EXHIBIT 4.2
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND THE TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE
RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M., PHILADELPHIA, PENNSYLVANIA TIME, DECEMBER 1, 1996
***************************************
WARRANT
to
PURCHASE COMMON STOCK
of
NATIONAL MEDIA CORPORATION
***************************************
This certifies that, for good and valuable consideration,
National Media Corporation, a Delaware corporation (the "Company"), grants to
_____________________ or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
$10.00 per share (the "Exercise Price"), from and after the date hereof, and to
and including 5:00 P.M. Philadelphia, Pennsylvania time on December 1, 1996 (the
"Expiration Date"), _______ shares, as such number of shares may be adjusted
from time to time (the "Warrant Shares"), of the Company's Common Stock, par
value $0.01 per share (the "Common Stock"), subject to the provisions and upon
the terms and conditions herein set forth. The Exercise Price and the number of
Warrant Shares are subject to adjustment from time to time as provided in
Section 6.
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SECTION 1. Exercise of Warrant; Limitation on Exercise; Payment of Taxes.
1.1 Exercise of Warrant.
(a) The Warrantholder may exercise this Warrant, at any time
and from time to time after the date hereof, in whole or in part, by
presentation and surrender of this Warrant to the Company at its principal
executive offices or at the office of its stock transfer agent, if any, with the
Subscription Form annexed hereto duly executed and accompanied by cash payment
of the full Exercise Price for each Warrant Share to be purchased against the
Exercise Price as set forth in Section 1.3 hereof).
(b) Upon receipt of this Warrant, with the Subscription Form
duly executed and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised, the Company shall
cause to be issued certificates for the total number of whole shares of Common
Stock for which this Warrant is being exercised (adjusted to reflect the effect
of the antidilution provisions contained in Section 6 hereof, if any, and as
provided in Sections 5 and 8.8 hereof) in such denominations as are requested
for delivery to the Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder. The stock certificates so delivered shall be
in such denominations as may be specified by the Warrantholder and shall be
issued in the name of the Warrantholder or, if permitted by Section 5 and in
accordance with the provisions thereof, such other name as shall be designated
in the Subscription Form. The Warrantholder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Warrantholder. If at the time this Warrant is
exercised, a registration statement is not in effect to register under the
Securities Act of 1933, the Warrant Shares issuable upon exercise of this
Warrant, the Company may require the Warrantholder to make such customary
representations, and may place such customary legends on certificates
representing the Warrant Shares, as may be reasonably required in the opinion of
counsel to the Company to permit the Warrant Shares to be issued without such
registration.
(c) If this Warrant shall have been exercised only in part,
the Company shall, at the time of delivery of the certificates for the Warrant
Shares, deliver to the Warrantholder a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this Warrant
for any regular cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be the
record holder of such Warrant Shares.
1.2 Limitation on Exercise. If this Warrant is not exercised prior to
5:00 P.M. on the Expiration Date (or the next succeeding Business Day, if the
Expiration Date is a Saturday, Sunday or a day on which the New York Stock
Exchange is authorized to close or on which the Company is otherwise closed for
business (a "Nonbusiness Day"), this Warrant, or any new Warrant issued
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pursuant to Section 1.1, shall cease to be exercisable and shall become void and
all rights of the Warrantholder hereunder shall cease.
1.3 Payment of Exercise Price. Payment of the Exercise Price shall be
made to the Company in cash; by certified or official bank check payable in
United States dollars to the order of the Company; or by any combination of the
foregoing.
1.4 Payment of Taxes. The issuance of certificates for Warrant Shares
shall be made without charge to the Warrantholder for any stock transfer or
other issuance tax in respect thereto; provided, however, that the Warrantholder
shall be required to pay any and all taxes which may be payable in respect to
any transfer involved in the issuance and delivery of any certificates for
Warrant Shares in a name other than that of the then Warrantholder as reflected
upon the books of the Company.
SECTION 2. Reservation and Listing of Shares, Etc.
All Warrant Shares which are issued upon the exercise of the
rights represented by this Warrant shall, upon issuance and payment of the
Exercise Price, be validly issued, fully paid and nonassessable and free from
all taxes, liens, security interests, charges and other encumbrances with
respect to the issue thereof other than taxes in respect of any transfer
occurring contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number of
shares of Common Stock to provide for the exercise of this Warrant, and if at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the exercise of this Warrant (and all other Warrants and
securities of the Company convertible into or exercisable or exchangeable for
Common Stock), in addition to such other remedies as shall be available to a
Warrantholder, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes. In addition, prior to the issuance of any Warrant Shares, the Company
shall at its expense procure the listing of the Warrant Shares (or any other
issues of capital stock issuable upon the exercise of this Warrant if such other
class of capital stock is then so listed) which shall be issued upon exercise of
this Warrant (subject to official notice of issuance) as then may be required on
all stock exchanges or interdealer quotation systems on which the Common Stock
is then listed and shall maintain such listing if and so long as any shares of
the same class shall be listed on such stock exchanges or interdealer quotation
systems. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at all
times equal to or less than the then effective Exercise Price.
SECTION 3. Exchange, Loss or Destruction of Warrant.
