AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
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THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is entered into as of June 26, 1998, by and among VALUE AMERICA,
INC. (the "Company"), a Virginia corporation, and each of the entities and
individuals listed on Annex A hereto (individually referred to herein as an
"Investor" and collectively as the "Investors").
R E C I T A L S
A. Pursuant to the Registration Rights Agreement dated as of
December 17, 1997 (the "Prior Registration Rights Agreement"), by and between
the Company and Union Labor Life Insurance Company, a Maryland corporation
acting on behalf of its Separate Account P ("Ullico"), the Company granted
Ullico certain rights regarding registration of the Company's securities.
B. The Company and Ullico desire to terminate the Prior
Registration Rights Agreement and accept the rights created pursuant hereto in
lieu of the rights granted to Ullico under the Prior Registration Rights
Agreement.
C. Concurrently with entering into this Agreement, the Company
and the Investors are entering into a Preferred Stock Purchase Agreement of even
date herewith, pursuant to which the Investors agree to purchase 617,979 shares
of Series B Preferred Stock of the Company (the "Preferred Stock Purchase
Agreement") from the Company on the terms and subject to the conditions
appearing therein, and the execution and delivery of this Agreement by the
parties hereto are a condition to the Investors' obligation to purchase the
Series B Preferred Stock.
A G R E E M E N T
THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the terms
defined in this Section 1 shall have the meanings herein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms herein defined.
"Agreement" means this Amended and Restated Registration Rights
Agreement.
"Board" means the Board of Directors of the Company.
"Common Stock" means the common stock of the Company, without par value
per share.
"Commission" means the Securities and Exchange Commission.
"Equity Security" has the meaning assigned to it in the Preferred Stock
Purchase Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" of any security means the record or beneficial owner of such
security. A Holder of Preferred Stock shall be treated as the Holder of the
Registrable Securities underlying such Preferred Stock.
"Holders of a Majority of the Registrable Securities" means the Person
or Persons who are the Holders of greater than 50% of the shares of Registrable
Securities then outstanding.
"Initiating Holders" means (i) with respect to each registration
pursuant to Section 2, other than on Form S-3, the Holder or Holders of at least
25% of the shares of Registrable Securities then outstanding, and (ii) with
respect to a registration on Form S-3, the Holder or Holders of Registrable
Securities having an anticipated public offering price of at least $5.0 million
at the time the demand for registration is given under Section 2.
"Investors" has the meaning assigned to it in the introductory
paragraph of this Agreement.
"Person" includes any natural person, corporation, trust, association,
company, partnership, joint venture and other entity and any government,
governmental agency, instrumentality or political subdivision.
"Preferred Stock" means the Series B Preferred Stock, without par
value, of the Company.
"Preferred Stock Purchase Agreement" means the Preferred Stock Purchase
Agreement dated as of the date hereof, among the Company and the Investors.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Prior Purchase Agreement" means that certain Preferred Stock Purchase
Agreement dated as of December 17, 1997, between the Company and Ullico.
"Prior Registration Rights Agreement" means that certain Registration
Rights Agreement dated as of December 17, 1997, between the Company and Ullico.
"Registrable Securities" means (1) all Common Stock owned now or in the
future by the Investors, (2) the Common Stock issued or issuable upon conversion
of the Preferred Stock issued and sold pursuant to the Preferred Stock Purchase
Agreement, whether owned by the Investors or not, (3) the Common Stock issued or
issuable upon conversion of the Series A Preferred Stock, without par value, of
the Company issued and sold pursuant to the Prior Purchase Agreement, whether
owned by Ullico or not, and (4) any securities issued or issuable with respect
to the Common Stock referred to in clauses (1), (2) and (3) above by way of a
stock dividend or stock split or in connection with a combination of shares,
reclassification, recapitalization, merger or consolidation or reorganization;
provided, however, that such shares of Common Stock shall (a) only be treated as
Registrable Securities if and so long as they have not been (i) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (ii) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect to such Common Stock are removed upon the consummation of such sale
and the seller and purchaser of such Common Stock receive an opinion of counsel
for the Company, which shall be in form and content reasonably satisfactory to
the seller and buyer and their respective counsel, to the effect that such
Common Stock in the hands of the purchaser is freely transferable without
restriction or registration under the Securities Act in any public or private
transaction, and (b) not be treated as Registrable Securities after the Company
has completed its initial firmly underwritten public offering registered under
the Securities Act if the Holder thereof is lawfully able to sell such shares of
Common Stock without registration and in compliance with all other applicable
securities laws and in reliance upon Rule 144 (k) of the Commission and has
received a reasonably satisfactory opinion of the Company's counsel (which
counsel is reasonably satisfactory to such Holder) and its own counsel to this
effect and all transfer restrictions and restrictive legends have been removed
from the certificates evidencing such shares.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
2. Required Registration
(a) If and whenever the Company shall receive a written
request therefor from Initiating Holders, the Company agrees to prepare and file
promptly a registration statement under the Securities Act covering the shares
of Registrable Securities which are the subject of such request and agrees to
use its best efforts to cause such registration statement to become effective as
expeditiously as possible. Upon the receipt of such request, the Company agrees
to give promptly written notice to all Holders of Registrable Securities that
such registration is to be effected. The Company agrees to include in such
registration statement such shares of Registrable Securities for which it has
received written requests to register such shares by the Holders thereof within
thirty (30) days after the receipt of written notice from the Company.
