SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
Amended and Restated Registration Rights Agreement dated as of
September 28, 1996, by and among ValueVision International, Inc., a
Minnesota corporation (the "Company"), Xxxxxxxxxx Xxxx Direct, L.P.,
a Delaware limited partnership ("MWD"), Xxxxxxxxxx Xxxx & Co.,
Incorporated, an Illinois corporation ("MW")and Merchant Partners,
Limited Partnership, a Delaware limited partnership ( MPLP ).
R E C I T A L S
A. Pursuant to a Securities Purchase Agreement, dated as of
March 13, 1995, by and between the Company and MW (the "Securities
Purchase Agreement"), the Company agreed to issue and sell, and MW
agreed to purchase, 1,280,000 shares (the "Shares") of Common Stock
of the Company, under the terms and subject to the conditions set
forth therein.
B. Pursuant to the Securities Purchase Agreement, the
Company also agreed to issue and sell, and MW agreed to purchase,
Existing Warrants (as herein defined) to purchase an aggregate of
25,000,000 shares of the Common Stock of the Company, subject to
adjustment, under the terms and subject to the conditions set forth
therein. Existing Warrants of Series A and Series B, both inclusive
(the "Series A-B Warrants"), have vested, and Existing Warrants of
Series C through Series O, all inclusive (the "Series C-O Warrants")
have not vested.
C. Pursuant to the Securities Purchase Agreement, the
Company agreed to xxxxx XX certain registration rights with respect
to the Shares and the shares issued upon exercise of the Existing
Warrants and executed that certain Registration Rights Agreement,
dated as of August 8, 1995 (the Original Registration Rights
Agreement ).
D. Pursuant to a certain Exchange Agreement, dated as of
even date herewith, between the Company and MW (the "Exchange
Agreement"), the Company and MW have agreed to exchange the Series C-
O Warrants, to amend and restate that certain Operating Agreement and
that certain Servicemark License Agreement, and to amend that certain
Credit Card Receivables Sale and Purchase Agreement, all dated as of
March 13, 1995, and to amend and restate that certain Warrant
Agreement, dated August 8, 1995 and this Agreement, all in
consideration of the issuance by VVI of new Series P Warrants ( New
Warrants ) to purchase an aggregate of 1,484,462 shares of Common
Stock.
E. MWD is a wholly owned subsidiary of MW. Pursuant to an
Asset Purchase Agreement, dated as of August 1, 1996, between the
Company s subsidiary, ValueVision Direct Marketing Company, Inc.,
and MWD (the "Asset Purchase Agreement"), ValueVision Direct
Marketing Company, Inc. has agreed to deliver to MWD, as
consideration for the sale of all of MWD's assets, New Warrants to
purchase an aggregate of 1,484,993 shares of Common Stock ( MWD
Warrants ). MWD subsequently transferred all of its right title and
interest in and to the MWD Warrants to MW. In addition, MW
transferred certain of its Series P Warrants to MPLP. MWD no longer
desires to be a party to this Agreement but MPLP desires to be a
party to this Agreement.
F. Pursuant to the Exchange Agreement, dated as of September
28, 1996, between the Company and MW (the "Exchange Agreement"), VVI
and MW have agreed to exchange all of the Series A-B Warrants for
Series P Warrants to purchase 2,200,000 shares of Common Stock (the
Exchange Warrants ).
G. In connection with the cancellation of the Series C-O
Warrants and the issuance of the New Warrants, the parties agreed to
amend and restate the Original Registration Rights Agreement as set
forth herein.
H. In connection with the cancellation of the Series A-B
Warrants and the issuance of the Replacement Warrants, the parties
desire to amend and restate the Amended and Restated Registration
Rights Agreement as set forth herein.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the premises set forth
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, MWD and MW
agree that the Original Registration Rights Agreement is amended and
restated in its entirety to read as follows:
1. Definition of Terms. As used in this Registration Rights
Agreement, the following capitalized terms shall have the following
respective meanings:
(a) Asset Purchase Agreement: See Recital E.
(b) Business Day: A day other than a Saturday, Sunday
or other day on which banks in the State of Minnesota are authorized
by law to remain closed.
(c) Closing Date: August 8, 1995.
(d) Common Stock: Common Stock, $.01 par value per
share, of the Company.
(e) Company: See the Preamble.
(f) Demand Notice: See Section 3(a).
(g) Demand Registration: See Section 3(a).
