EXHIBIT 7(d)
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WARRANT AGREEMENT
between
PRIMEDIA INC.
and
LIBERTY PRIME, INC.
Dated as of April 19, 2000
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This WARRANT AGREEMENT (the "Agreement") is entered into as of April 19,
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2000, between PRIMEDIA INC., a Delaware corporation (the "Company"), and LIBERTY
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PRIME, INC., a Delaware corporation ("Purchaser").
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WHEREAS, pursuant to the Stock Purchase Agreement, dated as of March 29,
2000, among the Company, Liberty Media Corporation, a Delaware corporation
("Liberty Media"), and Liberty Digital, Inc., a Delaware corporation and a
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majority owned subsidiary of Liberty Media (the "Stock Purchase Agreement"), the
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Company has authorized the sale and issuance to Liberty Media or its designee of
warrants to purchase initially up to 1,500,000 shares of common stock, par value
$0.01 per share (the "Common Stock"), of the Company on the terms and subject to
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the conditions set forth herein.
WHEREAS, in accordance with the terms and conditions of the Stock Purchase
Agreement, Liberty Media has designated Purchaser as its designee to acquire the
Warrants.
WHEREAS, Purchaser desires to acquire the Warrants on the terms and
conditions set forth in the Stock Purchase Agreement and herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1.
Defined Terms
SECTION 1.1 Definitions. Capitalized terms used and not defined herein
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shall have the meanings assigned to them in the Stock Purchase Agreement. As
used herein, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
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directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
"Board" means the Board of Directors of the Company.
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"Business Day" means any day that is not a Saturday, a Sunday or other day
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on which banks are required or authorized by law to be closed in The City of New
York.
"control" (including the terms "controlled by" and "under common control
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with"), with respect to the relationship between or among two or more Persons,
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means the possession, directly or indirectly, of the power to direct or cause
the direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exercise Price" means, at any date herein, the price at which a share of
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Common Stock may be purchased pursuant to this Warrant on such date. On the date
of original issuance of this Warrant, the Exercise Price is $25.00 per share of
Common Stock.
"Expiration Date" means the third anniversary of the Purchase Closing
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Date.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of the
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Exchange Act.
"Holder" means the duly registered holder of this Warrant under the terms
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hereof.
"Independent Investment Banking Firm" means an investment banking firm of
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nationally recognized standing that is, in the reasonable judgment of the Person
engaging such firm, qualified to perform the task for which it has been engaged.
"Majority Holders" shall mean the Holders of Warrants exercisable for in
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excess of 50% of the aggregate number of shares of Common Stock then purchasable
upon exercise of all of the Warrants then outstanding.
"Market Value" means, (a) with respect to capital stock or other equity
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securities, the last reported sales price on the date of determination or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices regular way for such day, in each case (i) on the principal
national securities exchange on which the shares of such capital stock or other
equity interest are listed or to which such shares are admitted for trading or
(ii) if such capital stock or other equity interest is not listed or admitted
for trading on a national securities exchange, in the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. National Market
System ("Nasdaq") or any comparable system, or (iii) if such capital stock or
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other equity interest is not listed on Nasdaq or a comparable system, as
furnished by two members of the National Association of Securities Dealers, Inc.
("NASD") selected from time to time in good faith by the Board for that purpose.
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In the absence of all of the foregoing, or if for any other reason the Market
Value per share cannot be determined pursuant to the foregoing provisions or if
the consideration to be received by the holders of Common Stock consists of
evidences of indebtedness, other property, warrants, options or subscription of
purchase rights, the Market Value shall be the fair market value thereof as
determined by an Independent Investment Banking Firm selected by the Company and
reasonably acceptable to the Majority Holders. Subject to Section 4.10, the
Company shall bear the fees and expenses of any Independent Investment Banking
Firm involved in the determination of Market Value.
"Person" means any individual, corporation, limited liability company,
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limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any Group comprised of two or more of the foregoing.
"SEC" means the U.S. Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
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ARTICLE 2.
Grant
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SECTION 2.1 The Company hereby grants to Purchaser warrants (the
"Warrants") which shall entitle the registered holder thereof to purchase from
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the Company, in accordance with the terms hereof, initially up to 1,500,000
shares (the "Warrant Shares") of Common Stock, subject to adjustment as provided
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in Article 7, at the Exercise Price, subject to adjustment as provided in
Article 7, all subject to the terms and conditions set forth herein.