(b) The Company shall be obligated to prepare, file and cause
to become effective only two registration statements pursuant to this Section 2,
excluding registration statements on Form S-3 which shall not count for purposes
of this limitation. The Company shall not be obligated to effect more than one
registration on Form S-3 under this Section 2 during any six-month period and
shall be obligated to prepare, file and cause to become effective only six
registration statements on Form S-3 pursuant to this Section 2.
(c) The Company shall not be required by this Section 2 to
effect a registration of Registrable Securities pursuant to any registration
statement, other than on Form S-3, unless the proposed public offering price of
the securities to be included in such registration shall be at least $5.0
million (before deducting underwriting discounts and commissions). A
registration under this Section 2 shall be on a form selected by the Holders of
a majority of the shares of Registrable Securities to be included in such
registration.
(d) If the Holders initiating a request for the registration
of Registrable Securities pursuant to this Section 2 intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they agree to provide the Company with the name of the managing underwriter or
underwriters (the "managing underwriter") that a majority interest of the
Initiating Holders requesting such registration propose to employ, as a part of
their request made pursuant to this Section 2, and the Company agrees to include
such information in its written notice referred to in Section 2(a). In such
event the right of any Holder to registration pursuant to this Section 2 shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested (unless otherwise mutually agreed by the Holders of a Majority
of the Registrable Securities initiating such request for registration and such
Holder) to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting agree to enter into (together with the
Company) an underwriting agreement with the underwriter or underwriters selected
for such underwriting, in the manner set forth above, provided that such
underwriting agreement is in customary form and is reasonably acceptable to the
Holders of a majority of the shares of Registrable Securities to be included in
such registration.
(e) Notwithstanding any other provision of this Section 2, if
the managing underwriter of an underwritten distribution advises the Company and
the Holders of Registrable Securities participating in such registration in
writing that in its good faith judgment the number of shares of Registrable
Securities requested to be included in such registration exceeds the number of
shares of Registrable Securities which can be sold in such offering, then (i)
the number of shares of Registrable Securities so requested to be included in
such registration shall be reduced to that number of shares which in the good
faith judgment of the managing underwriter can be sold in such offering and (ii)
this reduced number of shares shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective number of shares of
Registrable Securities held by such Holders at the time of filing the
registration statement. Those Registrable Securities and other securities which
are excluded from the underwriting by reason of the managing underwriter's
marketing limitation and all other Registrable Securities not originally
requested to be so included shall not be included in such registration and shall
be withheld from the market by the Holders thereof for a period, not to exceed
one hundred and eighty (180) days, which the managing underwriter reasonably
determines is necessary to effect the underwritten public offering.
(f) If the managing underwriter has not limited the number of
Registrable Securities to be underwritten, the Company and, subject to the
requirements of Section 7 hereof, other holders of the Company's securities may
include securities for its (or their) own account in such registration if the
managing underwriter so agrees and if the number of Registrable Securities which
would otherwise have been included in such registration and underwriting will
not thereby be limited.
3. Incidental Registration
(a) Each time the Company shall determine to file a
registration statement under the Securities Act other than pursuant to Section 2
hereof and other than on Form S-4 or S-8 in connection with the proposed offer
and sale for money of any of its securities either for its own account or on
behalf of any other security holder, the Company agrees to give prompt written
notice of its determination to all Holders of Registrable Securities. Upon the
written request of a Holder of any shares of Registrable Securities given within
thirty (30) days after the receipt of such written notice from the Company, the
Company agrees to cause all such Registrable Securities, the Holders of which
have so requested registration thereof, to be included in such registration
statement and registered under the Securities Act, all to the extent requisite
to permit the sale or other disposition by the prospective seller or sellers of
the Registrable Securities to be so registered.
(b) If the registration of which the Company gives written
notice pursuant to Section 3(a) is for a public offering involving an
underwriting, the Company agrees to so advise the Holders as a part of its
written notice. In such event the right of any Holder to registration pursuant
to this Section 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting agree to enter into
(together with the Company and the other holders distributing their securities
through such underwriting) an underwriting agreement with the underwriter or
underwriters selected for such underwriting by the Company, provided that such
underwriting agreement is in customary form and is reasonably acceptable to the
Holders of a majority of the shares of Registrable Securities requested to be
included in such registration.
