EXHIBIT 4.1
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED EXCEPT AS EXPRESSLY
PERMITTED UNDER THE STOCKHOLDERS AGREEMENT, DATED AS OF DECEMBER 16, 2002, BY
AND AMONG USA NETWORKS, INC. AND THE OTHER PARTIES SET FORTH ON THE SIGNATURE
PAGES THERETO, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND OTHERWISE IN
COMPLIANCE WITH FEDERAL AND APPLICABLE STATE SECURITIES LAWS.
EQUITY WARRANT AGREEMENT
dated as of May 7, 2002
for
Warrants to Purchase
UP TO 60,467,735 SHARES OF COMMON STOCK
EXPIRING MAY 7, 2012
between
USA NETWORKS, INC.
and
THE BANK OF NEW YORK, as
Equity Warrant Agent
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1. Definitions................................................. 1
ARTICLE 2. Issuance of Equity Warrants and Execution and Delivery of
Equity Warrant Certificates................................. 3
2.1. Issuance of Equity Warrants................................. 3
2.2. Form and Execution of Equity Warrant Certificates........... 3
2.3. Issuance and Delivery of Equity Warrant Certificates........ 4
2.4. Temporary Equity Warrant Certificates....................... 4
2.5. Payment of Taxes............................................ 4
ARTICLE 3. Duration and Exercise of Equity Warrants.................... 5
3.1. Exercise Price.............................................. 5
3.2. Duration of Equity Warrants................................. 5
3.3. Exercise of Equity Warrants................................. 5
ARTICLE 4. Adjustments of Number of Shares............................. 6
4.1. Adjustments................................................. 6
4.2. Statement on Warrants....................................... 9
4.3. Cash Payments in Lieu of Fractional Shares.................. 9
4.4. Notices to Warrantholders................................... 9
ARTICLE 5. Other Provisions Relating to Rights of Holders of Equity
Warrants.................................................... 9
5.1. No Rights as Holder of Common Stock Conferred by Equity
Warrants or Equity Warrant Certificates..................... 9
5.2. Lost, Stolen, Destroyed or Mutilated Equity Warrant
Certificates................................................ 9
5.3. Holders of Equity Warrants May Enforce Rights............... 10
5.4. Consolidation or Merger or Sale of Assets................... 10
ARTICLE 6. Exchange and Transfer of Equity Warrants.................... 11
6.1. Equity Warrant Register; Exchange and Transfer of Equity
Warrants.................................................... 11
6.2. Treatment of Holders of Equity Warrants..................... 12
6.3. Cancellation of Equity Warrant Certificates................. 12
ARTICLE 7. Concerning the Equity Warrant Agent......................... 12
7.1. Equity Warrant Agent........................................ 12
7.2. Conditions of Equity Warrant Agent's Obligations............ 12
7.3. Compliance with Applicable Laws............................. 14
-i-
7.4. Resignation and Appointment of Successor.................... 15
ARTICLE 8. Miscellaneous............................................... 16
8.1. Amendment................................................... 16
8.2. Notices and Demands to the Company and Equity Warrant Agent. 16
8.3. Addresses for Notices....................................... 16
8.4. Governing Law............................................... 17
8.5. Governmental Approvals...................................... 17
8.6. Reservation of Shares of Common Stock....................... 17
8.7. Covenant Regarding Shares of Common Stock................... 17
8.8. Persons Having Rights Under Agreement....................... 17
8.9 Limitation of Liability..................................... 18
8.10 Restrictions on Transfer/Registration Rights................ 18
8.11. Headings.................................................... 18
8.12. Counterparts................................................ 18
8.13. Inspection of Agreement..................................... 18
-ii-
THIS EQUITY WARRANT AGREEMENT (the "Agreement"), dated as of May
7, 2002, between USA Networks, Inc., a Delaware corporation (the "Company"),
and Bank of New York, a New York corporation, as warrant agent (the "Equity
Warrant Agent").
WHEREAS, pursuant to the Transaction Agreement, by and among the
Company, Vivendi Universal, S.A., Universal Studios, Inc., Liberty Media
Corporation, Mr. Xxxxx Xxxxxx and USANi LLC, dated as of December 16, 2001,
the Company has agreed to issue to Canal+ Benelux BV (the "Initial Holder")
an aggregate of 60,467,735 warrants, subject to adjustment pursuant to
Section 4.1 hereof (collectively, the "Equity Warrants" or, individually, an
"Equity Warrant"), each Equity Warrant representing the right to purchase one
share of common stock, par value $.01 per share, of the Company (the "Common
Stock") and being evidenced by certificates herein called the "Equity Warrant
Certificates";
WHEREAS, the Company desires the Equity Warrant Agent to assist
the Company in connection with the issuance, exchange, cancellation,
replacement and exercise of the Equity Warrants, and in this Agreement wishes
to set forth, among other things, the terms and conditions on which the
Equity Warrants may be issued, exchanged, cancelled, replaced and exercised;
and
WHEREAS, the Company has duly authorized the execution and
delivery of this Agreement to provide for the issuance of Equity Warrants to
be exercisable at such times and for such prices, and to have such other
provisions, as shall be fixed as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
"Agreement" shall have the meaning set forth in the preamble.
"Cashless Exercise" shall have the meaning set forth in Section 3.3.
"Cashless Exercise Ratio" means a fraction, the numerator of
which is the excess of the Closing Price per share of Common Stock on the
Exercise Date over the Exercise Price per share as of the Exercise Date and
the denominator of which is the Closing Price per share of the Common Stock
on the Exercise Date.
"Closing Price" for each Trading Day shall be the last reported
sales price regular way, during regular trading hours, or, in case no such
reported sales takes place on such day, the average of the closing bid and
asked prices regular way, during regular trading hours, for such day, in each
case on The Nasdaq Stock Market or, if not listed or quoted on such market,
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if not listed or admitted to
trading on a national securities exchange, the last sale price regular way
for the Common Stock as published by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), or if such last sale price is
not so published by NASDAQ or if no such sale takes place on such day, the
mean between the closing
bid and asked prices for the Common Stock as published by NASDAQ. If the Common
Stock is not publicly held or so listed or publicly traded, "Closing Price"
shall mean the Fair Market Value per share as determined in good faith by the
Board of Directors of the Company or, if such determination cannot be made, by a
nationally recognized independent investment banking firm selected in good faith
by the Board of Directors of the Company.
