{"id":43004,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-merger-amazon-com-inc-and-alexa-internet.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-amazon-com-inc-and-alexa-internet","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-amazon-com-inc-and-alexa-internet.html","title":{"rendered":"Agreement and Plan of Merger &#8211; Amazon.com Inc. and Alexa Internet"},"content":{"rendered":"<pre>\n                          AGREEMENT AND PLAN OF MERGER\n\n                                      AMONG\n\n                                AMAZON.COM, INC.,\n\n                              AI ACQUISITION, INC.,\n\n                                 ALEXA INTERNET\n\n\n\n                                       AND\n\n\n\n                                 BREWSTER KAHLE\n\n\n\n                           DATED AS OF APRIL 24, 1999\n\n\n   2\n\n                                    CONTENTS\n\n                                                                               \nARTICLE I -- THE MERGER..........................................................  1\n    1.1  The Merger..............................................................  1\n    1.2  The Closing.............................................................  2\n    1.3  Effective Date and Time.................................................  2\n    1.4  Articles of Incorporation of the Surviving Corporation..................  2\n    1.5  Bylaws of the Surviving Corporation.....................................  3\n    1.6  Directors and Officers..................................................  3\n    1.7  Conversion of Shares....................................................  3\n         1.7.1  Exchange Ratio; Pledged Shares...................................  3\n         1.7.2  Exchange of Certificates.........................................  7\n         1.7.3  No Fractional Shares.............................................  8\n         1.7.4  No Further Transfers.............................................  9\n    1.8  Shareholder Representative..............................................  9\n    1.9  Amendment to Provide for Forward Triangular Merger......................  9\n    1.10 Tax Free Reorganization.................................................  9\n\nARTICLE II -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE \n              SHAREHOLDER........................................................ 10\n   2.1  Organization............................................................. 10\n   2.2  Enforceability........................................................... 11\n   2.3  Capitalization........................................................... 11\n   2.4  Subsidiaries and Affiliates.............................................. 12\n   2.5  No Approvals; No Conflicts............................................... 13\n   2.6  Financial Statements..................................................... 13\n   2.7  Absence of Certain Changes or Events..................................... 14\n   2.8  Taxes.................................................................... 16\n   2.9  Property................................................................. 19\n   2.10 Contracts................................................................ 21\n   2.11 Claims and Legal Proceedings............................................. 22\n   2.12 Labor and Employment Matters............................................. 23\n   2.13 Employee Benefit Plans................................................... 23\n        2.13.1  Employee Benefit Plan Listing.................................... 23\n        2.13.2  Documents Provided............................................... 24\n        2.13.3  Compliance....................................................... 25\n        2.13.4  Contributions and Premium Payments............................... 26\n        2.13.5  Related Employers................................................ 26\n        2.13.6  Multiemployer and Title IV Plans................................. 26\n\n\n                                      -i-\n   3\n\n\n                                                                             \n        2.13.7  Post-Termination Welfare Benefits................................ 26\n        2.13.8  Suits, Claims and Investigations................................. 26\n        2.13.9  Payments Resulting From Transactions............................. 27\n   2.14 Intellectual Property.................................................... 27\n        2.14.1  General...........................................................27\n        2.14.2  Company Technology............................................... 28\n        2.14.3  Third Party Technology........................................... 28\n        2.14.4  Trademarks....................................................... 29\n        2.14.5  Intellectual Property Rights..................................... 29\n        2.14.6  Maintenance of Rights............................................ 30\n        2.14.7  Third Party Claims............................................... 30\n        2.14.8  Infringement by the Company...................................... 31\n        2.14.9  Confidentiality.................................................. 31\n        2.14.10 Warranty Against Defects......................................... 31\n        2.14.11 Domain Names..................................................... 31\n        2.14.12 Year 2000........................................................ 32\n        2.14.13 Indemnification.................................................. 32\n        2.14.14 Restrictions on Intellectual Property............................ 32\n   2.15 Corporate Books and Records.............................................. 32\n   2.16 Licenses, Permits, Authorizations, etc................................... 33\n   2.17 Compliance With Laws..................................................... 33\n   2.18 Insurance................................................................ 33\n   2.19 Brokers or Finders....................................................... 34\n   2.20 Absence of Questionable Payments......................................... 34\n   2.21 Bank Accounts............................................................ 34\n   2.22 Insider Interests........................................................ 35\n   2.23 Compliance With Environmental Laws....................................... 35\n   2.24 Information Supplied by the Company...................................... 36\n   2.25 Full Disclosure.......................................................... 36\n   2.26 Hart-Scott-Rodino........................................................ 36\n   2.27 Operating Data........................................................... 36\n\nARTICLE III -- REPRESENTATIONS AND WARRANTIES OF AMAZON.COM AND THE PURCHASER.... 37\n    3.1  Organization............................................................ 37\n    3.2  Enforceability.......................................................... 38\n    3.3  Securities.............................................................. 38\n    3.4  No Approvals or Notices Required; No Conflicts With Instruments......... 39\n    3.5  Capitalization.......................................................... 39\n\n\n                                      -ii-\n   4\n\n                                                                             \n    3.6  SEC Documents........................................................... 39\n    3.7  Absence of Certain Changes.............................................. 40\n    3.8  Information Supplied by Amazon.com...................................... 40\n    3.9  Full Disclosure......................................................... 40\n    3.10 Brokers or Finders...................................................... 40\n\nARTICLE IV -- CONDITIONS PRECEDENT TO OBLIGATIONS OF AMAZON.COM AND THE\n              PURCHASER.......................................................... 40\n    4.1  Accuracy of Representations and Warranties.............................. 41\n    4.2  Performance of Agreements............................................... 41\n    4.3  Opinion of Counsel for the Company...................................... 41\n    4.4  Compliance Certificate.................................................. 41\n    4.5  Material Adverse Change................................................. 41\n    4.6  Approvals and Consents.................................................. 41\n    4.7  Proceedings and Documents; Secretary's Certificate...................... 42\n    4.8  Nonforeign Affidavit.................................................... 42\n    4.9  Compliance With Laws.................................................... 42\n    4.10 Shareholder Approval.................................................... 42\n    4.11 Legal Proceedings....................................................... 42\n    4.12 Employment and Noncompetition Arrangements.............................. 43\n    4.13 Affiliate Letters....................................................... 43\n    4.14 Termination of Certain Agreements....................................... 43\n    4.15 Exercise of Stock Purchase Rights....................................... 43\n    4.16 No Dissenter Rights Exercised Greater Than 5% of Stock.................. 43\n    4.17 Transmittal Letters..................................................... 44\n    4.18 Consents to Merger...................................................... 44\n    4.19 Delivery of Audited Financial Statements................................ 44\n\nARTICLE V -- CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.................. 45\n    5.1  Accuracy of Representations and Warranties.............................. 45\n    5.2  Performance of Agreements............................................... 45\n    5.3  Opinion of Counsel...................................................... 45\n    5.4  Compliance Certificate.................................................. 45\n    5.5  Legal Proceedings....................................................... 45\n    5.6  Material Adverse Change................................................. 46\n    5.7  Approvals and Consents.................................................. 46\n    5.8  Compliance With Laws.................................................... 46\n    5.9  Tax Opinion............................................................. 46\n\n\n                                      -iii-\n   5\n\n\n                                                                              \nARTICLE VI -- COVENANTS.......................................................... 46\n    6.1  Conduct of Business by the Company Pending the Merger................... 47\n    6.2  Access to Information; Confidentiality.................................. 49\n    6.3  No Alternative Transactions............................................. 49\n    6.4  Notification of Certain Matters......................................... 50\n    6.5  Further Action; Commercially Reasonable Efforts......................... 50\n    6.6  Shareholder Approval.................................................... 50\n    6.7  Proxy Statement......................................................... 50\n    6.8  Amazon.com Common Stock................................................. 51\n    6.9  Securities Act Compliance............................................... 51\n    6.10 Dissenting Shares....................................................... 52\n    6.11 Publicity............................................................... 52\n    6.12 Option Grants........................................................... 52\n    6.13 Option Shares; Registration............................................. 52\n    6.14 Indemnification of Officers and Directors............................... 53\n    6.15 Benefits Rollover....................................................... 53\n\nARTICLE VII -- TERMINATION, AMENDMENT AND WAIVER................................. 54\n    7.1  Termination............................................................. 54\n    7.2  Effect of Termination................................................... 54\n    7.3  Amendment............................................................... 55\n    7.4  Waiver.................................................................. 55\n\nARTICLE VIII -- SURVIVAL AND INDEMNIFICATION..................................... 55\n    8.1  Survival................................................................ 55\n    8.2  Indemnification by the Holders of Company Capital Stock................. 55\n    8.3  Threshold and Limitations............................................... 56\n    8.4  Procedure for Indemnification........................................... 58\n    8.5  Remedies; Specific Performance.......................................... 61\n\nARTICLE IX -- GENERAL............................................................ 62\n    9.1  Tax Matters............................................................. 62\n    9.2  Expenses................................................................ 64\n    9.3  Notices................................................................. 64\n    9.4  Severability............................................................ 65\n    9.5  Entire Agreement........................................................ 66\n    9.6  Assignment.............................................................. 66\n    9.7  Parties in Interest..................................................... 66\n    9.8  Governing Law........................................................... 66\n    9.9  Headings................................................................ 66\n\n\n                                      -iv\n   6\n\n\n                                                                              \n    9.10 Counterparts............................................................ 66\n    9.11 Waiver of Jury Trial.................................................... 67\n\n\n\nEXHIBITS\n\n            \n        1.6    -- Officers of the Surviving Corporation\n        1.7.2  -- Letter of Transmittal\n        2      -- Company Disclosure Memorandum\n        4.3    -- Opinion of Counsel for the Company\n        4.8    -- Real Property Tax Affidavit\n        4.12   -- Form of Confidentiality, Noncompetition and Invention\n                  Assignment Agreement\n        4.13   -- Form of Affiliate Letter\n        5.3    -- Opinion of Counsel for Amazon.com and Purchaser\n        6.12   -- List of Company Employees and Options\n\n\n                                      -v\n   7\n\n                          AGREEMENT AND PLAN OF MERGER\n\n\n        This Agreement and Plan of Merger (this \"Agreement\") is made and entered\ninto as of April 24, 1999, by and among Amazon.com, Inc., a Delaware corporation\n(\"Amazon.com\"), AI Acquisition, Inc., a Washington corporation and wholly owned\nsubsidiary of Amazon.com (the \"Purchaser\"), Alexa Internet, a California\ncorporation (the \"Company\"), and Brewster Kahle (the \"Shareholder\").\n\n                                    RECITALS\n\n        A.      The Company, Amazon.com, the Shareholder and the Purchaser\nbelieve it advisable and in their respective best interests to effect a merger\nof Purchaser with and into the Company pursuant to this Agreement (the\n\"Merger\").\n\n        B.      The Board of Directors of the Company has approved this\nAgreement and the Merger as required by applicable law.\n\n        C.      The Boards of Directors of Amazon.com and the Purchaser and the\nsole shareholder of the Purchaser have approved this Agreement and the Merger as\nrequired by applicable law.\n\n        D.      It is intended that the Merger will qualify as a reorganization\nunder Section 368(a) of the Internal Revenue Code of 1986, as amended (the\n\"Code\").\n\n        E.      It is intended that shareholders holding approximately ninety\npercent (90%) of the voting securities of the Company will enter into Voting\nAgreements with Amazon.com concurrently herewith.\n\n                                    AGREEMENT\n\n        In consideration of the terms hereof, the parties hereto agree as\nfollows:\n\n                             ARTICLE I -- THE MERGER\n\n1.1     THE MERGER\n\n        Upon the terms and subject to the conditions hereof, (a) at the\nEffective Time (as defined in Section 1.3 hereof) the separate existence of the\nPurchaser shall cease and the Purchaser shall be merged with and into the\nCompany (the Company as the surviving corporation after the Merger is sometimes\nreferred to herein as the \"Surviving Corporation\"), and (b) from and after the\nEffective Time, the Merger shall \n\n                                      -1-\n   8\n\nhave all the effects of a merger under the laws of the State of Washington, the\nState of California and other applicable law.\n\n1.2     THE CLOSING\n\n        Subject to the terms and conditions of this Agreement, the closing of\nthe Merger pursuant to this Agreement (the \"Closing\") shall take place on the\nearliest practicable business day (the \"Closing Date\") following the\nsatisfaction or waiver of the conditions set forth in Articles IV and V at 10:00\na.m. local time at the offices of Perkins Coie LLP, 1201 Third Avenue, 48th\nFloor, Seattle, Washington, or such other date, time or location as Amazon.com\nand the Company shall agree.\n\n1.3     EFFECTIVE DATE AND TIME\n\n        On the Closing Date and subject to the terms and conditions hereof, the\nparties hereto shall cause the appropriate certificates (the \"Articles of\nMerger\") complying with the applicable provisions of the Washington Business\nCorporation Act (\"Washington Law\") and the California General Corporation Law\n(\"California Law\"), to be properly executed and filed with the Secretary of\nState of the State of Washington (the \"Washington Secretary of State\") and the\nSecretary of State of the State of California (\"California Secretary of State\").\nThe Merger shall become effective on the date (the \"Effective Date\") and at the\ntime (the \"Effective Time\") of filing of the Articles of Merger or at such other\ntime as may be specified in the Articles of Merger as filed. If the Washington\nSecretary of State or the California Secretary of State requires any changes in\nthe Articles of Merger as a condition to filing or to issuing its certificate to\nthe effect that the Merger is effective, Amazon.com, the Purchaser and the\nCompany will execute any necessary revisions incorporating such changes,\nprovided such changes are not inconsistent with and do not result in any\nmaterial change in the terms of this Agreement.\n\n1.4     ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION\n\n        At the Effective Time, the Articles of Incorporation of the Surviving\nCorporation shall be amended and restated in their entirety to conform to the\nArticles of Incorporation of the Purchaser as in effect immediately prior to the\nEffective Time; provided, however, that Article I thereof shall be amended to\nread as follows: \"The name of this corporation is Alexa Internet.\" Thereafter,\nthe Articles of Incorporation of the Surviving Corporation may be amended in\naccordance with their terms and as provided by law.\n\n                                      -2-\n   9\n\n1.5     BYLAWS OF THE SURVIVING CORPORATION\n\n        At the Effective Time, the Bylaws of the Purchaser as in effect\nimmediately prior to the Effective Time shall become the Bylaws of the Surviving\nCorporation. Thereafter, the Bylaws may be amended or repealed in accordance\nwith their terms and the Articles of Incorporation of the Surviving Corporation\nand as provided by law.\n\n1.6     DIRECTORS AND OFFICERS\n\n        At the Effective Time, the directors of the Surviving Corporation shall\nbe Jeff Bezos, David Risher, Rick Dalzell, Randy Tinsley and Brewster Kahle and\nthe officers of the Surviving Corporation shall be as set forth on Exhibit 1.6\nhereto, and such directors and officers shall hold office in accordance with and\nsubject to the Articles of Incorporation and Bylaws of the Surviving\nCorporation.\n\n1.7     CONVERSION OF SHARES\n\n        1.7.1   EXCHANGE RATIO; PLEDGED SHARES\n\n        As of the Effective Time, by virtue of the Merger and without any action\non the part of the holders thereof:\n\n               (a)  All shares of any class of capital stock of the Company\nheld by the Company as treasury shares shall be canceled.\n\n               (b)  Each issued and outstanding share of Common Stock of the\nCompany (the \"Company Common Stock\"), including each share of Company Common\nStock issued upon conversion of each issued and outstanding share of the\nCompany's Series A Preferred Stock (the \"Company Preferred Stock\"), other than\nshares of Company Common Stock for which dissenters' rights are perfected or as\nprovided in Section 1.7.1(a), shall be converted into the right to receive from\nAmazon.com a number of shares of Amazon.com common stock, par value $0.01 per\nshare (\"Amazon.com Common Stock\"), determined by dividing (i) the total number\nof shares of Amazon.com Common Stock to be issued in the Merger, which shall be\nequal to $250,000,000, less any adjustments pursuant to Section 9.2, divided by\nthe average of the closing price of Amazon.com Common Stock as reported on the\nNASDAQ National Market for each of the five trading days immediately preceding\nthe trading day immediately preceding the Closing Date (the \"Base Price\"), by\n(ii) the Fully Diluted Common Stock Number, rounded to ten decimal points. The\n\"Fully Diluted Common Stock Number\" shall mean the total number of shares of\nCompany Common Stock outstanding immediately prior to the Effective Time on a\nfully diluted basis, including (x) the exercise of all outstanding rights,\nwarrants or options, vested or \n\n                                      -3-\n   10\nunvested, to acquire Company Common Stock, regardless of restrictions on\nexercise or conversion and (y) the conversion of all outstanding securities\n(including, without limitation, the Company Preferred Stock) and notes\nconvertible at any time into Company Common Stock (such rights, warrants,\noptions and convertible securities referenced in clauses (x) and (y) being\nreferred to herein as \"Stock Purchase Rights\"). The shares of Amazon.com Common\nStock so issued shall be referred to herein as the \"Merger Consideration\" and\nthe quotient as derived being referred to as the \"Exchange Ratio.