Exhibit 3.1
Execution Version
VALUEVISION MEDIA, INC.
CERTIFICATE OF DESIGNATION
OF
SERIES B REDEEMABLE PREFERRED STOCK
Pursuant to Section 302A.401 of the Minnesota Business Corporation Act, ValueVision Media,
Inc., a Minnesota corporation (the
Corporation
), hereby certifies that the following resolutions
were duly adopted by its Board of Directors on February 25, 2009, to set forth the powers,
designations, preferences and relative, participating, optional or other rights of its Series B
Redeemable Preferred Stock:
RESOLVED, that, pursuant to the authority granted to the Board of Directors in the Articles of
Incorporation, there is hereby created, and the Corporation is hereby authorized to issue, a series
of preferred stock having the following designations, relative rights and preferences:
I.
Designation of Series and Number of Shares
. This series of the preferred stock shall be
designated the Series B Redeemable Preferred Stock (the
Preferred Stock
) and shall consist of
4,929,266 shares, par value $0.01 per share. The stated value of the Preferred Stock shall be
$8.288 per share (subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Preferred Stock) (as
adjusted, the
Stated Value
). The number of shares of Preferred Stock may be decreased from time
to time, as such shares are redeemed as provided herein or otherwise reacquired by the Corporation,
by a resolution of the Board of Directors filed with the Secretary of State of the State of
Minnesota.
II.
Rank
.
(a) All shares of Preferred Stock shall rank prior, both as to payment of dividends and
as to distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, to all of the Corporations now or hereafter
issued Common Stock, par value $0.01 per share (
Common Stock
), and to all of the
Corporations now existing or hereafter issued capital stock which by its terms ranks junior
to the Preferred Stock both as to the payment of dividends and as to distributions of assets
upon liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, when and if issued (the Common Stock and any such other capital stock being
herein referred to as
Junior Stock
).
(b) Except as expressly permitted by Section 3.03(a)(ii)(B)(3) of the Shareholder
Agreement (as defined below), no payment on account of the purchase, redemption, retirement
or other acquisition of shares of Junior Stock or any class or series of the Corporations
capital stock which by its terms ranks junior to the Preferred Stock as to distributions of
assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (the Junior Stock and any such other class or
series of the Corporations capital stock being herein referred to as
Junior Liquidation
Stock
), shall be made directly or indirectly by the Corporation unless and until all the
Preferred Stock shall have been redeemed as provided for herein or otherwise reacquired by
the Corporation.
III.
Dividends
.
(a) From and after the date of the issuance of any shares of Preferred Stock (the
Issue Date
), dividends shall accrue at the rate of 12.0% per annum (compounded quarterly)
(the
Standard Rate
) (or at the Default Rate (as hereinafter defined), if, and to the
extent, applicable) of the Base Amount (as hereinafter defined) on such shares of Preferred
Stock (the
Accruing Dividends
). Notwithstanding the previous sentence, dividends shall
accrue at the rate of 15.0% per annum (compounded quarterly) (the
Default Rate
) of the
Base Amount from and after the date of any Default (as hereinafter defined) through and
including the date on which the Corporation has cured any Default. Accruing Dividends shall
accrue and be declared by the Board of the Corporation on February 25, May 25, August 25,
and November 25 of each year (commencing with the first such date to occur after the Issue
Date) and shall be cumulative (whether or not declared and whether or not the Corporation
has funds legally available therefor); provided however, the Accruing Dividends shall only
be payable as set forth in this Section III(a) or in Sections IV or V. The Corporation
shall not declare, pay or set aside any dividends on shares of any Junior Stock, other than
dividends payable solely in shares of Junior Stock, so long as any shares of Preferred Stock
are outstanding. Holders of Preferred Stock will not be entitled to any dividends, whether
payable in cash, property or stock, in excess of the dividends provided for herein. Such
dividends shall be payable to holders of record at the close of business on the date
specified by the Board of Directors (or, to the extent permitted by applicable law, a duly
authorized committee thereof). All dividends paid with respect to shares of Preferred Stock
pursuant to this Section III shall be paid pro rata to the holders entitled thereto. The
Base Amount
means the aggregate Stated Value of all outstanding shares of Preferred Stock
plus the Accruing Dividends to date on such shares (to the extent not previously paid in
cash);
Default
means failure by the Corporation to pay in cash when due any of the
redemption payments required under Sections V(a) or V(c) (without regard to the Companys
failure to provide a redemption notice as provided in Section V), notwithstanding for this
purpose the requirement that funds be legally available therefor; and cure of any Default
refers to the date on which the Corporation has paid in cash any and all amounts otherwise
required to be paid, notwithstanding for this purpose the requirement that funds be legally
available therefor, under Sections V(a) or V(c).
(b) No dividends shall be declared, paid or set apart for payment on shares of any
class or series of the Corporations capital stock whether now existing or hereafter
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issued which by its terms ranks, as to dividends, on a parity with the Preferred Stock (any
such class or series of the Corporations capital stock being herein referred to as
Parity
Dividend Stock
) for any period unless dividends have been, or contemporaneously are, paid
or declared and set apart for payment on the Preferred Stock. No dividends shall be paid on
Parity Dividend Stock except on dates on which dividends are paid on the Preferred Stock.
All dividends paid or declared and set apart for payment on the Preferred Stock and any
Parity Dividend Stock shall be paid or declared and set apart for payment pro rata so that
the amount of dividend paid or declared and set apart for payment per share on the Preferred
Stock and the Parity Dividend Stock on any date shall in all cases bear to each other the
same ratio that accrued and unpaid dividends on the Preferred Stock and the Parity Dividend
Stock bear to each other.
IV.
Liquidation Preference
. In the event of a liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the then outstanding shares of
Preferred Stock shall be entitled to receive out of the assets of the Corporation available for
distribution to shareholders an amount in cash equal to the Stated Value for each share
outstanding, plus an amount in cash equal to the Accruing Dividends on such shares on the date of
final distribution to such holders (to the extent not previously paid in cash) before any payment
shall be made or any assets distributed to the holders of shares of Junior Liquidation Stock. The
entire assets of the Corporation available for distribution to holders of Preferred Stock and any
class or series of the Corporations capital stock which by its terms ranks on a parity with the
Preferred Stock as to distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (any such class or series of the Corporations
capital stock being herein referred to as
Parity Liquidation Stock
) shall be distributed ratably
among the holders of the Preferred Stock and any Parity Liquidation Stock in proportion to the
respective preferential amounts (including accrued and unpaid dividends, if any) to which each is
entitled (but only to the extent of such preferential amounts). After payment in full of the
liquidation preferences of the shares of the Preferred Stock, the holders of such shares shall not
be entitled to any further participation in any distribution of assets by the Corporation.
V.
Redemption
.
(a)
Mandatory Redemption
. The Corporation shall redeem for cash, out of any source of
funds legally available therefor, at a redemption price in each case equal to 100% of the
Stated Value per share, plus an amount in cash equal to all Accruing Dividends thereon
outstanding to the applicable redemption date (to the extent not previously paid in cash)
(the
Redemption Price
), shares of Preferred Stock in such amounts and at such dates as set
forth below in this Section V(a):
(i) On the fourth anniversary of the Issue Date, the Corporation shall pay an
amount equal to (A) $19,667,495, plus (B) an amount in cash equal to 30% of any
additional Accruing Dividends that have accrued since the Issue Date (to the extent
not previously paid in cash) as a result of the Default Rate (rather than
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the Standard Rate) being in effect, less (C) any amounts previously paid by the
Corporation under Sections V(a)(iii), V(a)(iv), V(b) and V(c), which amount shall be
applied first to all Accruing Dividends not previously paid in cash on outstanding
shares of Preferred Stock (pro rata with respect to all shares of Preferred Stock
then outstanding), and then to redeem shares of Preferred Stock at the Redemption
Price.
(ii) On the fifth anniversary of the Issue Date, the Corporation shall redeem
any and all remaining outstanding shares of Preferred Stock as of such date at the
Redemption Price;
(iii) Within 90 calendar days following the end of each fiscal year of the
Corporation (commencing with the fiscal year ending January 31, 2010), the
Corporation shall, in the following priority order, (1) apply any Excess Cash
Balance as of the end of such fiscal year to pay any Accruing Dividends on
outstanding shares of Preferred Stock not previously paid in cash (pro rata with
respect to all shares of Preferred Stock then outstanding), and (2) redeem that
number of shares of Preferred Stock obtained by dividing any remaining Excess Cash
Balance as of the end of such fiscal year (after the payments required by clause (1)
of this Section V(a)(iii)) by the Redemption Price.
Excess Cash Balance
as of the
end of any fiscal period means an amount equal to (1) the cash and cash equivalents
and marketable securities (the
Cash Balance
) reported on the Corporations
audited, if at fiscal year-end, or unaudited, if at fiscal quarter-end, balance
sheet as of the end of such fiscal period (the
Balance Sheet
), less (2) the amount
included in such Cash Balance attributable to any securities held by the Corporation
that are characterized as auction rate securities (or similar term), less (3) the
amount obtained (whether positive or negative) from subtracting (i) the accounts
payable that would have been reported on the Balance Sheet had all accounts payable
been paid on stated terms (and no earlier or later), from (ii) the accounts payable
reported on the Balance Sheet, less (4) the bona fide estimated additional cash
required to fund operations, as reasonably determined and reflected in an operating
budget approved by the Corporations Board of Directors for the next four fiscal
quarters following the end of such fiscal period (the
Additional Cash Amount
),
less (5) the amount included in the Cash Balance that is attributable to cash
pledged to vendors and other similar entities to secure the purchase price of
inventory acquired in the ordinary course of business, less (6) $20,000,000.
(iv) Within 45 calendar days following the end of any fiscal quarter of the
Corporation (except the fourth fiscal quarter of the Corporation, in which case
Section V(a)(iii) shall be applicable) during which an ARS Event (as defined below),
an Asset Sale Event (as defined below) or a Financing Event (as defined below)
occurs, the Corporation shall, in the following priority order, (1) apply any
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Excess Cash Balance as of the end of such fiscal quarter to pay any Accruing
Dividends on outstanding shares of Preferred Stock not previously paid in cash (pro
rata with respect to all shares of Preferred Stock then outstanding), and (2) redeem
that number of shares of Preferred Stock obtained by dividing any remaining Excess
Cash Balance as of the end of such fiscal quarter (after the payments required by
clause (1) of this Section V(a)(iv)) by the Redemption Price.
ARS Event
means the
receipt of any net cash proceeds from the sale or other disposition of any
securities held by the Corporation that are characterized as auction rate
securities (or similar term).
Asset Sale Event
means a sale or other disposition
for cash by the Corporation of fixed assets outside of the ordinary course of
business and
Financing Event
means the issuance by the Corporation of indebtedness
for borrowed money outside of the ordinary course of business; provided that an
Asset Sale Event or Financing Event shall not be deemed to occur for purposes of the
first sentence of this Section V(a)(iv) unless such Asset Sale Event or Financing
Event, together with any prior Asset Sale Events and Financing Events, generates net
cash proceeds to the Corporation in excess of (x) $500,000 in the current fiscal
year or (y) $2,500,000 since the Issue Date; provided, however, that the $500,000
limit in clause (x) shall be increased to the extent such $500,000 limit was not
entirely utilized in any prior fiscal year since the Issue Date.
(b)
Redemption at Option of the Corporation
. At any time and from time to time, at the
option of the Corporation and upon five calendar days prior written notice to the record
holders of the Preferred Stock, the Corporation may redeem for cash, out of any source of
funds legally available therefor, all or any of the outstanding shares of Preferred Stock,
at the Redemption Price; provided, however, that no share of Preferred Stock may be redeemed
pursuant to this Section V(b) until all Accruing Dividends on outstanding shares of
Preferred Stock not previously paid in cash have been fully paid in cash.
(c)
Redemption Upon Change in Control
. Upon the occurrence of a Change in Control, the
Preferred Stock shall be redeemable at the option of the holders thereof, in whole or in
part, at the Redemption Price. The Corporation shall redeem the number of shares specified
in the holders notices of election to redeem pursuant to Section V(e) on the date fixed for
redemption. A
Change of Control
shall mean (i) the consummation by the Corporation of a
merger, consolidation or other business combination in a transaction or series of
transactions as a result of which the holders of the Common Stock immediately prior to such
transaction or series of transactions will hold less than 50% of the voting power of all
outstanding voting securities of the surviving entity, (ii) the consummation of a sale or
other disposition in one or more transactions by the Corporation or its subsidiaries of all
or substantially all of the Corporations consolidated assets other than among the
Corporation and its subsidiaries, (iii) the acquisition by any person or entity, together
with its affiliates (as defined in Rule 12b-2 under the Exchange
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Act of 1934, as amended (the
Exchange Act
)), or any other group (as defined in
Section 13(d) of the Exchange Act), including through the formation of any such group or the
affiliation of any such persons or entities other than any Restricted Party (as defined in
the Shareholder Agreement) or an Affiliate thereof or any 13D Group (as defined in the
Shareholder Agreement) of which any of them is a member, of beneficial ownership of a
majority of the voting power of all the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors or (iv) Continuing
Directors no longer constitute a majority of the Board of Directors of the Corporation. For
purposes of this paragraph (b),
Continuing Directors
shall mean (i) each director who is a
member of the Board of Directors of the Corporation on the date hereof and (ii) each other
director whose initial nomination as a director was approved by a majority of the Continuing
Directors as of the time of such nomination (including, without limitation, director
designees of the Restricted Parties pursuant to the Shareholder Agreement).
(d)
Procedure for Mandatory or Optional Redemption; Notices
.
(i) In the event that the Corporation shall redeem shares of Preferred Stock
pursuant to Section V(a) or V(b) hereof, notice of such redemption shall be mailed
by first-class mail, postage prepaid, and mailed (1) in the case of a mandatory
redemption under Section V(a)(i) or V(a)(ii), not less than 30 days nor more than 90
days prior to the redemption date, (2) in the case of a mandatory redemption under
Section V(a)(iii) or V(a)(iv), not less than 10 days nor more than 90 days prior to
the redemption date, and (iii) in the case of an optional redemption under Section
V(b), not less than 5 days nor more than 90 days prior to the redemption date, in
any case to the holders of record of the shares to be redeemed at their respective
addresses as they shall appear in the records of the Corporation; provided, however,
that failure of the Corporation to give such notice or any defect therein or in the
mailing thereof shall not affect the validity of the proceeding for the redemption
of any shares so to be redeemed except as to the holder to whom the Corporation has
failed to give such notice or except as to the holder to whom notice was defective.
Each such notice shall state: (A) the redemption date; (B) the amount of Accruing
Dividends to be paid; (C) the number of shares of Preferred Stock to be redeemed;
(D) the Redemption Price; and (E) the place or places where certificates for such
shares are to be surrendered for payment of the Redemption Price (which place shall
be the principal place of business of the Corporation). In the event the
Corporation does not have sufficient funds legally available to redeem for cash at
the Redemption Price on any mandatory redemption date all shares of Preferred Stock
required to be redeemed on such redemption date, such failure to redeem all such
shares shall constitute a Default (notwithstanding for this purpose the requirement
that funds be legally available therefor), the Corporation shall redeem for cash at
the Redemption Price the maximum number of shares that can be redeemed by the
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Corporation out of any source of funds legally available therefor, and shall
redeem for cash at the Redemption Price the remaining shares to have been
redeemed as soon as the Corporation has sufficient funds legally available therefor.
(ii) The Corporation agrees that in the event that its Board of Directors
determines that there are insufficient funds legally available (in accordance with
the Minnesota Business Corporation Act) for any redemption (in whole or in part) of
the Preferred Stock pursuant to Section V, the Corporation shall provide a notice to
each holder of Series B Preferred Stock within 5 calendar days of such
determination, signed by the Chief Financial Officer of the Corporation. Such
notice shall disclose the most recent financial information (including all
underlying assumptions, calculations and other information related thereto),
provided to the Board of Directors for purposes of making such determination as well
as the amount of funds legally available to the Corporation, as determined by the
Board of Directors.
(iii) Within 5 calendar days after the determination by the Corporations Board
of Directors of whether the Corporation has an Excess Cash Balance, the Corporation
shall provide a notice, signed by the Chief Financial Officer of the Corporation, to
each holder of Series B Preferred Stock setting forth in reasonable detail the
calculation of the Excess Cash Balance, if any, as well as the Additional Cash
Amount, if any, and shall include the most recent financial information (including
all underlying assumptions, calculations and other information related thereto)
provided to the Board of Directors for reviewing and approving such determinations,
and a confirmation that the Corporations Board of Directors has approved such
determinations.
(e)
Procedure for Change in Control Redemption
.
(i) If a Change in Control should occur, then, in any one or more of such
events the Corporation shall give written notice by first-class mail, postage
prepaid, to each holder of Preferred Stock at its address as it appears in the
records of the Corporation, which notice shall describe such Change in Control and
shall state the date on which the Change in Control is expected to take place, and
shall be mailed within 10 business days following the occurrence of the Change in
Control. Such notice shall also set forth (in addition to the information required
by the next succeeding paragraph): (A) each holders right to require the
Corporation to redeem for cash shares of Preferred Stock held by such holder as a
result of such Change in Control; (B) the Redemption Price; (C) the optional
redemption date (which date shall be no earlier than 30 days and no later than 90
days from the date of such Change in Control); and (D) the procedures to be followed
by such holder in exercising its right of redemption, including the place or places
where certificates for such shares are to be surrendered for payment of
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the Redemption Price (which place shall be the principal place of business of the
Corporation). In the event a holder of shares of Preferred Stock shall elect
to require the Corporation to redeem any or all of such shares of Preferred Stock,
such holder shall deliver, within 20 days of the mailing to it of the Corporations
notice described in this Section V(e), a written notice stating such holders
election and specifying the number of shares to be redeemed pursuant to Section V(c)
hereof.
(ii) In the case of any redemption pursuant to Section V(c) hereof, the notice
by the Corporation shall describe the Change in Control, including a description of
the Surviving Person and, if applicable, the effect of the Change in Control on the
Common Stock. The notice shall be accompanied by (A) the consolidated balance sheet
of the Corporation and its Subsidiaries as of the end of the most recent fiscal year
of the Corporation for which such information is available and the related
consolidated statements of operations and cash flows for such fiscal year, in each
case setting forth the comparative figures for the preceding fiscal year,
accompanied by an opinion of independent public accountants of nationally recognized
standing selected by the Corporation as to the fair presentation in accordance with
generally accepted accounting principles of such financial statements, and (B) a
consolidated balance sheet of the Corporation and its Subsidiaries as of the end of
the most recent fiscal quarter of the Corporation for which such information is
available and the related consolidated statements of operations and cash flows for
such quarter and for the portion of the Corporations fiscal year ended at the end
of such fiscal quarter, in each case setting forth in comparative form the figures
for the corresponding quarter and the corresponding portion of the Corporations
preceding fiscal year. For so long as the Corporation is subject to the periodic
reporting requirements of the Exchange Act and makes timely filings thereunder, the
delivery requirements of the preceding sentence shall be satisfied by the
Corporations most current report, schedule, registration statement, definitive
proxy statement or other document on file with the United States Securities and
Exchange Commission.
(f) Notice by the Corporation having been mailed as provided in Section V(d) hereof, or
notice of election having been mailed by the holders as provided in Section V(e) hereof, and
provided that on or before the applicable redemption date funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from its other
funds, in trust for the pro rata benefit of the holders of the shares so called for or
entitled to redemption, so as to be and to continue to be available therefor, then, from and
after the redemption date (unless the Corporation defaults in the payment of the Redemption
Price, in which case such rights shall continue until the Redemption Price is paid), such
shares shall no longer be deemed to be outstanding and shall not have the status of shares
of Preferred Stock, and all rights of the holders thereof as shareholders of the Corporation
shall cease. Upon surrender of the certificates for any
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shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors
of the Corporation shall so require and a notice by the Corporation shall so state),
such shares shall be redeemed by the Corporation for cash at the Redemption Price as
aforesaid. In case fewer than all the shares represented by any such certificate are
redeemed, a new certificate or certificates shall be issued representing the unredeemed
shares without cost to the holder thereof.
VI.
No Conversion Rights
.
(a)
No Conversion
. The Preferred Stock is not convertible into shares of Common Stock
or any other securities, and is entitled solely to the designations, relative rights and
preferences set forth in this certificate.
(b)
Reclassification, Consolidation, Merger or Sale of Assets
. In the event that the
Corporation shall be a party to any transaction pursuant to which the Common Stock is
converted into the right to receive other securities, cash or other property (including
without limitation any capitalization or reclassification of the Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination of the Common Stock), any consolidation of
the Corporation with, or merger of the Corporation into, any other entity, any merger of
another entity into the Corporation (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of Common
Stock), any sale or transfer of all or substantially all of the assets of the Corporation or
any share exchange), then effective provisions shall be made in the certificate or articles
of incorporation of the resulting or surviving corporation, in any contract of sale,
conveyance, lease, transfer or otherwise so that the provisions set forth herein for the
protection of the rights of the holders of Preferred Stock shall thereafter continue to be
applicable, and any such resulting or surviving corporation shall expressly assume the
obligation to pay dividends on and redeem the Preferred Stock as set forth herein. The above
provisions shall similarly apply to successive transactions of the foregoing type.
(c)
Prior Notice of Certain Events
. In case:
(i) the Corporation shall (1) declare any dividend (or any other distribution)
on its Common Stock, other than (A) a dividend payable in shares of Common Stock or
(B) a dividend payable in cash out of its retained earnings other than any special
or nonrecurring or other extraordinary dividend or (2) declare or authorize a
redemption or repurchase of in excess of 5% of the then outstanding shares of Common
Stock;
(ii) the Corporation shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of any
class or series or of any other rights or warrants;
(iii) of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or
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from par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Corporation is a party and for which
approval of any shareholders of the Corporation shall be required, or of the sale of
all or substantially all of the assets of the Corporation or of any share exchange
whereby the Common Stock is converted into other securities, cash or other property;
or
(iv) of the voluntary or involuntary dissolution, liquidation or winding up of
the Corporation;
then the Corporation shall cause to be filed with the Transfer Agent for the Preferred
Stock, and shall cause to be mailed to the holders of record of the Preferred Stock, at
their last addresses as they shall appear upon the stock transfer books of the Corporation,
at least ten days prior to the applicable record or effective date hereinafter specified, a
notice stating (x) the date on which a record (if any) is to be taken for the purpose of
such dividend, distribution, redemption, repurchase, or grant of rights or warrants or, if a
record is not to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, redemption, repurchase, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation, winding up or other event is expected to
become effective, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation, winding up or other event (but no
failure to mail such notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice).
VII.
Voting Rights
.
(a)
General
. Subject to Sections VII(b), VII(c) and XI(b) and except as set forth below
or as otherwise from time to time required by law, the holders of shares of Preferred Stock
shall vote as a class together with the holders of the Common Stock on all matters with
respect to which the holders of Common Stock have the right to vote. In connection with any
right to vote, each share of Preferred Stock shall be entitled to one vote per share. Any
shares of Preferred Stock owned, directly or indirectly, by any entity of which the
Corporation owns, directly or indirectly, a majority of the shares entitled to vote for
directors shall not have voting rights hereunder and shall not be counted in determining the
presence of a quorum.
(b)
Limitations on Voting Rights
. Notwithstanding Section VII(a), no share of
Preferred Stock shall have any right to vote as a class together with the holders of the
Common Stock on any matter pursuant to Section VII(a) if (1) such share is transferred to
any third party other than a Restricted Party (as defined in the Shareholder Agreement), or
(2) to the extent that shares of Common Stock are issued pursuant to the exercise of the
Warrant (as hereinafter defined), on a one share of Common Stock so issued per one share of
Preferred Stock outstanding basis (subject to appropriate adjustment in the event
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of any
stock dividend, stock split, combination or other similar recapitalization).
Warrant
means that certain Warrant to purchase 6,000,000 shares of Common Stock dated
February 25, 2009 issued to GE Capital Equity Investments, Inc.
(c)
Voting Rights for Directors
.
(i) For so long as the Restricted Parties own a majority of the outstanding
shares of Preferred Stock and the Investor (as defined in the Shareholder Agreement)
is entitled to designate at least two nominees (each, a
Designee
) for election to
the Board of Directors of the Corporation pursuant to Section 2.01 of the
Shareholder Agreement, subject to Section XI(b), the holders of the outstanding
shares of Preferred Stock shall have the right, voting separately as a class and to
the exclusion of the holders of all other classes of stock of the Corporation, to
(A) initially elect three directors (who are reasonably acceptable to the
Corporation) and (B) thereafter, as long as the Investor is entitled to designate at
least two Designees for election to the Board of Directors pursuant to Section 2.01
of the Shareholder Agreement, elect that number of directors equal to the number of
Designees that the Investor is entitled to so designate (with each Designee being
reasonably acceptable to the Corporation if such Designee has not previously been a
member of the Board of Directors). For as long as the holders of Preferred Stock
voting separately as a class are entitled to elect two or more directors pursuant to
this Section VII(c)(i), holders of the outstanding Preferred Stock shall not be
entitled to vote in the election of any other directors of the Corporation.
(ii) The right to elect directors as described in Section VII(c)(i) hereof may
be exercised at any annual meeting of shareholders held for the purpose of electing
directors or by the written consent of the holders of Preferred Stock without a
meeting pursuant to Section 302A.441 of the Minnesota Business Corporation Act. For
so long as the Restricted Parties own a majority of the outstanding shares of
Preferred Stock and the Investor is entitled to designate at least two Designees for
election to the Board of Directors of the Corporation pursuant to Section 2.01 of
the Shareholder Agreement and subject to Section XI(b) hereof, such voting right
shall continue until such time as all outstanding shares of Preferred Stock shall
have been redeemed or otherwise retired. If the Restricted Parties own less than a
majority of the outstanding shares of Preferred Stock or if the Investor is no
longer entitled to designate at least two Designees for election to the Board of
Directors pursuant to Section 2.01 of the Shareholder Agreement, the holders of the
Preferred Stock shall, in any election of directors, vote as a single class together
with the holders of the Common Stock for the election of directors and each share of
Preferred Stock will be entitled to one vote per share, except as provided in
Section VII(b).
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(iii) The Secretary of the Corporation may, and upon the written request of the
holders of record of at least 10% of the outstanding shares of
Preferred Stock (addressed to the Secretary of the Corporation at the principal
office of the Corporation) shall, call a special meeting of the holders of Preferred
Stock for the election (and, if applicable, removal) of the directors to be elected
by them as herein provided. Such call shall be made by notice to each holder by
first-class mail, postage prepaid at its address as it appears in the records of the
Corporation, and such notice shall be mailed at least 10 days but no more than 20
days before the date of the special meeting, or as required by law. Such meeting
shall be held at the earliest practicable date upon the notice required for special
meetings of shareholders at the place designated by the Secretary of the
Corporation. If such meeting shall not be called by a proper officer of the
Corporation within 15 days after receipt of such written request by the Secretary of
the Corporation, then the holders of record of at least 10% of the shares of
Preferred Stock then outstanding may call such meeting at the expense of the
Corporation, and such meeting may be called by such holders upon the notice required
for special meetings of shareholders and shall be held at the place designated in
such notice. Any holder of Preferred Stock that would be entitled to vote at any
such meeting shall have access to the stock books of the Corporation for the purpose
of causing a meeting of holders of Preferred Stock to be called pursuant to the
provisions of this Section VII(c)(iii).
(iv) At any meeting held for the purpose of electing directors at which the
holders of Preferred Stock shall have the right to elect directors as a class as
provided in this Section VII(c), the presence in person or by proxy of the holders
of a majority of the then outstanding shares of Preferred Stock shall be required
and be sufficient to constitute a quorum of such class for the election of directors
by such class. At any such meeting or adjournment thereof, (x) the absence of a
quorum of the holders of Preferred Stock shall not prevent the election of directors
other than the directors to be elected by the holders of Preferred Stock as a class,
and the absence of a quorum or quorums of the holders of capital stock entitled to
elect such other directors shall not prevent the election of the directors to be
elected by the holders of Preferred Stock, and (y) in the absence of a quorum of the
holders of Preferred Stock, a majority of the holders of Preferred Stock present in
person or by proxy shall have the power to adjourn the meeting for the election of
directors which such holders are entitled to elect as a class, from time to time,
without notice (except as required by law) other than announcement at the meeting,
until a quorum shall be present.
(v) Except as provided in Section XI(b) hereof and this paragraph (v), the term
of office of any director elected by the holders of Preferred Stock pursuant to
Section VII(c)(i) hereof shall terminate upon the expiration of his term and the
election of his successor. Directors elected by the holders of Preferred
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Stock
pursuant to Section VII(c) may be removed with or without cause by the holders of a
majority of the outstanding shares of Preferred Stock and shall not
otherwise be subject to removal other than upon election of their successor or
the Preferred Stock voting separately as a class no longer being entitled to elect
directors as provided herein.