"Common Stock" shall have the meaning set forth in the recitals.
"Company" shall have the meaning set forth in the preamble.
"Current Market Price" shall have the meaning set forth in
Section 4.1(d).
"Equity Warrant" and "Equity Warrants" shall have the meaning set
forth in the recitals.
"Equity Warrant Agent" shall have the meaning set forth in the
preamble.
"Equity Warrant Certificates" shall have the meaning set forth in
the recitals.
"Equity Warrant Register" shall have the meaning set forth in
Section 6.1.
"Exercise Date" shall have the meaning set forth in 3.3(a).
"Exercise Price" shall have the meaning set forth in the
applicable Equity Warrant Certificate.
"Expiration Date" means 5:00 p.m. New York City time on May 7,
2012.
"Fair Market Value" means the amount that a willing buyer would
pay a willing seller in an arm's length transaction.
"Formed, Surviving or Acquiring Corporation" shall have the
meaning set forth in Section 5.4.
"Governance Agreement" shall have the meaning set forth in
Section 8.10.
"Holder" means the person or persons in whose name such Equity
Warrant Certificate shall then be registered as set forth in the Equity
Warrant Register to be maintained by the Equity Warrant Agent pursuant to
Section 6.1 for that purpose.
"Initial Holder" shall have the meaning set forth in the recitals.
"Non-Electing Share" shall have the meaning set forth in Section
5.4.
"Officer's Certificate" shall have the meaning set forth in Section
7.2(e).
"Prospectus" shall have the meaning set forth in Section 8.9.
"Sale Transaction" shall have the meaning set forth in Section 5.4.
-2-
"Stockholders Agreement" shall have the meaning set forth in
Section 8.10.
"Time of Determination" shall have the meaning set forth in
Section 4.1(d).
"Trading Day" shall mean a day on which the securities exchange
utilized for the purpose of calculating the Closing Price shall be open for
business or, if the shares of Common Stock shall not be listed on such
exchange for such period, a day on which The Nasdaq Stock Market is open for
business.
ARTICLE 2.
ISSUANCE OF EQUITY WARRANTS AND EXECUTION AND
DELIVERY OF EQUITY WARRANT CERTIFICATES
2.1. Issuance of Equity Warrants. Equity Warrants may be issued by
the Company from time to time.
2.2. Form and Execution of Equity Warrant Certificates.
(a) The Equity Warrants shall be evidenced by the Equity Warrant
Certificates, which shall be in registered form and substantially in the form
set forth as Exhibit A attached hereto. Each Equity Warrant Certificate shall be
dated the date it is countersigned by the Equity Warrant Agent and may have such
letters, numbers or other marks of identification and such legends or
endorsements printed, lithographed or engraved thereon as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which the Equity Warrants may be
listed, or to conform to usage, as the officer of the Company executing the same
may approve (his execution thereof to be conclusive evidence of such approval).
Each Equity Warrant Certificate shall evidence one or more Equity Warrants.
(b) The Equity Warrant Certificates shall be signed in the name
and on behalf of the Company by its Chairman, its Vice Chairman, its Chief
Executive Officer, President or a Vice President (any reference to a Vice
President of the Company herein shall be deemed to include any Vice President of
the Company whether or not designated by a number or a word or words added
before or after the title "Vice President") under its corporate seal, and
attested by its Secretary or an Assistant Secretary. Such signatures may be
manual or facsimile signatures of the present or any future holder of any such
office and may be imprinted or otherwise reproduced on the Equity Warrant
Certificates. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Equity
Warrant Certificates.
(c) No Equity Warrant Certificate shall be valid for any purpose,
and no Equity Warrant evidenced thereby shall be deemed issued or exercisable,
until such Equity Warrant Certificate has been countersigned by the manual or
facsimile signature of the Equity Warrant Agent. Such signature by the Equity
Warrant Agent upon any Equity Warrant Certificate executed by the Company shall
be conclusive evidence that the Equity Warrant Certificate so countersigned has
been duly issued hereunder.
-3-
(d) In case any officer of the Company who shall have signed any
Equity Warrant Certificate either manually or by facsimile signature shall cease
to be such officer before the Equity Warrant Certificate so signed shall have
been countersigned and delivered by the Equity Warrant Agent, such Equity
Warrant Certificate nevertheless may be countersigned and delivered as though
the person who signed such Equity Warrant Certificate had not ceased to be such
officer of the Company; and any Equity Warrant Certificate may be signed on
behalf of the Company by such person as, at the actual date of the execution of
such Equity Warrant Certificate, shall be the proper officer of the Company,
although at the date of the execution of this Agreement such person was not such
an officer.
2.3. Issuance and Delivery of Equity Warrant Certificates. At any
time and from time to time after the execution and delivery of this
Agreement, the Company may deliver Equity Warrant Certificates executed by
the Company to the Equity Warrant Agent for countersignature. Except as
provided in the following sentence, the Equity Warrant Agent shall thereupon
countersign and deliver such Equity Warrant Certificates to or upon the
written request of the Company. Subsequent to the original issuance of an
Equity Warrant Certificate evidencing Equity Warrants, the Equity Warrant
Agent shall countersign a new Equity Warrant Certificate evidencing such
Equity Warrants only if such Equity Warrant Certificate is issued in exchange
or substitution for one or more previously countersigned Equity Warrant
Certificates evidencing such Equity Warrants or in connection with their
transfer, as hereinafter provided.
2.4. Temporary Equity Warrant Certificates. Pending the preparation
of a definitive Equity Warrant Certificate, the Company may execute, and upon
the order of the Company the Equity Warrant Agent shall countersign and
deliver, temporary Equity Warrant Certificates that are printed,
lithographed, typewritten, mimeographed or otherwise produced, substantially
of the tenor of the definitive Equity Warrant Certificates in lieu of which
they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officer executing such Equity
Warrant Certificates may determine, as evidenced by his execution of such
Equity Warrant Certificates.
