EXHIBIT 10.27
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of November 17, 1998, by and among VALUE AMERICA, INC. (the "Company"),
a Virginia corporation, and The Union Labor Life Insurance Company, acting on
behalf of its Separate Account P (the "Investor").
R E C I T A L
WHEREAS, concurrently with entering into this Agreement, the
Company and the Investor are entering into a Warrant Purchase Agreement of even
date herewith (the "Warrant Purchase Agreement"), pursuant to which the Investor
agrees to purchase from the Company warrants (each, a "Warrant" and,
collectively, the "Warrants") to purchase up to 1,445,000 shares of Common Stock
(as hereinafter defined) of 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 Investor's obligation to purchase
such warrants.
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 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 Warrant
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.
"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 $2.5 million
at the time the demand for registration is given under Section 2.
"Investor" 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.
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.
"Registrable Securities" means (1) all Common Stock owned now or
in the future by the Investor, (2) the Common Stock issued or issuable upon
exercise of the Warrants issued and sold pursuant to the Warrant Purchase
Agreement, whether owned by the Investor or not and (3) any securities issued or
issuable with respect to the Common Stock referred to in clauses (1) and (2)
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.
"Warrant" shall have the meaning assigned to it in the Recital
hereof.
"Warrant Purchase Agreement" shall have the meaning assigned to
it in the Recital hereof.
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 prompt 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 $2.5
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, and (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, 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.
(a) 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 Investor 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 Investor 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(a)
Specifically, but without limiting the generality of the foregoing, the failure
of the Investor at any time or times to require performance of any provision
hereof by the Company shall in no manner affect the right of the Investor 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.
(b) Effect of Waiver or Amendment. The Investor
acknowledges that by operation of Section 11(a) hereof the Holders of a Majority
of the Registrable Securities will, subject to the limitations contained in such
Section 11(a), have the right and power to diminish or eliminate certain rights
of the Investor under this Agreement.
(c) Rights of the Investor Inter Se. The Investor shall
have the absolute right to exercise or refrain from exercising any right or
rights which the Investor 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 Investor 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.
(d) 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 Investor:
The Union Labor Life Insurance Company
000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxxxxxx Xxxxx, Senior Vice President,
Investments
Telecopier: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 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 Investor 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).
(e) 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.
(f) 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.
(g) 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.
(h) 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.
(i) Expenses. The Company agrees to pay and hold the
Investor 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 Investor or the consent of the Investor 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.
(j) 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.
(k) 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.
(l) Entire Agreement. This Agreement, the Warrant
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.
[SIGNATURE PAGE TO 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: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx, Chairman and
Title: Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY,
Acting on behalf of its Separate Account P
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
An Authorized Officer
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT dated as
of December 14, 1998 (this "Amendment") is hereby entered into by and between
Value America, Inc., a Virginia corporation (the "Company"), and The Union Labor
Life Insurance Company, acting on behalf of its Separate Account P (the
"Investor").
RECITALS
A. WHEREAS, the Company and the Investor have executed and
delivered that certain Registration Rights Agreement dated as of November 17,
1998 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Registration Rights Agreement"); and
B. WHEREAS, the parties hereto have agreed to amend the
provisions of the Registration Rights Agreement, among other things, to amend
the definition of "Registrable Securities."
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Investor do
hereby agree as follows:
1. Relation to Registration Rights Agreement; Definitions.
1.1 Relation to Registration Rights Agreement.
This Amendment constitutes an integral part of the Registration Rights
Agreement.
1.2 Capitalized Terms. For all purposes of this
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Registration Rights Agreement, as said agreement shall
be in effect on the Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE REGISTRATION RIGHTS AGREEMENT.
2.1 Amendment to Recital of the Registration Rights
Agreement. The Recital of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
RECITALS
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of November 17, 1998 (the
"First Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "First Warrant"
and, collectively, the "First Warrants") to purchase up to 1,445,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and Investor are parties to that
certain Warrant Purchase Agreement dated as of December 14, 1998 (the
"Second Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Second Warrant"
and, collectively, the "Second Warrants") to purchase up to 840,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
2.2 Amendment to Section 1 of the Registration Rights
Agreement.