(vi) For so long as the holders of Preferred Stock are entitled, voting
separately as a class, to elect at least two members of the Board of Directors and
the Restricted Parties own a majority of the outstanding Preferred Stock, in case of
a vacancy occurring in the office of any director so elected pursuant to Section
VII(c)(i) hereof, the holders of a majority of the Preferred Stock then outstanding
may, at a special meeting of the holders or by written consent as provided above,
elect a successor to hold office for the unexpired term of such director.
(vii) Unless otherwise agreed to by the holders of a majority of the
outstanding shares of Preferred Stock, for so long as the holders of Preferred Stock
are entitled, voting separately as a class, to elect at least two members of the
Board of Directors and the Restricted Parties own a majority of the outstanding
Preferred Stock, (A) the number of directors constituting the Board of Directors
shall remain at nine, (B) each of the Audit Committee and the Compensation Committee
of the Board of Directors shall contain at least one director elected by the holders
of Preferred Stock and (C) with respect to each other committee of the Board of
Directors, the percentage of directors on such committee designated by the holders
of Preferred Stock shall, at all times, be at least equal to the percentage of the
Board of Directors elected by the holders of Preferred Stock; provided, that, if
under applicable law or the rules and regulations of the securities exchange or
automated quotation system upon which the Common Stock is listed, such director
elected by the holders of Preferred Stock is not permitted to serve on any such
Committee, then the provisions of clauses (B) and (C) shall not apply to the holders
of the Preferred Stock.
(d)
Class Voting
. So long as any shares of Preferred Stock are outstanding the
Corporation shall not, without the affirmative vote or consent of the holders of at least a
majority of all outstanding shares of the Preferred Stock, voting or consenting separately
as a class without regard to series:
(i) create any class of stock that by its terms ranks senior to or on a parity
with the Preferred Stock as to dividends or upon liquidation, dissolution or winding
up of the Corporation or increase the authorized number of shares of, or issue any
additional shares of or any securities convertible into shares of, or reclassify any
Junior Stock into shares of, any such class;
(ii) alter or change any of the provisions of the Corporations Articles of
Incorporation (whether by merger, consolidation or other business combination
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with
another person or by any other means) so as to adversely affect the relative rights
and preferences of any outstanding Preferred Stock of the Corporation;
provided, however, that neither (A) the creation, amendment or reclassification
of any class of stock that following such creation, amendment or reclassification by
its terms ranks junior to shares of Preferred Stock of the Corporation as to
dividends and upon liquidation, dissolution or winding up, nor (B) an increase in
the authorized number of shares of any such class, nor (C) any merger, consolidation
or other business combination subject to the provisions of Section VI(b), shall give
rise to any such voting right;
(iii) issue any additional shares of Preferred Stock.
(e)
Additional Class Voting
. Unless otherwise agreed to by the holders of a majority of
the outstanding shares of Preferred Stock, for so long as the Restricted Parties own a
majority of the outstanding shares of Preferred Stock, the Corporation shall not, without
the express written consent of the holders of a majority of the shares of Preferred Stock,
take any action, requiring the approval of the Investor pursuant to Sections 3.02, 3.03 or
3.04 of the Shareholder Agreement. The provisions of this paragraph (d) will terminate with
respect to such Sections 3.02, 3.03 or 3.04, as applicable, when the obligations of the
Corporation under such Sections terminate under the Shareholder Agreement.
VIII.
Status of Acquired Shares
. For purposes hereof, all shares of Preferred Stock owned,
directly or indirectly, by any entity of which the Corporation owns, directly or indirectly, a
majority of the shares entitled to vote for directors shall be deemed not outstanding. Subject to
the Board of Directors right to reduce the shares of Preferred Stock pursuant to Section I, shares
of Preferred Stock redeemed by the Corporation or otherwise acquired by the Corporation shall be
restored to the status of authorized but unissued shares of capital stock, without designation as
to series, and, subject to the other provisions hereof, may thereafter be issued, but not as shares
of Preferred Stock.
IX.
Modification and Waiver
. The Corporation may not, without the consent of each holder
affected thereby, (a) change the stated redemption date of the Preferred Stock, (b) reduce the
Stated Value or liquidation preference of, or dividend on, the Preferred Stock, (c) change the
place or currency of payment of the Stated Value or liquidation preference of, or dividend on, the
Preferred Stock or (d) reduce the percentage of outstanding Preferred Stock necessary to modify or
amend the terms thereof or to grant waivers in respect thereto.
X.
Severability of Provisions
. Whenever possible, each provision hereof shall be interpreted
in a manner as to be effective and valid under applicable law, but if any provision hereof is held
to be prohibited by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
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or shortened or a
particular percentage were increased or decreased, then such court may make
such change as shall be necessary to render the provision in question effective and valid
under applicable law.
XI.
Miscellaneous
.
(a)
Transfer Taxes
. The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance of delivery of shares
of Preferred Stock or certificates or instruments evidencing such shares or securities. The
Corporation shall not, however, be required to pay any such tax which may be payable in
respect of any transfer involved in the issuance or delivery of shares of Preferred Stock in
a name other than that in which the shares of Preferred Stock with respect to which such
shares are issued or delivered were registered, or in respect of any payment to any entity
with respect to any such shares other than a payment to the registered holder thereof, and
shall not be required to make any such issuance, delivery or payment unless and until the
entity otherwise entitled to such issuance, delivery or payment has paid to the Corporation
the amount of any such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid or is not payable.
(b)
Shareholder Agreement
. Reference is made to the Amended and Restated Shareholder
Agreement, dated as of February 25, 2009 (as the same may be amended, supplemented or
modified from time to time pursuant to the terms thereof, the
Shareholder Agreement
),
among the Corporation, the Investor and NBC Universal, Inc. The Preferred Stock shall be
subject to the terms and conditions set forth in the Shareholder Agreement, including
without limitation, the voting, transfer and standstill restrictions set forth therein.
(e)
Documents on File
. Copies of the Shareholder Agreement shall be kept on file at the
principal place of business of the Corporation at 6740 Shady Oak Road, Eden Prairie, MN
55344-3433.
[Signature page follows]
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IN WITNESS WHEREOF, ValueVision Media, Inc. has caused this Certificate of Designation to be
signed on its behalf by the undersigned officer, this 25
th
day of February, 2009.
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VALUEVISION MEDIA, INC.
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By:
Name:
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/s/ Nathan E. Fagre
Nathan E. Fagre
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Title:
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Senior Vice President, General Counsel and
Secretary
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ValueVision Media, Inc. Series B Preferred Certificate of Designation
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Exhibit 4.1
Execution Version
AMENDED AND RESTATED SHAREHOLDER AGREEMENT
dated as of February 25, 2009
among
ValueVision Media, Inc.
GE Capital Equity Investments, Inc.
and
NBC Universal, Inc.
AMENDED AND RESTATED SHAREHOLDER AGREEMENT
AMENDED AND RESTATED SHAREHOLDER AGREEMENT, dated as of February 25, 2009, (this Agreement)
among ValueVision Media, Inc., a Minnesota corporation (together with its successors, the
Company), GE Capital Equity Investments, Inc., a Delaware corporation (together with its
successors, GE Capital Equity Investments), and NBC Universal, Inc., a Delaware corporation
(together with its successors, NBC).
W I T N E S S E T H :
WHEREAS, the Company and GE Capital Equity Investments entered into an Investment Agreement
dated as of March 8, 1999, as amended by the First Amendment and Agreement, dated as of April 15,
1999, pursuant to which GE Capital Equity Investments purchased shares of Series A Redeemable
Convertible Preferred Stock (the Series A Preferred Stock) and a warrant to purchase Common Stock
of the Company (which warrant is no longer outstanding);
WHEREAS, the Company and GE Capital Equity Investments have entered into an Exchange Agreement
dated as of the date hereof (the Exchange Agreement), pursuant to which GE Capital Equity
Investments has agreed to exchange its shares of Series A Preferred Stock for shares of Series B
Redeemable Preferred Stock (the Series B Preferred Stock) and a warrant to purchase shares of
Common Stock of the Company (the 2009 Warrant);
WHEREAS; the Company and NBC, an Affiliate of the Investor as of March 8, 1999, entered into
the Distribution Agreement (as defined below), pursuant to which the Company agreed to issue to NBC
or its designee (i) warrants to purchase 1,450,000 shares of Common Stock of the Company (which
warrants are no longer outstanding) and (ii) at agreed upon times and subject to the satisfaction
of certain conditions contained therein, additional warrants to purchase Common Stock of the
Company (the Bonus Distributor Warrants);
WHEREAS, this Agreement amends, restates and supersedes all prior agreements and
understandings between the Company, GE Capital Equity Investments and NBC or any of them, including
their respective predecessors, with respect to shareholder rights and if any provision of this
Agreement relating to shareholder rights conflicts, or is inconsistent, with the Shareholder
Agreement, dated as of April 15, 1999 among the Company, GE Capital Equity Investments and NBC, as
amended by Amendment No. 1 to the Shareholder Agreement, dated March 19, 2004 among the Company, GE
Capital Equity Investments and NBC, this Agreement shall control;
WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to
the closing of the transactions contemplated by the Exchange Agreement; and
WHEREAS, the parties hereto deem it in their best interests and in the best interests of the
Company to provide for certain matters with respect to the
governance of the Company and desire to enter into this Agreement in order to effectuate that
purpose.
NOW, THEREFORE, in consideration of the mutual agreements and understandings set forth herein,
the parties hereto hereby agree as follows:
ARTICLE I DEFINITIONS
Section 1.01.
Definitions
. As used in this Agreement, the following terms shall have
the meanings set forth below:
Adjusted Outstanding Common Stock shall mean, at any time, the total number of shares of
outstanding Common Stock at such time; provided that for purposes of such calculation (a) to the
extent that Bonus Distributor Warrants have been issued and are outstanding (and only to such
extent), all shares of Common Stock issuable upon the exercise of such issued and outstanding Bonus
Distributor Warrants (whether such Bonus Distributor Warrants are vested or unvested) shall be
considered outstanding and (b) the maximum number of shares of Common Stock then issuable upon
exercise of the 2009 Warrants shall be considered outstanding. For the avoidance of doubt, the
calculation of Adjusted Outstanding Common Stock shall not include the Series B Preferred Stock.
Affiliate shall mean, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, such Person. As used in
this definition, control (including its correlative meanings, controlled by and under common
control with) shall mean the possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise).
Agreement shall mean this Agreement as in effect on the date hereof and as hereafter from
time to time amended, modified or supplemented in accordance with the terms hereof.
Beneficially Own shall have the meaning set forth in Rule 13d-3 under the Exchange Act,
except that a Person shall be deemed to Beneficially Own all securities that such Person has a
right to acquire, whether such right is exercisable immediately or only after the passage of time
(and without any additional condition), provided that a Person shall not be deemed to Beneficially
Own any shares of Common Stock which are issuable upon exercise of any Bonus Distributor Warrants
unless and until such Bonus Distributor Warrants are actually issued and outstanding (at which time
such Person shall be deemed to Beneficially Own all shares of Common Stock which are issuable upon
exercise of such Bonus Distributor Warrants, whether or not they are vested or unvested). When
calculating Beneficial Ownership on any particular date, the 2009 Warrants will be deemed to
represent Beneficial Ownership of the maximum number of shares of Common Stock that could be
acquired upon exercise of the 2009 Warrants on such date.
2
Board of Directors shall mean the Board of Directors of the Company as from time to time
hereafter constituted.
Business Day shall mean any day, other than a Saturday, Sunday or a day on which commercial
banks in New York, New York are authorized or obligated by law or executive order to close.
Certificate of Designation shall mean the Certificate of Designation of the Series B
Preferred Stock, filed with the Secretary of State of the State of Minnesota on or prior to the
date hereof.
Change in Control of the Company shall mean any of the following: (i) a merger,
consolidation or other business combination or transaction to which the Company is a party if the
shareholders of the Company immediately prior to the effective date of such merger, consolidation
or other business combination or transaction, as a result of such merger, consolidation or other
business combination or transaction, do not have Beneficial Ownership of voting securities
representing 50% or more of the Total Current Voting Power of the surviving corporation following
such merger, consolidation or other business combination or transaction; (ii) an acquisition by any
Person (other than the Restricted Parties and their Affiliates or any 13D Group to which any of
them is a member) of Beneficial Ownership of Voting Stock of the Company representing 25% or more
of the Total Current Voting Power of the Company, (iii) a sale of all or substantially all the
consolidated assets of the Company to any Person or Persons (other than Restricted Parties and
their Affiliates or any 13D Group to which any of them is a member); or (iv) a liquidation or
dissolution of the Company.
Common Stock shall mean the common stock, par value $0.01 per share, of the Company and any
securities of the Company into which such Common Stock may be reclassified, exchanged or converted.
Company shall have the meaning set forth in the preamble hereto.
Designee shall have the meaning set forth in Section 2.01(b).
Disinterested Shareholders shall mean any shareholder of the Company who is not a Restricted
Party or an Affiliate of a Restricted Party or a member of a 13D Group in which a Restricted Party
or an Affiliate of a Restricted Party is also a member.
Distribution Agreement shall mean the Distribution and Marketing Agreement dated March 8,
1999 between the Company and NBC pursuant to which NBC has agreed to distribute certain programing
of the Company, as such agreement may be amended from time to time.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
GAAP shall mean generally accepted accounting principles in the United States of America in
effect from time to time.
3
GE Capital shall mean General Electric Capital Corporation, a New York corporation, together
with its successors by operation of law.
Independent Expert shall mean an investment banking firm mutually acceptable to the Company
and the Investor.
Investor shall mean GE Capital Equity Investments, a wholly-owned Subsidiary of GE Capital
as of the date hereof and an Affiliate of NBC as of the date hereof, together with its permitted
assigns pursuant to Section 6.06.
Investor Tender Offer shall mean a bona fide public tender offer subject to the provisions
of Regulation 14d under the Exchange Act, by a Restricted Party (or any 13D Group that includes a
Restricted Party) to purchase or exchange for cash or other consideration any Voting Stock and
which consists of an offer to acquire 100% of the Total Current Voting Power of the Company then in
effect (other than Voting Stock owned by Restricted Parties or any Affiliate of a Restricted Party)
and is conditioned (which condition may not be waived) on a majority of the shares of Voting Stock
held by Disinterested Shareholders being tendered and not withdrawn with respect to such offer.
Lien shall mean any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other) or security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement or any financing lease having
substantially the same effect as any of the foregoing).
Market Capitalization shall mean the aggregate Market Price of the outstanding capital stock
of the Company.
Market Price shall mean, with respect to a share of capital stock on any day, except as set
forth below in the case that the shares of such capital stock are not publicly held or listed, the
average of the quoted prices of such capital stock for 30 consecutive Trading Days commencing 45
Trading Days before the date in question. The term quoted prices of capital stock shall mean the
last reported sale price on that day or, in case no such reported sale takes place on such day, the
average of the last reported bid and asked prices, regular way, on that day, in either case, as
reported in the consolidated transaction reporting system with respect to securities quoted on
Nasdaq or, if shares of such capital stock are not quoted on Nasdaq, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which shares of such capital stock are listed or admitted to
trading or, if shares of such capital stock are not quoted on Nasdaq and not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices on such other nationally recognized quotation system
then in use, or, if on any such day shares of such capital stock are not quoted on any such
quotation system, the average of the closing bid and asked prices as furnished by a professional
market maker selected by the Board of Directors making a market in the shares of such capital
stock. Notwithstanding the foregoing, if shares of such capital stock are not publicly held or so
listed, quoted or
4
publicly traded, the Market Price shall mean the fair market value of a share of such
capital stock, as determined in good faith by the Board of Directors; provided, however, that if
the Investor shall dispute the fair market value as determined by the Board of Directors, the
Investor and the Company shall retain an Independent Expert. The determination of fair market value
by the Independent Expert shall be final, binding and conclusive on the Company and the Investor.
All costs and expenses of the Independent Expert shall be borne by the Investor unless the
determination of fair market value is more favorable to such Investor by 5% or more, in which case,
all such costs and expenses shall be borne by the Company.
Material Agreement shall mean any contract, lease, restriction, agreement, instrument or
commitment to which the Company or any Subsidiary of the Company is a party or by which its
properties are bound (i) which provides a benefit to the Company or any of its Subsidiaries of, or
commits the Company or any Subsidiary of the Company to expend, $500,000 or more (or, in the case
of any agreement with any customer of the Company or any Company Subsidiary of the Company, $50,000
or more), (ii) which if breached by any party thereto would result in liability or loss to the
Company and its Subsidiaries of $500,000 or more (or in the case of any agreement with any customer
of the Company or any Subsidiary of the Company, $50,000 or more) or (iii) which provides for the
distribution of programming of the Company to more than 250,000 full-time equivalent homes by any
multichannel video programming distributor, including without limitation, by a cable television
system, MATV and SMATV systems, MMDS, TVRO and other wireline, wireless or direct broadcast
satellite delivery methods.
Material Subsidiaries shall mean those Subsidiaries of the Company that constitute
significant subsidiaries as defined in Rule 1-02 of Regulation S-X under the Securities Act.
Material Transaction shall mean (i) the direct or indirect acquisition or purchase of 5% or
more of the assets (based on the fair market value thereof) of the Company and its Subsidiaries,
taken as a whole, or of 5% or more of any class of equity securities of the Company or any of its
Subsidiaries or any tender offer or exchange offer (including by the Company or its Subsidiaries)
that if consummated would result in any Person beneficially owning 5% or more of any class of
equity securities of the Company or any of its Subsidiaries, or (ii) any merger, consolidation,
business combination, sale of all or substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its Subsidiaries other than the
transactions contemplated by the Exchange Agreement or this Agreement.
NBC shall mean NBC Universal, Inc., a Delaware corporation and Affiliate of the Investor as
of the date hereof and a Subsidiary of General Electric Company as of the date hereof, together
with its successors by operation of law.
NBC Restricted Person shall mean each of the Persons listed on Annex A hereto together with
their respective Affiliates.
5
Options shall mean stock options to purchase Common Stock.
Permitted Liens shall mean (i) mechanics, carriers, repairmens or other like Liens
arising or incurred in the ordinary course of business, (ii) Liens arising under original purchase
price conditioned sales contracts and equipment leases with third parties entered into in the
ordinary course of business consistent with past practice, (iii) statutory Liens for Taxes not yet
due and payable and (iv) other encumbrances or restrictions or imperfections of title which do not
materially impair the continued use and operation of the assets to which they relate.
Person shall mean an individual, corporation, unincorporated association, partnership, group
(as defined in Section 13(d)(3) of the Exchange Act), trust, joint stock company, joint venture,
business trust or unincorporated organization, limited liability company, any governmental entity
or any other entity of whatever nature.
Registration Rights Agreement shall mean the Amended and Restated Registration Rights
Agreement dated as of the date hereof between the Company, NBC and GE Capital Equity Investments,
as it may be amended from time to time.
Representatives shall mean, with respect to any Person, such Persons directors, officers,
employees, agents and other representatives acting in such capacity.
Restricted Parties shall mean each of (i) NBC, its Ultimate Parent Entity (if any), each
Subsidiary of NBC and each Subsidiary of its Ultimate Parent Entity, (ii) GE Capital, its Ultimate
Parent Entity (if any), each Subsidiary of GE Capital and each Subsidiary of its Ultimate Parent
Entity and (iii) any Affiliate of any Person that is a Restricted Party if (and only if) such
Restricted Party has the right or power (acting alone or solely with other Restricted Parties) to
either cause such Affiliate to comply with or prevent such Affiliate from not complying with all of
the terms of this Agreement that are applicable to Restricted Parties.
SEC shall mean the United States Securities and Exchange Commission.
Securities Act shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Series A Preferred Stock shall have the meaning set forth in the recitals hereto.
Series B Preferred Stock shall have the meaning set forth in the recitals hereto.
Standstill Limit means Beneficial Ownership of 39.9% of the Adjusted Outstanding Common
Stock.
Standstill Period shall mean the period beginning on April 15, 1999 and ending on the
occurrence of a Standstill Termination Event, provided that the Standstill
6
Period shall recommence immediately upon the occurrence of a Standstill Reinstatement Event.
Standstill Reinstatement Event shall mean the occurrence of any of the following (a) the
Standstill Period has terminated pursuant to clause (iii) of the definition of Standstill
Termination Event and such Third Party Tender Offer is withdrawn or terminated (without having
been consummated) at any time during which an Investor Tender Offer is not then pending (unless the
party that commenced such Investor Tender Offer determines to terminate such Investor Tender Offer
in accordance with Section 4.01(f), in which event a Standstill Reinstatement Event shall occur at
the time of such termination), or (b) the Standstill Period has terminated pursuant to clause (iv)
of the definition of Standstill Termination Event due to a Change in Control of the Company
identified in clause (ii) of the definition thereof and, within twelve months after the occurrence
of such Change in Control of the Company, the Person whose Beneficial Ownership of Voting Stock
triggered such Change in Control of the Company no longer Beneficially Owns 25% or more of the
Total Current Voting Power of the Company or (c) the Standstill Period has terminated pursuant to
clause (ii) of the definition of Standstill Termination Event, the relevant agreement that would
have otherwise resulted in a Change in Control of the Company has been terminated without a Change
in Control of the Company having occurred and subsequent to the occurrence of such Standstill
Termination Event but prior to the termination of such agreement (x) the Restricted Parties have
not acquired actual ownership of Voting Stock representing in the aggregate a majority of the Total
Current Voting Power of the Company, (y) no Restricted Party has made any proposal or offer to the
Company regarding an Investor Tender Offer (other than any such proposal or offer that has been
withdrawn by the party making such proposal or offer or is no longer being pursued) and (z) no
Restricted Party has commenced any tender or exchange offer that is pending when such agreement is
terminated and that, if completed, would result in the Restricted Parties having actual ownership
of Voting Stock representing in the aggregate a majority of the Total Current Voting Power of the
Company. Notwithstanding the foregoing, a Standstill Reinstatement Event will not occur if prior to
the occurrence of the event specified in clause (a), (b) or (c) above that would otherwise result
in a Standstill Reinstatement Event, another Standstill Termination Event occurs for which there
has not been a related Standstill Reinstatement Event.
Standstill Revised Limit shall mean the percentage of the Adjusted Outstanding Common Stock
Beneficially Owned by the Restricted Parties as of the occurrence of a Standstill Reinstatement
Event.
Standstill Termination Event shall mean the earliest to occur of the following: (i) the ten
(10) year anniversary of the date of this Agreement, (ii) the date the Company enters into an
agreement relating to a transaction that if consummated will result in a Change in Control of the
Company, (iii) a Third Party Tender Offer, (iv) any Change in Control of the Company occurs, or (v)
the six month anniversary of the date on which the Investor is no longer entitled to designate any
nominees to the Board of Directors pursuant to Section 2.01; provided, that the Standstill Period
will be immediately reinstated upon the occurrence of a Standstill Reinstatement Event; provided
7
further that, upon a Standstill Reinstatement Event, if the Standstill Revised Limit is
greater than the Standstill Limit, then the Standstill Revised Limit and not the Standstill Limit
shall thereafter be deemed the Standstill Limit for all purposes hereunder.
Subsidiary shall mean, as to any Person, a corporation, partnership, limited liability
company, joint venture or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned, directly or
indirectly through one or more intermediaries (including, without limitation, other Subsidiaries),
or both, by such Person.
Takeover Transaction shall mean (A) the direct or indirect acquisition or purchase of 50% or
more of the assets (based on the fair market value thereof) of the Company and its Subsidiaries,
taken as a whole, or of 50% or more of the Common Stock of the Company or any of its Subsidiaries
or any tender offer or exchange offer (including by the Company or its Subsidiaries) that if
consummated would result in any Person beneficially owning 50% or more of the Common Stock of the
Company or any of its Subsidiaries, (B) a sale of all or substantially all of the assets of the
Company and its Subsidiaries or (C) a merger or consolidation of the Company.
Third Party Tender Offer shall mean a bona fide public offer subject to the provisions of
Regulation 14D under the Exchange Act, by a Person (which is not made by and does not include any
of the Company, a Restricted Party or any Affiliate of any of them or any 13D Group that includes
the Company, a Restricted Party or any Affiliate of them) to purchase or exchange for cash or other
consideration any Voting Stock and which consists of an offer to acquire 25% or more of the then
Total Current Voting Power of the Company.
13D Group means any group (within the meaning of Section 13(d) of the Exchange Act) formed
for the purpose of acquiring, holding, voting or disposing of Voting Stock.
Total Current Voting Power shall mean, with respect to any corporation the total number of
votes which may be cast in the election of members of the Board of Directors of the corporation if
all securities entitled to vote in the election of such directors (excluding shares of preferred
stock that are entitled to elect directors only upon the occurrence of customary events of default)
are present and voted (it being understood that the shares of Series B Preferred Stock will be
included in the Total Current Voting Power of the Company to the extent such shares of Series B
Preferred Stock are entitled to vote in accordance with Section VII(a) and Section VII(b) of the
Certificate of Designation).
Trademark License Agreement shall mean that certain Trademark License Agreement, between NBC
and the Company, dated as of November 16, 2000 and as amended on March 28, 2007.
8
Transfer shall have the meaning set forth in Section 4.02.
Ultimate Parent Entity shall mean, with respect to any Person (the Subject Person), the
Person (if any) that (i) owns, directly or indirectly through one or more intermediaries, or both,
shares of stock or other ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of the Subject Person and (ii) is not
itself a Subsidiary of any other Person or is a natural person.
Voting Stock shall mean shares of the Common Stock, Series B Preferred Stock, to the extent
such shares of Series B Preferred Stock are entitled to vote in accordance with Section VII(a) and
Section VII(b) of the Certificate of Designation, and any other securities of the Company having
the ordinary power to vote in the election of members of the Board of Directors of the Company.
Warrants shall mean the 2009 Warrants and any outstanding Bonus Distributor Warrants.
ARTICLE II CORPORATE GOVERNANCE
Section 2.01.
Board of Directors
.
(a) (i) As long as the Restricted Parties continue to Beneficially Own an aggregate number
of shares of Common Stock equal to or greater than 50% of the number of shares of Common Stock
which the Restricted Parties Beneficially Own on the date hereof (assuming for purposes of this
clause (i) each share of Series B Preferred Stock is converted into one share of Common Stock
and making equitable adjustments for any conversions, reclassifications, reorganizations, stock
dividends, stock splits, reverse splits and similar events which occur with respect to the
Common Stock), the Investor shall be entitled to designate three individuals to be nominated to
the Board of Directors or (ii) if the condition in clause (i) of this paragraph (b) is not
satisfied, then as long as the Restricted Parties shall continue to Beneficially Own at least
10% of the Adjusted Outstanding Common Stock, the Investor shall be entitled to designate two
individuals to be nominated to the Board of Directors.
(b) Any individual so designated by the Investor pursuant to paragraph (a) of this Section
2.01 (each a Designee) that has not previously served as a member of the Board of Directors
shall be subject to the reasonable approval of a majority of the members of the Board of
Directors.
(c) As long as a majority of the outstanding shares of Series B Preferred Stock are owned
by the Restricted Parties and the Investor is otherwise entitled to designate nominee(s) for
election as director(s) pursuant to Section 2.01, the Designee(s) will be elected to the Board
of Directors by the holders of the Series B Preferred Stock voting separately as a class, as
provided in the Certificate of Designation. If the Restricted Parties no longer own a majority
of the outstanding shares of Series B Preferred Stock (or no shares of Series B Preferred Stock
are outstanding) but the
9
Investor is otherwise entitled to designate nominee(s) for election as director(s)
pursuant to Section 2.01, the Company shall nominate each such Designee for election as a
director as part of the management slate that is included in the proxy statement (or consent
solicitation or similar document) of the Company relating to the election of directors, and
shall provide the same support for the election of each such Designee as it provides to other
persons standing for election as directors of the Company as part of the Companys management
slate.
(d) Subject to applicable law, in the event that any Designee on the Board of Directors
shall cease to serve as a director for any reason (other than the failure of the shareholders
of the Company to elect such person as director), the vacancy resulting therefrom shall be
filled by another Designee.
(e) For the avoidance of doubt, nothing in this Section 2.01 or elsewhere in this
Agreement is intended to prohibit the Restricted Parties from nominating and electing a
majority of the members of the Board of Directors if the Restricted Parties have actual
ownership of Voting Stock representing in the aggregate a majority of the Total Current Voting
Power and the Standstill Period is no longer in effect.
(f) [Reserved]
(g) As long as the Investor is entitled to designate three persons for nomination as
directors, the then current Investor may assign pursuant to Section 6.06 the right to designate
pursuant to the terms and conditions hereof one or two of such nominees to any other Restricted
Party (such that one Restricted Party will have the right to designate two nominees and the
other Restricted Party will have the right to designate one nominee; it being understood that
in such a case for all purposes of this Agreement where rights or obligations of the Investor
or the Restricted Parties are determined by the number of nominees the Investor is entitled to
designate, the Investor will be deemed to have the right to designate three nominees).