SECTION 2.2 Warrant Certificates. The Warrants shall be evidenced by
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certificates issued pursuant to this Agreement (the "Warrant Certificates") in
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the form set forth in Exhibit A hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement.
ARTICLE 3.
Exercise Terms
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SECTION 3.1 Exercise Periods. At any time from and after the date of this
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Agreement and until 12:00 a.m., New York City time, on the Expiration Date, the
Holder may exercise the Warrants, on any Business Day, for all or any part of
the Warrant Shares.
SECTION 3.2 Expiration. Each Warrant shall terminate and become void, and
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all rights thereunder and all rights in respect thereof under this Agreement
shall cease, as of the earlier of (i) 12:00 a.m., New York City time, on the
Expiration Date and (ii) the time and date such Warrant is exercised.
SECTION 3.3 Manner of Exercise. In order to exercise the Warrants, in
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whole or in part, the Holder shall deliver to the Company at its principal
office at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, or at the office or
agency designated by the Company pursuant to Article 7, (i) a Warrant
Certificate with the annexed Subscription Form duly executed and (ii) payment of
the Exercise Price for the number of Warrant Shares in respect of which such
Warrant(s) is then exercised. Payment of the Exercise Price shall be made in
cash, by certified or official bank check payable to the order of the Company or
by wire transfer of funds to an account designated by the Company for such
purpose. In the event that such a Warrant Certificate is surrendered for
exercise in respect of less than all the Warrant Shares purchasable on such
exercise at any time prior to the Expiration Date, the Company shall, at the
time of delivery of the certificate or certificates representing the Warrant
Shares, deliver to such Holder a new Warrant Certificate evidencing the rights
of such Holder to purchase the remaining number
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of Warrant Shares, which new Warrant Certificate shall in all other respects be
identical with the surrendered Warrant Certificate.
SECTION 3.4 Issuance of Warrant Shares. Subject to Section 3.5, upon the
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surrender of a Warrant Certificate and payment of the per share Exercise Price
as set forth in Section 3.3, the Company shall, as promptly as practicable, and
in any event within five (5) Business Days thereafter, issue or cause there to
be issued and deliver or cause to be delivered to the Holder (i) a certificate
or certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrant Certificate or (ii) such other securities or property
to which the Holder is entitled, registered or otherwise to the Person or
Persons entitled to receive the same, together with cash as provided in Section
3.5 in respect of any fractional Warrant Shares otherwise issuable upon such
exercise. Such certificate or certificates shall be deemed to have been issued
and any Person so designated to be named therein shall be deemed to have become
a holder of record of such Warrant Shares as of the date of the delivery of the
Warrant Certificate (together with a duly executed Subscription Form) and
payment of the Exercise Price.
SECTION 3.5 Fractional Warrant Shares. The Company shall not be required
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to issue fractional Warrant Shares on the exercise of the Warrants. If any
fraction of a Warrant Share would, except for the provisions of this Section
3.5, be issuable on the exercise of a Warrant (or specified portion thereof),
the Company shall pay an amount in cash equal to the Market Value for one
Warrant Share on the Business Day immediately preceding the date such Warrant is
exercised, multiplied by such fraction, computed to the nearest whole cent. For
purposes of determining the Market Value, if in accordance with such term, an
Independent Investment Banking Firm would be required to be hired to determine
the Market Value and but for this Section 3.5, an Independent Investment Banking
Firm is not otherwise required to be retained to determine Market Value at such
time, then Market Value shall be determined in good faith by the Board.
SECTION 3.6 Reservation of Warrant Shares. (a) The Company shall at all
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times on and following the Purchase Closing Date keep reserved out of its
authorized shares of Common Stock a number of shares of Common Stock sufficient
to provide for the exercise in full of all outstanding Warrants. The registrar
for the Common Stock shall at all times on and following the Purchase Closing
Date and until the Expiration Date, or the time at which all Warrants have been
exercised or canceled, reserve such number of authorized shares as shall be
required for such purpose. All Warrant Shares which may be issued upon exercise
of the Warrants shall be duly and validly authorized, validly issued, fully
paid, nonassessable, free of preemptive rights and free from all Encumbrances.
(b) Before taking any action which would cause an adjustment pursuant to
Article 4 to reduce the Exercise Price below the then par value (if any) of the
Common Stock, the Company shall take any and all corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock at the
Exercise Price as so adjusted.