\" The Company\nCommon Stock together with the Company Preferred Stock shall be referred to\nherein as the \"Company Capital Stock.\" The number of shares of Amazon.com Common\nStock to be issued to each shareholder of the Company under this Section\n1.7.1(b) shall be calculated by aggregating all shares of Company Common Stock\nheld by each such shareholder, so that such number of shares of Amazon.com\nCommon Stock to be issued shall be equal to the number of shares of Company\nCommon Stock held by such shareholder multiplied by the Exchange Ratio, with\ncash paid in lieu of any fractional share of Amazon.com Common Stock pursuant to\nSection 1.7.3 hereof.\n\n               (c)  Notwithstanding the foregoing:\n\n                    (i)  As collateral security for the indemnification \nobligations of the shareholders of the Company pursuant to Article VIII, the\nshareholders of the Company, by approving the Merger at a special meeting of\nshareholders or by written consent, shall thereby pledge, transfer and assign to\nAmazon.com, subject to the effectiveness of the Merger, that number of shares of\nAmazon.com Common Stock that equals the quotient of $37,500,000 divided by the\nBase Price (the \"Pledged Shares\"). Each shareholder of the Company, by approving\nthe Merger at a special meeting of shareholders or by written consent, shall\nthereby pledge, transfer and assign to Amazon.com, subject to the effectiveness\nof the Merger, a security interest in such shareholder's pro rata share of the\nPledged Shares, and the certificates and instruments, if any, representing or\nevidencing such Pledged Shares. Fractional shares of Amazon.com Common Stock\nshall not be pledged. In lieu thereof, each shareholder of the Company shall\nround up such fractional share to the nearest whole number and pledge a full\nshare of Amazon.com Common Stock for such fractional share. The pledge pursuant\nto this Section 1.7.1(c)(i) includes all securities hereafter delivered to such\nshareholder with respect to or in substitution for such shareholder's Pledged\nShares, all certificates and instruments representing or evidencing such\nsecurities, and all cash and noncash dividends and other property at any time\nreceived, receivable or otherwise distributed in respect of or in exchange for\nany or all thereof. In the event such shareholder receives any such property,\nsuch shareholder shall hold such property \n\n\n                                      -4-\n   11\n\nin trust for Amazon.com and shall immediately deliver such property to\nAmazon.com to be held as Pledged Shares.\n\n                        (ii)    Each certificate, if any, evidencing a\nshareholder's Pledged Shares issued in his, her or its name in the Merger shall\nbe delivered to Amazon.com directly by the transfer agent, such certificate\nbearing no restrictive or cautionary legend other than those imprinted by the\ntransfer agent at Amazon.com's request or as set forth herein. Each shareholder\nof the Company shall, at the Closing, deliver to Amazon.com, for each such\ncertificate, a stock power duly signed in blank by him, her or it.\n\n                        (iii)   The pledgor of any Pledged Share shall be the\nholder of record thereof and entitled to exercise any voting powers incident to\nsuch Pledged Share until such time, if any, as such Pledged Share is transferred\nto Amazon.com to satisfy any indemnification obligations pursuant to Article\nVIII. In addition, upon any release of such Pledged Share from the pledge\npursuant to the terms hereof, such pledgor shall be entitled to any cash or\nother proceeds from such Pledged Share.\n\n                        (iv)    The Pledged Shares shall be available solely to\nsatisfy any indemnification obligations of the shareholders of the Company\npursuant to Article VIII for the Survival Period (as defined in Section 8.1).\nWithin five (5) business days following the end of the Survival Period,\nAmazon.com shall return or cause to be returned to the respective former\nshareholders of the Company, the Pledged Shares less (A) any Pledged Shares\npreviously forfeited to Amazon.com to satisfy any indemnification obligations\npursuant to Article VIII and (B) an additional number of Pledged Shares\nsufficient to satisfy any pending Claims for indemnification made by any\nIndemnified Parties (as such terms are defined in Article VIII). Any remaining\nPledged Shares shall be released within five (5) business days following final\nresolution of, and full payment in connection with, any such pending Claims.\n\n                        (v)     Stop transfer instructions will be given to\nAmazon.com's transfer agent with respect to those certificates evidencing the\nPledged Shares and certificates evidencing the Pledged Shares will contain a\nlegend, stating in substance:\n\n                \"THESE SHARES HAVE BEEN PLEDGED AS COLLATERAL PURSUANT TO THAT\n                CERTAIN AGREEMENT AND PLAN OF MERGER DATED AS OF APRIL 24, 1999\n                BY AND AMONG AMAZON.COM, INC., AI ACQUISITION, INC., ALEXA\n                INTERNET AND BREWSTER KAHLE. PRIOR TO THE EXPIRATION OF THE\n                PLEDGE AS SET FORTH IN SUCH AGREEMENT, SUCH SHARES MAY NOT BE\n\n                                      -5-\n   12\n\n                OFFERED, SOLD, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF.\"\n\nAmazon.com will terminate such stop transfer instructions and authorize its\ntransfer agent to remove such restrictive legend with respect to any\ncertificates representing Pledged Shares that are returned by Amazon.com\npursuant to Section 1.7.1(c)(iv).\n\n        (d)     Each issued and outstanding share of capital stock of the\nPurchaser shall be converted into one share of common stock of the Surviving\nCorporation.\n\n        (e)     Amazon.com shall assume the Company's Amended and Restated 1997\nStock Option Plan (the \"Company Option Plan\"), and each outstanding option to\npurchase shares of Company Common Stock issued pursuant to the Company Option\nPlan or any other stock option agreement, whether or not vested or exercisable\n(each an \"Option\"), shall be assumed by Amazon.com and shall constitute an\noption to acquire, on the same vesting terms, and on substantially the same\nother terms and conditions as were applicable under such assumed Option, that\nnumber of shares of Amazon.com Common Stock equal to the product of the Exchange\nRatio and the number of shares of Company Common Stock subject to such Option,\nat a price per share (rounded to the nearest $0.01) equal to the aggregate\nexercise price for the shares of Company Common Stock subject to such Option\ndivided by the number of full shares of Amazon.com Common Stock deemed to be\npurchasable pursuant to such Option; provided, however, that (i) subject to the\nprovisions of clause (ii) below, the number of shares of Amazon.com Common Stock\nthat may be purchased upon exercise of such Option shall not include any\nfractional shares, and, upon the last exercise of such Option, Amazon.com shall\npay to the holder thereof as soon as practicable an amount of cash equal to such\nfraction multiplied by the average of the high and low selling price of\nAmazon.com Common Stock on the date the Company Option Plan is assumed, and (ii)\nin the case of any Option to which Section 421 of the Code applies by reason of\nits qualification under Section 422 of the Code, the option price, the number of\nshares purchasable pursuant to such Option and the terms and conditions of\nexercise of such Option shall be determined in order to comply with Section 424\nof the Code. Amazon.com shall assume the obligations of the Company under the\nCompany Option Plan and shall comply with the terms of such plan as they apply\nto the Options assumed as set forth above.\n\n        (f)     Holders of shares of Company Capital Stock who have complied\nwith all the requirements for perfecting dissenters' rights, as required under\nCalifornia Law, shall be entitled to their rights under California Law with\nrespect to such shares (the \"Dissenting Shares\"). Notwithstanding the foregoing,\nif any holder of Dissenting Shares shall effectively withdraw or lose (through\nfailure to perfect or otherwise) the \n\n                                      -6-\n   13\n\nright to dissent, then, as of the later of the Effective Time and the occurrence\nof such event, such holder's shares shall automatically be converted into and\nrepresent only the right to receive the shares of Amazon.com Common Stock to\nwhich such holder is then entitled under this Agreement and California Law,\nwithout interest thereon and upon surrender of the certificate representing such\nshares. Notwithstanding any provision of this Agreement to the contrary, any\nDissenting Shares held by a shareholder who has perfected Dissenter's rights for\nsuch shares in accordance with California Law shall not be converted in\nAmazon.com Common Stock pursuant to this Section 1.7.1.\n\n        (g)     If, prior to the Effective Time, Amazon.com recapitalizes\nthrough a split-up of its outstanding shares of capital stock into a greater\nnumber, or a combination of its outstanding shares of capital stock into a\nlesser number, reorganizes, reclassifies or otherwise changes its outstanding\nshares of capital stock into the same or a different number of shares of other\nclasses of capital stock, or declares a dividend on its outstanding shares of\ncapital stock payable in shares or securities convertible into shares, the\nnumber of shares of Amazon.com Common Stock into which the shares of Company\nCapital Stock are to be converted, and the number of shares of Amazon.com Common\nStock issuable upon the exercise of each assumed Option, will be adjusted\nappropriately so as to maintain the proportionate interests and economic\nbenefits of the holders of the Company Capital Stock and Options and the holders\nof shares of capital stock of Amazon.com.\n\n        1.7.2   EXCHANGE OF CERTIFICATES\n\n        (a)     ChaseMellon Shareholder Services, L.L.C. (\"ChaseMellon\"), as\nexchange agent, shall mail prior to the Closing Date to each holder of record as\nof the date 20 business days prior to the Closing Date of a certificate or\ncertificates which immediately prior to the Effective Time represented\noutstanding shares of Company Capital Stock (and as soon as practicable to\nshareholders that become holders of Company Capital Stock subsequent to such\ndate), other than shares to be cancelled in accordance with Section 1.7.1(a),\n(i) a letter of transmittal (the \"Letter of Transmittal\") in substantially the\nform set forth at Exhibit 1.7.2 and (ii) instructions for effecting the\nsurrender of the certificates in exchange for certificates representing\nAmazon.com Common Stock. Upon surrender of a certificate for cancellation to\nChaseMellon or to such other agent or agents as may be appointed by Amazon.com,\ntogether with such Letter of Transmittal, duly executed, and such other\ndocuments as may reasonably be required by ChaseMellon, the holder of such\ncertificate shall be entitled to receive in exchange therefor, by the later of\n(a) three business days following the Effective Time and (b) three business days\nfollowing the surrender of such certificate, a certificate representing that\nnumber of whole shares of Amazon.com Common Stock which such holder has the\nright to receive pursuant to the provisions of Section 1.7.1, and the\n\n                                      -7-\n   14\n\ncertificate so surrendered shall forthwith be cancelled. In the event that any\ncertificates representing shares of Company Capital Stock shall have been lost,\nstolen or destroyed, upon the making of an affidavit of that fact by the\nshareholder claiming such certificate to be lost, stolen or destroyed,\nAmazon.com shall issue in exchange for such lost, stolen or destroyed\ncertificate the shares of Amazon.com Common Stock that such shareholder is\nentitled to receive pursuant to Section 1.7.1 hereof; provided, however, that\nAmazon.com may in its discretion and as a condition precedent to the issuance\nthereof, require such shareholder to provide Amazon.com with an indemnity\nagreement against any claim that may be made against Amazon.com with respect to\nthe certificate alleged to have been lost, stolen or destroyed. The shares of\nAmazon.com Common Stock that each shareholder of the Company shall be entitled\nto receive pursuant to the Merger shall be deemed to have been issued at the\nEffective Time. No interest shall accrue on the Merger Consideration. If the\nMerger Consideration (or any portion thereof) is to be delivered to any person\nother than the person in whose name the certificate or certificates representing\nshares of Company Capital Stock surrendered in exchange therefor is registered,\nit shall be a condition to such exchange that the person requesting such\nexchange shall pay to Amazon.com any transfer or other taxes required by reason\nof the payment of the Merger Consideration to a person other than the registered\nholder of the certificate or certificates so surrendered, or shall establish to\nthe satisfaction of Amazon.com that such tax has been paid or is not applicable.\nNotwithstanding the foregoing, neither Amazon.com nor any other party hereto\nshall be liable to a holder of shares of Company Capital Stock for any Merger\nConsideration delivered to a public official pursuant to applicable abandoned\nproperty, escheat and similar laws.\n\n        (b)     Amazon.com or the exchange agent will be entitled to deduct and\nwithhold from the Merger Consideration such amounts as Amazon.com or the\nexchange agent are required to deduct and withhold with respect to the making of\nsuch payment under the Code, or any provision of state, local or foreign tax\nlaw. To the extent that amounts are so withheld, such amounts will be treated\nfor all purposes of this Agreement as having been paid to the former holder of\nthe Company Capital Stock in respect of whom such deduction and withholding were\nmade by Amazon.com or the exchange agent.\n\n        1.7.3   NO FRACTIONAL SHARES\n\n        No certificates or scrip representing fractional shares of Amazon.com\nCommon Stock shall be issued by virtue of the Merger, and no dividend, stock\nsplit or other distribution with respect to Amazon.com Common Stock shall relate\nto any such fractional interest, and any such fractional interests shall not\nentitle the owner thereof to vote or to any rights of a security holder. In lieu\nthereof, Amazon.com shall pay to \n\n                                      -8-\n   15\n\nthe holder of shares of Company Capital Stock who would otherwise be entitled to\na fraction of a share of Amazon.com Common Stock, as soon as practicable after\nthe Effective Date (and in the same timely manner required for delivery of\ncertificates of Amazon.com Common Stock provided in Section 1.7.2), an amount in\ncash equal to such fraction multiplied by the Base Price.\n\n        1.7.4   NO FURTHER TRANSFERS\n\n        After the Effective Time, there shall be no transfers of any shares of\nCompany Capital Stock on the stock transfer books of the Surviving Corporation.\nIf, after the Effective Time, certificates formerly representing shares of\nCompany Capital Stock are presented to the Surviving Corporation, they shall be\nforwarded to Amazon.com and be canceled and exchanged in accordance with this\nSection 1.7, subject to applicable law in the case of Dissenting Shares.\n\n1.8     SHAREHOLDER REPRESENTATIVE\n\n        By approving the Merger at a special meeting of shareholders or by\nwritten consent of the shareholders, each shareholder of the Company shall have\nirrevocably authorized and appointed Bruce Gilliat (the \"Shareholder\nRepresentative\"), with full power of substitution and resubstitution, as his,\nher or its representative and true and lawful attorney-in-fact and agent to act\nin his, her or its name, place and stead as contemplated by Article VIII.\n\n1.9     AMENDMENT TO PROVIDE FOR FORWARD TRIANGULAR MERGER\n\n        If at any time prior to the Closing Date, Amazon.com elects to have\nPurchaser be the Surviving Corporation or elects to have the Company merge\ndirectly into Amazon.com or a different subsidiary of Amazon.com merge with and\ninto the Company, the parties shall promptly enter into an amendment to this\nAgreement to so provide, so long as such action does not result in a breach of a\nrepresentation or warranty set forth in Article II hereof, the inability to\nsatisfy any of the conditions set forth in Articles IV and V hereof, and\nAmazon.com makes representations, warrants and covenants consistent with Section\n9.1 hereof.\n\n1.10    TAX FREE REORGANIZATION\n\n        (a)     Except as otherwise required by the Internal Revenue Service\n(the \"IRS\") pursuant to a determination (as defined in Section 1313 of the Code)\nor otherwise, or by applicable law, the parties shall not take a position on any\ntax returns inconsistent with the treatment of the Merger for tax purposes as a\nreorganization within the meaning of Section 368(a) of the Code.\n\n                                      -9-\n   16\n\n        (b)     In addition, Amazon.com represents, now and as of the Closing\nDate, that it presently intends to continue the Company's historic business or\nuse a significant portion of the Company's business assets in business in a\nmanner that satisfies the continuity of business enterprise requirement set\nforth in Treasury Regulation Section 1.368-1(d); provided, however, that nothing\ncontained herein shall constitute a representation by Amazon.com regarding the\ntax consequences of the Merger or the transactions contemplated herein to the\nCompany or any shareholder of the Company.\n\n                 ARTICLE II -- REPRESENTATIONS AND WARRANTIES OF\n                        THE COMPANY AND THE SHAREHOLDER\n\n        Except as is otherwise set forth with appropriate Section references in\nthe Disclosure Memorandum attached as Exhibit 2 (the \"Disclosure Memorandum\"),\nand in order to induce Amazon.com and the Purchaser to enter into and perform\nthis Agreement and the other agreements and certificates that are required to be\nexecuted pursuant to this Agreement (collectively, the \"Operative Documents\"),\nthe Company and the Shareholder severally and not jointly represent and warrant\nto Amazon.com and the Purchaser as of the date of this Agreement and as of the\nClosing as follows in this Article II.\n\n2.1     ORGANIZATION\n\n        The Company is a corporation duly organized, validly existing and in\ngood standing under the laws of the State of California. The Company has all\nrequisite corporate power and authority to own, operate and lease its properties\nand assets, to carry on its business as now conducted and as currently proposed\nto be conducted, and to enter into and perform its obligations under this\nAgreement and the other Operative Documents to which the Company is a party, and\nto consummate the transactions contemplated hereby and thereby. The Company is\nduly qualified and licensed as a foreign corporation to do business and is in\ngood standing in each jurisdiction in which the character of the Company's\nproperties occupied, owned or held under lease or the nature of the business\nconducted by the Company makes such qualification or licensing necessary, except\nwhere the failure to be so qualified or in good standing would not have a\nCompany Material Adverse Effect. For purposes of this Agreement, the term\n\"Company Material Adverse Effect\" shall mean any change, event or effect that is\nor is reasonably likely to be materially adverse to the Company's business,\nproperties or prospects; provided, however, that a Company Material Adverse\nEffect shall not include any change, circumstance, event or effect that relates\nto or results from the announcement or other disclosure or consummation of the\ntransactions contemplated by this Agreement or general economic conditions.\n\n                                      -10-\n   17\n\n2.2     ENFORCEABILITY\n\n        The Company has all necessary corporate power and authority to execute,\ndeliver and perform its obligations under this Agreement and each of the other\nOperative Documents to which it is a party and each of the certificates,\ninstruments and documents executed or delivered by it pursuant to the terms of\nthis Agreement. All corporate action on the part of the Board of Directors of\nthe Company necessary for the authorization, execution, delivery and performance\nof this Agreement, the consummation of the Merger, and the performance of all\nthe Company's obligations under this Agreement to which the Company is a party\nhas been taken. All corporate action on the part of the Board of Directors of\nthe Company necessary for the authorization, execution, delivery and performance\nof the Operative Documents to which it is a party and the performance of all of\nthe Company's obligations under the Operative Documents to which it is a party\nhas been or will be taken prior to the Effective Time. All corporate action on\nthe part of the shareholders of the Company necessary for the authorization,\nexecution, delivery and performance of this Agreement and the other Operative\nDocuments to which the Company is a party has been taken or will be taken as of\nor prior to the Effective Time. This Agreement has been, and each of the other\nOperative Documents to which the Company is a party at the Closing will have\nbeen, duly executed and delivered by the Company, and this Agreement is, and\neach of the other Operative Documents to which the Company is a party will be at\nthe Closing, a legal, valid and binding obligation of the Company, enforceable\nagainst the Company in accordance with its terms, except as to the effect, if\nany, of (a) applicable bankruptcy and other similar laws affecting the rights of\ncreditors generally, (b) rules of law governing specific performance, injunctive\nrelief and other equitable remedies, and (c) the enforceability of provisions\nrequiring indemnification in connection with the offering, issuance or sale of\nsecurities.