(c) Notwithstanding any other provision of this Section 3, if
the managing underwriter of an underwritten distribution advises the Company and
the Holders of the Registrable Securities participating in such registration in
writing that in its good faith judgment the number of shares of Registrable
Securities and the other securities requested to be registered exceeds the
number of shares of Registrable Securities and other securities which can be
sold in such offering, then (i) the number of shares of Registrable Securities
and other securities so requested to be included in the offering shall be
reduced to that number of shares which in the good faith judgment of the
managing underwriter can be sold in such offering (except for (x) shares to be
included pursuant to demand registration rights granted by the Company in
accordance with Section 7 hereof, in an offering initiated upon the exercise of
such rights, (y) shares to be issued by the Company in an offering initiated by
the Company, which shall have priority over the shares of Registrable
Securities, and (z) that number of shares of Common Stock with a proposed public
offering price not to exceed, in the aggregate, $7.0 million to be sold by Xxxxx
Xxxx and Xxx Xxxxxxx upon the exercise of the over-allotment option granted to
the managing underwriters of the initial public offering pursuant to an
effective registration statement under the Securities Act covering the offering
and sale of the Common Stock of the Company for the account of the Company),
provided, however that, in connection with a public offering of the Company's
Common Stock pursuant to an effective registration statement under the
Securities Act (other than the initial public offering), in no event shall the
number of shares of Registrable Securities be reduced below that number of
shares equal to 20% of the aggregate number of shares of Registrable Securities
and all other securities to be sold in such offering, and (ii) such reduced
number of shares shall be allocated among all participating Holders of
Registrable Securities and the holders of other securities in proportion, as
nearly as practicable, to the respective number of shares of Registrable
Securities and other securities held by such Holders and other holders at the
time of filing the registration statement. All Registrable Securities and other
securities which are excluded from the underwriting by reason of the
underwriter's marketing limitation and all other Registrable Securities not
originally requested to be so included shall not be included in such
registration and shall be withheld from the market by the Holders thereof for a
period, not to exceed one hundred and eighty (180) days, which the managing
underwriter reasonably determines is necessary to effect the underwritten public
offering.
4. Registration Procedures. If and whenever the Company is required by
the provisions of Section 2 or 3 hereof to effect the registration of
Registrable Securities under the Securities Act, the Company, at its expense
and as expeditiously as possible, agrees to:
(a) In accordance with the Securities Act and all applicable
rules and regulations, prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective until the securities
covered by such registration statement have been sold, and prepare and file with
the Commission such amendments and supplements to such registration statement
and the prospectus contained therein as may be necessary to keep such
registration statement effective and such registration statement and prospectus
accurate and complete until the securities covered by such registration
statement have been sold;
(b) If the offering is to be underwritten in whole or in part,
enter into a written underwriting agreement in form and substance reasonably
satisfactory to the managing underwriter of the public offering and the Holders
of a majority of the Registrable Securities participating in such offering;
(c) Furnish to the Holders of securities participating in such
registration and to the underwriters of the securities being registered such
number of copies of the registration statement and each amendment and supplement
thereto, preliminary prospectus, final prospectus and such other documents as
such underwriters and Holders may reasonably request in order to facilitate the
public offering of such securities;
(d) Use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as such participating Holders and underwriters may
reasonably request within ten (10) days prior to the original filing of such
registration statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process or to qualify to do
business as a foreign corporation in any jurisdiction where it is not so
qualified;
(e) Notify the Holders participating in such registration,
promptly after it shall receive notice thereof, of the date and time when such
registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;
(f) Notify such Holders promptly of any request by the
Commission for the amending or supplementing of such registration statement or
prospectus or for additional information;
(g) Prepare and file with the Commission, promptly upon the
request of any such Holders, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such Holders, is
required under the Securities Act or the rules and regulations thereunder in
connection with the distribution of the Registrable Securities by such Holders;
(h) Prepare and file promptly with the Commission, and
promptly notify such Holders of the filing of, such amendments or supplements to
such registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event has
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an 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;
(i) In case any of such Holders or any underwriter for any
such Holders is required to deliver a prospectus at a time when the prospectus
then in circulation is not in compliance with the Securities Act or the rules
and regulations of the Commission, prepare promptly upon request such amendments
or supplements to such registration statement and such prospectus as may be
necessary in order for such prospectus to comply with the requirements of the
Securities Act and such rules and regulations;
(j) Advise such Holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(k) Not file any registration statement or prospectus or any
amendment or supplement to such registration statement or prospectus to which
the Holders of a majority of the Registrable Securities included or to be
included in a registration have reasonably objected on the grounds that such
registration statement or prospectus or amendment or supplement thereto does not
comply in all material respects with the requirements of the Securities Act or
the rules and regulations thereunder, after having been furnished with a copy
thereof at least five (5) business days prior to the filing thereof; provided,
however, that the failure of such Holders or their counsel to review or object
to any registration statement or prospectus or any amendment or supplement to
such registration statement or prospectus shall not affect the rights of such
Holders or their respective officers, directors, partners, legal counsel,
accountants or controlling Persons or any underwriter or any controlling Person
of such underwriter under Section 6 hereof;
(l) Make available for inspection upon request by any Holder
of Registrable Securities covered by such registration statement, by any
managing underwriter of any distribution to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by any such Holder or any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney, accountant or
agent in connection with such registration statement; and
(m) At the request of any Holder of Registrable Securities
covered by such registration statement, furnish to such Holder on the effective
date of the registration statement or, if such registration includes an
underwritten public offering, at the closing provided for in the underwriting
agreement, (i) an opinion dated such date of the counsel representing the
Company for the purposes of such registration, addressed to the underwriters, if
any, and to the Holder or Holders making such request, covering such matters
with respect to the registration statement, the prospectus and each amendment or
supplement thereto, proceedings under state and federal securities laws, other
matters relating to the Company, the securities being registered and the offer
and sale of such securities as are customarily the subject of opinions of
issuer's counsel provided to underwriters in underwritten public offerings, and
such opinion of counsel shall additionally cover such legal matters with respect
to the registration as such requesting Holder or Holders may reasonably request,
and (ii) letters dated each of such effective date and such closing date, from
the independent certified public accountants of the Company, addressed to the
underwriters, if any, and to the Holder or Holders making such request, stating
that they are independent certified public accountants within the meaning of the
Securities Act and dealing with such matters as the underwriters may request, or
if the offering is not underwritten that in the opinion of such accountants the
financial statements and other financial data of the Company included in the
registration statement or the prospectus or any amendment or supplement thereto
comply in all material respects with the applicable accounting requirements of
the Securities Act, and additionally covering such other accounting and
financial matters, including information as to the period ending not more than
five (5) business days prior to the date of such letter with respect to the
registration statement and prospectus, as such requesting Holder or Holders may
reasonably request.
5. Expenses
(a) With respect to each registration effected pursuant to
Section 2 hereof and with respect to each inclusion of shares of Registrable
Securities in a registration statement pursuant to Section 3 hereof, the Company
agrees to bear all fees, costs and expenses of and incidental to such
registration and the public offering in connection therewith; provided, however,
that security holders participating in any such registration agree to bear their
pro rata share of the underwriting discount and commissions.
(b) The fees, costs and expenses of registration to be borne
as provided in paragraph (a) above, shall include, without limitation, all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel for
the underwriter or underwriters of such securities (if the Company and/or
selling security holders are otherwise required to bear such fees and
disbursements), all legal fees and disbursements and other expenses of complying
with state securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified, reasonable fees and
disbursements of one firm of counsel for the selling security holders, selected
by the Holders of a majority of the shares of Registrable Securities to be
included in such registration, and the premiums and other costs of policies of
insurance against liability arising out of such public offering.
6. Indemnification
(a) The Company hereby agrees to indemnify and hold harmless
each Holder of Registrable Securities which are included in a registration
statement pursuant to the provisions of this Agreement and each of such Holder's
officers, directors, partners, legal counsel and accountants, and each Person
who controls such Holder within the meaning of the Securities Act and any
underwriter (as defined in the Securities Act) for such Holder, and any Person
who controls such underwriter within the meaning of the Securities Act, from and
against, and agrees to reimburse such Holder, its officers, directors, partners,
legal counsel, accountants and controlling Persons and each such underwriter and
controlling Person of such underwriter with respect to, any and all claims,
actions (actual or threatened), demands, losses, damages, liabilities, costs and
expenses to which such Holder, its officers, directors, partners, legal counsel,
accountants or controlling Persons, or any such underwriter or controlling
Person of such underwriter may become subject under the Securities Act or
otherwise, insofar as such claims, actions, demands, losses, damages,
liabilities, costs or expenses arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
claim, action, demand, loss, damage, liability, cost or expense is caused by an
untrue statement or alleged untrue statement or omission or alleged omission so
made in strict conformity with written information furnished by such Holder,
such underwriter or such controlling Person specifically for use in the
preparation thereof.
(b) Each Holder of shares of Registrable Securities which are
included in a registration statement pursuant to the provisions of this
Agreement hereby agrees, severally (in the proportion that the number of shares
sold by it bears to the total number of shares sold in the applicable
registration) and not jointly, to indemnify and hold harmless the Company, its
officers, directors, legal counsel and accountants and each Person who controls
the Company within the meaning of the Securities Act, from and against, and
agrees to reimburse the Company, its officers, directors, legal counsel,
accountants and controlling Persons with respect to, any and all claims,
actions, demands, losses, damages, liabilities, costs or expenses to which the
Company, its officers, directors, legal counsel, accountants or such controlling
Persons may become subject under the Securities Act or otherwise, insofar as
such claims, actions, demands, losses, damages, liabilities, costs or expenses
are caused by any untrue or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or are caused by the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was so made in reliance upon and in strict conformity with
written information furnished by such Holder specifically for use in the
preparation thereof. Notwithstanding the foregoing, no Holder of Registrable
Securities shall be obligated hereunder to pay more than the net proceeds
realized by it upon its sale of Registrable Securities included in such
registration statement.
(c) Promptly after receipt by a party indemnified pursuant to
the provisions of subsection (a) or (b) of this Section 6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim therefor is to be
made against the indemnifying party pursuant to the provisions of subsection (a)
or (b), notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 6 and shall not relieve the indemnifying party from liability under this
Section 6 unless such indemnifying party is prejudiced by such omission. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties). Upon the permitted assumption by the indemnifying party of the defense
of such action, and approval by the indemnified party of counsel, the
indemnifying party shall not be liable to such indemnified party under
subsection (a) or (b) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof (other than
reasonable costs of investigation) unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time,
(iii) the indemnifying party and its counsel do not actively and vigorously
pursue the defense of such action, or (iv) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party shall be liable to an indemnified
party for any settlement of any action or claim without the consent of the
indemnifying party, and no indemnifying party may unreasonably withhold its
consent to any such settlement. No indemnifying party will consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.
(d) If the indemnification provided for in subsection (a) or
(b) of this Section 6 is held by a court of competent jurisdiction to be
unavailable to a party to be indemnified with respect to any claims, actions,
demands, losses, damages, liabilities, costs or expenses referred to therein,
then each indemnifying party under any such subsection, in lieu of indemnifying
such indemnified party thereunder, hereby agrees to contribute to the amount
paid or payable by such indemnified party as a result of such claims, actions,
demands, losses, damages, liabilities, costs or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions which resulted in such claims, actions, demands, losses,
damages, liabilities, costs or expenses, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, the amount
any Holder of Registrable Securities shall be obligated to contribute pursuant
to this subsection (d) shall be limited to an amount equal to the per share
public offering price (less any underwriting discount and commissions)
multiplied by the number of shares of Registrable Securities sold by such Holder
pursuant to the registration statement which gives rise to such obligation to
contribute (less the aggregate amount of any damages which such Holder has
otherwise been required to pay in respect of such claim, action, demand, loss,
damage, liability, cost or expense or any substantially similar claim, action,
demand, loss, damage, liability, cost or expense arising from the sale of such
Registrable Securities).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution hereunder
from any person who was not guilty of such fraudulent misrepresentation.
(e) In addition to its other obligations under this Section 6,
the Company further agrees to reimburse each Holder of Registrable Securities
included in a registration statement pursuant to this Agreement (and each of
such Holder's controlling Persons, officers, directors, parties, legal counsel,
accountants and underwriters (and controlling Persons of such underwriters)) on
a semi-annual basis for all reasonable legal fees and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or admission, described in subsection (a) of
this Section 6, notwithstanding the possibility that such payments might later
be held to be improper. To the extent that any payment is ultimately held to be
improper, each Person receiving such payment shall promptly refund such payment.
7. Future Registration Rights. Except as expressly permitted by this
Agreement and except for an underwriting agreement between the Company and
one or more professional underwriters of securities, the Company shall not
enter into any agreement to register any Equity Securities under the
Securities Act unless such agreement specifically provides that (a) the holder
of such Equity Securities may not participate in any registration requested
pursuant to Section 2 hereof without the written consent of the Holders of a
majority of the shares of Registrable Securities included in such registration
unless (i) the sale of the Registrable Securities is to be underwritten on a
firm commitment basis and the managing underwriter in its good faith judgment
concludes that the public offering or sale of such Equity Securities would
not cause the number of shares of Registrable Securities and such Equity
Securities to exceed the number which can be sold in such offering, and (ii)
the Holders of Registrable Securities shall have the right to participate, to
the extent that they may request, in any registration statement initiated
under a demand registration right exercised by the holder of such Equity
Securities, except that if the managing underwriter of a public offering made
pursuant to such a demand registration limits the number of shares of Common
Stock to be sold, the participation of the Holders of Registrable
Securities and the holders of all other Common Stock (other than the Equity
Securities held by such holder of Equity Securities) shall be pro rata based
upon the number of shares of Registrable Securities and Common Stock held at
the time of filing the registration statement, (b) the holder of such Equity
Securities may not participate in any registration requested pursuant to Section
3 hereof if the sale of Registrable Securities is to be underwritten unless, if
the managing underwriter limits the total number of securities to be sold, the
holders of such Equity Securities and the Holders of Registrable Securities are
entitled to participate in such underwritten distribution pro rata based upon
the number of shares of Common Stock and Registrable Securities held at the time
of filing the registration statement, and (c) all Equity Securities excluded
from any registration as a result of the foregoing limitations shall not be
included in such registration and may not be publicly offered or sold for such
period as the managing underwriter of such registered distribution may
reasonably request.