(a) Section 1 of the Registration Rights Agreement
is amended by deleting each of the definitions of "Registrable Securities" and
"Warrants" in its entirety and replacing it with the following:
"Registrable Securities" means (1) all Common Stock owned
now or in the future by the Investor, (2) the Common Stock issued or
issuable upon exercise of the Warrants issued and sold pursuant to the
Warrant Purchase Agreement, whether owned by the Investor or not, (3)
the Common Stock issued or issuable upon exercise of the Second Warrants
issued and sold pursuant to the Second Warrant Purchase Agreement,
whether owned by the Investor or not, and (3) 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.
"Warrants" shall mean the First Warrants and the
Second Warrants.
(b) Section 1 of the Registration Rights Agreement
is amended by deleting the definition of "Warrant Purchase Agreement" in its
entirety.
(c) Section 1 of the Registration Rights Agreement
is amended by adding the following definitions, in alphabetical order:
"First Warrant Purchase Agreement" shall have the meaning
assigned to it in the Recitals of this Agreement.
"Second Warrant Purchase Agreement" shall have the meaning
assigned to it in the Recitals of this Agreement.
2.3 Amendment to Section 11(l) of the Registration Rights
Agreement. Section 11(l) of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
(l) Entire Agreement. This Agreement, the First Warrant
Purchase Agreement, the Second Warrant 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.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the
Investor to execute and deliver this Amendment (which representations shall
survive the execution and deliver of this Amendment), the Company represents and
warrants to the Investor that:
(a) Authority. This Amendment has been duly
authorized, executed and delivered by it and this Amendment constitutes the
legal, valid and binding obligation, contract and agreement of the Company
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Registration Rights
Agreement, as amended by this Amendment, constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with their respective terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization; No Violation. The execution,
delivery and performance by the Company of this Amendment (i) will not require
from the Board (as defined in the Loan Agreement) or stockholders of the Company
any consent or approval that has not been validly and lawfully obtained, (ii)
will not require any authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality of government, (iii) will not cause the
Company to violate or contravene (A) any provision of law, (B) any rule or
regulation of any agency or government, domestic or foreign, (C) any order,
writ, judgment, injunction, decree, determination or award, or (D) any provision
of the Articles of Incorporation or Bylaws of the Company, (iv) except as
disclosed in Annex 3.1, will not violate or be in conflict with, result in a
breach of or constitute (with or without notice or lapse of time or both) a
default under, any indenture, loan or credit agreement, note agreement,
promissory note, deed of trust, mortgage, security agreement or other agreement,
lease or instrument, commitment or arrangement to which the Company is a party
or by which the Company or any of its properties, assets or rights is bound or
affected, to the extent that such violation, conflict, breach or default would
(individually or in the aggregate) have a Material Adverse Effect (as defined in
the Loan Agreement) and (e) except as contemplated by the Amended and Restated
Security Agreement (as defined in the Loan Agreement), will not result in the
creation or imposition of any Lien (as defined in the Loan Agreement). Except as
disclosed in Annex 3.1, the Company is not in material violation of, or (with or
without notice or lapse of time or both) in default under, any term or provision
of its Articles of Incorporation or Bylaws or of any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage, security
agreement or other agreement, lease or other instrument, commitment or
arrangement to which the Company is a party or by which any of the Company's
properties, assets or rights is bound or affected. The Company is not subject to
any restriction of any kind or character which has or may have a Material
Adverse Effect (as defined in the Loan Agreement) or which prohibits the Company
from entering into this Amendment or would prevent or make burdensome its
performance of or compliance with all or any part of this Amendment or the
consummation of the transactions contemplated hereby.
4. Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become
effective until, and shall become effective when, each and every one of the
following conditions shall have been satisfied or waived by the Investor (the
"Effective Date").
(a) Execution of Counterparts. Counterparts of
this Amendment shall have been executed and delivered by each of the Company and
the Investor.
(b) Ratification and Confirmation of Registration
Rights Agreement. The Registration Rights Agreement and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company hereby confirms and ratifies each of the provisions of the
Registration Rights Agreement.
(c) Consents. All necessary consents, waivers,
approvals, authorizations, registrations, filings and notifications in
connection with the authorization, execution and delivery of this Amendment have
been obtained or made and are in full force and effect.