If permitted by Section 5 and in accordance with the
provisions thereof, upon surrender of this Warrant to the Company with a duly
executed instrument of assignment and funds sufficient to pay any transfer tax,
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the Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of such
mutilation, upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant of like tenor. The term "Warrant" as used
herein includes any Warrants issued in substitution or exchange of this Warrant.
SECTION 4. Ownership of Warrant; Certain Rights of Warrantholders.
(a) The Company may deem and treat the person in whose name
this Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer as provided in
subsection 1.1, Section 3 or Section 5.
(b) Nothing contained in this Warrant shall be construed as
conferring upon the Warrantholder or its transferees the right to vote or to
receive dividends or to consent or to receive notice as a stockholder in respect
of any meeting of stockholders for the election of directors of the Company or
of any other matter, or any rights whatsoever as stockholders of the Company.
The Company shall give notice to the Warrantholder by registered mail if at any
time prior to the expiration or exercise in full of the Warrants, any of the
following events shall occur:
(i) the Company shall authorize the payment of any
dividend payable in any securities upon shares of Common Stock or authorize the
making of any distribution (other than a regular cash dividend paid out of net
profits legally available therefor) to all holders of Common Stock;
(ii) the Company shall authorize the issuance to all
holders of Common Stock of any additional shares of Common Stock or securities
that are convertible into or exercisable for shares of Common Stock ("Common
Stock Equivalents") or of rights, options or warrants to subscribe for or
purchase Common Stock or Common Stock Equivalents or of any other subscription
rights, options or warrants;
(iii) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation, merger, or sale or
conveyance of the property of the Company as an entirety or substantially as an
entirety); or
(iv) a capital reorganization or reclassification of
the Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common Stock) or
any consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or change of Common
Stock outstanding) or in the case of any sale or conveyance to another
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corporation of the property of the Company as an entirety or substantially as an
entirety.
Such giving of notice shall be initiated at least 20 days
prior to the date fixed as a record date or effective date or the date of
closing of the Company's stock transfer books for the determination of the
stockholders entitled to such dividend, distribution, issuance or subscription
rights, or for the determination of the stockholders entitled to vote on such
proposed merger, consolidation, sale, conveyance, dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the stock transfer books, as the case may be. Failure to provide such notice
shall not affect the validity of any action taken in connection with such
dividend, distribution, issuance or subscription rights, or proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up.
SECTION 5. Split-Up, Combination, Exchange and Transfer of Warrants.
(a) Subject to the provisions of Section 5(b), this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, he,
she or it shall make such request in writing delivered to the Company and shall
surrender to the Company this Warrant and any other Warrants to be so split up,
combined or exchanged. Upon any such surrender for a split up, combination or
exchange, the Company shall execute and deliver to the person entitled thereto a
Warrant or Warrants, as the case may be, as so requested. The Company shall not
be required to effect any split up, combination or exchange which will result in
the issuance of a warrant entitling the Warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split up,
combination or exchange of Warrants.
(b) Neither this Warrant not the Warrant Shares may be
Transferred except in accordance with and subject to the provisions of the
Securities Act and the rules and regulations promulgated thereunder. If at the
time of a Transfer, a registration statement is not in effect to register this
Warrant or the Warrant Shares, the Company may require the Warrantholder to make
such customary representations, and may place such customary legends on
certificates representing this Warrant, as may be reasonably required in the
opinion of counsel to the Company to permit a Transfer without such
registration.
SECTION 6. Certain Adjustments.
(a) If at any time or from time to time the Company shall (i)
take a record of the holders of the Common Stock for the purpose of entitling
them to receive a dividend payable in, or other distribution of, shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock into a
larger number of shares of Common Stock or (iii) combine the outstanding shares
of Common Stock into a smaller number of shares of Common Stock, then the number
of shares of Common Stock thereafter issuable upon exercise of this Warrant and
the Exercise Price then in effect shall be adjusted so that this Warrant shall
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be exercisable for the same number of shares that a record holder of the number
of shares of Common Stock issuable upon exercise of this Warrant immediately
prior to the happening of such event would own or be entitled to receive after
the happening of such event and so that the aggregate Exercise Price payable for
the purchase of all Warrant Shares pursuant to this Warrant shall remain
unchanged. Any adjustments required by this Section 6(a) shall be made whenever
and as often as any specified event requiring an adjustment shall occur. If the
Company shall take a record of the holders of the Common Stock for the purpose
of effecting such distribution, subdivision or combination and shall, thereafter
and before such distribution, subdivision, or combination, legally abandon its
plan to pay or deliver such distribution or effect such subdivision or
combination, then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(b) If at any time prior to the exercise of this Warrant in
full, the Company shall (i) issue or sell any Common Stock or Common Stock
Equivalents without consideration or for consideration per share (in cash,
property or other assets) less than the current market price per share on the
date of such issuance or sale as determined pursuant to Section 6(d) or (ii) fix
a record date for the issuance of subscription rights, options or warrants to
all holders of Common Stock entitling them to subscribe for or purchase Common
Stock (or Common Stock Equivalents (as hereinafter defined)) at a price (or