\n\n2.3     CAPITALIZATION\n\n        (a)     The authorized capital stock of the Company consists of\n50,000,000 shares of Company Common Stock and 10,524,792 shares of preferred\nstock, of which 10,524,792 shares are designated as Company Preferred Stock.\n\n        (b)     As of the date of this Agreement, the issued and outstanding\ncapital stock of the Company consists solely of 15,410,964 shares of Company\nCommon Stock and 10,524,792 shares of Company Preferred Stock, which are held of\nrecord and, to the knowledge of the Company and the Shareholder, beneficially by\nthe shareholders of the Company as set forth on Schedule 2.3(b) to the\nDisclosure Memorandum. Such outstanding shares are, and immediately prior to the\nClosing will be, duly authorized and validly issued, fully paid and \nnonassessable, and issued in compliance with all \n\n                                      -11-\n   18\napplicable federal and state securities laws. To the knowledge of the Company\nand the Shareholder, no Person (as defined in Section 2.5 hereof) other than the\nshareholders of the Company holds any interest in any of the outstanding shares.\nTrue and correct copies of the stock records of the Company, showing all\nissuances and transfers of shares of capital stock of the Company since\ninception, have been provided to Amazon.com or its counsel.\n\n        (c)     As of the date of this Agreement, other than Options to purchase\nup to 1,838,495 shares of Company Common Stock and except as set forth on\nSchedule 2.3(c) to the Disclosure Schedule, there are no outstanding rights of\nfirst refusal or offer, preemptive rights, Stock Purchase Rights or other\nagreements, either directly or indirectly, for the purchase or acquisition from\nthe Company, to the knowledge of the Company and the Shareholder, or any\nshareholder of any shares of Company Capital Stock or any securities convertible\ninto or exchangeable for shares of Company Capital Stock. Set forth on Schedule\n2.3(c) to the Disclosure Memorandum is a spreadsheet accurately reflecting the\nnumber of such Options and other Stock Purchase Rights outstanding, the grant or\nissue dates, vesting schedules and exercise or conversion prices thereof, and,\nin each case, the identities of the holders and an indication of their\nrelationships to the Company (if any exist other than a security holder). The\nCompany has delivered to Amazon.com or its counsel true and correct copies of\nthe Company Option Plan, the stock option agreements relating to Options granted\nthereunder and all agreements with respect to Stock Purchase Rights. Schedule\n2.3(c) to the Disclosure Memorandum also identifies all Options or Stock\nPurchase Rights that have been offered in connection with any employee or\nconsulting agreement but that, as of the date hereof, have not been issued or\ngranted.\n\n        (d)     The Company is not a party or subject to any agreement or\nunderstanding, and, to the knowledge of the Company and the Shareholder (other\nthan voting agreements entered into in connection with this Agreement), there is\nno agreement or understanding between any Persons that affects or relates to the\nvoting or giving of written consents with respect to any securities of the\nCompany or the voting by any director of the Company. The Company is not under\nany contractual or other obligation to register any of its presently outstanding\nsecurities or any of its securities that may hereafter be issued.\n\n2.4     SUBSIDIARIES AND AFFILIATES\n\n        The Company does not own or control, and has not in the past owned or\ncontrolled, directly or indirectly, any corporation, partnership, limited\nliability company or other business entity. The Company does not own, directly\nor indirectly, \n\n\n                                      -12-\n   19\n\nany ownership, equity, or voting interest in any corporation,\npartnership, joint venture or other entity, and has no agreement or commitment\nto purchase any such interest.\n\n2.5     NO APPROVALS; NO CONFLICTS\n\n        The execution, delivery and performance by the Company of this Agreement\nand the other Operative Documents to which the Company is a party and the\nconsummation of the transactions contemplated hereby and thereby will not (a)\nconstitute a material violation (with or without the giving of notice or lapse\nof time, or both) of any provision of law or any judgment, decree, order,\nregulation or rule of any court or other governmental authority applicable to\nthe Company, (b) require any consent, approval or authorization of, or\ndeclaration, filing or registration with, any person, corporation, partnership,\njoint venture, association, organization, other entity or governmental or\nregulatory authority (a \"Person\"), except (i) compliance with applicable\nsecurities laws, (ii) the filing of all documents necessary to consummate the\nMerger with the Washington Secretary of State and California Secretary of State,\n(iii) the approval by the shareholders of the Company of the transactions\ncontemplated hereby, as provided under California Law and the Articles of\nIncorporation and Bylaws of the Company and (iv) the notification requirements\nof the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the\n\"Hart-Scott-Rodino Act\"), (c) result in a material default (with or without the\ngiving of notice or lapse of time, or both) under, or acceleration or\ntermination of, or the creation in any party of the right to accelerate,\nterminate, modify or cancel, any material agreement, lease, note or other\nrestriction, encumbrance, obligation or liability to which the Company is a\nparty or by which it is bound or to which any assets of the Company are subject,\n(d) result in the creation of any Encumbrance (as defined in Section 2.9(d))\nupon any material assets of the Company or, to the knowledge of the Company and\nthe Shareholder, upon any outstanding shares or other securities of the Company,\n(e) conflict with or result in a breach of or constitute a default under any\nprovision of the Articles of Incorporation or Bylaws of the Company, or (f)\ninvalidate or adversely affect any permit, license or authorization currently\nmaterial to the conduct of the business of the Company.\n\n2.6     FINANCIAL STATEMENTS\n\n        The Company has delivered to Amazon.com (a) audited balance sheets,\nstatements of income and expense, statements of cash and statements of\nshareholders' equity of the Company as of or for the fiscal years ended December\n31, 1996 and 1997, (b) an unaudited balance sheet, statement of income and\nexpense, statement of cash and statement of shareholder's equity of the Company\nas of and for the fiscal year ended 1998 and (c) an unaudited balance sheet,\nstatement of income and expense, statements of cash flow and statements of\nshareholders' equity of the Company as of\n                                      -13-\n   20\nand for the three-month period ended March 31, 1999. All the foregoing\nfinancial statements are herein referred to as the \"Financial Statements.\" The\nunaudited balance sheet of the Company as of December 31, 1998 is herein\nreferred to as the \"Company Balance Sheet.\" The Financial Statements have been\nprepared in conformity with generally accepted accounting principles in the\nUnited States (\"GAAP\") on a basis consistent with prior accounting periods,\nexcept as set forth therein, and fairly present in all material respects the\nfinancial position, results of operations and changes in financial position of\nthe Company as of the dates and for the periods indicated, subject in the case\nof interim Financial Statements to normal recurring year-end audit adjustments.\nThe Company has no liabilities or obligations of any nature (absolute,\ncontingent or otherwise) that are not fully reflected or reserved against in the\nCompany Balance Sheet and that would be required under GAAP to be reflected or\nreserved, except liabilities or obligations incurred since the date of the\nCompany Balance Sheet in the ordinary course of business and consistent with\npast practice that are not in excess of $40,000 in the aggregate or $30,000\nindividually. The Company maintains standard systems of accounting that are\nadequate for its business. The Company is not a guarantor, indemnitor, surety or\nother obligor of any indebtedness of any other Person. The Company's practices\nwith respect to capitalizing software development costs, as reflected in the\nFinancial Statements, are reasonable, in accordance with industry standards and\nconsistent with the advice of the Company's independent accountants.\n\n2.7     ABSENCE OF CERTAIN CHANGES OR EVENTS\n\n        Except for transactions specifically contemplated in this Agreement,\nsince the date of the Company Balance Sheet through the date of this Agreement,\nneither the Company nor any of its officers or directors in their representative\ncapacities on behalf of the Company have:\n\n        (a)     taken any action or entered into or agreed to enter into any\ntransaction, agreement or commitment other than in the ordinary course of\nbusiness;\n\n        (b)     forgiven or canceled any indebtedness for money borrowed or\nwaived any claims or rights of material value (including, without limitation,\nany indebtedness owing by any shareholder, officer, director, employee or\naffiliate of the Company);\n\n        (c)     granted, other than in the ordinary course of business and\nconsistent with past practice, any increase in the compensation of directors,\nofficers, employees or consultants (including any such increase pursuant to any\nemployment agreement or bonus, pension, profit-sharing, lease payment or other\nplan or \n\n                                      -14-\n   21\n\ncommitment) or any increase in the compensation payable or to become payable to\nany director, officer, employee or consultant;\n\n        (d)     suffered any change having a Company Material Adverse Effect;\n\n        (e)     borrowed or agreed to borrow any funds, incurred or become\nsubject to, whether directly or by way of assumption or guarantee or otherwise,\nany obligations or liabilities (absolute, accrued, contingent or otherwise)\nindividually in excess of $30,000 or in excess of $40,000 in the aggregate,\nexcept liabilities and obligations (i) that are incurred in the ordinary course\nof business and consistent with past practice or (ii) that would not be required\nto be reflected or reserved against in a balance sheet prepared in accordance\nwith GAAP, or increased, or experienced any change in any assumptions underlying\nor methods of calculating, any bad debt, contingency or other reserves;\n\n        (f)     paid, discharged or satisfied any material claims, liabilities\nor obligations (absolute, accrued, contingent or otherwise) other than the\npayment, discharge or satisfaction in the ordinary course of business and\nconsistent with past practice of claims, liabilities and obligations reflected\nor reserved against in the Company Balance Sheet or incurred in the ordinary\ncourse of business and consistent with past practice since the date of the\nCompany Balance Sheet, or prepaid any material obligation having a fixed\nmaturity of more than 90 days from the date such obligation was issued or\nincurred;\n\n        (g)     knowingly permitted or allowed any of its property or assets\n(real, personal or mixed, tangible or intangible) to be subjected to any\nmortgage, pledge, lien, security interest, encumbrance, restriction or charge,\nexcept in the ordinary course of business and consistent with past practice;\n\n        (h)     purchased or sold, transferred (except by way of license) or\notherwise disposed of any of its material properties or assets (real, personal\nor mixed, tangible or intangible) except in the ordinary course of business and\nconsistent with past practice;\n\n        (i)     disposed of or permitted to lapse any rights to the use of any\nmaterial trademark, trade name, patent or copyright, or disposed of or disclosed\nto any Person without obtaining an appropriate confidentiality agreement from\nany such Person any material trade secret, formula, process or know-how not\ntheretofore a matter of public knowledge;\n\n                                      -15-\n   22\n\n        (j)     made any single capital expenditure or commitment in excess of\n$10,000 for additions to property, plant, equipment or intangible capital assets\nor made aggregate capital expenditures in excess of $30,000 for additions to\nproperty, plant, equipment or intangible capital assets;\n\n        (k)     made any change in accounting methods or practices or internal\ncontrol procedure other than as required as a result of changes in law or GAAP;\n\n        (l)     issued any capital stock or other securities, or declared, paid\nor set aside for payment any dividend or other distribution in respect of its\ncapital stock, or redeemed, purchased or otherwise acquired, directly or\nindirectly, any shares of capital stock or other securities of the Company, or\notherwise permitted the withdrawal by any of the holders of Company Capital\nStock of any cash or other assets (real, personal or mixed, tangible or\nintangible), in compensation, indebtedness or otherwise, other than (i) payments\nof compensation in the ordinary course of business and consistent with past\npractice, (ii) pursuant to the exercise of Company Options, or (iii) repurchases\nof Company Common Stock at cost from holders thereof pursuant to the Company's\nrepurchase rights;\n\n        (m)     paid, loaned or advanced any amount to, or sold, transferred or\nleased any properties or assets (real, personal or mixed, tangible or\nintangible) to any of the Company's shareholders, officers, directors or\nemployees or any affiliate of any of the Company's shareholders, officers,\ndirectors or employees, except compensation paid to officers and employees at\nrates not exceeding the rates of compensation paid during the fiscal year last\nended and except for advances for travel and other business-related expenses; or\n\n        (n)     agreed, whether in writing or otherwise, to take any action\ndescribed in this Section 2.7.\n\n2.8     TAXES\n\n        (a)     (i) All Tax Returns (as defined below) required to be filed by \nor on behalf of the Company have been filed on a timely basis with the\nappropriate governmental authority in all jurisdictions in which such Tax\nReturns are required to be filed, and all such Tax Returns were (at the time\nthey were filed) true, correct and complete in all material respects; (ii) all\nTaxes (as defined below) of the Company shown on such Tax Returns have been\nfully and timely paid; (iii) no waivers of statutes of limitation have been\ngiven or requested with respect to the Company in connection with any Tax\nReturns covering the Company with respect to any Taxes payable by it; (iv) to\nthe knowledge of the Company and the Shareholder no taxing authority in a\n\n\n                                      -16-\n   23\n\njurisdiction where the Company does not file Tax Returns has made a claim,\nassertion, or threat to the Company that the Company is or may be subject to\ntaxation by such jurisdiction; (v) the Company has duly and timely withheld from\nemployee salaries, wages and other compensation and paid over to the appropriate\ngovernmental authority all amounts required to be so withheld and paid over for\nall periods under all applicable laws; and no amounts have been or would be\nrequired to be withheld with respect to the lapse of restrictions on Company\nCapital Stock; (vi) there are no liens with respect to Taxes on any of the\nCompany's property or assets other than liens for current Taxes not yet payable;\n(vii) there are no Tax rulings, requests for rulings, or closing agreements\nrelating to the Company which could affect the liability for Taxes or the amount\nof taxable income of the Company for any period (or portion of a period) after\nthe date hereof; and (viii) any adjustment of Taxes of the Company made by the\nIRS in any examination which is required to be reported to the appropriate\nstate, local or foreign taxing authorities has been reported, and any additional\nTaxes due with respect thereto have been paid.\n\n        (b) Neither the Company nor any other Person on behalf of the Company\n(i) has filed a consent pursuant to Section 341(f) of the Code or agreed to have\nSection 341(f)(2) of the Code apply to any disposition of a subsection (f) asset\n(as such term is defined in Section 341(f)(4) of the Code) owned by the Company;\n(ii) has executed or entered into a closing agreement pursuant to Section 7121\nof the Code or any predecessor provision thereof or any similar provision of\nstate, local or foreign law; or (iii) has agreed to or is required to make any\nadjustments pursuant to Section 481 (a) of the Code or any similar provision of\nstate, local or foreign law by reason of a change in accounting method initiated\nby the Company or has notice that a governmental authority has proposed any such\nadjustment or change in accounting method.\n\n        (c) There is no dispute or claim concerning any Tax liability of the\nCompany either (i) claimed or raised by any authority in writing or (ii) as to\nwhich any of the directors and officers (and employees responsible for Tax\nmatters) of the Company have knowledge based on contact or correspondence with\nany agent of such authority. Schedule 2.8 to the Disclosure Memorandum lists all\nTax Returns filed with respect to the Company for taxable periods ended on or\nafter December 31, 1996 that have been audited, and indicates those Tax Returns\nthat currently are the subject of audit. The Company has delivered to Amazon.com\nor its counsel correct and complete copies of all Tax Returns, examination\nreports and statements of deficiencies assessed against or agreed to by the\nCompany since the Company's inception.\n\n        (d) The Company has not made any payments, is not obligated to make any\npayments and is not a party to any agreement that under certain circumstances\ncould \n\n\n                                      -17-\n   24\n\nobligate it to make any payments that will not be deductible under Section\n280G of the Code (or any similar provision of state, local or foreign law).\n\n        (e) The Company has not been a United States real property holding\ncorporation within the meaning of Section 897(c)(2) of the Code during the\napplicable period specified in Section 897(c)(1)(A)(ii) of the Code.\n\n        (f) The Company is not a party to any Tax allocation or sharing\nagreement. The Company (i) has not been a member of a Tax Group (as defined\nbelow) filing a consolidated income Tax Return under Section 1501 of the Code\n(or any similar provision of state, local or foreign law) and (ii) does not have\nany liability for Taxes of any Person under Treasury Regulations Section\n1.1502-6 (or any similar provision of state, local or foreign law) as a\ntransferee or successor by contract or otherwise.\n\n        (g) The unpaid Taxes of the Company (i) did not, as of December 31,\n1998, exceed the reserve for Tax liability set forth on the face (rather than\nany reserve for deferred Taxes established to reflect timing differences between\nbook and Tax income) of the Company Balance Sheet and (ii) do not exceed that\nreserve as adjusted for the passage of time and operations in the ordinary\ncourse of business through the Closing Date.\n\n        (h) All Options that the Company has treated as incentive stock options\nunder Section 421 of the Code at the time of grant met the requirements of\nSection 422 of the Code.\n\n        As used in this Agreement, the following terms shall have the following\nmeanings:\n\n        \"Taxes\" means all foreign, federal, state, county or local taxes,\ncharges, fees, levies, imposts, duties, and other assessments, including, but\nnot limited to, any income, alternative minimum or add-on tax, estimated, gross\nincome, gross receipts, sales, use, transfer, transactions, intangibles, ad\nvalorem, value-added, franchise, registration, title, license, capital, paid-up\ncapital, profits, withholding, payroll, employment, excise, severance, stamp,\noccupation, premium, real property, recording, personal property, federal\nhighway use, commercial rent, environmental (including, but not limited to,\ntaxes under Section 59A of the Code) or windfall profit tax, custom, duty or\nother tax, governmental fee or other like assessment or charge of any kind\nwhatsoever, together with any interest, penalties or additions to tax; and \"Tax\"\nmeans any of the foregoing Taxes.\n\n                                      -18-\n   25\n\n        \"Tax Group\" means any federal, state, local or foreign consolidated,\naffiliated, combined, unitary or other similar group of which the Company is now\nor was formerly a member.