8. Reporting Requirements Under the Exchange Act. When it is first
legally required to do so, the Company agrees to register its Common Stock
under Section 12 of the Exchange Act and agrees to keep effective such
registration and to file timely such information, documents and reports as the
Commission may require or prescribe under Section 13 of the Exchange Act.
From and after the effective date of the first registration statement filed
by the Company under the Securities Act, the Company agrees to file timely
(whether or not it shall then be required to do so) such information,
documents and reports as the Commission may require or prescribe under Section
13 or 15(d) (whichever is applicable) of the Exchange Act. Upon becoming
subject to the reporting requirements of either Section 13 or 15(d) of the
Exchange Act, the Company forthwith upon request agrees to furnish to any
Holder of Registrable Securities (a) a written statement by the Company that it
has complied with such reporting requirements, (b) a copy of the most recent
annual or quarterly report of the Company and (c) such other reports and
documents filed by the Company with the Commission as such Holder may reasonably
request in availing itself of an exemption for the sale of Registrable
Securities without registration under the Securities Act. The Company
acknowledges and agrees that the purposes of the requirements contained in this
Section 8 are (a) to enable any such Holder to comply with the current public
information requirement contained in paragraph (c) of Rule 144 under the
Securities Act should such Holder ever wish to dispose of any of the securities
of the Company acquired by it without registration under the Securities Act in
reliance upon Rule 144 (or any other similar exemptive provision) and (b) to
qualify the Company for the use of registration statements on Form S-3. In
addition, the Company agrees to take such other measures and file such other
information, documents and reports, as shall be required of it hereafter by the
Commission as a condition to the availability of Rule 144 under the Securities
Act (or any similar exemptive provision hereafter in effect) and the use of Form
S-3. The Company also covenants to use its best efforts, to the extent that it
is reasonably within its power to do so, to qualify for the use of Form S-3.
9. Shareholder Information. The Company may request each Holder of
Registrable Securities as to which any registration is to be effected pursuant
to this Agreement to furnish the Company with such information with respect
to such Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request in writing and as shall
be required by law or by the Commission in connection therewith, and each
Holder of Registrable Securities as to which any registration is to be effected
pursuant to this Agreement agrees to furnish the Company with such information.
10. Forms. All references in this Agreement to particular forms of
registration statements are intended to include, and shall be deemed to
include, references to all successor forms which are intended to replace, or
to apply to similar transactions as, the forms herein referenced.
11. Miscellaneous
11.1. Waivers and Amendments. With the written consent of the
Holders of a majority of the Common Stock described in each of clauses (1), (2)
and (3) of the definition of "Registrable Securities", the obligations of the
Company and the rights of the Investors under this Agreement may be waived
(either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely),
and with the same consent the Company, when authorized by resolution of
its Board, may enter into a supplementary agreement for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of any supplemental agreement or modifying in
any manner the rights and obligations hereunder of the Investors and the
Company; provided, however, that no such waiver or supplemental agreement
shall reduce the aforesaid proportion of Registrable Securities, the
Holders of which are required to consent to any waiver or supplemental
agreement, without the consent of the Holders of all of the Registrable
Securities. Upon the effectuation of each such waiver, consent or agreement of
amendment or modification, the Company agrees to give prompt written notice
thereof to the Holders of the Registrable Securities who have not previously
consented thereto in writing. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, but only by a statement in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought,
except to the extent provided in this Section 11.1. Specifically, but without
limiting the generality of the foregoing, the failure of the Investors at any
time or times to require performance of any provision hereof by the
Company shall in no manner affect the right of the Investors at a later time to
enforce the same. No waiver by any party of the breach of any term or provision
contained in this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
11.2. Effect of Waiver or Amendment. The Investors acknowledge
that by operation of Section 11.1 hereof the Holders of a Majority of the
Registrable Securities will, subject to the limitations contained in such
Section 11.1, have the right and power to diminish or eliminate certain rights
of the Investors under this Agreement.
