VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is made and entered into
this 26th day of June, 1998, by and among Value America, Inc., a Virginia
corporation (the "Company"), those certain existing holders of the Company's
Common Stock listed on Exhibit A hereto (the "Holders") and those certain
purchasers of the Company's Series B Preferred, as defined herein, listed on
Exhibit B hereto (the "Investors").
RECITALS
A. The Company and the Investors are parties to that certain
Preferred Stock Purchase Agreement, dated as of the date hereof (the "Series B
Agreement"), and the Company's and the Investors' obligations under the Series B
Agreement are conditioned upon the execution and delivery of this Agreement by
the parties hereto.
B. The Investors, as holders of Series B Preferred Stock, without
par value (the "Series B Preferred") of the Company, are entitled to elect one
director to serve on the Board of Directors of the Company, to remove such
director and to fill any vacancy caused by the resignation, death or removal of
such director, and the Company and the Investors desire to enter into this
Agreement with respect to the election of such director.
C. Upon the consummation of a Qualified Offering (as defined
herein) of the Common Stock, without par value (the "Common Stock") of the
Company, the holders of Common Stock (including the Holders as holders of Common
Stock and the Investors as holders of Common Stock upon conversion of the
Preferred Stock, without par value, of the Company) shall be entitled to elect
directors to serve on the Board of Directors of the Company, to remove such
directors and to fill any vacancy caused by the resignation, death or removal of
such directors, and the Company, the Holders and the Investors desire to enter
into this Agreement with respect to the election of such directors.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Voting of Series B Preferred Stock for Director.
-5-
(a) Each Investor agrees to vote all shares of the
Series B Preferred registered in such Investor's name or beneficially owned
by such Investor as of the date hereof and any and all other shares of the
Series B Preferred legally or beneficially acquired by such Investor after
the date hereof (hereinafter collectively referred to as the "Series B
Shares"), at each meeting or pursuant to each consent of the Company's
stockholders in each case to elect directors, to elect as a director to serve
on the Board of Directors of the Company (the "Board"), pursuant to Article
IIIA, Section 6(c)(1) of the Company's Articles of Incorporation, as amended, a
nominee of Vulcan Ventures Incorporated or any affiliate thereof
(collectively, "Vulcan") as designated by Vulcan from time to time. As used
herein, the term "affiliate" shall have the meaning assigned thereto in the
Series B Agreement. In the event of the death, resignation, removal or
inability to serve for any reason of any nominee designated by Vulcan,
Vulcan shall be entitled to designate a successor to such nominee. Any vote
taken to remove any director elected pursuant to this Section 1(a), or to fill
any vacancy created by the resignation, death or removal of a director
elected pursuant to this Section 1(a), shall also be subject to the provisions
of this Section 1(a).
(b) Not later than thirty (30) days following the date of
this Agreement, the Investors shall cause the initial designee of Vulcan to be
elected as a director to serve on the Board until the next annual meeting of
stockholders of the Company and until his successor is duly elected and
qualified in accordance herewith.
(c) Each Investor hereby grants to Vulcan an irrevocable
proxy to vote its Series B Shares in accordance with the agreements contained in
this Section 1. THIS PROXY IS IRREVOCABLE AND IS COUPLED WITH AN INTEREST, HAS
BEEN GIVEN IN CONNECTION WITH A VOTING AGREEMENT COVERING SHARES OF CAPITAL
STOCK THAT ARE SUBJECT TO THE PROXY AND IS BEING GIVEN AND MADE PURSUANT TO
SECTION 13.1-664 OF THE CODE OF VIRGINIA.
2. Voting of Common Stock for Directors.
(a) (i) Each Holder agrees to vote all shares of
voting capital stock of the Company registered in his name or beneficially owned
by him as of the date hereof, and any and all other securities of the Company
legally or beneficially acquired by such Holder after the date hereof
(hereinafter collectively referred to as the "Holder Shares") subject to,
and in accordance with, the provisions of this Agreement.
(ii) Each Investor agrees to vote all shares
of voting capital stock of the Company (including, without limitation, all
shares of Common Stock issued upon conversion of the Series A Preferred and the
Series B Preferred) registered in its name or beneficially owned by it as of
the date hereof, and any and all other securities of the Company legally
or beneficially acquired by such Investor after the date hereof
(hereinafter collectively referred to as the "Investor Shares") subject to,
and in accordance with, the provisions of this Agreement.
(b) From and after the consummation of a Qualified
Offering (as herein defined), and the conversion of the Series A Preferred and
Series B Preferred in connection therewith, each Holder shall vote all of such
person's Holder Shares, and each Investor shall vote all of such person's
Investor Shares, at each meeting or pursuant to each consent of the Company's
stockholders in each case to elect directors, to elect as a director to serve
on the Board (i) Xxxxxxx X. Xxxxx as nominee of Union Labor Life Insurance
Company ("Ullico") (provided that Ullico has nominated Xxxxxxx X. Xxxxx by
written notice to the Company to such effect) and (ii) Xxxxxxx X. Xxxxx as
nominee of Vulcan (provided that Vulcan has nominated Xxxxxxx X. Xxxxx by
written notice to the Company to such effect), in connection with the
expiration of their respective terms as directors. Any vote taken to remove any
director elected pursuant to this Section 2(b) shall also be subject to the
provisions of this Section 2(b). This Agreement shall not restrict the
voting of Investor Shares or Holder Shares to elect any director to any Board
seat other than those held by Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx. As used
herein, a "Qualified Offering" means an underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offering and sale of Common Stock for the account
of the Company in which the aggregate gross proceeds received by the Company at
the public offering price equals or exceeds $25.0 million, and the public
offering price per share of which equals or exceeds 110% of the conversion price
of the Series A Preferred then in effect, and the obligation of the underwriters
with respect to which is that if any of the securities being offered are
purchased, all of such securities must be purchased.
(c) Subject to Sections 3(c) and 4 below, each Holder and
each Investor hereby grants to Ullico and Vulcan, respectively, an
irrevocable proxy to vote his Holder Shares and its Investor Shares solely
(and without limitation of other voting rights with regard to the election of
directors or otherwise) for the election of Xxxxxxx X. Xxxxx and Xxxxxxx
X. Xxxxx as directors of the Company in accordance with Section 2 hereof.
SUBJECT TO SECTIONS 3(c) AND 4 BELOW, THIS PROXY IS IRREVOCABLE AND IS
COUPLED WITH AN INTEREST, HAS BEEN GIVEN IN CONNECTION WITH A VOTING
AGREEMENT COVERING SHARES OF CAPITAL STOCK THAT ARE SUBJECT TO THE PROXY AND
IS BEING GIVEN AND MADE PURSUANT TO SECTION 13.1-664 OF THE CODE OF VIRGINIA.
The Company hereby acknowledges the proxy created hereby for the sole purpose
provided, and recognizes that the Investors and the Holders possess the
authority to vote all Investor Shares and Holder Shares, respectively,
on matters not covered by such proxy.
3. General Provisions.
(a) Concurrently with the execution of this
Agreement, there shall be imprinted or otherwise placed, on certificates
representing the Series B Shares, Holder Shares and the Investor Shares the
following restrictive legend (the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE TERMS AND CONDITIONS OF A VOTING AGREEMENT, DATED JUNE
26, 1998 WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING
OF THE SHARES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY
INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND
SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH
AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS."
(b) The Company agrees that, during the term of this
Agreement, it will not remove, and will not permit to be removed (upon
registration of transfer, reissuance of otherwise), the Legend from any such
certificate and will place or cause to be placed the Legend on any new
certificate issued to represent Series B Shares, Holder Shares or Investor
Shares theretofore represented by a certificate carrying the Legend.
(c) The provisions of this Agreement shall be binding upon
the successors in interest to or transferee of any of the Series B Shares,
Holder Shares or Investor Shares, other than any transferee of any Holder
Shares which is not affiliated with any Holder or related by blood or marriage
to any Holder or a trustee for the benefit of any Holder or any of such
relatives (a "Non-Related Transferee"). The Company shall not permit the
transfer of any of the Series B Shares, Holder Shares or Investor Shares on its
books or issue a new certificate representing any of the Holder Shares or
Investor Shares unless and until the person to whom such security is to be
transferred (other than any Non-Related Transferee) shall have executed a
written agreement, pursuant to which such person becomes a party to this
Agreement or otherwise agrees to be bound by all the provisions hereof as if
such person were a Holder or an Investor, as applicable.
(d) The Company agrees not to give effect to any
action by any Holder or any Investor, Ullico, Vulcan or any other person or
entity which is in contravention of this Agreement.
(e) Except as provided by this Agreement, each Holder and
each Investor shall exercise the full rights of a stockholder with respect
to the Holder Shares and the Series B Shares and Investor Shares,
respectively.
4. Termination. This Agreement shall continue in full force and
effect from the date hereof through the date as of which the parties hereto
terminate this Agreement by written consent of holders of at least a majority
of the Investor Shares which constitute Series A Preferred and a majority of the
Investor Shares which constitute Series B Preferred and a majority of the
Holder Shares, on which date this Agreement shall terminate in its entirety;
provided, however, that the obligations of the Investors under Section 1 and
the obligations of the Holders and Investors under Section 2 with respect to
the election to the Board of a Vulcan designee or Xxxxxxx X. Xxxxx as Vulcan's
designee under Section 2 shall terminate on the earlier to occur of (a) the
date that Vulcan ceases to hold at least that number of shares equal to 25%
of the number of shares of capital stock of the Company, on a fully diluted
basis, owned by Vulcan on the date hereof, including, without limitation,
after giving effect to the purchase of Series B Preferred under the Series
B Agreement, and (b) the tenth anniversary of the date of this
Agreement; provided further, that the obligations of the Holders and the
Investors under Section 2 with respect to the election to the Board of Xxxxxxx
X. Xxxxx as Ullico's designee shall terminate on the earlier to occur of (a)
the date on which Ullico ceases to hold at least that number of shares equal
to 25% of the number of shares of capital stock of the Company, on a fully
diluted basis, owned by Ullico on the date hereof, including, without
limitation, after giving effect to the purchase of Series B Preferred under
the Series B Agreement and the purchase of Common Stock under that certain
Stock Purchase Agreement dated as of the date hereof and defined in Section
6.1(m) of the Series B Agreement, and (b) the tenth anniversary of the date of
this Agreement.
5. Miscellaneous.
(a) The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party
hereto or to their heirs, personal representatives, or assigns by reason
of a failure to perform any of the obligations under this Agreement and
agree that the terms of this Agreement shall be specifically enforceable. If
any party hereto or his heirs, personal representatives, or assigns institutes
any action or proceeding to specifically enforce the provisions hereof, any
person against whom such action or proceeding is brought hereby waives the
claim or defense therein that such party or such personal representative has an
adequate remedy at law, and such person shall not offer in any such action or
proceeding the claim or defense that such remedy at law exists.
(b) This Agreement, and the rights of the parties
hereto, shall be governed by and construed in accordance with the laws of the
State of Virginia.
(c) This Agreement may be amended and any term hereof
may be waived only by an instrument in writing signed by the Company, Vulcan,
holders of a majority of the Investor Shares and holders of a majority of the
Holder Shares, except that this Agreement may be amended to include
transferees of Series B Shares and Investor Shares and transferees of Holder
Shares which are not Non-Related Transferees, in each case in accordance
herewith.
(d) If any provision of this Agreement is held to be
invalid or unenforceable, the validity and enforceability of the remaining
provisions of this Agreement shall not be affected thereby.
(e) This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, successors,
assigns, administrators, executors and other legal representatives.
(f) This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.
(g) No waivers of any breach of this Agreement
extended by any party hereto to any other party shall be construed as a
waiver of any rights or remedies of any other party hereto or with respect to
any subsequent breach.
(h) In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party
shall be entitled to all costs and expenses of maintaining such suit or action,
including reasonable attorneys' fees.
(i) As used herein, the masculine, feminine or neuter
gender shall be deemed to include the others whenever the context so indicates
or requires.
(j) This is a voting agreement made pursuant to
Section 13.1-671 of the Code of Virginia regarding voting agreements.
[SIGNATURE PAGE TO VOTING AGREEMENT]
In Witness Whereof, the parties hereto have executed this
Agreement as of the date first above written.
COMPANY:
VALUE AMERICA, INC.
---------------------------
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
UNION LABOR LIFE INSURANCE
COMPANY Acting on behalf of its
Separate Account P
By: ___________________________
An Authorized Officer
[SIGNATURE PAGE TO VOTING AGREEMENT]
VULCAN VENTURES INCORPORATED
By:___________________________
An Authorized Officer
UNITED ASSOCIATION OF
JOURNEYMEN AND APPRENTICES OF
THE PLUMBING AND PIPEFITTING
INDUSTRY OF THE UNITED STATES
AND CANADA, GENERAL FUND
By: __________________________
An Authorized Officer
THE XXXXXXX X. AND XXXXXXXX X.
XXXXXX FAMILY FOUNDATION
By: __________________________
An Authorized Officer
RYMAC JOINT VENTURE
By:___________________________
An Authorized Officer
XXXXXX FAMILY INVESTMENT
LIMITED PARTNERSHIP
By:___________________________
An Authorized Officer
[SIGNATURE PAGE TO VOTING AGREEMENT]
XXXXXX INVESTMENTS LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Moloreaux, Inc., its
general partner
By:____________________________
An Authorized Officer
[SIGNATURE PAGE TO VOTING AGREEMENT]
------------------------------
Xxxxxxx X. Xxxxx
------------------------------
Xxxxxx XxXxxx
------------------------------
Xxxxx Xxxxxxxxx
------------------------------
Xxxxxxx X. XxXxxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. X. Xxxxxx
------------------------------
Xxxxxx Xxxxxxxx
------------------------------
Xxxx X. Xxxxxxx
------------------------------
C. Xxxxxxx Xxxxxx
-10-
[SIGNATURE PAGE TO VOTING AGREEMENT]
YAGEMANN REVOCABLE TRUST,
DATED NOVEMBER 13, 1992
By: _________________________
Name: _______________________
Title: ____________________
[SIGNATURE PAGE TO VOTING AGREEMENT]
DAVIDSON FAMILY LIMITED
PARTNERSHIP, a Nevada limited
partnership
By:___________________________
Xxxxxx X. Xxxxxxxx,
General Partner
[SIGNATURE PAGE TO VOTING AGREEMENT]
HOLDERS:
------------------------------
Xxxxx X. Xxxx
------------------------------
Xxx Xxxxxxx
CRYSTAL INVESTMENTS, L.L.C.
By:___________________________
An Authorized Officer
FROSTINE, L.L.C.
By:___________________________
An Authorized Officer
Exhibit A
LIST OF HOLDERS
Name No. of Shares of Common Stock
---- -----------------------------
Xxxxx X. Xxxx 5,053,793
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxx Xxxxxxx 2,149,900
000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Crystal Investments, L.L.C. 100,100
c/o Xxxxx X. Xxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Frostine, L.L.C. 100,100
c/o Xxx Xxxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Exhibit B
LIST OF INVESTORS
No. of Shares of
----------------
Common Series A Preferred Series B
------ ------------------ --------
Preferred
---------
Union Labor Life Insurance Company 77,742 5,000,000 7,801
000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxx,
Senior Vice President
Telecopier: (000) 000-0000
Vulcan Ventures Incorporated 492,287
000 000xx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
The United Association of 89,478 8,979
Journeymen and Apprentices
of the Plumbing and Pipefitting
Industry of the United States and
Canada, General Fund
000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
The Xxxxxxx X. and Xxxxxxxx 38,773 3,891
X. Xxxxxx Family Foundation, Inc.
00000 Xxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Partner
Telecopier: (000) 000-0000
Xxxxxx Investments Limited Partnership, 6,563
a Maryland limited partnership
00000 Xxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Partner
Telecopier: (000) 000-0000
No. of Shares of
----------------
Common Series A Preferred Series B
------ ------------------ --------
Preferred
---------
Rymac Joint Venture 9,846
0000 Xxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx XxXxxxxx
Telecopier: (000) 000-0000
Xxxxxx Family Investment 6,563
Limited Partnership
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Davidson Family Limited Partnership 13,127
c/o Xxxxxx Xxxxxxxx
c/o Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxxx X. Xxxxx 16,411
c/o Vulcan Ventures Incorporated
000 000xx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxx XxXxxx 1,641
0000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxx Xxxxxxxxx 6,563
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Xxxxxxx X. XxXxxxxxx 3,282
0000 Xxx Xxxxxxxx Xxxxx
XxXxxx, XX 00000
Telecopier: (000) 000-0000
No. of Shares of
----------------
Common Series A Preferred Series B
------ ------------------ --------
Preferred
---------
Xxxxxxx X. Xxxxxx 1,641
Manatt Xxxxxx & Xxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxx X.X. Xxxxxx 3,282
c/o Hawkes Xxxxxxx Xxxxxxx & Co., Ltd.
00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
(000) 000-0000
Xxxxxx Xxxxxxxx 3,282
c/o X.X. Xxxxxxxxxx & Co., Inc.
00 Xxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxx X. Xxxxxxx 3,282
0000 Xxxxxxxx Xxxxx, XX
Xxxxxxxxxx, X.X. 00000
Telecopier: (000) 000-0000
C. Xxxxxxx Xxxxxx 13,127
0000 Xxxxx Xxxx
XxXxxx, XX 00000
Telecopier: (000) 000-0000
Yagemann Revocable Trust, 16,411
Dated November 13,1 992
0 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
TABLE OF CONTENTS
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Page
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1. Voting of Series B Preferred Stock for Director. 1
2. Voting of Common Stock for Directors 2
3. General Provisions 3
4. Termination 4
5. Miscellaneous 4