(h) [Reserved]
Section 2.02.
Board Committees
. As long as the Investor has the right to designate at
least two nominees to the Board of Directors, unless otherwise agreed to by the Investor or
otherwise prohibited by applicable law or the rules and regulations of the securities exchange or
automated quotation system upon which the Common Stock is listed, (a) so long as applicable law or
the rules and regulations of the securities exchange or automated quotation system upon which the
Common Stock is listed do not permit the Investors Designees to serve on the Audit Committee,
Human Resources and Compensation Committee or Corporate Governance and Nominating Committees
pursuant to the independence requirements of such law or rules and regulations or otherwise, the
Investor shall have the right to designate one observer to each of the Audit Committee, Human
Resources and Compensation Committee and Corporate Governance and Nominating Committee of the Board
of Directors; provided, however, that in the event such law or rules and regulations in the future
do permit the Investors Designees to serve on such Committees, effective as of the time of such
change in applicable law or
10
rules and regulations, the Investor shall have the right to designate at least one Designee to
each of the Audit Committee, Human Resources and Compensation Committee, and Corporate Governance
and Nominating Committee, and (b) each other committee of the Board of Directors shall contain a
number of Designees (to the extent available), rounded upward to the nearest whole number, equal to
the total number of directors on such committee multiplied by the percentage of the entire Board of
Directors who are Designees.
Section 2.03.
Reimbursement of Expenses; Attendance at Board Meetings;
Indemnification
. The Company will reimburse each Designee that serves as a director for all
reasonable costs and expenses (including travel expenses) incurred in connection with such
directors attendance at meetings of the Board of Directors or any committee of the Board of
Directors upon which such director serves. The Company will not pay such director annual fees and
fees for attending Board of Directors or committee meetings. The Company shall indemnify each such
director to the same extent it indemnifies its other directors pursuant to its organizational
documents and applicable law.
Section 2.04.
Consultation and Other Rights
. As long as the Investor has the right to
designate at least two nominees to the Board of Directors, it shall have: (i) the right to examine
the books and records of the Company and (ii) the right to have its representative consult with the
Companys executive officers regarding business strategies, operating priorities and other major
corporate issues.
ARTICLE III CERTAIN AGREEMENTS
Section 3.01.
Financial Statements and Other Reports
. For so long as the Investor is
entitled to designate two persons to be nominated for election to the Board of Directors pursuant
to Section 2.01, the Company will deliver, or cause to be delivered to the Investor:
(a) between 30 days prior to and 60 days after the end of each fiscal year, a budget (on a
monthly basis) for the Company and its Subsidiaries for the following fiscal year (including
consolidating and consolidated statements of operations);
(b) as soon as available and in any event within 45 days after the end of each month,
consolidating and consolidated statements of operations of the Company and its Subsidiaries for
such month and for the period from the beginning of the current fiscal year to the end of such
month and a consolidated balance sheet of the Company and its Subsidiaries as at the end of such
period and setting forth, in each case, in comparative form, figures for the corresponding month
and period in the preceding fiscal year and the budget for such month and for the period from the
beginning of the current fiscal year to the end of such month, all in reasonable detail and
certified by an authorized financial officer of the Company as fairly presenting in all material
respects the financial condition and results of operations of the Company and its Subsidiaries on a
consolidated basis in accordance with GAAP;
11
(c) as soon as practicable and in any event within 45 days after the end of each fiscal
quarter of the Company, consolidating and consolidated statements of operations and cash flow of
the Company and its Subsidiaries for such quarter and for the period from the beginning of the
current fiscal year to the end of such quarter and a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, setting forth, in each case, in comparative form,
figures for the corresponding quarter in the preceding fiscal year and the budget for such quarter,
all in reasonable detail, and certified by an authorized financial officer of the Company as fairly
presenting in all material respects the financial condition and results of operations of the
Company and its Subsidiaries on a consolidated basis in accordance with GAAP;
(d) as soon as available and in any event within 120 days after the end of each fiscal year,
consolidating and consolidated statements of operations, shareholders equity and cash flow of the
Company and its Subsidiaries for such fiscal year, and the related consolidating and consolidated
balance sheets of the Company and its Subsidiaries as at the end of such fiscal year, setting
forth, in each case, in comparative form, corresponding consolidated and consolidating figures from
the preceding fiscal year, all in reasonable detail and accompanied (i) in the case of such
consolidated statements and balance sheet of the Company, by an opinion thereon of independent
certified public accountants of recognized national standing (which shall be generally recognized
as one of the Big Four independent public accounting firms), which opinion shall state that such
consolidated financial statements fairly present the consolidated financial condition and results
of operations of the Company and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with GAAP, and (ii) in the case of such consolidating statements and balance sheets, by
a certificate of an authorized financial officer of the Company, which certificate shall state that
such consolidating financial statements fairly present, in all material respects, the respective
individual unconsolidated financial condition and results of operations of the Company and of each
of its Subsidiaries, in each case in accordance with GAAP, consistently applied, as at the end of,
and for, such fiscal year;
(e) promptly upon transmission thereof to the shareholders of the Company generally or to any
other security holder of the Company, including, without limitation, any holder of debt, copies of
all financial statements, notices, certificates, annual reports and proxy statements so
transmitted;
(f) promptly upon receipt thereof, a copy of each other report submitted to the Company or any
of its Subsidiaries by independent accountants in connection with any annual, interim or special
audit of the books of the Company or any of its Subsidiaries made by such accountants, or any
management letters or similar document submitted to the Company or any of its Subsidiaries by such
accountants;
(g) promptly upon any material revision to the budgets referred to in paragraph (a) above,
such monthly budgets, as revised;
12
(h) promptly upon any officer of the Company obtaining knowledge thereof, notice of any event
of default under any credit agreement, loan agreement or indenture that the Company is party to;
and
(i) with reasonable promptness, such other information and data with respect to the Company or
any of its Subsidiaries as the Investor may reasonably request.
Section 3.02.
Certain Transactions with NBC Restricted Persons
. (a) The Company agrees
for the benefit of the Restricted Parties that except with the prior written consent of the
Investor and except as may be expressly permitted by this Agreement, the Company and its
Subsidiaries shall not, directly or indirectly:
(i) issue or sell to any NBC Restricted Person, or authorize or propose the issuance
or sale to any NBC Restricted Person of, any capital stock, partnership or limited
liability company interests or other equity securities of the Company or any Subsidiary of
the Company or any options, warrants or other rights (including, without limitation, any
convertible or exchangeable securities) to acquire, any such capital stock, partnership or
limited liability interests or other equity securities;
(ii) form, enter into or join any partnership or joint venture with, sell or dispose
of any business or any assets (other than inventory and any other assets disposed of in the
ordinary course consistent with past practice of such business) to, or make any investment
in any NBC Restricted Person;
(iii) enter into any transaction involving the incurrence of indebtedness (other than
in the ordinary course of business consistent with past practice) involving any NBC
Restricted Person;
(iv) authorize, enter into or approve any Material Transaction with any NBC Restricted
Person or enter into any discussions or negotiations relating to any inquiry, proposal or
offer relating thereto;
(v) enter into any joint marketing or co-branding arrangement with any NBC Restricted
Person, license or otherwise grant to any NBC Restricted Person the right to utilize any
trademark, tradename or brand of the Company or any Subsidiary of the Company or grant to
any NBC Restricted Person any rights to have a branded presence on any media of the Company
or its Subsidiaries or rights to cross-promote home shopping transactions; or
(vi) authorize or commit or agree to take any of the foregoing actions.
(b) The provisions of this Section 3.02 shall terminate and be of no further force or effect
at the earlier of (i) such time as the Investor is no longer entitled to designate at least two
persons to be nominated for election to the Board of Directors pursuant to Section 2.01 and (ii)
the effective date of expiration or termination of the Trademark License Agreement.
13
Section 3.03.
Certain Other Transactions
.
(a) The Company agrees that except with the prior written consent of the Investor, the Company
and its Subsidiaries shall not, directly or indirectly:
(i) issue or sell, or authorize or propose the issuance or sale, of any capital stock
of the Company, or any options, warrants or other rights (including, without limitation,
any convertible or exchangeable securities) to acquire capital stock of the Company other
than (i) pursuant to Options outstanding on the date hereof or issued pursuant to clause
(ii) below, (ii) Options to be issued to officers, directors, employees or consultants of
the Company or any of its Subsidiaries pursuant to any plan or arrangement approved by the
Companys shareholders, (iii) pursuant to the Warrants, (iv) the issuance of Common Stock
and other Voting Stock in an aggregate amount not to exceed (x) during any twelve month
period 15% of the Total Current Voting Power of the Company as of the first day of such
twelve month period and (y) during any twenty-four month period 25% of the Total Current
Voting Power of the Company as of the first day of such twenty-four month period, provided
that no issuance will be made to any Person pursuant to this clause (iv) who, together with
its Affiliates, to the knowledge of the Company after reasonable inquiry, would
Beneficially Own securities representing 10% or more of the Total Current Voting Power of
the Company following such issuance and (v) issuances of non-voting capital stock that does
not violate the terms of the Series B Preferred Stock;
(ii) (A) declare or pay any dividends or distributions to holders of Common Stock (1)
while there are any shares of Series B Preferred Stock outstanding or (2) if there are no
shares of Series B Preferred Stock outstanding, in any fiscal quarter exceeding in the
aggregate 5% of the Market Capitalization of the Company as of the first day of such fiscal
quarter or (B) repurchase or redeem any Common Stock except (1) repurchases and redemption
of Common Stock from officers, directors, employees or consultants of the Company and its
Subsidiaries, (2) once no shares of Series B Preferred Stock are outstanding, repurchases
and redemptions of Common Stock in any fiscal quarter that, when aggregated with all
distributions and dividends on the Common Stock in such fiscal quarter, do not exceed 5% of
the Market Capitalization of the Company as of the first day of such fiscal quarter, and
(3) repurchases and redemptions of Common Stock consummated at any time during the twelve
(12) month period ending February 25, 2010 that, when aggregated with all distributions and
dividends on, and redemptions of, the Common Stock in such twelve (12) month period, do not
(x) exceed $1,500,000, inclusive of all out of pocket costs incurred or otherwise payable
by the Company in connection therewith, (y) result in the Restricted Parties Beneficial
Ownership exceeding 38% of the Adjusted Outstanding Common Stock or (z) constitute a tender
offer under the Securities Exchange Act of 1934, as amended;
(iii) enter into or effect any single or related series of acquisitions of businesses
or assets or investments therein (including, without limitation,
14
forming, entering into or joining any joint venture), other than money market
instruments and trade receivables, pursuant to which the fair market value of the aggregate
purchase price paid, or investment made, by the Company and its Subsidiaries will exceed
the greater of (x) $20 million or (y) 10% of the Market Capitalization of the Company at
the time the Company or its Subsidiaries enter into an agreement to effect such acquisition
or investment;
(iv) enter into or effect any single or related series of sales, leases or other
dispositions of assets having a fair market value in excess of the greater of (x) $20
million or (y) 10% of the Market Capitalization of the Company at the time the Company or
its Subsidiaries enter into an agreement to effect such sale, lease or other disposition;
(v) incur indebtedness for borrowed money that would cause the Companys consolidated
indebtedness to exceed the greater of (x) $20 million and (y) an amount equal to 30% of the
Companys total capitalization; for purposes of this clause (e) total capitalization
means the sum of consolidated shareholders equity and consolidated indebtedness; provided
that no written consent of the Investor is required in connection with any incurrence of
indebtedness for borrowed money by the Company or any of its Subsidiaries if the net
proceeds of such indebtedness are used to redeem all of the outstanding shares of Series B
Preferred Stock in accordance with the provisions of the Certificate of Designation;
(vi) issue any series or class of capital stock having (i) voting rights that are
disproportionate relating to its economic interest or (ii) a separate class vote on any
Takeover Transaction; enter into any business, either directly or indirectly, except for
those businesses in which the Company and/or its Subsidiaries and/or its Affiliates are
engaged in on the date hereof and those businesses which are ancillary, complementary or
reasonably related thereto;
(vii) amend the Restated Articles of Incorporation of the Company, as amended and in
effect on the date of this Agreement (the Articles of Incorporation) so as to adversely
affect the Restricted Parties (it being understood that increases in the authorized capital
stock of the Company and/or creation of a staggered Board of Directors will not be deemed
to adversely affect the Restricted Parties); or
(viii) authorize or commit or agree to take any of the foregoing actions.
(b) The provisions of this Section 3.03 shall terminate and be of no further force or effect
at the later of (i) such time as the Investor is no longer entitled to designate three persons to
be nominated for election to the Board of Directors pursuant to Section 2.01 and (ii) such time as
the Restricted Parties no longer Beneficially Own any shares of Series B Preferred Stock.
15
Section 3.04.
Other Covenants
. (a) The Company agrees that except with the prior
written consent of the Investor and except as otherwise expressly permitted by this Agreement, it
and its Subsidiaries shall not, directly or indirectly:
(i) adopt any shareholders rights plan, or amend any of its organizational documents
or enter into any Material Agreement with a third party or issue any capital stock or other
securities, the provisions of which, upon the acquisition of all of the outstanding Common
Stock or any portion thereof by any Restricted Party would be violated or breached, or
which would require a consent, approval or notice thereunder, or which would result in a
default thereof (or an event which, with notice or lapse of time or both, would constitute
a default), or which would result in the termination thereof or accelerate the performance
required thereby, or would result in a right of termination or acceleration thereunder, or
result in the creation of any Lien (except Permitted Liens) upon any of the properties or
assets of the Company or Material Subsidiaries thereunder or disadvantage the Restricted
Parties relative to other shareholders on the basis of the size of their shareholdings or
otherwise restrict or impede the ability of the Restricted Parties to acquire additional
shares of Voting Stock or dispose of such Voting Stock in any manner permitted by Section
4.02 to any Restricted Party or to any Person that would Beneficially Own (together with
such Persons Ultimate Parent Entity, Subsidiaries and Affiliates) less than 10% of the
Adjusted Outstanding Common Stock;
(ii) Take any action that would result in any Restricted Party being deemed to be in
violation of Section 73.3555 of the rules and regulations of the Federal Communications
Commission, as the same may be amended from time to time.
(b) The provisions of Section 3.04(a)(i) shall terminate and be of no further force or effect
at such time as the Investor is no longer entitled to designate at least two persons to be
nominated for election to the Board of Directors pursuant to Section 2.01.
Section 3.05.
No Reinstatement of Rights
. Anything in this Agreement to the contrary
notwithstanding, to the extent the Restricted Parties fail to satisfy any ownership threshold set
forth herein so that any rights of the Investor under this Agreement and/or obligations of the
Company under this Agreement terminate, such terminated rights and/or obligations will not be
reinstated if the Restricted Parties thereafter satisfy such ownership threshold.
ARTICLE
IV STANDSTILL AGREEMENTS
Section 4.01.
Standstill Agreement
.
(a) During the Standstill Period (and during the Standstill Period only), no Restricted Party
will, directly or indirectly, nor will it authorize or direct any of its Representatives to (and
will take appropriate action against such Representatives to discourage), in each
16
case unless specifically requested to do so in writing in advance by the Board of Directors:
(i) acquire or agree, offer, seek or propose to acquire, or cause to be acquired,
ownership of any assets or businesses of the Company or any of its Subsidiaries having a
fair market value in excess of 10% of the fair market value of all of the Companys and its
Subsidiaries assets, or any rights or options to acquire any such ownership (including
from a third party);
(ii) acquire or agree, offer, seek or propose to acquire, or cause to be acquired,
Beneficial Ownership of any Common Stock of the Company or any of its Subsidiaries, or any
options, warrants or other rights (including, without limitation, any convertible or
exchangeable securities) to acquire any such Common Stock, in any case other than the
Warrants and any Common Stock issuable upon exercise of the Warrants; provided, however,
the Restricted Parties may acquire or agree, offer, seek or propose to acquire, or cause to
be acquired, shares of Common Stock of the Company (or any convertible or exchangeable
securities to acquire any such Common Stock) if such acquisition would not increase the
Restricted Parties aggregate Beneficial Ownership of shares of Adjusted Outstanding Common
Stock to more than the Standstill Limit (other than due to the issuance of additional Bonus
Distributor Warrants; provided that if the issuance of additional Bonus Distributor
Warrants results in the Restricted Parties aggregate Beneficial Ownership of shares of
Common Stock exceeding the Standstill Limit, then at any time during the Standstill Period
(and only during the Standstill Period) when the Standstill Limit is so exceeded, the
Restricted Parties shall not exercise any Bonus Distributor Warrants unless (A) such
exercise occurs during the six months prior to the expiration or termination of such Bonus
Distributor Warrants or (B) immediately upon such exercise, the Restricted Parties
aggregate actual ownership of outstanding shares of Common Stock would not exceed 39.9% of
the total outstanding shares of Common Stock, treating as outstanding and actually owned
for such purpose shares of Common Stock issuable upon the exercise of the 2009 Warrant, but
no shares of Common Stock issuable upon exchange, exercise or conversion of any other
rights, warrants, options or other securities). Notwithstanding the foregoing, during the
Standstill Period, no holder of Warrants will disclaim Beneficial Ownership of such
Warrants and for as long as the 2009 Warrants are outstanding and exercisable, no
Restricted Party will acquire actual ownership of any shares of Common Stock other than (x)
through exercise of the Warrants and (y) other acquisitions of shares of Common Stock at a
price per share equal to or greater than the applicable price set forth in Section 8 of the
2009 Warrant;
(iii) make, or in any way participate in, any solicitation of proxies (as such
terms are used in the proxy rules of the SEC) with respect to the voting of any securities
of the Company or any of its Subsidiaries, provided that the limitation contained in this
clause (iii) shall not apply to any Takeover Transaction to be voted on by the Companys
shareholders that is not instituted or proposed by any Restricted Party or any Affiliate of
a Restricted Party or any 13D
17
Group of which any Restricted Party or any Affiliate of a Restricted Party is a
member;
(iv) deposit any securities of the Company or any of its Subsidiaries in a voting
trust or subject any such securities to any arrangement or agreement with any Person (other
than one or more Restricted Parties);
(v) form, join, or in any way become a member of a 13D Group with respect to any
voting securities of the Company or any of its Subsidiaries (other than a group
consisting solely of Restricted Parties);
(vi) arrange any financing for, or provide any financing commitment specifically for,
the purchase of any voting securities or securities convertible or exchangeable into or
exercisable for any voting securities or assets of the Company or any of its Subsidiaries,
except for such assets as are then being offered for sale by the Company or such
Subsidiary;
(vii) otherwise act, whether alone or in concert with others, to seek to propose to
the Company any tender or exchange offer, merger, business combination, restructuring,
liquidation, recapitalization or similar transaction involving the Company or any of its
Subsidiaries, or nominate any person as a director of the Company who is not nominated by
the then incumbent directors, or propose any matter to be voted upon by the shareholders of
the Company; provided that the Restricted Entities may nominate directors in accordance
with Section 2.01 and, provided further, the provisions of this clause (vii) will not
prohibit or restrict any Restricted Party from entering into any agreement, arrangement or
understanding relating to the Transfer of any securities in accordance with Section 4.02 or
engaging in an discussion or negotiations relating to any potential Transfer of any
securities in accordance with Section 4.02;
(viii) solicit, initiate, encourage or knowingly or intentionally facilitate the
taking of any action by any Affiliate of a Restricted Party (that is not itself a
Restricted Party) that would be prohibited by this Section 4.01 if that Affiliate were a
Restricted Party; or
(ix) publicly announce or disclose any intention, plan or arrangement inconsistent
with the foregoing.
(b) In addition, during the Standstill Period (and only during the Standstill Period), no
Restricted Party will, nor will they authorize or direct any of their respective Representatives
to, take any action that they reasonably believe based on the advice of outside counsel would
require the Company to make a public announcement regarding any of the matters set forth in Section
4.01(a) (other than in connection with the transactions contemplated by the Exchange Agreement).
(c) If, at any time during the Standstill Period, (i) any Person other than a Restricted Party
or any Affiliate thereof or any 13D Group of which any Restricted Party is a member has made any
inquiry, proposal or offer relating to a Takeover Transaction or
18
Change in Control of the Company which has not been rejected by the Board of Directors, (ii)
the Board of Directors has determined to pursue a Takeover Transaction or other Change in Control
of the Company and the Board of Directors has not resolved to stop pursuing such Takeover
Transaction or other Change in Control of the Company or (iii) the Board of Directors or the
Company has engaged in any discussions or negotiations with, or provided any information to, any
Person other than a Restricted Party or any Affiliate thereof or any 13D Group of which any
Restricted Party is a member with respect to a potential Takeover Transaction or other Change in
Control of the Company or any potential inquiry, proposal or offer relating thereto and the Board
of Directors has not resolved to terminate all such discussions, negotiations and provision of
information, then, for so long as such condition continues to apply, the limitation on the actions
described in clause (a)(vii) above shall not be applicable to the Restricted Parties (but all other
provisions of this Agreement will, subject to Section 4.01(d), continue to apply).
(d) Anything in this Section 4.01 to the contrary notwithstanding, this Section 4.01 shall not
prohibit or restrict any of the following: (x) actions taken by the Investors nominees on the
Board of Directors in such capacity, (y) the exercise by the Restricted Parties of their voting
rights (i.e., their right to vote their shares but not their right to make nominations, to the
extent prohibited by this Agreement, or take other related actions otherwise prohibited by this
Section 4.01) with respect to any shares of Voting Stock they Beneficially Own and (z) any
disclosure pursuant to Section 13(d) of the Exchange Act which a Restricted Party reasonably
believes, based on the advice of outside counsel, is required in connection with any action taken
by a Restricted Party pursuant to Section 4.01(c).
(e) Following the expiration of the Standstill Period pursuant to clause (i) of the definition
of Standstill Termination Event and for two years following the expiration of the Standstill Period
pursuant to clause (v) of the definition of Standstill Termination Event, no Restricted Party will
purchase or otherwise acquire any shares of Common Stock if such acquisition would increase the
Restricted Parties aggregate Beneficial Ownership of shares of Common Stock to more than 39.9% of
the Adjusted Outstanding Common Stock except (x) increases in Beneficial Ownership resulting from
issuance of the Warrants or the exercise of the Warrants or (y) pursuant to an Investor Tender
Offer.
(f) If the Standstill Period terminates pursuant to clause (iii) of the definition of
Standstill Termination Event and the subject Third Party Tender Offer is terminated at any time
during which an Investor Tender Offer is then pending, unless otherwise agreed by the Company, the
Restricted Party that commenced such Investor Tender Offer (the Tendering Restricted Party) will
not complete such Investor Tender Offer until at least the sixth Business Day after the termination
of such Third Party Tender Offer. If, within two Business Days after termination of the subject
Third Party Tender Offer, the Company requests in writing that the Tendering Restricted Party
terminate its Investor Tender Offer and by the end of the second Business Day after the receipt of
such request the Tendering Restricted Party has not terminated its Investor Tender Offer, then the
provisions of Section 3.04(a)(i) shall no longer prohibit the Company from amending its then
existing shareholders rights plan or adopting a shareholders rights plan that could be
19
triggered by the Restricted Parties if (and, only if) they subsequently acquired Beneficial
Ownership of additional Voting Stock that would increase the Restricted Parties aggregate
Beneficial Ownership of shares of Common Stock to more than the Standstill Limit (determined for
these purposes as if a Standstill Reinstatement Event had occurred on such date) other than as a
result of the acquisition of Beneficial Ownership of additional shares of Common Stock upon the
issuance or exercise of additional Bonus Distributor Warrants.
Section 4.02.
Transfer Restrictions
.
(a) Unless the Restricted Parties Beneficially Own in the aggregate less than 5% of the
Adjusted Outstanding Common Stock or until the Restricted Parties Beneficially Own in the aggregate
at least 90% of the Adjusted Outstanding Common Stock, the Restricted Parties shall not, directly
or indirectly, sell, transfer or otherwise dispose of (collectively, Transfer) any of the Series
B Preferred Stock, Warrants or shares of Common Stock Beneficially Owned by such Persons, except
for Transfers: (i) to Restricted Parties or to Affiliates who agree to be Restricted Parties bound
by the provisions of this Agreement, (ii) which have been consented to by the Company, (iii)
pursuant to a Third Party Tender Offer, provided that the Restricted Parties may not Transfer
pursuant to this clause (iii) any shares of Common Stock acquired upon exercise of the 2009
Warrants on or after the date of commencement of such Third Party Tender Offer or the public
announcement by the offeror thereof or that such offeror intends to commence such Third Party
Tender Offer, (iv) pursuant to a merger, consolidation or reorganization to which the Company is a
party, (v) in a underwritten public offering pursuant to an effective registration statement, (vi)
pursuant to Rule 144 of the Securities Act or (vii) in a private sale or pursuant to Rule 144A of
the Securities Act; provided that, (A) in the case of any Transfer by NBC pursuant to clause (v),
(vi) or (vii), such Transfer does not result in, to the knowledge of NBC after reasonable inquiry,
any other Person acquiring, after giving effect to such Transfer, Beneficial Ownership,
individually or in the aggregate with such Persons Ultimate Parent Entity, Subsidiaries and
Affiliates, of more than 20% of the Adjusted Outstanding Common Stock without the prior written
consent of the Company, which shall not be unreasonably withheld, and (B) in the case of any
Transfer by any Restricted Party other than NBC pursuant to clause (v), (vi) or (vii), such
Transfer does not result in, to the knowledge of the Restricted Parties after reasonable inquiry,
any other Person acquiring, after giving effect to such Transfer, Beneficial Ownership,
individually or in the aggregate with such Persons Ultimate Parent Entity, Subsidiaries and
Affiliates, of more than 10% of the Adjusted Outstanding Common Stock.
(b) Subject to the provisions of Section 4.02(a), if any Restricted Party decides to dispose
of any of the Series B Preferred Stock or any Warrants (or the Common Stock issuable upon exercise
of any Warrants), each Restricted Party understands and agrees that it may do so only pursuant to
an effective registration statement under the Securities Act and applicable registration under
state securities laws or pursuant to an exemption from registration under the Securities Act and
applicable state securities laws. Each Restricted Party agrees to the imprinting, so long as
appropriate, of substantially the following legends on certificates representing any of the
securities referenced in the preceding sentence:
20
NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE
UPON EXERCISE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE SECURITIES LAW, AND
SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS OF AN AMENDED AND RESTATED SHAREHOLDER AGREEMENT, DATED AS OF FEBRUARY
25, 2009, AMONG VALUEVISION MEDIA, INC., GE CAPITAL EQUITY INVESTMENTS, INC. AND NBC
UNIVERSAL, INC., AS THEREAFTER AMENDED FROM TIME TO TIME.
THE RESTATED ARTICLES OF INCORPORATION, AS AMENDED, OF THE COMPANY PROVIDE THAT,
EXCEPT AS OTHERWISE PROVIDED BY LAW, SHARES OF STOCK IN THE COMPANY SHALL NOT BE
TRANSFERRED TO ALIENS UNLESS, AFTER GIVING EFFECT TO SUCH TRANSFER, THE AGGREGATE NUMBER
OF SHARES OF STOCK OWNED BY OR FOR THE ACCOUNT OF ALIENS WILL NOT EXCEED 20% OF THE
NUMBER OF SHARES OF OUTSTANDING STOCK OF THE COMPANY, AND THE AGGREGATE VOTING POWER OF
SUCH SHARES WILL NOT EXCEED 20% OF THE AGGREGATE VOTING POWER OF ALL OUTSTANDING SHARES OF
VOTING STOCK OF THE COMPANY. NOT MORE THAN 20% OF THE AGGREGATE VOTING POWER OF ALL SHARES
OUTSTANDING ENTITLED TO VOTE MAY BE VOTED BY OR FOR THE ACCOUNT OF ALIENS. IF,
NOTWITHSTANDING SUCH RESTRICTION ON TRANSFERS TO ALIENS, THE AGGREGATE NUMBER OF SHARES
OF STOCK OWNED BY OR FOR THE ACCOUNT OF ALIENS EXCEEDS 20% OF THE NUMBER OF SHARES OF
OUTSTANDING STOCK OF THE COMPANY OR IF THE AGGREGATE VOTING POWER OF SUCH SHARES EXCEEDS
20% OF THE AGGREGATE VOTING POWER OF ALL OUTSTANDING SHARES OF VOTING STOCK OF THE COMPANY,
THE COMPANY HAS THE RIGHT TO REDEEM SHARES OF ALL CLASSES OF CAPITAL STOCK, AT THEIR THEN
FAIR MARKET VALUE, ON A PRO RATA BASIS, OWNED BY OR FOR THE ACCOUNT OF ALL ALIENS IN
ORDER TO REDUCE THE NUMBER OF SHARES AND/OR PERCENTAGE OF VOTING POWER HELD BY OR FOR THE
ACCOUNT OF ALIENS TO THE MAXIMUM NUMBER OR PERCENTAGE ALLOWED UNDER THE RESTATED ARTICLES
OF INCORPORATION, AS AMENDED, OR AS OTHERWISE REQUIRED BY APPLICABLE FEDERAL LAW. AS USED
HEREIN, ALIENS MEANS ALIENS AND THEIR REPRESENTATIVES, FOREIGN GOVERNMENTS AND THEIR
REPRESENTATIVES, AND
21
CORPORATIONS ORGANIZED UNDER THE LAW OF A FOREIGN COUNTRY, AND THEIR REPRESENTATIVES.