\n\n        \"Tax Returns\" means any return, declaration, report, claim or refund,\ninformation return, statement, or other similar document relating to Taxes,\nincluding any schedule or attachment thereto, and including any amendment\nthereof.\n\n2.9     PROPERTY\n\n        (a)     The Company owns no real property other than the leasehold\ninterests described on Schedule 2.9(a) to the Disclosure Memorandum, which\ncontains a complete and accurate list of all real property owned, leased or\ncurrently being used by the Company (the \"Real Property\"). The Company has\ndelivered to Amazon.com or its counsel true and complete copies of all written\nleases, subleases, rental agreements, contracts of sale, tenancies or licenses\nrelating to the Real Property and written summaries of the terms of any oral\nleases, subleases, rental agreements, contracts of sale, tenancies or licenses\nto which the Real Property is subject.\n\n        (b)     Schedule 2.9(b) to the Disclosure Memorandum contains a complete\nand accurate list of each item of personal property having a value in excess of\n$5,000 which is owned, leased, rented or used by the Company as of the date of\nthis Agreement (the \"Personal Property\"); provided that such list need not\ndescribe the Technology or the IP Rights (as defined in Sections 2.14.2 and\n2.14.5, respectively), listed on Schedule 2.14 to the Disclosure Memorandum. The\nCompany has delivered to Amazon.com or its counsel true and complete copies of\nall leases, subleases, rental agreements, contracts of sale, tenancies or\nlicenses to which the Personal Property is subject.\n\n        (c)     The Real Property and the Personal Property include all the\nproperties and assets (whether real, personal or mixed, tangible or intangible)\n(other than, in the case of the Personal Property, property rights with an\nindividual value of less than $5,000) reflected in the Company Balance Sheet\n(except for such properties or assets sold since the date of the Company Balance\nSheet in the ordinary course of business and consistent with past practice) and\nall the properties and assets purchased by the Company since the date of the\nCompany Balance Sheet (other than, in the case of the Personal Property,\nproperty rights with an individual value of less than $5,000 and the Technology\nand the IP Rights). The Real Property and the Personal Property include all\nmaterial property used in the business of the Company, other than the Technology\nand IP Rights. The Company's offices and other structures and its Personal\nProperty are of a quality consistent with industry standards, are in good\noperating condition and \n\n                                      -19-\n   26\n\nrepair, normal wear and tear excepted, are adequate for the uses to which they\nare being put, and comply in all material respects with applicable material\nsafety and other laws and regulations.\n\n        (d)     The Company's leasehold interest in each parcel of the Real\nProperty is free and clear of all liens, mortgages, pledges, deeds of trust,\nsecurity interests, charges, encumbrances and other adverse claims or interests\nof any kind (each, an \"Encumbrance\"), except for (i) Encumbrances related to\nTaxes not yet due and payable, (ii) Encumbrances for inchoate mechanics' and\nmaterialmen's liens for construction in progress and workmen's, repairmen's,\nwarehousemen's and carriers' liens arising in the ordinary course, (iii)\nEncumbrances for Taxes being contested in good faith, (iv) Encumbrances in favor\nof Amazon.com or Purchaser arising out of, under or in connection with this\nAgreement, and (v) Encumbrances and imperfections of title that do not secure\npayment of indebtedness and the existence of which would not materially affect\nthe use of the property subject thereto, consistent with past practice\n(collectively, \"Permitted Encumbrances\"). Each lease of any portion of the Real\nProperty is valid, binding and enforceable in accordance with its terms against\nthe Company and, to the knowledge of the Company and the Shareholder, any other\nPerson with an interest in such Real Property (except as to the effect, if any,\nof (a) applicable bankruptcy and other similar laws affecting the rights of\ncreditors generally and (b) rules of law governing specific performance,\ninjunctive relief and other equitable remedies), the Company has performed in\nall material respects all material obligations imposed upon it thereunder, and\nneither the Company nor, to the knowledge of the Company and the Shareholder,\nany other party thereto is in default thereunder, nor is there any event which\nwith notice or lapse of time, or both, would constitute a default thereunder by\nthe Company or, to the knowledge of the Company and the Shareholder, by any\nother party. The Company has not granted any lease, sublease, tenancy or license\nof, or entered into any rental agreement or contract of sale with respect to,\nany portion of the Real Property.\n\n        (e)     The Personal Property is free and clear of all Encumbrances\nother than Permitted Encumbrances and Encumbrances of the owner thereof, and,\nother than leased Personal Property which is so noted on the list supplied\npursuant to Section 2.9(b) hereof, the Company owns such Personal Property. Each\nlease, license, rental agreement, contract of sale or other agreement to which\nthe Personal Property is subject is valid, binding and enforceable in accordance\nwith its terms against the Company (except as to the effect, if any, of (a)\napplicable bankruptcy and other similar laws affecting the rights of creditors\ngenerally and (b) rules of law governing specific performance, injunctive relief\nand other equitable remedies), the Company has performed in all material\nrespects all material obligations imposed upon it thereunder, \n\n                                      -20-\n   27\n\nand neither the Company nor, to the knowledge of the Company and the\nShareholder, any other party thereto is in default thereunder, nor is there any\nevent which with notice or lapse of time, or both, would constitute a default by\nthe Company or, to the knowledge of the Company and the Shareholder, any other\nparty thereunder. The Company has not granted any lease, sublease, tenancy or\nlicense of any portion of the Personal Property, except in the ordinary course\nof business.\n\n2.10    CONTRACTS\n\n        Schedule 2.10 to the Disclosure Memorandum contains a complete and\naccurate list (other than the IP Rights listed on Schedule 2.14 to the\nDisclosure Memorandum) of all contracts, agreements and understandings, oral or\nwritten, to which the Company is a party as of the date of this Agreement or by\nwhich the Company is currently bound as of the date of this Agreement providing\nfor potential future payments by or to the Company in excess of $20,000 (except\nfor those contracts, agreements and understandings listed on Schedules 2.9(a)\nand 2.9(b)), including, without limitation, security agreements, license\nagreements, software development agreements, distribution agreements, joint\nventure agreements, reseller agreements, credit agreements and instruments\nrelating to the borrowing of money. All contracts set forth on Schedule 2.10 are\nvalid, binding and enforceable in accordance with their terms against the\nCompany and, to the knowledge of the Company and the Shareholder, each other\nparty thereto, except as to the effect, if any, of (a) applicable bankruptcy and\nother similar laws affecting the rights of creditors generally, (b) rules of law\ngoverning specific performance, injunctive relief and other equitable remedies,\nand (c) the enforceability of provisions requiring indemnification in connection\nwith the offering, issuance or sale of securities, and are in full force and\neffect, the Company has performed in all material respects all material\nobligations imposed on it thereunder, and neither the Company nor, to the\nknowledge of the Company and the Shareholder, any other party thereto is in\ndefault thereunder, nor to the knowledge of the Company and the Shareholder is\nthere any event which with notice or lapse of time, or both, would constitute a\ndefault by the Company or, to the knowledge of the Company and the Shareholder,\nany other party thereunder. True and complete copies of each such written\ncontract (or written summaries of the terms of any such oral contract) have been\ndelivered to Amazon.com or its counsel by the Company. Except as set forth on\nSchedule 2.10, as of the date of this Agreement the Company has no currently\nbinding\n\n        (a)     contracts with directors, officers, stockholders, employees,\nagents, consultants, advisors, salespeople, sales representatives, distributors\nor dealers that cannot be canceled by the Company within 30 days' notice without\nliability, penalty or premium, any agreement or arrangement providing for the\npayment of any bonus or \n\n                                      -21-\n   28\n\ncommission based on sales or earnings, or any compensation agreement or\narrangement affecting or relating to former employees of the Company;\n\n        (b)     employment agreement, or any other agreement for services that\ncontains severance or termination pay liabilities or obligations;\n\n        (c)     noncompetition agreement or other arrangement that would prevent\nthe Company from carrying on its business anywhere in the world;\n\n        (d)     notice that any party to a contract listed on Schedule 2.10\nintends to cancel, terminate or refuse to renew such contract (if such contract\nis renewable);\n\n        (e)     material dispute with any of its suppliers, customers,\ndistributors, OEM resellers, licensors or licensees;\n\n        (f)     product distribution agreement, development agreement, or\nlicense agreement as licensor or licensee (except for standard nonexclusive\nsoftware licenses granted to end-user customers in the ordinary course of\nbusiness the form of which has been provided to Amazon.com or its counsel or\nstandard licenses purchased by the Company for off-the-shelf software);\n\n        (g)     joint venture contract or arrangement or any other agreement\nthat involves a sharing of profits with other Persons;\n\n        (h)     instrument evidencing indebtedness of the Company for borrowed\nmoney by way of a direct loan, sale of debt securities, purchase money\nobligation, conditional sale or guarantee, or otherwise, except for trade\nindebtedness incurred in the ordinary course of business, and except as\ndisclosed in the Financial Statements; and\n\n        (i)     agreements or commitments of the Company to provide\nindemnification.\n\n2.11    CLAIMS AND LEGAL PROCEEDINGS\n\n        Except as set forth on Schedule 2.11 or 2.14 to the Disclosure\nMemorandum, as of the date hereof there are no claims, actions, suits,\narbitrations, investigations or proceedings pending or, to the Company's and the\nShareholder's knowledge, threatened against the Company before or by any court\nor governmental or nongovernmental department, commission, board, bureau, agency\nor instrumentality, or any other Person. Except as set forth on Schedule 2.11 or\n2.14, to the knowledge of the Company and the Shareholder, there are no events\nor circumstances now in existence \n\n                                      -22-\n   29\n\nthat could reasonably be expected to give rise to any claim, action, suit,\narbitration, proceeding or investigation before or by any Person. There are no\noutstanding or unsatisfied judgments, orders, decrees or stipulations to which\nthe Company is a party. Schedule 2.11 sets forth a description of any material\ndisputes that have been settled or resolved by litigation or arbitration since\nthe Company's inception.\n\n2.12    LABOR AND EMPLOYMENT MATTERS\n\n        There are no material labor disputes, employee grievances or\ndisciplinary actions pending or, to the Company's and the Shareholder's\nknowledge, threatened against the Company or any of its present or former\nemployees in their capacity as such. There is no labor strike, dispute, slowdown\nor stoppage pending or, to the knowledge of the Company and the Shareholder,\nthreatened against or affecting the Company, and the Company has not experienced\nany work stoppage or other labor difficulty since its incorporation. No\ncollective bargaining agreement is binding on the Company. The Company and the\nShareholder has no knowledge of any organizational efforts presently being made\nor threatened by or on behalf of any labor union with respect to employees of\nthe Company. Each employee, officer and consultant of the Company has executed a\nnondisclosure agreement substantially in the form provided to Amazon.com or its\ncounsel. To the knowledge of the Company and the Shareholder, no employee (or\nperson performing similar functions) of the Company is in violation of any such\nagreement or any employment agreement, noncompetition agreement, patent\ndisclosure agreement, invention assignment agreement, proprietary information\nagreement or other contract or agreement relating to the relationship of such\nemployee with the Company or any other party. Schedule 2.12 to the Disclosure\nMemorandum sets forth as of the date hereof a true and complete list of (a) the\nnames and current compensation amounts of all directors and officers of the\nCompany; (b) the wage rates for nondirector and nonofficer salaried employees of\nthe Company by classification, and all labor union contracts (if any); (c) all\ngroup insurance programs in effect for employees of the Company; and (d) the\nnames and current compensation packages of all independent contractors and\nconsultants of the Company. The Company is not in default with respect to any of\nits obligations referred to in clause (b) above and has no material obligation\nor liability for severance or back pay owed through or by virtue of the Merger.\nExcept as disclosed on Schedule 2.12, all employees of the Company are employed\non an \"at will\" basis.\n\n                                      -23-\n   30\n\n2.13    EMPLOYEE BENEFIT PLANS\n\n        2.13.1  EMPLOYEE BENEFIT PLAN LISTING\n\n        Schedule 2.13.1 to the Disclosure Memorandum sets forth a true, accurate\nand complete list and description of all retirement, pension, profit sharing,\ndeferred compensation, savings, bonus, incentive, cafeteria, flexible benefits,\nmedical, dental, vision, hospitalization, life insurance, group insurance,\nmedical expense reimbursement, dependent care assistance, tuition reimbursement,\ndisability, accident, sick pay, holiday, vacation, severance, stock purchase,\nstock option, stock appreciation rights, fringe benefit and other employee\nbenefit plans, funds, policies, programs, contracts, arrangements and payroll\npractices (including, but not limited to, all \"employee benefit plans,\" as\ndefined in Section 3(3) of the Employee Retirement Income Security Act of 1974,\nas amended (\"ERISA\")) and all employment, consulting and personal service\ncontracts and agreements, whether formal or informal, whether written or\nunwritten, and whether legally binding or not, (a) sponsored, maintained or\ncontributed to by the Company, (b) covering or benefiting any current or former\nofficer, employee, agent, director or independent contractor of the Company (or\nany dependent or beneficiary of any such individual) with respect to, or as a\nresult of, such, individual's relationship with the Company, or (c) with respect\nto which the Company has (or could have) any obligation or liability (such\nplans, funds, policies, programs, contracts, arrangements and payroll practices\nare hereinafter referred to collectively as \"Employee Benefit Plans\" and each\nindividually as an \"Employee Benefit Plan\"). The Company does not have any\nagreement, arrangement, commitment or obligation, whether formal or informal,\nwhether written or unwritten and whether legally binding or not, to create (or\ncontribute to) any employee benefit plan, fund, policy, program, contract,\narrangement or payroll practice that is not identified in Schedule 2.13.1 as an\nEmployee Benefit Plan or to modify or amend any existing Employee Benefit Plan\n(except as may be required by applicable law and has been disclosed in Schedule\n2.13.1). There has been no amendment, written interpretation or announcement\n(whether or not written) by the Company relating to, or change in participation\nor coverage under, any Employee Benefit Plan that, either alone or together with\nother such items or events, could materially increase the expense of maintaining\nthe Employee Benefit Plans above the level of expense incurred with respect\nthereto for the most recent fiscal year included in the Financial Statements.\n\n        2.13.2  DOCUMENTS PROVIDED\n\n        The Company has delivered to Amazon.com or its counsel true, correct and\ncomplete copies (or, in the case of unwritten Employee Benefit Plans,\ndescriptions) of all Employee Benefit Plans (and all amendments thereto), along\nwith, to the extent \n\n                                      -24-\n   31\n\napplicable to the particular Employee Benefit Plan, the\nfollowing information: (a) copies of the last three annual reports (Form 5500\nseries) filed with respect to such Employee Benefit Plan; (b) copies of the\nsummary plan descriptions, and summaries of material modifications filed or\ndistributed with respect to such Employee Benefit Plan during the last three\nyears; (c) copies of all contracts (and any amendments thereto) relating to such\nEmployee Benefit Plan, including, but not limited to, service provider\nagreements, administrative service agreements, insurance contracts, annuity\ncontracts, investment management agreements and record-keeping agreements; and\n(d) the most recent determination letter issued by the IRS with respect to such\nEmployee Benefit Plan.\n\n        2.13.3  COMPLIANCE\n\n        With respect to each Employee Benefit Plan, (a) such Employee Benefit\nPlan is, and at all times since its inception has been, maintained, administered\nand operated in all material respects in accordance with its terms and in\ncompliance with all applicable laws, statutes, orders, rules and regulations,\nand all requirements prescribed thereby, including, but not limited to, ERISA\nand the Code; (b) all amendments and actions required to bring such Employee\nBenefit Plan into conformity with the applicable provisions of ERISA, the Code\nand other applicable laws and regulations have been made or taken within the\ntime prescribed by law, except to the extent that such amendments or actions are\nnot required by law to be made or taken until after the Closing Date; (c) all\nreturns, reports and other disclosures relating to such Employee Benefit Plan\nrequired to be filed with any governmental entity or agency or furnished to any\nparticipant or beneficiary have been properly completed or prepared and timely\nfiled or furnished in accordance with applicable law; (d) neither the Company,\nnor to the knowledge of the Company or the Shareholder, any other fiduciary of\nsuch Employee Benefit Plan has engaged in any transaction or acted or failed to\nact in a manner that violates the fiduciary requirements of ERISA or any other\napplicable law; and (e) none of the Company, any employee of the Company or, to\nthe knowledge of the Company or the Shareholder, any other Person has engaged in\nor is about to engage in a nonexempt prohibited transaction under Section 406 or\n407 of ERISA or under Section 4975 of the Code. Each Employee Benefit Plan that\nconstitutes a \"group health plan,\" as defined in Section 607(1) or 733(a)(1) of\nERISA or Section 4980B(g)(2) of the Code, has been maintained, administered and\noperated at all times since its inception in compliance in all material respects\nwith (and the Company has never violated any of) the requirements of Parts 6 and\n7 of Subtitle B of Title I of ERISA, Section 4980B(f) of the Code, any\nregulations under such ERISA and Code sections and any other applicable federal,\nstate, local or foreign law regarding the provision or continuation of health\ninsurance coverage or other welfare \n\n\n                                      -25-\n   32\n\nbenefits (within the meaning of Section 3(1) of ERISA). Each Employee Benefit\nPlan that is intended to be qualified under Section 401(a) of the Code is the\nsubject of an unrevoked favorable determination letter from the IRS with respect\nto such qualification; its related trust or annuity contract has been determined\nto be exempt from taxation under Section 501(a) of the Code; and nothing has\noccurred since the date of such letter, and no circumstances exist or are\nreasonably expected by the Company or the Shareholder to occur, that could\nadversely affect such qualification or exemption. No event or omission has\noccurred, or is reasonably expected by the Company to occur (including, but not\nlimited to, any of the transactions contemplated in or by this Agreement), with\nrespect to any Employee Benefit Plan that has or could subject, directly or\nindirectly, the Company or, to the knowledge of the Company or the Shareholder,\nany other Person to a tax under Chapter 43 of Subtitle D of the Code or a\npenalty under Part 5 of Subtitle B of Title I of ERISA.\n\n        2.13.4  CONTRIBUTIONS AND PREMIUM PAYMENTS\n\n        All contributions, premiums and other payments due or required to be\nmade to each Employee Benefit Plan under the terms of such Employee Benefit\nPlan, ERISA, the Code or other applicable law have been timely paid, or, if not\nyet due, have been properly recorded on the books of the Company.\n\n        2.13.5  RELATED EMPLOYERS\n\n        The Company is not, and has never been, a member of (a) a controlled\ngroup of corporations, within the meaning of Section 414(b) of the Code, (b) a\ngroup of trades or businesses under common control, within the meaning of\nSection 414(c) of the Code, (c) an affiliated service group, within the meaning\nof Section 414(m) of the Code, or (d) any other group of Persons treated as a\nsingle employer under Section 414(o) of the Code.