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SECTION 3.7 Compliance with Law. If any shares of Common Stock required to
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be reserved for purposes of exercise of the Warrants would require, under any
federal or state law or applicable governing rule or regulation of any national
securities exchange, Nasdaq or any comparable system, registration with or
approval of any governmental authority, or listing on any such national
securities exchange, Nasdaq or any comparable system before such shares may be
issued upon exercise, the Company will use its reasonable best efforts to cause
such shares to be duly registered or approved by such governmental authority or
listed on the relevant national securities exchange, Nasdaq or any comparable
system, at its expense.
ARTICLE 4.
Adjustment Provisions
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SECTION 4.1 Changes in Common Stock. In the event that at any time or from
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time to time after the date hereof, the Company shall (i) pay a dividend or make
a distribution on its Common Stock in shares of its Common Stock or other shares
of its capital stock to all holders of Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a larger number of shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) increase or decrease the number of
shares of Common Stock outstanding by reclassification of its Common Stock (in
each case, other than a transaction to which Section 4.4 is applicable), then
the number of shares of Common Stock purchasable upon exercise of the Warrants
immediately after the happening of such event shall be adjusted so that, after
giving effect to such adjustment, each Holder of the Warrants shall be entitled
to receive the number of shares of Common Stock (and other shares of capital
stock, if applicable) upon exercise that such Holder would have owned or have
been entitled to receive had the Warrants been exercised immediately prior to
the happening of the events described above (or, in the case of a dividend or
distribution of Common Stock or other shares of capital stock, immediately prior
to the record date therefor), and the Exercise Price shall be adjusted in
inverse proportion. An adjustment made pursuant to this Section 4.1 shall become
effective immediately after the effective date, retroactive to the record date
therefor in the case of a dividend or distribution in shares of Common Stock or
other shares of capital stock, and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The adjustment contemplated by this Section 4.1 shall be made successively
whenever any event listed above shall occur.
SECTION 4.2 Cash Dividends and Certain Other Distributions. In case at any
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time or from time to time after the date hereof, the Company shall distribute to
all holders of Common Stock any dividend or other distribution of cash (other
than ordinary cash dividends, but including extraordinary cash dividends),
evidences of its indebtedness, shares of its capital stock or any other
properties or securities or (ii) any options, warrants or other rights to
subscribe for or purchase any of the foregoing (other than, in each case set
forth in (i) and (ii), (x) any dividend or distribution described in Section 4.1
or, (y) any rights, options, warrants or securities described in Section 4.3),
then (i) the number of shares of Common Stock purchasable upon the exercise of
the Warrants shall be increased to a number determined by multiplying the number
of
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shares of Common Stock purchasable upon the exercise of the Warrants immediately
prior to the record date for any such dividend or distribution by a fraction,
(A) the numerator of which shall be the Market Value per share of Common Stock
on the record date for such distribution, and (B) the denominator of which shall
be such Market Value per share of Common Stock less the sum of (x) any cash
distributed per share of Common Stock and (y) the fair value (the "Fair Value")
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(as determined in good faith by the Board, whose determination shall be
evidenced by a board resolution) of the portion, if any, of the distribution
applicable to one share of Common Stock consisting of evidences of indebtedness,
shares of stock, securities or other property and (ii) the Exercise Price shall
be adjusted to a number determined by dividing the Exercise Price immediately
prior to such record date by the above fraction. Such adjustments shall be made
successively whenever any distribution is made and shall become effective as of
the date of distribution, retroactive to the record date for any such
distribution; provided, however, that the Company is not required to make an
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adjustment pursuant to this Section 4.2 (other than with respect to rights,
warrants or other subscription rights that expire by their terms prior to the
Expiration Date) if at the time of such distribution the Company sets aside for
the benefit of the Holders of Warrants the same distribution as it makes to
holders of Common Stock pro rata based on the number of shares of Common Stock
for which such Warrants are then exercisable.