THE COMPANY WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE, A FULL
STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF THE SHARES
OF EACH CLASS OR SERIES AUTHORIZED TO BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND
THE AUTHORITY OF THE BOARD TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT
CLASSES OR SERIES.
The first legend set forth above shall be removed if and when (i) the securities represented
by such certificate are disposed of pursuant to an effective registration statement under the
Securities Act or (ii) the Investor delivers to the Company an opinion of counsel reasonably
acceptable to the Company to the effect that such legends are no longer necessary.
Section 4.03.
Certain Permitted Transactions and Communications
. Notwithstanding the
foregoing, this Agreement shall not prohibit (i) the acquisition or holding of securities or rights
in the ordinary course of business by any employee benefit plan whose trustees, investment managers
or similar advisors are not Affiliates of any Restricted Party, (ii) the consummation of any
transaction expressly provided for in the Exchange Agreement including the acquisition and/or
exercise of the Warrants or (iii) officers and employees of the Restricted Parties from
communicating with officers of the Company or its Affiliates on matters related to or governed by
the Distribution Agreement, the Trademark License Agreement or other operational matters, or the
Restricted Parties from communicating with the Board of Directors, the Chairman of the Board of
Directors, the Chief Executive Officer or the Chief Financial Officer of the Company, so long as
such communication is conveyed in confidence, does not require public disclosure by the Restricted
Parties or, in the reasonable belief (based on the advice of outside counsel) of the Restricted
Party making such communication, by the Company, and is not intended to (A) elicit, and, in the
reasonable belief (based on the advice of outside counsel) of the Restricted Party making such
communication, does not require the issuance of, a public response by the Company or (B) otherwise
circumvent the provisions of Section 4.01.
ARTICLE
V [RESERVED]
ARTICLE VI MISCELLANEOUS
Section 6.01.
Notices
. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given, if delivered personally, by telecopier or sent
by overnight courier as follows:
(a) If to the Investor, to:
GE Capital Equity Investments, Inc.
22
201 Merritt 7
1st Floor
Norwalk, CT 06851
Attention: VVTV Account Manager
cc: General Counsel Equity
Fax: (203) 229-5097
with a copy to (which shall not constitute notice):
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Alexander D. Lynch
Fax: (212) 310-8007
(b) If to NBC, to:
NBC Universal, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attention: Chief Financial Officer
Fax: (212) 664-0427
with a copy to (which shall not constitute notice):
NBC Universal, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attention: General Counsel
Fax: (212) 664-4733
(c) If to the Company, to:
ValueVision Media, Inc.
6740 Shady Oak Road
Eden Prairie, MN 55344-3433
Attention: General Counsel
Fax: (612) 947-0188
with a copy to (which shall not constitute notice):
Faegre & Benson LLP
2200 Wells Fargo Center
90 South 7
th
Street
Minneapolis, MN 55402
Attention: Peter J. Ekberg
Fax: (612) 766-1600
23
and
Latham & Watkins LLP
355 South Grand Avenue
Los Angeles, CA 90071
Attention: James P. Beaubien
Jason H. Silvera
Fax: (213) 891-8763
or to such other address or addresses as shall be designated in writing. All notices shall be
effective when received.
Section 6.02.
Entire Agreement; Amendment
. This Agreement sets forth the entire
agreement between the parties hereto with respect to the transactions contemplated by this
Agreement. Any provision of this Agreement may be amended or modified in whole or in part at any
time by an agreement in writing between the parties hereto executed in the same manner as this
Agreement. No failure on the part of any party to exercise, and no delay in exercising, any right
shall operate as a waiver thereof nor shall any single or partial exercise by any party of any
right preclude any other or future exercise thereof or the exercise of any other right.
Section 6.03.
Severability
. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any other such
instrument.
Section 6.04.
Counterparts
. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all of which together
shall constitute one and the same document.
Section 6.05.
Governing Law; Jurisdiction; Waiver of Jury Trial
. This Agreement shall
be governed and construed in accordance with the laws of the State of New York applicable to
contracts executed and performed within such state, and each party hereby submits to the
jurisdiction of any state or U.S. federal court sitting within the County of New York, New York or
the County of Hennepin, Minnesota. The parties hereto waive all right to trial by jury in any
action, suit or proceeding brought to enforce or defend any rights or remedies under this
Agreement.
Section 6.06.
Successors and Assigns; Third Party Beneficiaries
. Subject to applicable
law, (i) GE Capital Equity Investments may assign its rights under this Agreement in whole or in
part only to a Restricted Party, but no such assignment shall relieve GE Capital Equity Investments
of its obligations hereunder unless GE Capital Equity Investments obligations hereunder are
assumed by NBC and/or GE Capital in a written agreement reasonably acceptable to the Company
delivered to the Company (in which case GE Capital Equity Investments will be released from its
obligations hereunder
24
except for its obligations as a Restricted Party to comply with the terms hereof) and (ii) NBC
may assign its rights under this Agreement in whole or in part only to a Restricted Party, but no
such assignment shall relieve NBC of its obligations hereunder unless NBCs obligations hereunder
are assumed by GE Capital in a written agreement reasonably acceptable to the Company delivered to
the Company (in which case NBC will be released from its obligations hereunder except for its
obligations as a Restricted Party to comply with the terms hereof). The Company may not assign any
of its rights or delegate any of its duties under this Agreement without the prior written consent
of the Investor. Any purported assignment in violation of this Section shall be void. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any Person other
than the Restricted Parties (who shall be third party beneficiaries of this Agreement entitled to
the benefit of, and to enforce, its terms) and the Company and their respective successors, any
legal or equitable right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Restricted Parties and the Company and their respective
successors, and for the benefit of no other Person. No purchaser of Series B Preferred Stock,
Warrants or Common Stock from a Restricted Party (other than another Restricted Party) shall be
deemed to be a successor or assignee by reason merely of such purchase.
Section 6.07.
Arbitration
. Any controversy, dispute or claim arising out of, in
connection with or in relation to the interpretation, performance or breach of this Agreement,
shall be determined, at the request of any party, by arbitration in a city mutually agreeable to
the parties to such controversy, dispute or claim before and in accordance with the then-existing
Rules for Commercial Arbitration of the American Arbitration Association, and any judgment or award
rendered by the arbitrator will be final, binding and unappealable and judgment may be entered by
any state or Federal court having jurisdiction thereof. The pre-trial discovery procedures of the
Federal Rules of Civil Procedure shall apply to any arbitration under this Section 6.07. Any
controversy concerning whether a dispute is an arbitrable dispute or as to the interpretation or
enforceability of this Section 6.07 shall be determined by the arbitrator. The arbitrator shall be
a retired or former United States District Judge or other person acceptable to each of the parties,
provided such individual has substantial professional experience with regard to corporate or
partnership legal matters. The parties intend that this agreement to arbitrate be valid,
enforceable and irrevocable.
Section 6.08.
Specific Performance
. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement
in addition to any other remedy to which they are entitled at law or in equity.
Section 6.09.
Headings, Captions and Table of Contents
. The section headings, captions
and table of contents contained in this Agreement are for reference purposes only, are not part of
this Agreement and shall not affect the meaning or interpretation of this Agreement.
25
Section 6.10.
Confidentiality
. The provisions of Sections 1, 2 and 8 of the
confidentiality agreement dated June 24, 1998 between the Company and the Investor (the Investor
Confidentiality Agreement) shall continue and be in full force and effect and apply to each
Restricted Party as if it were the Investor until the later to occur of the termination of the
Distribution Agreement and termination of the Investors rights to designate at least two directors
for nomination to the Board of Directors pursuant to Section 2.01.
26
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their
respective duly authorized representatives, all as of the date first above written.
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VALUEVISION MEDIA, INC.
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By:
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/s/ Nathan E. Fagre
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Name:
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Nathan E. Fagre
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Title:
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Senior Vice President, General Counsel
and Secretary
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GE CAPITAL EQUITY INVESTMENTS, INC.
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By:
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/s/ Michael S. Fisher
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Name:
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Michael S. Fisher
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Title:
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Sr. Managing Director
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NBC UNIVERSAL, INC.
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By:
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/s/ Salil Mehta
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Name:
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Salil Mehta
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Title:
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President, Business Operations,
Strategy & Development
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[SIGNATURE PAGE TO THE AMENDED & RESTATED SHAREHOLDER AGREEMENT]
ANNEX A
NBC RESTRICTED PERSONS
CBS
Fox
Disney
Time Warner
Viacom
Exhibit 4.2
Execution Version
NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON
EXERCISE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE SECURITIES LAW, AND SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF
AN AMENDED AND RESTATED SHAREHOLDER AGREEMENT, DATED AS OF FEBRUARY 25, 2009, AMONG
VALUEVISION MEDIA, INC., GE CAPITAL EQUITY INVESTMENTS, INC. AND NBC UNIVERSAL, INC., AS
THEREAFTER AMENDED FROM TIME TO TIME.
THE RESTATED ARTICLES OF INCORPORATION, AS AMENDED, OF THE COMPANY PROVIDE THAT, EXCEPT AS
OTHERWISE PROVIDED BY LAW, SHARES OF STOCK IN THE COMPANY SHALL NOT BE TRANSFERRED TO
ALIENS UNLESS, AFTER GIVING EFFECT TO SUCH TRANSFER, THE AGGREGATE NUMBER OF SHARES OF
STOCK OWNED BY OR FOR THE ACCOUNT OF ALIENS WILL NOT EXCEED 20% OF THE NUMBER OF SHARES OF
OUTSTANDING STOCK OF THE COMPANY, AND THE AGGREGATE VOTING POWER OF SUCH SHARES WILL NOT
EXCEED 20% OF THE AGGREGATE VOTING POWER OF ALL OUTSTANDING SHARES OF VOTING STOCK OF THE
COMPANY. NOT MORE THAN 20% OF THE AGGREGATE VOTING POWER OF ALL SHARES OUTSTANDING ENTITLED
TO VOTE MAY BE VOTED BY OR FOR THE ACCOUNT OF ALIENS. IF, NOTWITHSTANDING SUCH
RESTRICTION ON TRANSFERS TO ALIENS, THE AGGREGATE NUMBER OF SHARES OF STOCK OWNED BY OR
FOR THE ACCOUNT OF ALIENS EXCEEDS 20% OF THE NUMBER OF SHARES OF OUTSTANDING STOCK OF THE
COMPANY OR IF THE AGGREGATE VOTING POWER OF SUCH SHARES EXCEEDS 20% OF THE AGGREGATE VOTING
POWER OF ALL OUTSTANDING SHARES OF VOTING STOCK OF THE COMPANY, THE COMPANY HAS THE RIGHT TO
REDEEM SHARES OF ALL CLASSES OF CAPITAL STOCK, AT THEIR THEN FAIR MARKET VALUE, ON A PRO
RATA BASIS, OWNED BY OR FOR THE ACCOUNT OF ALL ALIENS IN ORDER TO REDUCE THE NUMBER OF
SHARES AND/OR PERCENTAGE OF VOTING POWER HELD BY OR FOR THE ACCOUNT OF ALIENS TO THE
MAXIMUM NUMBER OR PERCENTAGE ALLOWED UNDER THE RESTATED ARTICLES OF INCORPORATION, AS
AMENDED, OR AS OTHERWISE REQUIRED BY APPLICABLE FEDERAL LAW. AS USED HEREIN, ALIENS MEANS
ALIENS AND THEIR REPRESENTATIVES, FOREIGN GOVERNMENTS AND THEIR REPRESENTATIVES, AND
CORPORATIONS ORGANIZED UNDER THE LAW OF A FOREIGN COUNTRY, AND THEIR REPRESENTATIVES. THE
COMPANY WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF
THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF THE SHARES OF EACH CLASS
OR SERIES AUTHORIZED TO BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND THE AUTHORITY OF
THE BOARD TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES OR SERIES.
6,000,000 Warrants
Date of Issuance: February 25, 2009
COMMON STOCK PURCHASE WARRANTS
Exercisable commencing February 25, 2009
Void after Expiration Time (as defined herein)
ValueVision Media, Inc., a Minnesota corporation (the
Company
), hereby certifies
that, for value received, GE Capital Equity Investments, Inc., a Delaware corporation (the
Initial Holder
or
GE
), or registered assigns (in either case, the
Warrantholder
), is the owner of 6,000,000 Warrants (as defined below), each of which
entitles the Warrantholder to purchase from the Company one fully paid, duly authorized and
nonassessable share of Common Stock, par value $0.01 per share, of the Company (the
Common
Stock
) at any time or from time to time subject to the terms set forth herein, commencing on
February 25, 2009 (the
Issue Date
) and continuing up to the Expiration Time (as defined
herein) at a per share exercise price determined according to the terms and subject to the
conditions set forth in this certificate (the
Warrant Certificate
). The number of shares
of Common Stock issuable upon exercise of each such Warrant and the exercise price per share of
Common Stock are subject to adjustment from time to time pursuant to the provisions of Sections 8
and 9 of this Warrant Certificate. The Warrants evidenced by this Warrant Certificate (the
Warrants
) are being issued pursuant to an Exchange Agreement, dated as of February 25,
2009 (as it may be amended, supplemented or otherwise modified from time to time, the
Exchange
Agreement
), by and between the Company, NBC and the Initial Holder.
Section 1.
Definitions
. As used in this Warrant Certificate, the following terms
shall have the meanings set forth below:
Additional Warrants
shall have the meaning set forth in the Distribution
Agreement.
2
Affiliate
shall mean, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control with, such
Person. As used in this definition, control (including its correlative meanings,
controlled by and under common control with) shall mean the possession, directly or
indirectly, of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by contract or
otherwise).
Articles of Incorporation
shall mean the Restated Articles of Incorporation
of the Company, as amended, as further amended from time to time.
Beneficially Own
shall have the meaning set forth in Rule 13d-3 under the
Exchange Act, except that a Person shall be deemed to Beneficially Own all securities that
such Person has a right to acquire, whether such right is exercisable immediately or only
after the passage of time (and without any additional condition),
provided
that a
Person shall not be deemed to Beneficially Own any shares of Common Stock which are
issuable upon exercise of any Additional Warrants unless and until such Additional Warrants
are actually issued and outstanding (at which time such Person shall be deemed to
Beneficially Own all shares of Common Stock which are issuable upon exercise of such
Additional Warrants, whether or not they are vested or unvested).
Board of Directors
shall mean the board of directors of the Company.
Business Day
shall mean any day, other than a Saturday, Sunday or a day on
which commercial banks in New York, New York are authorized or obligated by law or executive
order to close.
Certificate of Designation
shall mean the Certificate of Designation of the
Preferred Stock, to be executed and filed with the Secretary of State of the State of Minnesota on
or prior to February 25, 2009.
Common Stock
shall have the meaning set forth in the preamble hereto.
Company
shall have the meaning set forth in the preamble hereto.
Designated Entity
shall mean HSN, Inc., QVC, Inc., Ion Media Networks, Inc.,
and Americas Collectibles Network, Inc. (a/k/a Jewelry Television or JTV) and any of their
respective Affiliates.
Distribution Agreement
means that certain Distribution and Marketing
Agreement, dated as of March 8, 1999, between the Company and NBC, as amended from time to
time.
3
Election to Exercise
shall have the meaning set forth in Section 4.2(a)
hereof.
Equity Securities
shall mean, with respect to any Person, any and all common
stock, preferred stock, any other class of capital stock and partnership or limited
liability company interests of such Person or any other similar interests of any Person that
is not a corporation, partnership or limited liability company.
Exchange Act
shall mean the Securities Exchange act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exercise Price
shall have the meaning set forth in Section 8 hereof.
Exchange Agreement
shall have the meaning set forth in the preamble hereto.
Expiration Date
shall mean with respect to any Warrant represented hereunder,
the tenth anniversary of the Issue Date.
Expiration Time
shall mean 5:00 P.M., New York City time, on the Expiration
Date.
Expired
shall mean, with respect to a Warrant issued hereunder, that such
Warrant has not been exercised prior to the Expiration Date for such Warrant.
Fractional Warrant Share
shall mean any fraction of a whole share of Common
Stock issued, or issuable upon, exercise of the Warrants.
GE
shall have the meaning set forth in the preamble hereto.
Governmental Entity
shall mean any federal, state or local government or any
court, administrative agency or commission or other governmental authority or agency,
domestic or foreign.
Independent Expert
shall mean an investment banking firm mutually acceptable
to the Company and the Warrantholder.
Initial Holder
shall have the meaning set forth in the preamble hereto.
Issue Date
shall have the meaning set forth in the preamble hereto.
Market Price
shall mean, with respect to a share of Common Stock on any day,
except as set forth below in the case that the shares of Common Stock are not publicly held
or listed, the average of the quoted prices of the Common Stock for 30 consecutive Trading
Days commencing 45 Trading Days before the date in
4
question. The term quoted prices of
the Common Stock shall mean the last reported sale price on that day or, in case no such
reported sale takes place on such day, the average of the last reported bid and asked
prices, regular way, on that day, in either case, as reported in the consolidated
transaction reporting system with respect to securities listed on Nasdaq or, if the shares
of Common Stock are not listed on Nasdaq, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted to trading
or, if the shares of Common Stock are not listed on Nasdaq and not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices on such other nationally recognized quotation
system then in use, or, if on any such day the shares of Common Stock are not quoted on any
such quotation system, the average of the closing bid and asked prices as furnished by a
professional market maker selected by the Board of Directors making a market in the shares
of Common Stock. Notwithstanding the foregoing, if the shares of Common Stock are not
publicly held or so listed, quoted or publicly traded, the Market Price means the fair
market value of a share of Common Stock, as determined in good faith by the Board of
Directors;
provided
,
however
, that if the Warrantholder shall dispute the
fair market value as determined by the Board, the Warrantholder and the Company shall retain
an Independent Expert. The determination of fair market value by the Independent Expert
shall be final, binding and conclusive on the Company and the Warrantholder. All costs and
expenses of the Independent Expert shall be borne by the Warrantholder unless the
determination of fair market value is more favorable to such Warrantholder by 5% or more, in
which case, all such costs and expenses shall be borne by the Company.
Nasdaq
shall mean The Nasdaq Stock Markets Global Market.
NBC
shall mean NBC Universal, Inc., a Delaware corporation.
Organic Change
shall mean, with respect to any Person, any transaction
(including without limitation any recapitalization, capital reorganization or
reclassification of any class or series of Equity Securities, any consolidation of such
Person with, or merger of such Person into, any other Person, any merger of another Person
into such Person (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of capital stock of such Person),
and any sale or transfer or lease of all or substantially all of the assets of such Person,
but not including any stock split, combination or subdivision which is the subject of
Section 9.1(b)) pursuant to which any entire class or series of Equity Securities of such
Person is exchanged for, or converted into the right to receive other securities, cash or
other property.
Person
shall mean any individual, firm, corporation, company, limited
liability company, association, partnership, joint venture, trust or unincorporated
organization, or a government or any agency or political subdivision thereof.
5
Preferred Stock
shall mean the Series B Redeemable Preferred Stock, par value
$0.01 per share, of the Company.
Record Date
shall have the meaning set forth in Section 9.1(a) hereof.
Reference Date
shall have the meaning set forth in Section 9.1(c) hereof.
Registration Rights Agreement
shall mean the amended and restated
registration rights agreement, dated as of February 25, 2009, among GE, NBC and the
Company.
Restricted Parties
shall mean each of (i) NBC, its Ultimate Parent Entity (if
any), each Subsidiary of NBC and each Subsidiary of its Ultimate Parent Entity, (ii) GE, its
Ultimate Parent Entity (if any), each Subsidiary of GE and each Subsidiary of its Ultimate
Parent Entity and (iii) any Affiliate of any Person that is a Restricted Party if (and only
if) such Restricted Party has the right or power (acting alone or solely with other
Restricted Parties) to either cause such Affiliate to comply with or prevent such Affiliate
from not complying with all of the terms of this Agreement that are applicable to Restricted
Parties.
Securities Act
shall mean the U.S. Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Shareholder Agreement
shall mean the Amended and Restated Shareholder
Agreement, dated as of February 25, 2009, among GE, NBC and the Company, as hereafter
amended, restated or supplemented from time to time.
Subsidiary
shall mean, as to any Person, a corporation, partnership, limited
liability company, joint venture or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or other entity
are at the time owned, directly or indirectly through one or more intermediaries (including,
without limitation, other Subsidiaries), or both, by such Person.
Trading Day
shall mean any day on which Nasdaq is open for trading, or if the
shares of Common Stock are not listed on Nasdaq, any day on which the principal national
securities exchange or national quotation system on which the shares of Common Stock are
listed, admitted to trading or quoted is open for trading, or if the shares of Common Stock
are not so listed, admitted to trading or quoted, any Business Day.
6
Ultimate Parent Entity
shall mean, with respect to any Person (the
Subject Person
), the Person (if any) that (i) owns, directly or indirectly through
one or more intermediaries, or both, shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of the Subject Person and (ii) is not itself a Subsidiary of any
other Person or is a natural person.
Warrant
shall have the meaning set forth in the preamble hereto.
Warrant Certificate
shall have the meaning set forth in the preamble hereto.
Warrant Register
shall have meaning set forth in Section 2.2 hereof.
Warrant Shares
shall mean the shares of Common Stock issued, or issuable
upon, exercise of the Warrants.
Warrantholder
shall have the meaning set forth in the preamble hereto.
Section 2.
Transferability.
2.1
Registration
. The Warrants shall be issued only in registered form. The Company
agrees to maintain, at its office or agency, books for the registration and transfer of the
Warrants.
2.2
Transfer
. Subject to the terms and conditions of the Shareholder Agreement, the
Warrants evidenced by this Warrant Certificate may be sold or otherwise transferred at any time
(except as such sale or transfer may be restricted pursuant to the regulations of the Federal
Communications Commission, the Securities Act or any applicable state securities laws) with the
prior written consent of the Company, which consent shall not be unreasonably withheld;
provided
,
however
, that the consent of the Company shall not be deemed to have been
unreasonably withheld if the Company does not approve a transfer of such Warrants to any Designated
Entity. Any such sale or transfer shall be effected on the books of the Company (the
Warrant
Register
) maintained at its principal executive offices upon surrender of this Warrant
Certificate for registration of transfer duly endorsed by the Warrantholder or by its duly
authorized attorney or representative, or accompanied by proper evidence of succession, assignment
or authority to transfer. Upon any registration of transfer, the Company shall execute and deliver
a new Warrant Certificate or Certificates in appropriate denominations to the Person or Persons
entitled thereto.
Section 3.
Exchange of Warrant Certificate
.
7
Any Warrant Certificate may be exchanged for another certificate or certificates of like tenor
entitling the Warrantholder to purchase a like aggregate number of Warrant Shares as the
certificate or certificates surrendered then entitles such Warrantholder to purchase. Any
Warrantholder desiring to exchange a Warrant Certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the certificate evidencing the
Warrant to be so exchanged. Thereupon, the Company shall execute and deliver to the Person
entitled thereto a new Warrant Certificate or Certificates as so requested.
Section 4.
Term of Warrants; Exercise of Warrants
.
4.1
Vesting and Duration of Warrants
. Subject to the terms and conditions set forth
in this Warrant Certificate and the Shareholder Agreement, the Warrantholder may exercise the
Warrants evidenced hereby, in whole or in part, at any time and from time to time after the Issue
Date and before the Expiration Time of such Warrants. Any Warrant not exercised by the Expiration
Time applicable to such Warrant shall become void, and all rights hereunder with respect to such
Warrant shall thereupon cease.
4.2
Exercise of Warrant
.
(a) On the terms and subject to the conditions set forth in this Warrant Certificate and the
Shareholder Agreement, the Warrantholder may exercise the Warrants evidenced hereby, in whole or in
part, by presentation and surrender to the Company of this Warrant Certificate together with the
attached Election to Exercise (the
Election to Exercise
) duly filled in and signed, and
accompanied by payment to the Company of the Exercise Price for the number of Warrant Shares
specified in such Election to Exercise. Payment of the aggregate Exercise Price (including payment
made pursuant to a purchase under Section 9.3(a) hereof) shall be made (i) in cash in an amount
equal to the aggregate Exercise Price; (ii) by certified or official bank check in an amount equal
to the aggregate Exercise Price; (iii) by the surrender (which surrender shall be evidenced by
cancellation of the number of Warrants represented by any Warrant certificate presented in
connection with a Cashless Exercise (as defined below)) of a Warrant or Warrants (represented by
one or more relevant Warrant certificates), and without the payment of the Exercise Price in cash,
in return for the delivery to the surrendering holder of such number of shares of Common Stock
equal to the number of shares of Common Stock for which such Warrant is exercisable as of the date
of exercise (if the Exercise Price were being paid in cash or certified or official bank check)
reduced by that number of shares of Common Stock equal to the quotient obtained by dividing (x) the
aggregate Exercise Price to be paid by (y) the Market Price of one share of Common Stock on the
Business Day which next precedes the day of exercise of the Warrant or (iv) by any combination of
the foregoing. An exercise of a Warrant in accordance with clause (iii) is herein referred to as a
Cashless Exercise
.
(b) On the terms and subject to the conditions set forth in this Warrant Certificate, upon
such presentation of a duly executed Election to Exercise and surrender of this Warrant Certificate
and payment of such aggregate Exercise Price as set forth in
8
paragraph (a) hereof, the Company
shall promptly issue and cause to be delivered to the Warrantholder, or, subject to Section 2
hereunder, to such Persons as the Warrantholder may designate in writing, a certificate or
certificates (in such name or names as the Warrantholder may designate in writing) for the
specified number of duly authorized, fully paid and non-assessable Warrant Shares issuable upon
exercise, and shall deliver to the Warrantholder cash, as provided in Section 10 hereof, with
respect to any Fractional Warrant Shares otherwise issuable upon such surrender. In the event that
the Warrants evidenced by this Warrant Certificate are exercised in part prior to the Expiration
Time applicable to such Warrants, the Company shall issue and cause to be delivered to the
Warrantholder, or, subject to Section 2 hereunder, to such Persons as the Warrantholder may
designate in writing, a certificate or certificates (in such name or names as the Warrantholder may
designate in writing) evidencing any remaining unexercised and un-Expired Warrants.
(c) Each Person in whose name any certificate for Warrant Shares is issued shall for all
purposes be deemed to have become the holder of record of the Warrant Shares represented thereby on
the first date on which both the Warrant Certificate evidencing the respective Warrants was
surrendered, along with a duly executed Election to Exercise, and payment of the Exercise Price and
any applicable taxes was made, irrespective of date of issue or delivery of such certificate.
4.3
Conditions to Exercise
. Each exercise of the Warrants shall be subject to the
following conditions:
(a) Such exercise shall be consistent with the terms of Section 4.2 hereof;
(b) The purchase of the Warrant Shares issuable upon such exercise shall not be
prohibited under applicable law; and
(c) If in the opinion of counsel to the Company, the exercise would require consent of
the Federal Communications Commission, the receipt of such consent prior to the exercise.
Section 5.
Payment of Taxes
.
The Company shall pay any and all documentary, stamp or similar issue or transfer taxes and
other governmental charges that may be imposed under the laws of the United States or any political
subdivision or taxing authority thereof or therein in respect of any issue or delivery of Warrant
Shares or of other securities or property deliverable upon exercise of the Warrants evidenced by
this Warrant Certificate or certificates representing such shares or securities (other than income
or withholding taxes imposed on the Warrantholder);
provided
,
however
, that the
Company shall not be required to pay any tax or taxes which may be payable with respect to any
transfer involving the issue of any Warrant Certificate or any certificates for Warrant Shares in a
name other than that of the registered holders thereof, and the Company shall not be required to
issue or deliver such Warrant Certificate or certificates for Warrant Shares unless and until the
person or persons
9
requesting the issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax has been paid.
Section 6.
Mutilated or Missing Warrant
.
If any Warrant Certificate is lost, stolen, mutilated or destroyed, the Company shall issue in
exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in
lieu of and substitution for the Warrant Certificate lost, stolen or destroyed, upon receipt of a
proper affidavit or other evidence reasonably satisfactory to the Company (and surrender of any
mutilated Warrant Certificate) and indemnity in form and amount reasonably satisfactory to the
Company in each instance protecting the Company, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants as the Warrant Certificate so lost, stolen, mutilated
or destroyed. Any such new Warrant Certificate shall constitute an original contractual obligation
of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate shall be at any time enforceable by anyone. An applicant for such substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe. All Warrant Certificates shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to the replacement of
lost, stolen, mutilated or destroyed Warrant Certificates, and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement of negotiable instruments or other securities without their
surrender.