If temporary Equity Warrant Certificates are issued, the Company
will cause definitive Equity Warrant Certificates to be prepared without
unreasonable delay. After the preparation of definitive Equity Warrant
Certificates, the temporary Equity Warrant Certificates shall be exchangeable
for definitive Equity Warrant Certificates upon surrender of the temporary
Equity Warrant Certificates at the corporate trust office of the Equity
Warrant Agent. Upon surrender for cancellation of any one or more temporary
Equity Warrant Certificates, the Company shall execute and the Equity Warrant
Agent shall countersign and deliver in exchange therefor definitive Equity
Warrant Certificates representing the same aggregate number of Equity
Warrants. Until so exchanged, the temporary Equity Warrant Certificates
shall in all respects be entitled to the same benefits under this Agreement
as definitive Equity Warrant Certificates.
2.5. Payment of Taxes. The Company will pay all stamp and other
duties, if any, to which this Agreement or the original issuance, or
exercise, of the Equity Warrants or Equity Warrant Certificates may be
subject under the laws of the United States of America or any state or
locality; provided, however, that the Holder, and not the Company, shall be
required to pay any stamp or other tax or other governmental charge that may
be imposed in connection with any transfer involved in the issuance of the
Common Stock where the Holder designates the shares to
-4-
be issued in a name other than the name of the Holder; and in the event that any
such transfer is involved, the Company shall not be required to issue any Common
Stock (and the purchase of the shares of Common Stock issued upon the exercise
of such Holder's Equity Warrant shall not be deemed to have been consummated)
until such tax or other charge shall have been paid or it has been established
to the Company's satisfaction that no such tax or other charge is due.
ARTICLE 3.
DURATION AND EXERCISE OF EQUITY WARRANTS
3.1. Exercise Price. Each Holder shall have the right to purchase the
number of fully paid and nonassessable shares of Common Stock which the
Holder may at the time be entitled to receive on exercise of such Equity
Warrant and payment of the Exercise Price, subject to the terms herein. The
number of shares of Common Stock which shall be purchasable upon the payment
of the Exercise Price and to the extent provided therein, the Exercise Price,
shall be subject to adjustment pursuant to Article 4 hereof.
3.2. Duration of Equity Warrants. Each Equity Warrant is exercisable
at any time commencing on November 8, 2002* up to the Expiration Date. Each
Equity Warrant not exercised at or before the Expiration Date shall become
void, and all rights of the Holder of such Equity Warrant thereunder and
under this Agreement shall cease.
3.3. Exercise of Equity Warrants.
(a) The Holder of an Equity Warrant shall have the right, at its
option, to exercise such Equity Warrant and purchase one share of Common Stock
during the period referred to in Section 3.2, subject to adjustment pursuant to
Article 4 hereof. Except as may be provided in an Equity Warrant Certificate, an
Equity Warrant may be exercised by completing the form of election to purchase
set forth on the reverse side of the Equity Warrant Certificate, by duly
executing the same, and by delivering the same, together with payment in full of
the Exercise Price, in lawful money of the United States of America, in cash or
by certified or official bank check or by bank wire transfer, to the Equity
Warrant Agent. In lieu of the foregoing, the Holder of an Equity Warrant shall
have the right, at its option, without payment of cash, to reduce the number of
shares of Common Stock otherwise obtainable upon the exercise of an Equity
Warrant for payment of the Exercise Price in cash, so as to yield a number of
shares of Common Stock upon the exercise of such Equity Warrant equal to the
product of (x) the number of shares of Common Stock issuable as of the Exercise
Date upon the exercise of such Equity Warrant (if payment of the Exercise Price
were being made in cash) and (y) the Cashless Exercise Ratio. An exercise of an
Equity Warrant in accordance with the immediately preceding sentence is herein
called a "Cashless Exercise". Except as may be provided in an Equity Warrant
Certificate, the date on which such Equity Warrant Certificate and payment are
received by the Equity Warrant Agent as aforesaid shall be deemed to be the date
on which the Equity Warrant is exercised and the relevant shares of Common Stock
are issued (the "Exercise Date").
-----------------------------------
* Date following the six-month anniversary of the Closing.
-5-
(b) Upon the exercise of an Equity Warrant, the Company shall, as
soon as practicable, issue, to or upon the order of the Holder of such Equity
Warrant, the shares of Common Stock to which such Holder is entitled, registered
in such name or names as may be directed by such Holder.
(c) Unless the Equity Warrant Agent and the Company agree
otherwise, the Equity Warrant Agent shall deposit all funds received by it in
payment of the Equity Warrant Price for Equity Warrants in the account of the
Company maintained with it for such purpose and shall advise the Company by
telephone by 5:00 P.M., New York City time, of each day on which a payment of
the Exercise Price for Equity Warrants is received of the amount so deposited in
its account. The Equity Warrant Agent shall promptly confirm such telephone
advice in writing to the Company.
(d) The Equity Warrant Agent shall, from time to time, as promptly
as practicable, advise the Company of (i) the number of Equity Warrants
exercised for cash or otherwise, as provided herein, (ii) the instructions of
each Holder of such Equity Warrants with respect to delivery of the Common Stock
issued upon exercise of such Equity Warrants to which such Holder is entitled
upon such exercise, and (iii) such other information as the Company shall
reasonably require. Such advice may be given by telephone to be confirmed in
writing.
ARTICLE 4.
ADJUSTMENTS OF NUMBER OF SHARES
4.1. Adjustments. The number of shares of Common Stock purchasable
upon the exercise of the Equity Warrants shall be subject to adjustment as
follows:
(a) In case the Company shall (A) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (B) subdivide its
outstanding shares of Common Stock into a greater number of shares, (C) combine
its outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification, recapitalization or reorganization of its Common
Stock any shares of capital stock of the Company, then in each such case the
number of shares of Common Stock issuable upon exercise of an Equity Warrant
shall be equitably adjusted so that the Holder of any Equity Warrant thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock or other capital stock of the Company which such Holder would have
owned or been entitled to receive immediately following such action had such
Equity Warrant been exercised immediately prior to the occurrence of such event.