(e) Proceedings, Instruments, etc. All proceedings
and actions taken on or prior to the Effective Date in connection with the
transactions contemplated by this Amendment and all instruments incident thereto
shall be in form and substance satisfactory to the Investor and its special
counsel, and the Investor and its special counsel shall have received copies of
all documents that it or they may request in connection with such proceedings,
actions and transactions (including, without limitation, copies of court
documents, certifications, and evidence of the correctness of the
representations and warranties contained herein and certifications and evidence
of the compliance with the terms and the fulfillment of the conditions of this
Amendment) in the form and substance satisfactory to the Investor and its
special counsel.
5. Miscellaneous.
5.1 Cross-References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Registration Rights
Agreement; Limited Amendment. This Amendment is executed pursuant to Section
11(a) of the Registration Rights Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered, and applied in accordance with all
of the terms and provisions of the Registration Rights Agreement, including
Section 11(a) thereof. Except as expressly amended, any conditions of the
Registration Rights Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Investor under the Registration
Rights Agreement.
5.3. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
5.4 Counterparts. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute together but one and the same
instrument.
5.5 Governing Law. This Amendment and the notes shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
5.6 Expenses. The Company agrees to pay all expenses of
the Investor in connection with the transactions contemplated by this Amendment
(including, without limitation, the reasonable fees and expenses of counsel for
the Investor).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
VALUE AMERICA, INC.
By:/s/ Xxxxx X. Xxxx
-----------------------------
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
An Authorized Officer
SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT dated as
of December 23, 1998 (this "Amendment") is hereby entered into by and between
Value America, Inc., a Virginia corporation (the "Company"), and The Union Labor
Life Insurance Company, acting on behalf of its Separate Account P (the
"Investor").
RECITALS
A. WHEREAS, the Company and the Investor have executed and
delivered that certain Registration Rights Agreement dated as of November 17,
1998 (as amended by that certain First Amendment to Registration Rights
Agreement dated as of December 14, 1998 and as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the
"Registration Rights Agreement"); and
B. WHEREAS, the parties hereto have agreed to amend the
provisions of the Registration Rights Agreement, among other things, to amend
the definition of "Registrable Securities."
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Investor do
hereby agree as follows:
1. Relation to Registration Rights Agreement; Definitions.
1.1 Relation to Registration Rights Agreement. This
Amendment constitutes an integral part of the Registration Rights Agreement.
1.2 Capitalized Terms. For all purposes of this
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Registration Rights Agreement, as said agreement shall
be in effect on the Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE REGISTRATION RIGHTS AGREEMENT.
2.1 Amendment to Recital of the Registration Rights
Agreement. The Recital of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
RECITALS
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of November 17, 1998 (the
"First Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "First Warrant"
and, collectively, the "First Warrants") to purchase up to 1,445,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and Investor are parties to that
certain Warrant Purchase Agreement dated as of December 14, 1998 (the
"Second Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Second Warrant"
and, collectively, the "Second Warrants") to purchase up to 840,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of December 23, 1998 (the
"Third Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Third Warrant"
and, collectively, the "Third Warrants") to purchase up to 448,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
2.2 Amendment to Section 1 of the Registration Rights
Agreement.
(a) Section 1 of the Registration Rights Agreement
is amended by deleting each of the definitions of "Registrable Securities" and
"Warrants" in its entirety and replacing it with the following:
"Registrable Securities" means (1) all Common Stock owned
now or in the future by the Investor, (2) the Common Stock issued or
issuable upon exercise of the Warrants issued and sold pursuant to the
Warrant Purchase Agreement, whether owned by the Investor or not, (3)
the Common Stock issued or issuable upon exercise of the Second Warrants
issued and sold pursuant to the Second Warrant Purchase Agreement,
whether owned by the Investor or not, (4) the Common Stock issued or
issuable upon exercise of the Third Warrants issued and sold pursuant to
the Third Warrant Purchase Agreement, whether owned by the Investor or
not, and (5) any securities issued or issuable with respect to the
Common Stock referred to in clauses (1), (2), (3), and (4) 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.
"Warrants" shall mean the First Warrants, the Second
Warrants and the Third Warrants.
(b) Section 1 of the Registration Rights Agreement
is amended by deleting the definition of "Warrant Purchase Agreement" in its
entirety.
(c) Section 1 of the Registration Rights Agreement
is amended by adding the following definitions, in alphabetical order:
"First Warrant Purchase Agreement" shall have the meaning
assigned to it in the Recitals of this Agreement.
"Second Warrant Purchase Agreement" shall have the meaning
assigned to it in the Recitals of this Agreement.