\n\n        2.13.6  MULTIEMPLOYER AND TITLE IV PLANS\n\n        The Company does not maintain or contribute to, and has never maintained\nor contributed to (or been obligated to contribute to), any multiemployer plan\nas defined in Section-3(37) or Section 4001(a)(3) of ERISA or 414(f) of the\nCode, any multiple employer plan within the meaning of Section 4063 or 4064 of\nERISA or Section 413(c) of the Code, or any employee benefit plan, fund,\nprogram, contract or arrangement that is subject to Section 412 of the Code,\nSection 302 of ERISA or Title IV of ERISA.\n\n                                      -26-\n   33\n\n        2.13.7  POST-TERMINATION WELFARE BENEFITS\n\n        Neither the Company nor any Employee Benefit Plan provides or has any\nobligation to provide (or contribute toward the cost of) health, severance or\nany other welfare benefits (within the meaning of Section 3(1) of ERISA) with\nrespect to any current or former officer, employee, agent, director or\nindependent contractor of the Company or any other entity beyond such\nindividual's retirement or other termination of service, other than continuation\ncoverage mandated by Sections 601 through 608 of ERISA or Section 4980B(f) of\nthe Code.\n\n        2.13.8  SUITS, CLAIMS AND INVESTIGATIONS\n\n        There are no actions, suits or claims (other than routine claims for\nbenefits) pending or, to the knowledge of the Company or the Shareholder,\nthreatened with respect to (or against the assets of) any Employee Benefit Plan,\nnor, to the knowledge of the Company or the Shareholder, is there a basis for\nany such action, suit or claim. No Employee Benefit Plan is currently under\ninvestigation, audit or review, directly or indirectly, by the IRS, the\nDepartment of Labor (the \"DOL\") or any other governmental entity or agency, and,\nto the knowledge of the Company and the Shareholder, no such action is\ncontemplated or under consideration by the IRS, the DOL or any other\ngovernmental entity or agency.\n\n        2.13.9  PAYMENTS RESULTING FROM TRANSACTIONS\n\n        Neither the execution and delivery of this Agreement or any of the other\nOperative Documents nor the consummation of the transactions contemplated in (or\nby) this Agreement or any of the other Operative Documents will (a) entitle any\ncurrent or former officer, employee, agent, director or independent contractor\nof the Company to severance pay, unemployment compensation or any other payment\nfrom the Company or any other Person, or otherwise increase the amount of\ncompensation due to any such individual, or (b) result in any benefit or right\nbecoming established or increased, or accelerate the time of payment or vesting\nof any benefit, under any Employee Benefit Plan, whether or not some other\nsubsequent action or event would be required to trigger any of the items\nspecified in (a) or (b) above.\n\n2.14    INTELLECTUAL PROPERTY\n\n        2.14.1  GENERAL\n\n        The Company owns or is licensed and has all rights in and to the\nfollowing as required to conduct its business as now conducted and as proposed\nto be conducted: (a) all products, tools, computer programs, specifications,\nsource code, object code, \n\n                                      -27-\n   34\n\ngraphics, devices, techniques, algorithms, methods, processes, procedures,\npackaging, trade dress, formulae, drawings, designs, improvements, discoveries,\nconcepts, user interfaces, the \"look and feel\" of any software or web sites,\nsoftware, software development and other tools, content, data inventions\n(whether or not patentable or copyrightable and whether or not reduced to\npractice), designs, logos, themes, know-how, concepts and other technology that\nare now or are currently proposed to be developed, produced, used, marketed or\nsold by the Company (collectively, the \"Technology-Related Assets\"); and (b) all\nintellectual property and other proprietary rights in the Technology-Related\nAssets, including, without limitation, all: (i) domain names; (ii) trade names,\ntrademarks, service marks, logos, brand names and other identifiers, with\nrespect only to the goods and services on which they are currently used by the\nCompany; (iii) trade secrets,(iv) copyrights and (v) domestic and foreign\nletters patent, and the registrations, applications, renewals, extensions and\ncontinuations (in whole or in part) thereof, together with all goodwill\nassociated with the Company Marks (as defined in Section 2.14.4), and all rights\nand causes of action for infringement, misappropriation, misuse, dilution or\nunfair trade practices associated with the Company IP Rights (as defined in\nSection 2.14.5).\n\n        2.14.2  COMPANY TECHNOLOGY\n\n        Schedule 2.14.2 to the Disclosure Memorandum sets forth a list of all\nproducts and tools developed, produced, used, marketed or sold by the Company\nduring the two years prior to the date of this Agreement (collectively, the\n\"Products\"). Except for the Third Party Technologies (as defined in Section\n2.14.3), the Company owns all right, title and interest in and to the following\n(collectively, the \"Technology\"), free and clear of all Encumbrances (except for\nPermitted Encumbrances and licenses granted by the Company which are disclosed\nin the Disclosure Memorandum or, under the terms of this Agreement, are not\nrequired to be so disclosed): (a) the Products, together with any and all codes,\ntechniques, software tools, formats, designs, user interfaces, content, data and\n\"look and feel\" related thereto; (b) any and all updates, enhancements,\ncorrections, modifications, improvements and new releases related to the items\nset forth in clause (a) above; (c) any and all technology and work in progress\nrelated to the items set forth in clauses (a) and (b) above; and (d) all\ninventions, discoveries, processes, designs, trade secrets, know-how and other\nconfidential or proprietary information related to the items set forth in\nclauses (a), (b) and (c) above. The Technology, excluding the Third Party\nTechnologies, is sometimes referred to herein as the \"Company Technology.\"\n\n                                      -28-\n   35\n\n        2.14.3  THIRD PARTY TECHNOLOGY\n\n        Schedule 2.14.3 to the Disclosure Memorandum sets forth a list of all\nTechnology used in the Company's business for which the Company does not own all\nright, title and interest (collectively, the \"Third Party Technologies\"), and\nall license agreements or other contracts pursuant to which the Company has the\nright to use (in the manner used by the Company, or intended or necessary for\nuse with the Company Technology) the Third Party Technologies (the \"Third Party\nLicenses\"), indicating, with respect to each of the Third Party Technologies\nlisted therein, and the Third Party License applicable thereto. The Company has\nthe lawful right to use (to the full extent permitted under the terms of the\napplicable Third Party License) (a) all Third Party Technology that is\nincorporated in or used in the development or production of the Company\nTechnology as currently being developed, licensed, marketed or used by the\nCompany, and (b) all other Third Party Technology necessary for the conduct of\nthe Company's business as now conducted and as proposed to be conducted. All\nThird Party Licenses are valid, binding and in full force and effect, the\nCompany and, to the knowledge of the Company and the Shareholder, each other\nparty thereto have performed in all material respects their obligations\nthereunder, and neither the Company nor, to the knowledge of the Company and the\nShareholder, any other party thereto is in default thereunder, nor to the\nknowledge of the Company and the Shareholder has there occurred any event or\ncircumstance which with notice or lapse of time or both would constitute a\ndefault or event of default on the part of the Company or, to the knowledge of\nthe Company and the Shareholder, any other party thereto or, to the knowledge of\nthe Company and the Shareholder, give to any other party thereto the right to\nterminate or modify any Third Party License. The Company has not received\nwritten notice or, to the best of the knowledge of the Company and the\nShareholder, oral or other notice that any party to any Third Party License\nintends to cancel, terminate or refuse to renew (if renewable) such Third Party\nLicense or to exercise or decline to exercise any option or right thereunder.\n\n        2.14.4  TRADEMARKS\n\n        Schedule 2.14.4 to the Disclosure Memorandum sets forth as of the date\nhereof a list of (a) all trademarks, trade names, brand names, service marks,\nlogos or other identifiers for the Products owned or claimed to be owned by the\nCompany in its business together with a description of the goods and\/or services\non or with respect to which such identifiers are used (the \"Company Marks\") and,\nif applicable, the application or registration numbers for such Company Marks,\nand (b) all trademarks, trade names, brand names, service marks, logos or other\nidentifiers for the Products which are used but not owned by the Company in its\nbusiness (the \"Licensed Marks\"). The Company has full legal and beneficial\nownership, free and clear of any \n\n                                      -29-\n   36\n\nEncumbrances (except for Permitted Encumbrances and licenses granted by the\nCompany which are disclosed in the Disclosure Memorandum or, under the terms of\nthis Agreement, are not required to be so disclosed), of all rights conferred by\nuse of the Company Marks on or with respect to the goods and\/or services\nidentified in Schedule 2.14.4 and, as to those Company Marks that have been\nregistered in the United States Patent and Trademark Office, by federal\nregistration of the Company Marks on the goods and\/or services set forth in such\nfederal registrations. The Company is licensed or otherwise has sufficient\nrights in and to the Licensed Marks as required to conduct its business as now\nconducted and as proposed to be conducted.\n\n        2.14.5  INTELLECTUAL PROPERTY RIGHTS\n\n        Schedule 2.14.5 to the Disclosure Memorandum sets forth as of the date\nhereof all patents, patent applications, copyright registrations (and\napplications therefor) and trademark registrations (and applications therefor)\nfiled or obtained by the Company and claiming or covering the Company Technology\n(or any portion thereof) and the Company Marks (collectively, the \"IP\nRegistrations\"). The Company owns all right, title and interest, free and clear\nof any Encumbrances (except for Permitted Encumbrances and licenses granted by\nthe Company which are disclosed in the Disclosure Memorandum or, under the terms\nof this Agreement, are not required to be so disclosed), in and to the IP\nRegistrations, together with any other rights in or to any copyrights\n(registered or unregistered), rights in the Company Marks (registered or\nunregistered), trade secret rights and other intellectual property rights\n(including, without limitation, rights of enforcement) contained or embodied in\nthe Company Technology and the Company Marks (collectively, the \"Company IP\nRights\").\n\n        2.14.6  MAINTENANCE OF RIGHTS\n\n        Except as set forth on Schedule 2.14.6 to the Disclosure Memorandum, the\nCompany has not conducted its business, and has not used or enforced (or, to the\nknowledge of the Company or the Shareholder, failed to use or enforce) the\nCompany IP Rights as currently being used by the Company, in a manner that would\nresult in the abandonment, cancellation or unenforceability of any item of the\nCompany IP Rights, and the Company has not taken (or, to the knowledge of the\nCompany or the Shareholder, failed to take) any action that would result in the\nforfeiture or relinquishment of any Company IP Rights, in each case where such\nabandonment, cancellation, unenforceability, forfeiture or relinquishment would\nhave a Company Material Adverse Effect. Except as set forth in Schedule 2.14.6,\nthe Company has not granted to any third party any rights or permissions to use\nany of the Technology or the IP Rights. To the best of the Company's and the\nShareholder's knowledge, except pursuant to reasonably prudent safeguards, \n(a) no third party has been given by the \n\n                                      -30-\n   37\n\nCompany any confidential information relating to the Technology or the Company\nIP Rights, and (b) the Company is not under any contractual or other obligation\nto disclose to any third party any confidential information relating to the\nCompany Technology.\n\n        2.14.7  THIRD PARTY CLAIMS\n\n        Except as set forth on Schedule 2.14.7 to the Disclosure Memorandum, (a)\nthe Company has not received any notice or claim (whether written, oral or\notherwise) challenging the Company's ownership or rights in the Company\nTechnology or the Company IP Rights or claiming that any other person or entity\nhas any legal or beneficial ownership with respect thereto; (b) the Company has\nnot received any notice or claim (whether written, oral or otherwise)\nchallenging the validity or enforceability of any of the Company IP Rights; and\n(c) to the knowledge of the Company and the Shareholder, no other person or\nentity is infringing or misappropriating any part of the Company IP Rights or\notherwise making any unauthorized use of the Company Technology.\n\n        2.14.8  INFRINGEMENT BY THE COMPANY\n\n        Except as set forth on Schedule 2.14.8 to the Disclosure Memorandum, the\nuse of any of the Company Technology, Company Marks or Company IP Rights in the\nCompany's business as currently used or proposed to be used does not infringe,\nviolate or constitute an appropriation of any right, title or interest\n(including, without limitation, any patent, copyright or trade secret right)\nheld by any other person or entity, and there have been no claims made with\nrespect thereto.\n\n        2.14.9  CONFIDENTIALITY\n\n        Except as set forth on Schedule 2.14.9 to the Disclosure Memorandum, (a)\nthe Company has not disclosed any source code regarding the Technology to any\nperson or entity other than an employee of the Company and under a written\nnondisclosure agreement; (b) the Company has at all times maintained and\ndiligently enforced commercially reasonable procedures to protect all\nconfidential information relating to the Technology; (c) neither the Company\nnor, to the knowledge of the Company and the Shareholder, any escrow agent is\nunder any contractual or other obligation to disclose the source code or any\nother proprietary information included in or relating to the Technology; and (d)\nthe Company has not deposited any source code relating to the Technology into\nany source code escrows or similar arrangements. If, as disclosed on Schedule\n2.14.9, the Company has deposited any source code to the Technology into source\ncode escrows or similar arrangements, the Company has not taken any action \n\n                                      -31-\n   38\n\nand has not failed to take any action which action or omission has or could\nreasonably form the basis for a release of such source code from such escrows or\narrangements.\n\n        2.14.10 WARRANTY AGAINST DEFECTS\n\n        Except as set forth in Schedule 2.14.10 to the Disclosure Memorandum,\nthe Technology is free from known material defects and substantially conforms to\nthe applicable specifications and documentation of such Technology.\n\n        2.14.11 DOMAIN NAMES\n\n        Schedule 2.14.11 sets forth a list of all Internet domain names used by\nthe Company in its business (collectively, the \"Domain Names\"). The Company has,\nand after the Closing the Surviving Corporation will have, a valid registration\nand all material rights (free of any material restriction) in and to the Domain\nNames, including, without limitation, all rights necessary to continue to\nconduct the Company's business as it is currently conducted, subject only to a\nsuccessful challenge to the Company's registration of a Domain Name by the third\nparty owner of the registered United States trademark that corresponds to the\nDomain Name.\n\n        2.14.12 YEAR 2000\n\n        Each hardware, software and firmware product developed by or for the\nCompany in its business (collectively, the \"Software\") will accurately process\ndate data (including, but not limited to, calculating, comparing and sequencing)\nfrom, into and between the twentieth and twenty-first centuries, including,\nwithout limitation, leap year calculations, without a decrease in the\nfunctionality of the Software. The Software is designed to be used prior to,\nduring and after the calendar year 2000 A.D. and will operate during each such\ntime period without breach of this Section 2.14.12. Without limiting the\ngenerality of the foregoing, the Software (a) will not abnormally end or provide\ninvalid or incorrect results as a result of correctly entered date data,\nspecifically including date data which represents or references different\ncenturies or more than one century; (b) has been designed to ensure date data\ncentury recognition, calculations which accommodate same century and\nmulti-century formulas and date values, and date data interface values that\nreflect the century; and (c) provides that all date-related user interface\nfunctionalities and data fields include the indication of century.\n\n        2.14.13 INDEMNIFICATION\n\n        Except as set forth in Schedule 2.14.13, the Company has not entered\ninto any agreement or offered to indemnify any Person against any charge of\ninfringement by \n\n                                      -32-\n   39\n\nthe Technology or Company IP Rights, or any other intellectual property or\nright. The Company has not entered into any agreement granting any Person the\nright to bring any infringement action with respect to, or otherwise to enforce,\nany of the Technology or Company IP Rights.\n\n        2.14.14 RESTRICTIONS ON INTELLECTUAL PROPERTY\n\n        To the knowledge of the Company and the Shareholder, none of the\nCompany's officers, employees, consultants, distributors, agents or\nrepresentatives have on their own behalf entered into any agreement regarding\nknow-how, trade secrets, assignment of rights in inventions, or prohibition or\nrestriction of competition or solicitation of customers, or any other similar\nrestrictive agreement or covenant, whether written or oral, with any Person\nother than the Company during the period in which such officer, employee,\nconsultant, agent or representative was employed with or engaged by the Company.\n\n2.15    CORPORATE BOOKS AND RECORDS\n\n        The Company has furnished to Amazon.com or its representatives for their\nexamination true and complete copies of (a) the Articles of Incorporation and\nBylaws of the Company as currently in effect, including all amendments thereto,\n(b) the minute books of the Company through the date hereof, and (c) the stock\ntransfer books of the Company through the date hereof. Such minutes reflect all\nmeetings of the Company's shareholders, Board of Directors and any committees\nthereof since the Company's inception, and such minutes accurately reflect in\nall material respects the events of and actions taken at such meetings. Such\nstock transfer books accurately reflect all issuances and transfers of shares of\ncapital stock of the Company since its inception.\n\n2.16    LICENSES, PERMITS, AUTHORIZATIONS, ETC.\n\n        Except as identified on Schedule 2.1 or 2.5 to the Disclosure\nMemorandum, the Company has received all currently required governmental\napprovals, authorizations, consents, licenses, orders, registrations and permits\nof all agencies relating to the operation of its business, whether federal,\nstate, local or foreign, the failure to obtain of which would have a Company\nMaterial Adverse Effect. The Company has not received any notifications of any\nasserted present failure by it to have obtained any such governmental approval,\nauthorization, consent, license, order, registration or permit, or past and\nunremedied failure to obtain such items.\n\n                                      -33-\n   40\n\n2.17    COMPLIANCE WITH LAWS\n\n        Except as described on Schedule 2.17 to the Disclosure Memorandum, the\nCompany is in compliance with all federal, state, local and foreign laws, rules,\nregulations, ordinances, decrees and orders applicable to it, to its employees\nor to the Real Property and the Personal Property, including, without\nlimitation, all such laws, rules, regulations, ordinances, decrees and orders\nrelating to intellectual property protection, antitrust matters, consumer\nprotection, environmental protection, equal employment opportunity, health and\noccupational safety, pension and employee benefit matters, securities and\ninvestor protection matters, labor and employment matters and practices, except\nwhere the failure of the Company to so comply would not have a Company Material\nAdverse Effect. The Company has not received any notification of any asserted\npresent or past unremedied failure by the Company to comply with any of such\nlaws, rules, ordinances, decrees or orders.