An adjustment made pursuant to this subsection 4.1(a) shall become effective
immediately after the record date, in the case of a dividend or distribution, or
immediately after the effective date, in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection 4.1(a), the Holder of any Equity Warrant thereafter exercised shall
become entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company, the Board of
Directors (whose determination shall be in its good faith judgment and shall be
described in a statement filed by the Company with the Equity Warrant Agent)
shall determine the allocation of the Exercise Price between or among shares of
such classes of capital stock or shares of
-6-
Common Stock and other capital stock. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Company shall issue options, rights or warrants to
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe for
or purchase shares of Common Stock or other securities convertible or
exchangeable for shares of Common Stock at a price per share of Common Stock
less than the Current Market Price (as determined pursuant to subsection (d) of
this Section 4.1) (other than pursuant to any stock option, restricted stock or
other incentive or benefit plan or stock ownership or purchase plan for the
benefit of employees, directors or officers or any dividend reinvestment plan of
the Company in effect at the time hereof or any other similar plan adopted or
implemented hereafter, it being agreed that none of the adjustments set forth in
this Section 4.1 shall apply to the issuance of stock, rights, warrants or other
property pursuant to such benefit plans), then the number of shares of Common
Stock issuable upon exercise of an Equity Warrant shall be adjusted so that it
shall equal the product obtained by multiplying the number of shares of Common
Stock issuable upon exercise of an Equity Warrant immediately prior to the date
of issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants (immediately prior to such issuance) plus
the number of additional shares of Common Stock offered for subscription or
purchase and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants
(immediately prior to such issuance) plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price. Such adjustment shall be made successively
whenever any rights or warrants are issued, and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such rights or warrants; provided, however, in the event that all the
shares of Common Stock offered for subscription or purchase are not delivered
upon the exercise of such rights or warrants, upon the expiration of such rights
or warrants the number of shares of Common Stock issuable upon exercise of an
Equity Warrant shall be readjusted to the number of shares of Common Stock
issuable upon exercise of an Equity Warrant which would have been in effect had
the numerator and the denominator of the foregoing fraction and the resulting
adjustment been made based upon the number of shares of Common Stock actually
delivered upon the exercise of such rights or warrants rather than upon the
number of shares of Common Stock offered for subscription or purchase. In
determining whether any security covered by this Section 4.1(b) entitles the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for the issuance of such options, rights, warrants or
convertible or exchangeable securities, plus the aggregate amount of additional
consideration (as set forth in the instruments relating thereto) to be received
by the Company upon the exercise, conversion or exchange of such securities, the
value of such consideration, if other than cash, to be determined by the Board
of Directors in its good faith judgment (whose determination shall be described
in a statement filed by the Company with the Equity Warrant Agent).
(c) In case the Company shall, by dividend or otherwise,
distribute to all holders of its outstanding Common Stock, evidences of its
indebtedness or assets (including securities and cash, but excluding any regular
periodic cash dividend of the Company and
-7-
dividends or distributions payable in stock for which adjustment is made
pursuant to subsection (a) of this Section 4.1) or rights or warrants to
subscribe for or purchase securities of the Company (excluding those referred to
in subsection (b) of this Section 4.1), then in each such case the number of
shares of Common Stock issuable upon exercise of an Equity Warrant shall be
adjusted so that the same shall equal the product determined by multiplying the
number of shares of Common Stock issuable upon exercise of an Equity Warrant
immediately prior to the record date of such distribution by a fraction of which
the numerator shall be the Current Market Price as of the Time of Determination,
and of which the denominator shall be such Current Market Price less the Fair
Market Value on such record date (as determined by the Board of Directors in its
good faith judgment, whose determination shall be described in a statement filed
by the Company with the stock transfer or conversion agent, as appropriate) of
the portion of the capital stock or assets or the evidences of indebtedness or
assets so distributed to the holder of one share of Common Stock or of such
subscription rights or warrants applicable to one share of Common Stock. Such
adjustment shall be made successively whenever any such distributions referred
to in the first sentence of this Section 4.01(c) are made and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(d) For the purpose of any computation under subsections (b) and
(c) of this Section 4.1, the "Current Market Price" per share of Common Stock on
any date shall be deemed to be the average of the daily Closing Prices for the
shorter of (A) 10 consecutive Trading Days ending on the day immediately
preceding the applicable Time of Determination or (B) the period commencing on
the date next succeeding the first public announcement of the issuance of such
rights or warrants or such distribution through such last day prior to the
applicable Time of Determination. For purposes of the foregoing, the term "Time
of Determination" shall mean the time and date of the record date for
determining stockholders entitled to receive the rights, warrants or
distributions referred to in Section 4.1(b) and (c).
(e) In any case in which this Section 4.1 shall require that an
adjustment in the amount of Common Stock or other property to be received by a
Holder upon exercise of an Equity Warrant be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the Holder of any Equity Warrant exercised after such
record date the Common Stock or other property issuable upon such exercise over
and above the shares of Common Stock issuable upon such exercise prior to such
adjustment, provided, however, that the Company shall deliver to such Holder a
due xxxx or other appropriate instrument evidencing such Holde's right to
receive such additional shares of Common Stock or other property, if any, upon
the occurrence of the event requiring such adjustment.
(f) [Intentionally Omitted]
(g) No adjustment in the number of shares of Common Stock issuable
upon exercise of an Equity Warrant shall be required to be made pursuant to this
Section 4.1 unless such adjustment would require an increase or decrease of at
least 1% of such number; provided, however, that any adjustments which by reason
of this subsection (g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
subsection 4.1(g) shall be made to the nearest cent or to the nearest 1/1000th
of a
-8-
share, as the case may be. Except as set forth in subsections 4.1(a), (b), and
(c) above, the number of shares of Common Stock issuable upon exercise of an
Equity Warrant shall not be adjusted as a result of the issuance of Common
Stock, or any securities convertible into or exchangeable for Common Stock or
carrying the right to purchase any of the foregoing, in exchange for cash,
property or services.