Section 7.
Reservation of Shares
.
The Company hereby agrees that, at all times until all of the Warrants issued hereunder have
been exercised, Expired or canceled, there shall be reserved for issuance and delivery upon
exercise of this Warrant, free from preemptive rights, the number of shares of authorized but
unissued shares of Common Stock as may be required at such time (adjusted from time to time for
cancellation of exercised or Expired Warrants) for issuance or delivery upon exercise of the
Warrants evidenced by this Warrant Certificate. The Company further agrees that it will not, by
amendment of its Articles of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance
or performance of any of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company. Without limiting the generality of the foregoing, the Company shall from
time to time take all such action that may be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock at the Exercise Price as so
adjusted.
10
Section 8.
Exercise Price
.
The price per share (the
Exercise Price
) at which Warrant Shares shall be
purchasable upon the exercise of the Warrants evidenced by this Warrant Certificate shall be $0.75,
subject to adjustment pursuant to Section 9 hereof.
Section 9.
Adjustment of Exercise Price and Number of Shares
.
The number and kind of securities purchasable upon the exercise of the Warrants evidenced by
this Warrant Certificate and the Exercise Price thereof shall be subject to adjustment from time to
time after the date hereof upon the happening of certain events, as follows:
9.1
Adjustments to Exercise Price
. The Exercise Price shall be subject to adjustment
as follows:
(a)
Stock Dividends
. In case the Company shall, after the Issue Date, pay a
dividend or make a distribution on its Common Stock or on any other class or series of
capital stock of the Company which dividend or distribution includes or is convertible
(without the payment of any consideration other than surrender of such convertible security)
into Common Stock, the Exercise Price in effect at the opening of business on the day
following the date fixed for determination of the holders of Common Stock or capital stock
entitled to such payment or distribution (the
Record Date
) shall be reduced by
multiplying such Exercise Price by a fraction of which (A) the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the Record Date and (B)
the denominator shall be the sum of such number of shares and the total number of shares
constituting or included in such dividend or other distribution (or in the case of a
dividend consisting of securities convertible into Common Stock, the number of shares of
Common Stock into which such securities are convertible), such reduction to become effective
immediately after the opening of business on the day following the Record Date;
provided
,
however
, that if any such dividend or distribution is rescinded
and not paid, then the Exercise Price shall, as of the date when it is determined that such
dividend or distribution will be rescinded, revert back to the Exercise Price in effect
prior to the adjustment made pursuant to this paragraph.
(b)
Stock Splits and Reverse Splits
. In case the Common Stock shall be
subdivided into a greater number of shares of Common Stock or combined into a smaller number
of shares of Common Stock, the Exercise Price in effect at the opening of business on the
day following the day upon which such subdivision or combination becomes effective shall be
adjusted so that the holder of any Warrants thereafter surrendered for purchase of shares of
Common Stock shall be entitled to receive the number of shares of Common Stock which such
holder would have owned or been entitled to receive after the happening of such events had
such Warrants been
11
surrendered for exercise immediately prior to such event. Such
adjustment shall become effective at the close of business on the day upon which such
subdivision or combination becomes effective.
(c)
Special Dividends
. Subject to the last sentence of this paragraph (c), in
case the Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock evidences of its indebtedness, shares of any class or series of capital stock, cash or
assets (including securities, but excluding any shares of Common Stock, rights, warrants,
options or convertible securities for which an appropriate and full adjustment has been made
pursuant to paragraph (a) above), the Exercise Price in effect on the day immediately
preceding the date fixed for the payment of such distribution (the date fixed for payment
being referred to as the
Reference Date
) shall be reduced by multiplying such
Exercise Price by a fraction of which (A) the numerator shall be the current Market Price
per share of the Common Stock on the Reference Date less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be mailed to
the holders of the Warrants) on the Reference Date of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable to one
share of Common Stock, and (B) the denominator shall be such current Market Price per share
of the Common Stock, such reduction to become effective immediately prior to the opening of
business on the day following the Reference Date;
provided
,
however
, that if
such dividend or distribution is rescinded and not paid, then the Exercise Price shall, as
of the date when it is determined that such dividend or distribution will be rescinded,
revert back to the Exercise Price in effect prior to the adjustment made pursuant to this
paragraph. If the Board of Directors determines the fair market value of any distribution
for purposes of this paragraph (c) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider, to the extent
possible, the prices in such market over the same period used in computing the current
Market Price per share of Common Stock pursuant to this Section 9.1. Notwithstanding the
foregoing, if the holders of a majority of the outstanding unexercised and un-Expired
Warrants shall dispute the fair market determination of the Board of Directors, an
Independent Expert shall be selected to determine the fair market value of the Common Stock
as of the Reference Date, and such Independent Experts determination shall be final,
binding and conclusive. All costs and expenses of such Independent Expert shall be borne by
the holders of the then outstanding unexercised and un-Expired Warrants unless the
determination of fair market value is more favorable to such holders by 5% or more, in which
case, all such costs and expenses shall be borne by the Company. For purposes of this
paragraph (c), any dividend or distribution that also includes shares of Common Stock or
rights, warrants or options to subscribe for or purchase shares of Common Stock shall be
deemed to be (1) a dividend or distribution of the evidences of indebtedness, cash, assets
or shares of capital stock other than such shares of Common Stock or rights, warrants,
options or
12
convertible securities (making any Exercise Price reduction required by this
subparagraph (c)) immediately followed by (2) a dividend or distribution of such shares of
Common Stock or such rights, warrants, options or convertible securities (making any further
Exercise Price reduction required by subparagraph (a) of this Section 9.1), except (A) the
Reference Date of such dividend or distribution as defined in this subparagraph (c) shall be
substituted as the date fixed for the determination of shareholders entitled to receive
such dividend or other distribution within the meaning of subparagraph (a) of this Section
9.1 and (B) any shares of Common Stock included in such dividend or distribution shall not
be deemed outstanding at the close of business on the date fixed for such determination
within the meaning of subparagraph (a) of this Section 9.1).
(d)
Minimum Adjustment Requirement
. No adjustment shall be required unless
such adjustment would result in an increase or decrease of at least 1% in the Exercise Price
then subject to adjustment; provided, however, that any adjustments that are not made by
reason of this Section 9.1(d) shall be carried forward and taken into account in any
subsequent adjustment. In case the Company shall at any time issue shares of Common Stock
by way of dividend on any stock of the Company or subdivide or combine the outstanding
shares of Common Stock, said 1% specified in the preceding sentence (as theretofore
increased or decreased, if said amount shall have been adjusted in accordance with the
provisions of this Section 9.1(d)) shall forthwith be proportionately increased in the case
of such a combination or decreased in the case of such a subdivision or stock dividend so as
appropriately to reflect the same. No adjustment to the Exercise Price shall be required if
the holders of the outstanding unexercised Warrants receive the dividend or distribution
giving rise to such adjustment in respect of each such Warrant.
(e)
Calculations
. All calculations under this Section 9.1 shall be made to the
nearest $0.01.
(f)
Other Reductions in Exercise Price
. The Company from time to time may
reduce the Exercise Price by any amount for any period of time if the period is at least 20
days, the reduction is irrevocable during the period, subject to any conditions that the
Board of Directors may deem relevant, and the Board of Directors of the Company shall have
made a determination that such reduction would be in the best interest of the Company, which
determination shall be conclusive. Whenever the Exercise Price is reduced pursuant to the
preceding sentence, the Company shall mail to the Warrantholder a notice of the reduction at
least fifteen days prior to the date the reduced Exercise Price takes effect, and such
notice shall state the reduced Exercise Price and the period it will be in effect. If the
Company shall take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or other distribution, and shall thereafter and before the
distribution to shareholders thereof legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment in the number of shares of Common
Stock issuable upon exercise granted by this Section 9.1 or in the Exercise Price then in
effect shall be required by reason of the taking of such record.
13
(g)
Exercise between Record and Payment Date
. Anything in this Section 9.1 to
the contrary notwithstanding, in the event that a record date is established for a dividend
or distribution that gives rise to an adjustment to the Exercise Price pursuant to this
Section 9.1, if any Warrant is exercised to purchase shares of Common Stock between such
record date and the date such dividend or distribution is paid then (x) the number of shares
of Common Stock issued at the time of such exercise will be determined by reference to the
Exercise Price as in effect without taking into account the adjustment resulting from such
dividend or distribution and (y) on the date that such dividend or distribution is actually
paid there shall be issued in respect of such exercise such number of additional shares of
Common Stock as is necessary to reflect the Exercise Price in effect after taking into
account the adjustment resulting from the dividend or distribution.
(h)
Certificate
. Whenever an adjustment in the Exercise Price is made as
required or permitted by the provisions of this Section 9.1, the Company shall promptly
prepare a certificate of its chief financial officer setting forth (A) the adjusted Exercise
Price as provided in this Section 9.1 and a brief statement of the facts requiring such
adjustment and the computation thereof and (B) the number of shares of Common Stock (or
portions thereof) purchasable upon exercise of a Warrant after such adjustment in the
Exercise Price in accordance with Section 9.2 hereof and the record date therefor, and
promptly after the preparation of such certificate shall mail or cause to be mailed a notice
of such adjustment to each Warrantholder at his or her last address as the same appears on
the Warrant Register. Such certificate, in the absence of manifest error, shall be
conclusive and final evidence of the correctness of such adjustment. The Company shall be
entitled to rely upon such certificate, and shall be under no duty or responsibility with
respect to any such certificate except to exhibit the same to any Warrantholder desiring
inspection thereof.
(i)
Notice
. In case:
(i) the Company shall declare any dividend or any distribution of any kind or
character (whether in cash, securities or other property) on or in respect of shares of
Common Stock or to the shareholders of the Company (in their capacity as such), excluding a
dividend payable in shares of Common Stock or any regular periodic cash dividend paid out of
current or retained earnings (as such terms are used in generally accepted accounting
principles); or
(ii) the Company shall authorize the granting to the holders of shares of Common Stock
of rights to subscribe for or purchase any shares of capital stock or of any other right; or
(iii) of any reclassification of shares of Common Stock (other than a subdivision or
combination of outstanding shares of Common Stock or a change in par value, or from par
value to no par value, or from no par value to par value), or of any consolidation or merger
to which the Company is a party and for which approval
14
of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets of the
Company; or
(iv) of the voluntary or involuntary dissolution, liquidation or winding up of the
Company;
then the Company shall cause to be mailed to each Warrantholder, at its last address as it
shall appear upon the Warrant Register, at least 10 days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or, if a record is not to be taken, the
date as of which the holders of shares of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding
up is expected to become effective, and, if applicable, the date as of which it is expected
that holders of shares of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities or other property (including cash) deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding
up. Failure to give any such notice, or any defect therein, shall not affect the validity
of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
(j)
Section 305
. Anything in this Section 9.1 to the contrary notwithstanding,
the Company shall be entitled, but not required, to make such reductions in the Exercise
Price, in addition to those required by this Section 9.1, as it in its discretion shall
determine to be advisable, including, without limitation, in order that any dividend in or
distribution of shares of Common Stock or shares of capital stock of any class other than
Common Stock, subdivision, reclassification or combination of shares of Common Stock,
issuance of rights or warrants, or any other transaction having a similar effect, shall not
be treated as a distribution of property by the Company to its shareholders under Section
305 of the Internal Revenue Code of 1986, as amended, or any successor provision and shall
not be taxable to them.
9.2
Adjustments to Number of Warrant Shares
.
Upon each adjustment of the Exercise Price pursuant to Section 9.1 hereof, the number of
Warrant Shares purchasable upon exercise of a Warrant outstanding prior to the effectiveness of
such adjustment shall be adjusted to the number, calculated to the nearest one-hundredth of a
share, obtained by (x) multiplying the number of Warrant Shares purchasable immediately prior to
such adjustment upon the exercise of a Warrant by the Exercise Price in effect prior to such
adjustment and (y) dividing the product so obtained by the Exercise Price in effect after such
adjustment of the Exercise Price.
15
9.3
Organic Change
.
(a)
Company Survives
. Upon the consummation of an Organic Change (other than a
transaction in which the Company is not the surviving entity), lawful provision shall be made as
part of the terms of such transaction whereby the terms of the Warrant Certificates shall be
modified, without payment of any additional consideration therefor, so as to provide that upon
exercise of Warrants following the consummation of such Organic Change, the Warrantholder shall
have the exclusive right to purchase for the Exercise Price the kind and amount of securities, cash
and other property receivable upon such Organic Change by a holder of the number of Warrant Shares
into which such Warrants might have been exercised immediately prior to such Organic Change.
Lawful provision also shall be made as part of the terms of the Organic Change so that all other
terms of the Warrant Certificates shall remain in full force and effect following such an Organic
Change. The provisions of this Section 9.3(a) shall similarly apply to successive Organic Changes.
(b)
Company Does Not Survive
. The Company shall not enter into an Organic Change that
is a transaction in which the Company is not the surviving entity unless lawful provision shall be
made as part of the terms of such transaction whereby the surviving entity shall issue new
securities to each Warrantholder, without payment of any additional consideration therefor, with
terms that provide that upon the exercise of the Warrants, the Warrantholder shall have the
exclusive right to purchase the kind and amount of securities, cash and other property receivable
upon such Organic Change by a holder of the number of Warrant Shares into which such Warrants might
have been exercised immediately prior to such Organic Change.
9.4
Statement on Warrants
. The form of Warrant Certificate need not be changed
because of any adjustment made pursuant to Section 8, Section 9.1 or Section 9.2 hereof, and
Warrants issued after such adjustment may state the same Exercise Price and the same number of
Warrant Shares as are stated in this Warrant Certificate.
Section 10.
Fractional Interests
.
The Company shall not be required to issue Fractional Warrant Shares on the exercise of the
Warrants evidenced by this Warrant Certificate. If Fractional Warrant Shares totaling more than
one Warrant Share in the aggregate are presented for exercise at the same time by the
Warrantholder, the number of full Warrant Shares which shall be issuable upon exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares so purchasable upon the
exercise of the Warrants so presented. If any Fractional Warrant Share would but for the
provisions of this Section 10 be issuable on the exercise of this Warrant (or specified portions
thereof), the Company shall pay an amount in cash equal to the fraction of a Warrant Share
represented by such Fractional Warrant Share multiplied by the Market Price on the day of such
exercise.
16
Section 11.
No Rights as Shareholder
.
Nothing in this Warrant Certificate shall be construed as conferring upon the Warrantholder or
its transferees any rights as a shareholder of the Company, including the right to vote, receive
dividends, consent or receive notices as a shareholder with respect to any meeting of shareholders
for the election of directors of the Company or any other matter.
Section 12.
Cooperation; Validity of Warrant
.
The Company shall use its reasonable best efforts to obtain all such authorizations,
exemptions or consents from any Governmental Entity having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant. In addition, upon the request
of Warrantholder, the Company will at any time during the period this Warrant is outstanding
acknowledge in writing, in form satisfactory to Warrantholder, the continuing validity of this
Warrant and the obligations of the Company hereunder.
Section 13.
Listing on Nasdaq or Securities Exchange
.
The Company shall list any shares of Common Stock issuable upon exercise of the Warrants
evidenced by this Warrant Certificate in accordance with and as required by Section 5(l) of the
Registration Rights Agreement.
Section 14.
Covenant Regarding Consent
.
The Company hereby covenants to use its reasonable best efforts upon the request of the
Warrantholder to seek any waivers or consents, or to take any other action required, to effectuate
the exercise of this Warrant by such Warrantholder.
Section 15.
Limitation on Liability
.
No provision hereof, in the absence of action by the Warrantholder to receive shares of Common
Stock, and no enumeration herein of the rights or privileges of the Warrantholder, shall give rise
to any liability of the Warrantholder for any value subsequently assigned to the Common Stock or as
a shareholder of the Company, whether such liability is asserted by the Company or by creditors of
the Company.
17
Section 16.
Nonwaiver and Expenses
.
No course of dealing or any delay or failure to exercise any right hereunder on the part of
the Warrantholder or the Company shall operate as a waiver of such right or otherwise prejudice the
Warrantholders, or the Companys, as the case may be, rights, powers or remedies.
Section 17.
Amendment
.
This Warrant and all other Warrants issued hereunder may be modified or amended or the
provisions hereof waived with the written consent of the Company and holders of Warrants
exercisable for in excess of 50% of the aggregate number of shares of Common Stock then receivable
upon exercise of all Warrants whether or not then exercisable;
provided
that no such
Warrant may be modified or amended in a manner which is materially adverse to the Initial Holder or
any of its successors or assigns, so long as such Person holds any Warrants or Warrant Shares,
without the prior written consent of such Person.
Section 18.
Successors
.
All the covenants and provisions of this Warrant Certificate by or for the benefit of the
Company or the Warrantholder shall bind and inure to the benefit of their respective successors and
permitted assigns hereunder.
18
Section 19.
Governing Law; Choice of Forum, Etc.
The validity, construction and performance of this Warrant Certificate shall be governed by
and interpreted in accordance with, the laws of New York. The parties hereto agree that the
appropriate forum for any disputes arising out of this Warrant Certificate solely between or among
any or all of the Company, on the one hand, and the Initial Holder and/or any Person who has become
a Warrantholder, on the other, shall be any state or U.S. federal court sitting within the County
of New York, New York or County of Hennepin, Minnesota, and the parties hereto irrevocably consent
to the jurisdiction of such courts, and agree to comply with all requirements necessary to give
such courts jurisdiction. The parties hereto further agree that the parties will not bring suit
with respect to any disputes, except as expressly set forth below, arising out of this Warrant
Certificate for the execution or enforcement of judgment, in any jurisdiction other than the above
specified courts. Each of the parties hereto irrevocably consents to the service of process in any
action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, if to (i) the Company, at ValueVision Media, Inc., 6740 Shady Oak Road, Eden
Prairie, MN 55344-3433, Attention: General Counsel, Fax: (612) 943-6111, or at such other address
specified by the Company in writing to the other parties, with a copy to Faegre & Benson LLP, 2200
Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, Attention: Peter J.
Ekberg, Fax: (612) 766-1600 and (ii) any Warrantholder, at the address of such Warrantholder
specified in the Warrant Register. The foregoing shall not limit the rights of any party hereto to
serve process in an other manner permitted by the law or to obtain execution of judgment in any
other jurisdiction. The parties further agree, to the extent permitted by law, that final and
unappealable judgment against any of them in any action or proceeding contemplated above shall be
conclusive and may be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the
fact and the amount of indebtedness. THE PARTIES AGREE TO WAIVE ANY AND ALL RIGHTS THAT THEY MAY
HAVE TO A JURY TRIAL WITH RESPECT TO DISPUTES ARISING OUT OF THIS AGREEMENT.
Section 20.
Enforcement
.
The parties agree that irreparable damage would occur in the event that any of the provisions
of this Warrant were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Warrant and to enforce specifically the terms and
provisions of this Warrant.
19
Section 21.
Benefits of this Agreement
.
Nothing in this Warrant Certificate shall be construed to give to any Person other than the
Company and the Warrantholder any legal or equitable right, remedy or claim under this Warrant
Certificate, and this Warrant Certificate shall be for the sole and exclusive benefit of the
Company and the Warrantholder.
[Signature page follows]
20
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the date
first written above.
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VALUEVISION MEDIA, INC.
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By:
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/s/ Nathan E. Fagre
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Name:
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Nathan E. Fagre
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Title:
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Senior Vice President, General
Counsel and Secretary
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ELECTION TO EXERCISE
(To be executed upon exercise of Warrants)
To ValueVision Media, Inc.:
The undersigned hereby irrevocably elects to exercise the right represented by the within
Warrant Certificate for, and to acquire
thereunder, ___ Warrant Shares, as provided for therein,
and tenders herewith [payment of] [pursuant to a Cashless Exercise of securities with a value
equal to] the $___ Exercise Price in full in the form of [COMPLETE WHERE APPLICABLE]:
[ ] cash or a certified or official bank check in the amount of $
;
and/or
[ ]exchange of
Warrants for
Warrant Shares
For a total Exercise Price of $
.
If the value of the shares of the Company securities exchanged herewith exceeds the value of the
Exercise Price applied to such delivery, then the Company shall reissue certificates representing
such securities in the amounts necessary to preserve the value of such securities not applied to
the exercise of the Warrants pursuant to this Election to Exercise.
Please issue a certificate or certificates for such Warrant Shares in the name of, and pay
any cash for any Fractional Warrant Shares to (please print name, address and social security or
other identifying number)*:
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Name:
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Address:
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Soc. Sec. #:
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AND, if such number of Warrant Shares shall not be all the shares purchasable under the within
Warrant Certificate, a new Warrant Certificate is to be issued in the name of the undersigned for
the balance remaining of the Warrant Shares purchasable thereunder rounded up to the next higher
whole number of Warrant Shares.
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*
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The Warrant Certificate contains restrictions on the sale and other transfer of the Warrants
evidenced by such Warrant Certificate.
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**
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The above signature must correspond exactly with the name on the face of this Warrant
Certificate or with the name of the assignee appearing in the assignment form below.
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ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Name and Address of Assignee must be Printed or Typewritten)
Warrants to purchase
Warrant Shares of the Company, evidenced by the within Warrant
Certificate hereby irrevocably constituting and appointing
Attorney to transfer
said Warrants on the books of the Company, with full power of substitution in the premises.
Dated:
,
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Signature of Registered Holder*
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Signature Guaranteed:
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Signature of Guarantor
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*
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The above signature must correspond exactly with the name on the face of this Warrant Certificate.
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Exhibit 10.1
Execution Version
EXCHANGE AGREEMENT
By and Between
VALUEVISION MEDIA, INC.
G.E. CAPITAL EQUITY INVESTMENTS, INC.
and
NBC UNIVERSAL, INC.
Dated as of February 25, 2009
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS
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1
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Section 1.01. Definitions
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1
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ARTICLE II EXCHANGE AND ISSUANCE OF SECURITIES
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5
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Section 2.01. Authorization of Issue
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5
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Section 2.02. Exchange of Series A Preferred Stock; Issuance of Warrants; Cash Payment
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5
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Section 2.03. Legend on Series B Preferred Stock and Warrants
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5
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Section 2.04. Registration Rights
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5
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Section 2.05. Shareholder Agreement
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5
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ARTICLE III CLOSING DATE; DELIVERY
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6
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Section 3.01. Closing and Location
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6
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Section 3.02. Delivery
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6
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Section 3.03. Consummation of Closing
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6
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ARTICLE IV REPRESENTATIONS AND WARRANTIES
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6
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Section 4.01. Representations and Warranties of the Company
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6
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Section 4.02. Representations and Warranties of the Purchaser
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12
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Section 4.03. Representations and Warranties of NBC
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13
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ARTICLE V OTHER AGREEMENTS
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14
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Section 5.01. Public Statements
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14
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Section 5.02. Reservation of Shares
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15
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Section 5.03. Further Assurances
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15
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ARTICLE VI CONDITIONS PRECEDENT
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15
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Section 6.01. Conditions of the Purchaser
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15
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Section 6.02. Conditions of the Company
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16
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ARTICLE VII [RESERVED]
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17
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Section 7.01. [RESERVED]
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17
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Section 7.02. [RESERVED]
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17
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ARTICLE VIII MISCELLANEOUS
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17
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Section 8.01. Survival of Representations and Warranties
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17
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Section 8.02. Notices
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17
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Section 8.03. Entire Agreement; Amendment
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19
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Section 8.04. Counterparts
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i
TABLE OF CONTENTS
(continued)
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Page
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Section 8.05. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
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19
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Section 8.06. Public Announcements
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19
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Section 8.07. Fees and Expenses
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19
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Section 8.08. Indemnification by the Company
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19
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Section 8.09. Indemnification by the Purchaser
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20
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Section 8.10. Indemnification by NBC
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21
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Section 8.11. Successors and Assigns
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22
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Section 8.12. Arbitration
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23
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Section 8.13. Specific Performance
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Section 8.14. Headings, Captions and Table of Contents
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ii
SCHEDULES
4.01(b) Capital Stock Obligations of Material Subsidiaries
4.01(c) Conflicts
4.01(d) Consents and Approvals of Company
4.01(e) Common Stock Options and Obligations
4.01(f) SEC Filings; Claims and Liabilities
4.01(g) Tax Matters
4.01(j) FCC Licenses and Applications
4.01(k) Brokers and Finders
4.02(c) Consents and Approvals of GE
4.03(c) Consents and Approvals of NBC
EXHIBITS
A Form of Certificate of Designation
B Form of Registration Rights Agreement
C Form of Shareholder Agreement
iii
THIS EXCHANGE AGREEMENT (this
Agreement
) is made and entered into as of February 25,
2009 by and among ValueVision Media, Inc., a Minnesota corporation (the
Company
), GE
Capital Equity Investments, Inc. (the
Purchaser
), a Delaware corporation, and with
respect to Sections 2.04, 2.05, 4.03, 5.03, 8.10 and Articles I and VIII only, NBC Universal, Inc.,
a Delaware corporation and Affiliate of the Purchaser (
NBC
).
RECITALS
WHEREAS, the Company issued 5,339,500 shares of Series A Redeemable Convertible Preferred
Stock, par value $.01 per share (the
Series A Preferred Stock
), to the Purchaser;
WHEREAS, the Company and the Purchaser have reached an agreement, subject to and on the terms
and conditions set forth in this Agreement, to exchange 5,339,500 shares of Series A Preferred
Stock held by the Purchaser for 4,929,266 shares of a new series of Series B Redeemable Preferred
Stock (the
Series B Preferred Stock
);
WHEREAS, the Company will file with the Secretary of State of the State of Minnesota a
Certificate of Designation relating to the Series B Preferred Stock;
WHEREAS, the Company and the Purchaser have also reached an agreement for the Company to issue
to the Purchaser warrants (the
Warrants
) to purchase up to 6,000,000 shares (subject to
adjustment) of the Companys common stock, par value $0.01 per share (the
Common Stock
),
at an exercise price of $0.75 per share;
WHEREAS, concurrently with issuance of the Series B Preferred Stock and the Warrants, the
Company has agreed to make a cash payment of $3,400,000 (the
Cash Payment
) to the
Purchaser;
NOW, THEREFORE, in consideration of the premises and the representations, warranties and
agreements herein contained and intending to be legally bound hereby, the parties hereby agree as
follows:
ARTICLE
I DEFINITIONS
Section 1.01.
Definitions
. As used in this Agreement, the following terms shall have
the meanings set forth below:
Affiliate shall mean, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, such Person. As used in
this definition, control (including its correlative meanings, controlled by and under common
control with) shall mean the possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise).
Ancillary Documents shall mean the Certificate of Designation, Warrants, Shareholder
Agreement and Registration Rights Agreement.
1
Business Day shall mean any day, other than a Saturday, Sunday or a day on which commercial
banks in New York, New York are authorized or obligated by law or executive order to close.
Cash Payment shall have the meaning set forth in the recitals hereto.
Certificate of Cancellation shall mean the Certificate of Cancellation of the Company
cancelling the Companys Certificate of Designation of Series A Redeemable Convertible Preferred
Stock, to be executed and filed with the Secretary of State of the State of Minnesota on the
Closing Date.
Certificate of Designation shall mean the Certificate of Designation of the Shares of the
Company, to be executed and filed with the Secretary of State of the State of Minnesota on or prior
to the Closing Date, which shall be substantially in the form of Exhibit A hereto.
Closing and Closing Date shall have the meanings set forth in Section 3.01.
Code shall mean the Internal Revenue Code of 1986, as amended.
Common Stock shall have the meaning set forth in the recitals hereto.
Company shall have the meaning set forth in the preamble hereto.
Company Subsidiary shall mean any Subsidiary of the Company.
Contractual Obligation shall mean, as to any Person, any provision of any note, bond or
security issued by such Person, or of any mortgage, indenture, deed of trust, lease, license,
franchise, contract, agreement, instrument or undertaking to which such Person is party or by which
it or any of its property is subject.
Distribution Agreement shall mean the Distribution and Marketing Agreement dated as of March
8, 1999 between the Company and NBC pursuant to which NBC has agreed to distribute certain
programming of the Company.
Exchange shall have the meaning set forth in Section 2.02.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
Excluded Breach shall mean any breach of a representation or warranty hereunder, provided
that (i) the Purchaser had actual knowledge of the event or circumstance constituting such breach
on or prior to the date hereof and (ii) the Purchaser believed, on or prior to the date hereof,
that such circumstance or event constituted a breach of such representation or warranty hereunder.
FCC shall mean the Federal Communications Commission.
2
GAAP shall mean generally accepted accounting principles in the United States of America in
effect from time to time.
Governmental Entity shall mean any nation or government, any state or other political
subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any self-regulating organization,
securities exchange or securities trading system.
IRS shall have the meaning set forth in Section 4.01(g).