"Third Warrant Purchase Agreement" shall have the meaning
assigned to it in the Recitals of this Agreement.
2.3 Amendment to Section 11(l) of the Registration
Rights Agreement. Section 11(l) of the Registration Rights Agreement is amended
by deleting it in its entirety and replacing it with the following:
(l) Entire Agreement. This Agreement, the First Warrant
Purchase Agreement, the Second Warrant Purchase Agreement, the Third
Warrant 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.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the
Investor to execute and deliver this Amendment (which representations shall
survive the execution and deliver of this Amendment), the Company represents and
warrants to the Investor that:
(a) Authority. This Amendment has been duly
authorized, executed and delivered by it and this Amendment constitutes the
legal, valid and binding obligation, contract and agreement of the Company
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Registration Rights
Agreement, as amended by this Amendment, constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with their respective terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization; No Violation. The execution,
delivery and performance by the Company of this Amendment (i) will not require
from the Board (as defined in the Loan Agreement) or stockholders of the Company
any consent or approval that has not been validly and lawfully obtained, (ii)
will not require any authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality
of government, (iii) will not cause the Company to violate or contravene (A) any
provision of law, (B) any rule or regulation of any agency or government,
domestic or foreign, (C) any order, writ, judgment, injunction, decree,
determination or award, or (D) any provision of the Articles of Incorporation or
Bylaws of the Company, (iv) except as disclosed in Annex 3.1, will not violate
or be in conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under, any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage, security
agreement or other agreement, lease or instrument, commitment or arrangement to
which the Company is a party or by which the Company or any of its properties,
assets or rights is bound or affected, to the extent that such violation,
conflict, breach or default would (individually or in the aggregate) have a
Material Adverse Effect (as defined in the Loan Agreement) and (e) except as
contemplated by the Amended and Restated Security Agreement (as defined in the
Loan Agreement), will not result in the creation or imposition of any Lien (as
defined in the Loan Agreement). Except as disclosed in Annex 3.1, the Company is
not in material violation of, or (with or without notice or lapse of time or
both) in default under, any term or provision of its Articles of Incorporation
or Bylaws or of any indenture, loan or credit agreement, note agreement,
promissory note, deed of trust, mortgage, security agreement or other agreement,
lease or other instrument, commitment or arrangement to which the Company is a
party or by which any of the Company's properties, assets or rights is bound or
affected. The Company is not subject to any restriction of any kind or character
which has or may have a Material Adverse Effect (as defined in the Loan
Agreement) or which prohibits the Company from entering into this Amendment or
would prevent or make burdensome its performance of or compliance with all or
any part of this Amendment or the consummation of the transactions contemplated
hereby.
4. Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become
effective until, and shall become effective when, each and every one of the
following conditions shall have been satisfied or waived by the Investor (the
"Effective Date").
(a) Execution of Counterparts. Counterparts of
this Amendment shall have been executed and delivered by each of the Company and
the Investor.
(b) Ratification and Confirmation of Registration
Rights Agreement. The Registration Rights Agreement and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company hereby confirms and ratifies each of the provisions of the
Registration Rights Agreement.
(c) Consents. All necessary consents, waivers,
approvals, authorizations, registrations, filings and notifications in
connection with the authorization, execution and delivery of this Amendment have
been obtained or made and are in full force and effect.
(e) Proceedings, Instruments, etc. All proceedings
and actions taken on or prior to the Effective Date in connection with the
transactions contemplated by this Amendment and all instruments incident thereto
shall be in form and substance satisfactory to the Investor and its special
counsel, and the Investor and its special counsel shall have received copies of
all documents that it or they may request in connection with such proceedings,
actions and transactions (including, without limitation, copies of court
documents, certifications, and evidence of the correctness of the
representations and warranties contained herein and certifications and evidence
of the compliance with the terms and the fulfillment of the conditions of this
Amendment) in the form and substance satisfactory to the Investor and its
special counsel.
5. Miscellaneous.
5.1 Cross-References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Registration Rights
Agreement; Limited Amendment. This Amendment is executed pursuant to Section
11(a) of the Registration Rights Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered, and applied in accordance with all
of the terms and provisions of the Registration Rights Agreement, including
Section 11(a) thereof. Except as expressly amended, any conditions of the
Registration Rights Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Investor under the Registration
Rights Agreement.
5.3. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
5.4 Counterparts. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute together but one and the same
instrument.