4.2. Statement on Warrants. Irrespective of any adjustment in the
amount of Common Stock issued upon exercise of an Equity Warrant, Equity
Warrants theretofore or thereafter issued may continue to express the same
number and kind of shares as are stated in the Equity Warrants initially
issuable pursuant to this Agreement.
4.3. Cash Payments in Lieu of Fractional Shares No fractional shares
or scrip representing fractions of shares of Common Stock shall be issued
upon exercise of the Equity Warrants. If more than one share of Equity
Warrants shall be exercised at one time by the same Holder, the number of
full shares of Common Stock issuable upon exercise thereof shall be computed
on the basis of the aggregate number of shares of Common Stock purchasable on
exercise of the Equity Warrants so requested to be exercised. In lieu of any
fractional interest in a share of Common Stock which would otherwise be
deliverable upon the exercise of such Equity Warrants, the Company shall pay
to the Holder of such Equity Warrants an amount in cash (computed to the
nearest cent) equal to the Closing Price on the Exercise Date (or the next
Trading Day if such date is not a Trading Day) multiplied by the fractional
interest that otherwise would have been deliverable upon exercise of such
Equity Warrants.
4.4. Notices to Warrantholders. Upon any adjustment of the amount of
Common Stock issuable upon exercise of an Equity Warrant pursuant to Section
4.1 (but not for any fractional cumulation as described in Section 4.1(f)),
the Company within 30 days thereafter shall (i) cause to be filed with the
Equity Warrant Agent an Officer's Certificate (as defined hereinafter)
setting forth the amount of Common Stock issuable upon exercise of an Equity
Warrant after such adjustment and setting forth in reasonable detail the
method of calculation and the facts upon which such calculations are based,
which certificate, absent manifest error and any failure to comply with
Section 4.1 (other than failures that are de minimus in nature), shall be
conclusive evidence of the correctness of the matters set forth therein, and
(ii) cause to be given to each of the registered Holders at his address
appearing on the Equity Warrant Register (as defined hereinafter) written
notice of such adjustments by first-class mail, postage prepaid.
ARTICLE 5.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
OF EQUITY WARRANTS
5.1. No Rights as Holder of Common Stock Conferred by Equity Warrants
or Equity Warrant Certificates. No Equity Warrant or Equity Warrant
Certificate shall entitle the Holder to any of the rights of a holder of
Common Stock, including, without limitation, voting, dividend or liquidation
rights.
5.2. Lost, Stolen, Destroyed or Mutilated Equity Warrant
Certificates. Upon receipt by the Company and the Equity Warrant Agent of
evidence reasonably satisfactory to them of
-9-
the ownership of and the loss, theft, destruction or mutilation of any Equity
Warrant Certificate and of indemnity (other than in connection with any
mutilated Equity Warrant certificates surrendered to the Equity Warrant Agent
for cancellation) reasonably satisfactory to them, the Company shall execute,
and the Equity Warrant Agent shall countersign and deliver, in exchange for or
in lieu of each lost, stolen, destroyed or mutilated Equity Warrant Certificate,
a new Equity Warrant Certificate evidencing a like number of Equity Warrants of
the same title. Upon the issuance of a new Equity Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
stamp or other tax or other governmental charge that may be imposed in
connection therewith and any other expenses (including the fees and expenses of
the Equity Warrant Agent) in connection therewith. Every substitute Equity
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Equity Warrant Certificate shall represent a
contractual obligation of the Company, whether or not such lost, stolen or
destroyed Equity Warrant Certificate shall be at any time enforceable by anyone,
and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Equity Warrant Certificates, duly
executed and delivered hereunder, evidencing Equity Warrants of the same title.
The provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement of lost,
stolen, destroyed or mutilated Equity Warrant Certificates.
5.3. Holders of Equity Warrants May Enforce Rights. Notwithstanding
any of the provisions of this Agreement, any Holder may, without the consent
of the Equity Warrant Agent, enforce and may institute and maintain any suit,
action or proceeding against the Company suitable to enforce, or otherwise in
respect of his right to exercise his Equity Warrants as provided in the
Equity Warrants and in this Agreement.
5.4. Consolidation or Merger or Sale of Assets. For purposes of this
Section 5.4, a "Sale Transaction" means any transaction or event, including
any merger, consolidation, sale of assets, tender or exchange offer,
reclassification, compulsory share exchange or liquidation, in which all or
substantially all outstanding shares of the Compan's Common Stock are
converted into or exchanged for stock, other securities, cash or assets or
following which any remaining outstanding shares of Common Stock fail to meet
the listing standards imposed by each of the New York Stock Exchange, the
American Stock Exchange and the Nasdaq National Market at the time of such
transaction, but shall not include any transaction the primary purpose of
which is the reincorporation of the Company in another U.S. jurisdiction so
long as in such transaction each Equity Warrant shall convert into an equity
security of the successor to the Company having identical rights as the
Equity Warrant. If a Sale Transaction occurs, then lawful provision shall be
made by the corporation formed by such Sale Transaction or the corporation
whose securities, cash or other property will immediately after the Sale
Transaction be owned, by virtue of such Sale Transaction, by the holders of
Common Stock immediately prior to the Sale Transaction, or the corporation
which shall have acquired such securities of the Company (collectively the
"Formed, Surviving or Acquiring Corporation"), as the case may be, providing
that each Equity Warrant then outstanding shall thereafter be exercisable for
the kind and amount of securities, cash or other property receivable upon
such Sale Transaction by a holder of the number of shares of Common Stock
that would have been received upon exercise of such Equity Warrant
immediately prior to such Sale Transaction assuming such holder of Common
Stock did not exercise his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such Sale
Transaction (provided that, if the kind or amount of
-10-
securities, cash or other property receivable upon such Sale Transaction is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("Non-Electing Share"), then for the
purposes of this Section 5.4 the kind and amount of securities, cash or other
property receivable upon such Sale Transaction for each Non-Electing Share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the Non-Electing Shares). At the option of the Company, in lieu of the
foregoing, the Company may require that in a Sale Transaction each Holder of an
Equity Warrant shall receive in exchange for each such Equity Warrant a security
of the Formed, Surviving or Acquiring Corporation having substantially
equivalent rights, other than as set forth in this Section 5.4, as the Equity
Warrant. Concurrently with the consummation of such transaction, the Formed,
Surviving or Acquiring Corporation shall enter into a supplemental Equity
Warrant Agreement so providing and further providing for adjustments which shall
be as nearly equivalent as may be practical to the adjustments provided for in
Section 4.1. The Formed, Surviving or Acquiring Corporation shall mail to
Holders a notice describing the supplemental Equity Warrant Agreement. If the
issuer of securities deliverable upon exercise of Equity Warrants under the
supplemental Equity Warrant Agreement is an affiliate of the formed or surviving
corporation, that issuer shall join in the supplemental Equity Warrant
Agreement. Notwithstanding anything to the contrary herein, there will be no
adjustments pursuant to Article 4 hereof in case of the issuance of any shares
of the Company's stock in a Sale Transaction except as provided in this Section
5.4. The provisions of this Section 5.4 shall similarly apply to successive Sale
Transactions; provided, however, that in no event shall a Holder of an Equity
Warrant be entitled to more than one adjustment pursuant to this Section 5.4 in
respect of a series of related transactions.