Lien shall mean any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other) or security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement or any financing lease having
substantially the same effect as any of the foregoing).
Material Adverse Effect shall mean a material adverse effect on (i) with respect to the
Company, the assets, business condition, results of operations or financial condition of the
Company and the Company Subsidiaries taken as a whole or (ii) with respect to any party, the
ability of such party to timely perform its obligations under this Agreement or any Ancillary
Document to which it is a party.
Material Subsidiaries shall mean those Subsidiaries of the Company that constitute
significant subsidiaries as defined in Rule 1-02 of Regulation S-X under the Securities Act.
MBCA shall mean the Minnesota Business Corporation Act, as amended.
NBC shall have the meaning set forth in the preamble hereto.
Options shall mean stock options to purchase Common Stock (i) issued or issuable under the
Companys 1990 Stock Option Plan, (ii) issued or issuable under the Companys 1994 Executive Stock
Option Plan (whether or not issued) (iii) issued or issuable under the Companys 2001 Omnibus Stock
Option Plan, (iv) issued or issuable under the Companys 2004 Omnibus Stock Option Plan, as amended
and (v) as set forth on Schedule 4.01(e) hereto.
Person shall mean an individual, corporation, unincorporated association, partnership, group
(as defined in Section 13(d)(3) of the Exchange Act), trust, joint stock company, joint venture,
business trust or unincorporated organization, limited liability company, any Governmental Entity
or any other entity of whatever nature.
Purchaser shall have the meaning set forth in the preamble hereto.
Registration Rights Agreement shall mean the amended and restated registration rights
agreement to be executed by the Purchaser, NBC and the Company at the Closing, which shall be
substantially in the form attached as Exhibit B hereto.
3
Requirement of Law shall mean, as to any Person, the certificate of incorporation and
by-laws or other organizational documents of such Person, and any law, statute, order, treaty, rule
or regulation, or judgment, decree, determination or order of any arbitrator, court or other
Governmental Entity, applicable to or binding upon such Person or any of its property.
Restricted Party shall have the meaning set forth in the Shareholder Agreement.
SEC shall mean the United States Securities and Exchange Commission.
SEC Documents shall have the meaning set forth in Section 4.01(f).
Securities shall have the meaning set forth in Section 2.01.
Securities Act shall have the meaning set forth in Section 2.04.
Series A Preferred Stock shall have the meaning set forth in the recitals hereto.
Series B Preferred Stock shall have the meaning set forth in the recitals hereto.
Shares shall have the meaning set forth in Section 2.01.
Shareholder Agreement shall mean the Amended and Restated Shareholder Agreement, to be
executed and delivered by the Company, the Purchaser and NBC at Closing, which shall be
substantially in the form of Exhibit C hereto.
Subsidiary shall mean, as to any Person, a corporation, partnership, limited liability
company, joint venture or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more intermediaries, or
both, by such Person.
Surviving Representations and Warranties shall mean the representations and warranties
contained in Section 4.01(e)(ii).
Tax or, collectively, Taxes shall mean any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and liabilities, including
taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and
value added, ad valorem, transfer, gains, franchise, withholding, payroll, recapture, employment,
excise, unemployment insurance, social security, business license, occupation, business
organization, stamp, environmental and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts. For purposes of this Agreement, Taxes also
includes any obligations under any agreements or arrangements with any other person with respect to
Taxes of such other person (including pursuant to Treas. Reg. Section 1.1502-6 or comparable
provisions of state, local or foreign tax law) and including any liability for taxes of any
predecessor entity.
4
Warrants shall have the meaning set forth in the recitals hereto.
Warrant Issuance shall have the meaning set forth in Section 2.03.
Warrant Share shall mean the shares of Common Stock issued upon exercise of the Warrants.
ARTICLE
II EXCHANGE AND ISSUANCE OF SECURITIES
Section 2.01.
Authorization of Issue
. Upon and subject to the terms and conditions
set forth in this Agreement, the Company has authorized the issuance to the Purchaser of (i)
4,929,266 shares of Series B Preferred Stock (the
Shares
) and (ii) the Warrants to
purchase up to 6,000,000 shares of Common Stock at an exercise price of $0.75 per share. The Shares
and the Warrants are collectively referred to as the
Securities
.
Section 2.02.
Exchange of Series A Preferred Stock; Issuance of Warrants; Cash
Payment
.
(a) Subject to the terms and conditions set forth in this Agreement, the Purchaser hereby
agrees, on the basis of the representations, warranties and agreements of the Company contained
herein and subject to all the terms and conditions set forth herein, to surrender for exchange at
the Closing 5,339,500 shares of the Series A Preferred Stock owned by the Purchaser, which
constitutes all of the Purchasers shares of the Company.
(b) Subject to the terms and conditions set forth in this Agreement, the Company hereby
agrees, on the basis of the representations, warranties and agreements of the Purchaser and NBC
contained herein and subject to all the terms and conditions set forth herein, to (i) exchange at
the Closing (the Exchange) the shares of the Series A Preferred Stock held by the Purchaser for
4,929,266 shares of Series B Preferred Stock; (ii) issue to the Purchaser (the Warrant Issuance)
at the Closing, Warrants to purchase up to 6,000,000 shares of Common Stock at an exercise price of
$0.75 per share; and (iii) pay to the Purchaser the Cash Payment at the Closing. Immediately after
the Closing, the Company shall file the Certificate of Cancellation with the Secretary of State of
the State of Minnesota. Without limiting the Companys obligations under Section 8.08, from and
after the Closing, the Purchaser shall cease to have any rights with respect to such Series A
Preferred Stock, including any payments of accumulated and unpaid dividends.
Section 2.03.
Legend on Series B Preferred Stock and Warrants
. Each certificate
issued at the Closing representing Series B Preferred Stock, Warrants and Warrant Shares shall be
endorsed with a legend in substantially the form as provided in the Shareholder Agreement.
Section 2.04.
Registration Rights
. The Company, the Purchaser and NBC hereby agree to enter into the Registration Rights
Agreement at the Closing pursuant to which, under certain terms and conditions specified therein,
the Company shall provide to the Purchaser and NBC certain registration rights under the Securities
Act of 1933, as amended (the
Securities Act
).
Section 2.05.
Shareholder Agreement
. The Company, the Purchaser and NBC
5
hereby agree
to enter into the Shareholder Agreement at the Closing.
ARTICLE
III CLOSING DATE; DELIVERY
Section 3.01.
Closing and Location
. Subject to the satisfaction or waiver of the
conditions set forth in this Agreement, the Exchange and Warrant Issuance (the
Closing
)
shall take place at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New
York, on February 25, 2009 (the
Closing Date
), or at such other time and place as may be
mutually agreed upon by the Company and the Purchaser.
Section 3.02.
Delivery
. At the Closing: (i) the Purchaser shall deliver to the
Company the certificates evidencing the 5,339,500 shares of Series A Preferred Stock held by
Purchaser, (ii) the Company shall deliver to the Purchaser stock and warrant certificates for the
Securities to be issued in accordance with the provisions of Article II, registered in the name of
the Purchaser or its nominee (subject to the provisions herein and in the Ancillary Documents) and
in such denominations as the Purchaser shall specify not less than two Business Days prior to the
Closing Date; (iii) the Company shall deliver to the Purchaser on the Closing Date immediately
available funds, by wire transfer to such account as the Purchaser shall specify, in the amount of
$3,400,000 to be paid hereunder by the Company pursuant to Section 2.02; and (iv) each party shall
take or cause to happen such other actions, and shall execute and deliver such other instruments or
documents, as shall be required under Article VI hereof.
Section 3.03.
Consummation of Closing
. All acts, deliveries and confirmations
comprising the Closing, regardless of chronological sequence, shall be deemed to occur
contemporaneously and simultaneously upon the occurrence of the last act, delivery or confirmation
of the Closing and none of such acts, deliveries or confirmations shall be effective unless and
until the last of same shall have occurred.
ARTICLE
IV REPRESENTATIONS AND WARRANTIES
Section 4.01.
Representations and Warranties of the Company.
The Company represents
and warrants to the Purchaser as of the date hereof and as of the Closing Date as follows:
(a) Organization and Good Standing of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Minnesota and
has all requisite corporate power and authority to own, operate and lease its properties and to
carry on its businesses as they are now being conducted. The Company is duly licensed or
qualified as a foreign corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which its ownership or leasing of properties, or the
conduct of its businesses requires such licensing or qualification and good standing, except
where the failure to be so licensed or qualified or in good standing in any such jurisdiction
would not have a Material Adverse Effect.
(b) Organization and Good Standing of Company Subsidiaries. The Company owns, directly or
indirectly, all the shares of outstanding capital stock of each Material Subsidiary, free and
clear of all Liens, except such Liens which do not have a Material Adverse Effect. There are (i)
no equity securities of any of the Material Subsidiaries that are required to be
6
issued by
reason of any options, warrants, rights to subscribe to, calls, preemptive rights or commitments
of any character whatsoever, (ii) no outstanding securities or rights convertible into or
exchangeable for shares of any capital stock of any Material Subsidiary and (iii) no contracts,
commitments, understandings or arrangements by which any Material Subsidiary is bound to issue
additional shares of its capital stock or rights convertible into or exchangeable for its
capital stock or options, warrants or rights to purchase or acquire any additional shares of its
capital stock. Except as set forth in Schedule 4.01(b), none of the Material Subsidiaries is
subject to any obligation (contingent or otherwise) to repurchase, redeem or otherwise acquire
or retire any of its capital stock. All of the shares of capital stock of each of the Material
Subsidiaries are duly and validly authorized and issued, fully paid and non-assessable. Each
Material Subsidiary is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its businesses as they are
now being conducted, and is duly licensed or qualified to do business and is in good standing in
each other jurisdiction in which its ownership or leasing of properties, or the conduct of its
businesses, requires such licensing or qualification and good standing, except where the failure
to be so licensed or qualified or in good standing in any such jurisdiction would not have a
Material Adverse Effect.
(c) Authorization; No Conflicts. The Company has full corporate power and authority to
enter into this Agreement and the Ancillary Documents and to perform its obligations hereunder
and thereunder. The execution, delivery and performance by the Company of this Agreement and
each Ancillary Document and the consummation of the Companys obligations hereunder and
thereunder have been duly authorized by all necessary corporate action. This Agreement has been,
and on or prior to the Closing Date each Ancillary Document will be, duly and validly executed
and delivered by the Company. This Agreement constitutes, and upon its execution and delivery on
or prior to the Closing Date, each Ancillary Document will constitute, a valid and legally
binding obligation of the Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors generally and by general equitable principles.
Except as set forth in Schedule 4.01(c), the execution, delivery and performance of this
Agreement and the Ancillary Documents by the Company, the consummation of the transactions by
the Company contemplated hereby and thereby and the compliance by the Company with the
provisions hereof and thereof will not conflict with, violate or result in a breach of any
provision of, require a consent, approval or notice under, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under, or result in the
termination of or accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Lien upon any of the properties or assets
of the Company or Material Subsidiaries under, (i) the articles of incorporation, by-laws or
other governing instrument of the Company or any Material Subsidiary, (ii) any Contractual
Obligation of the Company or any Material Subsidiary or (iii) assuming that the filings,
consents and approvals specified in Schedule 4.01(d) have been obtained or made and any waiting
period applicable thereto has expired or been terminated, any Requirement of Law applicable to
the Company or any Material Subsidiary, except, in the case of clauses (ii) and (iii) above,
such conflicts, violations, breaches, consents, approvals, notices, defaults, terminations,
accelerations or Liens which would not have a Material Adverse Effect.
7
(d) Consents. Except as set forth in Schedule 4.01(d), no consent, approval, order or
authorization of, registration, declaration or filing with, or notice to, any Governmental
Entity is required on the part of the Company or any of its Subsidiaries in connection with the
execution and delivery by the Company of this Agreement and the Ancillary Documents, the
consummation by the Company of the transactions contemplated hereby and thereby or the
performance by the Company of its obligations hereunder and thereunder, except for (i) the
filing of all notices, reports and other documents required by the rules and regulations
promulgated by the FCC, (ii) such filings as may be required under the blue sky laws of the
various states, (ii) the filing of the Certificate of Designation with the Secretary of State of
the State of Minnesota and (iv) such consents, approvals, orders, authorizations, registrations,
declarations, filings or notices of which the failure to make or obtain would not have a
Material Adverse Effect.
(e) Capitalization. (i) As of the date hereof, the authorized capital stock of the Company
consists of 100,000,000 shares of capital stock. As of the date hereof, 33,690,266 shares of
Common Stock are issued and outstanding and fully paid and non-assessable, no shares of Common
Stock are held in treasury, and no shares of Common Stock are reserved for issuance upon
exercise of outstanding stock options except for 6,520,183 shares reserved in respect of
Options. As of the date hereof and prior to giving effect to the transactions contemplated by
this Agreement and the Ancillary Documents, 5,339,500 shares of Series A Preferred Stock are
designated, issued and outstanding.
(ii) Upon delivery of the Shares on the Closing Date as provided herein, such Shares will
be duly and validly authorized and issued, fully paid and non-assessable and not subject to
preemptive rights, and the Purchaser will acquire good title thereto, free and clear of all
Liens (other than any Lien created by the Purchaser, applicable state and federal securities
laws and the Ancillary Documents). The shares of Common Stock issuable upon exercise of the
Warrants have been reserved for issuance and, when issued upon exercise of the Warrants, will be
duly and validly authorized and issued, fully paid and non-assessable and not subject to
preemptive rights, and the owner of such shares will acquire good title thereto, free and clear
of all Liens (other than any Lien created by such owner).
(iii) Other than (A) the requirement to issue warrants to purchase shares of Common
Stock pursuant to the terms and conditions of the Distribution Agreement, (B) the
requirement to issue the Warrant Shares, (C) the requirement to issue shares of Common Stock
pursuant to Options set forth on Schedule 4.01(e), (D) the transactions contemplated by this
Agreement and the Ancillary Documents, including the requirement to issue the Shares, (E) as
disclosed in the SEC Documents and (F) as set forth in Schedule 4.01(e): (1) no equity
securities of the Company are or may become required to be issued by reason of any options,
warrants, rights to subscribe to, calls, preemptive rights, or commitments of any character
whatsoever, (2) there are outstanding no securities or rights convertible into or
exchangeable for shares of any capital stock of the Company, (3) there are no contracts,
commitments, understandings or arrangements by which the Company is or will be bound to
issue additional shares of its capital stock or securities or rights convertible into or
exchangeable for shares of its capital stock or options, warrants or rights to purchase or
acquire any additional shares of its capital stock, (4) the Company is not subject to any
obligation (contingent or otherwise) to
8
repurchase, redeem or otherwise acquire or retire
any of its capital stock, (5) the Company has not granted or agreed to grant any rights
relating to the registration of its securities under applicable federal and state securities
laws, including piggyback rights, (6) the Company is not a party to, and the executive
officers of the Company have no actual knowledge of any, voting trusts, proxies or any other
agreements or understandings with respect to the voting of any capital stock of the Company,
and (7) the consummation of the transactions contemplated by this Agreement will not trigger
the anti-dilution provisions or other price adjustment mechanisms of any outstanding
subscriptions, options, warrants, calls, contracts, preemptive rights, demands, commitments,
conversion rights or other agreements or arrangements of any character or nature whatsoever
under which the Company is or may be obligated to issue or acquire its capital stock. As of
the Closing Date and after giving effect to the Closing (and to all transactions to be
effected simultaneously therewith), there shall be issued no class or series of Preferred
Stock other than the Shares.
(f) SEC Filings, Financial Information, Liabilities. The Company has filed a true and
complete copy of each report, schedule, registration statement and definitive proxy statement
required to be filed with the SEC since January 1, 2006 (the SEC Documents). Except as set
forth in Schedule 4.01(f), as of their respective dates, the SEC Documents filed prior to the
date hereof, after giving effect to any amendments and supplements thereto filed prior to the
date hereof, complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, applicable to such SEC Documents. None of the SEC
Documents filed prior to the date hereof when filed, after giving effect to any amendments and
supplements thereto filed prior to the date hereof, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Documents filed prior to
the date hereof comply as to form in all material respect with the applicable accounting
requirements and with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP during the period involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by Form 10-Q of the
SEC, or for normal year-end
adjustments) and fairly present in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then ended. Except as
set forth in Schedule 4.01(f) and except as set forth in the SEC Documents (including any item
accounted for in the financial statements contained in the SEC Documents or set forth in the
notes thereto), as of February 2, 2008, neither the Company nor any of its Subsidiaries had, and
from such date until the date hereof neither the Company nor any of its Subsidiaries has
incurred, any claims, liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which, individually or in the aggregate, would have a Material Adverse
Effect (other than claims, liabilities or obligations contemplated by this Agreement or the
Ancillary Documents or expressly permitted to be incurred pursuant to this Agreement or the
Ancillary Documents). In addition, from February 2, 2008 until the date hereof, there has not
been any declaration, setting aside or payment of a dividend or other distribution with respect
to shares of capital stock of the Company or any material change in accounting methods or
practices by the Company or any of its Subsidiaries.
9
(g) Taxes. (i) The Company and each of its Subsidiaries have (A) filed all federal, state,
local and foreign Tax Returns and reports required to be filed by them (taking into account all
applicable extensions) which are correct and complete in all material respects, (B) paid or
accrued all Taxes due and payable, and (C) paid all Taxes for which a notice of assessment or
collection has been received (other than Taxes that are being contested in good faith by
appropriate proceedings and that have been reserved against in accordance with GAAP), except in
the case of clause (A), (B) or (C) for any such filings, payments or accruals that are not
reasonably likely, individually or in the aggregate, to have a Material Adverse Effect. Except
as set forth on Schedule 4.01(g), there are no audits known by the Company to be pending or
contemplated with respect to the Companys Tax Returns. Neither the Internal Revenue Service
(the IRS) nor any other taxing authority has asserted any claim for Taxes, or to the actual
knowledge of the executive officers of the Company, is threatening to assert any claims for
Taxes, which claims, individually or in the aggregate, are reasonably likely to have a Material
Adverse Effect. The Company and each of its Subsidiaries have withheld or collected and paid
over to the appropriate governmental authorities (or are properly holding for such payment) all
Taxes required by law to be withheld or collected, except for amounts that are not reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect. There are no liens
for Taxes upon the assets of the Company or any of its Subsidiaries (other than liens for Taxes
that are not yet due or that are being contested in good faith by appropriate proceedings),
except for liens that are not reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect. No extension of a statute of limitations relating to any Taxes is in
effect with respect to the Company or any of its Subsidiaries.
(ii) Neither the Company nor any of its Subsidiaries has been a member of an affiliated
group of corporations filing a consolidated federal income tax return (or a group of
corporations filing a consolidated, combined or unitary income tax return under comparable
provisions of state, local or foreign tax laws), other than a group the common parent of
which was the Company or any Subsidiary of the Company.
(iii) Neither the Company nor any of its Subsidiaries has any obligation under any
agreement or arrangement with any other person with respect to Taxes of such other person
(including pursuant to Treas. Reg. Section 1.1502-6 or comparable provisions of state,
local or foreign tax law) and including any liability for Taxes or any predecessor entity,
except for obligations that are not reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect.
(iv) Neither the Company nor any of its Subsidiaries has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(h) No Unlawful Payments. Neither the Company nor any of its Subsidiaries nor, to the
actual knowledge of the executive officers of the Company, any director, officer, agent,
employee or other person acting on behalf of the Company or any of its Subsidiaries has during
the three-year period prior to the date hereof (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic
10
government official or
employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (iv) made any illegal bribe, rebate, payoff, influence
payment, kickback or other unlawful payment, which in the case of each of clauses (i), (ii) and
(iv) would subject the Company or any of the Material Subsidiaries to any damage or penalty
which would have a Material Adverse Effect.
(i) Antitakeover Statutes. The Board of Directors of the Company has taken all actions
necessary under the MBCA, including approving the transactions contemplated by the Agreement and
each of the Ancillary Documents to which it is a party, to ensure that Section 302A.673 of the
MBCA applicable to a business combination does not, and will not, apply to the transactions
contemplated hereunder and thereunder or any business combination with any Restricted Party
occurring after the date hereof. The restrictions contained in Section 302A.671 of the MBCA
applicable to control share acquisitions will not apply to the authorization, execution,
delivery and performance of this Agreement or any of the Ancillary Documents by the Company or
to (i) any shares of Common Stock or Preferred Stock acquired at any time by the Purchaser
pursuant to Article II of this Agreement; (ii) the Warrant or (iii) any shares of Common Stock
or Preferred Stock or any warrants to purchase Common Stock held by any Restricted Party as of
the date hereof. No other fair price, moratorium, or other similar anti-takeover statute or
regulation is applicable to the Company (by reason of the Companys participation) in the
transactions contemplated by this Agreement or the Ancillary Documents.
(j) FCC Licenses and Applications. Set forth on Schedule 4.01(j) is a list of (i) all
licenses relating to television stations that are owned or operated by the Company or its
Subsidiaries as of the date hereof (FCC Licenses) and (ii) all applications for FCC Licenses
or for television station construction permits that are pending before the FCC as of the date
hereof. As of the date hereof, the FCC Licenses are the only licenses relating to television
stations that are required by applicable FCC law to be held by the Company and its Subsidiaries
in order to conduct the business of the Company and its Subsidiaries as it is currently
conducted. The FCC Licenses are in full force and effect and have not been
revoked, suspended, canceled, rescinded or terminated as of the date hereof. There is no
FCC order, judgment, decree, notice of apparent liability or order of forfeiture outstanding,
nor is there any action, suit, notice of apparent liability, order of forfeiture, investigation
or other proceeding pending or, to the actual knowledge of the executive officers of the
Company, threatened by or before the FCC against the Company or affecting the FCC Licenses,
except FCC rulemaking proceedings generally affecting the television broadcast industry. The
executive officers of the Company have no actual knowledge of any reason to believe that the FCC
Licenses will not be renewed in the ordinary course. Consummation of the transactions
contemplated by this Agreement and the Ancillary Documents shall not cause NBC or Purchaser to
be deemed to be an attributable owner of, or vertically integrated with, any cable system for
purposes of any of the provisions of 47 C.F.R. part 76, or to be deemed an affiliate of any
cable system for purposes of the commercial leased access rules as established in 47 C.F.R.
Section 76.970(b).
(k) Brokers and Finders. Except as set forth in Schedule 4.01(k), neither the Company nor
any Company Subsidiary has utilized any broker, finder, placement agent or financial advisor or
incurred any liability for any fees or commissions in connection with any
11
of the transactions
contemplated hereby or by the Ancillary Documents. The Company is solely responsible for all
fees or other amounts that may be payable to each Person listed on Schedule 4.01(k).
Section 4.02.
Representations and Warranties of the Purchaser
. The Purchaser
represents and warrants to the Company as of the date hereof and as of the Closing Date as follows:
(a) Organization and Good Standing. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has the requisite
power and authority to enter into this Agreement and the Ancillary Documents to which it is a
party and to carry out its obligations hereunder and thereunder. The Purchaser is duly licensed
or qualified as a foreign corporation for the transaction of business and is in good standing
under the laws of the State of New York.
(b) Authorization; No Conflicts. The execution, delivery and performance by the Purchaser
of this Agreement and the Ancillary Documents to which the Purchaser is a party and the
consummation of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on behalf of the Purchaser. This Agreement has been, and on or
prior to the Closing Date each of the Ancillary Documents to which the Purchaser is a party will
be, duly and validly executed and delivered by the Purchaser, and this Agreement is, and upon
their execution and delivery on or prior to the Closing Date each of the Ancillary Documents to
which the Purchaser is a party will be, a valid and binding obligation of the Purchaser,
enforceable against it in accordance with its terms. The execution, delivery and performance of
this Agreement and the Ancillary Documents to which the Purchaser is a party, the consummation
by the Purchaser, of the transactions contemplated hereby and thereby and the compliance by
Purchaser, with the provisions hereof and thereof will not conflict with, violate or result in a
breach of any provision of, require a consent, approval or notice under, or constitute a default
(or an event, which, with
notice or lapse of time or both, would constitute a default) under, (i) any organizational
document of the Purchaser, (ii) any Contractual Obligation of the Purchaser, or (iii) assuming
that the clearances, filings, consents and approvals specified in Schedule 4.02(c) have been
obtained or made and any waiting period applicable thereto has expired or been terminated, any
Requirement of Law applicable to the Purchaser, except, in the case of clauses (ii) and (iii)
above, such conflicts, violations, breaches, consents, approvals, notices, defaults,
terminations, accelerations or Liens which would not have a Material Adverse Effect.
(c) Consents and Approvals. Except as set forth in Schedule 4.02(c), no consent, approval,
order or authorization of, registration, declaration or filing with, or notice to, any
Governmental Entity is required on the part of Purchaser in connection with the execution and
delivery by Purchaser, of this Agreement and the Ancillary Documents to which the Purchaser is a
party, the consummation by the Purchaser, of the transactions contemplated hereby and thereby or
the performance by the Purchaser, of its obligations hereunder and thereunder, except for (i)
the filing of all notices, reports and other documents required by the rules and regulations
promulgated by the FCC, and (ii) such consents, approvals, orders, authorizations,
registrations, declarations, filings or notices of which the failure to make or obtain would not
have a Material Adverse Effect. The Purchaser is fully qualified under the
12
FCCs rules,
regulations, and policies (including, but not limited to, its television network and its
multiple ownership rules) to consummate the transactions contemplated by this Agreement and the
Ancillary Documents, and such consummation shall not cause the Company to be deemed to be an
attributable owner of, or vertically integrated with, any cable system for purposes of any of
the provisions of 47 C.F.R. part 76, or to be deemed an affiliate of any cable system for
purposes of the commercial leased access rules as established in 47 C.F.R. Section 76.970(b).
(d) Securities Act. The Purchaser (i) is acquiring the Securities solely for the purpose of
investment and not with a view to, or for resale in connection with, any distribution thereof in
violation of the Securities Act; (ii) has had the opportunity to ask questions of the officers
and directors of, and has had access to information concerning, the Company and the Securities;
(iii) is an accredited investor as defined in Rule 501(a) under the Securities Act; (iv) has
such knowledge, sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the investment in the Company and the Securities;
(v) has so evaluated the merits and risks of such investment; (vi) is able to bear the economic
risk of such investment; and (vii) is able to afford a complete loss of such investment.
(e) Listing Requirements. None of the current or proposed members of the Board of the
Directors of the Company designated by the Purchaser or its Affiliates (i) is a partner,
executive officer, or controlling shareholder of the Purchaser or such Affiliates or (ii) would
be the beneficial owner of or have a pecuniary interest in any of the securities to be issued by
the Company pursuant to this Agreement to the Purchaser.
(f) Brokers and Finders. The Purchaser has not utilized any broker, finder, placement agent
or financial advisor or incurred any liability for any fees or commissions in connection with
any of the transactions contemplated hereby or by the Ancillary Documents.
Section 4.03.
Representations and Warranties of NBC
. NBC represents and warrants to
the Company as of the date hereof and as of the Closing Date as follows:
(a)
Organization and Good Standing
. NBC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has the requisite
power and authority to enter into this Agreement and the Ancillary Documents to which it is a
party and to carry out its obligations hereunder and thereunder. NBC is duly licensed or
qualified as a foreign corporation for the transaction of business and is in good standing under
the laws of the State of New York.
(b)
Authorization; No Conflicts
. The execution, delivery and performance by NBC of
this Agreement and the Ancillary Documents to which NBC is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all necessary
corporate action on behalf of NBC. This Agreement and each of the Ancillary Documents to which
NBC is a party have been duly and validly executed and delivered by NBC, and this Agreement and
each of the Ancillary Documents to which NBC is a party are valid and binding obligations of
NBC, enforceable against it in accordance with their terms. The execution, delivery and
performance of this Agreement and the Ancillary Documents to
13
which NBC is a party, the
consummation by NBC of the transactions contemplated hereby, and thereby and the compliance by
NBC with the provisions hereof and thereof, will not conflict with, violate or result in a
breach of any provision of, require a consent, approval or notice under, or constitute a default
(or an event, which, with notice or lapse of time or both, would constitute a default) under,
(i) any organizational document of NBC, (ii) any provision of any note, bond or security issued
by NBC, or of any mortgage, indenture, deed of trust, lease, license, franchise, contract,
agreement, instrument or undertaking to which NBC is party or by which it or any of its property
is subject, or (iii) assuming that the clearances, filings, consents and approvals specified in
Schedule 4.03(c) have been obtained or made and any waiting period applicable thereto has
expired or been terminated, the certificate of incorporation and by-laws or other organizational
documents of NBC, and any law, statute, order, treaty, rule or regulation, or judgment, decree,
determination or order of any arbitrator, court or other Governmental Entity, applicable to or
binding upon NBC or any of its property, except, in the case of clauses (ii) and (iii) above,
such conflicts, violations, breaches, consents, approvals, notices, defaults, terminations,
accelerations or Liens which would not have a Material Adverse Effect.