5.5 Governing Law. This Amendment and the notes shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
5.6 Expenses. The Company agrees to pay all expenses of
the Investor in connection with the transactions contemplated by this Amendment
(including, without limitation, the reasonable fees and expenses of counsel for
the Investor).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
VALUE AMERICA, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
An Authorized Officer
THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT dated as of
December 31, 1998 (this "Amendment") is hereby entered into by and between Value
America, Inc., a Virginia corporation (the "Company"), and The Union Labor Life
Insurance Company, acting on behalf of its Separate Account P (the "Investor").
RECITALS
A. WHEREAS, the Company and the Investor have executed and
delivered that certain Registration Rights Agreement dated as of November 17,
1998 (as amended by that certain First Amendment to Registration Rights
Agreement dated as of December 14, 1998 and that certain Second Amendment to
Registration Rights Agreement dated as of December 23, 1998 and as the same may
be further amended, restated, supplemented or otherwise modified from time to
time, the "Registration Rights Agreement"); and
B. WHEREAS, the parties hereto have agreed to amend the
provisions of the Registration Rights Agreement, among other things, to amend
the definition of "Registrable Securities."
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Investor do
hereby agree as follows:
1. Relation to Registration Rights Agreement; Definitions.
1.1 Relation to Registration Rights Agreement. This
Amendment constitutes an integral part of the Registration Rights Agreement.
1.2 Capitalized Terms. For all purposes of this
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Registration Rights Agreement, as said agreement shall
be in effect on the Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE REGISTRATION RIGHTS AGREEMENT.
2.1 Amendment to Recital of the Registration Rights
Agreement. The Recital of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
RECITALS
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of November 17, 1998 (the
"First Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "First Warrant"
and, collectively, the "First Warrants") to purchase up to 1,445,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and Investor are parties to that
certain Warrant Purchase Agreement dated as of December 14, 1998 (the
"Second Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Second Warrant"
and, collectively, the "Second Warrants") to purchase up to 840,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of December 23, 1998 (the
"Third Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Third Warrant"
and, collectively, the "Third Warrants") to purchase up to 448,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of December 31, 1998 (the
"Fourth Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Fourth Warrant"
and, collectively, the "Fourth Warrants") to purchase up to 840,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
2.2 Amendment to Section 1 of the Registration Rights
Agreement.
(a) Section 1 of the Registration Rights Agreement
is amended by deleting each of the definitions of "Registrable Securities" and
"Warrants" in its entirety and replacing it with the following:
"Registrable Securities" means (1) all Common Stock owned
now or in the future by the Investor, (2) the Common Stock issued or
issuable upon exercise of the First Warrants issued and sold pursuant to
the First Warrant Purchase Agreement, whether owned by the Investor or
not, (3) the Common Stock issued or issuable upon exercise of the Second
Warrants issued and sold pursuant to the Second Warrant Purchase
Agreement, whether owned by the Investor or not, (4) the Common Stock
issued or issuable upon exercise of the Third Warrants issued and sold
pursuant to the Third Warrant Purchase Agreement, whether owned by the
Investor or not, (5) the Common Stock issued or issuable upon exercise
of the Fourth Warrants issued and sold pursuant to the Fourth Warrant
Purchase Agreement, whether owned by the Investor or not, and (6) any
securities issued or issuable with respect to the Common Stock referred
to in clauses (1), (2), (3), (4), or (5) 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.
"Warrants" shall mean the First Warrants, the Second
Warrants, the Third Warrants and the Fourth Warrants.
(b) Section 1 of the Registration Rights Agreement
is amended by adding the following definitions, in alphabetical order:
"Fourth Warrant Purchase Agreement" shall have the
meaning assigned to it in the Recitals of this Agreement.
