EXHIBIT 10.21
VALUE AMERICA, INC.
------------------------------------------
STOCK PURCHASE AGREEMENT
------------------------------------------
205,993 SHARES OF COMMON STOCK
Dated as of June 26, 1998
TABLE OF CONTENTS
Page
1. Sale and Purchase of Common Stock. 2
2. Closing 2
3. Certificates for Shares of Common Stock. 2
4. Representations and Warranties by the Selling Stockholders 2
4.1 Purchase Agreement 2
4.2 This Agreement 3
5. Investors' Representations and Warranties 4
6. Indemnification 5
6.1 Survival of Representations and Warranties
and Covenants 5
6.2 Indemnification 5
6.3 Third Party Claims 6
7. Miscellaneous 7
7.1 Waivers and Amendments 7
7.2 Effect of Waiver or Amendment 7
7.3 Rights of Investors Inter Se 7
7.4 Notices 8
7.5 Severability 8
7.6 Parties in Interest 8
7.7 Headings 8
7.8 Choice of Law 8
7.9 Counterparts 8
7.10 Authorship 9
7.11 Entire Agreement 9
7.12 Cumulative Remedies 9
7.13 No Implied Waiver 9
7.14 Exculpation Among Investors 9
7.15 Counsel 9
7.16 Lock-Up Agreement 10
7.17 Waivers 10
7.18 Participation Agreement and Related Indemnification 10
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of
June 26, 1998, among ▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"), ▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") (each a
"Selling Stockholder" and collectively the "Selling Stockholders"), UNION LABOR
LIFE INSURANCE COMPANY, a Maryland corporation acting on behalf of its Separate
Account P (which is not a separate entity) ("Ullico"), UNITED ASSOCIATION OF
JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPEFITTING INDUSTRY OF THE
UNITED STATES AND CANADA, GENERAL FUND (the "Plumbers"), and THE ▇▇▇▇▇▇▇ ▇. AND
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY FOUNDATION (the "▇▇▇▇▇▇ Entity") (each of Ullico, the
Plumbers, and the ▇▇▇▇▇▇ Entity, an "Investor" and collectively, the
"Investors").
RECITALS
A. Concurrent with the execution of this Agreement, Value America,
Inc., a Virginia corporation (the "Company"), the Investors and certain other
entities and individuals (collectively, the "Series B Investors") propose to
enter into a Preferred Stock Purchase Agreement dated the date of this Agreement
(the "Purchase Agreement") under which the Series B Investors will become
obligated, subject to certain conditions, to provide approximately $18.5 million
in equity financing to the Company.
▇. ▇▇▇▇ is the record owner of 5,053,793 shares of the Company's
authorized and issued common stock, without par value (which class of shares is
herein called the "Common Stock") and the beneficial owner of 5,153,893 shares
of Common Stock.
▇. ▇▇▇▇▇▇▇ is the record owner of 2,149,900 shares of Common Stock
and the beneficial owner of 2,250,000 shares of Common Stock.
D. The Investors are unwilling to provide equity financing to the
Company, unless each Selling Stockholder is willing to sell certain shares of
Common Stock held by it to the Investors, and it is a condition to the
performance of the Series B Investors' obligations under the Purchase Agreement
that the Selling Stockholders enter into this Agreement.
E. Each Selling Stockholder acknowledges that having the Series B
Investors provide equity financing to the Company pursuant to the Purchase
Agreement will directly benefit such Selling Stockholder as a result of its
ownership of Common Stock and, accordingly, that such Selling Stockholder is
entering into this Agreement to induce the Investors to provide equity financing
to the Company under the Purchase Agreement.
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. Sale and Purchase of Common Stock. Upon the terms and subject to
the conditions herein contained, the Selling Stockholders agree to sell to
the Investors, and each Investor agrees, severally and not jointly, to
purchase from the Selling Stockholders, at the Closing (as hereinafter
defined) on the Closing Date (as hereinafter defined), the total number of
shares of Common Stock specified opposite such Investor's name on the
Schedule of Investors attached hereto as Annex A (collectively, the "Shares"),
at a price of $30.47 per share (the "Purchase Payment").
2. Closing. The closing of the sale to and purchase by the
Investors of the Common Stock (the "Closing") shall occur at the offices
of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 1299 Pennsylvania Avenue, N.W., Tenth
Floor, Washington, D.C., at the time and on the date of closing of the
purchase of Series B Preferred Stock of the Company by the Series B
Investors pursuant to the Purchase Agreement (the "Closing Date"). At
the Closing, each Selling Stockholder will deliver to each Investor a
certificate evidencing the Common Stock sold by him pursuant hereto together
with stock powers, dated the Closing Date, with respect to all of such shares
of Common Stock duly executed in blank, together with a certificate duly
executed by such Selling Stockholder, dated the Closing Date, certifying, upon
having made a reasonable investigation sufficient to express an informed view,
that all representations and warranties of the Selling Stockholders under
this Agreement are true and correct on the Closing Date and that the Selling
Stockholders have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by them on or before
the Closing Date, against delivery to the Selling Stockholders of payment
by check or wire transfer in an amount equal to the Purchase Payment.
3. Certificates for Shares of Common Stock. Each Selling
Stockholder covenants and agrees to cause the Company to issue to each Investor
on the Closing Date a certificate representing the shares of Common Stock
purchased by such Investor pursuant hereto in such Investor's name upon
surrender by such Investor to the Company of the certificate and stock
power described in Section 2. The certificates evidencing the Common Stock
purchased by the Investors hereunder shall bear the legends agreed upon by
the Selling Stockholders and the Investors.
4. Representations and Warranties by the Selling Stockholders.
Representations and Warranties by the Selling Stockholders.
4.1 Purchase Agreement.
(a) Each Selling Stockholder, jointly and
severally, represents and warrants to, and covenants and agrees with the
Investors as follows:
(i) The Selling Stockholders have
carefully reviewed the Purchase Agreement and the representations and warranties
of the Company appearing in Section 5 of the Purchase Agreement.
(ii) On the date hereof, each
representation and warranty of the Company appearing in Section 5 of the
Purchase Agreement is true and complete in all material respects and does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated or necessary to make the statements made, in light
of the circumstances under which they were made, not misleading. On the Closing
Date, each representation and warranty of the Company appearing in Section 5
of the Purchase Agreement will be true and complete in all material respects and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated or necessary to make the statements made,
in light of the circumstances under which they were made, not misleading.
4.2 This Agreement. Each Selling Stockholder, severally,
but not jointly, represents and warrants to, and covenants and agrees with the
Investors, as follows:
(a) Such Selling Stockholder has full power
and authority to execute, deliver and perform this Agreement and this Agreement
has been duly executed and delivered by such Selling Stockholder.
(b) This Agreement constitutes the legal, valid
and binding obligation of such Selling Stockholder and is enforceable against
such Selling Stockholder in accordance with its terms, except as such
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting enforcement of creditors' rights generally.
(c) ▇▇▇▇ is the beneficial owner of
5,153,893 share of Common Stock, and ▇▇▇▇ is the record owner of 5,053,793
shares of Common Stock and Crystal Investments, L.L.C., a Virginia limited
liability company, which is closely-held and managed by ▇▇▇▇, is the record
owner of 100,100 shares of Common Stock. ▇▇▇▇▇▇▇ is the beneficial owner of
2,250,000 shares of Common Stock, and ▇▇▇▇▇▇▇ is the record owner of
2,149,900 shares of Common Stock and Frostine, L.L.C., a Virginia limited
liability company, which is closely-held and managed by ▇▇▇▇▇▇▇, is the record
owner of 100,100 shares of Common Stock. Each Selling Stockholder has good and
marketable title to all of such Common Stock held of record, free and clear of
any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(a "Lien") or restriction on transfer.
(d) Upon delivery of a certificate evidencing the
shares of Common Stock owned by such Selling Stockholder and payment therefor
to such Selling Stockholder by each Investor pursuant to this Agreement, the
Investors will receive good and marketable title to all of the shares of Common
Stock purchased hereby, free and clear of all Liens, restrictions on transfer
and adverse claims.
(e) The execution, delivery and performance of
this Agreement by the Selling Stockholders (a) will not require any consent or
approval that has not been validly and lawfully obtained, (b) 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, except such
as shall have been lawfully and validly obtained prior to the Closing, (c)
will not violate or contravene (i) any provision of law, (ii) any rule or
regulation of any agency or government, domestic or foreign, (iii) any order,
writ, judgment, injunction, decree, determination or award, or (iv) any
provision of the Articles of Incorporation or Bylaws of the Company, (d) 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, deed of trust, mortgage, security agreement or
other agreement, lease or instrument, commitment or arrangement to which any
Selling Stockholder is a party or by which any Selling Stockholder or any of his
properties, assets or rights is bound or affected, and (e) will not result in
the creation or imposition of any Lien.
(f) No person, corporation, trust, association,
company, partnership, joint venture or other entity (a "Person") has, or as a
result of the transactions contemplated herein will have, any right or valid
claim against any Selling Stockholder for any commission, fee or other
compensation as a finder or broker, or any similar capacity.
(g) The Selling Stockholders are being
represented in connection with this Agreement by ▇▇▇▇▇▇▇ ▇▇▇▇, A Professional
Corporation, and such Selling Stockholders have not received any
information or advice from, and are not relying upon any statement made by
Ullico or Ullico's special counsel, Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, or
counsel to any other Investor in entering into or in connection with this
Agreement or the transactions contemplated hereby.
5. Investor's Representations and Warranties. Each Investor hereby
represents and warrants severally, but not jointly, to the Selling Stockholders:
(a) Such Investor is a corporation or partnership or other
entity duly organized or formed, validly existing and in good standing under
the laws of its state of incorporation or formation and has full power and
authority to execute, deliver, and perform this Agreement and this Agreement
has been duly executed and delivered by such Investor.
(b) This Agreement constitutes the legal, valid and binding
obligation of such Investor and is enforceable against such Investor in
accordance with its terms, except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally.
(c) Such Investor understands that the Common Stock it
acquires hereunder has not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and that accordingly it will not be
fully transferable except as permitted under various exemptions contained in
the Securities Act or applicable state securities laws, or upon satisfaction of
the registration and prospectus delivery requirements of the Securities Act or
registration or qualification requirements under applicable state
securities laws. Such Investor acknowledges that it must bear the economic
risk of its investment in the Common Stock for an indefinite period of time
since it has not been registered under the Securities Act and therefore cannot
be sold unless it is subsequently registered or an exemption from
registration is available.
(d) Such Investor (i) is acquiring the Common Stock it has
agreed to purchase for investment purposes only, for its own account, and not
as nominee or agent for any other person or entity, and not with the view to,
or for resale in connection with, any distribution thereof within the
meaning of the Securities Act, (ii) is an "accredited investor" within the
meaning of Rule 501(a) of the Securities and Exchange Commission under the
Securities Act, (iii) is a corporation, partnership, or other entity
headquartered in the jurisdiction as set forth on Annex A to this Agreement and
(iv) has had the opportunity to review information provided to it by the Company
and ask questions about and received answers regarding the same.
(e) Such Investor acknowledges that it has received and
reviewed a draft dated June 16, 1998 of a Registration Statement on Form S-1
(the "Registration Statement"), which the Company has represented it
intends to file with the Securities and Exchange Commission in connection
with an initial public offering of the Common Stock of the Company (an "IPO").
Such Investor acknowledges that the terms of the IPO may differ from those
contained in the Registration Statement and that the IPO may be delayed or
terminated at any time.
(f) Such Investor recognizes that the purchase of Shares of
the Company by it pursuant to this Agreement involves a high degree of risk and
acknowledges that it understands such risks, including those set forth in
the Section titled "Risk Factors" in the Registration Statement.
6. Indemnification.
6.1 Survival of Representations and Warranties and
Covenants. The representations, warranties and covenants of the Selling
Stockholders contained in this Agreement or in any writing delivered pursuant
hereto or at the Closing shall survive the execution and delivery of this
Agreement and the Closing and the consummation of the transactions
contemplated hereby (and any examination or investigation by or on behalf of any
party hereto) indefinitely. The representations, warranties and covenants of the
Investors contained in this Agreement or in any writing delivered pursuant
hereto or at the Closing shall survive the execution and delivery of this
Agreement and the Closing and the consummation of the transactions contemplated
hereby (and any examination or investigation by or on behalf of any party
hereto) indefinitely.
6.2 Indemnification.
(a) Each Selling Stockholder covenants and agrees
to defend, indemnify and hold harmless each Investor and each Person who
controls such Investor within the meaning of the Securities Act from and
against any and all losses, liabilities, obligations, costs, expenses, damages
or judgments of any kind or nature whatsoever, including without
limitation reasonable attorneys', accountants' and experts' fees and
disbursements of counsel (collectively, "Damages") arising out of or
resulting from: (i) any inaccuracy in or breach of any representation or
warranty made by any Selling Stockholder in this Agreement or in any writing
delivered pursuant to this Agreement or at the Closing, or (ii) the failure
of any Selling Stockholder to perform or observe fully any covenant,
agreement or provision to be performed or observed by such Selling Stockholder
pursuant to this Agreement.
(b) Each Investor severally, but not jointly,
covenants and agrees to defend, indemnify and hold harmless each Selling
Stockholder and each Person who controls such Selling Stockholder within the
meaning of the Securities Act from and against any and all Damages arising out
of or resulting from: any inaccuracy in or breach of any representation or
warranty made by such Investor in Section 5(a), (c) or (d) of this Agreement.
6.3 Third Party Claims.
(a) If any party indemnifiable hereunder (an
"Indemnified Party") receives notice of the assertion by any third party of any
claim or of the commencement by any such third person of any action (any such
claim or action being referred to herein as an "Indemnifiable Claim")
with respect to which any other party hereto (an "Indemnifying Party")
is or may be obligated to provide indemnification, the Indemnified Party
shall promptly notify the Indemnifying Party in writing (the "Claim Notice") of
the Indemnifiable Claim; provided, however, that the failure to provide such
notice shall not relieve or otherwise affect the obligation of the
Indemnifying Party to provide indemnification hereunder, except to the
extent that any Damages directly resulted or were caused by such failure.
(b) The Indemnifying Party shall have thirty (30)
days after receipt of the Claim Notice to undertake, conduct and control,
through counsel of its own choosing, and at its expense, the settlement or
defense thereof, and the Indemnified Party shall cooperate with the
Indemnifying Party in connection therewith; provided, however, that (i)
the Indemnifying Party shall permit the Indemnified Party to participate in
such settlement or defense through counsel chosen by the Indemnified
Party (subject to the consent of the Indemnifying Party, which consent
shall not be unreasonably withheld), provided that the fees and expenses of such
counsel shall not be borne by the Indemnifying Party, and (ii) the
Indemnifying Party shall not settle any Indemnifiable Claim without the
Indemnified Party's consent. So long as the Indemnifying Party is vigorously
contesting any such Indemnifiable Claim in good faith, the Indemnified Party
shall not pay or settle such claim without the Indemnifying Party's consent,
which consent shall not be unreasonably withheld.
(c) If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days after receipt of the Claim Notice
that it elects to undertake the defense of the Indemnifiable Claim
described therein or does not undertake and pursue vigorously the defense
of such Indemnifiable Claim, the Indemnified Party shall have the right to
contest, settle or compromise the Indemnifiable Claim in the exercise of its
reasonable discretion; provided, however, that the Indemnified Party shall
notify the Indemnifying Party of any compromise or settlement of any such
Indemnifiable Claim.
(d) Anything contained in this Section 6.3 to the
contrary notwithstanding, no Indemnifying Party shall be entitled to assume the
defense of any Indemnifiable Claim (and shall be liable for the reasonable fees
and expenses incurred by the Indemnified Party in defending such claim) if the
Indemnifiable Claim seeks an order, injunction or other equitable relief or
relief for other than money damages against any Investor which such
Investor determines, after conferring with its counsel, cannot be separated
from any related claim for money damages.
7. Miscellaneous.
7.1 Waivers and Amendments. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only by the
written consent of (a) as to the Investors, only by the Investors holding more
than fifty percent (50%) in interest of the Common Stock purchased hereunder
voting as a single group, and (b) as to the Selling Stockholders, only by the
Selling Stockholder selling more than fifty percent (50%) of the Shares sold
hereunder. Any amendment or waiver effected in accordance with clause (a) and
(b) or this Section 7.1 shall be binding upon the Investors and the Selling
Stockholders and their respective successors and assigns. Upon the effectuation
of each such waiver, consent or agreement of amendment or modification, the
parties so consenting or waiving shall promptly give written notice thereof to
the other parties who have not previously consented thereto in writing. This
Agreement, and any provision hereof or thereof, shall not be amended, 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 7.1. Specifically, but without limiting the generality of the foregoing,
the failure of the Investors at any time or times to require performance of any
provision hereof by the Selling Stockholders shall in no manner affect the
rights of the Investors at a later time to enforce the same. No waiver by any
party of the breach of any term or provision contained in this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in the Agreement.
7.2 Effect of Waiver or Amendment. Each Investor acknowledges
that by operation of Section 7.1 hereof the Investors which purchase more than
fifty percent in interest of the Common Stock hereunder will, subject
to the limitations contained in such Section 7.1, have the right and power to
diminish or eliminate certain rights of the Investors under this Agreement.
7.3 Rights of Investors Inter Se. Each Investor shall have the
absolute right to exercise or refrain from exercising any right or rights which
such Investor may have by reason of this Agreement or any Share, including,
without limitation, the right to consent to the waiver of any obligation of any
Selling Stockholder under this Agreement and to enter into an agreement with any
Selling Stockholder for the purpose of modifying this Agreement or any agreement
effecting any such modification, and such Investor shall not incur any liability
to any other Investor with respect to exercising or refraining from exercising
any such right or rights.
7.4 Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing (including
telecopy or similar writing) and shall be given to any Investor at the address
or to the telecopier number set forth opposite such Investor's name on Annex A
of this Agreement, to any Selling Stockholder at the address or to the
telecopier number set forth beneath such Selling Stockholder's name on the
signatures page(s) to this Agreement, 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 any
Investor or any Selling Stockholder shall also be given to each other Investor
or Selling Stockholder, respectively. 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).
7.5 Severability. Should any one or more of the provisions of
this Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this
Agreement, shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected thereby.
7.6 Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, whether so
expressed or not, and, in particular, shall inure to the benefit of and be
enforceable by the holder or holders at the time of any of the Shares. 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.
7.7 Headings. The headings of the Sections and paragraphs of
this Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
7.8 Choice of Law. It is the intention of the parties that the
internal laws, and not the laws of conflicts, 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.
7.9 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.
7.10 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.
7.11 Entire Agreement. This Agreement and any agreement,
document or instrument referred to herein 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.
7.12 Cumulative Remedies. None of the rights, powers or
remedies conferred upon any Investor shall be mutually exclusive, and each such
right, power or remedy shall be cumulative and in addition to every other right,
power or remedy, whether conferred hereby or now or hereafter available at law,
in equity, by statute or otherwise.
7.13 No Implied Waiver. Except as expressly provided in this
Agreement, no course of dealing between any Selling Stockholder and any Investor
and no delay in exercising any such right, power or remedy conferred hereby
or now or hereafter existing at law in equity, by statute or otherwise, shall
operate as a waiver of, or otherwise prejudice, any such right, power or
remedy.
7.14 Exculpation Among Investors. Each Investor acknowledges
that it is not relying upon any other Investor, or any officer, director,
employee, agent, partner or affiliate of any such other Investor, in making its
investment or decision to invest in the Shares or in monitoring such
investment. Each Investor agrees that no Investor nor any controlling person,
officer, director, stockholder, partner, agent or employee of any Investor
shall be liable for any action heretofore or hereafter taken or omitted to
be taken by any of them relating to or in connection with the Company or the
Common Stock, or both. Without limiting the generality of the foregoing, no
Investor (or any of its affiliates, officers, directors, stockholders,
partners, agents or employees) shall have any obligation, liability or
responsibility whatsoever for the accuracy, completeness or fairness of any
or all information about the Company or its properties, business or financial
and other affairs, acquired by such Investor from the Company or its
officers, directors, employees, agents, representatives, counsel or
auditors, and in turn provided to another Investor, nor shall such Investor
(or such other person) have any obligation or responsibility whatsoever
to provide any such information to any other Investor (or such other person) or
to continue to provide any such information if any information is provided.
7.15 Counsel. Each party hereto has reviewed the contents of
this Agreement and fully understands its terms. Each party hereto acknowledges
that he or it is fully aware of his or its right to the advice of counsel
independent from that of any other party, and that it understands the
potentially adverse interests of the parties with respect to this Agreement.
Each party hereto further acknowledges that no representations have been made
with respect to the tax or other consequences of this Agreement or the
transactions contemplated herein to him or it, and that he or it has been
advised of the importance of seeking independent counsel with respect to such
consequences. Each Investor acknowledges and agrees that it has not received any
information or advice from, and is not relying upon any statement made by Ullico
or Ullico's special counsel, Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP in entering
into or in connection with this Agreement or the transactions contemplated
hereby.
7.16 Lock-Up Agreement. Each Investor agrees to execute a
Lock-Up Agreement, in the form attached as Annex 7.16 hereto, in connection with
the proposed initial public offering of the Common Stock of the Company for the
account of the Company pursuant to an effective registration statement under the
Securities Act. To the extent that the Company should change lead
underwriters prior to the effective date of such initial public offering, each
Investor agrees to execute a Lock-Up Agreement with such lead underwriter, so
long as such agreement is in the form attached as Annex 7.16 hereto. Each
Investor (other than Ullico) agrees to execute a lock-up agreement, if any,
requested by The Nasdaq Stock Market, Inc. (the "Nasdaq Lock-Up Agreement") in
connection with such initial public offering.
7.17 Waivers. Ullico hereby waives the applicability of
Sections 2 and 4 of that certain Stockholders Agreement dated as of December 17,
1997, by and among the Company, Ullico and the Selling Stockholders (the
"Stockholders Agreement") with respect to the sale of the Shares of Common
Stock of the Company to the Investors pursuant to this Agreement, and Ullico
hereby agrees that its rights of first refusal and co-sale set forth in Section
4 of the Stockholders Agreement shall not apply to the Shares of Common Stock
sold to the ▇▇▇▇▇▇ Entity and the Plumbers pursuant to this Agreement.
7.18 Participation Agreement and Related Indemnification. Each
Selling Stockholder, jointly and severally, covenants and agrees that if any
transfer of shares of Common Stock held by any Investor would be restricted by
virtue of the application of the provisions of that certain Participation
Agreement dated October 31, 1997 executed by each Selling Stockholder,
if applicable, such Selling Stockholder shall not transfer or shall purchase
from such Investor (on the terms proposed by such Investor) such number of
shares of Common Stock so as to enable such Investor to transfer the full
number of shares of Common Stock it so desires to transfer. Each Selling
Stockholder, jointly and severally, covenants and agrees to defend, indemnify
and hold harmless each Investor and each Person who controls such Investor
within the meaning of the Securities Act from against any and all Damages
arising out of or resulting from the failure of any Selling Stockholder to
perform or observe fully its covenants and agreements contained in this Section
7.18 or arising out of or resulting from that certain such Participation
Agreement or any attachment thereto.
[SIGNATURE PAGE OF STOCK PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed by their respective duly authorized officers as of the day
and year first above written.
UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By:____________________________________
[SIGNATURE PAGE OF STOCK PURCHASE AGREEMENT]
UNITED ASSOCIATION OF JOURNEYMEN
AND APPRENTICES OF THE PLUMBING AND
PIPEFITTING INDUSTRY OF THE UNITED
STATES AND CANADA, GENERAL FUND
By:____________________________________
THE ▇▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ FAMILY FOUNDATION
By:____________________________________
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ANNEX A
COMMON STOCK PURCHASED BY INVESTORS
Name/Address Number of
Shares
=======================================================================
Union Labor Life Insurance Company 77,742
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
United Association of Journeymen and 89,478
Apprentices of the Plumbing and Pipefitting
Industry of the United States and Canada,
General Fund
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
The ▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 38,773
Family Foundation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX 7.16
LOCK-UP AGREEMENT FOR
DIRECTORS, OFFICERS AND SECURITYHOLDERS
OF VALUE AMERICA, INC.
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
As Lead Representative of the several Underwriters
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned understands that you, as lead
representative of the several underwriters (the "Underwriters"), propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") with Value
America, Inc. (the "Company") and certain Selling Stockholders (as defined in
the Underwriting Agreement) providing for the initial public offering (the
"Public Offering") by the Underwriters, including yourselves, of the
Company's common stock, no par value, (the "Common Stock") pursuant to a
Registration Statement of Form S-1 (the "Registration Statement") to be filed
with the Securities and Exchange Commission. This letter agreement shall
terminate and be of no further force and effect either (i) upon a decision by
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or the Company not to proceed with the Public
Offering, or (ii) if the Registration Statement is not filed with the Securities
and Exchange Commission by July 15, 1998.
In consideration of the Underwriters' agreement to purchase
and make the Public Offering of the Common Stock, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
undersigned hereby agrees that the undersigned will not, for a period commencing
on the date hereof and continuing thereafter until 180 days after the date of
the final prospectus for the Public Offering (the "Lock-Up Period"), offer to
sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant any
rights with respect to (collectively, a "Disposition") any shares of Common
Stock, any options or warrants to purchase any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock
(collectively, "Securities") now owned or hereafter acquired directly by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, otherwise than (a) as a bona fide gift or a
distribution to limited partners, members or shareholders of the undersigned,
provided that the donees or distributees thereof (as the case may be) agree in
writing to be bound by the terms of this Lock-Up Agreement, (b) as a bona fide
pledge or, upon foreclosure of such pledge, to the pledgee, provided that the
pledgee agrees to be subject to the transfer restrictions herein to the same
extent as the undersigned, or (c) with the prior written consent of BancAmerica
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. The foregoing restriction is expressly agreed to preclude
the holder of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition of securities during the Lock-Up Period, even if such Securities
would be disposed of by someone other than the undersigned. Such prohibited
hedging or other transactions include, without limitation, any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from the Securities. Notwithstanding the foregoing, this Lock-Up
Agreement does not prohibit (i) the sale of shares of Common Stock by the
undersigned to the Underwriters in the Public Offering or (ii) resales of shares
of Common Stock acquired by the undersigned in the Public Offering or in
subsequent open-market purchases. The undersigned hereby agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of the Securities held by the undersigned except in
compliance with this Lock-Up Agreement.
Date: _____________________, 1998
Very truly yours,