SECTION 4.3 Rights Issue. In the event that at any time or from time to
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time after the date hereof, the Company shall issue, sell, distribute or
otherwise grant any rights to subscribe for or to purchase, or any options or
warrants for the purchase of, or any securities convertible or exchangeable
into, Common Stock to all holders of Common Stock, entitling such holders to
subscribe for or purchase shares of Common Stock or stock or securities
convertible into Common Stock, whether or not immediately exercisable,
convertible or exchangeable, as the case may be, and the subscription or
purchase price per share of Common Stock or the price per share of Common Stock
issuable upon exercise, conversion or exchange thereof is lower at the record
date for such issuance than the then Market Value per share of Common Stock, the
number of shares of Common Stock thereafter purchasable upon the exercise of the
Warrants shall be determined by multiplying the number of shares of Common Stock
purchasable upon the exercise of the Warrants prior to the record date by a
fraction, (A) the numerator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights, options, warrants or
securities plus the maximum number of additional shares of Common Stock offered
for subscription or purchase or into or for which such securities are
convertible or exchangeable, and (B) the denominator of which shall be the
number of shares of Common Stock outstanding on the date of issuance of such
rights, options, warrants or securities plus the total number of shares of
Common Stock which could be purchased at the Market Value with the aggregate
consideration received through the issuance of such rights, warrants, options,
or convertible securities. In the event of any such adjustment, the Exercise
Price shall be adjusted to a number determined by dividing the Exercise Price
immediately prior to such date of issuance by the above fraction. Such
adjustment shall be made successively whenever such rights, options or warrants
are issued and shall become effective retroactively immediately after the record
date for the determination of stockholders entitled to receive such rights,
options, warrants or securities.
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If the Company at any time shall issue two or more securities as a unit
and one or more of such securities shall be rights, options or warrants for or
securities convertible or exchangeable into, Common Stock subject to this
Section 4.3, the consideration allocated to each such security shall be
determined in good faith by a Board resolution.
SECTION 4.4 Reorganization, Reclassification, Merger, Consolidation or
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Disposition of Assets. In case the Company shall reorganize its capital,
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reclassify its capital stock, consolidate or merge with or into another Person
(where the Company is not the surviving entity or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another Person and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring Person, or any cash, shares of stock
or other securities or property of any nature whatsoever (including warrants or
other subscription or purchase rights) in addition to or in lieu of common stock
of the successor or acquiring Person ("Other Property"), are to be received by
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or distributed to the holders of Common Stock of the Company, then each Holder
shall have the right thereafter to receive, upon exercise of such Warrant, the
number of shares of common stock of the successor or acquiring Person or of the
Company, if it is the surviving entity, and Other Property receivable upon or as
a result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a holder of the number of shares of Common Stock for
which such Warrant is exercisable immediately prior to such event (assuming, to
the extent applicable, that such holder failed to exercise any rights of
election with respect thereto and, in the case of a transaction in which
non-electing holders receive more than two types of consideration, assuming that
such holder received per share of Common Stock the kind and amount of shares of
common stock of the successor or acquiring person and/or Other Property received
by a plurality of the non-electing shares of Common Stock). In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring Person (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of the Warrants to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board) in order to provide for adjustments of shares of the common stock of the
successor or acquiring person for which this Warrant is exercisable (in addition
to any Other Property) which shall be as nearly equivalent as practicable to the
adjustments provided for in this Article 4 with respect to the Common Stock. For
purposes of this Section 4.4 "common stock of the successor or acquiring Person"
shall include stock of such Person of any class which is not preferred as to
dividends or assets over any other class of stock of such Person and which is
not subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 4.4 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or dispositions of assets.
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SECTION 4.5 Superseding Adjustment. Upon the expiration of any rights,
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options, warrants or conversion or exchange privileges which resulted in any
adjustments pursuant to this Article 4, if any thereof shall not have been
exercised, the number of Warrant Shares purchasable upon the exercise of each
Warrant shall be readjusted as if (A) the only shares of Common Stock issuable
upon exercise of such rights, options, warrants, conversion or exchange
privileges were the shares of Common Stock, if any, actually issued upon the
exercise of such rights, options, warrants or conversion or exchange privileges
and (B) shares of Common Stock actually issued, if any, were issuable for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange privileges whether or not exercised and the Exercise Price shall be
readjusted inversely; provided, however, that no such readjustment shall (except
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by reason of an intervening adjustment under Section 4.1) have the effect of
decreasing the number of Warrant Shares purchasable upon the exercise of each
Warrant or increasing the Exercise Price by an amount in excess of the amount of
the adjustments to the number of Warrant Shares purchasable and the Exercise
Price initially made in respect of the issuance, sale or grant of such rights,
options, warrants or conversion or exchange privileges.