2.3 Amendment to Section 11(l) of the Registration Rights
Agreement. Section 11(l) of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
(l) Entire Agreement. This Agreement, the First Warrant
Purchase Agreement, the Second Warrant Purchase Agreement, the Third
Warrant Purchase Agreement, the Fourth Warrant 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.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the
Investor to execute and deliver this Amendment (which representations shall
survive the execution and deliver of this Amendment), the Company represents and
warrants to the Investor that:
(a) Authority. This Amendment has been duly
authorized, executed and delivered by it and this Amendment constitutes the
legal, valid and binding obligation, contract and agreement of the Company
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Registration Rights
Agreement, as amended by this Amendment, constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with their respective terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization; No Violation. The execution,
delivery and performance by the Company of this Amendment (i) will not require
from the Board (as defined in the Loan Agreement) or stockholders of the Company
any consent or approval that has not been validly and lawfully obtained, (ii)
will not require any authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality of government, (iii) will not cause the
Company to violate or contravene (A) any provision of law, (B) any rule or
regulation of any agency or government, domestic or foreign, (C) any order,
writ, judgment, injunction, decree, determination or award, or (D) any provision
of the Articles of Incorporation or Bylaws of the Company, (iv) except as
disclosed in Annex 3.1, will not violate or be in conflict with, result in a
breach of or constitute (with or without notice or lapse of time or both) a
default under, any indenture, loan or credit agreement, note agreement,
promissory note, deed of trust, mortgage, security agreement or other agreement,
lease or instrument, commitment or arrangement to which the Company is a party
or by which the Company or any of its properties, assets or rights is bound or
affected, to the extent that such violation, conflict, breach or default would
(individually or in the aggregate) have a Material Adverse Effect (as defined in
the Loan Agreement) and (e) except as contemplated by the Amended and Restated
Security Agreement (as defined in the Loan Agreement), will not result in the
creation or imposition of any Lien (as defined in the Loan Agreement). Except as
disclosed in Annex 3.1, the Company is not in material violation of, or (with or
without notice or lapse of time or both) in default under, any term or provision
of its Articles of Incorporation or Bylaws or of any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage, security
agreement or other agreement, lease or other instrument, commitment or
arrangement to which the Company is a party or by which any of the Company's
properties, assets or rights is bound or affected. The Company is not subject to
any restriction of any kind or character which has or may have a Material
Adverse Effect (as defined in the Loan Agreement) or which prohibits the Company
from entering into this Amendment or would prevent or make burdensome its
performance of or compliance with all or any part of this Amendment or the
consummation of the transactions contemplated hereby.
4. Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become
effective until, and shall become effective when, each and every one of the
following conditions shall have been satisfied or waived by the Investor (the
"Effective Date").
(a) Execution of Counterparts. Counterparts of
this Amendment shall have been executed and delivered by each of the Company and
the Investor.
(b) Ratification and Confirmation of Registration
Rights Agreement. The Registration Rights Agreement and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company hereby confirms and ratifies each of the provisions of the
Registration Rights Agreement.
(c) Consents. All necessary consents, waivers,
approvals, authorizations, registrations, filings and notifications in
connection with the authorization, execution and delivery of this Amendment have
been obtained or made and are in full force and effect.
(e) Proceedings, Instruments, etc. All proceedings
and actions taken on or prior to the Effective Date in connection with the
transactions contemplated by this Amendment and all instruments incident thereto
shall be in form and substance satisfactory to the Investor and its special
counsel, and the Investor and its special counsel shall have received copies of
all documents that it or they may request in connection with such proceedings,
actions and transactions (including, without limitation, copies of court
documents, certifications, and evidence of the correctness of the
representations and warranties contained herein and certifications and evidence
of the compliance with the terms and the fulfillment of the conditions of this
Amendment) in the form and substance satisfactory to the Investor and its
special counsel.
5. Miscellaneous.
5.1 Cross-References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Registration Rights
Agreement; Limited Amendment. This Amendment is executed pursuant to Section
11(a) of the Registration Rights Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered, and applied in accordance with all
of the terms and provisions of the Registration Rights Agreement, including
Section 11(a) thereof. Except as expressly amended, any conditions of the
Registration Rights Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Investor under the Registration
Rights Agreement.
5.3. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
5.4 Counterparts. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute together but one and the same
instrument.
5.5 Governing Law. This Amendment and the notes shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
5.6 Expenses. The Company agrees to pay all expenses of
the Investor in connection with the transactions contemplated by this Amendment
(including, without limitation, the reasonable fees and expenses of counsel for
the Investor).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
VALUE AMERICA, INC.
By: /s/ Xxxxx X. Xxxx
---------------------
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ Xxxxxxx X. Xxxxx
---------------------
An Authorized Officer
FOURTH AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This FOURTH AMENDMENT TO REGISTRATION RIGHTS AGREEMENT dated as
of January 6, 1999 (this "Amendment") is hereby entered into by and between
Value America, Inc., a Virginia corporation (the "Company"), and The Union Labor
Life Insurance Company, acting on behalf of its Separate Account P (the
"Investor").
