EXHIBIT 10.2
SUBSCRIPTION AGREEMENT
XXXxXXXX.xxx, Inc.
00 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxx XxXxxxxx, Jr.
This Subscription Agreement (the "Agreement") is made by and between
XXXxXXXX.xxx, Inc., a Delaware corporation (the "Company"), and PETsMART, Inc.,
a Delaware corporation (the "Subscriber"), which is subscribing hereby to
purchase 1,361,027 shares (the "Shares") of the Company's common stock, $0.001
par value per share ("Common Stock") for a purchase price of $0.36 per share.
NOW THEREFORE, the parties hereto hereby agree as follows:
A. SUBSCRIPTION
1. The Subscriber hereby irrevocably subscribes to purchase the
Shares for an aggregate purchase price of $489,969.72.
2. The purchase and sale of the Shares will be consummated on
February 10, 2000 or such other date as may agreed upon between
the Subscriber and the Company (the date of consummation of the
purchase and sale of the Shares is hereinafter referred to as the
"Closing Date"). On the Closing Date, the Subscriber will pay and
deliver to the Company $489,969.72 in the form of a check or
wire transfer (the "Payment") payable to "XXXxXXXX.xxx, Inc.",
and the Company will deliver to the Subscriber certificates
representing the Shares at the time of purchase.
B. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
1. The Subscriber hereby represents and warrants to, and agrees with
the Company, as follows:
(a) The Shares are being purchased for the Subscriber's own
account, and not for the account of any other person, and
not with a view to, or for sale in connection with, any
distribution or resale to others within the meaning of
Section 2(11) or Rule 502(d) promulgated under the
Securities Act
of 1933, as amended (the "Act"). The offering and sale of
the Shares is intended to be exempt from registration under
the Act by virtue of Section 4(2) of the Act. The Subscriber
is an "accredited investor" as defined in Rule 501(a) under
the Act. No other person has a direct or indirect beneficial
interest in such Shares.
(b) The Subscriber will not sell, hypothecate, or otherwise
transfer his or her Shares (except in accordance with the
registration requirements of the Act and applicable state
securities laws) unless the Subscriber delivers a written
opinion of counsel, acceptable in form and substance and
addressed to the Company, to the effect that an exemption
from the registration requirements of the Act and such state
securities laws is available.
(c) The Company has made available to the Subscriber all
documents and information that the Subscriber has requested
relating to an investment in the Company. The Subscriber
recognizes the Company has only recently been organized and
that it has a limited financial or operating history and
that investing in the Company involves substantial risks,
and has taken full cognizance of and understands all of the
risk factors related to the purchase of the Shares. The
Subscriber has carefully considered and has, to the extent
the Subscriber believes such discussion necessary, discussed
with the Subscriber's professional legal, tax and financial
advisers the suitability of an investment in the Company and
the Subscriber has determined that the Shares are a suitable
investment for the Subscriber. The Subscriber has not relied
on the Company for any tax or legal advice in connection
with the Subscriber's purchase of the Shares.
(d) All corporate action necessary for the authorization,
execution, delivery and performance of the Agreement by the
Subscriber has been taken or will be taken prior to the
Closing. This Agreement is a valid and binding obligation of
the Subscriber, enforceable in accordance with its terms,
subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules
of law governing specific performance, injunctive relief or
other equitable remedies.
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(e) The Shares have not been registered under the Act nor
qualified under the California Corporate Securities Law of
1968, as amended, or any other applicable state securities
or blue sky laws in reliance, in part, on the
representations and warranties herein. No federal or state
agency has made any finding or determination as to the
fairness of this offering for investment, nor any
recommendation or endorsement of the Shares. There is no
public market for the Shares or any of the Company's
securities and there is no certainty that such a market will
ever develop. There can be no assurance that the Subscriber
will be able to sell or dispose of the Shares.
(f) The Subscriber shall not sell, transfer, assign, distribute
or otherwise make any transfer of the Shares (including,
without limitation, any distribution to shareholders,
partners, beneficiaries or the like) during the period
beginning on the Closing Date and ending 180 calendar days
following the earliest of (i) the date the Company has a
class of publicly traded equity securities registered
pursuant to Section 12(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (ii) the date the
Company is acquired by an entity with publicly traded equity
securities registered pursuant to Section 12(b) of the
Exchange Act and the terms of such acquisition provide for
the equity securities of the Company to be converted into
the equity securities of such other entity, or (iii) January
1, 2008; provided, that the restriction in this sentence
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shall not apply to a transfer by the Subscriber to one or
more trusts or other entities for the benefit of employees
of the Subscriber complying with the provisions of paragraph
B.1.(b) above if, prior to such transfer, the transferee
agrees to be bound by (and makes the representations,
warranties and agreements contained in) this Section B
pursuant to a written agreement in form and substance
satisfactory to the Company. The restriction in the
foregoing sentence is in addition to any other restrictions
in this Agreement.
2. The Company hereby represents and warrants to the Subscriber as
follows:
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(a) The Company is a corporation duly organized and validly
existing under the laws of the State of Delaware and is in
good standing under such laws. The Company has the
requisite corporate power and authority to own and operate
its properties and assets and to carry on its business as
presently conducted and as proposed to be conducted. The
Company is presently qualified to do business as a foreign
corporation in California and there is no other jurisdiction
in which the failure to be so qualified would have a
material adverse effect on the business or financial
condition of the Company.
(b) The authorized capital stock of the Company consists of
70,000,000 shares of Common Stock and 19,769,648 shares of
Preferred Stock, 3,300,000 of which have been designated
Series A Preferred, 1,800,000 of which have been designated
Series B Preferred Stock, 2,805,770 of which have been
designated Series C Preferred Stock and 11,863,878 shares of
which have been designated Series D Preferred Stock. The
Company has an aggregate of 5,466,464 shares of Common Stock
reserved for issuance under its 1999 Stock Plan.
(c) All corporate action necessary for the authorization,
execution, delivery and performance of the Agreement by the
Company, and the authorization, sale, issuance and delivery
of the Shares has been taken or will be taken prior to the
Closing. This Agreement is a valid and binding obligation of
the Company, enforceable in accordance with their terms,
subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules
of law governing specific performance, injunctive relief or
other equitable remedies. The Shares, when issued in
compliance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable. At the time of
Closing, the issuance of the Shares is not subject to any
preemptive rights or rights of first refusal which will not
have been complied with or waived.
C. MISCELLANEOUS
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1. All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, singular, or plural
as the identity of the person or persons may require.
2. Neither this Agreement nor any provisions hereof shall be waived,
modified, changed, discharged, terminated, revoked, or cancelled
except by an instrument in writing signed by the party against
whom any change, discharge, or termination is sought.
3. Notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to be sufficiently given
when personally delivered or sent by registered mail, return
receipt requested, addressed to the Company at the address set
forth above or, in the case of the Subscriber, at the address
provided in this Agreement, or to such other address furnished by
notice given in accordance with this paragraph.
4. Failure of the Company to exercise any right or remedy under this
Agreement or any other agreement between the Company and the
Subscriber, or otherwise, or delay by the Company in exercising
such right or remedy, shall not operate as a waiver thereof. No
waiver by the Company shall be effective unless and until it is
in writing and signed by the Company.
5. This Agreement and all questions relating to its validity,
interpretation, performance, and enforcement shall be enforced,
governed and construed in accordance with the laws of the State
of California, without giving effect to conflict of law
principles and shall be binding on the Subscriber and the
Subscriber's successors and assigns, and shall inure to the
benefit of the Company, its successors and assigns.
6. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may
prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.
7. Any dispute concerning this Agreement shall be submitted to
arbitration before a single arbitrator under the then applicable
rules of the American Arbitration Association (or any successor
thereto or
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any replacement arbitration tribunal as agreed to by the
parties). The provisions of Part 3, Title 9 (Sections 1280 et
seq.), of the California Code of Civil Procedure will apply to
any such arbitration. The arbitration hearing will be held in
Los Angeles, California.
8. This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous representations,
warranties, agreements and understandings in connection
therewith. This Agreement may be amended only by a writing
executed by the Subscriber and the Company.
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XXXxXXXX.XXX, INC.
SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
This page constitutes the Signature Page for the Agreement. The
Subscriber represents to the Company that (a) the information contained in the
Agreement is complete and accurate on the date hereof and will be accurate on
the Closing Date and may be relied upon by the Company and (b) the Subscriber
will notify the Company immediately of any change in any of such information
occurring prior to the acceptance of the subscription and will promptly send the
Company written confirmation of such change. The Subscriber hereby certifies
that he or she has read and understands this Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Agreement
effective as of February 3, 2000.
XXXxXXXX.xxx, Inc.
By: /s/ Xxx XxXxxxxx
----------------------------
Name: Xxx XxXxxxxx, Jr.
Title: President and CEO
Address:
PETsMART, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
Address:
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