having an exercise or conversion price per share) less than the current market
price of the Common Stock (as determined pursuant to Section 6(d)) on the record
date described below, the Exercise Price shall be adjusted so that the Exercise
Price shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the date of such sale or issuance (which date in the
event of a distribution to stockholders shall be deemed to be the record date
set by the Company to determine stockholders entitled to participate in such
distribution) by a fraction, the numerator of which shall be (i) the number of
shares of Common Stock outstanding on the date of such sale or issuance, plus
(ii) the number of additional shares of Common Stock which the aggregate
consideration received by the Company upon such issuance or sale (plus the
aggregate of any additional amount to be received by the Company upon the
exercise of such subscription rights, options or warrants) would purchase at
such current market price per share of the Common Stock and the denominator of
which shall be (i) the number of shares of Common Stock outstanding on the date
of such issuance or sale, plus (ii) the number of additional shares of Common
Stock offered for subscription or purchase (or into which the Common Stock
Equivalents so offered are exercisable or convertible). Whenever the Exercise
Price payable upon exercise of this Warrant is adjusted pursuant to this Section
6(b), the number of Warrant Shares issuable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Warrant Shares issuable
upon exercise of this Warrant by the Exercise Price in effect on the date of
such adjustment and dividing the product so obtained by the Exercise Price, as
adjusted. Any adjustments required by this Section 6(b) shall be made
immediately after such issuance or sale or record date, as the case may be. Such
adjustments shall be made successively whenever such event shall occur. To the
extent that shares of Common Stock (or Common Stock Equivalents) are not
delivered in connection with such subscription rights, options or warrants, the
Exercise Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights, options or
warrants been made upon the basis of delivery of only the number of shares of
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Common Stock (or Common Stock Equivalents) actually delivered. In the case of an
issue of additional Common Stock or Common Stock Equivalents for cash, the
consideration received by the Company therefor, before deducting therefrom any
discount or commission or other expenses allowed, paid or incurred by the
Company for underwriting of, or otherwise in connection with, the issuance
thereof, shall be deemed to be the amount received by the Company therefor. In
the case of an issue of additional Common Stock or Common Stock Equivalents for
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as reasonably determined by
the Company's Board of Directors, irrespective of any accounting treatment. No
adjustments to the Exercise Price or the number of Warrant Shares issuable upon
exercise of this Warrant shall be made pursuant to this Section 6(b) for (x) any
transaction for which adjustment thereto is required to be made pursuant to
Section 6(a) hereof, (y) the exercise of Warrants or (2) the conversion,
exchange or exercise of any Common Stock Equivalents.
(c) For purposes of this Section 6, "Common Stock Equivalents"
shall mean any options, warrants or other securities or rights convertible into,
or exercisable or exchangeable for, shares of Common Stock.
(d) For the purpose of any computation under this Section 6,
the current market price per share of Common Stock at any date shall be deemed
to be the average of the daily closing prices for the 20 consecutive trading
days immediately preceding such date. The closing price for each day shall be
the last sale price of the Common Stock or, in case no such reported sales take
place on such day, the average of the last reported bid and asked prices of the
Common Stock in either case on the principal national securities exchange on
which the Common Stock is admitted to trading or listed, or if not listed or
admitted to trading on any such exchange, the representative closing bid price
of the Common Stock as reported by NASDAQ, or other similar organization if
NASDAQ is no longer reporting such information, or if not so available, the fair
market price of the Common Stock as determined by the Company's Board of
Directors. The term "issue" shall include the sale other disposition of shares
held by or on account of the Company or in the treasury of the Company but until
so sold or otherwise disposed of such shares shall not be deemed outstanding.
(e) In the event that at any time, as a result of any
adjustment made pursuant to Section 6, the Warrantholder thereafter shall become
entitled to receive any shares of the Company other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Section 6.
(f) In case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock (other than a dividend,
distribution, subdivision or combination of the outstanding Common Stock
provided for in Section 6(a) and other than a change in the par value of the
Common Stock or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which the
Company is the continuing corporation and that does not result in any
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reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant)) or in case
of any sale, lease, transfer or conveyance to another corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, the Company shall, as a condition precedent to such transaction, cause
such successor or purchasing corporation, as the case may be, to execute with
the Warrantholder an agreement granting the Warrantholder the right thereafter,
upon payment of the Exercise Price in effect immediately prior to such action,
to receive upon exercise of this Warrant the kind and amount of shares and other
securities and property which it, he or she would have owned or have been
entitled to receive after the happening of such reclassification, change,
consolidation, merger, sale or conveyance had this Warrant been exercised
immediately prior to such action. Such agreement shall provide for adjustments
in respect of such shares of stock and other securities and property, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 6. In the event that in connection with any such
reclassification, capital reorganization, change, consolidation, merger, sale or
conveyance, additional shares of Common Stock shall be issued in exchange,
conversion, substitution or payment, in whole or in part, for, or of, a security
of the Company other than Common Stock, any such issue shall be treated as an
issue of Common Stock covered by the provisions of this Section 6. The
provisions of this Section 6 shall similarly apply to successive
reclassifications, capital reorganizations, consolidations, mergers, sales or
conveyances.