ARTICLE 6.
EXCHANGE AND TRANSFER OF EQUITY WARRANTS
6.1. Equity Warrant Register; Exchange and Transfer of Equity
Warrants. The Equity Warrant Agent shall maintain, at its corporate trust
office or at 000 Xxxxx Xxxx Xxxx, Xxxxxxxxxxxxxx Services Department, 0xx
Xxxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx 00000, a register (the "Equity Warrant
Register") in which, upon the issuance of Equity Warrants, and, subject to
such reasonable regulations as the Equity Warrant Agent may prescribe, it
shall register Equity Warrant Certificates and exchanges and transfers
thereof. The Equity Warrant Register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time.
Except as provided in the following sentence, upon surrender at
the corporate trust office of the Equity Warrant Agent or at 000 Xxxxx Xxxx
Xxxx, Xxxxxxxxxxxxxx Services Department, 0xx Xxxxx, Xxxx Xxxxxxxx, Xxx
Xxxxxx 00000, Equity Warrant Certificates may be exchanged for one or more
other Equity Warrant Certificates evidencing the same aggregate number of
Equity Warrants of the same title, or may be transferred in whole or in
part. A transfer shall be registered and an appropriate entry made in the
Equity Warrant Register upon surrender of an Equity Warrant Certificate to
the Equity Warrant Agent at its corporate trust office or at 000 Xxxxx Xxxx
Xxxx, Xxxxxxxxxxxxxx Services Department, 0xx Xxxxx, Xxxx Xxxxxxxx, Xxx
Xxxxxx 00000 for transfer, properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Equity Warrant Agent. Whenever an Equity
Warrant Certificate is
-11-
surrendered for exchange or transfer, the Equity Warrant Agent shall countersign
and deliver to the person or person entitled thereto one or more Equity Warrant
Certificates duly executed by the Company, as so requested. The Equity Warrant
Agent shall not be required to effect any exchange or transfer which will result
in the issuance of an Equity Warrant Certificate evidencing a fraction of an
Equity Warrant. All Equity Warrant Certificates issued upon any exchange or
transfer of an Equity Warrant Certificate shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Equity Warrant Certificate surrendered for such
exchange or transfer.
No service charge shall be made for any exchange or transfer of
Equity Warrants, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such exchange or transfer, in accordance with Section 2.5 hereof.
6.2. Treatment of Holders of Equity Warrants. Every Holder of an
Equity Warrant, by accepting the Equity Warrant Certificate evidencing the
same, consents and agrees with the Company, the Equity Warrant Agent and with
every other Holder of Equity Warrants that the Company and the Equity Warrant
Agent may treat the record holder of an Equity Warrant Certificate as the
absolute owner of such Equity Warrant for all purposes and as the person
entitled to exercise the rights represented by such Equity Warrant.
6.3. Cancellation of Equity Warrant Certificates. In the event that
the Company shall purchase, redeem or otherwise acquire any Equity Warrants
after the issuance thereof, the Equity Warrant Certificate shall thereupon be
delivered to the Equity Warrant Agent and be canceled by it. The Equity
Warrant Agent shall also cancel any Equity Warrant Certificate (including any
mutilated Equity Warrant Certificate) delivered to it for exercise, in whole
or in part, or for exchange or transfer. Equity Warrant Certificates so
canceled shall be delivered by the Equity Warrant Agent to the Company from
time to time, or disposed of in accordance with the instructions of the
Company.
ARTICLE 7.
CONCERNING THE EQUITY WARRANT AGENT
7.1. Equity Warrant Agent. The Company hereby appoints The Bank of
New York as Equity Warrant Agent of the Company in respect of the Equity
Warrants upon the terms and subject to the conditions set forth herein; and
The Bank of New York hereby accepts such appointment. The Equity Warrant
Agent shall have the powers and authority granted to and conferred upon it in
the Equity Warrant Certificates and hereby and such further powers and
authority acceptable to it to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such powers and authority contained in the Equity Warrant
Certificates are subject to and governed by the terms and provisions hereof.
7.2. Conditions of Equity Warrant Agent's Obligations. The Equity
Warrant Agent accepts its obligations set forth herein upon the terms and
conditions hereof, including the
-12-
following, to all of which the Company agrees and to all of which the rights
hereunder of the Holders shall be subject:
(a) Compensation and Indemnification. The Company agrees to pay
the Equity Warrant Agent from time to time such compensation for its services as
the Company and the Equity Warrant shall agree in writing and to reimburse the
Equity Warrant Agent for reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by the Equity Warrant Agent in connection with the
services rendered hereunder by the Equity Warrant Agent. The Company also agrees
to indemnify the Equity Warrant Agent for, and to hold it harmless against, any
loss, liability or expenses (including the reasonable costs and expense of
defending against any claim of liability) incurred without negligence or bad
faith on the part of the Equity Warrant Agent arising out of or in connection
with its appointment as Equity Warrant Agent hereunder.
(b) Agent for the Company. In acting under this Agreement and in
connection with any Equity Warrant Certificate, the Equity Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any Holder.
(c) Counsel. The Equity Warrant Agent may consult with counsel
reasonably satisfactory to it, and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the advice of
such counsel.
(d) Documents. The Equity Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in reliance upon any notice, direction, consent, certification,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
(e) Officer's Certificate. Whenever in the performance of its
duties hereunder the Equity Warrant Agent shall reasonably deem it necessary
that any fact or matter be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, the Equity Warrant Agent may (unless
other evidence in respect thereof be herein specifically prescribed), in the
absence of bad faith on its part, rely upon a certificate signed by the
Chairman, the Vice Chairman, the Chief Executive Officer, the President, a Vice
President, the Treasurer, and Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company (an "Office's Certificate") delivered by the Company
to the Equity Warrant Agent.
(f) Actions Through Agents. The Equity Warrant Agent may execute
and exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents, provided,
however, that reasonable care shall be exercised in the selection and continued
employment of such attorneys and agents.
-13-
(g) Certain Transactions. The Equity Warrant Agent, and any
officer, director or employee thereof, may become the owner of, or acquire
interest in, any Equity Warrant, with the same rights that he, she or it would
have if it were not the Equity Warrant Agent, and, to the extent permitted by
applicable law, he, she or it may engage or be interested in any financial or
other transaction with the Company and may serve on, or as depositary, trustee
or agent for, any committee or body of holders of any obligations of the Company
as if it were not the Equity Warrant Agent.
(h) No Liability for Interest. The Equity Warrant Agent shall not
be liable for interest on any monies at any time received by it pursuant to any
of the provisions of this Agreement or of the Equity Warrant Certificates,
except as otherwise agreed with the Company.
(i) No Liability for Invalidity. The Equity Warrant Agent shall
incur no liability with respect to the validity of this Agreement (except as to
the due execution hereof by the Equity Warrant Agent) or any Equity Warrant
Certificate (except as to the countersignature thereof by the Equity Warrant
Agent).
(j) No Responsibility for Company Representations. The Equity
Warrant Agent shall not be responsible for any of the recitals or
representations contained herein (except as to such statements or recitals as
describe the Equity Warrant Agent or action taken or to be taken by it) or in
any Equity Warrant Certificate (except as to the Equity Warrant Agent's
countersignature on such Equity Warrant Certificate), all of which recitals and
representations are made solely by the Company.
(k) No Implied Obligations. The Equity Warrant Agent shall be
obligated to perform only such duties as are specifically set forth herein, and
no other duties or obligations shall be implied. The Equity Warrant Agent shall
not be under any obligation to take any action hereunder that may subject it to
any expense or liability, the payment of which within a reasonable time is not,
in its reasonable opinion, assured to it. The Equity Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any Equity Warrant Certificate countersigned by the Equity Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the application
by the Company of the proceeds of the issuance or exercise of Equity Warrants.
The Equity Warrant Agent shall have no duty or responsibility in case of any
default by the Company in the performance of its covenants or agreements
contained herein or in any Equity Warrant Certificate or in case of the receipt
of any written demand from a Holder with respect to such default, including,
without limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except
as provided in Section 8.2 hereof, to make any demand upon the Company.
7.3. Compliance with Applicable Laws. The Equity Warrant Agent agrees
to comply with all applicable federal and state laws imposing obligations on
it in respect of the services rendered by it under this Agreement and in
connection with the Equity Warrants, including (but not limited to) the
provisions of United States federal income tax laws regarding information
reporting and backup withholding. The Equity Warrant Agent expressly assumes
all liability for
-14-
its failure to comply with any such laws imposing obligations on it, including
(but not limited to) any liability for failure to comply with any applicable
provisions of United States federal income tax laws regarding information
reporting and backup withholding.
7.4. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the Holders of the
Equity Warrants, that there shall at all times be an Equity Warrant Agent
hereunder until all the Equity Warrants are no longer exercisable.
(b) The Equity Warrant Agent may at any time resign as such agent
by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective,
subject to the appointment of a successor Equity Warrant Agent and acceptance of
such appointment by such successor Equity Warrant Agent, as hereinafter
provided. The Equity Warrant Agent hereunder may be removed at any time by the
filing with it of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when it shall become effective. Such
resignation or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Equity Warrant Agent (which shall be a
banking institution organized under the laws of the United States of America, or
one of the states thereof and having an office or an agent's office in the
Borough of Manhattan, the City of New York) and the acceptance of such
appointment by such successor Equity Warrant Agent. In the event a successor
Equity Warrant Agent has not been appointed and has not accepted its duties
within 90 days of the Equity Warrant Agen's notice of resignation, the Equity
Warrant Agent may apply to any court of competent jurisdiction for the
designation of a successor Equity Warrant Agent.
(c) In case at any time the Equity Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or make an assignment for the benefit of its creditors or
consent to the appointment of a receiver or custodian of all or any substantial
part of its property, or shall admit in writing its inability to pay or meet its
debts as they mature, or if a receiver or custodian of it or all or any
substantial part of its property shall be appointed, or if any public officer
shall have taken charge or control of the Equity Warrant Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Equity Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Equity Warrant Agent. Upon the appointment as aforesaid of a successor Equity
Warrant Agent and acceptance by the latter of such appointment, the Equity
Warrant Agent so superseded shall cease to be the Equity Warrant Agent
hereunder.
(d) Any successor Equity Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Equity Warrant Agent, without any further act, deed or conveyance, shall become
vested with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Equity Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over,
-15-
and such successor Equity Warrant Agent shall be entitled to receive all moneys,
securities and other property on deposit with or held by such predecessor, as
Equity Warrant Agent hereunder.
(e) Any corporation into which the Equity Warrant Agent hereunder
may be merged or converted or any corporation with which the Equity Warrant
Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Equity Warrant Agent shall be a party,
or any corporation to which the Equity Warrant Agent shall sell or otherwise
transfer all or substantially all of the assets and business of the Equity
Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Equity Warrant Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE 8.