RECITALS
A. WHEREAS, the Company and the Investor have executed and
delivered that certain Registration Rights Agreement dated as of November 17,
1998 (as amended by that certain First Amendment to Registration Rights
Agreement dated as of December 14, 1998, that certain Second Amendment to
Registration Rights Agreement dated as of December 23, 1998 and that certain
Third Amendment to Registration Rights Agreement dated as of December 31, 1998
and as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the "Registration Rights Agreement"); and
B. WHEREAS, the parties hereto have agreed to amend the
provisions of the Registration Rights Agreement, among other things, to amend
the definition of "Registrable Securities."
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Investor do
hereby agree as follows:
1. Relation to Registration Rights Agreement; Definitions.
1.1 Relation to Registration Rights Agreement. This
Amendment constitutes an integral part of the Registration Rights Agreement.
1.2 Capitalized Terms. For all purposes of this
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Registration Rights Agreement, as said agreement shall
be in effect on the Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE REGISTRATION RIGHTS AGREEMENT.
2.1 Amendment to Recital of the Registration Rights
Agreement. The Recital of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
RECITALS
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of November 17, 1998 (the
"First Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "First Warrant"
and, collectively, the "First Warrants") to purchase up to 1,445,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and Investor are parties to that
certain Warrant Purchase Agreement dated as of December 14, 1998 (the
"Second Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Second Warrant"
and, collectively, the "Second Warrants") to purchase up to 840,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of December 23, 1998 (the
"Third Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Third Warrant"
and, collectively, the "Third Warrants") to purchase up to 448,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of December 31, 1998 (the
"Fourth Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Fourth Warrant"
and, collectively, the "Fourth Warrants") to purchase up to 840,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
WHEREAS, the Company and the Investor are parties to that
certain Warrant Purchase Agreement dated as of January 6, 1999 (the
"Fifth
Warrant Purchase Agreement"), pursuant to which the Investor has
agreed to purchase from the Company warrants (each, a "Fifth Warrant"
and, collectively, the "Fifth Warrants") to purchase up to 560,000
shares of Common Stock (as hereinafter defined) of the Company on the
terms and subject to the conditions appearing therein.
2.2 Amendment to Section 1 of the Registration Rights
Agreement.
(a) Section 1 of the Registration Rights Agreement
is amended by deleting each of the definitions of "Registrable Securities" and
"Warrants" in its entirety and replacing it with the following:
"Registrable Securities" means (1) all Common Stock owned
now or in the future by the Investor, (2) the Common Stock issued or
issuable upon exercise of the First Warrants issued and sold pursuant to
the First Warrant Purchase Agreement, whether owned by the Investor or
not, (3) the Common Stock issued or issuable upon exercise of the Second
Warrants issued and sold pursuant to the Second Warrant Purchase
Agreement, whether owned by the Investor or not, (4) the Common Stock
issued or issuable upon exercise of the Third Warrants issued and sold
pursuant to the Third Warrant Purchase Agreement, whether owned by the
Investor or not, (5) the Common Stock issued or issuable upon exercise
of the Fourth Warrants issued and sold pursuant to the Fourth Warrant
Purchase Agreement, whether owned by the Investor or not, (6) the Common
Stock issued or issuable upon exercise of the Fifth Warrants issued and
sold pursuant to the Fifth Warrant Purchase Agreement, whether owned by
the Investor or not, and (7) any securities issued or issuable with
respect to the Common Stock referred to in clauses (1), (2), (3), (4),
(5) or (6) 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.
"Warrants" shall mean the First Warrants, the Second
Warrants, the Third Warrants, the Fourth Warrants and the Fifth Warrants.
(b) Section 1 of the Registration Rights Agreement
is amended by adding the following definitions, in alphabetical order:
"Fifth Warrant Purchase Agreement" shall have the meaning
assigned to it in the Recitals of this Agreement.