SECTION 4.6 Minimum Adjustment. The adjustments required by the preceding
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Sections of this Article 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that no adjustment of the
Exercise Price or the number of shares of Common Stock purchasable upon exercise
of the Warrants that would otherwise be required shall be made (except in the
case of a subdivision or combination of shares of Common Stock, as provided for
in Section 4.1) unless and until such adjustment either by itself or with other
adjustments not previously made increases or decreases by at least 1% the
Exercise Price or the number of shares of Common Stock purchasable upon exercise
of the Warrants immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Article 4 and not previously made, would result in
a minimum adjustment. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date of its
occurrence. In computing adjustments under this Article 4, fractional interests
in Common Stock shall be taken into account to the nearest one-hundredth of a
share.
SECTION 4.7 Other Provisions Regarding Adjustments. In the event that at
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any time, as a result of an adjustment made pursuant to Section 4.1 hereof, the
Holder of a Warrant shall become entitled to receive any shares of capital stock
of the Company other than shares of Common Stock, thereafter the number of such
other shares of capital stock so receivable upon exercise of such 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 Article 4 and the provisions contained elsewhere herein with
respect to Common Stock shall apply on like terms to any such other shares.
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SECTION 4.8 Notice of Adjustment. Whenever the Exercise Price or the
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number of shares of Common Stock and other property, if any, purchasable upon
exercise of Warrants is adjusted, as herein provided, the Company shall deliver
to the Holders a certificate of a firm of independent accountants (who may be
the regular accountants employed by the Company) or the Chief Financial Officer
of the Company setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated (including a
description of the basis on which the Board determined the Market Value of any
evidences of indebtedness, other securities or property or warrants or other
subscription or purchase rights), and specifying the Exercise Price and the
number of shares of Common Stock purchasable upon exercise of the Warrants after
giving effect to such adjustment.
SECTION 4.9 Notice of Certain Transactions. In the event that the Company
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shall resolve or agree (a) to pay any dividend payable in securities of any
class to the holders of its Common Stock or to make any other distribution to
the holders of its Common Stock, (b) to offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible into shares of
Common Stock or shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification of
its Common Stock, capital reorganization, merger, consolidation or disposition
of all or substantially all of its assets, the Company shall within 5 days send
to the Holders, a notice of such proposed action or offer, such notice to be
mailed to the Holders, which shall specify the record date for the purposes of
such dividend, distribution or rights, or the date such issuance or event is to
take place and the date of participation therein by the holders of Common Stock,
if any such date is to be fixed, and shall briefly indicate the effect of such
action on the Common Stock and on the number and kind of any other shares of
stock and on other property, if any, and the number of shares of Common Stock
and other property, if any, purchasable upon exercise of each Warrant and the
Exercise Price after giving effect to any adjustment which will be required as a
result of such action. Such notice shall be given by the Company as promptly as
possible.
ARTICLE 5.
Transfer, Division and Combination
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SECTION 5.1 Transfer. Subject to compliance with Section 5.5, transfer of
the Warrants and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon surrender of
the Warrants at the principal office of the Company referred to in Section 3.3
or the office or agency designated by the Company pursuant to Article 7,
together with a written assignment of such Warrants substantially in the form of
Exhibit B hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall, subject
to Section 5.5, execute and deliver a new Warrant Certificate or Warrant
Certificates in the name of the assignee or assignees and in the denomination
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant Certificate evidencing the portion of the Warrants not so assigned,
and the Warrant Certificate shall promptly be cancelled. A Warrant, if properly
assigned in
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compliance with Section 5.5, may be exercised by a new Holder for the purchase
of shares of Common Stock without having a new Warrant Certificate issued. If
requested by the Company, a new Holder shall acknowledge in writing, in form
reasonably satisfactory to the Company, such Holder's continuing obligations
under Section 5.5 and Article 9.
SECTION 5.2 Division and Combination. Subject to Section 5.5, a Warrant
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Certificate may be divided or combined with other Warrant Certificates upon
presentation hereof at the aforesaid office or agency of the Company, together
with a written notice specifying the names and denominations in which new
Warrant Certificates are to be issued, signed by Holder or its agent or
attorney. Subject to compliance with Section 5.1 and with Section 5.5, as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant Certificate or Warrants Certificates in
exchange for the Warrant Certificate or Warrants Certificates to be divided or
combined in accordance with such notice.
SECTION 5.3 Expenses. The Company shall prepare, issue and deliver at its
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own expense (other than transfer taxes) the new Warrant Certificate or Warrant
Certificates under this Article 5. The Company will pay all documentary stamp
taxes attributable to the initial issuance of the Warrants and of the Warrant
Shares upon the exercise of the Warrants; provided, however, that the Company
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shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issuance of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the registered
Holder of such Warrant Certificate, and the Company shall not be required to
issue or deliver such Warrant Certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the reasonable satisfaction of the Company
that such tax has been paid.
SECTION 5.4 Maintenance of Books. The Company agrees to maintain, at its
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aforesaid office or agency, books for the registration or transfer of the
Warrants.
SECTION 5.5 Restriction on Transfer. (a) The Warrants and the Warrant
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Shares issuable upon exercise hereof are subject in all respects to the terms
and conditions of the Stock Purchase Agreement. No transfer, sale, assignment,
hypothecation or other disposition of the Warrants or the Warrant Shares
issuable upon exercise hereof may be made except in accordance with the
provisions of the Stock Purchase Agreement (it being understood that any
transfer of Common Stock permitted under the provisions of the Stock Purchase
Agreement shall be a permitted transfer with respect to the Warrants and the
Warrant Shares). The Holder, by acceptance of a Warrant Certificate, agrees to
the bound by the applicable provisions of the Stock Purchase Agreement and all
applicable benefits of the Stock Purchase Agreement shall inure to such Holder.
(b) Each Holder of the Warrants, by acceptance thereof, represents and
acknowledges that the Warrants and the Warrant Shares which may be purchased
upon exercise of a Warrant have not been registered under the Securities Act or
under any state securities laws. Each Holder of the Warrants, by acceptance
thereof, represents and acknowledges that such Holder (i) is acquiring the
Warrants and the Warrant Shares for investment for its own account,
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not as a nominee or agent, and not with the view to, or for resale in connection
with, any distribution thereof, (ii) is an "accredited investor" within the
meaning of Regulation D, Rule 501(a), promulgated by the SEC, (iii) acknowledges
that the Warrants and the Warrant Shares must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from the
registration requirements of the Securities Act is available and (iv) represents
that by reason of its business or financial experience, such Holder has the
capacity to protect its own interests in connection with the transactions
contemplated by this Agreement. Neither the Warrants nor the Warrant Shares may
be transferred except (x) pursuant to an effective registration statement under
the Securities Act, (y) pursuant to Rule 144 under the Securities Act if the
transferor delivers a certificate, in form and substance reasonably satisfactory
to the Company, that such transfer complies with the requirements of Rule 144,
or (z) pursuant to any other available exemption from registration if such
transferee makes the representations set forth in the preceding sentence in
writing to the Company and, in the case of clause (z), with the delivery to the
Company of an opinion of counsel reasonably satisfactory to the Company by
counsel reasonably satisfactory to the Company stating that no registration is
required under the Securities Act; provided, however, that such opinion of
counsel shall not be required in connection with any transfer to a Subsidiary of
Purchaser.
(c) (i) Except as otherwise provided in this Section 5.5, each certificate
for Warrant Shares initially issued upon the exercise of a Warrant, and each
certificate for Warrant Shares issued to any transferee of any such certificate,
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR WITH ANY
STATE SECURITIES COMMISSIONER, AND MAY NOT BE
TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE
OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 OR AN APPLICABLE EXEMPTION
THEREFROM. THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE
STOCK PURCHASE AGREEMENT DATED AS OF MARCH 29, 2000,
AMONG PRIMEDIA INC., LIBERTY MEDIA CORPORATION AND
LIBERTY DIGITAL, INC., A COPY OF WHICH IS ON FILE WITH THE
COMPANY."
(ii) Except as otherwise provided in this Section 5.5, each Warrant shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR WITH ANY STATE SECURITIES COMMISSIONER, AND
MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS,
THE RULES AND REGULATIONS THEREUNDER OR THE PROVISIONS
OF THIS WARRANT.
12
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED
IN THE STOCK PURCHASE AGREEMENT DATED AS OF MARCH 29,
2000, AMONG PRIMEDIA INC, LIBERTY MEDIA CORPORATION AND
LIBERTY DIGITAL, INC., A COPY OF WHICH IS ON FILE WITH THE
COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT OR
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE MADE
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCK
PURCHASE AGREEMENT. THE HOLDER OF THIS WARRANT AGREES
TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCK
PURCHASE AGREEMENT.