MISCELLANEOUS
8.1. Amendment.
(a) This Agreement and the Equity Warrants may be amended by the
Company and the Equity Warrant Agent, without the consent of the Holders of
Equity Warrants, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision contained
herein or therein or in any other manner which the Company may deem to be
necessary or desirable and which will not (i) materially and adversely affect
the rights of the Equity Warrants and (ii) adversely affect the rights of the
Initial Holder under this Agreement to the extent the Initial Holder is a Holder
at the time of such amendment.
(b) The Company and the Equity Warrant Agent may modify or amend
this Agreement and the Equity Warrant Certificates with the consent of the
Holders of not fewer than a majority in number of the then outstanding
unexercised Equity Warrants affected by such modification or amendment, for any
purpose; provided, however, (i) that no such modification or amendment that
shortens the period of time during which the Equity Warrants may be exercised,
or increases the Exercise Price, or otherwise materially and adversely affects
the exercise rights of the holders or reduces the percentage of holders of
outstanding Equity Warrants the consent of which is required for modification or
amendment of this Agreement or the Equity Warrants, may be made without the
consent of each Holder affected thereby, and (ii) that no such modification or
amendment that adversely affects the exercise rights of the holders may be made
without the consent of the Initial Holder of the Equity Warrants to the extent
the Initial Holder is a Holder at the time of such modification and/or
amendment.
8.2. Notices and Demands to the Company and Equity Warrant Agent.
If the Equity Warrant Agent shall receive any notice or demand addressed to the
Company by any Holder pursuant to the provisions of the Equity Warrant
Certificate, the Equity Warrant Agent shall promptly forward such notice or
demand to the Company.
8.3. Addresses for Notices. Any communications from the Company to
the Equity Warrant Agent with respect to this Agreement shall be addressed to
The Bank of New York, 385 Rifle Camp Road, Reorganization Services Department,
5th Floor, West Paterson, New Jersey
-16-
07424; any communications from the Equity Warrant Agent to the Company with
respect to this Agreement shall be addressed to USA Networks, Inc., 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: General Counsel; or such other
addresses as shall be specified in writing by the Equity Warrant Agent or by the
Company.
8.4. Governing Law. This Agreement and the Equity Warrants shall be
governed by the laws of the State of New York applicable to contracts made
and to be performed entirely within such state.
8.5. Governmental Approvals. The Company will from time to time use
all reasonable efforts to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and the
national securities exchange on which the Equity Warrants may be listed or
authorized for trading from time to time and filings under the United States
federal and state laws, which may be or become requisite in connection with
the issuance, sale, trading, transfer or delivery of the Equity Warrants, and
the exercise of the Equity Warrants.
8.6. Reservation of Shares of Common Stock. The Company covenants
that it will at all times reserve and keep available, free from preemptive
rights (other than such rights as do not affect the ownership of shares
issued to a Holder), out of the aggregate of its authorized but unissued
shares of Common Stock or its issued shares of Common Stock held in its
treasury, or both, for the purpose of effecting exercises of Equity Warrants,
the full number of shares of Common Stock deliverable upon the exercise of
all outstanding Equity Warrants not theretofore exercised and on or before
taking any action that would cause an adjustment resulting in an increase in
the number of shares of Common Stock deliverable upon exercise above the
number thereof previously reserved and available therefor, the Company shall
take all such action so required. For purposes of this Section 8.6, the
number of shares of Common Stock which shall be deliverable upon the exercise
of all outstanding Equity Warrants shall be computed as if at the time of
computation all outstanding Equity Warrants were held by a single holder.
Before taking any action which would cause an adjustment reducing the price
per share of Common Stock issued upon exercise of the Equity Warrants below
the then par value (if any) of such shares of Common Stock, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock at such Exercise Price.
8.7. Covenant Regarding Shares of Common Stock. All shares of Common
Stock which may be delivered upon exercise of the Equity Warrants will upon
delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights (other than
rights which do not affect the Holder's right to own the shares of Common
Stock to be issued), and prior to the Exercise Date the Company shall take
any corporate action necessary therefor. The issuance of all such shares of
Common Stock shall, to the extent permitted by law, be registered under the
Securities Act of 1933, as amended.
8.8. Persons Having Rights Under Agreement. Nothing in this Agreement
expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Equity Warrant
Agent and the Holders any right, remedy or claim under or by reason of this
-17-
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof; and all covenants, conditions, stipulations, promises and agreements in
this Agreement contained shall be for the sole and exclusive benefit of the
Company and the Equity Warrant Agent and their successors and of the Holders of
Equity Warrant Certificates.
8.9. Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall
give rise to any liability of such Holder to pay the Exercise Price for any
shares of Common Stock other than pursuant to an exercise of the Equity
Warrant or any liability as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
8.10. Restrictions on Transfer/Registration Rights. For any transfer
of Equity Warrants and/or the Common Stock purchasable upon exercise of the
Equity Warrants to be effective, the Holders of the Equity Warrants must
comply with the transfer restrictions set forth in the Amended and Restated
Stockholders Agreement, dated as of December 16, 2001, among the Company and
the other parties on the signature pages thereto, as the same may be amended
from time to time (the "Stockholders Agreement"). On delivery of the Equity
Warrants by the Company to the Initial Holder, such Initial Holder (and to
the extent provided for in the Amended and Restated Governance Agreement,
dated as of December 16, 2001, among the Company and the other parties set
forth on the signature pages thereto, as the same may be amended from time to
time (the "Governance Agreement"), certain transferees of the Initial Holder)
shall have registration rights with respect to the Equity Warrants to the
extent provided in the Governance Agreement.
8.11. Headings. The descriptive headings of the several Articles and
Sections and the Table of Contents of this Agreement are for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
8.12. Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original; but all such counterparts shall
together constitute but one and the same instrument.
8.13. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of
the Equity Warrant Agent, for inspection by the Holders of Equity Warrants.
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the day and year first above written.
USA NETWORKS, INC.
By /s/ Xxxxxx Xxxxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Executive Vice President
Attest:
/s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Secretary
THE BANK OF NEW YORK
By /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
Attest:
/s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Treasurer
-19-