11.3. Rights of the Investors Inter Se. The Investors shall
have the absolute right to exercise or refrain from exercising any right or
rights which the Investors may have by reason of this Agreement or any
Registrable Security, including, without limitation, the right to consent to
the waiver of any obligation of the Company under this Agreement and to enter
into an agreement with the Company for the purpose of modifying this
Agreement or any agreement effecting any such modification; and the
Investors shall not incur any liability to any Holder or Holders of Registrable
Securities with respect to exercising or refraining from exercising any such
right or rights.
11.4. Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing (including
telecopy or similar writing) and shall be given,
if to the Company to:
Value America, Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxx, Chairman and Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to
Xxxx X. XxXxxxx, Esq.
XxXxxxx Xxxx, A Professional Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
if to any Holder of Registrable Securities to such Holder at
the address or to the telecopier number as set forth for such
Holder on Annex A hereto or as such Holder may otherwise
specify by notice to the Company from time to time,
or to such other address or telecopier number as such party may specify for the
purpose by notice to the other party or parties to this Agreement, as the case
may be. A copy of any notice to the Company or to the Investors or any other
Holder of Registrable Securities shall also be given to each other Holder of
Registrable Securities. Any notice, request, consent or other communication
hereunder shall be deemed to have been given and received on the day on which it
is delivered (by any means including personal delivery, overnight air courier,
United States mail) or telecopied (or, if such day is not a business day or if
the notice, request, consent or communication is not telecopied during business
hours of the intended recipient, at the place of receipt, on the next following
business day).
11.5. Severability. Should any one or more of the provisions
of this Agreement or of any agreement entered into pursuant to this Agreement
be determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected thereby.
11.6. Parties in Interest. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not and, in particular, shall inure to the benefit of
and be enforceable by the Holder or Holders at the time of any of the
Registrable Securities, provided that the Company has received notice of any
such assignment. Subject to the immediately preceding sentence, this
Agreement shall not run to the benefit of or be enforceable by any Person
other than a party to this Agreement and its successors and assigns.
11.7. Headings. The headings of the sections, subsections and
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement.
11.8. Choice of Law. It is the intention of the parties
that the internal substantive laws, and not the laws of conflicts, of the
Commonwealth of Virginia should govern the enforceability and validity of
this Agreement, the construction of its terms and the interpretation of the
rights and duties of the parties.
11.9. Expenses. The Company agrees to pay and hold the
Investors and Holders of the Registrable Securities harmless from liability
for the payment of, (i) the fees and expenses incurred in connection with any
requested waiver of the right of the Investors or the consent of the Investors
to contemplated acts of the Company not otherwise permissible by the terms of
this Agreement, (ii) the fees and expenses incurred with respect to any
amendment to this Agreement proposed by the Company (whether or not the same
becomes effective), (iii) the fees and expenses incurred in respect of the
enforcement of the rights granted under this Agreement, and (iv) all costs of
the Company's performance of and compliance with this Agreement.
11.10. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
11.11. Restatement and Amendment. This Agreement amends and
restates in its entirety the Prior Registration Rights Agreement. All
provisions of, rights granted and covenants made in the Prior Registration
Rights Agreement are hereby waived, released and terminated in their entirety
and shall have no further force or effect whatsoever. The rights and
covenants contained in this Agreement set forth the sole and entire agreement
among the Company and the Investors, including, without limitation, Ullico,
on the subject matter hereof and supercede any and all rights granted or
covenants made under any prior agreement with respect to the subject matter
hereof, including the Prior Registration Rights Agreement.
11.12. Authorship. This Agreement shall not be construed
for or against any party by reason of the authorship or claimed authorship of
any provision of this Agreement or by reason of the status of the respective
parties.
11.13 Entire Agreement. This Agreement, the Preferred Stock
Purchase Agreement and any agreement, document or instrument referred to
herein or therein, constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, and supersede all other
prior agreements or undertakings with respect thereto, both written and oral.
11.14. Counsel. In connection with the transactions
contemplated by this Agreement, the Company has been represented by XxXxxxx
Xxxx, A Professional Corporation ("Counsel"). Each party hereto has reviewed
the contents of this Agreement and fully understands its terms. Each party
hereto other than the Company acknowledges that he or it is fully aware of
his or its right to the advice of counsel independent from that of the Company,
that Counsel has advised him or it of such right and disclosed to him or it the
risks in not seeking such independent advice, and that he or it understands
the potentially adverse interests of the parties with respect to this
Agreement. Each party hereto further acknowledges that no representations
have been made with respect to tax or other consequences of this Agreement or
the transactions contemplated herein to him or it, and that he or it has been
advised of the importance of seeking independent counsel with respect to
such consequences. Each Investor acknowledges that he or it has not
received any information or advice from, and is not relying upon any statement
made by Ullico or Ullico's special counsel, Paul, Hastings, Xxxxxxxx &
Xxxxxx LLP, in entering into or in connection with this Agreement or the
transactions contemplated hereby.
[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers thereof as of
the day and year first above written.
VALUE AMERICA, INC.
By:
----------------------------
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
UNION LABOR LIFE INSURANCE COMPANY
Acting on behalf of its Separate Account P
By:
----------------------------
An Authorized Officer
[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
VULCAN VENTURES INCORPORATED
By:_______________________________________
An Authorized Officer
UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE
PLUMBING AND PIPEFITTING INDUSTRY OF THE UNITED STATES AND
CANADA, GENERAL FUND
By:
-----------------------------------------
An Authorized Officer
THE XXXXXXX X. AND XXXXXXXX X.
XXXXXX FAMILY FOUNDATION
By:
------------------------------------------
An Authorized Officer
RYMAC JOINT VENTURE
By:_______________________________________
An Authorized Officer
XXXXXX FAMILY INVESTMENT LIMITED PARTNERSHIP
By:_______________________________________
An Authorized Officer
[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
XXXXXX INVESTMENTS LIMITED
PARTNERSHIP, a Maryland limited partnership
By: Moloreaux, Inc., its general partner
By:________________________________
An Authorized Officer
[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxx XxXxxx
------------------------------------
Xxxxx Xxxxxxxxx
------------------------------------
Xxxxxxx X. XxXxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. X. Xxxxxx
------------------------------------
Xxxxxx Xxxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
------------------------------------
C. Xxxxxxx Xxxxxx
[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
YAGEMANN REVOCABLE TRUST,
DATED NOVEMBER 13, 1992
By: ____________________________
Name: ____________________________
Title: ____________________________
[SIGNATURE PAGE TO AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT]
DAVIDSON FAMILY LIMITED PARTNERSHIP,
a Nevada limited partnership
By:________________________________
Xxxxxx X. Xxxxxxxx, General Partner
VALUE AMERICA, INC.
------------------------------------------
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
------------------------------------------
Dated as of June 26, 1998
TABLE OF CONTENTS
Page
R E C I T A L S 1
A G R E E M E N T 1
1. Definitions 1
2. Required Registration 3
3. Incidental Registration 4
4. Registration Procedures 6
5. Expenses 8
6. Indemnification 8
7. Future Registration Rights 11
8. Reporting Requirements Under the Exchange Act 11
9. Shareholder Information 12
10. Forms 12
11. Miscellaneous 12
11.1 Waivers and Amendments 12
11.2 Effect of Waiver or Amendment 13
11.3 Rights of the Investors Inter Se 13
11.4 Notices 13
11.5 Severability 14
11.6 Parties in Interest 14
11.7 Headings 14
11.8 Choice of Law 14
11.9 Expenses 14
11.10 Counterparts 15
11.11 Restatement and Amendment 15
11.12 Authorship 15
11.13 Entire Agreement 15
11.14 Counsel 15
ANNEX A
SCHEDULE OF INVESTORS
Name/Address
====================================================================
Union Labor Life Insurance Company
000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxx,
Senior Vice President
Telecopier: (000) 000-0000
Vulcan Ventures Incorporated
000 000xx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
The United Association of Journeymen and Apprentices of
the Plumbing and Pipefitting Industry of the United
States and Canada,
General Fund
000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
The Xxxxxxx X. and Xxxxxxxx X. Xxxxxx
Family Foundation, Inc.
00000 Xxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Partner
Telecopier: (000) 000-0000
Xxxxxx Investments Limited Partnership
00000 Xxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telecopier: (000) 000-0000
Rymac Joint Venture
0000 Xxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxx
Telecopier: (000) 000-0000
Xxxxxx Family Investment Limited Partnership
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxx Xxxxxxxx
c/o Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxxx X. Xxxxx
c/o Vulcan Ventures Incorporated
000 000xx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxx XxXxxx
0000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxx Xxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Xxxxxxx X. XxXxxxxxx
0000 Xxx Xxxxxxxx Xxxxx
XxXxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxxx X. Xxxxxx
Manatt Xxxxxx & Xxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxx Xxxxxxx & Co., Ltd.
00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
(000) 000-0000
Xxxxxx Xxxxxxxx
c/o X.X. Xxxxxxxxxx & Co., Inc.
00 Xxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx, XX
Xxxxxxxxxx, X.X. 00000
Telecopier: (000) 000-0000
C. Xxxxxxx Xxxxxx
0000 Xxxxx Xxxx
XxXxxx, XX 00000
Telecopier: (000) 000-0000
Yagemann Revocable Trust,
Dated November 13, 1992
0 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