2.3 Amendment to Section 11(l) of the Registration Rights
Agreement. Section 11(l) of the Registration Rights Agreement is amended by
deleting it in its entirety and replacing it with the following:
(l) Entire Agreement. This Agreement, the First Warrant
Purchase Agreement, the Second Warrant Purchase Agreement, the Third
Warrant Purchase Agreement, the Fourth Warrant Purchase Agreement, the
Fifth Warrant 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.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the
Investor to execute and deliver this Amendment (which representations shall
survive the execution and deliver of this Amendment), the Company represents and
warrants to the Investor that:
(a) Authority. This Amendment has been duly authorized,
executed and delivered by it and this Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Registration Rights
Agreement, as amended by this Amendment, constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with their respective terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization; No Violation. The execution, delivery
and performance by the Company of this Amendment (i) will not require from the
Board (as defined in the Loan Agreement) or stockholders of the Company any
consent or approval that has not been validly and lawfully obtained, (ii) will
not require any authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality of government, (iii) will not cause the
Company to violate or contravene (A) any provision of law, (B) any rule or
regulation of any agency or government, domestic or foreign, (C) any order,
writ, judgment, injunction, decree, determination or award, or (D) any provision
of the Articles of Incorporation or Bylaws of the Company, (iv) except as
disclosed in Annex 3.1, will not violate or be in conflict with, result in a
breach of or constitute (with or without notice or
lapse of time or both) a default under, any indenture, loan or credit agreement,
note agreement, promissory note, deed of trust, mortgage, security agreement or
other agreement, lease or instrument, commitment or arrangement to which the
Company is a party or by which the Company or any of its properties, assets or
rights is bound or affected, to the extent that such violation, conflict, breach
or default would (individually or in the aggregate) have a Material Adverse
Effect (as defined in the Loan Agreement) and (e) except as contemplated by the
Amended and Restated Security Agreement (as defined in the Loan Agreement), will
not result in the creation or imposition of any Lien (as defined in the Loan
Agreement). Except as disclosed in Annex 3.1, the Company is not in material
violation of, or (with or without notice or lapse of time or both) in default
under, any term or provision of its Articles of Incorporation or Bylaws or of
any indenture, loan or credit agreement, note agreement, promissory note, deed
of trust, mortgage, security agreement or other agreement, lease or other
instrument, commitment or arrangement to which the Company is a party or by
which any of the Company's properties, assets or rights is bound or affected.
The Company is not subject to any restriction of any kind or character which has
or may have a Material Adverse Effect (as defined in the Loan Agreement) or
which prohibits the Company from entering into this Amendment or would prevent
or make burdensome its performance of or compliance with all or any part of this
Amendment or the consummation of the transactions contemplated hereby.
4. Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become
effective until, and shall become effective when, each and every one of the
following conditions shall have been satisfied or waived by the Investor (the
"Effective Date").
(a) Execution of Counterparts. Counterparts of
this Amendment shall have been executed and delivered by each of the Company and
the Investor.
(b) Ratification and Confirmation of Registration
Rights Agreement. The Registration Rights Agreement and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company hereby confirms and ratifies each of the provisions of the
Registration Rights Agreement.
(c) Consents. All necessary consents, waivers,
approvals, authorizations, registrations, filings and notifications in
connection with the authorization, execution and delivery of this Amendment have
been obtained or made and are in full force and effect.
(e) Proceedings, Instruments, etc. All proceedings
and actions taken on or prior to the Effective Date in connection with the
transactions contemplated by this Amendment and all instruments incident thereto
shall be in form and substance satisfactory to the Investor and its special
counsel, and the Investor and its special counsel shall have received copies of
all documents that it or they may request in connection with such proceedings,
actions and transactions (including, without limitation, copies of court
documents, certifications, and evidence of the correctness of the
representations and warranties contained herein and certifications and evidence
of the compliance with the terms and the fulfillment of the conditions of this
Amendment) in the form and substance satisfactory to the Investor and its
special counsel.
5. Miscellaneous.
5.1 Cross-References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Registration Rights
Agreement; Limited Amendment. This Amendment is executed pursuant to Section
11(a) of the Registration Rights Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered, and applied in accordance with all
of the terms and provisions of the Registration Rights Agreement, including
Section 11(a) thereof. Except as expressly amended, any conditions of the
Registration Rights Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Investor under the Registration
Rights Agreement.
5.3. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
5.4 Counterparts. This Amendment may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute together but one and the same
instrument.
5.5 Governing Law. This Amendment and the notes shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
5.6 Expenses. The Company agrees to pay all expenses of
the Investor in connection with the transactions contemplated by this Amendment
(including, without limitation, the reasonable fees and expenses of counsel for
the Investor).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
VALUE AMERICA, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx, Executive Vice President
and Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
An Authorized Officer