(d) Notwithstanding the provisions of Section 5.5(b), (i) the Company
shall deliver the Warrants or certificates for Warrant Shares without the first
paragraph of the legend set forth in any such clause if the securities referred
to in such clause shall have been registered under the Securities Act or if such
legend is otherwise not required under the Securities Act, and if such legend
has been set forth on any previously delivered certificates, such legend shall
be removed from any certificates at the request of the Holder if the securities
referred to in such clause have been registered under the Securities Act, or if
such legend is not otherwise required under the Securities Act, and (ii) the
Company shall deliver the Warrants or certificates for Warrant Shares without
the second paragraph of the legend set forth in such clause if such legend is no
longer required pursuant to the terms of the Stock Purchase Agreement.
ARTICLE 6.
Loss or Mutilation
------------------
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of a Warrant Certificate and indemnity reasonably satisfactory to it
(it being understood that the written agreement of the Purchaser shall be
sufficient indemnity) and in case of mutilation upon surrender and cancellation
hereof, the Company will execute and deliver in lieu hereof a new Warrant
Certificate of like tenor to such Holder (without expense to the Holder);
provided, in the case of mutilation, no indemnity shall be required if a Warrant
Certificate in identifiable form is surrendered to the Company for cancellation.
13
ARTICLE 7.
Office of the Company
---------------------
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrant Certificates may be presented for exercise,
registration of transfer, division or combination as provided certificates in
this Agreement.
ARTICLE 8.
Limitation of Liability
-----------------------
No provision hereof, in the absence of affirmative action by the Holder
hereof 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 for the purchase price of any Common Stock or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.
ARTICLE 9.
Miscellaneous
-------------
SECTION 9.1 Nonwaiver. No course of dealing or any delay or failure to
---------
exercise any right hereunder on the part of the Holder hereof shall operate as a
waiver of such right or otherwise prejudice such Holder's rights, powers or
remedies.
SECTION 9.2 Unexercised Warrants. Except as otherwise specifically
--------------------
required herein, holders of unexercised Warrants are not entitled (i) to receive
dividends or other distributions, (ii) to receive notice of or vote at any
meeting of the stockholders, (iii) to consent to any action of the stockholders,
(iv) to receive notice of any other proceedings of the Company or (v) to
exercise any other rights as stockholders of the Company.
SECTION 9.3 Amendment. This Agreement, the Warrants and all the Warrant
---------
Certificates may be amended with the written consent of the Company and the
Majority Holders; provided, however, that no such Warrant may be amended to
-------- -------
reduce the number of shares of Common Stock for which such Warrant is
exercisable or to increase the Exercise Price (before giving effect to any
adjustment as provided therein) without the prior written consent of the Holder
thereof. In determining whether the Holders of the required number of Warrants
have concurred in any direction, waiver or consent, Warrants owned by the
Company or any Subsidiary of the Company shall be disregarded and deemed not to
be outstanding. Also, subject to the foregoing, only Warrants outstanding at the
time shall be considered in any such determination.
14
SECTION 9.4 Notices. Any notice or communication shall be in writing and
-------
delivered in person or mailed by first-class mail to the addresses set forth in
the Stock Purchase Agreement with respect to the Company and the Holder on the
date hereof and if to any subsequent Holder, at its last known address appearing
on the books of the Company maintained for such purposes.
The Company and any Holder by notice to the other may designate additional
or different addresses for subsequent notices or communications.
SECTION 9.5 Remedies. The Company and the Holder hereof each stipulates
--------
that the remedies at law of each party hereto in the event of any default or
threatened default by the other party in the performance or compliance with any
of the terms of this Agreement are not and will not be adequate and that, to the
fullest extent permitted by law, such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
SECTION 9.6 Governing Law. The laws of the State of New York shall govern
-------------
this Agreement.
SECTION 9.7 Successors. Subject to Section 5.5 hereof, this Agreement and
----------
the rights evidenced hereby shall inure to the benefit of and be binding upon
the successors and assigns of the Company and the Holder hereof, and shall be
enforceable by any such successors and assigns.
SECTION 9.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 9.9 Headings. The headings of the Articles and Sections of this
--------
Agreement have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 9.10 Severability. The provisions of this Agreement are severable,
------------
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, each of the parties hereto have executed this
Agreement as of the date first written above.
PRIMEDIA INC.
By:
--------------------------------
Name:
Title:
LIBERTY PRIME, INC.
By:
--------------------------------
Name:
Title:
