensed or qualified as a
foreign corporation to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
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ownership or leasing of its properties makes such qualification and being in
good standing necessary, other than where the failure to be so qualified and
in good standing would not have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole (a "Company Material Adverse Effect").
2.2 Capitalization.
(a) As of November 16, 2000, the authorized capital
stock of the Company consists of 10,000,000 shares of Common Stock, $.01 par
value per share (the "Common Stock"), 38,675,401 of which are issued and
outstanding and 5,339,500 shares of Series A Redeemable Convertible Preferred
Stock, par value $.01 per share (the "Preferred Stock"), all of which are
issued and outstanding. All outstanding shares are duly authorized, validly
issued, fully paid and non-assessable and not subject to preemptive rights
created by statute, the Company's Restated Articles of Incorporation or By-
Laws or any agreement to which the Company is a party or is bound. The
Company has reserved (i) 5,339,500 shares of Common Stock for issuance upon
conversion of the Preferred Stock, (ii) 1,854,760 shares of Common Stock for
issuance upon exercise of outstanding warrants (excluding the Warrants)
issued or to be issued and (iii) 4,250,000 shares of Common Stock for
issuance pursuant to the Company's 1990 Stock Option Plan and the Company's
1994 Executive Stock Option Plan. There are no options, warrants or other
rights (including registration rights), agreements, restrictions on transfer,
arrangements or commitments of any character to which the Company is a party
relating to the issued or unissued capital stock of, or other equity
interests in, the Company, by sale, lease, license or otherwise, except (x)
as disclosed in the Company SEC Reports (as defined in Section 2.5) or
otherwise as set forth in this Section 2.2, (y) for the Company's existing
stock option plans described in the Company SEC Reports to the extent stock
options thereunder have not yet been granted and (z) as set forth above.
(b) 6,000,000 shares of Common Stock have been reserved
for issuance upon exercise of the Warrants (the "Warrant Shares"). When
issued, the Warrant Shares will be duly authorized, validly issued, fully
paid and non-assessable and not subject to preemptive rights created by
statute, the Company's Restated Articles of Incorporation or By-Laws or any
agreement to which the Company is a party or is bound.
2.3 Authority. The Company has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby to be
consummated by the Company. The execution and delivery of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
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contemplated hereby. This Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery
hereof by NBC, constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited or affected by (a) applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation, arrangement,
fraudulent transfer, fraudulent conveyance and other similar laws (including
court decisions) now or hereafter in effect and affecting the rights and
remedies of creditors generally or providing for the relief of debtors, (b)
the refusal of a particular court to grant equitable remedies, including,
without limitation, specific performance and injunction relief, and (c)
general principles of equity (regardless of whether such remedies are sought
in a proceeding in equity or at law).
2.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder will not, (i) conflict with, breach or violate the Restated
Articles of Incorporation or By-Laws of the Company, (ii) conflict with or
violate any laws in effect as of the date of this Agreement applicable to the
Company or any of its subsidiaries or by which any of their respective
properties or assets is bound or (iii) result in any breach of, constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, give to any other entity any right of termination, amendment,
acceleration or cancellation of, require payment under, or result in the
creation of a lien or encumbrance on any of the properties or assets of the
Company or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of their
respective properties or assets is bound except, in the case of clauses (ii)
and (iii) above, such conflicts, breaches, defaults, terminations,
amendments, accelerations, payments or liens or encumbrances which would not
have a Company Material Adverse Effect or a material adverse effect on the
Warrants.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder will not, require the Company to obtain any consent, registration,
approval, authorization or permit of, to make any filing with, or to give
notification to, any person, including any governmental entities, based on
any law in effect as of the date of this Agreement, except (i) those which
have been or will be timely obtained, made or given , (ii) such filings as
may be required under the Federal securities laws and the blue sky laws of
the various states, and (iii) such consents, registrations, approvals,
authorizations, permits, or notifications of which the failure to make or
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obtain would not have a Company Material Adverse Effect or a material adverse
effect on the Warrants.
2.5 Reports; Financial Statements.
(a) Copies of all reports, registration statements and other
filings, together with any amendments thereto, filed by the Company with the
Securities and Exchange Commission (the "SEC") since December 31, 1998
through the date of this Agreement (the "Company SEC Reports"), have been
made available to NBC. As of the respective dates of their filing with the
SEC, after giving effect to any amendments and supplements thereto filed
prior to the date hereof, the Company SEC Reports complied, and all such
reports, registration statements and other filings to be filed by the Company
with the SEC prior to the Closing Date will comply, in all material respects
with the applicable requirements of the Securities Act of 1933, as amended
(the "Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the SEC promulgated
thereunder, and did not at the time they were filed with the SEC, after
giving effect to any amendments and supplements thereto filed prior to the
date hereof, or will not at the time they are filed with the SEC, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
(b) The consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports and in
any such reports, registration statements and other filings to be filed by
the Company with the SEC prior to the Closing Date (i) have been or will be
prepared in accordance with the published rules and regulations of the SEC
and generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form 10-
Q of the SEC, or for normal year-end adjustments) and (ii) fairly present or
will fairly present in all material respects the consolidated financial
position of the Company and its subsidiaries as of the respective dates
thereof and the consolidated results of their operations and cash flows for
the periods indicated, except that any unaudited interim financial statements
were or will be subject to normal and recurring year-end adjustments and may
omit footnote disclosure as permitted by regulations of the SEC.
2.6 No Brokers. The Company has not retained any broker, finder
or investment banker in connection with the issuance of the Warrants provided
for in this Agreement.
3. Representations and Warranties of NBC. NBC hereby represents and
warrants to the Company as of the date hereof as follows:
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3.1 Organization and Qualification. NBC is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its businesses as they are now
being conducted. NBC is duly licensed or qualified as a foreign corporation
to do business and is in good standing in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification and being in good standing necessary,
other than where the failure to be so qualified and in good standing would
not have a material adverse effect on NBC and its subsidiaries taken as a
whole, their business, financial condition or results of operations.
3.2 Authority. NBC has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby to be
consummated by NBC. The execution and delivery of this Agreement by NBC and
the consummation by NBC of the transactions contemplated hereby have been
duly authorized by all necessary corporate action and no other corporate
proceedings on the part of NBC are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by NBC and, assuming the due authorization,
execution and delivery hereof by the Company, constitutes the legal, valid
and binding obligation of NBC enforceable against NBC in accordance with its
terms, except as such enforceability may be limited or affected by (a)
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
arrangement, fraudulent transfer, fraudulent conveyance and other similar
laws (including court decisions) now or hereafter in effect and affecting the
rights and remedies of creditors generally or providing for the relief of
debtors, (b) the refusal of a particular court to grant equitable remedies,
including, without limitation, specific performance and injunction relief,
and (c) general principles of equity (regardless of whether such remedies are
sought in a proceeding in equity or at law).
3.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by NBC does
not, and the performance by NBC of its obligations hereunder will not, (i)
conflict with, breach or violate the Certificate of Incorporation or By-Laws
of NBC, (ii) conflict with or violate any laws in effect as of the date of
this Agreement applicable to NBC or any of its subsidiaries or by which any
of their respective properties or assets is bound or (iii) result in any
breach of, constitute a default (or an event that with notice or lapse of
time or both would become a default) under, give to any other entity any
right of termination, amendment, acceleration or cancellation of, require
payment under, or result in the creation of a lien or encumbrance on any of
the properties or assets of NBC or any of its subsidiaries pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
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franchise, or other instrument or obligation to which NBC or any of its
subsidiaries is a party or by which NBC or any of its subsidiaries or any of
their respective properties or assets is bound.
(b) The execution and delivery of this Agreement by NBC does
not, and the performance by NBC of its obligations hereunder will not,
require NBC to obtain any consent, registration, approval, authorization or
permit of, to make any filing with, or to give notification to, any person,
including any governmental entities, based on any law in effect as of the
date of this Agreement, except those which have been or will be timely
obtained, made or given.
3.4 Acquisition of Securities for Investment. NBC has such
knowledge, sophistication and experience in financial and business matters
that it is capable of evaluating the merits and risks of its acquisition of
the Warrants hereunder and has so evaluated the merits and risks of such
investment. NBC is an "accredited investor" within the meaning of Rule 501
promulgated under the Securities Act. NBC confirms that it has reviewed the
Company SEC Reports, that it is able to bear the economic risk of such
investment and that the Company has made available to NBC the opportunity to
ask questions of the officers and management of the Company and to acquire
additional information about the business and financial condition of the
Company. NBC is acquiring the Warrants (and if NBC acquires any Warrant
Shares, NBC will acquire such Warrant Shares) solely for the purpose of
investment and not with a view toward or for sale in connection with any
distribution thereof in violation of any federal or state securities or "blue
sky" laws, or with the present intention of distributing or selling such
Warrants or Warrant Shares in violation of any federal or state securities or
"blue sky" law. NBC understands and agrees that the Warrants and the Warrant
Shares may not be sold, transferred, offered for sale, pledged, hypothecated
or otherwise disposed of without registration under the Securities Act or
pursuant to an exemption therefrom, and without compliance with state, local
and foreign securities laws (in each case to the extent applicable). NBC
understands and agrees that the Warrants are, and the Warrant Shares will be,
"restricted securities" within the meaning of Rule 144 promulgated under the
Securities Act and that, except as set forth in the Registration Rights
Agreement dated as of April 15, 1999 (as amended from time to time, the
"Registration Rights Agreement"), by and among the Company, NBC and GE
Capital Equity Investments, Inc. ("GECEI"), the Company has no obligation or
intention to register any of the Warrants or the Warrant Shares.
3.5 No Brokers. NBC has not retained any broker, finder or
investment banker in connection with the acquisition of the Warrants by NBC.
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4. Covenants of the Company. The Company hereby covenants that:
4.1 Listing of Shares. The Company shall comply with its
obligations to list any Warrant Shares issued upon exercise of the Warrants
in accordance with and pursuant to Section 5(l) of the Registration Rights
Agreement.
4.2 Reservation of Shares of Common Stock. The Company shall keep
reserved a sufficient number of shares of Common Stock solely for the purpose
of issuance upon the exercise of all of the Warrants.
5. Conditions to Closing.
5.1 Conditions Precedent to Obligation of the Company. The
obligation of the Company to consummate the Closing shall be subject to the
satisfaction (or waiver by the Company) of the following conditions on or
prior to the Closing Date: (i) the representations and warranties of NBC
contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on, as of and with reference to
the Closing Date (except to the extent such representations and warranties
specifically relate to a prior date); and (ii) the Company shall have
received the License Agreement, duly executed by NBC.
5.2 Conditions Precedent to Obligation of NBC. The obligation of
NBC to consummate the Closing shall be subject to the satisfaction (or waiver
by NBC) of the following conditions on or prior to the Closing Date: (i) the
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made on, as of and with reference to the Closing Date (except to the
extent such representations and warranties specifically relate to a prior
date) and (ii) NBC shall have received (a) the Warrant Certificate, duly
executed by the Company, (b) the opinion of Faegre & Benson LLP, counsel to
the Company, dated the Closing Date, in the form attached hereto as Exhibit
B, (c) an Amended and Restated Registration Rights Agreement, in
substantially the form of Exhibit D, duly executed by the Company and GECEI
and (d) the License Agreement, duly executed by the Company.
6. Miscellaneous.
6.1 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery to the party to be notified in person, by facsimile,
or by overnight delivery service or four (4) calendar days after deposit with
the United States mail, by registered or certified mail, postage prepaid,
addressed (a) if to NBC, at 30 Rockefeller Plaza, New York, NY 10112,
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Attention: Law Department, (Fax: (212) 977-7165) or at such other address as
NBC shall have furnished in writing to the Company or (b) if to the Company,
at 6740 Shady Oak Road, Eden Prairie, Minnesota 55344-3433, Attention:
General Counsel (Fax: (612) 947-0188) or at such other address as the Company
shall have furnished to NBC in writing.
6.2. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York (excluding the laws
regarding conflict of laws questions). The parties hereby submit to the
exclusive jurisdiction of the federal and state courts located in the County
of New York, and any action or suit under this Agreement shall only be
brought by the parties in any federal or state court with appropriate
jurisdiction over the subject matter established or settled in the County of
New York. The parties shall not raise in connection herewith, and hereby
waive, trial by jury and/or other defenses based upon the venue, the
inconvenience of the forum, the lack of personal jurisdiction, the
sufficiency of service of process or the like in any action or suit brought
pursuant to this Agreement.
6.3 Amendment. Neither this Agreement nor any provisions hereof
may be changed, waived, discharged or terminated orally, but only by a signed
statement in writing by both parties.
6.4 Agreement. This Agreement, the Warrant, the Amended and
Restated Registration Rights Agreement dated as of the date hereof among the
Company, NBC and GE Capital Equity Investments, Inc., Amendment No. 1, the
Letter Agreement dated the date hereof between NBC and the Company and the
Trademark License Agreement constitute the full and entire understanding and
agreement between the parties with regard to the subject matter of this
Agreement and supersede any prior written or oral agreement relating to the
same subject matter.
6.5. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be an original, and all of which together
shall be deemed to constitute one instrument.
6.6. Successors and Assigns; Third Party Beneficiaries. Subject to
applicable law and the following sentence, either party may assign its rights
and obligations under this Agreement in whole or in part only to an Affiliate
of such party, but no such assignment shall relieve the assigning party of
its obligations hereunder. No party shall assign any rights or obligations
under this Agreement to any Affiliate if such Affiliate does not expressly
assume pursuant to a document in form and substance reasonably satisfactory
to the other party all of the obligations of the assigning party hereunder.
For purposes of this Section 6.6, "Affiliate" shall mean, with respect to any
party, any other person that directly or indirectly controls, is controlled
by, or is under common control with, such person. As used in this
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definition, "control" (including its correlative meanings, "controlled by"
and "under common control with") shall mean the possession, directly or
indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership of other
ownership interests, by contract or otherwise).
6.7. Consent to Violation of Standstill; Amendment No. 1. The
Company hereby consents to any possible violation by GECEI and NBC of the
standstill agreement set forth in Section 4.1 of that certain Shareholder
Agreement dated as of April 15, 1999 (the "Shareholder Agreement"), among the
Company, GECEI, and NBC, in connection with the purchase of the Warrants or
the issuance of the Warrant Shares upon the exercise thereof, and waives any
rights in connection therewith. As soon as practicable after the date
hereof, the Company, GECEI and NBC shall execute and deliver an amendment to
the Shareholder Agreement, providing that consummation of the transactions
contemplated hereby shall not result in a violation of Section 4.1
(Standstill Agreement) thereof, in form and substance substantially similar
to the form of such amendment set forth in Exhibit C attached hereto.
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IN WITNESS WHEREOF, the parties have executed this Warrant Purchase
Agreement as of the date first above written.
VALUEVISION INTERNATIONAL, INC.
By:________________________________
Name:
Title:
NATIONAL BROADCASTING COMPANY, INC.
By:________________________________
Name:
Title:
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Exhibit A
[Form of Warrant Certificate]
<PAGE>
Exhibit B
[Form of Legal Opinion]
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, New York 10112
Ladies and Gentlemen:
We have acted as counsel for ValueVision International, Inc., a
Minnesota corporation (the "Company"), in connection with (i) the Warrant
Purchase Agreement dated as of November 16, 2000 (the "Agreement") between
the Company and National Broadcasting Company, Inc. ("NBC"), a Delaware
corporation, and (ii) an unsigned Amended and Restated Registration Rights
Agreement dated as of November 16, 2000 (the "Amended and Restated
Registration Rights Agreement") among the Company, NBC and GE Capital Equity
Investments, Inc. in the form attached hereto as Exhibit A. This opinion is
being delivered to you pursuant to Section 5.2 of the Agreement. Capitalized
terms used herein and not otherwise defined shall have the respective
meanings ascribed to those terms in the Agreement.
We have made such examination of law and facts as we have deemed
relevant and necessary as a basis for our opinions hereafter set forth.
Based upon and subject to the foregoing and the qualifications set forth
in Annex 1 attached hereto, we are of the opinion that:
(1) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Minnesota and has the
requisite corporate power and corporate authority (a) to own, lease and
operate its properties and to carry on its businesses as they are now being
conducted and (b) to enter into and perform its obligations under the
Agreement and the Amended and Restated Registration Rights Agreement.
(2) Upon issuance and delivery in accordance with the terms of the
Agreement, the Warrants will be duly authorized, validly issued, fully paid
and non-assessable. When issued in accordance with the terms of the
Warrants, the Warrant Shares will be duly authorized, validly issued, fully
paid and non-assessable.
(3) The Company has the requisite corporate power and authority to
execute and deliver the Agreement and the Amended and Restated Registration
Rights Agreement, to perform its obligations thereunder and to consummate the
transactions contemplated thereby. The execution, delivery and performance
of the Agreement and the Amended and Restated Registration Rights Agreement
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by the Company and the consummation by the Company of the transactions
contemplated thereby have been duly authorized by all requisite corporate
action on the part of the Company.
(4) The Agreement has been duly executed and delivered by the Company
and constitutes the valid and binding obligations of the Company, enforceable
against the Company in accordance with its terms. In the event that the
Amended and Restated Registration Rights Agreement is duly executed and
delivered by each party thereto (including the Company), the Amended and
Restated Registration Rights Agreement will constitute the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(5) The execution and delivery of the Agreement by the Company does
not, and the execution and delivery of the Amended and Restated Registration
Rights Agreement by the Company will not, and the performance of the
Agreement and the Amended and Restated Registration Rights Agreement by the
Company will not, (A) conflict with or violate the Restated Articles of
Incorporation or By-Laws of the Company or (B) to our knowledge, conflict
with or violate any United States federal law, state of Minnesota law,
Delaware General Corporation Law, rule or regulation or any order, judgment
or decree known to us to be applicable to the Company..
(6) To our knowledge, the execution, delivery and performance of the
Agreement and the Amended and Restated Registration Rights Agreement by the
Company will not require any consent, approval, authorization or permit of,
or filing with or notification to, any United States federal, or state of
Minnesota governmental or regulatory authority, other than such as have been
obtained or made.
This opinion may not be used or relied upon by or published or
communicated to any person or entity other than the addressee hereof, or used
or relied upon for any purpose whatsoever other than the consummation of the
transaction contemplated by the Agreement, without our prior written consent
in each instance.
Very truly yours,
FAEGRE & BENSON LLP
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Annex 1 to
Opinion Letter
dated November 20, 2000
In rendering the accompanying opinion letter dated November
20, 2000, we wish to advise you of the following additional qualifications to
which such opinion is subject:
(a) We have relied solely upon certificates of public officials as
to the opinions set forth in clause (1). We have also relied, as to
certain relevant facts, upon representations made by the Company in the
Agreement, the assumptions set forth in paragraph (d) below as to the
matters referred therein, and upon certificates of officers of the
Company, reasonably believed by us to be appropriate sources of
information, as to the accuracy of factual matters, in each case without
independent verification thereof or other investigation; provided our
Primary Lawyers have no Actual Knowledge concerning the factual matters
upon which reliance is placed which would render such reliance
unreasonable. For the purposes hereof, the term "Primary Lawyers" means
lawyers in this firm who have given substantive legal attention to
representation of the Company in connection with this matter, and the
term "Actual Knowledge" means the conscious awareness by such Primary
Lawyers of facts or other information without any other investigation.
(b) We express no opinion with respect to the laws of any
jurisdiction other than the laws of the State of Minnesota (the "Opinion
Jurisdiction"), the General Corporation Law of the State of Delaware and
the federal laws of the United States.
(c) Because the governing law provision of each of the Agreement
and the Amended and Restated Registration Rights Agreement relates to
the law of a jurisdiction as to which we express no opinion, the opinion
set forth in clause (4) is given as if the law of the Opining
Jurisdiction governs each such agreement.
(d) We have relied, without investigation, upon the following
assumptions: (i) natural persons who are involved on behalf of the
Company have sufficient legal capacity to enter into and perform the
transaction or to carry out their role in it; (ii) the Company holds the
requisite title and rights to any property involved in the transaction;
(iii) each party to the Agreement and the Amended and Restated
Registration Rights Agreement (other than the Company) has satisfied
those legal requirements that are applicable to it to the extent
necessary to make the Agreement or the Amended and Restated Registration
Rights Agreement, as the case may be, enforceable against it; (iv) each
party to the Agreement and the Amended and Restated Registration Rights
Agreement (other than the Company) has complied with all legal
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requirements pertaining to its status as such status relates to its
rights to enforce the Agreement or the Amended and Restated Registration
Rights Agreement, as the case may be, against the Company; (v) each
document submitted to us for review is accurate and complete, each such
document that is an original is authentic, each such document that is a
copy conforms to an authentic original, and all signatures on each such
document are genuine; (vi) there has not been any mutual mistake of fact
or misunderstanding, fraud, duress or undue influence; (vii) the conduct
of the parties to the Agreement and the Amended and Restated
Registration Rights Agreement has complied with any requirement of good
faith, fair dealing and conscionability; (viii) you and any agent acting
for you in connection with the Agreement and the Amended and Restated
Registration Rights Agreement have acted in good faith and without
notice of any defense against the enforcement of any rights created by
or adverse claim to any property or security interest transferred or
created as part of, the Agreement or the Amended and Restated
Registration Rights Agreement, as the case may be; (ix) there are no
agreements or understandings among the parties, written or oral, and
there is no usage of trade or course of prior dealing among the parties
that would, in either case, define, supplement or qualify the terms of
the Agreement or the Amended and Restated Registration Rights Agreement;
(x) all statutes, judicial and administrative decisions, and rules and
regulations of governmental agencies, constituting the law of the
Opining Jurisdiction, are generally available (i.e., in terms of access
and distribution following publication or other release) to lawyers
practicing in the Opining Jurisdiction, and are in a format that makes
legal research reasonably feasible; (xi) the constitutionality or
validity of a relevant statute, rule, regulation or agency action is not
in issue unless a reported decision in the Opining Jurisdiction has
specifically addressed but not resolved, or has established, its
unconstitutionality or invalidity; (xii) documents reviewed by us (other
than the Agreement and the Amended and Restated Registration Rights
Agreement) would be enforced as written; (xiii) the Company will not in
the future take any discretionary action (including a decision not to
act) permitted under the Agreement or the Amended and Restated
Registration Rights Agreement that would result in a violation of law or
constitute a breach or default under any other agreement or court order;
(xiv) the Company will obtain all permits and governmental approvals
required in the future, and take all actions similarly required,
relevant to subsequent consummation of the transaction or performance of
the Agreement or the Amended and Restated Registration Rights Agreement;
(xv) all parties to the transaction will act in accordance with, and
will refrain from taking any action that is forbidden by, the terms and
conditions of the Agreement and the Amended and Restated Registration
Rights Agreement and (xvi) the Amended and Restated Registration Rights
Agreement will be duly executed and delivered by each party thereto in
the form attached hereto as Exhibit A.
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(e) The opinions herein expressed are limited to the specific
issues addressed and to laws existing on the date hereof. By rendering
our opinion, we do not undertake to advise you with respect to any other
matter or of any change in such laws or in the interpretation hereof
which may occur after the date hereof.
(f) In rendering the opinion in clauses (4), (5) and (6), we have
not considered the applicability of rules and regulations of the United
States Federal Communications Commission and similar foreign
governmental agencies.
(g) Without limiting any other qualifications set forth herein,
the opinion expressed in clause (4) is subject to the effect of
generally applicable laws that (i) provide for the enforcement of oral
waivers or modifications where a material change of position in reliance
thereon has occurred or provide that a course of performance may operate
as a waiver, (ii) limit the enforcement of provisions of a contract that
purport to require waiver of the obligations of good faith, fair
dealing, diligence and reasonableness, (iii) provide that forum
selection clauses in contracts are not necessarily binding on courts,
(iv) limit the availability of a remedy under certain circumstances
where another remedy has been elected, (v) limit the enforceability of
provisions releasing, exculpating or exempting a party from, or
requiring indemnification of a party for, liability for its own action
or inaction, to the extent the action or inaction involves gross
negligence, recklessness, willful misconduct or unlawful conduct, (vi)
may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in which
the unenforceable portion is not an essential part of the agreed
exchange, (vii) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys' fees and other
costs, (viii) may permit a party who has materially failed to render or
offer performance required by a contract to cure that failure unless
either permitting a cure would unreasonably hinder the aggrieved party
from making substitute arrangements for performance or it is important
under the circumstances to the aggrieved party that performance occur by
the date stated in the contract, (ix) may limit the enforceability of
provisions restricting competition, the solicitation of customers or
employees, the use or disclosure of information or other activities in
restraint of trade, (x) may require mitigation of damages, (xi) limit
the right of a creditor to use force or cause a breach of the peace in
enforcing rights, (xii) relate to the sale or disposition of collateral
or the requirements of a commercially reasonable sale, (xiii) may, in
the absence of a waiver or consent, discharge a guarantor to the extent
that either action by a creditor impairs the value of collateral
securing the guaranteed debt to the detriment of the guarantor or the
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<PAGE>
guaranteed debt is materially modified, or (xiv) may limit the
enforceability of provisions imposing increased interest rates or late
payment charges upon delinquency in payment or default or providing for
liquidated damages or for premiums upon acceleration.
(h) In rendering the opinion in clause (4), we have only
considered the applicability of statutes, rules and regulations that a
lawyer in the Opining Jurisdiction exercising customary professional
diligence would reasonably recognize as being directly applicable to the
Company, the transactions contemplated by the Agreement, or both.
