EXECUTION COPY
AMENDED AND RESTATED VOTING AGREEMENT
THIS AMENDED AND RESTATED VOTING AGREEMENT (this "Agreement") dated as of
December 21, 2009, by and among Bluefly, Inc., a Delaware corporation (the
"Company"), Quantum Industrial Partners LDC ("QIP"), SFM Domestic Investments,
LLC, ("SFM" and, together with QIP, the "▇▇▇▇▇ Parties"), Maverick Fund USA,
Ltd., Maverick Fund, L.D.C., Maverick Fund II, Ltd. (collectively, the "Maverick
Parties"), Prentice Capital Partners, LP, Prentice Capital Partners QP, LP,
Prentice Capital Offshore, Ltd., S.A.C. Capital Associates, LLC ("SAC"), GPC
XLIII, LLC, PEC I, LLC (collectively, the "Prentice Parties"; the ▇▇▇▇▇ Parties,
the Maverick Parties and the Prentice Parties, collectively, the "Existing
Stockholders") and Rho Ventures VI, LP ("Rho"; the ▇▇▇▇▇ Parties, the Maverick
Parties, the Prentice Parties and Rho, collectively, the "Stockholders").
WHEREAS, the Company and the Existing Stockholders have entered into that
certain Voting Agreement dated as of June 15, 2006 (the "Existing Agreement");
WHEREAS, the Company and Rho have entered into a Securities Purchase
Agreement, dated as of December 21, 2009 (the "Securities Purchase Agreement"),
pursuant to which the Company has agreed to sell, and Rho has agreed to
purchase, an aggregate of 8,823,529 shares of the Company's common stock, par
value $0.01 per share (the "Common Stock"), which shall be consummated in two
separate closings; an initial closing at which Rho will purchase a number of
shares of Common Stock equal to 19.9% of the Company's outstanding Common Stock
(the "Initial Closing"), and a second closing at which Rho will purchase the
remaining shares of Common Stock not purchased at the Initial Closing (the
"Second Closing"), which Second Closing shall take place following approval by
the Company's stockholders of the issuance of such remaining shares, as required
by the rules and regulations of the NASDAQ Capital Market (the "Stockholder
Approval Condition"); and
WHEREAS, it is a condition to the parties' obligations under the
Securities Purchase Agreement that the Company and the Existing Stockholders
amend and restate the Existing Agreement, for the purpose of setting forth the
terms and conditions pursuant to which (i) the Company's Board of Directors (the
"Board") shall be restructured into a classified board, (ii) the Stockholders
shall vote their shares of Common Stock in favor of certain designees to the
Board and (iii) the Existing Stockholders shall vote their shares of Common
Stock in support of the Stockholder Approval Condition and the Board
Restructuring Condition (as hereinafter defined).
NOW, THEREFORE, in consideration for the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to amend and restate the Existing Agreement as follows:
ARTICLE I
BOARD OF DIRECTORS
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SECTION 1.1 Board Restructuring. Subject to receipt of stockholder
approval to amend the Company's certificate of incorporation to effect the Board
Restructuring (the "Board
Restructuring Condition"), at the Second Closing, the Board shall be
restructured into a ten member Board consisting of three classes of directors
with staggered terms, as follows (the "Board Restructuring"):
(i) three directors shall be up for election in 2012, which shall
consist of one designee of the ▇▇▇▇▇ Parties, one designee of Rho, and one
outside independent director;
(ii) three directors shall be up for election in 2011, which shall
consist of one designee of the ▇▇▇▇▇ Parties, one designee of Rho, and the
Company's Chief Executive Officer; and
(iii) four directors shall be up for election in 2010, which shall
consist of two outside directors, one designee of Maverick, and one
designee of Prentice.
Prior to receipt of approval by the Company's stockholders of the
Board Restructuring Condition, the Board shall continue as a declassified Board
consisting of between 10 and 12 members, including the members nominated in
accordance with Section 1.2. Subsequent to the earlier of (i) the receipt of
approval by the Company's stockholders of the Board Restructuring Condition or
(ii) the date of the Company's receipt of the Rho Notice (pursuant to, and as
defined in, that certain Registration Rights Agreement dated as of the date
hereof among the Company and the Stockholders), the Board shall have no more
than 10 members unless otherwise agreed in writing by Rho and ▇▇▇▇▇.
SECTION 1.2 Designation of Directors. As of the Initial Closing and,
except as otherwise provided herein, continuing subsequent to the receipt of
approval by the Company's stockholders of the Board Restructuring Condition or
the date of the Company's receipt of the Rho Notice, as applicable,
(a) subject to Section 1.6(a), the ▇▇▇▇▇ Parties shall be entitled
to designate to serve on the Board, two designees;
(b) subject to Section 1.6(b), Rho shall be entitled to designate to
serve on the Board, two designees, one of which such designees shall be elected
to the Board immediately after the date hereof and the other such designee shall
be elected to the Board in January 2010;
(c) subject to Section 1.6(c), the Maverick Parties shall be
entitled to designate to serve on the Board, one designee; and
(d) subject to Section 1.6(d), the Prentice Parties (other than SAC)
shall be entitled to designate to serve on the Board, one designee.
SECTION 1.3 Nomination. Subject to limitations, if any, imposed by
stock exchange rules in effect from time to time or stock exchange
interpretations requiring Board representation to be proportional to stock
ownership ( "Proportionality Requirements"), the Company agrees to cause the
persons designated pursuant to Section 1.2 to be nominated for election in
accordance with such person's term (or staggered term, as the case may be) at
meetings of the stockholders of the Company called with respect to the election
of members of the Board, and at every
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adjournment or postponement thereof, and on each action or approval by written
consent with respect to the election of members of the Board consistent with
such person's term or staggered term (as the case may be).
SECTION 1.4 Agreement to Vote.
(a) The Stockholders hereby agree that at any meeting of the
stockholders of the Company, however called, or at any adjournment or
postponement thereof or in any other circumstances upon which a vote, consent or
other approval (including by written consent) is sought for the election of
members to the Board (a "Board Vote"), the Stockholders shall (a) when a Board
Vote is held, appear at such Board Vote or otherwise cause all shares of capital
stock of the Company owned by them to be counted as present thereat for the
purpose of establishing a quorum and (b) vote (or cause to be voted) all shares
of capital stock of the Company owned by them in favor of the persons designated
pursuant to Section 1.2. The failure of any Stockholder entitled to designate
nominees pursuant to Section 1.2 to fully exercise its respective designation
rights shall not constitute a waiver or dimunition of such rights nor shall it
prevent such Stockholder from exercising such rights prospectively.
(b) Should a person designated pursuant to Section 1.2 be unwilling
or unable to serve, or otherwise cease to serve (including by means of removal
in accordance with the following clause (c)), the Stockholders who originally
nominated such director shall be entitled to designate any replacement director.
(c) If (i) the ▇▇▇▇▇ Parties propose to remove any director
designated by the ▇▇▇▇▇ Parties, (ii) Rho proposes to remove any director
designated by Rho, (iii) the Maverick Parties propose to remove any director
designated by the Maverick Parties or (iv) the Prentice Parties propose to
remove any director designated by the Prentice Parties, the Stockholders agree
to cooperate in, and shall vote all shares of capital stock of the Company owned
by them (or, if any action is being taken by written consent, execute a written
consent) in support of, such removal and any resulting vacancy shall be filled
in accordance with the preceding clause (b). The Stockholders agree not to take
any action to remove, with or without cause, any director other than in
accordance with the foregoing.
SECTION 1.5 Committees of the Board of Directors.
(a) The Company and the ▇▇▇▇▇ Parties agree that, subject to
applicable law, rules or regulations (including stock exchange regulations), the
▇▇▇▇▇ Parties have the right to have one person designated by the ▇▇▇▇▇ Parties
pursuant to Section 1.2(a) serve on any committee of the Board; provided that if
the Nasdaq rules require that such committee must consist of members who are
"independent" (as defined in applicable Nasdaq rules), then such designee must
be "independent".
(b) The Company and Rho agree that, subject to applicable law, rules
or regulations (including stock exchange regulations), Rho has the right to have
one person designated by Rho pursuant to Section 1.2(b) serve on any committee
of the Board; provided that if the
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Nasdaq rules require that such committee must consist of members who are
"independent" (as defined in applicable Nasdaq rules), then such designee must
be "independent".
(c) The Company and the Maverick Parties agree that, subject to
applicable law, rules or regulations (including stock exchange regulations), the
Maverick Parties have the right to have one person designated by the Maverick
Parties pursuant to Section 1.2(c) serve on any committee of the Board; provided
that if the Nasdaq rules require that such committee must consist of members who
are "independent" (as defined in applicable Nasdaq rules), then such designee
must be "independent".
(d) The Company and the Prentice Parties (other than SAC) agree
that, subject to applicable law, rules or regulations (including stock exchange
regulations), the Prentice Parties (other than SAC) have the right to have one
person designated to the Board by the Prentice Parties pursuant to Section
1.2(d) serve on any committee of the Board; provided that if the Nasdaq rules
require that such committee must consist of members who are "independent" (as
defined in applicable Nasdaq rules), then such designee must be "independent".
(e) The parties hereto agree that if the Company establishes an
Executive Committee (or a committee with executive or similar functions) of the
Board (the "Executive Committee"), then (i) the persons designated by the ▇▇▇▇▇
Parties pursuant to Section 1.2(a) shall serve on such Executive Committee, (ii)
the persons designated by Rho pursuant to Section 1.2(b) shall serve on such
Executive Committee, (iii) the person designated by the Maverick Parties
pursuant to Section 1.2(c) shall serve on such Executive Committee and (iv) the
person designated by the Prentice Parties pursuant to Section 1.2(d) shall serve
on such Executive Committee.
SECTION 1.6 Resignation.
(a) (i) If the ▇▇▇▇▇ Parties dispose of their capital stock of the
Company so that they own less than the greater of 50% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the ▇▇▇▇▇ Parties to designate two directors to serve on the
Board, they shall cause one of the directors designated by them pursuant to
Section 1.2(a) to resign from the Board.
(ii) If the ▇▇▇▇▇ Parties dispose of their capital stock of the
Company so that they own less than the greater of 25% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the ▇▇▇▇▇ Parties to designate one director to serve on the
Board (a "▇▇▇▇▇ Termination Event"), they shall cause each of the directors
designated by them pursuant to Section 1.2(a) to resign from the Board.
(b) (i) If Rho disposes of its capital stock of the Company so that
it owns less than the greater of 28% of its Current Shares or the minimum number
of shares that are required to be owned under applicable Nasdaq rules and
regulations with respect to the Proportionality Requirements which would allow
Rho to designate two directors to serve on the
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Board, it shall cause one of the directors designated by it pursuant to Section
1.2(b) to resign from the Board.
(ii) If Rho disposes of its capital stock of the Company so
that it owns less than the greater of 14% of its Current Shares or the minimum
number of shares that are required to be owned under applicable Nasdaq rules and
regulations with respect to the Proportionality Requirements which would allow
Rho to designate one director to serve on the Board (a "Rho Termination Event"),
it shall cause each of the directors designated by it pursuant to Section 1.2(b)
to resign from the Board.
(c) If the Maverick Parties dispose of their capital stock of the
Company so that they own less than the greater of 50% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the Maverick Parties to designate one director to serve on the
Board (a "Maverick Termination Event"), they shall cause the director designated
by them pursuant to Section 1.2(c) to resign from the Board.
(d) If the Prentice Parties dispose of their capital stock of the
Company so that they own less than the greater of 50% of their Current Shares or
the minimum number of shares that are required to be owned under applicable
Nasdaq rules and regulations with respect to the Proportionality Requirements
which would allow the Prentice Parties to designate one director to serve on the
Board (a "Prentice Termination Event"), they shall cause the director designated
by them pursuant to Section 1.2(d) to resign from the Board.
(e) "Current Shares" shall mean (i) with respect to the Maverick
Parties and the Prentice Parties, the shares of capital stock of the Company
beneficially owned by the Maverick Parties or the Prentice Parties, as
applicable, immediately following the closing of the transactions contemplated
by the Stock Purchase Agreement, dated as of June 5, 2006, by and among the
Company, the ▇▇▇▇▇ Parties, the Maverick Parties and the Prentice Parties (the
"Original Closing"), including shares of capital stock of the Company issuable
upon exercise of warrants or options outstanding immediately following the
Original Closing and (ii) with respect to the ▇▇▇▇▇ Parties and Rho, the shares
of capital stock of the Company owned by or for the benefit of the ▇▇▇▇▇ Parties
or Rho, as applicable, immediately following the Initial Closing, including
shares of capital stock of the Company issuable upon exercise of warrants or
options outstanding immediately following the Initial Closing; provided, that,
with respect to Rho, if the Second Closing occurs, "Current Shares" shall mean
the shares of Common Stock of the Company owned by or for the benefit of Rho
immediately following the Second Closing, including shares of capital stock of
the Company issuable upon exercise of warrants or options outstanding
immediately following the Second Closing.
(f) If either a Maverick Termination Event or a Prentice Termination
Event occurs, then the size of the Board shall be reduced by the number of
directors resigning from the Board and, for so long as Rho and/or ▇▇▇▇▇
respectively owns 10% or more of the outstanding Common Stock, the size of the
Board may not be increased to larger than an eight member Board without the
prior written consent of Rho and/or ▇▇▇▇▇ (as applicable).
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SECTION 1.7 Liability. No Party who shall vote or consent or
withhold consent or make a request in their capacity as a stockholder of the
Company with respect to any securities subject to this Agreement on, to or from
any matter in compliance with the terms hereof shall, as a result of any such
vote or consent or withholding of consent or making of a request, have any
obligation or liability to any other party hereto (whether such other party
shall also vote or consent or withhold consent or make a request with respect to
any securities, then subject to this Agreement).
SECTION 1.8 Reimbursement of Expenses; Director Fees. The Company
shall reimburse the directors for all reasonable out-of-pocket expenses incurred
in connection with their attendance at meetings of the Board and any committees
thereof, including without limitation travel, lodging and meal expenses. For the
avoidance of doubt, directors designated by Rho shall receive (a) equity based
compensation for serving on the Board and on any committees thereof equivalent
to the equity based compensation paid to other non-management directors for such
service and (b) cash compensation for serving on the Board and any committees
thereof equivalent to the cash compensation paid to the directors designated to
the Board by any of the Existing Stockholders.
SECTION 1.9 D&O Insurance. To the extent available on commercially
reasonable terms, the Company shall obtain and maintain customary director and
officer indemnity insurance on commercially reasonable terms and the terms of
such insurance shall be reasonably acceptable to (i) for so long as Rho is
entitled to designate at least one director for election to the Board pursuant
to Section 1.2(b), Rho, and (ii) for so long as ▇▇▇▇▇ is entitled to designate
at least one director for election to the Board pursuant Section 1.2(a), ▇▇▇▇▇.
SECTION 1.10 Information. Each Stockholder and the Company agrees and
acknowledges that the directors designated by Rho may share confidential,
non-public information about the Company with Rho; provided that Rho agrees to
keep such information confidential and agrees to comply with all applicable
securities laws in connection therewith, and provided, further, that information
protected by attorney client privilege or attorney work product will not be
disclosed to the extent such disclosure will cause the loss of such privilege.
ARTICLE II
SUPPORT AGREEMENT; LOCK-UP
--------------------------
SECTION 2.1 Support Agreement. The Existing Stockholders hereby agree
that at any meeting of the stockholders of the Company, however called, or at
any adjournment or postponement thereof or in any other circumstances upon which
a vote, consent or other approval (including by written consent) is sought (a
"Company Stockholders' Vote"), the Existing Stockholders shall (a) when a
Company Stockholders' Vote is held, appear at such Company Stockholders' Vote or
otherwise cause all Eligible Vote Shares to be counted as present thereat for
the purpose of establishing a quorum and (b) vote (or cause to be voted) all
Eligible Vote Shares in favor of the Stockholder Approval Condition and the
Board Restructuring Condition. "Eligible Vote Shares " means, with respect to a
particular Existing Stockholder, the aggregate number of shares of Common Stock
held by such Existing Stockholder, multiplied by the Specified Portion.
"Specified Portion" means the percentage of the shares of Common Stock owned by
the Existing
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Stockholders, which (when aggregated with the shares of Common Stock purchased
by Rho at the Initial Closing or otherwise beneficially owned by it and eligible
to be voted in such Company Stockholders' Vote) equals 40% of the outstanding
shares of Common Stock of the Company. The Specified Portion shall be allocated
among the Existing Stockholders on a pro rata basis in proportion to their
respective share ownership as of the date of the Company Stockholders' Vote.
SECTION 2.2 Lock-Up.
(a) Maverick/Prentice Lock-Up.
(i) Subject to section 2.2(a)(ii), until the date that is 90 days
from the date hereof (the "Prentice/Maverick Initial Lock-Up Termination
Date"), neither the Maverick Parties nor the Prentice Parties will,
without the prior written consent of the ▇▇▇▇▇ Parties, Rho and the
Company, (1) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly, any shares of capital stock of the
Company, (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of any shares of capital stock of the Company, or any securities
exchangeable for or any other rights to purchase any shares of capital
stock of the Company or (3) publicly announce an intention to effect any
transaction specified in clause (1) or (2) (such restrictions being
referred to herein as the "Prentice/Maverick Lock-Up Restrictions").
Notwithstanding anything to the contrary contained herein, the
Prentice/Maverick Lock-Up Restrictions shall not apply to any sale of
Common Stock by the Maverick Parties or the Prentice Parties to Rho or an
individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, or any other form of entity
unaffiliated with Rho (a "Rho Co-Investor"), if (A) such sale is approved
in writing by Rho and, to the extent required under Nasdaq rules and
regulations, the Company's shareholders and (B) in the case of a sale to a
Rho Co-Investor, the Rho Co-Investor was introduced to Prentice or
Maverick (as applicable) by Rho. Notwithstanding anything to the contrary
contained herein, the Maverick Parties and Prentice Parties hereby each
covenant and agree that they will comply with the requirements of Section
2.1 with respect to any shares held by them as of the record date of any
Company Stockholders' Vote with respect to the Stockholder Approval
Condition or Board Restructuring Condition, regardless of any transaction
effected pursuant to Section 2.2(a)(i)(1) or (2) hereof.
(ii) The Prentice/Maverick Lock-Up Restrictions shall continue to
apply with respect to the Prentice Parties or the Maverick Parties (as the
case may be) until the one year anniversary of the Initial Closing (or
such earlier date as Rho and/or ▇▇▇▇▇ is permitted to sell securities that
are subject to the lock-up set forth in Section 2.2(b) hereof) if Rho
and/or a Rho Co-Investor shall have offered, in writing, (and in the case
of such a written offer, the Prentice Parties or the Maverick Parties, as
the case may be, shall not have accepted such an offer), on or prior to
the Prentice/Maverick Initial Lock-Up Termination Date, to purchase for
cash at least 50% (or, in the case of Prentice, 100%) of the shares of
Common Stock owned by the Prentice Parties or the Maverick Parties (as the
case may be) as of the date hereof on pricing terms no less favorable than
those included in the Securities
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Purchase Agreement, with such purchase to be consummated within 20 days of
delivery of such written notice. In connection with any such sale to Rho
and/or a Rho Co-Investor, neither the Prentice Parties nor the Maverick
Parties (as the case may be) shall be required to make any representations
or warranties concerning the Company. Notwithstanding anything contained
in this Section 2.2(a)(ii) to the contrary, the lock-up restrictions
applicable to (1) the Prentice Parties hereunder shall not apply to any
transfer by any of the Prentice Parties to any person so long as Prentice
Capital Management, L.P. remains the beneficial owner of the transferred
securities; and (2) the Maverick Parties hereunder shall not apply to any
transfer by any of the Maverick Parties to any person so long as Maverick
Capital, Ltd. remains the beneficial owner of the transferred securities.
For purposes of this Section 2.2(a)(ii) only, the term "Prentice Parties"
shall not include SAC.
(b) ▇▇▇▇▇/Rho Lock-Up. Until the one year anniversary of the date of
the Initial Closing, neither the ▇▇▇▇▇ Parties nor Rho will, without the prior
written consent of non-selling party (i.e., Rho or ▇▇▇▇▇ Parties), (i) sell,
offer to sell, contract or agree to sell, hypothecate, pledge, grant any option
to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, any shares of capital stock of the Company, (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any shares of capital stock of the
Company, or any securities exchangeable for or any other rights to purchase any
shares of capital stock of the Company or (iii) publicly announce an intention
to effect any transaction specified in clause (i) or (ii). Notwithstanding
anything contained in this Section 2.2(b) to the contrary, the lock-up
restrictions applicable to the ▇▇▇▇▇ Parties hereunder shall not apply to any
transfer by the ▇▇▇▇▇ Parties to (1) any of ▇▇▇▇▇ Fund Management LLC or ▇▇▇▇▇▇
▇▇▇▇▇ or any of their respective affiliates, (2) any person or entity that is
managed (x) by ▇▇▇▇▇ Fund Management LLC or (y) by any person or entity that is
an Affiliate of ▇▇▇▇▇ Fund Management LLC or (3) any person or entity that is a
charitable organization established by ▇▇▇▇▇▇ ▇▇▇▇▇ or any of the members of
▇▇▇▇▇▇ ▇▇▇▇▇' family.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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OF EXISTING STOCKHOLDERS
------------------------
Each Existing Stockholder hereby, for itself and for no other Existing
Stockholder, represents and warrants to the Stockholders as follows:
SECTION 3.1 Authorization; Binding Agreement. Such Existing
Stockholder has all requisite legal right, power, authority and capacity to
execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby and thereby. This Agreement has
been duly and validly executed and delivered by or on behalf of such Existing
Stockholder and, assuming its due authorization, execution and delivery by or on
behalf of such Existing Stockholder, constitute the legal, valid and binding
obligations of such Existing Stockholder, enforceable against such Existing
Stockholder in accordance with its respective terms, subject to the effect of
any applicable bankruptcy, insolvency, moratorium or similar law affecting
creditors' rights generally.
SECTION 3.2 No Conflict; Required Filings and Consents.
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(a) The execution and delivery of this Agreement by such Existing
Stockholder do not, and the performance of this Agreement by such Existing
Stockholder will not, (i) conflict with or violate any statute, law, rule,
regulation, order, judgment or decree applicable to such Existing Stockholder or
by which such Existing Stockholder or any of such Existing Stockholder's
material properties or assets is bound or affected, (ii) violate or conflict
with the Certificate of Incorporation, Bylaws or other equivalent organizational
documents of such Existing Stockholder, or (iii) result in or constitute (with
or without notice or lapse of time or both) any breach of or default under, or
give to another party any right of termination, amendment, acceleration or
cancellation of, or result in the creation of any lien or encumbrance or
restriction on any of the material property or assets of such Existing
Stockholder pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which such Existing Stockholder is a party or by which such Existing
Stockholder or any of such Existing Stockholder's material properties or assets
is bound or affected; except in the case of the foregoing clauses (i), (ii) and
(iii), where such violation, conflict, breach, default, right of termination,
amendment, acceleration or cancellation, lien, encumbrance or restriction would
not, or would reasonably be expected not to, prevent or materially delay the
performance by such Existing Stockholder of such Existing Stockholder's
obligations under this Agreement. There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which such Existing
Stockholder is a trustee whose consent is required for the execution and
delivery of this Agreement or the consummation by such Existing Stockholder of
the transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement by such Existing
Stockholder do not, and the performance of this Agreement by such Existing
Stockholder will not, require any consent, approval, order, permit or
governmental, authorization or permit of, or filing with or notification to, any
third party or any governmental, regulatory or administrative authority, agency
or commission, domestic or foreign, except as may be required under the Exchange
Act, and except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
or would reasonably be expected not to, prevent or materially delay the
performance by such Existing Stockholder of such Existing Stockholder's
obligations under this Agreement. Other than as contained in this Agreement,
such Existing Stockholder does not have any understanding in effect with respect
to the voting or transfer of any shares of capital stock of the Company owned by
such Existing Stockholder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
---------------------------------
THE COMPANY AND RHO
-------------------
Each of the Company and Rho hereby, jointly and not severally,
represents and warrants to the Existing Stockholders as follows:
SECTION 4.1 Authorization; Binding Agreement. Each of the Company and
Rho has all requisite legal right, power, authority and capacity to execute and
deliver this Agreement and to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by or on behalf of each of the Company and
Rho and, assuming its due authorization, execution and delivery by or on behalf
of
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the Existing Stockholders, constitutes the legal, valid and binding obligation
of the Company and Rho, enforceable against the Company and Rho in accordance
with its terms, subject to the effect of any applicable bankruptcy, insolvency,
moratorium or similar law affecting creditors' rights generally.
SECTION 4.2 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by each of the
Company and Rho will not, (i) conflict with or violate any statute, law, rule,
regulation, order, judgment or decree applicable to the Company or Rho or by
which the Company or Rho or any of the Company's or Rho's respective material
properties or assets is bound or affected, (ii) violate or conflict with the
Certificate of Incorporation, Bylaws or other equivalent organizational
documents of the Company or Rho, or (iii) result in or constitute (with or
without notice or lapse of time or both) any breach of or default under, or give
to another party any right of termination, amendment, acceleration or
cancellation of, or result in the creation of any lien or encumbrance or
restriction on any of the respective material property or assets of the Company
or Rho pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or Rho is a party or by which the Company or Rho or any of the Company's
or Rho's respective material properties or assets is bound or affected; except
in the case of the foregoing clauses (i), (ii) and (iii), where such violation,
conflict, breach, default, right of termination, amendment, acceleration or
cancellation, lien, encumbrance or restriction would not, or would reasonably be
expected not to, prevent or materially delay the performance by the Company or
Rho of any of their respective obligations under this Agreement.
(b) The execution and delivery of this Agreement by each of the
Company or Rho do not, and the performance of this Agreement by each of the
Company or Rho will not, require any consent, approval, order, permit or
governmental, authorization or permit of, or filing with or notification to, any
third party or any governmental, regulatory or administrative authority, agency
or commission, domestic or foreign, except as may be required under the Exchange
Act, and except where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
or would reasonably be expected not to, prevent or materially delay the
performance by the Company or Rho of the Company's or Rho's respective
obligations under this Agreement.
ARTICLE V
MISCELLANEOUS
-------------
SECTION 5.1 Further Assurances. From time to time and without
additional consideration, the Company and each of the Stockholders shall execute
and deliver, or cause to be executed and delivered, such additional transfers,
assignments, endorsements, proxies, consents and other instruments, and shall
take such further actions, as the Company or any of the Stockholders may
reasonably request for the purpose of carrying out and furthering the intent of
this Agreement.
10
SECTION 5.2 Entire Agreement. This Agreement, the Securities Purchase
Agreement and the other documents executed in connection therewith
(collectively, the "Transaction Documents") constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all previous negotiations, commitments and writings with respect to
such subject matter, including, without limitation, the Existing Agreement.
SECTION 5.3 Assignments; Parties in Interest. Neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any
of the parties hereto without the prior written consent of the other parties.
This Agreement shall be binding upon and inure solely to the benefit of each
party hereto, and nothing herein, express or implied, is intended to or shall
confer upon any person not a party hereto any right, benefit or remedy of any
nature whatsoever under or by reason hereof, except as otherwise provided
herein. In the event that any Stockholder desires to transfer any shares of
capital stock (or rights to purchase shares of capital stock) owned by such
Stockholder to any affiliate of such Stockholder, then it shall be a condition
to such transfer that any such affiliate transferee agree to become a party to,
and bound by, this Agreement in the same capacity as the Stockholder that
transferred such shares of capital stock (or rights to purchase shares of
capital stock) to it.
SECTION 5.4 Term.
(a) The rights and obligations of the ▇▇▇▇▇ Parties hereunder
(except with respect to their obligation to cause directors designated by them
to resign under Section 1.6(a)) shall automatically terminate upon occurrence of
a ▇▇▇▇▇ Termination Event.
(b) The rights and obligations of Rho hereunder (except with respect
to their obligation to cause directors designated by them to resign under
Section 1.6(b)) shall automatically terminate upon occurrence of a Rho
Termination Event.
(c) The rights and obligations of the Maverick Parties hereunder
(except with respect to their obligation to cause directors designated by them
to resign under Section 1.6(c)) shall automatically terminate upon occurrence of
a Maverick Termination Event.
(d) The rights and obligations of the Prentice Parties hereunder
(except with respect to their obligation to cause directors designated by them
to resign under Section 1.6(d)) shall automatically terminate upon the
occurrence of a Prentice Termination Event.
SECTION 5.5 Amendments. This Agreement may not be amended or modified
except by an instrument in writing signed by, or on behalf of, the parties
against whom such amendment or modification is sought to be enforced.
SECTION 5.6 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.
SECTION 5.7 Notices and Addresses. Any notice, demand, request,
waiver, or other communication under this Agreement shall be in writing and
shall be deemed to have been duly
11
given on the date of service, if personally served or sent by facsimile; on the
business day after notice is delivered to a courier or mailed by express mail,
if sent by courier delivery service or express mail for next day delivery; and
on the fifth business day after mailing, if mailed to the party to whom notice
is to be given, by first class mail, registered, return receipt requested,
postage prepaid and addressed as follows:
To the Company: Bluefly, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With a copy (which shall not constitute notice) to:
Dechert LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To the ▇▇▇▇▇ Parties: Quantum Industrial Partners LDC
SFM Domestic Investments LLC
c/▇ ▇▇▇▇▇ Fund Management LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
To the Maverick Parties: Maverick Fund USA, Ltd.
Maverick Fund, L.D.C.
Maverick Fund II, Ltd.
c/o Maverick Capital, Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy (which shall not constitute notice) to:
Shearman & Sterling, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
12
To the Prentice Parties
(other than SAC): Prentice Capital Management, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To SAC: S.A.C. Capital Associates, LLC
c/o S.A.C. Capital Advisors, LLC
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With a copy (which shall not constitute notice) to:
Prentice Capital Management, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Rho: Rho Ventures VI, ▇.▇.
▇▇▇▇▇▇▇▇ Hall Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (212.751.3613
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
With a copy to (which shall not constitute notice) to:
▇▇▇▇▇▇▇ Procter LLP
The New York Times Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
13
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
SECTION 5.8 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, void or unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
such void or unenforceable provision.
SECTION 5.9 Governing Law; Choice of Forum; Jury Waiver. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS LAW,
PROVIDED THAT THE PROVISIONS SET FORTH HEREIN AND ANY CLAIMS OR DISPUTES ARISING
OUT OF OR RELATED TO SUCH PROVISIONS OR THE SUBJECT MATTER THEREOF THAT ARE
REQUIRED TO BE GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW SHALL BE
GOVERNED BY THE DELAWARE GENERAL CORPORATION LAW The parties hereto agree that
any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby may only be brought in the United States
District Court for the Southern District of New York or any New York State court
sitting in the Borough of Manhattan in New York City, and each of the parties
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by Law (as defined in the
Investment Agreement), any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.
SECTION 5.10 Counterparts; Facsimile Signatures. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart. This Agreement
may be executed by facsimile, and a facsimile signature shall have the same
force and effect as an original signature on this Agreement. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 5.11 Independent Nature of Stockholders' Obligations and
Rights. The obligations of each Stockholder this Agreement are several and not
joint with the obligations of any other Stockholder, and no Stockholder shall be
responsible in any way for the performance of the obligations of any other
Stockholder under this Agreement. Nothing contained herein or in any Transaction
Document, and no action taken by any party hereto pursuant thereto, shall be
deemed to constitute any Stockholder as a partnership, an association, a joint
venture or any other kind of
14
entity with any other Stockholder, or create a presumption that the Stockholders
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Stockholder
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Stockholder
to be joined as an additional party in any proceeding for such purpose. Each
Stockholder has been represented by its own separate legal counsel in their
review and negotiation of the Transaction Documents.
SECTION 5.12 Specific Performance. Each of the parties hereto, in
addition to being entitled to exercise all of its rights hereunder, including
recovery of damages, shall be entitled to specific performance of its rights
under this Agreement. Each party agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
SECTION 5.13 No Violations. Each of the parties hereto agree that no
party hereto shall be obligated to comply with any provisions of this Agreement
relating to the voting of shares of capital stock of the Company if doing so
would constitute a violation of law or public policy.
[Signature pages follow]
15
IN WITNESS WHEREOF, this Amended and Restated Voting Agreement has
been duly executed on the date first set forth above.
BLUEFLY, INC.
By:
----------------------------------
Name:
Title:
QUANTUM INDUSTRIAL PARTNERS LDC
By:
----------------------------------
Name:
Title:
SFM DOMESTIC INVESTMENTS LLC
By:
----------------------------------
Name:
Title:
MAVERICK FUND USA, LTD
By: MAVERICK CAPITAL, LTD.,
as its Investment Manager
By:
----------------------------------
Name:
Title:
MAVERICK FUND L.D.C.
By: MAVERICK CAPITAL, LTD.,
as its Investment Manager
By:
----------------------------------
Name:
Title:
MAVERICK FUND II, LTD
By: MAVERICK CAPITAL, LTD.,
as its Investment Manager
By:
----------------------------------
Name:
Title:
PRENTICE CAPITAL PARTNERS, LP
By: Prentice Capital GP, LLC
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
PRENTICE CAPITAL PARTNERS QP, LP
By: Prentice Capital GP, LLC
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
PRENTICE CAPITAL OFFSHORE, LTD.
By: Prentice Capital Management, LP, its
investment manager
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
GPC XLIII, LLC
By: Prentice Capital Management, LP, its advisor
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
PEC I, LLC
By: Prentice Capital Management, LP, its manager
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
S.A.C. CAPITAL ASSOCIATES, LLC
By: S.A.C. Capital Advisors, LLC
By:
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: General Counsel
RHO VENTURES VI, L.P.
By:
----------------------------------
Name:
Title:
