Amended & Restated Voting Trust Agree 10/26/1999

EXHIBIT 9.2


VOTING TRUST AGREEMENT
----------------------


THIS VOTING TRUST AGREEMENT (the "Agreement"), is dated as of October
--------- 26, 1999, by and among Scott A. Blum ("Blum"), the trusts listed on Exhibit A
---- --------- (individually a "Stockholder" and collectively the "Stockholders"), BUY.COM
----------- ------------ Inc., a Delaware corporation (the "Company") and the Outside Directors (as
------- hereinafter defined) of the Company's Board of Directors listed on Exhibit B to
--------- this Agreement (the "Trustees").
--------


RECITALS


A. WHEREAS, the Company intends to make an initial public offering (the "IPO") of its common stock, par value $.0001 per share (the "Common
--- ------ Stock"), through a group of underwriters lead managed by Merrill Lynch & Co., ----- Merrill Lynch, Pierce, Fenner & Smith Incorporated; and


B. WHEREAS, the Stockholders currently own in the aggregate a total of 99,372,465 shares of Common Stock (the "Initial Shares") and no other shares
-------------- of the Company's capital stock; and


C. WHEREAS, neither Blum nor any Blum Family Member (as hereinafter defined) currently owns any shares of Common Stock or any other shares of the Company's capital stock (other than as set forth on Exhibit D); and
---------


D. WHEREAS, the Initial Shares constitute approximately fifty-six percent (56%) of the outstanding capital stock of the Company as of the date hereof (assuming the conversion of all outstanding shares of the Company's capital stock into shares of Common Stock); and


E. WHEREAS, in order to assist the Company in marketing and completing the IPO and for other valuable consideration, the Company, the Stockholders and Blum have agreed to enter into this Agreement to create the BUY.COM Inc. Voting Trust (the "Trust"); and
-----


F. WHEREAS, in accordance with the provisions of this Agreement, the Stockholders and Blum have agreed to deposit, or cause to be deposited, into the Trust: (i) the Initial Shares; and (ii) any additional shares of the Company's capital stock that hereafter are acquired by the Stockholders or Blum from the Company or any other stockholder (including, without limitation, any shares of capital stock of the Company that may be issued upon the exercise of rights, warrants or options to purchase, or other securities convertible into or exchangeable for, the Common Stock) (collectively, the "Additional Shares"); and
-----------------


G. WHEREAS, the Stockholders and Blum desire to empower the Trustees to vote all of the shares of the Company's capital stock that become subject to the terms and conditions of this Agreement.


AGREEMENT


NOW, THEREFORE, in consideration of the foregoing and of the agreements contained herein, it is hereby agreed:


1. Definitions. For all purposes of this Agreement, except as otherwise
----------- expressly provided herein or unless the context otherwise requires:


(i) capitalized terms defined in the Recitals to this Agreement have the meanings assigned to them there;


(ii) capitalized terms defined in other Sections of this Agreement have the meanings assigned to them there;


(iii) all capitalized terms defined in this Agreement include the plural as well as the singular and vice versa, when the context requires; and


(iv) where appropriate, all references to the masculine in this Agreement include both the feminine and the neuter, and vice versa, when the context requires.


"Excluded Shares" means: all shares of the Company's capital stock
--------------- acquired by all Blum Affiliates in the aggregate (other than shares of capital stock or options to purchase shares of capital stock issued or granted to Blum Affiliates pursuant to the Company's equity compensation plans or other agreements approved by a majority of the disinterested members of the Board of Directors) on or after the date hereof until the number of shares so acquired equals one percent (1%) of the Company's issued and outstanding capital stock. (Conversely, all shares of the Company's capital stock acquired by all Blum Affiliates in the aggregate (including shares of capital stock or options to purchase shares of capital stock issued or granted to Blum Affiliates pursuant to the Company's equity compensation plans or other agreements approved by a majority of the disinterested members of the Board of Directors) on or after the date hereof that are in excess of one percent (1%) of the Company's issued and outstanding capital stock shall not constitute Excluded Shares.)


"Blum Affiliate" means: (i) a Blum Family Member; (ii) an individual
-------------- that is supported, directly or indirectly, to a material extent by Blum or any Blum Family Member; (iii) an individual that is (or has been during the past three months) employed directly or indirectly by Blum, any of the Stockholders or any Blum Family Member; (iv) an individual or entity that is (or has been during the past three months) retained by Blum, any of the Stockholders or any Blum Family Member as a consultant generally operating at the direction of Blum, any of the Stockholders or such Blum Family Member; (v) an individual or entity that has a Substantial Business Investment in any entity with Blum, any of the Stockholders, or any Blum Family Member; (vi) an entity that controls, is controlled by, or is under common control with, Blum, any of the Stockholders or any Blum Family Member; or (vii) an individual who serves as an officer, director, partner, member, executor, administrator, personal representative, trustee, successor or assign (or in a similar capacity) with respect to any of the foregoing. Notwithstanding the foregoing, the following shall not be deemed to be a Blum Affiliate for purposes of Section 3(c) and, pursuant to such Section 3(c), shall not be required to deposit shares of the Company into the Trust: (a) officers, directors and employees of the Company who would not otherwise meet the definition of a Blum Affiliate but for their position as an officer, director or employee of the Company, any subsidiary of the Company, including but not limited to BUYNOW INC., or any joint venture in which the Company has an interest; and (b) the entities listed on Exhibit C hereto.
---------


"Blum Family Member" means any former, existing or future spouse,
------------------ parent, child, sibling, mother-in-law, father-in-law, son-in-law, daughter-in- law, brother-in-law or sister-in-law of Blum.


"control" (including the terms "controlled by" and "under common
------- control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of any entity, whether through the ownership of voting securities, by contract, or otherwise.


"Outside Director" means a member of the Board of Directors of the
---------------- Company who: (i) is not (and has not been during the past three months) employed directly or indirectly by the Company; (ii) has not been during the past twelve months involved in any transaction or series of transactions with the Company in which the amount involved exceeded $60,000 and in which such person has or had a direct or indirect material interest; and (iii) is not a Blum Affiliate. Notwithstanding the foregoing, the sale of 209,145 shares of Common Stock to each of Donald M. Kendall, Charles W. Richion, James B. Roszak, John Sculley and Wayne T. Thorson in October 1998 through March 1999 at a purchase price of $2.39 per share shall not disqualify such individuals from otherwise satisfying the definition of an Outside Director. Any successor Trustee who, although not a member of the Board of Directors of the Company, is appointed by the Board of Directors of the Company and approved by the remaining Trustees, if any, in accordance with Section 7(b) hereof, shall be deemed to be an Outside Director for all purposes under this Agreement.


"Substantial Business Investment" means any investment by a person or
------------------------------- entity that comprises more than five percent (5%) of the equity or debt of a corporation, partnership, limited liability company, joint venture or other entity in which the Stockholders, Blum or any Blum Family Member is the record or beneficial owner of five percent (5%) or more of the equity or debt of such entity.


"Trust Beneficiary" means the Stockholders and any other beneficial
----------------- owner of shares of the Company's capital stock that become subject to the terms and conditions of this Agreement.


"Trust Shares" means the Initial Shares, the Additional Shares and any
------------ other shares of the Company's capital stock that become subject to the terms and conditions of this Agreement (including, without limitation, any Initial Shares or Additional Shares or other shares of the Company's capital stock that are acquired by a Blum Affiliate on or after the date hereof). Notwithstanding the foregoing, (i) all shares of capital stock or options to purchase shares of capital stock issued or granted to Blum Affiliates pursuant to the Company's equity compensation plans or other agreements approved by a majority of the disinterested members of the Board of Directors; and (ii) all Excluded Shares acquired on or after the date hereof shall not be included in the definition of "Trust Shares" and will not be subject to the terms and conditions of this Agreement. Further, and as a matter of clarity, all shares of the Company's capital stock acquired by Blum Affiliates prior to the date hereof (and listed on Exhibit D hereto) shall be excluded from the definition of "Trust Shares."
---------


2. Appointment of Trustees; Minimum Number of Trustees. The
--------------------------------------------------- Stockholders, Blum and the Company hereby appoint the Trustees to serve as Trustees of the Trust, and the Trustees


hereby accept such appointment and agree to act as Trustees of the Trust in accordance with the terms and conditions of this Agreement. For so long as this Agreement shall remain in effect, there shall be at least two Outside Directors serving as Trustees under this Agreement and, if at any time there shall be less than two Outside Directors serving as Trustees, then the Board of Directors of the Company shall promptly appoint and the remaining Trustees, if any, shall approve one or more Trustees in accordance with the procedures set forth in Section 7(b) hereof.


3. Deposit of Shares and Issuance of Trust Certificates.
----------------------------------------------------


(a) Deposit of Initial Shares. Concurrent with the execution of this
------------------------- Agreement, the Stockholders and Blum will endorse in blank and assign and deliver to the Trustee all certificates for the Initial Shares and shall do all things necessary for the transfer of the Initial Shares to the Trustees on the books of the Company.


(b) Deposit of Additional Shares. For so long as this Agreement
---------------------------- remains in effect, the Stockholders and Blum agree to deliver to the Trustees certificates for all Additional Shares hereafter acquired by the Stockholders, Blum or any Blum Family Member immediately upon becoming the record or beneficial owner thereof, duly endorsed for transfer or accompanied by duly executed instruments of transfer.


(c) Deposit of Shares to be Acquired by a Blum Affiliate. For so long
---------------------------------------------------- as this Agreement remains in effect, the Stockholders and Blum agree to cause any Blum Affiliate who intends to acquire any Trust Shares (hereinafter, a "Blum
---- Affiliate Stockholder"): (i) to become a party to this Agreement; and (ii) to --------------------- consent to the registration, transfer and issuance of such shares in the names of the Trustees (for the benefit of such Blum Affiliate Stockholder) and to the registration, issuance and delivery by the Trustees to such Blum Affiliate Stockholder of Trust Certificates (as hereinafter defined) in place of the stock certificates for the Trust Shares being acquired by such Blum Affiliate Stockholder, all in accordance with the terms and conditions of this Agreement. Thereafter, such Blum Affiliate Stockholder shall be included within the definition of "Trust Beneficiary" for all purposes of this Agreement.


(d) Delivery of Trust Certificates. Promptly upon receipt of any
------------------------------ Trust Shares, the Trustees shall: (i) cause such Trust Shares to be cancelled, transferred and registered in the stock records of the Company in the name of the Trustees (or a nominee name designated by them); (ii) shall cause the new share certificates to bear a legend stating that the securities evidenced thereby are subject to the terms of this Agreement; and (iii) shall issue and deliver to the Trust Beneficiary a Voting Trust Certificate (a "Trust
----- Certificate") in respect of the number and type of Trust Shares transferred to ----------- and held of record by the Trustees for the benefit of such Trust Beneficiary under this Agreement, in the form of Exhibit E hereto (except that the Trustees
--------- shall affix to any such Trust Certificate any restrictive legend borne by the certificate for the Trust Shares for which such Trust Certificate is exchanged). All Trust Certificates shall be signed by a majority of the Trustees.


(e) Release of Shares from Trust. In the event that one of the
---------------------------- Stockholders, Blum or any Blum Affiliate Stockholder sells or transfers any of the Trust Shares to a third party (other than to Blum, a Blum Family Member, a Blum Affiliate or a Blum Affiliate Stockholder), then, upon the closing of such transaction, the Trust Shares so transferred shall be released from this Trust.


4. Trustees' Powers and Duties.
---------------------------


(a) Voting Powers. For so long as this Agreement remains in effect,
------------- the Trustees shall have the right to exercise all voting rights and powers in respect of the Trust Shares, and to take part in, consent to, or oppose, any corporate or stockholders' action of any kind whatsoever. The Trustees' right to exercise all voting rights and powers in respect of the Trust Shares, and to take part in, consent to, or oppose, any corporate or stockholders' action of any kind whatsoever shall be subject to the different terms and conditions depending on whether the proposed action is characterized as a "Significant Stockholder Action" or a "Routine Stockholder Action," as hereineafter defined.


(i) "Significant Stockholder Action" means (i) the election of directors; (ii) the dissolution, consolidation, merger, reorganization or recapitalization of the Company; (iii) the lease, sale or license of all or a substantial portion of the assets of the Company; (iv) the issuance or sale of securities by the Company or any "affiliate" of the Company (as defined in Rule 405 of Regulation C under the Securities Exchange Act of 1934, as amended); (v) the amendment of this Agreement; or (vi) any combination of the foregoing; in each case, to the extent a stockholder vote is otherwise required by law.


(ii) "Routine Stockholder Action" means any stockholder action required by law other than a Significant Stockholder Action.


(b) Voting Procedure For Significant Stockholder Actions. The
---------------------------------------------------- Trustees must vote in respect of any Significant Stockholder Action as follows:


(i) if the matter concerned is the election of directors, then the Trustees shall vote the whole number of Trust Shares for each director (or nominee for director) for which such Trust Shares are eligible to vote by multiplying the total number of votes held by the Trust by a fraction, the numerator of which is the number of votes cast in respect of shares of the Company other than the Trust Shares (the "Nonaffiliated Votes") for such person
------------------- and the denominator of which is the total number of Nonaffiliated Votes represented by all shares casting any votes in the election of such directors; provided, however, that notwithstanding the foregoing, the Trustees shall vote all of the Trust Shares against any proposal to elect Blum to the Board of Directors of the Company; and


(ii) on all other matters, including without limitation, any amendment of this Agreement for which a stockholder vote is required under Section 14(h) hereof, the Trustees shall at all times vote all of the Trust Shares for the matter, against the matter, or shall abstain or cause to have the same effect as broker non-votes, in the same proportion in favor of, in opposition to, or in abstention or as broker non-votes with respect to, such matter as the Non-Affiliated Votes are cast for, against, or in abstention or are broker non-votes with respect to, such matter.


(c) Voting Procedure For Routine Stockholder Actions. The Trustees
------------------------------------------------ may vote in respect of any Routine Stockholder Action in any manner as determined by a majority of the Trustees who shall act in the best interests of the Company. In the event that only two individuals


are serving as Trustees at the time such Routine Stockholder Action is to ...