(h) Demand Registration Rights: See Section 3(a).
(i) Exchange Act: The Securities Exchange Act of 1934,
as amended.
(j) Exercise Price: The exercise price of a New
Warrant as indicated in, and as may be adjusted by, the Warrant
Agreement.
(k) Expiration Date: 5:00 P.M., Minneapolis, Minnesota
time, on August 7, 2003, or if such day is not a Business Day, the
next succeeding day which is a Business Day.
(l) Inspectors: See Section 5(g).
(m) MW: See the Preamble.
(n) MWD: See the Preamble.
(o) NASD: National Association of Securities Dealers,
Inc. and NASDAQ: NASD Automated Quotation System.
(p) New Warrants: Series P warrants issued pursuant to
the Amended and Restated Exchange Agreement and the Asset Purchase
Agreement.
(q) Outstanding Registration Rights Agreement: The
Representative's Warrant Agreement dated as of November 15, 1993 by
and between the Company and Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
(r) Person: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any
department or agency thereof.
(s) Piggyback Notice: See Section 2(a).
(t) Piggyback Registration: See Section 2(a).
(u) Piggyback Registration Rights: See Section 2(a).
(v) Prospectus: Any prospectus included in any
Registration Statement, as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement
and all other amendments and supplements to the Prospectus, including
post-effective amendments and all material incorporated by reference
in such Prospectus.
(w) Public Offering: A public offering of any of the
Company's equity or debt securities pursuant to a registration
statement under the Securities Act.
(x) Records: See Section 5(g).
(y) Registration Expenses: Any and all expenses
incurred in connection with any registration or action incident to
performance of or compliance by the Company with this Agreement,
including, without limitation, (i) all SEC, national securities
exchange and NASD registration and filing fees; all listing fees and
all transfer agent fees; (ii) all fees and expenses of complying with
state securities or blue sky laws; (iii) all printing, mailing,
messenger and delivery expenses and (iv) all fees and disbursements
of counsel for the Company and of its accountants, including the
expenses of any special audits and/or "cold comfort" letters required
by or incident to such performance and compliance, but excluding
underwriting discounts and commissions, brokerage fees and transfer
taxes, if any, and fees of counsel or accountants retained by MW.
(z) Registration Notice: See Section 2(a).
(aa) Registration Period: The period of time from the
second anniversary of the Closing Date to the Expiration Date except
as provided in Sections 3(a), 3(b) and 5.
(ab) Registrable Securities: Any Shares or Warrant
Shares issued to MW or MPLP, including those which may thereafter be
issued by the Company in respect of any such securities by means of
any stock splits, stock dividends, recapitalizations,
reclassifications or the like, and as adjusted pursuant to the
Amended and Restated Warrant Agreement.
(ac) Registration Statement: Any registration statement
of the Company filed or to be filed with the SEC which covers any of
the Registrable Securities pursuant to the provisions of this
Agreement, including all amendments (including post-effective
amendments) and supplements thereto, all exhibits thereto and all
material incorporated therein by reference.
(ad) SEC: The Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act or
the Exchange Act.
(ae) Securities Act: The Securities Act of 1933, as
amended.
(af) Securities Purchase Agreement: See Recital A.
(ag) Series A-B Warrants: See Recital B.
(ah) Series C-O Warrants: See Recital B.
(ai) Series P Warrants: See Recital B.
(aj) Shares: See Recital A.
(ak) Warrant Agreement: That certain Second Amended and
Restated Warrant Agreement, dated as of July 27, 1996, among the
Company, MW, MPLP and MWD.
(al) Warrant Shares: All shares of Common Stock issued
or issuable upon exercise of any or all of the New Warrants.
2. Piggyback Registration.
(a) Right to Include Registrable Securities. If at any
time during the Registration Period, the Company proposes to register
any of its securities under the Securities Act on any form for the
registration of securities under such Act, whether or not for its own
account (other than by a registration statement on Form X-0, X-0 or
other successor form), it shall as expeditiously as possible give
written notice (a "Registration Notice") to the holders of
Registrable Securities of its intention to do so. Upon the written
request of any such holder (a "Piggyback Notice", which notice shall
specify the Registrable Securities intended to be registered) made
within 20 days after receipt of a Registration Notice, the Company
shall include in the Registration Statement the Registrable
Securities (a "Piggyback Registration") which the Company has been so
requested by such holder to register, subject to the limitations
provided in the Existing Registration Rights Agreements. Such
holder's rights to register shares hereunder are referred to
hereinafter as "Piggyback Registration Rights."
(b) Withdrawal of Piggyback Registration by Company.
If, at any time after giving a Registration Notice but prior to the
effective date of the related Registration Statement, the Company
shall determine for any reason not to register such securities, the
Company shall give written notice of such determination to the
holders of the Registrable Securities sought to be registered and,
thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such Piggyback
Registration. All best efforts obligations of the Company shall
cease if the Company determines to terminate prior to such effective
date any registration where Registrable Securities are being
registered pursuant to this Section 2.
(c) Piggyback Registration of Underwritten Public
Offerings. If a Piggyback Registration involves an offering by or
through underwriters, then, (i) the holders of the Registrable
Securities sought to be registered must agree to sell their
Registrable Securities included in the Company's Registration
Statement to the underwriters selected by the Company on the same
terms and conditions as apply to other selling shareholders and (ii)
such holders may elect in writing, not later than five Business Days
prior to the effectiveness of the Registration Statement filed in
connection with such registration, not to have their Registrable
Securities so included in connection with such registration.
(d) Payment of Registration Expenses for Piggyback
Registration. The Company shall pay all Registration Expenses in
connection with each registration of Registrable Securities requested
pursuant to a Piggyback Registration Right contained in this Section
2.
3. Demand Registration.
(a) Request for Registration. Upon the written request
(a "Demand Notice") of a holder of Registrable Securities at any time
during the Registration Period, and subject to the limitations
provided in the Existing Registration Rights Agreements, the Company
shall, as soon as practicable, use its best efforts to file a
Registration Statement (a "Demand Registration") with respect to all
Registrable Securities that such holder requested be registered in
the Demand Notice. Prior to the filing of such Demand Registration,
the Company shall give written notice to all other holders of
Registrable Securities of the Demand Registration. Upon the written
request of any such holder made within 20 days after receipt of such
notice, the Company shall include in the Demand Registration the
Registrable Securities that such holder requested be registered,
subject to the limitations provided in the Existing Registration
Rights Agreements. The rights of holders of Registrable Securities
to register shares hereunder are referred to hereinafter as "Demand
Registration Rights." The holders of Registrable Securities may in
the aggregate exercise up to two Demand Registration Rights during
the Registration Period. The Company shall use its best efforts to
obtain the effectiveness of the Registration Statement and to take
all other action necessary under any Federal or state law or
regulation to permit such Registered Securities to be sold or
otherwise disposed of, and the Company shall maintain such compliance
with each such Federal and state law and regulation for the period
necessary for the holder of Registrable Securities to effect the
proposed sale or other disposition (but in no event for more than 120
days). The Company shall be entitled to have the Demand Registration
prepared, filed and caused to become effective pursuant to Form S-3
or any successor form promulgated by the SEC ("Form S-3") pursuant to
this Section 3(a), so long as it is eligible to register its
securities pursuant to Form S-3 and Form S-3 is available for the
distribution contemplated by the holder of Registrable Securities.
(b) Deferment of Demand Registration by Company. The
Company shall be entitled to defer a Demand Registration for a period
of up to 120 days if and to the extent that its Board of Directors
shall determine in good faith that such registration would interfere
with a pending material corporate transaction which has been approved
by the Board of Directors of the Company. In such event, the
Registration Period shall be extended by the amount of such delay and
the related Demand Registration Right would be deemed not to be
exercised.
(c) Payment of Registration Expenses for Demand
Registration. Except as provided below, holders of Registrable
Securities sought to be registered shall pay the first $75,000 or
Registration Expenses, plus 50% of all remaining Registration
Expenses of a Demand Registration and the Company shall pay the
balance of such Registration Expenses; and holders of such
Registrable Securities and the Company shall pay the fees and
expenses of each of their respective legal counsel. A registration
will not count as a Demand Registration until it has become
effective, unless the holders demanding such registration withdraw
the Registrable Securities, in which case such demand will count as a
Demand Registration unless the holders of such Registrable Securities
agree to pay all Registration Expenses.
(d) Registration of Additional Securities. Except to
the extent required by the Outstanding Registration Rights
Agreements, neither the Company nor any other party may include in
any Registration Statement filed pursuant to a Demand Registration
any additional shares of Common Stock for registration for sale by
the Company or any other holder of securities. The Company shall not
grant any rights inconsistent with this Section 3(d).
(e) Priority in Demand Registration. If a Demand
Registration involves an offering by or through an underwriter or
underwriters, and the managing underwriter or underwriters of such
offering advise the Company and the holders of Registrable Securities
sought to be registered pursuant to such Demand Registration in
writing that in their opinion the size of the offering which such
holders and all other persons including the Company intend to make is
such that the success of the offering would be materially and
adversely affected by the inclusion of the Registrable Securities
requested to be included, then the amount of securities to be offered
for the account of holders of Registrable Securities shall be reduced
pro rata (according to the Registrable Securities proposed for
registration) to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount recommended
by such managing underwriter or underwriters; provided that if
securities are being offered for the account of other persons or
entities as well as the Company, then with respect to the Registrable
Securities intended to be offered by holders of Registrable
Securities, the proportion by which the amount of such securities is
reduced shall not exceed the proportion by which the amount of such
class of securities intended to be offered by such other persons or
entities is reduced, except to the extent such other persons are
entitled to a lesser reduction under the Existing Registration Rights
Agreements.
4. Company Buy-out of Piggyback Registration or Demand
Registration. In lieu of carrying out its obligations to effect a
Piggyback Registration or Demand Registration of any Registrable
Securities pursuant to this Agreement, the Company may carry out such
obligation by offering to purchase and purchasing such Registrable
Securities requested to be registered (a) in the case of outstanding
shares of Common Stock, at the last sale price of the Common Stock on
the day immediately prior to the day the request for registration is
made and (b) in the case of shares not yet purchased under the New
Warrants or Series A-B Warrants at an amount in cash equal to the
difference between (i) the last sale price of the Common Stock on the
day immediately prior to the day the request for registration is made
and (b) the Exercise Price in effect on such day.
5. Registration Procedures. Whenever a holder of
Registrable Securities has requested that any Registrable Securities
be registered pursuant to either Section 2 or 3 hereof, the Company
will use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable, and in connection with
any such request, the Company will as expeditiously as possible:
(a) prepare and file with the Commission a Registration
Statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall
be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of
distribution thereof, and use its best efforts to cause such filed
registration statement to become effective; provided that before
filing a Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall furnish to one counsel
selected by such holder copies of all such documents proposed to be
filed, which documents will be subject to the review of such counsel,
and that after the filing of the registration statement, the Company
will promptly notify all holders of Registrable Securities of any
stop order issued or threatened by the SEC and take all reasonable
actions required to prevent the entry of such stop order or to remove
it if entered;
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective for a period of not less than 120 days or such
shorter period which will terminate when all Registrable Securities
covered by such Registration Statement have been sold (but not before
the expiration of the requirement of underwriters and dealers to
deliver Prospectuses in connection with such distribution) and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement
during such period in accordance with the intended methods of
disposition by the selling holders thereof set forth in such
Registration Statement;
(c) furnish to each selling holder of Registrable
Securities and to each underwriter, prior to filing the Registration
Statement or Prospectus or any amendment or supplement thereto, if
requested, copies of such Registration Statement as proposed to be
filed, and thereafter furnish to each selling holder of Registrable
Securities and such underwriter such number of copies of such
Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the Prospectus included in
such Registration Statement (including each Preliminary Prospectus)
and such other documents as each selling holder of Registrable
Securities or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
each selling holder of Registrable Securities;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws
of such jurisdictions as any selling holder of Registrable Securities
or any managing underwriter reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable
to enable any selling holder of Registrable Securities or such
managing underwriter to consummate the disposition in such
jurisdictions of the Registrable Securities owned by any selling
holder of Registrable Securities; provided that the Company will not
be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this clause, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(e) use its best efforts to cause the Registrable
Securities covered by such Registration Statement to be registered
with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the
Company or its subsidiaries to enable any selling holder of
Registrable Securities and any managing underwriters to consummate
the disposition of such Registrable Securities;
(f) immediately notify each selling holder of
Registrable Securities, at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the Prospectus included
in such Registration Statement contains an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not
misleading, and the Company will promptly prepare a supplement or
amendment to such Prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus will not
contain 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;
(g) make available for inspection by each selling
holder of Registrable Securities, any underwriter participating in
any disposition pursuant to such Registration Statement, and any
attorney, accountant or other agent retained by any selling holder of
Registrable Securities or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due
diligence responsibilities, and cause the Company's officers,
directors and employees to supply all information reasonably
requested by any such Inspector in connection with such Registration
Statement. Records which the Company determines, in good faith, to
be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of
such Records is necessary in the opinion of the underwriter's
counsel, if any, or counsel to selling holders of Registrable
Securities to avoid or correct a material misstatement or omission in
the Registration Statement, or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or governmental agency, or (iii) the
information in such Records has been made generally available to the
public. Each selling holder of Registrable Securities agrees that it
will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction or by a governmental agency, give
notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;
(h) for purposes of a Demand Registration only, furnish
to each selling holder of Registrable Securities and to each
underwriter, if any, (x) an opinion or opinions of counsel to the
Company and (y) a comfort letter or comfort letters from the
Company's independent public accountants, each in customary form and
covering such matters of the type customarily covered by opinions or
by comfort letters, as the case may be, as any selling holder of
Registrable Securities or the managing underwriter reasonably
requests;
(i) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally
available to its security holders, as soon as reasonably practicable,
an earnings statement covering a period of twelve months, beginning
within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder;
(j) use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar
securities issued by the Company are then listed; and
(k) cooperate with the selling holders of Registrable
Securities, the underwriter or underwriters (or broker/dealer
involved in the distribution), if any, and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
If any Demand Registration is requested to be in the form of an
underwritten offering, the selection of the managing underwriter
shall be subject to the Company's consent, which consent shall not be
unreasonably withheld. If requested by the underwriters for any
underwritten offering, the Company shall enter into an underwriting
agreement in customary form with such underwriters for such offering,
but subject to the Company's reasonable approval. The selling
holders of the Registrable Securities shall be a party to such
underwriting agreement. All fees and expenses (other than
Registration Expenses otherwise required to be paid) of any managing
underwriter, any co-manager or any independent underwriter shall be
paid for by such underwriters or by such selling holders.
The Company may require the selling holders of Registrable
Securities to furnish to the Company such information regarding the
distribution of such Registrable Securities as the Company may from
time to time reasonably request and such other information as may be
legally required or reasonably requested in connection with such
registration.
Each selling holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(f) hereof, such selling holder
will forthwith discontinue disposition of such Registrable Securities
pursuant to the Registration Statement covering such Registrable
Securities until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(f)
hereof, and, if so directed by the Company, such holder will deliver
to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the
Prospectus covering such Registrable Securities current at the time
of receipt of such notice. In the event the Company shall give any
such notice, the Company shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this
Agreement (including the period referred to in Section 5(b) hereof)
by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 5(f) hereof to and
including the date when each seller of Registrable Securities covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 5(f)
hereof.
Except as otherwise provided in this Agreement, the Company
shall have sole control in connection with the preparation, filing,
withdrawal, amendment or supplementing of each Registration
Statement, the selection of underwriters, and the distribution of any
preliminary prospectus included in the Registration Statement, and
may include within the coverage thereof additional shares of Common
Stock or other securities for its own account or for the account of
one or more of its other security holders.
6. Indemnification.
(a) Indemnification by Company. In connection with
each Registration Statement relating to disposition of Registrable
Securities, the Company shall indemnify and hold harmless each
selling holder of Registrable Securities and each underwriter of
Registrable Securities and each Person, if any, who controls any
selling holder of Registrable Securities or underwriter (within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other Federal
or state law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus or
preliminary prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that such indemnity shall not inure to the benefit
of any selling holder of Registrable Securities or underwriter (or
any Person controlling any selling holder of Registrable Securities
or underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) on account of any losses, claims,
damages or liabilities arising from the sale of the Registrable
Securities if such untrue statement or omission or alleged untrue
statement or omission was made in such Registration Statement,
Prospectus or preliminary prospectus, or such amendment or
supplement, in reliance upon and in conformity with information
furnished in writing to the Company by such selling holder of
Registrable Securities or underwriter specifically for use therein.
The Company shall also indemnify selling brokers, dealer managers and
similar securities industry professionals participating in the
distribution, their officers and directors and each Person who
controls such Persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent
as provided above with respect to the indemnification of the Holders
of Registrable Securities, if requested. The indemnification
obligation imposed on the Company under this Section 6(a) shall be in
addition to any liability which the Company may otherwise have.
(b) Indemnification by Holder of Registrable
Securities. In connection with each Registration Statement, each
selling holder of Registrable Securities shall indemnify, to the same
extent as the indemnification provided by the Company in Section
6(a), the Company, its directors and each officer who signs the
Registration Statement and each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act) but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which
was made in the Registration Statement, the Prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, in
reliance upon and in conformity with information furnished in writing
by such selling holder of Registrable Securities to the Company
specifically for use therein. In no event shall the liability of any
selling holder of Registrable Securities hereunder be greater in
amount than the dollar amount of the net proceeds received by any
selling holder of Registrable Securities from the sale of the
Registrable Securities giving rise to such indemnification
obligation. The Company shall be entitled to receive indemnities
from underwriters participating in the distribution, in the
underwriting agreement pursuant to which such sales are made, with
respect to information so furnished in writing by such Persons
specifically for inclusion in any Prospectus, Registration Statement
or preliminary prospectus or any amendment thereof or supplement
thereto.
(c) Conduct of Indemnification Procedure. Any party
that proposes to assert the right to be indemnified hereunder will,
promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim is to be
made against an indemnifying party or parties under this Section,
notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served.
No indemnification provided for in this Section shall be available to
any party who shall fail to give notice as provided in this Section 6
if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced
by the failure to give such notice but the omission so to notify such
indemnifying party of any such action, suit or proceeding shall not
relieve it from any liability that it may have to any indemnified
party for contribution or otherwise than under this Section. In case
any such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the
approval by the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses,
except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall
have the right to employ its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has
been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in
which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party)
or (iii) the indemnifying parties shall not have employed counsel to
assume the defense of such action within a reasonable time after
notice of the commencement thereof, in each of which cases the fees
and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without
its written consent, but if settled with its written consent, or if
there is a final judgment for the plaintiff in any such action or
proceeding, the indemnifying party shall indemnify and hold harmless
such indemnified parties from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that
are the subject matter of such proceeding.
(d) Contribution. If the indemnification provided for
in this Section 6 from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in Section 6(c), any
legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding. The parties hereto
agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation
or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 6(d). No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e) Priority of Indemnification. If indemnification is
available under this Section 6, the indemnifying parties shall
indemnify each indemnified party to the full extent provided in
subparagraphs (a) and (b) of this paragraph without regard to the
relative fault of said indemnifying party or indemnified party or any
other equitable consideration provided for in this Section 6.
7. Assignment. The Piggyback Rights, Demand Registration
Rights and any other rights of MW and MPLP pursuant to this Agreement
shall run in favor of any subsequent holder of Registrable
Securities.
8. Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing
and shall be delivered, or mailed first-class postage prepaid,
registered or certified mail,
if to MW, addressed to:
XXXXXXXXXX XXXX & CO, INCORPORATED
Xxxxxxxxxx Xxxx Plaza
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
if to MPLP, addressed to:
MERCHANT PARTNERS, LIMITED PARTNERSHIP
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Bank
in case of either (i) or (ii), with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
Telecopier: (000) 000-0000
if to the Company, addressed to:
VALUEVISION INTERNATIONAL, INC.
0000 Xxxxx Xxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
with a copy to:
Maslon, Edelman, Xxxxxx & Brand, a
professional limited liability
partnership
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
and such notices and other communications shall for all purposes of
this Agreement be treated as being effective or having been given if
delivered personally, or, if sent by mail, when received.
9. Headings. The headings of the Sections and paragraphs of
this Agreement have been inserted for convenience of reference only
and do not constitute part of this Agreement.
10. Choice of Law. It is the intention of the parties that
the laws of Minnesota shall govern the validity of this Agreement,
the construction of its terms and the interpretation of the rights
and duties of the parties.
11. Counterparts. This Agreement may be executed
concurrently in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument.
12. Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under present or
future law, such provision shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or its severance from
this Agreement.
13. Termination of MWD s Interest. Upon execution of the
this Agreement by the parties hereto, MWD shall cease to be a party
to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the date first above written.
VALUEVISION INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxxxx
Its Chief Executive Officer
XXXXXXXXXX XXXX & CO.,
INCORPORATED
By: /s/ XXXX X. XXXXXXX
Executive Vice President
XXXXXXXXXX XXXX DIRECT, L.P.
By: MW Direct General, Inc.,
the general partner
By: /s/ XXXX X. XXXXXXX
Its: Vice President
MERCHANT PARTNERS, LIMITED
PARTNERSHIP
By: MERCHANT PARTNERS, LIMITED
PARTNERSHIP, the general partner
By: Merchant Development Corp.,
the general partner
By: /s/ XXXXXXX X. BANK
Its: President