(c)
Consents and Approvals
. Except as set forth in Schedule 4.03(c), no consent,
approval, order or authorization of, registration, declaration or filing with, or notice to, any
Governmental Entity is required on the part of NBC in connection with the execution and delivery
by NBC of this Agreement and the Ancillary Documents to which NBC is a party, the consummation
by NBC of the transactions contemplated hereby and thereby or the performance by NBC of its
obligations hereunder and thereunder, except for (i) the filing of all notices, reports and
other documents required by the rules and regulations promulgated by the Federal Communications
Commission, and (ii) such consents, approvals, orders, authorizations, registrations,
declarations, filings or notices of which the failure to make or obtain would not have a
Material Adverse Effect. NBC is fully qualified under the Federal
Communications Commissions rules, regulations, and policies (including, but not limited
to, its television network and its multiple ownership rules) to consummate the transactions
contemplated by this Agreement and the Ancillary Documents, and such consummation shall not
cause the Company to be deemed to be an attributable owner of, or vertically integrated with,
any cable system for purposes of any of the provisions of 47 C.F.R. part 76, or to be deemed an
affiliate of any cable system for purposes of the commercial leased access rules as
established in 47 C.F.R. Section 76.970(b).
(d)
Brokers and Finders
. NBC has not utilized any broker, finder, placement agent
or financial advisor whose fees would be payable by the Company or any of its Subsidiaries or
incurred any liability for any fees or commissions in connection with any of the transactions
contemplated hereby or by the Ancillary Documents that would be payable by the Company or any of
its Subsidiaries.
ARTICLE
V OTHER AGREEMENTS
Section 5.01.
Public Statements
. Before any party or any Affiliate of such party
shall release any information concerning this Agreement or the Ancillary Documents or the matters
contemplated hereby or thereby which is intended for or may result in public dissemination thereof,
such party shall cooperate with the other parties, shall furnish drafts of all
14
documents or
proposed oral statements to the other parties, provide the other parties the opportunity to review
and comment upon any such documents or statements and shall not release or permit release of any
such information without the consent of the other parties, except to the extent required by
applicable law or the rules of any securities exchange or automated quotation system on which its
securities or those of its Affiliate are traded.
Section 5.02.
Reservation of Shares
. The Company agrees to keep reserved for issuance
at all time prior to the exercise of the Warrants the aggregate number of shares of Common Stock
issuable upon the exercise of the Warrants.
Section 5.03.
Further Assurances
. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions as may be necessary
or appropriate to effectuate, carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby.
ARTICLE
VI CONDITIONS PRECEDENT
Section 6.01.
Conditions of the Purchaser
. The obligation of the Purchaser to
exchange the Series A Preferred Stock and accept the Warrants at the Closing is subject to the
satisfaction or waiver of each of the following conditions precedent at or prior to the Closing:
(a) Representations and Warranties; Covenants. The representations and warranties of the
Company contained in this Agreement and the Ancillary Documents shall be true and correct in all
material respects on and as of the date of this Agreement and on and as of the Closing Date,
with the same effect as though made on and as of such date, except (i) to the extent any such
representation and warranty is made as of a specified date, in which case such representation
and warranty shall be true and correct in all material respects on and as of such specified date
and (ii) where the inaccuracy of such representation and warranty constitutes an Excluded
Breach, and the Company shall have performed in all material respects all obligations,
agreements, undertakings, covenants and conditions of this Agreement and the Ancillary Documents
required to be performed by it at or prior to the Closing Date.
(b) No Litigation. There shall not be in effect any order, decree or injunction of a court
or agency of competent jurisdiction which enjoins or prohibits consummation of the transactions
contemplated hereby or in the Ancillary Documents. No action, suit, investigation, arbitration,
or administrative or governmental proceeding by any Governmental Entity shall be pending,
seeking to restrain, prohibit or invalidate the transactions contemplated by this Agreement, or
any of the Ancillary Documents.
(c) Regulatory Approvals. All permits, consents, authorizations, orders and approvals of,
and filings and registrations required under any Federal or state law, rule or regulation for or
in connection with the execution and delivery of this Agreement and the Ancillary Documents and
the consummation by the parties hereto of the transactions contemplated hereby and thereby shall
have been obtained or made and all statutory waiting periods thereunder in respect thereof shall
have expired, except where the failure to obtain any
15
permit, consent, authorization, order or
approval, or make any filing or registration would not have a Material Adverse Effect.
(d) Shareholder Agreement. The Shareholder Agreement shall have been duly executed and
delivered by the Company.
(e) Distribution Agreement. The Distribution Agreement shall be in full force and effect.
(f) Registration Rights Agreement. The Registration Rights Agreement shall have been duly
executed and delivered by the Company.
(g) Certificate of Designation. The Certificate of Designation shall have been duly filed
with the Secretary of State of the State of Minnesota.
(h) Legal Opinion. The Purchaser shall have received from counsel for the Company, opinions
in form and substance reasonably acceptable to the Purchaser, addressed to the Purchaser.
(i) Expense Reimbursement. The Purchaser shall have received the expense reimbursement set
forth in Section 8.07.
Section 6.02.
Conditions of the Company
. The obligation of the Company to issue the Securities at the Closing is subject to
satisfaction or waiver of each of the following conditions precedent at or prior to the Closing:
(a) Representations and Warranties; Covenants. The representations and warranties of the
Purchaser and NBC contained in this Agreement and the Ancillary Documents shall be true and
correct in all material respects on and as of the date of this Agreement and on and as of the
Closing Date with the same effect as though made on and as of such date, except to the extent
any such representation and warranty is made as of a specified date, in which case such
representation and warranty shall be true and correct in all material respects on and as of such
specified date, and the Purchaser and NBC shall have performed in all material respects all
obligations, agreements, undertakings, covenants and conditions of this Agreement and the
Ancillary Documents required to be performed by them at or prior to the Closing.
(b) No Litigation. There shall not be in effect any order, decree or injunction of a court
or agency of competent jurisdiction which enjoins or prohibits consummation of the transactions
contemplated hereby or in the Ancillary Documents. No action, suit, investigation, arbitration,
or administrative or governmental proceeding by any Governmental Entity shall be pending,
seeking to restrain, prohibit or invalidate the transactions contemplated by this Agreement, or
any of the Ancillary Documents.
(c) Regulatory Consents. All permits, consents, authorizations, orders and approvals of,
and filings and registrations required under Federal or state law, rule or regulation for or in
connection with the execution and delivery of this Agreement and the Ancillary Documents and the
consummation by the parties hereto of the transactions contemplated hereby and thereby shall
have been obtained or made and all statutory waiting periods
16
thereunder in respect thereof shall
have expired, except where the failure to obtain any permit, consent, authorization, order or
approval, or make any filing or registration would not have a Material Adverse Effect.
(d) Shareholder Agreement. The Shareholder Agreement shall have been duly executed and
delivered by the Purchaser and NBC.
(e) Distribution Agreement. The Distribution Agreement shall be in full force and effect.
(f) Registration Rights Agreement. The Registration Rights Agreement shall have been duly
executed and delivered by the Purchaser and NBC.
ARTICLE
VII [RESERVED]
Section 7.01.[
RESERVED
]
Section 7.02.[
RESERVED
]
ARTICLE
VIII MISCELLANEOUS
Section 8.01.
Survival of Representations and Warranties
. All representations and
warranties made herein or in any certificates delivered in connection with the Closing shall
survive for a period of eighteen months after the Closing, provided, however, that (a) the
Surviving Representations and Warranties shall not terminate pursuant to this Section 8.01 and
shall continue to survive indefinitely and (b) the representations and warranties in Section
4.01(g) shall survive until 30 days after the expiration of the applicable statute of limitations
relating to the taxes or other matters covered.
Section 8.02.
Notices
. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given, if delivered personally, by telecopier or sent
by overnight courier as follows:
If to the Purchaser, to:
G.E. Capital Equity Investments, Inc.
201 Merritt 7
1st Floor
Norwalk, CT 06851
Attention: VVTV Account Manager
Fax: (203) 229-5097
with a copy to (which shall not constitute notice):
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Alexander D. Lynch
Fax: (212) 310-8007
17
If to NBC, to:
NBC Universal, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attention: Chief Financial Officer
Fax: (212) 664-0427
with a copy to (which shall not constitute notice):
NBC Universal, Inc.
30 Rockefeller Plaza
New York, New York 10112
Attention: General Counsel
Fax: (212) 664-4733
If to the Company, to:
ValueVision Media, Inc.
6740 Shady Oak Road
Eden Prairie, Minnesota 55344-3433
Attention: General Counsel
Fax: (612) 947-0188
with copies to (which shall not constitute notice):
Latham & Watkins LLP
355 South Grand Avenue
Los Angeles, CA 90071-1560
Attention: James P. Beaubien and Jason H. Silvera
Fax: (213) 891-8763
Faegre & Benson LLP
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3901
Attention: Peter J. Ekberg
Fax: (612) 766-1600
or to such other address or addresses as shall be designated in writing. All notices shall be
effective when received.
18
Section 8.03.
Entire Agreement; Amendment
. This Agreement, the Ancillary Documents
and the documents described herein and therein or attached or delivered pursuant hereto or thereto
set forth the entire agreement between the parties hereto with respect to the transactions
contemplated by this Agreement. Any provision of this Agreement may be amended or modified in whole
or in part at any time by an agreement in writing between the parties hereto executed in the same
manner as this Agreement. No failure on the part of any party to exercise, and no delay in
exercising, any right shall operate as a waiver thereof nor shall any single or partial exercise by
any party of any right preclude any other or future exercise thereof or the exercise of any other
right.
Section 8.04.
Counterparts
. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all of which together
shall constitute one and the same document.
Section 8.05.
GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
. THIS AGREEMENT SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED AND PERFORMED WITHIN SUCH STATE, AND EACH PARTY HEREBY SUBMITS TO THE
JURISDICTION OF ANY STATE OR U.S. FEDERAL COURT SITTING WITHIN THE COUNTY OF NEW YORK OR COUNTY OF
HENNEPIN. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING
BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT.
Section 8.06.
Public Announcements
. Each of the Company, the Purchaser and NBC agrees
to hold in strict confidence and not to disclose to others the status of any discussions or
relations among the parties with respect to the subject matter of this Agreement or the Ancillary
Documents until such time as the parties mutually agree to publicly disclose such information or
are legally obligated to disclose such information or are obligated by applicable Nasdaq rules to
disclose such information.
Section 8.07.
Fees and Expenses
. The Company shall reimburse the Purchaser for 50% of
the reasonable fees and expenses incurred by Purchaser in connection with this Agreement and the
Ancillary Documents and the transactions contemplated hereby, except that the Companys
reimbursement obligation under this Section 8.07 will not in any case exceed $350,000 in the
aggregate.
Section 8.08.
Indemnification by the Company
. (a) Subject to the provisions of
Section 8.08(d), the Company agrees to indemnify and save harmless the Purchaser and each of the
respective partners, officers, directors, employees, agents and Affiliates of the Purchaser in
their respective capacities as such (the
Purchaser Indemnitees
), from and against any and
all actions, suits, claims, proceedings, costs, damages, judgments, amounts paid in settlement
(subject to Section 8.08(b)) and expenses (including without limitation reasonable attorneys fees
and disbursements) (collectively,
Losses
), relating to or arising out of any inaccuracy
in or breach of the representations, warranties, covenants or agreements made by the Company herein
other than any inaccuracy or breach of any representation or warranty that constitutes an Excluded
Breach.
19
(b) A Purchaser Indemnitee shall give written notice to the Company of any claim with
respect to which it seeks indemnification promptly after the discovery by such party of any
matters giving rise to a claim for indemnification; provided that the failure of any Purchaser
Indemnitee to give notice as provided herein shall not relieve the Company of its obligations
under this Section 8.08 unless and to the extent that the Company shall have been materially
prejudiced by the failure of such Purchaser Indemnitee to so notify the Company. In case any
such action, suit, claim or proceeding is brought against a Purchaser Indemnitee, the Company
shall be entitled to participate in the defense thereof and, to the extent that it
may wish, to assume the defense thereof, with counsel reasonably satisfactory to the
Purchaser, and after notice from the Company of its election so to assume the defense thereof,
the Company will not be liable to such Purchaser Indemnitee under this Section 8.08 for any
legal or other expense subsequently incurred by such Purchaser Indemnitee in connection with the
defense thereof; provided, however, that (i) if the Company shall elect not to assume the
defense of such claim or action or (ii) if outside legal counsel to the Purchaser Indemnitee
reasonably determines that there maybe a conflict between the positions of the Company and of
the Purchaser Indemnitee in defending such claim or action, then separate counsel shall be
entitled to participate in and conduct the defense, and the Company shall be liable for any
legal or other expenses reasonably incurred by the Purchaser Indemnitee in connection with the
defense (but only with respect to one such separate counsel). The Company shall not be liable
for any settlement of any action, suit, claim or proceeding effected without its written
consent; provided, however, that the Company shall not unreasonably withhold, delay or condition
its consent. The Company further agrees that it will not, without the Purchaser Indemnitees
prior written consent (which consent shall not be unreasonably withheld), settle or compromise
any claim or consent to entry of any judgment in respect thereof in any pending or threatened
action, suit, claim or proceeding in respect of which indemnification may be sought hereunder
unless such settlement or compromise includes an unconditional release of the Purchaser and each
other Purchaser Indemnitee from all liability arising out of such action, suit, claim or
proceeding.
(c) The indemnification provided for in this Section 8.08 shall be the exclusive
post-Closing remedy available to the Purchaser Indemnitees with respect to any inaccuracy in or
breach of any representation or warranty made by the Company in this Agreement; provided that
nothing herein shall prevent the Purchaser Indemnitees from pursuing any remedies legally
available for fraud or fraudulent misrepresentation. Any payment made pursuant to this Section
8.08 shall be treated as an adjustment to the purchase price.
(d) Notwithstanding anything to the contrary in this Agreement, the Company shall only
indemnify and hold harmless the Purchaser Indemnitees under Section 8.08(a) with respect to any
Loss relating to or arising out of any inaccuracy in or breach of any representation or warranty
made by the Company if, and only if, such Loss, together with the aggregate of all other Losses
relating to or arising out of any inaccuracy in or breach of any representation or warranty made
by the Company shall exceed $500,000, whereupon the Company shall be liable for all such Losses
up to $40,900,000.
Section 8.09.
Indemnification by the Purchaser
. (a) The Purchaser agrees to indemnify
and save harmless the Company and each of the respective partners, officers, directors, employees,
agents and Affiliates of the Company in their respective capacities as such
20
(the
Company
Indemnitees
) from and against any and all Losses relating to or arising out of any inaccuracy
in or breach of the representations, warranties, covenants or agreements made by the Purchaser
herein.
(b) A Company Indemnitee shall give written notice to Purchaser of any claim with respect
to which it seeks indemnification promptly after the discovery by such party of any matters
giving rise to a claim for indemnification; provided that the failure of any Company
Indemnitee to give notice as provided herein shall not relieve Purchaser of its obligations
under this Section 8.09 unless and to the extent that Purchaser shall have been materially
prejudiced by the failure of such Company Indemnitee to so notify the Purchaser. In case any
such action, suit, claim or proceeding is brought against a Company Indemnitee, the Purchaser
shall be entitled to participate in the defense thereof and, to the extent that it may wish, to
assume the defense thereof, with counsel reasonably satisfactory to the Company, and after
notice from the Purchaser of its election so to assume the defense thereof, the Purchaser will
not be liable to such Company Indemnitee under this Section 8.09 for any legal or other expense
subsequently incurred by such Company Indemnitee in connection with the defense thereof;
provided, however, that (i) if the Purchaser shall elect not to assume the defense of such claim
or action or (ii) if outside legal counsel to the Company Indemnitee reasonably determines that
there may be a conflict between the positions of the Purchaser and of the Company Indemnitee in
defending such claim or action, then separate counsel shall be entitled to participate in and
conduct the defense, and the Purchaser shall be liable for any legal or other expenses
reasonably incurred by the Company Indemnitee in connection with the defense (but only with
respect to one such separate counsel). The Purchaser shall not be liable for any settlement of
any action, suit, claim or proceeding effected without its written consent; provided, however,
that the Purchaser shall not unreasonably withhold, delay or condition its consent. The
Purchaser further agrees that it will not, without the Company Indemnitees prior written
consent (which consent shall not be unreasonably withheld), settle or compromise any claim or
consent to entry of any judgment in respect thereof in any pending or threatened action, suit,
claim or proceeding in respect of which indemnification may be sought hereunder unless such
settlement or compromise includes an unconditional release of the Company and each other Company
Indemnitee from all liability arising out of such action, suit, claim or proceeding.
(c) The indemnification provided for in this Section 8.09 shall be the exclusive
post-Closing remedy available to the Company Indemnitees with respect to any inaccuracy in or
breach of any representation or warranty made by Purchaser in this Agreement; provided that
nothing herein shall prevent the Company Indemnitees from pursuing any remedies legally
available for fraud or fraudulent misrepresentation. Any payment made pursuant to this Section
8.09 shall be treated as an adjustment to the purchase price.
Section 8.10.
Indemnification by NBC
. (a) NBC agrees to indemnify and save harmless
the Company Indemnitees from and against any and all Losses relating to or arising out of any
inaccuracy in or breach of the representations, warranties covenants or agreements made by NBC
herein.
(b) A Company Indemnitee shall give written notice to NBC of any claim with respect to
which it seeks indemnification promptly after the discovery by such party of any
21
matters giving
rise to a claim for indemnification; provided that the failure of any Company Indemnitee to give
notice as provided herein shall not relieve NBC of its obligations under this Section 8.10
unless and to the extent that NBC shall have been materially prejudiced by the failure of such
Company Indemnitee to so notify NBC. In case any such action, suit, claim or proceeding is
brought against a Company Indemnitee, NBC shall be entitled to participate in the defense
thereof and, to the extent that it may wish, to assume the defense
thereof, with counsel reasonably satisfactory to the Company, and after notice from NBC of
its election so to assume the defense thereof, NBC will not be liable to such Company Indemnitee
under this Section 8.10 for any legal or other expense subsequently incurred by such Company
Indemnitee in connection with the defense thereof; provided, however, that (i) if NBC shall
elect not to assume the defense of such claim or action or (ii) if outside legal counsel to the
Company Indemnitee reasonably determines that there may be a conflict between the positions of
NBC and of the Company Indemnitee in defending such claim or action, then separate counsel shall
be entitled to participate in and conduct the defense, and NBC shall be liable for any legal or
other expenses reasonably incurred by the Company Indemnitee in connection with the defense (but
only with respect to one such separate counsel). NBC shall not be liable for any settlement of
any action, suit, claim or proceeding effected without its written consent; provided, however,
that NBC shall not unreasonably withhold, delay or condition its consent. NBC further agrees
that it will not, without the Company Indemnitees prior written consent (which consent shall
not be unreasonably withheld), settle or compromise any claim or consent to entry of any
judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in
respect of which indemnification may be sought hereunder unless such settlement or compromise
includes an unconditional release of the Company and each other Company Indemnitee from all
liability arising out of such action, suit, claim or proceeding.
(c) The indemnification provided for in this Section 8.10 shall be the exclusive
post-Closing remedy available to the Company Indemnitees with respect to any inaccuracy in or
breach of any representation or warranty made by NBC in Section 4.03 of this Agreement; provided
that nothing herein shall prevent the Company Indemnitees from pursuing any remedies legally
available for fraud or fraudulent misrepresentation. Any payment made pursuant to this Section
8.10 shall be treated as an adjustment to the purchase price.
Section 8.11.
Successors and Assigns
. Subject to applicable law and the following
sentence, the Purchaser may assign its rights under this Agreement in whole or in part only to any
Affiliate of the Purchaser, but no such assignment shall relieve the Purchaser of its obligations
hereunder. The Purchaser shall not assign any rights under this Agreement to any Affiliate if (a)
such assignment would cause any representation or warranty of the Purchaser to become materially
untrue or incorrect, (b) such Affiliate does not expressly assume pursuant to a document in form
and substance reasonably satisfactory to the Company all of the obligations of the Purchaser
associated with the rights proposed to be assigned or (c) such assignment would materially delay or
impair consummation of the transactions contemplated by this Agreement or the Ancillary Documents.
The Company may not assign any of its rights or delegate any of its duties under this Agreement
without the prior written consent of the Purchaser. Any purported assignment in violation of this
Section shall be void.
22
Section 8.12.
Arbitration
. Any controversy, dispute or claim arising out of, in
connection with or in relation to the interpretation, performance or breach of this Agreement,
shall be determined, at the request of any party, by arbitration in a city mutually agreeable to
the parties to such
controversy, dispute or claim, or, failing such agreement, in New York, New York or
Minneapolis, Minnesota, before and in accordance with the then-existing Rules for Commercial
Arbitration of the American Arbitration Association, and any judgment or award rendered by the
arbitrator will be final, binding and unappealable and judgment may be entered by any state or
Federal court having jurisdiction thereof. The pre-trial discovery procedures of the Federal Rules
of Civil Procedure shall apply to any arbitration under this Section 8.12. Any controversy
concerning whether a dispute is an arbitrable dispute or as to the interpretation or enforceability
of this Section 8.12 shall be determined by the arbitrator. The arbitrator shall be a retired or
former United States District Judge or other person acceptable to each of the parties, provided
such individual has substantial professional experience with regard to corporate or partnership
legal matters. The parties intend that this agreement to arbitrate be valid, enforceable and
irrevocable.
Section 8.13.
Specific Performance
. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement
in addition to any other remedy to which they are entitled at law or in equity.
Section 8.14.
Headings, Captions and Table of Contents
. The section headings,
captions and table of contents contained in this Agreement are for reference purposes only, are not
part of this Agreement and shall not affect the meaning or interpretation of this Agreement.
23
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their
respective duly authorized representatives, all as of the date first above written.
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VALUEVISION MEDIA, INC.
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By:
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/s/ Nathan E. Fagre
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Name:
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Nathan E. Fagre
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Title:
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Senior Vice President, General Counsel
and Secretary
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G.E. CAPITAL EQUITY INVESTMENTS, INC.
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By:
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/s/ Michael S. Fisher
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Name:
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Michael S. Fisher
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Title:
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Sr. Managing Director
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With respect to Sections 2.04, 2.05, 4.03, 5.03, 8.10
and Articles I and VIII only
NBC UNIVERSAL, INC.
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By:
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/s/ Salil Mehta
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Name:
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Salil Mehta
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Title:
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President, Business Operations,
Strategy & Development
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24
Exhibit 10.2
Execution Version
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
among
ValueVision Media, Inc.,
GE Capital Equity Investments, Inc.,
and
NBC Universal, Inc.
Dated as of February 25, 2009
TABLE OF CONTENTS
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Page
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Section 1. Definitions
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2
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Section 2. Demand Registration
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3
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(a) Requests for Registration by Holders
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3
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(b) Filing and Effectiveness
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4
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(c) Priority on Demand Registration
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5
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(d) Postponement of Demand Registration
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5
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Section 3. Piggyback Registration
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5
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(a) Right to Piggyback
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5
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(b) Priority on Piggyback Registrations
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6
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Section 4. Restrictions on Sale by Holders
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6
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Section 5. Registration Procedures
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6
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Section 6. Registration Expenses
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12
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Section 7. Indemnification
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13
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(a) Indemnification by the Company
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13
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(b) Indemnification by Holders
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13
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(c) Conduct of Indemnification Proceedings
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14
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(d) Contribution
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14
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Section 8. Underwritten Registrations
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15
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Section 9. Miscellaneous
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15
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(a) Remedies
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15
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(b) Amendments and Waivers
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16
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(c) Notices
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16
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(d) Merger or Consolidation of the Company
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17
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(e) Successors and Assigns
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17
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(f) Counterparts
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18
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(g) Headings
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18
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(h) Governing Law
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18
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(i) Severability
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18
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(j) Entire Agreement
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i
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this Agreement) is made and entered
into as of February 25, 2009, by and between ValueVision Media, Inc., a Minnesota corporation
(together with its successors and assigns, the Company), GE Capital Equity Investments, Inc., a
Delaware corporation (together with its successors and assigns, the Purchaser), NBC Universal,
Inc., a Delaware corporation (together with its successors and assigns, NBC). Each other person
who becomes a Holder hereunder shall become a party hereto by executing a counterpart and
acknowledgment as set forth on Exhibit A.
RECITALS
WHEREAS, pursuant to an Investment Agreement, dated as of March 8, 1999 (the Investment
Agreement), between the Company and the Purchaser, the Purchaser purchased shares of Series A
Redeemable Convertible Preferred Stock of the Company, par value $0.01 per share (the Series A
Preferred Stock), and warrants to purchase shares of Common Stock of the Company, par value $0.01
per share (the Common Stock); and
WHEREAS, all of the warrants purchased by the Purchaser pursuant to the Investment Agreement
have expired and are no longer outstanding; and
WHEREAS, pursuant to the Distribution Agreement (as defined below), the Company has issued
warrants to NBC to purchase shares of Common Stock;
WHEREAS, pursuant to an Exchange Agreement, dated as of February 25, 2009 (the Exchange
Agreement), between the Company and the Purchaser, the Purchaser exchanged all of its shares of
Series A Preferred Stock for 4,929,266 shares of Series B Redeemable Preferred Stock of the
Company, par value $0.01 per share; and
WHEREAS, pursuant to the Exchange Agreement the Company issued warrants to the Purchaser to
purchase up to 6,000,000 shares of Common Stock (the 2009 Warrants and together with the warrants
issued under the Distribution Agreement, the Warrants); and
WHEREAS, to induce the Purchaser to execute and deliver the Exchange Agreement, the Company
has agreed to provide to the Holders (as defined below) certain registration rights (the
Registration Rights) under the Securities Act;
WHEREAS, this Agreement amends, restates and supersedes that certain Registration Rights
Agreement, dated as of April 15, 1999 between the Company, the Purchaser and NBC and any other
prior agreements and understandings between the Company, the Purchaser and NBC or any of them,
including their respective predecessors, with respect to the Registration Rights and if any
provision of this
Agreement relating to the Registration Rights conflicts, or is inconsistent therewith, this
Agreement shall control; and
WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to
the closing of the transactions contemplated by the Exchange Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein and in
the Exchange Agreement, and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
Section 1.
Definitions
. For purposes of this Agreement, the following capitalized
terms have the following meanings:
Common Stock: The common stock of the Company and any securities into which such common
stock is converted or exchanged in any merger, consolidation or reclassification.
Distribution Agreement: The Distribution and Marketing Agreement dated as of March 8, 1999
between the Company and NBC pursuant to which NBC has agreed to distribute certain programming of
the Company, as such agreement may be amended, supplemented or otherwise modified from time to
time.
Holders: Each Restricted Party (as defined in the Shareholder Agreement) that from time to
time owns Registrable Securities and each of their permitted transferees that owns Registrable
Securities pursuant to Section 9(e) who agree to be bound by the provisions of this Agreement in
accordance with such section.
Prospectus: The prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a prospectus filed as
part of an effective registration statement in reliance upon Rule 430A under the Securities Act),
as amended or supplemented by any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in such prospectus.
Registrable Securities: All shares of Common Stock (i) held from time to time by the
Holders who are Restricted Parties (the Restricted Party Common Stock) or (ii) held by Holders
who are not Restricted Parties (but only to the extent that such Common Stock previously
constituted Restricted Party Common Stock or Common Stock described in clause (iii) below) or (iii)
issued or issuable upon the exercise of Warrants, excluding shares of Common Stock that have been
disposed of by a Holder pursuant to a Registration Statement relating to the sale thereof that has
become effective under the Securities Act or pursuant to Rule 144 or Rule 145 under the Securities
Act or that may be disposed of by a Holder pursuant to Rule 144 free of any restrictions or
limitations
2
thereunder. Registrable Securities shall also include any shares of Common Stock or other
securities convertible into or exercisable for shares of Common Stock that may be received by the
Holders (x) as a result of a stock dividend on or stock split of Registrable Securities or (y) on
account of Registrable Securities in a recapitalization of or other transaction involving the
Company.
Registration Statement: Any registration statement of the Company under the Securities Act
that covers any of the Registrable Securities pursuant to the provisions of this Agreement,
including the related Prospectus, any preliminary prospectus, all amendments and supplements to
such registration statement (including post-effective amendments), all exhibits and schedules and
all material incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Restricted Parties: As defined in the Shareholder Agreement.
Rule 144: Rule 144 under the Securities Act or any successor rule or provision.
Rule 145: Rule 145 under the Securities Act or any successor rule or provision.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
Shareholder Agreement: The Amended and Restated Shareholder Agreement, dated as of the date
hereof, between the Company and the Purchaser, as such agreement may be amended, supplemented or
otherwise modified from time to time.
Underwritten Offering: A registered offering of Common Stock pursuant to the Securities
Act, in which shares of Common Stock of the Company are sold to the public through one or more
underwriters.
Section 2.
Demand Registration
.
(a)
Requests for Registration by Holders
. Subject to the terms and conditions of the
Shareholder Agreement, at any time and from time to time, subject to the conditions set forth in
this Agreement: (i) one or more Holders will have the right, by written notice delivered to the
Company (a Demand Notice), to require the Company to register Registrable Securities under and in
accordance with the provisions of the Securities Act (a Demand Registration), provided that the
Holders may not make in the aggregate more than four (4) Demand Registrations under this Agreement;
provided, further, that: (i) no such Demand Registration may be required unless the Holders
requesting such Demand Registration provide to the Company a certificate (the Authorizing
Certificate), seeking to include at least two million (2,000,000) shares of Registrable Securities
in such Demand Registration as of the date the Demand Notice is given; and (ii) no Demand Notice
may be given prior to six (6) months after the effective
3
date of the immediately preceding Demand Registration or, if later, the date on which a
registration pursuant to this Section 2 is terminated in its entirety prior to the effective date
of the applicable registration statement. The Authorizing Certificate shall set forth (A) the name
of each Holder signing such Authorizing Certificate, (B) the number of Registrable Securities held
by each such Holder, and, if different, the number of Registrable Securities such Holder has
elected to have registered, and (C) the intended methods of disposition of the Registrable
Securities. Notwithstanding the foregoing, a good faith decision by a Holder to withdraw
Registrable Securities from registration will not affect the Companys obligations hereunder even
if the amount remaining to be registered is fewer than two million (2,000,000) shares of
Registrable Securities, provided that: (1) such continuing registration shall constitute a Demand
Registration, (2) the withdrawing Holder reimburses the Company for any registration and filing
fees (including any fees payable to the Financial Industry Regulatory Authority, Inc. or any
successor organization) it has incurred with respect to the withdrawn Registrable Securities
(unless all Registrable Securities are withdrawn, in which case the withdrawing Holder(s) shall
reimburse the Company for all costs and expenses incurred by it in connection with the registration
of such Registrable Securities) and (3) such Holder (or the other Holders participating in the
subject registration) did not include the withdrawn Registrable Securities as a means of
circumventing the threshold of two million (2,000,000) shares of Registrable Securities described
above. Subject to compliance with clause (2) of the preceding proviso, a registration that is
terminated in its entirety prior to the effective date of the applicable registration statement
will not constitute a Demand Registration.
(b)
Filing and Effectiveness
. The Company will file a Registration Statement relating
to any Demand Registration as promptly as practicable (but in any event within 90 calendar days)
following the date on which the Demand Notice is given and will use all commercially reasonable
efforts to cause the same to be declared effective by the SEC as soon as practicable thereafter.
If any Demand Registration is requested to be effected as a shelf registration pursuant to Rule 415
under the Securities Act by the Holders demanding such Demand Registration, the Company will keep
the Registration Statement filed in respect thereof effective for a period of six (6) months from
the date on which the SEC declares such Registration Statement effective (subject to extension
pursuant to Section 5) or such shorter period that will terminate when all Registrable Securities
covered by such Registration Statement have been sold pursuant to such Registration Statement.
Within ten (10) business days after receipt of such Demand Notice, the Company will serve
written notice thereof (the Notice) to all other Holders and will, subject to the provisions of
Section 2(c), include in such registration all Registrable Securities with respect to which the
Company receives written requests for inclusion therein within ten (10) business days after receipt
of the Notice by the applicable Holder. Subject to the proviso at the end of Section 2(a), the
Holder will be permitted to withdraw in good faith all or part of the Registrable Securities from a
Demand Registration at any time prior to
4
the effective date of such Demand Registration, in which event the Company will promptly amend
or, if applicable, withdraw the related Registration Statement.
(c)
Priority on Demand Registration
. If Registrable Securities are to be registered
pursuant to a Demand Registration, the Company shall provide written notice to the other Holders
and will permit all such Holders who request to be included in the Demand Registration to include
any or all Registrable Securities held by such Holders in such Demand Registration.
Notwithstanding the foregoing, if the managing underwriter or underwriters of an Underwritten
Offering to which such Demand Registration relates advises the Holders that the total amount of
Registrable Securities that such Holders intend to include in such Demand Registration is in the
aggregate such as to materially and adversely affect the success of such offering, then the number
of Registrable Securities to be included in such Demand Registration will, if necessary, be reduced
and there will be included in such underwritten offering the number of Registrable Securities that,
in the opinion of such managing underwriter or underwriters, can be sold without materially and
adversely affecting the success of such Underwritten Offering. The Registrable Securities of the
Holder or Holders initiating the Demand Registration shall receive priority in such Underwritten
Offering to the full extent of the Registrable Securities such Holder or Holders desire to sell
(unless these securities would materially and adversely affect the success of such offering, in
which case the number of such Holders Registrable Securities included in the offering shall be
reduced to the extent necessary) and the remaining allocation available for sale, if any, shall be
allocated pro rata among the other Holders on the basis of the amount of Registrable Securities
requested to be included therein by each such Holder.
(d)
Postponement of Demand Registration
. The Company will be entitled to postpone the
filing period of any Demand Registration for a reasonable period of time not in excess of 90
calendar days if the Company determines, in the good faith exercise of the business judgment of its
Board of Directors, that such registration and offering could materially interfere with a bona fide
business or financing transaction of the Company or would require disclosure of information, the
premature disclosure of which could materially and adversely affect the Company. If the Company
postpones the filing of a Registration Statement, it will promptly notify the Holders in writing
(i) when the events or circumstances permitting such postponement have ended and (ii) that the
decision to postpone was made by the Board of Directors of the Company in accordance with this
Section 2(d).
Section 3.
Piggyback Registration
.
(a)
Right to Piggyback
. If at any time the Company proposes to file a Registration
Statement, whether or not for sale for the Companys own account, on a form and in a manner that
would also permit registration of Registrable Securities, the Company shall give to Holders holding
Registrable Securities, written notice of such proposed filing at least thirty (30) calendar days
before the anticipated filing. The notice referred to in the preceding sentence shall offer
Holders the opportunity to register such amount of Registrable Securities as each Holder may
request (a Piggyback
5
Registration). Subject to Section 3(b), the Company will include in each such Piggyback
Registration all Registrable Securities with respect to which the Company has received written
requests for inclusion therein. Subject to clause (2) of the proviso at the end of Section 2(a),
the Holders will be permitted to withdraw all or part of the Registrable Securities from a
Piggyback Registration at any time prior to the effective date of such Piggyback Registration.
Notwithstanding the foregoing, the Company will not be obligated to effect any registration of
Registrable Securities under this Section 3 as a result of the registration of any of its
securities solely in connection with mergers, acquisitions, exchange offers, dividend reinvestment
and share purchase plans offered solely to current holders of the Common Stock, rights offerings or
option or other employee benefit plans.
(b)
Priority on Piggyback Registrations
. The Company will cause the managing
underwriter or underwriters of a proposed Underwritten Offering to permit Holders holding
Registrable Securities requested to be included in the registration for such offering to include
therein all such Registrable Securities requested to be so included on the same terms and
conditions as any securities of the Company included therein (other than the indemnification by the
Holders, which will be limited as set forth in Section 7 hereof). Notwithstanding the foregoing,
if the managing underwriter or underwriters of such Underwritten Offering advises the Holders to
the effect that the total amount of securities that such Holders and the Company propose to include
in such Underwritten Offering is such as to materially and adversely affect the success of such
offering, then the Company will include in such registration (i) first, 100% of the Common Stock of
the Person who requests such registration, if any, (ii) second, 100% of the Common Stock the
Company proposes to sell, and (iii) third, to the extent of the number of Registrable Securities
requested to be included in such registration which, with the advice of such managing underwriter,
can be sold without having the adverse effect referred to above, the number of Registrable
Securities which the Holders have requested to be included in such registration, such amount to be
allocated pro rata among all requesting Holders on the basis of the relative number of Registrable
Securities then held by each such Holder.
Section 4.
Restrictions on Sale by Holders
. Each Holder agrees, if such Holder is so
requested (pursuant to a timely written notice) by the managing underwriter or underwriters in an
Underwritten Offering, not to effect any public sale or distribution of any of the Companys
securities of such class or securities convertible or exchangeable into such class (except as part
of such underwritten offering), including a sale pursuant to Rule 144 under the Securities Act,
during the 15-calendar day period prior to, and during the 90-calendar day period beginning on, the
closing date of such Underwritten Offering.
Section 5.
Registration Procedures
. In connection with the Companys registration
obligations pursuant to Sections 2 and 3, the Company will use its commercially reasonable efforts
to effect such registrations to permit the sale of such Registrable Securities in accordance with
the intended method or methods of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible, and in each
6
case to the extent applicable (it being understood that the obligations of the Company in
clauses (a), (b), (d), (h), (j), (k), (l), (n) and (q) of this Section 5 will be subject to the
first sentence of Section 3(b) and, except as provided in Section 3(b), the Holders will not have
any right to effect an underwritten public offering under Section 3) use its commercially
reasonable efforts to:
(a) Prepare and file with the SEC a Registration Statement or Registration Statements
on any appropriate form under the Securities Act available for the sale of the Registrable
Securities by the holders thereof in accordance with the intended method or methods of
distribution thereof, and cause each such Registration Statement to become effective and
remain effective as provided herein; provided, however, that before filing a Registration
Statement or Prospectus or any amendments or supplements thereto the Company will furnish
to the Holders holding Registrable Securities covered by such Registration Statement, not
more than one counsel chosen by Holders holding a majority of the Registrable Securities
being registered (Special Counsel) and the managing underwriters, if any, copies of all
such documents proposed to be filed, which documents will be subject to the review of such
Holders, such Special Counsel and such underwriters, and the Company will not file any such
Registration Statement or amendment thereto or any Prospectus or any supplement thereto
(excluding such documents that, upon filing, will be incorporated or deemed to be
incorporated by reference therein) to which the Holders holding a majority of the
Registrable Securities covered by such Registration Statement or the managing underwriter,
if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective amendments to
each Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable periods specified in Section 2; cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the selling Holders and the managing underwriters, if any, promptly, and
(if requested by any such person) confirm such notice in writing, (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with respect to
a Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or related Prospectus
or for additional information, (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
7
Registration Statement or the initiation of any proceedings for that purpose, (iv) if
at any time the representations and warranties of the Company contained in any agreement
contemplated by Section 5(n) (including any underwriting agreement) cease to be true and
correct in any material respect, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, (vi) of the occurrence of any event that makes any
statement made in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material
respect or that requires the making of any changes in a Registration Statement, Prospectus
or any such document so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading and, in the
case of the Prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, and
(vii) of the Companys reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Obtain the withdrawal of any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any jurisdiction, at the
earliest possible moment.
(e) If requested by the managing underwriters, if any, or Holders holding a majority
of the Registrable Securities being registered, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing underwriters, if
any, and such Holders agree should be included therein as may be required by applicable law
and (ii) make all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of the matters
to be incorporated in such Prospectus supplement or post-effective amendment; provided,
however, that the Company will not be required to take any actions under this Section 5(e)
that are not, in the opinion of counsel for the Company, in compliance with applicable law.
(f) Furnish to each selling Holder and each managing underwriter, if any, without
charge, at least one conformed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements (but excluding schedules, all documents
incorporated or deemed incorporated therein by reference and all exhibits, unless requested
in writing by such holder or underwriter).
8
(g) Deliver to each selling Holder and the underwriters, if any, without charge as
many copies of the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto as such
persons may reasonably request; and, subject to the last paragraph of this Section 5, the
Company hereby consents to the use of such Prospectus or each amendment or supplement
thereto by each of the selling Holders and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to register or qualify or
cooperate with the selling Holders, the underwriters, if any, and their respective counsel
in connection with the registration or qualification (or exemption from such registration
or qualification) of such Registrable Securities for offer and sale under the securities or
blue sky laws of such jurisdictions within the United States as any seller or underwriter
reasonably requests in writing; use all commercially reasonable efforts to keep such
registration or qualification (or exemption therefrom) effective during the period the
applicable Registration Statement is required to be kept effective and do any and all other
acts or things necessary or advisable to enable the disposition in each such jurisdiction
of the Registrable Securities covered by the applicable Registration Statement; provided,
however, that the Company will not be required to (i) qualify to do business in any
jurisdiction where it is not then so qualified or (ii) take any action that would subject
it to taxation or service of process in any such jurisdiction where it is not then so
subject.
(i) Cooperate with the selling Holders and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be sold and enable such Registrable Securities to be in such denominations
and registered in such names as the managing underwriters, if any, shall request at least
two business days prior to any sale of Registrable Securities to the underwriters.
(j) Cause the Registrable Securities covered by the applicable Registration Statement
to be registered with or approved by such other governmental agencies or authorities within
the United States except as may be required solely as a consequence of the nature of any
selling Holders business, in which case the Company will cooperate in all reasonable
respects with the filing of such Registration Statement and the granting of such approvals
as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to
consummate the disposition of such Registrable Securities.
(k) Upon the occurrence of any event contemplated by Section 5(c)(vi) or 5(c)(vii),
prepare a supplement or post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by reference or
file any other required document so that, as
9
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, such Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading.
(l) If requested by Holders holding a majority of the Registrable Securities covered
by such Registration Statement or the managing underwriters, if any, use its commercially
reasonable efforts to cause all Registrable Securities covered by such Registration
Statement to be listed on each securities exchange or automated quotation system, if any,
on which securities issued by the Company of the same class are then listed or quoted.
(m) As needed, (i) engage an appropriate transfer agent and provide the transfer agent
with printed certificates for the Registrable Securities in a form eligible for deposit
with The Depository Trust Company and (ii) provide a CUSIP number for the Registrable
Securities.
(n) Enter into such customary agreements (including, in the event of an Underwritten
Offering, an underwriting agreement in form, scope and substance as is customary in
underwritten offerings) and take all such other commercially reasonable and customary
actions in connection therewith (including those reasonably requested by the Holders
holding a majority of the Registrable Securities being sold or, in the event of an
Underwritten Offering, those reasonably requested by the managing underwriters) in order to
facilitate the disposition of such Registrable Securities and in such connection, but only
where an underwriting agreement is entered into in connection with an underwritten
registration, (i) make such representations and warranties to the underwriters with respect
to the businesses of the Company and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by reference
therein, if any, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof, which
counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, addressed to each of the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such underwriters; (iii) use commercially reasonable
efforts to obtain comfort letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other certified public
accountants of any subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be, included in the
Registration Statement), addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in comfort letters in
connection with underwritten offerings; and (iv) deliver such documents and
10
certificates as may be reasonably requested by the managing underwriters, if any, to
evidence the continued validity of the representations and warranties of the Company and
its subsidiaries made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement entered into by the Company.
The foregoing actions will be taken in connection with each closing under such underwriting
agreement as and to the extent required thereunder.
(o) Make available for reasonable inspection during normal business hours by a
representative of the Holders holding Registrable Securities being sold, any underwriter
participating in any disposition of Registrable Securities, and any attorney or accountant
retained by such selling Holders or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and cause the
officers, directors and employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement; provided, however, that any
records, information or documents that are designated by the Company in writing as
confidential at the time of delivery of such records, information or documents will be kept
confidential by such persons unless (i) such records, information or documents are in the
public domain or otherwise publicly available, (ii) disclosure of such records, information
or documents is required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, or (iii) disclosure of such records, information or
documents, in the reasonable opinion of counsel to such person, is otherwise required by
law (including, without limitation, pursuant to the requirements of the Securities Act).
(p) Comply with all applicable rules and regulations of the SEC and make generally
available to its security holders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 45 calendar days after the end of any 12-month period (or
90 calendar days after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Securities are sold to
underwriters in a firm commitment or best efforts underwritten offering, or (ii) if not
sold to underwriters in such an offering, commencing on the first day of the first fiscal
quarter of the Company, after the effective date of a Registration Statement, which
statements shall cover such 12-month period.
(q) In connection with any Underwritten Offering, cause appropriate members of
management to cooperate and participate on a reasonable basis in the underwriters road
show conferences related to such offering.
The Company may require each seller of Registrable Securities as to which any registration is
being effected to furnish to the Company such information regarding the distribution of such
Registrable Securities as the Company may, from time to time,
11
reasonably request in writing, and the Company may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
Each Holder will be deemed to have agreed by virtue of its acquisition of Registrable
Securities that, upon receipt of any notice from the Company of the occurrence of any event of the
kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(v), 5(c)(vi) or 5(c)(vii) (Suspension
Notice), such Holder will forthwith discontinue disposition of such Registrable Securities covered
by such Registration Statement or Prospectus (a Black-Out) until such Holders receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(k), or until it is
advised in writing (the Advice) by the Company that the use of the applicable Prospectus may be
resumed, and such Holder has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus. Except as expressly
provided herein, there shall be no limitation with regard to the number of Suspension Notices that
the Company is entitled to give hereunder; provided, however, that in no event shall the aggregate
number of days the Holders are subject to Black-Out during any period of 12 consecutive months
exceed 180 days.
Section 6.
Registration Expenses
. Subject to clause (2) of the proviso at the end of
section 2(a), all fees and expenses incident to the performance of or compliance with this
Agreement by the Company will be borne by the Company whether or not any of the Registration
Statements become effective. Such fees and expenses will include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses for compliance with
securities or blue sky laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit with The Depository
Trust Company and of printing a reasonable number of prospectuses if the printing of such
prospectuses is requested by the Holders holding a majority of the Registrable Securities included
in any Registration Statement), (iii) messenger, telephone and delivery expenses incurred by the
Company, (iv) fees and disbursements of counsel for the Company incurred by the Company, (v) fees
and disbursements of all independent certified public accountants referred to in Section 5(n)(iii)
(including the expenses of any special audit and comfort letter required by or incident to such
performance) incurred by the Company, (vi) Securities Act liability insurance, if any, and (vii)
fees and expenses of Special Counsel retained by the Holders in connection with the registration
and sale of their Registrable Securities (which counsel will be selected by the Holders of a
majority of the Registrable Securities being sold), provided that any such fees and expenses of
Special Counsel in excess of $20,000 for any offering will not be reimbursed by the Company. In
addition, the Company will pay internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting duties), the expense of any
annual audit, the fees and expenses incurred in connection with the listing of the securities to be
registered on any securities exchange on which securities of the same class issued by the Company
are then listed and the fees and expenses of any person, including special experts, retained by the
Company. In no event, however, will
12
the Company be responsible for any underwriting discount or selling commission with respect to
any sale of Registrable Securities pursuant to this Agreement, and the Holders shall be responsible
on a pro rata basis for any taxes of any kind (including, without limitation, transfer taxes) with
respect to any disposition, sale or transfer of Registrable Securities and for any legal,
accounting and other expenses incurred by them in connection with any Registration Statement.
Section 7.
Indemnification
.
(a)
Indemnification by the Company
. The Company will, without limitation as to time,
indemnify and hold harmless, to the fullest extent permitted by law, each Holder holding
Registrable Securities registered pursuant to this Agreement, the officers, directors and agents
and employees of each of them, each person who controls such a Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of any such controlling person, from and against all losses, claims, damages,
liabilities, costs (including without limitation the reasonable costs of investigation and
reasonable attorneys fees) and expenses (collectively, Losses), as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or in any preliminary prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar and to the extent as the
same are based upon information furnished in writing to the Company by such Holder for use therein;
provided, however, that the Company will not be liable to any Holder to the extent that any such
Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Registration Statement, Prospectus or preliminary prospectus if
either (A) (i) such Holder failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale by such Holder of a Registrable Security to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would have corrected such
untrue statement or alleged untrue statement or such omission or alleged omission; or (B) such
untrue statement or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus previously furnished by or on behalf of the Company with
copies of the Prospectus, and such Holder thereafter fails to deliver such Prospectus as so amended
or supplemented prior to or concurrently with the sale of a Registrable Security to the person
asserting the claim from which such Losses arise.
(b)
Indemnification by Holders
. In connection with any Registration Statement in
which a Holder is participating, such Holder will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any Registration
Statement, Prospectus or preliminary prospectus and will indemnify, to the fullest extent permitted
by law, the Company, its directors and officers, agents and employees, each person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling persons, from and
against all Losses arising out of or
13
based upon any untrue statement of a material fact contained in any Registration Statement,
Prospectus or preliminary prospectus or arising out of or based upon any omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company for use in such Registration
Statement, Prospectus or preliminary prospectus and was relied upon by the Company in the
preparation of such Registration Statement, Prospectus or preliminary prospectus. In no event will
the liability of any selling Holder hereunder be greater in amount than the dollar amount of the
proceeds (net of payment of all expenses) received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c)
Conduct of Indemnification Proceedings
. If any person shall become entitled to
indemnity hereunder (an indemnified party), such indemnified party shall give prompt notice to
the party from which such indemnity is sought (the indemnifying party) of any claim or of the
commencement of any action or proceeding with respect to which such indemnified party seeks
indemnification or contribution pursuant hereto; provided, however, that the failure to so notify
the indemnifying party will not relieve the indemnifying party from any obligation or liability
except to the extent that the indemnifying party has been prejudiced materially by such failure.
All reasonable fees and expenses (including any reasonable fees and expenses incurred in connection
with investigating or preparing to defend such action or proceeding) will be paid to the
indemnified party (provided appropriate documentation for such expenses is also submitted with such
notice), as incurred, within five calendar days of written notice thereof to the indemnifying party
(regardless of whether it is ultimately determined that an indemnified party is not entitled to
indemnification hereunder). The indemnifying party will not consent to entry of any judgment or
enter into any settlement or otherwise seek to terminate any action or proceeding in which any
indemnified party is or could be a party and as to which indemnification or contribution could be
sought by such indemnified party under this Section 7, unless such judgment, settlement or other
termination includes as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release, in form and substance reasonably satisfactory to the
indemnified party, from all liability in respect of such claim or litigation for which such
indemnified party would be entitled to indemnification hereunder.
(d)
Contribution
. If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under Section 7(a) or 7(b) in respect of any Losses or is
insufficient to hold such indemnified party harmless, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, will, severally but not jointly, contribute to the
amount paid or payable by such indemnified party as a result of such Losses, in such proportion as
is appropriate to reflect the relative fault of the indemnifying party or indemnifying parties, on
the one hand, and such indemnified party, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of
14
such indemnifying party or indemnifying parties, on the one hand, and such indemnified party,
on the other hand, will be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or
alleged omission of a material fact, has been taken or made by, or related to information supplied
by, such indemnifying party or indemnified party, and the parties relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by a party as a result of any Losses will be deemed to include any legal
or other fees or expenses incurred by such party in connection with any action or proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 7(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7(d), an indemnifying party that is a
selling Holder will not be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by such indemnifying party and distributed to
the public were offered to the public exceeds the amount of any damages that such indemnifying
party has otherwise been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of the Company hereunder
will be in addition to any liability the Company may otherwise have hereunder or otherwise. The
provisions of this Section 7 will survive so long as Registrable Securities remain outstanding,
notwithstanding any permitted transfer of the Registrable Securities by any Holder thereof or any
termination of this Agreement.
Section 8.
Underwritten Registrations
. If any of the Registrable Securities included
in any Demand Registration are to be sold in an Underwritten Offering, the Holders holding a
majority of the Registrable Securities included in the Demand Notice may select an investment
banker or investment bankers and manager or managers to manage the Underwritten Offering, provided
that such investment banker or bankers is (are) reasonably acceptable to the Company. If any
Piggyback Registration is an Underwritten Offering, the Company will have the exclusive right to
select the investment banker or investment bankers and managers to administer the offering. The
Company agrees that, in connection with any Underwritten Offering hereunder, it shall undertake to
offer customary indemnification to the participating underwriters.
Section 9.
Miscellaneous
.
(a)
Remedies
. In the event of a breach by a party of its obligations under this
Agreement, each other party, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its rights under this
Agreement. Each party agrees that monetary damages would not
15
be adequate compensation for any loss incurred by reason of a breach by it of any provision of
this Agreement and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it will waive the defense that a remedy at law would be adequate.
(b)
Amendments and Waivers
. The provisions of this Agreement may not be amended,
modified or supplemented without the prior written consent of the Company and Holders holding in
excess of 50% of the Registrable Securities.
(c)
Notices
. Except as set forth below, all notices and other communications provided
for or permitted hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by telex or telecopier, registered or certified mail (return receipt
requested), postage prepaid or courier or overnight delivery service to the Company at the
following address and to a Holder at the address set forth on his or her signature page to this
Agreement (or at such other address for any party as shall be specified by like notice, provided
that notices of a change of address shall be effective only upon receipt thereof):
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If to the Company:
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ValueVision Media, Inc.
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6740 Shady Oak Road
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Eden Prairie, MN 55344-3433
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Attention: General Counsel
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Telecopy: (612) 947-0188
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With copies to (which shall
not constitute notice):
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Latham & Watkins LLP
355 South Grand Avenue
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Los Angeles, CA 90071-1560
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Attention: James P. Beaubien and Jason H.
Silvera
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Telecopy: (213) 891-8763
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and
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Faegre & Benson LLP
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2200 Wells Fargo Center
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90 South Seventh Street
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Minneapolis, MN 55402-3901
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Attention: Peter J. Ekberg
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Telecopy: (612) 766-1600
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If to the
Purchaser:
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GE Capital Equity Investments, Inc.
201 Merritt 7
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16
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1st Floor
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Norwalk, CT 06851
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Attention: VVTV Account Manager
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Telecopy: (203) 229-5097
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With copies to (which shall
not constitute notice):
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Weil, Gotshal & Manges LLP
767 Fifth Avenue
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New York, NY 10153
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Attention: Alexander D. Lynch
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Telecopy: (212) 310-8007
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If to NBC:
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NBC Universal, Inc.
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30 Rockefeller Plaza
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New York, New York 10112
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Attention: Chief Financial Officer
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Telecopy: (212) 664-0427
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With copies to (which shall
not constitute notice):
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NBC Universal, Inc.
30 Rockefeller Plaza
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New York, New York 10112
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Attention: General Counsel
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Telecopy: (212) 664-4733
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(d)
Merger or Consolidation of the Company
. If the Company is a party to any merger
or consolidation pursuant to which Registrable Securities are converted into or exchanged for
securities or the right to receive securities of any other person (Conversion Securities), the
issuer of such Conversion Securities shall assume (in a writing delivered to all Holders) all
obligations of the Company hereunder. The Company will not effect any merger or consolidation
described in the immediately preceding sentence unless the issuer of the Conversion Securities
complies with this Section 9(d).
(e)
Successors and Assigns
. Subject to the terms and conditions of the Shareholder
Agreement, (i) any transferee of all or a portion of the Registrable Securities and (ii) any
Restricted Party that holds Registrable Securities shall become a Holder hereunder to the extent it
agrees in writing to be bound by all of the provisions applicable hereunder to a Holder (such
acknowledgment being evidenced by execution of a
17
Counterpart and Acknowledgment substantially in the form of Exhibit A). Subject to the
requirements of this Section 9(e), this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto.
(f)
Counterparts
. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed will be deemed to be an
original and all of which taken together will constitute one and the same instrument.
(g)
Headings
. The headings in this Agreement are for convenience of reference only
and will not limit or otherwise affect the meaning.
(h)
Governing Law
. This agreement will be governed by and construed in accordance
with the laws of the State of New York, as applied to contracts made and performed within the State
of New York, without regard to principles of conflict of laws.
(i)
Severability
. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions set forth herein will remain in full force and
effect and will in no way be affected, impaired or invalidated, and the parties hereto will use
their best efforts to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such which may be
hereafter declared invalid, void or unenforceable.
(j)
Entire Agreement
. This Agreement is intended by the parties as a final expression
of their agreement and intended to be the complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
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VALUEVISION MEDIA, INC.
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By:
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/s/ Nathan E. Fagre
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Name:
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Nathan E. Fagre
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Title:
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Senior Vice President, General
Counsel and Secretary
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GE CAPITAL EQUITY INVESTMENTS, INC.
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By:
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/s/ Michael S. Fisher
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Name:
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Michael S. Fisher
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Title:
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Sr. Managing Director
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NBC UNIVERSAL, INC.
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By:
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/s/ Salil Mehta
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Name:
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Salil Mehta
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Title:
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President, Business Operations,
Strategy & Development
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19
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
COUNTERPART AND ACKNOWLEDGMENT
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RE:
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The Amended and Restated Registration
Rights Agreement (the
Agreement) dated
as of February 25, 2009 by and among the
Company
and the Holders (as defined in the Agreement)
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The undersigned hereby agrees to be bound by the terms of the Agreement as a party to the
Agreement, and shall be entitled to all benefits of a Holder (as defined in the Agreement) and
shall be subject to all obligations and restrictions of a Holder pursuant to the Agreement, as
fully and effectively as though the undersigned had executed a counterpart of the Agreement
together with the other parties to the Agreement. The undersigned hereby acknowledges having
received and reviewed a copy of the Agreement.
DATED
this ___ day of __,
Number of Shares of Registrable Securities: