EXHIBIT 4.7
FOGDOG, INC.
____________________________
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
____________________________
September 23, 1999
TABLE OF CONTENTS
Page
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1. Authorization, Issuance and Sale of Securities....................... 1
1.1 Authorization.................................................. 1
1.2 Issuance and Sale of Series D Preferred Stock.................. 1
1.3 Closing........................................................ 1
2. Representations and Warranties of the Company........................ 1
2.1 Organization, Good Standing and Qualification.................. 2
2.2 Capitalization................................................. 2
2.3 Subsidiaries, Etc.............................................. 3
2.4 Shareholder List and Agreements................................ 3
2.5 Issuance of Securities......................................... 3
2.6 Authority for Agreement........................................ 3
2.7 Governmental Consents.......................................... 3
2.8 Litigation..................................................... 4
2.9 Employee Proprietary Information and Inventions Agreements..... 4
2.10 Acquisitions of the Company.................................... 4
2.11 Absence of Liabilities......................................... 4
2.12 Financial Statements........................................... 4
2.13 Taxes.......................................................... 4
2.14 Property and Assets............................................ 5
2.15 Intellectual Property.......................................... 5
2.16 Material Contracts and Obligations............................. 5
2.17 Compliance..................................................... 6
2.18 Books and Records.............................................. 6
2.19 Disclosures.................................................... 6
2.20 Changes........................................................ 6
2.21 Year 2000 Compliance........................................... 6
2.22 Qualified Small Business Stock................................. 7
2.23 Business Plan.................................................. 7
3. Representations and Warranties of the Investors...................... 7
3.1 Authorization.................................................. 7
3.2 Purchase Entirely for Own Account.............................. 7
3.3 Disclosure of Information...................................... 8
3.4 Investment Experience.......................................... 8
3.5 Accredited Investor............................................ 8
3.6 Restricted Securities.......................................... 8
3.7 Further Limitations on Disposition............................. 8
3.8 Legends........................................................ 9
3.9 Transfer of Rights............................................. 9
4. Conditions to the Investors' Obligations at the Closing.............. 10
4.1 Representations and Warranties................................. 10
4.2 Covenants...................................................... 10
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4.3 Compliance Certificate.............................................. 10
4.4 Proceedings......................................................... 10
4.5 Consents and Approvals.............................................. 10
4.6 Bylaws.............................................................. 10
4.7 Amended and Restated Articles of Incorporation..................... 10
4.8 Registration Rights Agreement....................................... 10
4.9 Shareholders Agreement.............................................. 10
4.10 Opinion of Counsel.................................................. 11
4.11 Voting Agreement.................................................... 11
5. Conditions of the Company's Obligations at Closing........................ 11
5.1 Representations and Warranties...................................... 11
5.2 Payment of Purchase Price........................................... 11
5.3 Qualifications...................................................... 11
6. Covenants of the Company.................................................. 11
6.1 Financial Statements and Other Information.......................... 11
6.2 Inspection of Property.............................................. 12
6.3 Limit on Information................................................ 12
6.4 Option Grants....................................................... 12
6.5 Qualified Small Business Stock...................................... 12
7. Miscellaneous............................................................. 12
7.1 Survival of Representations, Warranties, Covenants and Agreements... 12
7.2 Notices............................................................. 13
7.3 Entire Agreement; Waivers and Amendments............................ 13
7.4 Successors and Assigns.............................................. 14
7.5 Severability........................................................ 14
7.6 Governing Law....................................................... 14
7.7 Strict Construction................................................. 14
7.8 Captions............................................................ 14
7.9 Expenses............................................................ 14
7.10 Counterparts........................................................ 14
7.11 Broker's Fees....................................................... 14
Exhibits
A Amended and Restated Articles of Incorporation
B Form of Third Amended and Restated Registration Rights Agreement
C Form of Third Amended and Restated Shareholders' Agreement
D Opinion of Counsel to the Company
E Form of Third Amended and Restated Voting Agreement
F Form of Employee Proprietary Information and Inventions Agreement
Schedules
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A Schedule of Investors
B Disclosure Schedule
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SERIES D PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT ("Agreement") is made
as of September 23, 1999 by and among Fogdog, Inc., a California corporation
(formerly known as Cedro Group, Inc.) (the "Company") and the investors listed
on the signature pages hereof (individually, an "Investor" and collectively, the
"Investors").
W I T N E S S E T H:
WHEREAS, the Company wishes to sell to the Investors, and the
Investors wish to purchase from the Company, shares of the Company's Series D
Preferred Stock, no par value per share (the "Series D Preferred Stock") subject
to the terms and in the manner further set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the Company, the parties hereto hereby agree as follows:
1. Authorization, Issuance and Sale of Securities.
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1.1 Authorization. The Company has authorized the issuance and
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sale pursuant to the terms hereof of an aggregate of Five Million Five Hundred
Thousand (5,500,000) shares of Series D Preferred Stock, at a purchase price of
$2.89 per share. The rights, preferences and privileges of the Series D
Preferred Stock shall be as set forth in the Amended and Restated Articles of
Incorporation (the "Restated Articles") in substantially the form of Exhibit A
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attached hereto.
1.2 Issuance and Sale of Series D Preferred Stock. Subject to
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the terms and conditions hereof, at the Closing (as defined below) the Company
will issue and sell to the Investors and the Investors will purchase from the
Company the number of shares of Series D Preferred Stock set forth opposite each
Investor's name on Schedule A.
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1.3 Closing. The closing of the transactions contemplated
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herein (the "Closing") shall take place at the offices of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, Two Embarcadero Place, 2200 Geng Road, Palo Alto, California at
3:00 p.m. local time on September 23, 1999, or at such other time and place as
may be mutually agreed upon by the Company and the Investors. The date on which
the Closing occurs is referred to herein as the "Closing Date." At the Closing,
the Company shall deliver to the Investors participating therein certificates
evidencing the number of shares of Series D Preferred Stock set forth on
Schedule A opposite such Investor's name against payment of the purchase price
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set forth on Schedule A by check or wire transfer of immediately available
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funds to an account designated by the Company in a written notice delivered to
such Investors prior to the Closing Date.
2. Representations and Warranties of the Company. Except as set
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forth in the Disclosure Schedule attached hereto as Schedule B, prepared by the
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Company, which shall be
representations and warranties of the Company, the Company hereby represents and
warrants to the Investors as follows:
2.1 Organization, Good Standing and Qualification. The Company
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is a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has full corporate power and authority to
conduct its business as presently conducted and as proposed to be conducted by
it and to enter into and perform this Agreement and each of the Ancillary
Agreements (as defined in Section 2.6 below) and to carry out the transactions
contemplated by this Agreement and each of the Ancillary Agreements. The Company
is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties (a "Material Adverse Effect"). The Company
has furnished or made available to the Investors true and complete copies of the
Restated Articles and the Bylaws of the Company, each as amended to date and
currently in effect.
2.2 Capitalization. Upon the filing of the Restated Articles
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with the State of California, the authorized capital stock of the Company will
consist of (i) Seventy-Two Million (72,000,000) shares of Common Stock, no par
value per share, (the "Common Stock"), of which Eight Million Seven Hundred
Forty-Two Thousand Two Hundred Ninety-Two (8,742,292) shares are issued and
outstanding and Eight Million One Hundred Thousand Two Hundred Seventy-Four
(8,100,274) shares are reserved for issuance upon exercise of options under the
Company's Amended and Restated 1996 Stock Option Plan, as amended and in effect
from time to time (the "Option Plan"), of which options for the purchase of Six
Million Seven Hundred Twenty-Six Thousand Ninety-Three (6,726,093) shares have
been issued, and (ii) Forty-One Million Seven Hundred Ninety-Six Thousand Two
Hundred Eighty-Two (41,796,282) shares of Preferred Stock, which consist of (a)
Two Million Eight Hundred Thirteen Thousand Forty-Six (2,813,046) shares of
Series A Preferred Stock, no par value per share (the "Series A Preferred
Stock"), of which Two Million Six Hundred Seventy-Nine Thousand Two Hundred
Sixty-Eight (2,679,268) shares are issued and outstanding, (b) Nine Million Six
Hundred Seventy-Eight Thousand Seven Hundred (9,678,700) shares of Series B
Preferred Stock, no par value per share (the "Series B Preferred Stock"), all of
which are issued and outstanding, (c) Twenty-Three Million Eight Hundred Four
Thousand Five Hundred Thirty-Six (23,804,536) of Series C Preferred Stock, no
par value per shares (the "Series C Preferred Stock"), of which Seventeen
Million Four Hundred Eighty-Five Thousand Nine Hundred Fourteen (17,485,914)
shares are issued and outstanding and (d) Five Million Five Hundred Thousand
(5,500,000) shares of Series D Preferred Stock, none of which are outstanding
and up to all of which may be issued pursuant to this Agreement. All of the
issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable, and were issued
in compliance with all applicable securities laws. Except as contemplated by
this Agreement and except for warrants for the purchase of 147,144 shares of
Common Stock, 133,779 shares of Series A Preferred Stock and 6,171,524 shares of
Series C Preferred Stock (i) no subscription, warrant, option, convertible
security or other right (contingent or otherwise) to purchase or acquire any
shares of capital stock of the Company is authorized or outstanding, (ii) the
Company has no obligation (contingent or otherwise) to issue any subscription,
warrant, option, convertible security or other such right or to issue or
distribute to holders of any shares of its capital stock any evidences of
indebtedness or assets of the Company, and (iii) the Company has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any shares of
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its capital stock or any interest therein or to pay any dividend or make any
other distribution in respect thereof. The percentage ownership of the Company,
on a fully diluted basis, represented by the Series D Preferred Stock purchased
hereunder shall be, for each Investor, as set forth opposite such Investor's
name on the Schedule of Investors attached hereto as Schedule A.
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2.3 Subsidiaries, Etc. Except as listed on the Disclosure
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Schedule, the Company has no subsidiaries and does not own or control, directly
or indirectly, any shares of capital stock of any other corporation or any
interest in any partnership, joint venture or other non-corporate business
enterprise.
2.4 Shareholder List and Agreements. The Disclosure Schedule
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sets forth a true and complete list of the shareholders of the Company, showing
the number of shares of capital stock or other securities of the Company held by
each shareholder as of the date of this Agreement and the Closing Date. The
Company is not a party or subject to any agreement or understanding, and, to the
best of the Company's knowledge, there is no agreement or understanding between
any persons and/or entities, which affects or relates to the voting or giving of
written consents with respect to any security or by a director of the Company,
except as referred to herein.
2.5 Issuance of Securities. The issuance, sale and delivery of
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the Series D Preferred Stock in accordance with this Agreement, and the issuance
and delivery of the shares of Common Stock issuable upon conversion of the
Series D Preferred Stock, have been, or will be on or prior to the Closing, duly
authorized by all necessary corporate action on the part of the Company, and all
such shares of Series D Preferred Stock and Common Stock have been duly reserved
for issuance. The Series D Preferred Stock when so issued, sold and delivered
against payment therefor in accordance with the provisions of this Agreement,
and the shares of Common Stock issuable upon conversion of the Series D
Preferred Stock, when issued upon such conversion in accordance with the Second
Restated Articles, will be duly and validly issued, fully paid and non-
assessable.
2.6 Authority for Agreement. The execution, delivery and
-----------------------
performance by the Company of this Agreement and all other agreements required
to be executed by the Company on or prior to the Closing pursuant to Section 4
of this Agreement (the "Ancillary Agreements"), and the consummation by the
Company of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action. This Agreement and the Ancillary
Agreements have been duly executed and delivered by the Company and constitute
valid and binding obligations of the Company enforceable in accordance with
their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent that the indemnification
provisions contained in the Registration Rights Agreement (as defined herein)
may be limited by applicable federal or state laws. The sale of the Series D
Preferred Stock, and the subsequent conversion of the Series D Preferred Stock
into Common Stock, are not and will not be subject to any preemptive rights that
have not been properly waived or complied with.
2.7 Governmental Consents. No consent, approval, order or
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authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority
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is required on the part of the Company in connection with the execution and
delivery of this Agreement, the offer, issuance, sale and delivery of the Series
D Preferred Stock, or the other transactions to be consummated at the Closing,
as contemplated by this Agreement, except such filings as shall have been made
prior to and shall be effective on and as of the Closing, and except for filings
required by federal and state securities laws.
2.8 Litigation. There is no action, suit or proceeding, or
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governmental inquiry or investigation, pending, or, to the best of the Company's
knowledge, threatened, which questions the validity of this Agreement or any
Ancillary Agreement or the right of the Company to enter into or perform this
Agreement or any Ancillary Agreement, or which could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect, nor is
there any litigation pending, or, to the best of the Company's knowledge,
threatened against the Company. The Company is not a party or subject to the
provisions of any order, writ, injunction, judgement or decree of any court or
governmental agency. The Company has not commenced nor does it currently intend
to initiate any action, suit, proceeding or investigation.
2.9 Employee Proprietary Information and Inventions Agreements.
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Each current employee, officer and consultant of the Company has executed an
Employee Proprietary Information and Inventions Agreement in substantially the
form attached hereto as Exhibit F. The Company is not aware that any of its
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employees, officers or consultants have excluded works or inventions made prior
to employment or retention by the Company from application under such agreement
except as set forth on then Disclosure Schedule, or that any such persons are in
violation thereof, and the Company will use its best efforts to prevent any such
violation.
2.10 Acquisitions of the Company. The Company has not engaged
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in substantive discussions or negotiations with a third party for the sale of
all or substantially all of the assets or stock of the Company or merger of the
Company with another entity, or the exchange of any consideration in connection
with any such sale or merger, in the six months preceding the date of this
Agreement.
2.11 Absence of Liabilities. The Company has no liabilities in
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excess of $50,000 and, to the best of its knowledge, has no material contingent
liabilities.
2.12 Financial Statements. Included in the Disclosure Schedule
--------------------
are an unaudited balance sheet and income statement at June 30, 1999, together
with related statements of operations, shareholders' equity and cash flow for
the fiscal year then ended (collectively, the "Financial Statements"). Such
Financial Statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") except that the Financial Statements do not
contain all footnotes required by GAAP and are subject to normal year-end audit
adjustments that in the aggregate will not be material. The Financial
Statements (a) are complete and correct in all material respects, (b) are in
accordance with the Company's books and records, and (c) fairly present the
financial condition and operating results of the Company as of the dates, and
for the periods indicated therein, subject to normal year-end audit adjustments.
2.13 Taxes. The Company has filed all federal, state and
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foreign tax returns which are required to be filed by it on or prior to the
Closing Date, such returns are true and correct and all taxes shown thereon to
be due have been timely paid with exceptions not material to the Company. Income
tax returns of the Company have not been audited by the Internal
4
Revenue Service or any equivalent state agency or instrumentality, and no
controversy with respect to taxes of any type is pending or, to the best of the
Company's knowledge, threatened.
2.14 Property and Assets. The Company has good title to or a
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valid leasehold interest in all of its properties and assets, which comprise all
of the properties and assets necessary or useful for the conduct of its business
and none of such properties or assets is subject to any mortgage, pledge, lien,
security interest, lease, charge or encumbrance other than those the material
terms of which are described on the Disclosure Schedule, or as would not result
in a Material Adverse Effect. The Company is in compliance with all material
terms of each lease to which it is a party or is materially bound.
2.15 Intellectual Property. Set forth on the Disclosure
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Schedule is a true and complete list of all patents, patent applications,
trademarks, service marks, trademark and service xxxx applications, trade names,
copyright registrations and licenses presently owned or used by the Company, as
well as any agreement under which the Company has access to any material
confidential information used by the Company in its business (the "Intellectual
Property Rights"). To the best of its knowledge, the Company has sufficient
title and ownership of, or license rights to, all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information, proprietary rights
and processes necessary for its business as now conducted and as proposed to be
conducted without any known conflict with or infringement of the rights of
others. There are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity. The
Company has not received any communications alleging that the Company has
violated or, by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity. The Company is not aware
that any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote the interests of
the Company or that would conflict with the business of the Company as proposed
to be conducted.
2.16 Material Contracts and Obligations. The Disclosure
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Schedule sets forth a list of all material agreements or commitments of any
nature to which the Company is a party or by which it is bound, including
without limitation (i) each agreement which requires future expenditures by the
Company in excess of $50,000 or which might result in payments to the Company in
excess of $50,000, (ii) all employment and consulting agreements (including any
agreement entitling any employee to continued employment or any severance),
employee benefit, bonus, pension, profit-sharing, stock option, stock purchase
and similar plans and arrangements, and distributor and sales representative
agreements, (iii) each agreement with any shareholder, officer or director of
the Company, or any "affiliate" or "associate" of such persons (as such terms
are defined in the rules and regulations promulgated under the Securities Act of
1933, as amended (the "Securities Act")), including without limitation any
agreement or other arrangement providing for the furnishing of services by,
rental of real or personal property from, or otherwise requiring payments to,
any such person or entity, (iv) any agreement relating to the Intellectual
Property Rights, and (v) any loans or indebtedness for borrowed money, including
5
guarantees thereof. The Company has delivered or made available to the
Investors copies of such of the foregoing agreements as the Investors have
requested. To the knowledge of the Company, all of such agreements and contracts
are valid, binding and in full force and effect, except where the failure to so
comply would not have a Material Adverse Effect on the Company's business.
2.17 Compliance. The Company is not in violation or default of
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any provision of its Restated Articles or Bylaws, of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound,
or, to the best of its knowledge, of any provision of any federal or state
statute, rule or regulation applicable to the Company which would have a
Material Adverse Effect. The execution, delivery and performance of this
Agreement and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree or contract or an event that results in the creation of any lien,
charge or encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its assets or properties.
2.18 Books and Records. The minute books of the Company
-----------------
contain complete and accurate records of all meetings and other corporate
actions of its shareholders and its Board of Directors and committees thereof.
The stock ledger of the Company is complete and reflects all issuances,
transfers, repurchases and cancellations of shares of capital stock of the
Company.
2.19 Disclosures. Neither this Agreement nor any exhibit
-----------
hereto, nor any report, certificate or instrument furnished to the Investors in
connection with the transactions contemplated by this Agreement, when read
together, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
2.20 Changes. Since June 30, 1999, there have been no changes
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in the condition, financial or otherwise, net worth or results of operations of
the Company, other than changes occurring in the ordinary course of business
which changes have not, individually or in the aggregate, had a Material Adverse
Effect.
2.21 Year 2000 Compliance. The Company has undertaken an
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assessment of all of its IT Systems (as defined herein) and such systems are, or
prior to December 1, 1999 will be, Year 2000 Compliant (as defined herein). The
Company is not aware of any Material Third Party (as defined herein) or any
material off-the-shelf software that is used by the Company that will not be
Year 2000 Compliant by December 1, 1999. For purposes of this Section 2.21: (a)
"Year 2000 Compliant" shall mean that the IT Systems will: (i) accurately
process all date and time data (including, but not limited to, calculating,
comparing and sequencing) including, without limiting the foregoing, between the
years 1999 and earlier and the years 2000 and later (in either direction,
forward or backwards); (ii) accurately process leap year calculations for date
and time data; and (iii) when used in combination with any other IT System,
accurately process date and time data if such other IT System properly exchanges
date and time data with it; (b) "IT Systems" shall mean any and all systems,
facilities and devices by which information (including data, text and images) is
generated, stored, processed, displayed, received or communicated, including
computer hardware, computer software and any machinery which incorporates a
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microchip; and (c) "Material Third Party" shall mean any of the Company's
information exchange partners, suppliers, vendors and distributors that own any
IT System which is material to the Company's business.
2.22 Qualified Small Business Stock.
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(a) As of and immediately following the Closing, the Preferred
Stock will meet each of the requirements for qualification as "qualified small
business stock" set forth in Section 1202(c) of the Internal Revenue Code of
1986, as amended (the "Code"), including without limitation the following: (i)
the Company will be a domestic C corporation, (ii) the Company will not have
made any purchases of its own stock described in Code Section 1202(c)(3)(B)
during the one-year period preceding the Closing, and (iii) the Company's (and
any predecessor's) aggregate gross assets, as defined by Code Section
1202(d)(2), at no time from the date of incorporation of the Company and through
the Closing have exceeded or will exceed $50 million, taking into account the
assets of any corporations required to be aggregated with the Company in
accordance with Code Section 1202(d)(3).
(b) As of the Closing, at least 80% (by value) of the assets of
the Company are used by it in the active conduct of one or more qualified trades
or businesses, as defined by Code Section 1202(e)(3), and the Company is an
eligible corporation, as defined by Code Section 1202(e)(4).
2.23 Business Plan. The Company's business plan dated November
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1998 (the "Business Plan"), as furnished to the Investors, is the Company's
current business plan and the Company currently has no intention of making any
material deviations from such Business Plan.
3. Representations and Warranties of the Investors. Each Investor
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hereby represents and warrants as to itself to the Company that:
3.1 Authorization. Such Investor has full power and authority
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to enter into this Agreement and the Ancillary Agreements, and each such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Registration Rights Agreement may be limited by applicable
federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made
---------------------------------
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series D Preferred Stock to be received by such
Investor and the Common Stock issuable upon conversion of the Series D Preferred
Stock (collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not have any contract, undertaking,
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agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Securities.
3.3 Disclosure of Information. Such Investor believes it has
-------------------------
received all the information it considers necessary or appropriate for deciding
whether to purchase the Securities. Such Investor further represents that it has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Securities and the
business, properties, prospects and financial condition of the Company. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this Agreement or the right of the Investors to
rely thereon.
3.4 Investment Experience. Such Investor is an investor in
---------------------
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Securities.
If other than an individual, Investor also represents it has not been organized
for the purpose of acquiring the Securities.
3.5 Accredited Investor. Such Investor is an "accredited
-------------------
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
3.6 Restricted Securities. Such Investor understands that
---------------------
immediately following its purchase of the Securities hereunder, such Securities
will be characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Securities may be resold without registration under the Securities Act,
only in certain limited circumstances. In this connection, such Investor
represents that it is familiar with Rule 144 as promulgated by the SEC under the
Securities Act, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act.
3.7 Further Limitations on Disposition. Without in any way
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limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3 to the extent this Section is then applicable, and:
(a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such Registration Statement; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
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(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer (i) by an Investor that is a partnership to a partner or member
of such partnership or a retired partner or member of such partnership who
retires after the date hereof, or (ii) to the estate of any such partner or
member or retired partner or member or the transfer by gift, will or intestate
succession of any partner or member to his or her spouse or to the siblings,
lineal descendants or ancestors of such partner or member or his or her spouse,
if any transferee pursuant to (i) and (ii) above agrees in writing to be subject
to the terms hereof to the same extent as if he or she were an original Investor
hereunder.
3.8 Legends. It is understood that the certificates evidencing
-------
the Securities may bear one or all of the following legends:
(a) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH SECURITIES ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO RULE 144 OF SUCH SECURITIES ACT.
(b) Any legends required by the laws of the State of California,
or any other applicable jurisdiction.
(c) Any legend required by the Ancillary Agreements.
3.9 Transfer of Rights. Subject to the limitations in Section
------------------
3.8 above, all rights and obligations of the Investors in this Agreement and the
Ancillary Agreements may be transferred to (i) a partner or retired partner of
any Investor that is a partnership, (ii) any immediate family member of an
Investor who is an individual, or an irrevocable trust for the benefit of an
individual Investor or his or her immediate family members, (iii) any
shareholder of any Investor which is a corporation, (iv) any member of any
Investor who is a limited liability company, or (v) any transferee who acquires
not less than Five Hundred Thousand (500,000) shares of Series D Preferred
Stock, provided the following conditions are met,
(a) the Company is given written notice of such proposed
transfer; and
(b) the transferee agrees in writing to be subject to the terms
hereof and in each of the Ancillary Agreements, including all representations
and warranties and covenants contained herein or therein to the same extent as
if he or she were an original Investor hereunder.
9
4. Conditions to the Investors' Obligations at the Closing. The
-------------------------------------------------------
obligations of each Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions, the waiver of
which shall not be effective against any Investor who does not consent in
writing thereto:
4.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing with the same force and effect as
though made as of the Closing.
4.2 Covenants. The Company shall have performed and complied
---------
with all covenants and agreements required to be performed or complied with by
it hereunder at or prior to the Closing.
4.3 Compliance Certificate. An officer of the Company shall
----------------------
deliver to each Investor at the Closing a certificate stating that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 Proceedings. All corporate and other proceedings taken or
-----------
required to be taken by the Company and in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Investors and their counsel.
4.5 Consents and Approvals. Except for filings pursuant to
----------------------
Regulation D under U.S. Federal securities laws and the "blue sky" laws having
jurisdiction over the sale of the Series D Preferred Stock, such filings to be
made in a timely fashion by the Company, all consents, approvals,
authorizations, licenses or orders of, registrations, qualifications,
designations, declarations or filings with, or notice to any governmental entity
or any other person necessary to be obtained, made or given in connection with
the transactions contemplated hereby shall have been duly obtained, made or
given and shall be in full force and effect, without the imposition upon the
Company of any condition, restriction or required undertaking.
4.6 Bylaws. A copy of the Company's Bylaws, as amended and in
------
effect, shall have been provided to the Investors prior to the Closing Date.
4.7 Amended and Restated Articles of Incorporation. The
-----------------------------------------------
Company shall have filed the Restated Articles, containing the rights,
preferences and privileges of the Series D Preferred Stock, in substantially the
form attached hereto as Exhibit A.
---------
4.8 Registration Rights Agreement. The Company shall have
-----------------------------
entered into the Third Amended and Restated Registration Rights Agreement (the
"Registration Rights Agreement"), substantially in the form of Exhibit B hereto,
---------
with the Investors and the other parties named therein, and the Registration
Rights Agreement shall be in full force and effect as of the Closing.
4.9 Shareholders Agreement. The Company shall have entered into
----------------------
the Third Amended and Restated Shareholders' Agreement (the "Shareholders
Agreement"), substantially in the form attached as Exhibit C hereto, with the
---------
Investors and the other parties named therein, and the Shareholders Agreement
shall be in full force and effect as of the Closing.
10
4.10 Opinion of Counsel. The Investors shall have received the
------------------
opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, dated the
Closing Date and addressed to the Investors, with respect to the matters set
forth in Exhibit D hereto and otherwise in form and substance reasonably
---------
satisfactory to the Investors and its counsel.
4.11 Voting Agreement. The Company shall have entered into the
----------------
Third Amended and Restated Voting Agreement (the "Voting Agreement"),
substantially in the form attached as Exhibit E hereto, with the Investors and
the other parties named therein, and the Voting Agreement shall be in full force
and effect as of the Closing.
5. Conditions of the Company's Obligations at Closing. The
--------------------------------------------------
obligations of the Company to each Investor under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions by
that Investor:
5.1 Representations and Warranties. The representations and
------------------------------
warranties of each of the Investors contained in Section 3 shall be true on and
as of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
5.2 Payment of Purchase Price. Each Investor shall have
-------------------------
delivered, in immediately available funds to an account designated by the
Company, the consideration specified in Schedule A.
----------
5.3 Qualifications. All authorizations, approvals, or permits,
--------------
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
6. Covenants of the Company. Until the earlier of (i) the sale of
------------------------
securities of the Company pursuant to a registration statement filed by the
Company under the Securities Act in connection with the underwritten offering of
its securities to the general public is consummated, (ii) the date on which the
Company first becomes subject to the periodic reporting requirements of Sections
12(g) or 15(d) of the Securities Exchange Act of 1934, or (iii) a sale of all or
substantially all of the Company's assets to, or merger or other reorganization
with, a public company (a "Transaction") whereby the holders of the outstanding
voting securities of the Company immediately prior to the Transaction fail to
hold equity securities representing a majority of the voting securities of the
Company or surviving entity immediately following the Transaction, the Company
shall comply with the following covenants:
6.1 Financial Statements and Other Information. The Company
------------------------------------------
shall deliver to each Investor, so long as such Investor and its affiliates
beneficially owns at least fifty thousand (50,000) shares of Series D Preferred
Stock issued on the date hereof to such Investor, subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations:
(a) as soon as available, but in any event within fifteen (15)
days after the end of each month, monthly unaudited consolidated statements of
income and cash flows of the Company and its subsidiaries and monthly unaudited
consolidated balance sheets of the Company and its subsidiaries, and all such
statements shall be prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), consistently applied, except that they may
11
not contain full footnote disclosures and may be subject to normal year-end
adjustments for recurring accruals;
(b) as soon as available but in any event within one hundred
twenty (120) days after the end of each fiscal year, commencing with fiscal year
1999, audited consolidated statements of income and cash flows of the Company
and its subsidiaries for the fiscal year, and audited consolidated balance
sheets of the Company and its subsidiaries as of the end of the fiscal year, all
prepared in accordance with GAAP, consistently applied; and
(c) not fewer than thirty days, but also not greater than
seventy days prior to the end of the Company's fiscal year, an annual budget and
operating plan prepared on a monthly basis for the Company and its subsidiaries
for the following fiscal year requested (displaying anticipated statements of
income and cash flows and balance sheets), approved by the Company's Board of
Directors, and promptly upon preparation thereof any material revisions of such
annual or other budgets and operating plans.
6.2 Inspection of Property. The Company shall permit each
----------------------
Investor and its representatives, so long as an Investor and its affiliates
beneficially own at least fifty thousand (50,000) shares of Series D Preferred
Stock issued pursuant to this Agreement, subject to appropriate adjustment for
stock splits, stock dividends, combinations and other recapitalizations, upon
reasonable notice and during normal business hours and at such other times as
any such person may reasonably request subject to Section 6.4 below, to (a)
examine the corporate and financial records of the Company and its subsidiaries
and make copies thereof or extracts therefrom and (b) discuss the affairs,
finances and accounts of any such entities with the directors, officers, key
employees and independent accountants of the Company and its subsidiaries.
6.3 Limit on Information. Each Investor hereby agrees to hold
--------------------
in confidence and trust and not to misuse or disclose any confidential
information of the Company.
6.4 Option Grants. The Investors hereby acknowledge and agree
-------------
that the number of shares subject to the Company's stock option plans shall be
increased to reserve an additional two million (2,000,000) shares of Common
Stock to the existing pool of shares reserved for such stock option plans,
effective upon the Closing.
6.5 Qualified Small Business Stock. The Company covenants that
------------------------------
so long as the Securities are held by an Investor (or a transferee in whose
hands the Securities are eligible to qualify as Qualified Small Business Stock
as defined in Section 1202(c) of the Code, it will use its reasonable efforts to
cause the Securities to qualify as Qualified Small Business Stock and shall make
all filings required under Section 1202(D)(1)(c) of the Code.
7. Miscellaneous.
-------------
7.1 Survival of Representations, Warranties, Covenants and
------------------------------------------------------
Agreements. The representations, warranties, covenants and agreements contained
----------
in this Agreement, any Ancillary Agreement or any exhibits, schedules,
attachments, written statements, documents, certificates or other items prepared
and supplied to the Investors by or on behalf of the Company
12
in connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
7.2 Notices. All notices, demands or other communications to
-------
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid), mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, or transmitted by
facsimile or electronic mail (with request for immediate confirmation of receipt
in a manner customary for communications of such type and with physical delivery
of the communication being made by one of the other means specified in this
Section as promptly as practicable thereafter). Such notices, demands and other
communications shall be addressed as follows:
If to the Company:
Fogdog, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy : (000) 000-0000
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxxx Xxxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy : (000) 000-0000
If to the Investors:
Worldview Technology Partners
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party
(provided that notice of a change of address shall be effective only upon
receipt thereof).
7.3 Entire Agreement; Waivers and Amendments. This Agreement
----------------------------------------
(including the exhibits and schedules hereto and the documents and instruments
referred to herein,
13
including the Ancillary Agreements) contains the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior written or oral agreements and understandings with respect
thereto, including the Memorandum of Terms for Private Placement of Series D
Preferred Stock, as amended. This Agreement may only be amended or modified, and
the terms hereof may only be waived, by a writing signed by each party hereto
or, in the case of a waiver, by the party entitled to the benefit of the terms
being waived.
7.4 Successors and Assigns. Except as otherwise provided
----------------------
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.5 Severability. In the event that any provision of this
------------
Agreement shall be declared invalid or unenforceable by a court of competent
jurisdiction in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent declared invalid or unenforceable without affecting
the validity or enforceability of the other provisions of this Agreement, and
the remainder of this Agreement shall remain binding on the parties hereto.
7.6 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of California,
without giving effect to the principles of conflicts of law thereof.
7.7 Strict Construction. This Agreement is the result of arms-
-------------------
length negotiations between the parties hereto and has been prepared jointly by
the parties. In applying and interpreting the provisions of this Agreement,
there shall be no presumption that the Agreement was prepared by any one party
or that the Agreement shall be construed in favor of or against any one party.
7.8 Captions. The paragraph and subsection headings in this
--------
Agreement are inserted for convenience of reference only, and shall not affect
the interpretation of this Agreement.
7.9 Expenses. The Company shall pay the legal fees and
--------
expenses of the Investors up to an aggregate of $10,000 arising in connection
with the negotiation and execution of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby; provided however, that the Company shall not be responsible for any
such fees or expenses if the transactions contemplated by this Agreement and the
Ancillary Agreements are not consummated. The Investors have used their best
efforts to keep such legal fees and expenses to a minimum.
7.10 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original and both of which
together shall be considered one and the same agreement.
7.11 Broker's Fees. Each party hereto represents and warrants
-------------
that no agent, broker, investment banker, person or firm acting on behalf of or
under the authority of such party
14
hereto is or will be entitled to any broker's or finder's fee or any other
commission directly or indirectly in connection with the transactions
contemplated herein. Each party hereto further agrees to indemnify each other
party for any claims, losses or expenses incurred by such other party as a
result of the representation in this Section 7.11 being untrue.
[The Remainder of this Page is Intentionally Left Blank]
15
IN WITNESS WHEREOF, each of the parties hereto has caused this Series
D Preferred Stock Purchase Agreement to be duly executed on its behalf as of the
date first written above.
FOGDOG, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
SIGNATURE PAGE TO SERIES D PREFERRED STOCK PURCHASE AGREEMENT
INVESTORS
HIKARI TSUSHIN, INC.
By: /s/ Xxxxxxxx Xxxxx
------------------------------------
Xxxxxxxx Xxxxx, Director
AMAN VENTURES L.L.C.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
General Partner
BOSTON MILLENNIA PARTNERS, L.P.
By: /s/ A. Xxxx Xxxxxx Xx.
------------------------------------
A. Xxxx Xxxxxx, Xx.
Managing General Partner
LYCOS VENTURES, L.P.
By: Lycos Triangle Partners, LLC, its
general partner
[signature illegible]
-----------------------------------------
By:______________________________________
Its:_____________________________________
LYCOS VENTURES CO-INVESTMENT FUND, L.P.
By: Lycos Triangle Partners, LLC, its
general partner
[signature illegible]
-----------------------------------------
By:______________________________________
Its:_____________________________________
SIGNATURE PAGE TO SERIES D PREFERRED STOCK PURCHASE AGREEMENT
WORLDVIEW TECHNOLOGY PARTNERS II, L.P.
By: Worldview Capital II, L.P., its
General Partner
By: Worldview Equity I, L.L.C., its
General Partner
/s/ Xxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxx Xxxxx - Member
WORLDVIEW TECHNOLOGY INTERNATIONAL II,
L.P.
By: Worldview Capital II, L.P., its
General Partner
By: Worldview Equity I, L.L.C., its
General Partner
/s/ Xxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxx Xxxxx - Member
WORLDVIEW STRATEGIC PARTNERS II, L.P.
By: Worldview Capital II, L.P., its
General Partner
By: Worldview Equity I, L.L.C., its
General Partner
/s/ Xxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxx Xxxxx - Member
SIGNATURE PAGE TO SERIES D PREFERRED STOCK PURCHASE AGREEMENT
VENROCK ASSOCIATES
By: /s/ Xxxxxxxxx Xxxxxxxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxxxx
Title: General Partner
VENROCK ASSOCIATES II, L.P.
By: /s/ Xxxxxxxxx Xxxxxxxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxxxx
Title: General Partner
VERTEX TECHNOLOGY FUND (II), LTD.
/s/ Xxx Xxxxx Nam
-----------------------------------------
By: Xxx Xxxxx Nam
------------------------------------
Its: President
------------------------------------
SIGNATURE PAGE TO SERIES D PREFERRED STOCK PURCHASE AGREEMENT
X.X. XXXXXXX III, L.P.
By: X.X. Xxxxxxx Equity Partners III,
L.L.C. Its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
Managing Member
WHITNEY STRATEGIC PARTNERS III, L.P.
By: X.X. Xxxxxxx Equity Partners III,
L.L.C. Its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
Managing Member
XXXXXX XXXXXX ASSOCIATES FUND IV, L.P.
[signature illegible]
-----------------------------------------
By:______________________________________
Its:_____________________________________
XXXXXX XXXXXX PARTNERS IV, L.L.C.
By: [signature illegible]
------------------------------------
By:______________________________________
Its:_____________________________________
SIGNATURE PAGE TO SERIES D PREFERRED STOCK PURCHASE AGREEMENT
DLJ CAPITAL CORP.
/s/ Xxxxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxxxx Xxxxx
Its: Attorney In Fact
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its: Manager
/s/ Xxxxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxxxx Xxxxx
Its: Attorney In Fact
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
/s/ Xxxxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxxxx Xxxxx
Its: Attorney In Fact
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
/s/ Xxxxxxxxx Xxxxx
-----------------------------------------
By: Xxxxxxxxx Xxxxx
Its: Attorney In Fact
SIGNATURE PAGE TO SERIES D PREFERRED STOCK PURCHASE AGREEMENT
MARQUETTE VENTURE PARTNERS III, L.P.
By: MARQUETTE III, L.L.C.
Its: General Partner
[signature illegible]
-----------------------------------------
By: Xxxxx X. Xxxxxxxx or Xxxxx X. Xxxx
Its: Authorized Signatory
MV VENTURE PARTNERS II, SERIES 9
[signature illegible]
-----------------------------------------
By:______________________________________
Its:_____________________________________
ICON INTERNATIONAL, INC.
/s/ Xxxxx Lunzberg
-----------------------------------------
By: Xx. Xxxxx Lunzberg
Its: President
XXXXX XXXXXXX CAPITAL VENTURE III AS
[signature illegible]
-----------------------------------------
By:______________________________________
(Please print)
Its:_____________________________________
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
TRIAD MEDIA VENTURES LLC
By: Triad Media Management LLC
Its Managing Member
By: [signature illegible]
--------------------------------------
A Managing Member