(i) The opinions expressed do not address any of the following
legal issues: (1) Federal securities laws and regulations administered
by the Securities and Exchange Commission, state "Blue Sky" laws and
regulations, and laws and regulations relating to commodity (and other)
futures and indices and other similar instruments; (2) Federal Reserve
Board margin regulations; (3) pension and employee benefit laws and
regulations (e.g., ERISA); (4) Federal and state antitrust and unfair
competition laws and regulations; (5) Federal laws and regulations
concerning filing and notice requirements under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and Exon-Florio, other
than requirements applicable to charter-related documents such as a
certificate of merger; (6) compliance with fiduciary duty requirements;
(7) the statutes and ordinances, administrative decisions and the rules
and regulations of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at
the Federal, state or regional level) and judicial decisions to the
extent that they deal with the foregoing; (8) the characterization of a
transaction as one involving the creation of a lien on real property or
a security interest in personal property, the characterization of a
contract as one in a form sufficient to create a lien or a security
interest, and the creation, attachment, perfection, priority or
enforcement of a lien on real property or a security interest in
personal property; (9) fraudulent transfer and fraudulent conveyance
laws; (10) Federal and state environmental laws and regulations; (11)
Federal and state land use and subdivision laws and regulations; (12)
Federal and state tax laws and regulations; (13) Federal patent,
copyright and trademark, state trademark, and other Federal and state
intellectual property laws and regulations; (14) Federal and state
racketeering laws and regulations (e.g., RICO); (15) Federal and state
health and safety laws and regulations (e.g., OSHA); (16) Federal and
state labor laws and regulations; (17) Federal and state laws,
regulations and policies concerning (i) national and local emergency,
(ii) possible judicial deference to acts of sovereign states, and (iii)
criminal and civil forfeiture laws; and (18) other Federal and state
statutes of general application to the extent they provide for criminal
prosecution (e.g., mail fraud and wire fraud statutes).
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Exhibit C
AMENDMENT NO. 1
to
SHAREHOLDER AGREEMENT
THIS AMENDMENT NO. 1 TO SHAREHOLDER AGREEMENT (this "Amendment"), dated
as of November 16, 2000, among ValueVision International, Inc., a Minnesota
corporation (together with its successors, the "Company"), and GE Capital
Equity Investments, Inc., a Delaware corporation (together with its
successors, "GE Capital Equity Investments") and National Broadcasting
Company, Inc., a Delaware corporation (together with its successors, "NBC").
WITNESSETH:
WHEREAS, the Company, GE Capital Equity Investments and NBC have
previously entered into that certain Shareholder Agreement dated as of April
15, 1999 (the "Original Shareholder Agreement"; terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the
Original Shareholder Agreement);
WHEREAS, concurrently with the execution hereof, the Company is entering
that certain Warrant Purchase Agreement (the "Warrant Purchase Agreement")
with NBC providing for the purchase by and issuance to NBC from the Company
of warrants (the "Warrants") to purchase 6,000,000 shares of Common Stock;
WHEREAS, in connection with the Company's consent and waiver of the
violation of Section 4.1(a)(ii) of the Original Shareholder Agreement that
would otherwise occur in connection with the issuance by the Company to NBC
of the Warrants, the Company and NBC have agreed to execute and deliver this
Agreement pursuant to Section 6.7 of the Warrant Purchase Agreement; and
WHEREAS, the parties hereto deem it in their best interests and in the
best interests of the Company to amend the Original Shareholder Agreement
upon the terms and conditions set forth herein and desire to enter into this
Amendment in order to effectuate that purpose.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, the parties hereto hereby agree as follows:
1. Amendment of Definition of "Standstill Limit". The definition of
"Standstill Limit" set forth in Section 1.1 of the Original Shareholder
Agreement is hereby amended and restated as follows:
"Standstill Limit" means the Beneficial Ownership of 45.0% of the
Adjusted Outstanding Common Stock.
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<PAGE>
2. Except as hereby specifically amended, the Original Shareholder
Agreement and all of the terms and provisions thereof shall remain unchanged
and in full force and effect.
3. This Amendment may be executed in counterparts, each of which shall
be deemed an original but which together shall constitute one instrument.
IN WITNESS WHEREOF, this Amendment has been executed by the parties
hereto or by their respective duly authorized representatives, all as of the
date first above written.
VALUEVISION INTERNATIONAL, INC.
By:_______________________________
Its:______________________________
GE CAPITAL EQUITY INVESTMENTS, INC.
By:_______________________________
Its:______________________________
NATIONAL BROADCASTING COMPANY, INC.
By:________________________________
Its:_______________________________
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Exhibit D
[Amended and Restated Registration Rights Agreement]