(g) Liquidating Dividends, Etc. If the Company at any time
while Warrants are outstanding and unexpired makes a distribution of its assets
to the holders of its Common Stock as a dividend in liquidation or by way of
return of capital or other than as a dividend payable out of earnings or surplus
legally available for dividends under applicable law or any distribution to such
holders made in respect of the sale of all or substantially all of the Company's
assets (other than under the circumstances provided for in the foregoing
subsections (a) through (f)), the holder of this Warrant shall be entitled to
receive upon the exercise hereof, in addition to the shares of Common Stock
receivable upon such exercise, and without payment of any consideration other
than the Exercise Price, an amount in cash equal to the value of such
distribution per share of Common Stock multiplied by the number of shares of
Common Stock which, on the record date for such distribution, are issuable upon
exercise of this Warrant (with no further adjustment being made following any
event which causes a subsequent adjustment in the number of shares of Common
Stock issuable upon the exercise hereof), and an appropriate provision therefor
should be made as part of any such distribution. The value of a distribution
which is paid in other than cash shall be determined in good faith by the Board
of Directors.
(h) If at any time prior to the date of the original issuance
of this Warrant, or at any time thereafter while this Warrant is outstanding, a
Distribution Date (as defined in the Company's Rights Agreement as of January 3,
1994 by and between the Company and Mellon Securities Trust Company (the "Rights
Plan") shall occur and all of the Rights (as defined in the Rights Plan) then
issued and outstanding pursuant to such Rights Plan shall not be redeemed by the
Company for nominal consideration of $.001 per Right within the redemption
period provided for in Section 23 of the Rights Plan, then in such event there
shall be promptly issued to the holder of this Warrant, that number of Rights
under the Rights Plan as would have been issued to such holder if immediately
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prior to the Distribution Date the holder had exercised his right to purchase,
and the Company had issued to him, all Warrant Shares issuable to him upon
exercise of this Warrant and he was the record owner of such Warrant Shares on
the date provided for in the Rights Plan for determining the stockholders of
record entitled to receive Rights Certificates (as defined in the Rights Plan).
If the Company shall be prohibited from issuing such Rights to the Warrant
holder by law or by the terms of the Rights Plan, then the Warrant Holder shall
have the right under this paragraph (h) to purchase or acquire (by exchange of
securities or otherwise) the same number and class of equity securities of the
Company as such holder would have had the right to so purchase or otherwise
acquire if the Rights described in the preceding sentence had been issued to
him, for the same consideration as the holder would have paid or tendered under
such Rights and on the same other terms and conditions as would have been
applicable under such Rights if such Rights had been issued to such holder as
provided in the preceding sentence. The intent of this paragraph (h) is to
protect the holder of the Warrant from the dilution of and diminution in the
value of his investment in the Company that would occur if the Rights under the
Rights Plan become exercisable or exchangeable for stock of the Company
following the occurrence of a Distribution Date and the provisions of this
Warrant shall be liberally interpreted in order to give effect to this
intention. The Board of Directors of the Company shall also take such other
actions as may be necessary to carry out the purpose and intent of this
paragraph.
(i) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 6 and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrantholders
against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Exercise Price pursuant to this Section 6, the
Company, at its expense, shall promptly compute such adjustment or readjustment
in accordance with the terms hereof and prepare and furnish to each
Warrantholder a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request at any time of any Warrantholder,
furnish or cause to be furnished to such holder a like certificate setting forth
(i) such adjustment and readjustment, (ii) the Exercise Price at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the exercise of this
Warrant.
SECTION 7. Registration Rights. Each present and future holder of
Warrant Shares shall be entitled to the benefits of the registration rights
granted pursuant to this Section 7.
The Company covenants and agrees as follows:
(a) Definitions. For purposes of this Section 7:
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(i) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement or document;
(ii) The term "Registrable Securities" means the
Warrant Shares, all shares of Common Stock ("Other Warrant Shares") issued upon
exercise of any other Warrants issued by the Company on the date hereof (other
than the VVI Warrant (as defined herein)) and all shares of Common Stock issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, any of the Warrant Shares or Other
Warrant Shares excluding in all cases, however, any Registrable Securities (x)
sold by a person in a transaction in which his rights under this Section 7 are
not assigned, (y) sold in a public offering registered under the Securities Act
or (z) sold pursuant to Rule 144 promulgated under the Securities Act;
(iii) The number of shares of "Registrable Securities
then outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(iv) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 5(b) hereof; and
(v) The term "Form S-3" means such form under the
Securities Act as in effect on the date hereof or any registration form under
the Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
(b) Request for Registration.
(i) If the Company shall receive at any time, on or
after the first anniversary hereof, a written request from the Holders of a
majority of the Registrable Securities then outstanding that the Company file a
registration statement under the Securities Act covering the registration of at
least sixty percent (60%) of the Registrable Securities then outstanding, then
the Company shall, within ten (10) business days of the receipt thereof, give
written notice of such request to all Holders, and shall, subject to the
limitations of Section 7(b)(ii), effect as soon as practicable, and in any event
within 90 days of the receipt of such request, the registration under the
Securities Act of the Registrable Securities which the Holders request to be
registered within twenty (20) days of the mailing of such notice by the Company.
If within fifteen (15) days of the exercise of a demand registration right
granted under this Section 7(b), the Company notifies the Holders of the
Registrable Securities making such demand that the Company wishes to register
securities of the same class for its own account on the registration statement
being filed pursuant to the demand for offering to the public via a firm
commitment underwriting, then the Company may include securities for its own
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account in such registration statement; provided, however, that if the managing
underwriter determines and advises in writing that the inclusion of any or all
such securities for the Company's account in the registration statement covered
by the requests for registration made under this Section 7(b)(ii) would be
detrimental to the offering of the Registrable Securities being sold in such
registration, then the requisite number of securities for the Company's account
shall be excluded from registration hereunder and, provided, further, that if
the Company includes any securities for its own account on the registration
statement filed pursuant to this Section 7(b), such registration shall not be
counted as one of Holders' demand registrations pursuant to this Section 7(b)
and the Holders shall not be required to reimburse the Company for any expenses
incurred by it in connection with such registration.
(ii) If the Holders initiating the registration
request hereunder (the "Initiating Holders") intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 7(b) and the Company shall include such information in the written
notice referred to in Section 7(b)(i). In such event, the right of any Holder to
include its, his or her Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 7(d)(v)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders. The
Warrantholder acknowledges that the Preference Holders (as hereinafter defined)
have the right to include certain securities in any registration under this
Section 7(b). Notwithstanding any other provision of this Section 7(b), if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares of
securities that may be included in the underwriting shall be allocated first
among all holders (the "Preference Holders") of Company securities covered by
the registration rights ("Other Securities") granted pursuant to either that
certain Securities Purchase Agreement dated as of September 30, 1994 (as amended
as of December 19, 1994) by and among the Company and the purchasers named
therein or that certain Registration Rights Agreement dated as of December 19,
1994 by and among the Company and the other signatories thereto or those certain
Warrants to purchase an aggregate of up to 66,264 shares of the Company's Common
Stock issued pursuant to that certain Release and Settlement Agreement dated
February 10, 1995 by and between the Company and The Wall Street Group, Inc.
(the "Preferred Rights"); and next among all Initiating Holders and other
Holders who have been provided the notice required by Section 7(b)(i) in
proportion (as nearly as practicable) to the number of shares of Registrable
Securities requested to be included in such registration by such Holder and
which would be eligible for inclusion in the registration but for the
application of this sentence. In the event Holders are not permitted to include
at least seventy-five (75%) percent of the shares of Registrable Securities that
they requested pursuant to Section 7(b)(i) to be included in a demand
registration as a result of the application of the immediately preceding
sentence, such registration shall not be counted as one of the Holders' demand
registrations pursuant to this Section 7(b) and the Holders shall not be
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required to reimburse the Company for any expenses incurred by it in connection
with such registration. In the event, as a result of the second immediately
preceding sentence, Holders are permitted to include at least seventy-five (75%)
percent but less than one hundred (100%) percent of the shares of Registrable
Securities that they requested pursuant to Section 7(b)(i) to be included in any
registration which would be the last demand registration to which the Holders
would be entitled pursuant to this Section 7(b) but for the application of this
sentence, the Holders shall be entitled to effect an additional demand
registration in accordance with the provisions set forth in this Section 7(b)
and the Holders shall not be required to reimburse the Company for any expenses
incurred by it in connection with any such additional registration.
(iii) Subject to the last sentences of Sections
7(b)(ii) and (v) hereof, the Company is obligated to effect only two (2)
registrations pursuant to this Section 7(b).
(iv) Notwithstanding the foregoing, the Company shall
not be required to file a registration statement pursuant to a request of the
Initiating Holders during either (i) the one hundred twenty (120) day period
following the effective date of any registration of Company securities which
includes Registrable Securities, Other Securities or shares of Common Stock
("VVI Securities") issued pursuant to the Warrant (the "VVI Warrant") issued to
ValueVision International, Inc. ("VVI") pursuant to that certain Telemarketing,
Production and Post-Production Agreement dated April 13, 1995 by and between VVI
and the Company (ii) the period of time beginning on the date the Company files
a registration statement with the SEC covering Other Securities and/or VVI
Securities in a firm commitment underwriting and ending on the earlier to occur
of (x) the date which is 120 days after such registration becomes effective, (y)
the date on which the Company withdraws such registration with the SEC or (z)
the date which is 180 days after the date the Company files such registration
statement. In addition, if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 7(b) a certificate signed by the
President of the Company stating that in the good faith judgment of the board of
directors of the Company it would be seriously detrimental to the Company and
its stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than ninety (90)
days after receipt of the request of the Initiating Holders; provided, however,
that the Company may not utilize this right more than once in any twelve (12)
month period.
(v) The Warrantholder acknowledges that the Company
has granted the Preferred Holders and VVI the right to participate in
registrations of the Company's securities required to be undertaken pursuant to
this Section 7(b). If within forty-five (45) days of the exercise of a demand
registration right granted pursuant to this Section 7(b), the Company notifies
the Holders of the Registrable Securities that the Preferred Holders wish to
include Other Securities for their account in such registration, then the
Company may include Other Securities for the account of such Preferred Holders
in such registration and, in the case of an underwritten offering, may reduce
the number of shares of Registrable Securities included in such registration in
accordance with the provisions set forth in Section 7(b)(ii); provided, however,
that if the Holders are not permitted to include at least seventy-five (75%)
percent of the shares of Registrable Securities that they requested pursuant to
Section 7(b)(i) to be included in a demand registration as a result of the
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applications of this sentence, such registration shall not be counted as one of
Holders' demand registrations pursuant to this Section 7(b) and the Holders
shall not be required to reimburse the Company for any expenses incurred by it
in connection with such registration. In the event, as a result of the
immediately preceding sentence, Holders are permitted to include at least
seventy-five (75%) percent but less than one hundred (100%) percent of the
shares of Registrable Securities that they requested pursuant to Section 7(b)(i)
to be included in any registration which would be the last demand registration
to which the Holders would be entitled pursuant to this Section 7(b) but for the
application of this sentence, the Holders shall be entitled to effect an
additional demand registration in accordance with the provisions set forth in
this Section 7(b) and the Holders shall not be required to reimburse the Company
for any expenses incurred by it in connection with any such additional
registration.
(vi) In the event that the Warrant would expire at
any time when the Holders have requested registration of Registrable Securities
pursuant to Section 7(b)(i) and either (x) the Company is not required to file a
registration statement during such time pursuant to Section 7(b)(iv) or (y) the
Holders are not permitted to include all of the Registrable Securities that they
requested to be included in such demand registration pursuant to Section
7(b)(ii) or (v), then the term of the Warrant (but only with respect to
Registrable Securities that were not included in such demand registration by
reason of the circumstances described in clause (x) or (y)) shall be extended
until a registration statement registering such Registrable Securities is
effective.
(c) Company Registration. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any shares of
its Common Stock under the Securities Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to employees pursuant to stock option awards and/or to
participants in a Company employee benefit or stock plan, or a registration on
any form which does not include substantially the same information, other than
information related to the selling stockholders or their plan of distribution,
as would be required to be included in a registration statement covering the
sale of the Registrable Securities), the Company shall, at such time, promptly
give each Holder written notice of such registration. Upon the written request
of each Holder given within twenty (20) days after mailing of such notice by the
Company, the Company shall, subject to the provisions of the immediately
preceding sentence and Section 7(h) hereof, cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has
requested to be so registered. Notwithstanding anything herein to the contrary,
in the case of a registration required to be undertaken by the Company pursuant
to the Preferred Rights (a "Limited Piggyback Registration"), the Company shall
not be required to include any Registrable Securities in such Limited Piggyback
Registration if either (i) the Preferred Holders (whose determination shall be
made by Preferred Holders holding a majority of the securities covered by such
demand registration rights which are to be included in such registration) or the
managing underwriter (in the case of an underwritten offering) determine in good
faith that the inclusion of any or all of the Registrable Securities would be
detrimental to the offering of the Preferred Holders' securities or any
securities to be sold in such registration for the Company's account or (ii) the
number of Other Securities to be included in such registration would be reduced
by the inclusion of the Registrable Securities in such registration. In the
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event the number of shares of Registrable Securities requested by Holders to be
included in a registration is reduced by application of the immediately
preceding sentence, the number of Registrable Securities to be included in the
registration statement shall be allocated among the Holders who have provided
the notice required by this Section 7(c) and VVI in proportion (as nearly as
practicable) to the number of Registrable Securities or VVI Securities requested
to be included in such registration by such Holder or VVI and which would be
eligible for inclusion in such registration but for the application of the
immediately preceding sentence or application of a similar provision contained
in the VVI Warrant. Moreover, in the case of a registration required to be
undertaken by the Company pursuant to registration rights granted to VVI
pursuant to the VVI Warrant (a "VVI Piggyback Registration"), the Company shall
not be required to include any Registrable Securities in such VVI Piggyback
Registration if the number of VVI Securities to be included in such registration
would be reduced by the inclusion of the Registrable Securities in such
registration. In the event the number of shares of Registrable Securities
requested by Holders to be included in a registration is reduced by application
of the immediately preceding sentence, the number of Registrable Securities to
be included in the registration statement shall be allocated among the Holders
who have provided the notice required by this Section 7(c) in proportion (as
nearly as practicable) to the number of Registrable Securities requested to be
included in such registration by such Holder and which would be eligible for
inclusion in such registration but for the application of the immediately
preceding sentence.
(d) Obligations of the Company. Whenever required under this
Section 7 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(i) Prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for up to one hundred twenty (120) days.
(ii) Prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(iii) Furnish to the Holders such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required to qualify to do
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business or to file a general consent to service of process in any such states
or jurisdictions.
(v) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(vi) Notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
(vii) In the case of an underwritten public offering,
furnish, at the request of any Holder requesting registration of Registrable
Securities pursuant to this Section 7, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 7, (A) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in such
form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters and (B) a letter dated such date,
from the independent certified public accountants of the Company, in such form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters.
(e) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 7
with respect to the Registrable Securities of any selling Holder that such
Holder shall have furnished to the Company such information regarding itself,
the Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
(f) Expenses of Demand Registration. Except as set forth in
this Section 7(f), the Company shall bear and pay all expenses incurred by it in
connection with any registrations, filings or qualifications pursuant to Section
7(b), including without limitation all registration, filing and qualification
fees, printers, and accounting fees, and fees and disbursements of counsel for
the Company; provided, however, that (subject to Sections 7(b)(ii) and (v)
hereof) the Holders participating in any registration pursuant to Section 7(b)
shall reimburse the Company for (i) all such expenses (up to a maximum of Twenty
Five Thousand ($25,000.00) Dollars per registration) pro nm based upon the
number of Registrable Securities included in such registration by all Holders
(excluding, however, any expenses attributable to the inclusion of any other
securities therein, including, without limitation, any Other Securities) and
(ii) for any expenses of any registration proceeding begun pursuant to Section
7(b) if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which
case all Holders participating in such withdrawn registration shall bear such
expenses pro nm based upon the number of Registrable Securities to be included
-15-
in such registration), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one demand registration pursuant to
Section 7(b); provided further, however, that, in the case of clause (ii)
hereof, if at the time of such withdrawal the Holders have learned of a material
adverse change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request, then the Holders shall not be
required to reimburse the Company for any of such expenses and shall retain
their rights pursuant to Section 7(b). In no event shall the Company be required
to pay any expenses incurred by a Holder in connection with any registration,
filing or qualification pursuant to Section 7(b).
(g) Expenses of Company Registration. The Company shall bear
and pay all expenses incurred by it in connection with any registration, filing
or qualification of Registrable Securities with respect to the registrations
pursuant to Section 7(c), including without limitation all registration, filing,
and qualification fees, printers and accounting fees and all fees and
disbursements of counsel for the Company relating or allocable thereto. The
Company shall not pay any expenses incurred by a Holder in connection with any
such registration, filing or qualification, including, but not limited to
underwriting discounts and commissions relating to Registrable Securities and
the fees and disbursements of any professional advisors (including attorneys and
accountants) utilized by the selling Holders in connection with such
registration, filing or qualification.
(h) Reduction of Registrable Securities Included in Piggyback
Registration Statement. In connection with any offering involving an
underwriting of shares being issued by the Company, the Company shall not be
required under Section 7(c) hereof to include any of the Holders' securities in
such underwriting unless they accept the customary and reasonable terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it, and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters reasonably believe
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering (the securities so included to be allocated first among
all holders of Other Securities and next apportioned pro nm among the Holders
who have provided notice required by Section 7(c) and all other holders (other
than holders of Other Securities) of securities subject to registration rights
granted by the Company in proportion (as nearly as practicable) to the number of
shares of securities requested to be included in such registration by such
Holder and such other holders and which would have been eligible for inclusion
in such registration but for the application of this sentence, or in such other
proportions as shall mutually be agreed to by such selling stockholders). For
purposes of the provision of the preceding sentence concerning pro nm
apportionment amongst the selling stockholders, for any selling stockholder
which is a partnership or corporation, the partners, retired partners and
stockholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling stockholder," and any
pro nm reduction with respect to such "selling stockholder" shall be based upon
the aggregate amount of shares carrying registration rights owned by all
-16-
entities and individuals included in such "selling stockholder," as defined in
this sentence.
(i) Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any registration
by the Company as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 7.
(j) Indemnification and Contribution. In the event any
Registrable Securities are included pursuant to a registration statement under
this Section 7:
(i) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the
Securities Act) and each person if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act") against any losses, claims, damages or
liabilities (joint or several) to which they or any of them may become subject
under the Securities Act, the Exchange Act or any other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (A) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus (but only if such is not
corrected in the final prospectus) contained therein or any amendments or
supplements thereto, (B) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading (but only if such is not corrected in the final
prospectus), or (C) any violation or alleged violation by the Company in
connection with the registration of Registrable Securities under the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, underwriter or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 7(j)(i) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(ii) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
-17-
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
Section 7(j)(ii), in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 7(j)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided that in no event shall any indemnity
under this Section 7(j)(ii) exceed the net proceeds from the offering received
by such Holder.
(iii) Promptly after receipt by an indemnified party
under this Section 7(j) of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 7(j),
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 7(j), but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
7(j).
(iv) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(j)(i) and (ii) is applicable but for any reason is held to be
unavailable from the Company with respect to all Holders or any Holder, the
Company and the Holder or Holders, as the case may be, shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted) to which
the Company and one or more of the Holders may be subject in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand, and
the Holder or Holders on the other, in connection with statements or omissions
which resulted in such losses, claims, damages or liabilities. Notwithstanding
the foregoing, no Holder shall be required to contribute any amount in excess of
the net proceeds received by such Holder from the Registrable Securities as the
case may be, sold by such Holder pursuant to the registration statement. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Each person, if any,
who controls a Holder within the meaning of the Securities Act shall have the
same rights to contribution as such Holder.
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(v) The obligations of the Company and Holders under
this Section 7(j) shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 7 or otherwise.
(k) Reports Under the Exchange Act. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(i) make and keep public information available, as
those terms are understood and defined in Rule 144 of the SEC;
(ii) at all times take all such action as may be
necessary or advisable to enable the Holders to utilize Form S-3 for the sale of
their Registrable Securities;
(iii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
(iv) furnish to any Holder, so long as the Holder
owns any Registrable Securities, forthwith upon its request (i) a written
statement by the Company as to its compliance with the reporting requirements of
SEC Rule 144, the Securities Act and the Exchange Act, or as to its qualified
status as a registrant whose securities may be resold pursuant to Form S-3, (ii)
a copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
(l) Limitations on Subsequent Registration Rights. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (i) to include such securities in any registration filed under Section
7(b) hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of this securities will not reduce the amount of
the Registrable Securities of the Holders which is included in such
registration; (ii) to make a demand registration which could result in such
registration statement being declared effective within one hundred twenty (120)
days after the effective date of any registration effected pursuant to Section
7(b) hereof or (iii) to include such securities in any registration in which the
Holders may include Registrable Securities pursuant to Section 7(c) hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only on a basis no more
favorable than pro nm with all Holders of Registrable Securities in proportion
(as nearly as practicable) to the number of shares of securities to be included
in such registration by such Holder and such other holders.
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(m) The provisions of this Section 7 shall survive any
expiration of the Warrants evidenced hereby until the earlier to occur of (i)
the date that all Warrant Shares held by all Holders may be sold for resale
pursuant to Rule 144 under the Exchange Act without reduction as a result of
Rule 144(e) thereunder and (ii) the date that no Warrants or Warrant Shares are
held by any Holder.
SECTION 8. Miscellaneous.
8.1 Entire Agreement. This Warrant constitutes the entire agreement
between the Company and the Warrantholders with respect to this Warrant and
Warrant Shares.
8.2 Binding Effects; Benefits. This Warrant shall inure to the benefit
of and shall be binding upon the Company, the Warrantholders and holders of
Warrant Shares and their respective heirs, legal representatives, successors and
assigns. Nothing in this Warrant, expressed or implied, is intended to or shall
confer on any person other than the Company, the Warrantholders and holders of
Warrant Shares, or their respective heirs, legal representatives, successors or
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Warrant or the Warrant Shares.
8.3 Amendments and Waivers. This Warrant may not be modified or amended
except by an instrument in writing signed by the Company and Warrantholders that
hold Warrants entitling them to purchase at least 50% of the shares of Common
Stock then issuable pursuant to this Warrant and the other Warrants issued by
the Company on the date hereof (other than the VVI Warrant). The Company, any
Warrantholder or holders of Warrant Shares may, by an instrument in writing,
waive compliance by the other party with any term or provision of this Warrant
on the part of such other party hereto to be performed or complied with. The
waiver by any such party of a breach of any term or provision of this Warrant
shall not be construed as a waiver of any subsequent breach.
8.4 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
8.5 Further Assurances. Each of the Company, the Warrantholders and
holders of Warrant Shares shall do and perform all such further acts and things
(including, without limitation, any required filings under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended) and execute and deliver all such
other certificates, instruments and/or documents (including without limitation,
such proxies and/or powers of attorney as may be necessary or appropriate) as
any party hereto may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Warrant.
8.6 Notices. All demands, requests, notices and other communications
required or permitted to be given under this Warrant shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
United States certified or registered first class mail, postage prepaid, to the
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parties hereto at the following addresses or at such other address as any party
hereto shall hereafter specify by notice to the other party hereto:
(a) if to the Company, addressed to:
National Media Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman
(b) if to any Warrantholder or holder of Warrant Shares,
addressed to the address of such person appearing on the books of the
Company.
Except as otherwise provided herein, all such demands,
requests, notices and other communications shall be deemed to have been received
on the date of personal delivery thereof or on the third business day after the
mailing thereof.
8.7 Separability. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this Warrant
or affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
8.8 Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such fraction
multiplied by the current market price (as determined as of the date of
exercise, and with reference to the applicable trading market, in accordance
with Section 1.1(a)(ii)) of a share of such stock as of the date of such
exercise.
8.9 Rights of the Holder. The Warrantholder shall not, solely by virtue
of this Warrant, be entitled to any rights of a stockholder of the Company,
either at law or in equity.
8.10 Governing Law. This Warrant shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts made and performed in Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
NATIONAL MEDIA CORPORATION
By:_______________________________________
Name:
Title:
Dated: November 24, 1995
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ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, ____________________ hereby sells, assigns
and transfers unto _____________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint _________________ attorney, to transfer said Warrant
Certificate on the books of the within-named Company with respect to the number
of Warrants set forth below, with full power of substitution in the premises:
Name(s) of
Assignee(s) Address No. of Warrant Shares
----------- ------- ---------------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated: ________________, 19___
------------------------------------------
Note: The above signature should
correspond exactly with the name on
the face of this Warrant
Certificate.
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SUBSCRIPTION FORM
(To be executed upon exercise of Warrant
pursuant to Section 1.1(a))
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within Warrant Certificate for, and to
purchase thereunder, ___________ shares of Common Stock, as provided for
therein, and delivers payment in full of the Exercise Price in the amount of $
__________ as follows:
Cash $__________
Certified or Official bank check $__________
Please issue a certificate or certificates for such Common
Stock in the name of, and pay any cash for any fractional share to:
Name: ______________________________________
Address: ______________________________________
______________________________________
______________________________________
Social Security No.: ______________________________________
(Please Print Name, Address and Social Security No.)
Signature: ______________________________________
NOTE: The above signature should
correspond exactly with the name
on the first page of this
Warrant Certificate or with the
name of the assignee appearing
in the assignment form delivered
herewith.
And if said number of 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 said undersigned for the balance remaining of the
shares purchasable thereunder rounded up to the next higher number of shares.
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