\n\n2.18    INSURANCE\n\n        The Disclosure Memorandum sets forth a true and correct list of all\ninsurance policies maintained by the Company. The Company maintains commercially\nreasonable levels of (a) insurance on its property (including leased premises)\nthat insures against loss or damage by fire or other casualty and (b) insurance\nagainst liabilities, claims and risks of a nature and in such amounts as are\nnormal and customary in the Company's industry for companies of similar size and\nfinancial condition. As of the date hereof, all insurance policies of the\nCompany are in full force and effect, all premiums with respect thereto covering\nall periods up to and including the date this representation is made have been\npaid, and no notice of cancellation or termination has been received with\nrespect to any such policy or binder. Such policies or binders are sufficient\nfor compliance with all requirements of law currently applicable to the Company\nand of all agreements to which the Company is a party, will remain in full force\nand effect through the respective expiration dates of such policies or binders\nwithout the payment of additional premiums, and will not in any way be affected\nby, or terminate or lapse by reason of, the transactions contemplated by this\nAgreement. The Company has not been refused any insurance with respect to its\nassets or operations, nor has its coverage been limited, by any insurance\ncarrier to which it has applied for any such insurance or with which it has\ncarried insurance.\n\n2.19    BROKERS OR FINDERS\n\n        The Company has not incurred, and will not incur, directly or\nindirectly, as a result of any action taken by or on behalf of the Company, any\nliability for brokerage \n\n                                      -34-\n   41\n\nor finders' fees or agents' commissions or any similar charges in connection\nwith the Merger, this Agreement or any transaction contemplated hereby.\n\n2.20    ABSENCE OF QUESTIONABLE PAYMENTS\n\n        Neither the Company nor any director, officer, agent, employee or other\nPerson acting on behalf of the Company has used any Company funds for improper\nor unlawful contributions, payments, gifts or entertainment, or made any\nimproper or unlawful expenditures relating to political activity to domestic or\nforeign government officials or others. The Company has reasonable financial\ncontrols to prevent such improper or unlawful contributions, payments, gifts,\nentertainment or expenditures. Neither the Company nor any current director,\nofficer, agent, employee or other Person acting on behalf of the Company, in\ntheir capacity as such, has accepted or received any improper or unlawful\ncontributions, payments, gifts or expenditures. The Company has at all times\ncomplied, and is in compliance, in all respects with the Foreign Corrupt\nPractices Act and all foreign laws and regulations relating to prevention of\ncorrupt practices and similar matters.\n\n2.21    BANK ACCOUNTS\n\n        Schedule 2.21 to the Disclosure Memorandum sets forth as of the date\nhereof the names and locations of all banks, trust companies, savings and loan\nassociations and other financial institutions at which the Company maintains\nsafe deposit boxes or accounts of any nature and the names of all Persons\nauthorized to draw thereon, make withdrawals therefrom or have access thereto.\n\n2.22    INSIDER INTERESTS\n\n        Except as set forth on Schedule 2.22 to the Disclosure Memorandum, no\nshareholder or officer or director of the Company has any interest (other than\nas a shareholder of the Company) (a) in any Real Property, Personal Property,\nTechnology or IP Rights used in or directly pertaining to the business of the\nCompany, including, without limitation, inventions, patents, trademarks or trade\nnames, or (b) in any agreement, contract, arrangement or obligation relating to\nthe Company, its present or prospective business or its operations. Except as\nset forth on Schedule 2.22, there are no agreements, understandings or proposed\ntransactions between the Company and any of its officers, directors,\nshareholders, affiliates or any affiliate thereof. As of the date hereof, the\nCompany and its officers and directors have no interest, either directly or\nindirectly, in any entity, including, without limitation, any corporation,\npartnership, joint venture, proprietorship, firm, licensee, business or\nassociation (whether as an employee, officer, director, shareholder, agent,\nindependent contractor, security holder, \n\n                                      -35-\n   42\n\ncreditor, consultant or otherwise) that presently (i) provides any services,\nproduces and\/or sells any products or product lines, or engages in any activity\nthat is the same, similar to or competitive with any activity or business in\nwhich the Company is now engaged or proposes to engage; (ii) is a supplier,\ncustomer or creditor; or (iii) has any direct or indirect interest in any asset\nor property, real or personal, tangible or intangible, of the Company or any\nproperty, real or personal, tangible or intangible, that is necessary or\ndesirable for the present or currently anticipated future conduct of the\nCompany's business.\n\n2.23    COMPLIANCE WITH ENVIRONMENTAL LAWS\n\n        Neither the Company nor, to the knowledge of the Company and the\nShareholder, any other Person (including, without limitation, any previous\nowner, lessee or sublessee) has treated, stored or disposed of any material\namounts of petroleum products, hazardous waste, hazardous substances, pollutants\nor contaminants on the Real Property, or any real property previously owned,\nleased, subleased or used by the Company in the operation of its business, in\nviolation of any applicable material, federal, state or local statutes,\nregulations or ordinances, or common law, in each case as in existence at or\nprior to the Closing. To the knowledge of the Company and the Shareholder, there\nhave been no releases of any material amounts of petroleum, petroleum products,\nhazardous waste, hazardous substances, pollutants or contaminants on, at or from\nany assets or properties, including, without limitation, the Real Property,\nowned, leased, subleased or used by the Company in the operation of its business\nduring the time such assets or properties were owned, leased, subleased or used\nby the Company (or, to the knowledge of the Company and the Shareholder, prior\nto such time), including, without limitation, any releases of any material\namounts of petroleum, petroleum products, hazardous waste, hazardous substances,\npollutants or contaminants in violation of any law.\n\n2.24    INFORMATION SUPPLIED BY THE COMPANY\n\n        None of the information supplied or to be supplied by the Company for\ninclusion in the proxy statement to be delivered to its shareholders in\nconnection with any written consent by or meeting of such shareholders\n(collectively, \"Shareholder Materials\"), at the date on which such information\nwas supplied prior to the time the Company's shareholders were requested to\napprove the Merger, contained or will contain any untrue statement of a material\nfact or omits or will omit to state any material fact required to be stated\ntherein or necessary in order to make the statements therein, in light of the\ncircumstances under which they are made, not materially misleading; provided,\nhowever, that the Company makes no representations or \n\n                                      -36-\n   43\n\nwarranties regarding information furnished by or related to Amazon.com or the\nPurchaser.\n\n2.25    FULL DISCLOSURE\n\n        No information furnished by the Company to Amazon.com or its\nrepresentatives in connection with this Agreement (including, but not limited\nto, the Financial Statements and all information in the Disclosure Memorandum\nand the other Exhibits hereto) or the other Operative Documents contains any\nuntrue statement of a material fact or omits to state a material fact necessary\nin order to make the statements so made or information so delivered not\nmisleading in light of all the circumstances in which they were made or\ndelivered.\n\n2.26    HART-SCOTT-RODINO\n\n        The Company is its own ultimate parent entity as defined under the rules\nand regulations promulgated under the Hart-Scott-Rodino Act. The Company is not\na $10 million person as defined thereunder.\n\n2.27    OPERATING DATA\n\n        On or prior to the date hereof, the Company has delivered to Amazon.com\ncertain of its operating data and certain performance data for its Web Site\nincluding, without limitation, information with respect to downloads, users,\npage views and click-through rates, all as set forth in Schedule 2.27 of the\nDisclosure Memorandum (the \"Operations and Web Site Data\"). The Operations and\nWeb Site Data accurately and fairly present the operations of and other data\nrelated to the Company and the performance of its Web Site, for the period\ntherein indicated.\n\n                ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF\n                          AMAZON.COM AND THE PURCHASER\n\n        In order to induce the Company to enter into and perform this Agreement\nand the other Operative Documents, Amazon.com and the Purchaser jointly and\nseverally represent and warrant to the Company as follows in this Article III:\n\n3.1     ORGANIZATION\n\n        Amazon.com is a corporation duly organized validity existing and in good\nstanding under the laws of the state of Delaware. The Purchaser is a corporation\nvalidly existing and in good standing under the laws of the State of Washington.\nEach of Amazon.com and the Purchaser has all requisite corporate power and\nauthority to \n\n\n                                      -37-\n   44\n\nown, operate and lease its respective properties and assets, to\ncarry on its respective business as now conducted, and as proposed to be\nconducted and to enter into and perform its respective obligations under this\nAgreement and the other applicable Operative Documents to which Amazon.com or\nthe Purchaser is a party, and to consummate the transactions contemplated hereby\nand thereby. Each of Amazon.com and the Purchaser is duly qualified and licensed\nas a foreign corporation to do business and is in good standing in each\njurisdiction in which the character of properties occupied, owned or held under\nlease by Amazon.com or the Purchaser, as applicable, or the nature of the\nbusiness conducted by Amazon.com or the Purchaser, as applicable, makes such\nqualification or licensing necessary, except where the failure to be so\nqualified or in good standing would not have a material adverse effect on the\nbusiness, properties, or prospects of Amazon.com taken as a whole (an\n\"Amazon.com Material Adverse Effect\"); provided, however, that Amazon.com\nMaterial Adverse Effect shall not include any change, circumstance, event or\neffect that relates to or results from the announcement or other disclosure or\nconsummation of the transactions contemplated by this Agreement or general\neconomic conditions. Each of Amazon.com and the Purchaser has full corporate\npower and authority to execute, deliver and perform this Agreement and the other\nOperative Documents to which it is a party, and to carry out the transactions\ncontemplated hereby and thereby. All the issued and outstanding shares of\ncapital stock of the Purchaser are held of record and beneficially by\nAmazon.com. Since the date of its incorporation, the Purchaser has not engaged\nin any activities other than in connection with or as contemplated by this\nAgreement or the Operative Documents or the transactions contemplated hereby or\nthereby.\n\n3.2     ENFORCEABILITY\n\n        Amazon.com and the Purchaser each have full corporate power and\nauthority to execute, deliver and perform their obligations under this Agreement\nand each of the other Operative Documents to which they are a party and each of\nthe certificates, instruments and documents executed or delivered by them\npursuant to the terms of this Agreement. All corporate action on the part of\nAmazon.com and the Purchaser and their respective officers, directors and\nstockholders necessary for the authorization, execution, delivery and\nperformance of this Agreement and the other applicable Operative Documents to\nwhich Amazon.com or the Purchaser is a party, the consummation of the Merger and\nthe performance of all of their respective obligations under this Agreement and\nthe other applicable Operative Documents to which Amazon.com or the Purchaser is\na party has been taken or will be taken prior to the Effective Time. This\nAgreement has been, and each of the other Operative Documents to which\nAmazon.com is a party will have been at the Closing, duly executed and \n\n                                      -38-\n   45\n\ndelivered by Amazon.com, and this Agreement is, and each of the other Operative\nDocuments to which Amazon.com is a party will be at the Closing, a legal, valid\nand binding obligation of Amazon.com, enforceable against Amazon.com in\naccordance with its terms, except as to the effect, if any, of (a) applicable\nbankruptcy and other similar laws affecting the rights of creditors generally,\n(b) rules of law governing specific performance, injunctive relief and other\nequitable remedies, and (c) the enforceability of provisions requiring\nindemnification in connection with the offering, sale or issuance of securities.\nThis Agreement has been, and each of the other Operative Documents to which the\nPurchaser is a party will have been at the Closing, duly executed and delivered\nby the Purchaser, and this Agreement is, and each of the other Operative\nDocuments to which the Purchaser is a party will be at the Closing, a legal,\nvalid and binding obligation of the Purchaser, enforceable against the Purchaser\nin accordance with its terms, except as to the effect, if any, of (i) applicable\nbankruptcy and other similar laws affecting the rights of creditors generally,\n(ii) rules of law governing specific performance, injunctive relief and other\nequitable remedies, and (iii) the enforceability of provisions requiring\nindemnification in connection with the offering, sale or issuance of securities.\n\n3.3     SECURITIES\n\n        The Amazon.com Common Stock to be issued pursuant to this Agreement has\nbeen, or will be prior to the Effective Time, duly authorized for issuance, and\nsuch Amazon.com Common Stock, when issued and delivered to the Company's\nshareholders pursuant to this Agreement, shall be validly issued, fully paid and\nnonassessable.\n\n3.4     NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS\n\n        The execution, delivery and performance of this Agreement and the other\nOperative Documents by the Purchaser and Amazon.com, as applicable, and the\nconsummation by them of the transactions contemplated hereby and thereby will\nnot (a) constitute a violation (with or without the giving of notice or lapse of\ntime, or both) of any provision of law applicable to Amazon.com or the\nPurchaser; (b) require any consent, approval or authorization of any Person,\nexcept (i) compliance with applicable securities laws, (ii) the filing of all\ndocuments necessary to consummate the Merger with the Washington Secretary of\nState and California Secretary of State and (iii) the notification requirements\nof the Hart-Scott-Rodino Act; (c) result in a default (with or without the\ngiving of notice or lapse of time, or both) under, or acceleration or\ntermination of, or the creation in any party of the right to accelerate,\nterminate, modify or cancel, any agreement, lease, note or other restriction,\nencumbrance, obligation or liability to which Amazon.com or the Purchaser is a\nparty or by which it is bound or to \n\n                                      -39-\n   46\n\nwhich any assets of Amazon.com or the Purchaser are subject; or (d) conflict\nwith or result in a breach of or constitute a default under any provision of the\nCertificate of Incorporation or Bylaws of Amazon.com or the Articles of\nIncorporation or Bylaws of Purchaser.\n\n3.5     CAPITALIZATION\n\n        The authorized capital stock of Amazon.com consists of 300,000,000\nshares of Amazon.com Common Stock of which 161,371,398 shares were issued and\noutstanding as of March 31, 1999 and 10,000,000 shares of preferred stock, par\nvalue $0.01 per share, none of which is issued or outstanding. Such issued and\noutstanding shares of Amazon.com Common Stock are validly issued, fully paid and\nnonassessable.\n\n3.6     SEC DOCUMENTS\n\n        Amazon.com has furnished the shareholders with true and complete copies\nof its Annual Report on Form 10-K for the fiscal year ended December 31, 1998,\nall Forms 8-K and 10-Q's filed after the date of the last Form 10-K, and its\nProxy Statement relating to its 1999 Annual Meeting of Stockholders\n(collectively, the \"SEC Documents\"). As of their respective filing dates, each\nof the SEC Documents complied in all material respects with the requirements of\nthe Securities Exchange Act of 1934, as amended (the \"Exchange Act\"), and the\nrules and regulations of the Securities and Exchange Commission promulgated\nthereunder.\n\n3.7     ABSENCE OF CERTAIN CHANGES\n\n        Since the December 31, 1998 financial statements included in the SEC\nDocuments, there has not been any change which by itself or in conjunction with\nall other such changes, has had or could reasonably be expected to have an\nAmazon.com Material Adverse Effect, except as disclosed in the SEC Documents to\nthe date of this Agreement.\n\n3.8     INFORMATION SUPPLIED BY AMAZON.COM\n\n        None of the information supplied or to be supplied by Amazon.com for\ninclusion in the Shareholder Materials, including the SEC Documents, at the date\nsuch information was supplied prior to the time the shareholders of the Company\nwere requested to approve the Merger at either a special meeting of shareholders\nor by executing a written consent, contained or will contain any untrue\nstatement of a material fact or omits or will omit to state any material fact\nrequired to be stated therein or necessary in order to make the statements\ntherein, in light of the \n\n\n                                      -40-\n   47\n\ncircumstances under which they are made, not materially misleading; provided,\nhowever, that Amazon.com makes no representations or warranties regarding\ninformation furnished by or related to the Company.\n\n3.9     FULL DISCLOSURE\n\n        No information furnished by Amazon.com or the Purchaser to the Company\nor its representatives in connection with this Agreement or the other Operative\nDocuments contains any untrue statement of a material fact or omits to state a\nmaterial fact necessary in order to make the statements so made or information\nso delivered not misleading in light of all the circumstances in which they were\nmade or delivered.\n\n3.10    BROKERS OR FINDERS\n\n        Amazon.com has not incurred, and will not incur, directly or indirectly,\nas a result of any action taken by or on behalf of Amazon.com, any liability for\nbrokerage or finders' fees or agents' commissions or any similar charges in\nconnection with the Merger, this Agreement or any transaction contemplated\nhereby that would result in a claim against the Company or the Shareholders.\n\n                ARTICLE IV -- CONDITIONS PRECEDENT TO OBLIGATIONS\n                        OF AMAZON.COM AND THE PURCHASER\n\n        The obligations of Amazon.com and the Purchaser to perform and observe\nthe covenants, agreements and conditions hereof to be performed and observed by\nthem at or before the Closing shall be subject to the satisfaction of the\nfollowing conditions, which may be expressly waived only in writing signed by\nAmazon.com:\n\n4.1     ACCURACY OF REPRESENTATIONS AND WARRANTIES\n\n        The representations and warranties of the Company and the Shareholder\ncontained herein (including applicable Exhibits or Schedules to the Disclosure\nMemorandum) and in the other Operative Documents shall have been true and\ncorrect in all material respects when made and, except (a) for changes\ncontemplated by this Agreement and the other Operative Documents and (b) to the\nextent that such representations and warranties speak as of an earlier date,\nshall be true and correct in all material respects as of the Closing Date as\nthough made on that date.\n\n4.2     PERFORMANCE OF AGREEMENTS\n\n        The Company shall have performed in all material respects all\nobligations and agreements and complied with all covenants contained in this\nAgreement or any other \n\n                                      -41-\n   48\n\nOperative Document to be performed and complied with by them at or prior to the\nClosing.\n\n4.3     OPINION OF COUNSEL FOR THE COMPANY\n\n        Amazon.com shall have received the opinion letter of Latham &amp; Watkins,\ncounsel for the Company, dated the Closing Date, substantially in the form of\nExhibit 4.3.\n\n4.4     COMPLIANCE CERTIFICATE\n\n        Amazon.com shall have received a certificate of the President and the\nChief Financial Officer of the Company, dated the Closing Date, in form and\nsubstance satisfactory to Amazon.com, certifying that the conditions to the\nobligations of Amazon.com and the Purchaser in Sections 4.1, 4.2, 4.5 and 4.6\nhave been fulfilled.\n\n4.5     MATERIAL ADVERSE CHANGE\n\n        Since the date of this Agreement and through the Closing, there shall\nnot have occurred any Company Material Adverse Effect.\n\n4.6     APPROVALS AND CONSENTS\n\n        All transfers of permits or licenses and all approvals of or notices to\npublic agencies, federal, state, local or foreign, the granting or delivery of\nwhich is necessary for the consummation of the transactions contemplated hereby,\nor for the continued operation of the Company, shall have been obtained, and all\nwaiting periods specified by law shall have passed. All other consents,\napprovals and notices referred to in this Agreement shall have been obtained or\ndelivered.\n\n4.7     PROCEEDINGS AND DOCUMENTS; SECRETARY'S CERTIFICATE\n\n        All corporate and other proceedings in connection with the transactions\ncontemplated hereby and by the other Operative Documents, and all documents and\ninstruments incident to such transactions, shall have been approved by\nAmazon.com's counsel. Amazon.com shall have received a certificate of the\nSecretary of the Company, in form and substance satisfactory to Amazon.com, as\nto the authenticity and effectiveness of the actions of the Board of Directors\nand shareholders of the Company authorizing the Merger, the transactions\ncontemplated by this Agreement and the other Operative Documents, copies of the\nCompany's Articles of Incorporation, certified by the California Secretary of\nState, and Bylaws, certified by the Secretary of the Company, shall be attached\nto such certificate.\n\n                                      -42-\n   49\n\n4.8     NONFOREIGN AFFIDAVIT\n\n        Amazon.com shall have received from the Company, pursuant to Section\n1445 of the Code, a Foreign Investment in Real Property Tax Act Affidavit\nsubstantially in the form of Exhibit 4.8.\n\n4.9     COMPLIANCE WITH LAWS\n\n        The consummation of other transactions contemplated by this Agreement\nand the other Operative Documents shall be legally permitted by all laws and\nregulations to which Amazon.com or the Company is subject. The waiting period\nspecified in the Hart-Scott-Rodino Act, including any extensions thereof, shall\nhave expired or been terminated, if applicable.\n\n4.10    SHAREHOLDER APPROVAL\n\n        The principal terms of this Agreement shall have been approved by the\nholders of not less than a majority (or such higher percentage as required by\nthe Company's Articles of Incorporation) of each class of Company Capital Stock.\n\n4.11    LEGAL PROCEEDINGS\n\n        No order of any court or administrative agency shall be in effect which\nenjoins, restrains, conditions or prohibits consummation of this Agreement or\nany other Operative Document, and no litigation, investigation or administrative\nproceeding shall be pending or threatened which would enjoin, restrain,\ncondition or prevent consummation of this Agreement or any other Operative\nDocument.\n\n4.12    EMPLOYMENT AND NONCOMPETITION ARRANGEMENTS\n\n        Bruce Gilliat, Brewster Kahle, Mark Dirsa, Niall O'Driscoll, and Kelly\nRansom shall have accepted an oral offer of employment with Amazon.com and shall\nhave executed the Amazon.com standard form of Confidentiality, Noncompetition\nand Invention Assignment Agreement substantially in the form attached hereto as\nExhibit 4.12.\n\n4.13    AFFILIATE LETTERS\n\n        The Company shall have delivered or caused to be delivered to Amazon.com\nan Affiliate Letter substantially in the form of Exhibit 4.13 from each of those\nPersons who were, on the date on which the requisite number of consents has been\nobtained to \n\n                                      -43-\n   50\n\napprove the Merger, \"affiliates\" of the Company within the meaning\nof Rule 145 of the rules and regulations promulgated under the Securities Act.\n\n4.14    TERMINATION OF CERTAIN AGREEMENTS\n\n        Any and all rights of refusal, co-sale rights and registration rights\nfor the benefit of the holders of Company Capital Stock, if any, set forth in\nthe Disclosure Memorandum shall have been terminated. All amounts due and\npayable to Imperial Bank under the Equipment Loan Facilities dated June 19, 1997\nand March 25, 1998, shall have been paid in full and any security interest in\nthe assets and Personal Property of the Company (including, without limitation,\nTechnology-Related Assets, Company Technology and IP Rights) shall have been\nreleased. The Promotion and Licensing Agreement, dated March 1999, by and\nbetween the Company and Wired Digital Inc., shall have been terminated or\namended in form and substance reasonably acceptable to Amazon.com.\n\n4.15    EXERCISE OF STOCK PURCHASE RIGHTS\n\n        Any and all Stock Purchase Rights shall have been exercised or\nconverted, as the case may be (including the conversion of the Company Preferred\nStock), for shares of Company Common Stock immediately prior to the Effective\nTime, except for Options assumed by Amazon.com pursuant to Section 1.7.1(d).\n\n4.16    NO DISSENTER RIGHTS EXERCISED GREATER THAN 5% OF STOCK\n\n        No holders of the Preferred Stock shall have delivered to the Company\nbefore the Effective Time timely written notice of such holder's intent to\ndemand payment for such shares in accordance with California Law, unless such\nholder shall have withdrawn or otherwise lost his or her right to such payment\nas an assenting shareholder. Holders of not more than 5% of the shares of\nCompany Common Stock shall have not voted in favor of the Merger or not\nconsented thereto in writing and shall have delivered before the Effective Time\ntimely written notice of such holder's intent to demand payment as a dissenting\nshareholder for such shares in accordance with California Law.\n\n4.17    TRANSMITTAL LETTERS\n\n        All holders of the Company Series A Stock and holders of at least 95% of\nthe Company Common Stock shall have executed Letters of Transmittal in the form\nattached hereto as Exhibit 1.7.2, addressing, among other issues, (i) the\nmechanics of share exchange, (ii) representations and share ownership, and (iii)\nagreement to be bound to indemnification obligations hereunder.\n\n                                      -44-\n   51\n\n4.18    CONSENTS TO MERGER\n\n        Schedule 4.18 lists certain agreements, leases, notes or other documents\nidentified on Schedules 2.5, 2.9, 2.10 and 2.14 to the Disclosure Memorandum\nthat treat the Merger as an assignment or otherwise by their terms require\nconsent. Unless otherwise set forth in Schedule 4.18, the Company shall have\nreceived and shall have delivered to Amazon.com or its counsel written consents\nto the Merger from each of the parties (other than the Company) to such\nagreements, leases, notes or other documents, which consents shall be reasonably\nsatisfactory in all respects to Amazon.com.\n\n        4.19      DELIVERY OF AUDITED FINANCIAL STATEMENTS\n\n        The Company shall deliver to Amazon.com an audited balance sheet,\nstatement of income and expense, statements of cash and statement of\nshareholder's equity of the Company as of and for the fiscal year ended 1998.\nExcept as set forth on Schedule 4.19, the audited balance sheet, statement of\nincome and expense, statement of cash and statement of shareholder's equity of\nthe Company as of December 31, 1998 shall conform in all material respects with\nthe unaudited balance sheet, statement of income and expense, statement of cash\nand statement of shareholder's equity of the Company as of December 31, 1998.\n\n         ARTICLE V -- CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY\n\n        The obligations of the Company to perform and observe the covenants,\nagreements and conditions hereof to be performed and observed by them at or\nbefore the Closing shall be subject to the satisfaction of the following\nconditions, which may be expressly waived only in writing signed by the Company.\n\n5.1     ACCURACY OF REPRESENTATIONS AND WARRANTIES\n\n        The representations and warranties of Amazon.com and the Purchaser\ncontained herein and in the other Operative Documents shall have been true and\ncorrect in all material respects when made and, except for (a) changes\ncontemplated by this Agreement and the other Operative Documents and (b) to the\nextent that such representations and warranties speak as of an earlier date,\nshall be true and correct as of the Closing Date as though made on that date.\n\n                                      -45-\n   52\n\n5.2     PERFORMANCE OF AGREEMENTS\n\n        Amazon.com and the Purchaser shall have performed all obligations and\nagreements and complied with all covenants contained in this Agreement or any\nother Operative Document to be performed and complied with by them at or prior\nto the Closing.\n\n5.3     OPINION OF COUNSEL\n\n        The Company shall have received the opinion letter of Perkins Coie LLP,\ncounsel for Amazon.com and the Purchaser, dated the Closing Date, substantially\nin the form of Exhibit 5.3.\n\n5.4     COMPLIANCE CERTIFICATE\n\n        The Company shall have received a certificate of an officer of\nAmazon.com, dated the Closing Date, substantially in form and substance\nsatisfactory to the Company, certifying that the conditions to the obligations\nof the Company have been fulfilled.\n\n5.5     LEGAL PROCEEDINGS\n\n        No order of any court or administrative agency shall be in effect which\nenjoins, restrains, conditions or prohibits consummation of this Agreement or\nany other Operative Document, and no litigation, investigation or administrative\nproceeding shall be pending or threatened which would enjoin, restrain,\ncondition or prevent consummation of this Agreement or any other Operative\nDocument.\n\n5.6     MATERIAL ADVERSE CHANGE\n\n        Since the date of this Agreement and through the Closing, there shall\nnot have occurred any Amazon.com Material Adverse Effect. Changes in the trading\nprices of Amazon.com Common Stock shall not be deemed to have an Amazon.com\nMaterial Adverse Effect under this Agreement.\n\n5.7     APPROVALS AND CONSENTS\n\n        All transfers of permits or licenses and all approvals of or notices to\npublic agencies, federal, state, local or foreign, the granting or delivery of\nwhich is necessary for the consummation of the transactions contemplated hereby\nor for the continued operation of the Company, shall have been obtained, and all\nwaiting periods specified \n\n                                      -46-\n   53\n\nby law shall have passed. All other consents, approvals and notices referred to\nin this Agreement shall have been obtained or delivered.\n\n5.8     COMPLIANCE WITH LAWS\n\n        The consummation of other transactions contemplated by this Agreement\nand the other Operative Documents shall be legally permitted by all laws and\nregulations to which Amazon.com or the Company is subject. The waiting period\nspecified in the Hart-Scott-Rodino Act, including any extensions thereof, shall\nhave expired or been terminated, if applicable.\n\n5.9     TAX OPINION\n\n        The Company shall have received an opinion of Latham &amp; Watkins, dated as\nof the Closing Date, in form and substance reasonably satisfactory to the\nCompany, substantially to the effect that, on the basis of facts,\nrepresentations and assumptions set forth in such opinion, for federal income\ntax purposes, the Merger will constitute a \"reorganization\" within the meaning\nof Section 368(a) of the Code. In rendering such opinion, Latham &amp; Watkins may\nreceive and rely upon representations including those contained in this\nAgreement or in certificates of officers of the parties or others.\n\n                             ARTICLE VI -- COVENANTS\n\n        Between the date of this Agreement and the Effective Time (or such later\nperiod as set forth in Sections 6.5, 6.8, 6.9, 6.13 and 6.14), the parties\ncovenant and agree as set forth in this Article VI.\n\n6.1     CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER\n\n        Unless Amazon.com shall otherwise agree in writing, the business of the\nCompany shall be conducted in and only in, and the Company shall not take any\naction except in, the ordinary course of business and in accordance with\napplicable law; and the Company shall use its best efforts to preserve intact\nthe business organization of the Company, to keep available the services of the\ncurrent officers, employees and consultants of the Company and to preserve the\ncurrent relationships of the Company with, and the goodwill of, customers,\nsuppliers and other Persons with which the Company has significant business\nrelations. By way of amplification and not limitation, except as otherwise\ncontemplated by this Agreement or in the corresponding portion of Section 6.1 to\nthe Company Disclosure Schedules, the Company shall not, between the date of\nthis Agreement and the Effective Time, directly or indirectly do, or propose to\ndo, any of the following without the prior written consent of Amazon.com, which\nwill not be unreasonably withheld:\n\n                                      -47-\n   54\n\n        (a)     amend or otherwise change its Articles of Incorporation or\nBylaws;\n\n        (b)     except for the issuance of shares of Company Capital Stock upon\nthe exercise or conversion of currently outstanding Stock Purchase Rights or\nOptions, issue, sell, contract to issue or sell, pledge, dispose of, grant,\nencumber or authorize the issuance, sale, pledge, disposition, grant or\nEncumbrance of (i) any assets of the Company, except in the ordinary course of\nbusiness and in a manner consistent with past practice, or (ii) any shares of\ncapital stock of any class of the Company or (iii) any options, warrants,\nconvertible securities or other rights of any kind to acquire any shares of such\ncapital stock, or any other ownership interest (including, without limitation,\nany phantom interest) of the Company;\n\n        (c)     declare, set aside, make or pay any dividend or other\ndistribution, payable in cash, stock or other securities, property or otherwise,\nwith respect to any of its capital stock other than repurchases of employee\nshares at cost pursuant to contractual arrangements;\n\n        (d)     reclassify, combine, split, subdivide, redeem, purchase or\notherwise acquire, directly or indirectly, any of its capital stock or other\nsecurities;\n\n        (e)     (i) acquire (including, without limitation, by merger,\nconsolidation, or acquisition of stock or assets) any corporation, partnership,\nother business organization or division thereof or any material amount of\nassets; (ii) incur any indebtedness for borrowed money or issue any debt\nsecurities or assume, guarantee or endorse, or otherwise as an accommodation\nbecome responsible for, the obligations of any Person, or make any loans or\nadvances, except in the ordinary course of business and consistent with past\npractice; (iii) enter into any contract or agreement other than in the ordinary\ncourse of business, consistent with past practice; (iv) authorize any single\ncapital expenditure which is in excess of $30,000 or capital expenditures which\nare, in the aggregate, in excess of $40,000 for the Company taken as a whole;\n(v) enter into any agreement in which the obligation of the Company exceeds\n$40,000 or which shall not terminate or be subject to termination for\nconvenience within 180 days following execution; (vi) license any Technology or\nIP Rights other than customer downloading of software from the Internet in the\nordinary course of business; or (vii) amend any contract, agreement, commitment\nor arrangement with respect to any matter set forth in this subsection (e);\n\n        (f)     enter into or amend any employment, consulting or agency\nagreement, or increase the compensation payable or to become payable to its\nofficers, employees, agents or consultants, or grant any severance or\ntermination pay to, or enter \n\n                                      -48-\n   55\n\ninto any employment or severance agreement with, any director, officer or other\nemployee of the Company, or establish, adopt, enter into or amend any collective\nbargaining, bonus, profit sharing, thrift, compensation, stock option,\nrestricted stock, pension, retirement, deferred compensation, employment,\ntermination, severance, benefit, Employee Benefit Plan or other plan, agreement,\ntrust, fund, policy or arrangement for the benefit of any director, officer or\nemployee;\n\n        (g)     take any action, other than reasonable and usual actions in the\nordinary course of business and consistent with past practice, with respect to\naccounting methods, policies or procedures (including, without limitation,\nprocedures with respect to the payment of accounts payable and collection of\naccounts receivable) or as required as a result in a change in law or GAAP;\n\n        (h)     make any Tax election or settle or compromise any Tax liability;\n\n        (i)     pay, discharge or satisfy any claim, liability or obligation\n(absolute, accrued, asserted or unasserted, contingent or otherwise), other than\nthe payment, discharge or satisfaction in the ordinary course of business and\nconsistent with past practice or as reserved on the books of the Company;\n\n        (j)     take any action that would or is reasonably likely to result in\nany of the representations and warranties of the Company set forth in this\nAgreement being untrue in any material respect, or in any covenant of the\nCompany set forth in this Agreement being breached, or in any of the conditions\nto the Merger specified in Article IV hereof not being satisfied; or\n\n        (k)     agree to do any of the foregoing.\n\n6.2     ACCESS TO INFORMATION; CONFIDENTIALITY\n\n        From the date hereof to the Effective Time, the Company shall, and shall\ncause the officers, directors, employees and agents of the Company to, afford\nthe officers, employees and agents of Amazon.com access at all reasonable times\nto the officers, employees, agents, properties, offices, plants and other\nfacilities, books and records of the Company and shall furnish Amazon.com with\nall financial, operating and other data and information as Amazon.com, through\nits officers, employees or agents, may reasonably request for continuation of\nthe transactions contemplated hereby. From the date hereof until the Effective\nTime, the Company shall provide Amazon.com with monthly and other financial\nstatements of the Company as they become available internally at the Company,\nall of which financial statements shall fairly present the financial position\nand results of operations of the Company as of the dates and for the \n\n\n                                      -49-\n   56\n\nperiods therein specified. No investigation pursuant to this Section 6.2 shall\naffect any representation or warranty in this Agreement of any party hereto or\nany condition to the obligations of the parties hereto. The parties shall\ncontinue to comply with and to perform their respective obligations under the\nMutual Nondisclosure Agreement between Amazon.com and the Company entered into\nas of April 22, 1999.\n\n6.3     NO ALTERNATIVE TRANSACTIONS\n\n        Unless this Agreement shall have been terminated in accordance with its\nterms, the Company shall not, directly or indirectly, through any officer,\ndirector, agent or otherwise, solicit, initiate or encourage the submission of\nany proposal or offer from any Person relating to any acquisition or purchase of\nall or (other than in the ordinary course of business) any material portion of\nthe assets of, or any equity interest in (other than pursuant to the exercise of\nOptions), the Company or any business combination with the Company or\nparticipate in any negotiations regarding, or furnish to any other Person any\ninformation with respect to, or otherwise cooperate or negotiate in any way\nwith, or assist or participate in, facilitate or encourage, any effort or\nattempt by any other Person to do or seek any of the foregoing. The Company\nshall notify Amazon.com promptly if any such proposal or offer, or any inquiry\nor contact with any Person with respect thereto, is made and shall, in any such\nnotice to Amazon.com, indicate in reasonable detail the identity of the Person\nmaking such proposal, offer, inquiry or contact and the terms and conditions of\nsuch proposal, offer, inquiry or contact. The Company agrees not to release any\nthird party from, or waive any provision of, any confidentiality or standstill\n(e.g. agreement not to invest in or seek change of control of the Company)\nagreement to which the Company is a party.\n\n6.4     NOTIFICATION OF CERTAIN MATTERS\n\n        Each party shall give prompt notice to the other parties of (a) the\noccurrence or nonoccurrence of any event which would be likely to cause any\nrepresentation or warranty made by such party contained in this Agreement to be\nuntrue or inaccurate in any material respect and (b) any material failure by\nsuch party to comply with or satisfy any covenant, condition or agreement to be\ncomplied with or satisfied by it hereunder; provided, however, that the delivery\nof any notice pursuant to this Section 6.4 shall not limit or otherwise affect\nthe remedies available to the parties hereunder.\n\n6.5     FURTHER ACTION; COMMERCIALLY REASONABLE EFFORTS\n\n        Upon the terms and subject to the conditions hereof, each of Amazon.com,\nPurchaser and the Company shall use commercially reasonable efforts to take, or\ncause\n\n                                      -50-\n   57\nto be taken, all appropriate action, and to do, or cause to be done, all things\nnecessary, proper or advisable on their part under the Agreement or under\napplicable laws and regulations to consummate and make effective the\ntransactions contemplated hereby, including, without limitation, using its\ncommercially reasonable efforts to obtain all waivers, licenses, permits,\nconsents, approvals, authorizations, qualifications and orders of governmental\nauthorities and parties to contracts with the Company as are necessary for the\nconsummation of the transactions contemplated hereby and to fulfill the\nconditions to the Merger. In case at any time after the Effective Time any\nfurther action is necessary or desirable to carry out the purposes of this\nAgreement, each party to this Agreement shall use commercially reasonable\nefforts to take all such action. After the Closing Date, each party hereto, at\nthe request of and without any further cost or expense to the other parties,\nwill take any further actions necessary or desirable to carry out the purposes\nof this Agreement or any other Operative Document, to vest in the Surviving\nCorporation full title to all properties, assets and rights of the Company and\nto effect the issuance of the Amazon.com Common Stock to the shareholders of the\nCompany pursuant to the terms and conditions hereof.\n\n6.6     SHAREHOLDER APPROVAL\n\n        The Company will seek the approval at a special meeting of shareholders\nor the written consent of the shareholders at the earliest practicable date\napproving this Agreement, the other Operative Documents, the Merger and related\nmatters, which approval will be recommended by the Board of Directors of the\nCompany.\n\n6.7     PROXY STATEMENT\n\n        The Company will send the Shareholder Materials to the shareholders of\nthe Company, in a timely manner, for the purposes of considering approval of the\nMerger, either at a special meeting of shareholders or by their execution of a\nwritten consent. The Company and Amazon.com each will promptly provide all\ninformation relating to its respective business or operations necessary for\ninclusion in the Shareholder Materials to satisfy all requirements of applicable\nstate and federal securities laws. The Company and Amazon.com each shall be\nsolely responsible for any statement, information or omission in the Shareholder\nMaterials relating to it or its affiliates based on written information\nfurnished by it. The Company and Amazon.com will not provide or publish to the\nshareholders of the Company any material concerning them or their affiliates\nthat violates the Securities Act or the Exchange Act with respect to the\ntransactions contemplated hereby.\n\n                                      -51-\n   58\n\n6.8     AMAZON.COM COMMON STOCK\n\n        Amazon.com agrees to authorize for listing on the NASDAQ National Market\nthe shares of Amazon.com Common Stock issuable, and those required to be\nreserved for issuance, in connection with the Merger by filing with the NASDAQ\nNational Market a Notification of Listing of Additional Shares (or such other\nform as may be required by the NASDAQ National Market) in a timely manner prior\nto the Closing or otherwise in accordance with the rules and regulations of the\nNASDAQ National Market.\n\n6.9     SECURITIES ACT COMPLIANCE\n\n        Amazon.com represents and warrants that the issuance of the Amazon.com\nCommon Stock in connection with the Merger will have been registered on or prior\nto the Closing under the Securities Act, pursuant to a registration statement on\nForm S-4, which shall be effective as of the Closing. As a result, the shares of\nAmazon.com Common Stock issuable in the Merger will be freely tradable, without\nrestriction under the Securities Act, other than those restrictions imposed on\naffiliates of the Company pursuant to Rule 145 under the Securities Act and\nthose restrictions imposed on affiliates of Amazon.com pursuant to Rule 144\nunder the Securities Act. Amazon.com agrees to use commercially reasonable\nefforts to cause such registration statement to remain effective as of the\nEffective Date and to prepare and file with the Securities and Exchange\nCommission such amendments to such registration statement and amendments or\nsupplements to the prospectus used in connection therewith as may be necessary\nto comply with the provisions of the Securities Act with respect to the sale of\nAmazon.com Common Stock at the Closing. For so long as any shares of Amazon.com\nCommon Stock issued in connection with the Merger remain subject to Rule 145 of\nthe Securities Act, Amazon.com agrees to use commercially reasonable efforts to\ntimely file all required reports under the Exchange Act, and otherwise satisfy\nthe requirements of Rule 144(c) under the Securities Act.\n\n6.10    DISSENTING SHARES\n\n        Prior to the Closing Date, the Company shall furnish Amazon.com with the\nname and address of each shareholder of the Company who, prior to the Closing,\nhas requested appraisal rights pursuant to California law and the number of\nDissenting Shares owned by such shareholder.\n\n                                      -52-\n   59\n\n6.11    PUBLICITY\n\n        No party hereto shall issue any press release or otherwise make any\nstatements to any third party with respect to this Agreement or the transactions\ncontemplated hereby until the issuance by Amazon.com and the Company of a joint\npress release announcing this Agreement and the transactions contemplated\nhereby.\n\n6.12    OPTION GRANTS\n\n        Promptly following the Effective Date, Amazon.com will act to grant\nstock options in the numbers specified and to the employees of the Company set\nforth in Schedule 6.12 at an exercise price per share equal to Amazon.com Common\nStock fair market value as determined under the Amazon.com 1999 Stock Option\nPlan (the \"Amazon.com 1999 Plan\") at the first date the plan administrator of\nthe Amazon.com 1999 Plan acts following the Closing Date, with vesting in\naccordance with the standard five-year vesting schedule under the Amazon.com\n1999 Plan. Amazon.com shall offer employment, effective immediately following\nthe Effective Time, to those employees of the Company set forth at Exhibit 6.12\nwho immediately prior to the Effective Time continue to be employees of the\nCompany.\n\n6.13    OPTION SHARES; REGISTRATION\n\n        Amazon.com shall take all corporate action necessary to reserve for\nissuance a sufficient number of Amazon.com Common Stock for delivery upon\nexercise of the Options assumed in accordance with Section 1.7.1(d). Amazon.com\nshall use best efforts to cause to be filed with respect to Amazon.com Common\nStock subject to such Options a registration statement on Form S-8 (or any\nsuccessor form) with respect to those shares eligible to be registered on a\nprimary basis on such form to be effective within 10 business days of the date\non which the requirements of Items 2, 5 and 7 of Form 8-K have been satisfied\nand the responsive Report on Form 8-K, as it may be amended, with respect to the\nMerger has been filed with the SEC. Amazon.com shall use all commercially\nreasonable efforts to maintain the effectiveness of such registration statement\nor registration statements (and maintain the current status of the prospectus or\nprospectuses contained therein) for so long as such Options remain outstanding.\n\n        Amazon.com shall pay all expenses incident to the registration of shares\nunder this Section 6.13.\n\n                                      -53-\n   60\n\n6.14    INDEMNIFICATION OF OFFICERS AND DIRECTORS\n\n        From the Effective Time through the date that is six years after the\nEffective Time, Amazon.com agrees that it will, and will cause the Company to,\nindemnify and hold harmless each present and former director and officer (the\n\"Indemnified Persons\"), against any costs or expenses (including attorneys'\nfees), judgments, fines, losses, claims, damages, liabilities or amounts paid in\nsettlement incurred in connection with any claim, action, suit, proceeding or\ninvestigation, whether civil, criminal, administrative or investigative, arising\nout of or pertaining to matters existing or occurring at or prior to the\nEffective Time, whether asserted or claimed prior to, at or after the Effective\nTime, to the fullest extent that the Company would have been permitted under\nCalifornia law and its Articles of Incorporation or bylaws in effect on the date\nhereof to indemnify such Indemnified Person (and Amazon.com and the Company\nshall also advance expenses as incurred to the fullest extent permitted under\napplicable law, provided the Indemnified Person to whom expenses are advanced\nprovides an undertaking to repay such advances if it is ultimately determined\nthat such Indemnified Person is not entitled to indemnification). The provisions\nof this Section 6.14 are intended to be in addition to the rights otherwise\navailable to the current officers and directors of the Company by law, charter,\nbylaw or agreement, and shall operate for the benefit of, and shall be\nenforceable by, each of the Indemnified Persons, their heirs and their\nrepresentatives.\n\n6.15    BENEFITS ROLLOVER\n\n        After Closing and until December 31, 1999, Amazon.com, the Surviving\nCorporation and their affiliates shall provide employees of the Company who\nbecome employed by Amazon.com or the Surviving Corporation or any of their\naffiliates on the Closing Date or as a result of the transactions contemplated\nherein (the \"Retained Employees\") with employee benefit plans, policies,\nprograms and arrangements that in the aggregate are not materially less\nfavorable than those currently provided to such employees by the Company. For\npurposes of determining the amount of vacation and sick leave to which Retained\nEmployees shall be entitled upon becoming employees of Amazon.com, the Surviving\nCorporation or any of their affiliates, Amazon.com, the Surviving Corporation\nand each of their affiliates shall treat each Retained Employee's entire period\nof employment with the Company as if it had been employment with Amazon.com, the\nSurviving Corporation and their affiliates, even though the Retained Employees\nwere not actually employed by Amazon.com or any of its affiliates prior to\nClosing.\n\n                                      -54-\n   61\n\n                ARTICLE VII -- TERMINATION, AMENDMENT AND WAIVER\n\n7.1     TERMINATION\n\n        This Agreement may be terminated and the Merger may be abandoned at any\ntime prior to the Effective Time (notwithstanding any approval of this Agreement\nby the shareholders of the Company):\n\n        (a)     by mutual written consent;\n\n        (b)     by either the Company or Amazon.com, if the Merger has not been\nconsummated by June 30, 1999; provided, however, that the right to terminate\nthis Agreement under this subsection (b) shall not be available to any party\nwhose failure to fulfill any obligation under this Agreement has been the cause\nof, or resulted in, the failure of the Effective Time to occur on or before such\ndate;\n\n        (c)     by either the Company or Amazon.com, if there shall be any law\nor regulation that makes consummation of the Merger illegal or if any judgment,\ninjunction, order or decree enjoining Amazon.com, the Purchaser or the Company\nfrom consummating the Merger is entered and such judgment, injunction, order or\ndecree shall become final and nonappealable; provided, however, that the party\nseeking to terminate this Agreement pursuant to this subsection (c) shall have\nused all reasonable efforts to remove such judgment, injunction, order or\ndecree;\n\n        (d)     by the Company, in the event of a material breach by Amazon.com\nof any representation, warranty or agreement contained herein which has not been\ncured or is not curable by June 30, 1999; or\n\n        (e)     by Amazon.com, in the event of a material breach by the Company\nof any representation, warranty or agreement contained herein which has not been\ncured or is not curable by June 30, 1999.\n\n7.2     EFFECT OF TERMINATION\n\n        In the event of the termination of this Agreement pursuant to Section\n7.1 hereof, there shall be no further obligation on the part of any party\nhereto, other than the provisions of this Section 7.2 and Section 6.2. Nothing\nherein shall relieve any party from liability for any willful breach hereof.\n\n                                      -55-\n   62\n\n7.3     AMENDMENT\n\n        This Agreement may be amended by the parties hereto at any time before\nor after approval of the Company's shareholders; but after such approval,\nhowever, no amendment will be made which by applicable law requires the further\napproval of the Company's shareholders without obtaining such further approval.\n\n7.4     WAIVER\n\n        At any time prior to the Effective Time, any party hereto may (a) extend\nthe time for the performance of any obligation or other act of any other party\nhereto, (b) waive any inaccuracy in the representations and warranties contained\nherein or in any document delivered pursuant hereto, or (c) waive compliance\nwith any agreement or condition contained herein. Any such extension or waiver\nshall be valid only if set forth in an instrument in writing signed by the party\nor parties to be bound thereby.\n\n                  ARTICLE VIII -- SURVIVAL AND INDEMNIFICATION\n\n8.1     SURVIVAL\n\n        All representations and warranties contained in this Agreement or in the\nother Operative Documents or in any certificate delivered pursuant hereto or\nthereto shall survive the Closing for a period of one year after the Effective\nTime (the \"Survival Period\"), and shall not be deemed waived or otherwise\naffected by any investigation made or any knowledge acquired with respect\nthereto, or by any notice delivered pursuant to Section 6.4 hereof; provided,\nhowever, that any claim based on Section 2.8 (Taxes) shall survive until the end\nof the applicable statute of limitations. The covenants and agreements contained\nin this Agreement or in the other Operative Documents shall survive the Closing\nand shall continue until all obligations with respect thereto shall have been\nperformed or satisfied or shall have been terminated in accordance with their\nterms.\n\n8.2     INDEMNIFICATION BY THE HOLDERS OF COMPANY CAPITAL STOCK\n\n        Subject to the limitations set forth in this Article VIII, from and\nafter the Closing, each holder of Company Capital Stock severally and not\njointly shall indemnify and hold Amazon.com, its officers, directors and\naffiliates (as \"affiliate\" is defined in Rule 12b-2 of the Exchange Act) (the\n\"Indemnified Parties\") harmless from and against, and shall reimburse the\nIndemnified Parties for, any and all actual out-of-pocket losses, damages,\ndebts, liabilities, obligations, judgments, orders, awards, writs, injunctions,\ndecrees, fines, penalties, Taxes, costs or expenses (including, but not limited\nto, any reasonable legal or accounting fees or expenses and any Taxes or other\n\n                                      -56-\n   63\n\ncosts or damages arising under, caused by or related to Section 280G of the Code\nor any comparable provision of state, local or foreign law) net of insurance\nproceeds and any tax benefits attributable to such Losses which reduces the\nTaxes of Amazon.com or its subsidiaries (\"Losses\") arising out of (i) any\ninaccuracy or misrepresentation in, or breach of, any representation or warranty\nmade by the Company in this Agreement or in any other Operative Document or in\nthe certificates delivered hereto or thereto; (ii) any failure by the Company to\nperform or comply, in whole or in part, with any covenant or agreement in this\nAgreement or in any other Operative Document; (iii) all liability for Taxes of\nthe Company assessed during or attributable to any taxable period ending on or\nprior to the Effective Date, and the portion of any taxable period that\nincludes, but does not end on, the Effective Date to the extent such Taxes\nexceed the reserve for Tax liability (rather than any reserve for deferred Taxes\nestablished to reflect timing differences between book and Tax income) set forth\non the face of the Company Balance Sheet (rather than in any notes thereto);\n(iv) any liability for Taxes resulting from the transactions contemplated by\nthis Agreement, excluding any Taxes resulting from a reassessment of Real\nProperty or Personal Property occurring as a result of the Merger or (v) those\nexpenses of the Company incurred in connection with the transactions\ncontemplated hereby in excess of $200,000 (as such amount is described and\nlimited in Section 9.2 hereof) that are not deducted from the Merger\nConsideration as set forth in Sections 1.7.1(b)(i) and 9.2 hereof.\n\n8.3     THRESHOLD AND LIMITATIONS\n\n        (a)     No Indemnified Party shall be entitled to receive any\nindemnification payment with respect to any claims for indemnification under\nthis Article VIII (\"Claims\") until the aggregate Losses for which such\nIndemnified Parties would be otherwise entitled to receive indemnification\nexceed $100,000 (the \"Threshold\"); provided, however, that once such aggregate\nLosses exceed the Threshold, such Indemnified Parties shall be entitled to\nindemnification for the aggregate amount of all Losses without regard to the\nThreshold; and provided further, that the Indemnified Parties shall be entitled\nto indemnification for all Losses based on fraud or arising in connection with\nSection 9.2 (Expenses).\n\n        (b)     (i)     The obligation of the shareholders to indemnify\nAmazon.com and the other Indemnified Parties under Section 8.2 shall be\nAmazon.com's sole and exclusive remedy under this Agreement against the\nshareholders.\n\n                (ii)    The indemnity obligations of the shareholders with\nrespect to Losses (other than Losses based upon a claim of fraud or arising in\nconnection with Section 2.14 (Intellectual Property) or Section 9.2) (\"Section\n8.3(b)(ii) Losses\")shall be limited to $25,000,000 in the aggregate (as\ndetermined in accordance with Section \n\n                                      -57-\n   64\n\n8.3(d)) (the \"Initial Loss Limit\") and at no time shall any shareholder's\nindemnity obligations with respect to Section 8.3(b)(ii) Losses exceed such\nshareholder's pro rata portion of the Initial Loss Limit.\n\n                (iii)   Notwithstanding any other provision of this Agreement\nto the contrary, the indemnity obligations of the shareholders under Section 8.2\nfor Losses based upon claims arising in connection with Section 2.14 (\"Section\n8.3(b)(iii) Losses\") shall be limited to the Pledged Shares, and at no time\nshall such indemnity obligation of a shareholder exceed such shareholder's pro\nrata portion of the Pledged Shares (as determined in accordance with Section\n8.3(d) below).\n\n                (iv)    Each Section 8.3(b)(ii) Loss and Section 8.3(b)(iii) \nLoss paid shall reduce dollar for dollar the amount available for the\nsatisfaction of any subsequent claim for Section 8.3(b)(ii) and Section\n8.3(b)(iii) Losses.\n\n                (v)     Notwithstanding any other provision of this Agreement to\nthe contrary, the indemnity obligations of the shareholders under Section 8.2\nfor Losses based upon claims of fraud or for Losses arising in connection with\nSection 9.2 shall be limited to the Merger Consideration, and at no time shall\nsuch indemnity obligations of a shareholder exceed such shareholder's pro rata\nportion of the Merger Consideration.\n\n        (c)     An indemnifying party shall not be obligated to defend and hold\nharmless an Indemnified Party, or otherwise be liable to such party, with\nrespect to any claims made by the Indemnified Party after the expiration of the\napplicable time period as set forth in Section 8.1 hereof. Notwithstanding the\nforegoing, indemnity may be sought after the expiration of the Survival Period\npursuant to this Article VIII if a Claim Notice (as defined in Section 8.4(a)\nhereof) shall have been delivered to the Shareholder Representative prior to the\nexpiration of the Survival Period.\n\n        (d)     The indemnification obligations of the shareholders of the\nCompany under this Article VIII shall be satisfied, first, by means of the\nforfeiture to Amazon.com of Pledged Shares in accordance with the provisions of\nthis Article VIII. The number of Pledged Shares to be forfeited to Amazon.com in\npayment of any claims for indemnification under this Article VIII (\"Claims\")\nshall be determined by dividing (x) the aggregate dollar amount of such Claims\nby (y) the Base Price. The aggregate value of Claims paid by means of the\nforfeiture to Amazon.com of Pledged Shares shall be deemed to reduce the total\nMerger Consideration otherwise payable to the shareholders of the Company\npursuant to Section 1.7 of this Agreement. Any such Claims shall be deemed to\nreduce the Pledged Shares, pro rata with respect to each shareholder of the\nCompany, as determined by reference to the number of shares of \n\n                                      -58-\n   65\n\nAmazon.com Common Stock such shareholder is entitled to receive in the Merger as\ncompared to all other shareholders of the Company; provided, however, that any\nClaims paid with respect to any representation, warranty covenant or agreement\nof the Shareholder shall not result in a pro rata reduction of the Pledged\nShares but shall reduce only the Pledged Shares of such Shareholder.\n\n8.4     PROCEDURE FOR INDEMNIFICATION\n\n        (a)     An Indemnified Party shall give written notice (the \"Claim\nNotice\") of any Claim for indemnification under this Article VIII to the\nShareholder Representative reasonably promptly after the assertion against an\nIndemnified Party of any claim by a third party (a \"Third Party Claim\"), or, if\nsuch Claim is not in respect of a Third Party Claim, reasonably promptly after\nthe discovery of facts upon which the Indemnified Party intends to base a Claim\nfor indemnification pursuant to Article VIII hereof; provided, however, that the\nfailure or delay to so notify the Shareholder Representative shall not relieve\nthe Shareholder Representative of any obligation or liability that the\nShareholder Representative may have to the Indemnified Party except to the\nextent that the Shareholder Representative demonstrates that the indemnifying\nparties' ability to defend or resolve such Claim is adversely affected thereby.\nAny such Claim Notice shall describe the facts and circumstances on which the\nasserted Claim for indemnification is based and shall specify how such\nIndemnified Party intends to recover such funds pursuant to this Agreement and\nthe basis for the determination of the amount which the Indemnified Party intend\nto recover.\n\n        (b)     If, within 30 days of the receipt by the Shareholder\nRepresentative of a Claim Notice, the Shareholder Representative contests in\nwriting to the Indemnified Party that Losses identified in such Claim Notice\nconstitute indemnifiable Claims (the \"Representative Notice\"), then the\nIndemnified Party and the Shareholder Representative, acting in good faith,\nshall attempt to reach agreement with respect to the contested portions of such\nClaims. Unless a Claim is contested within such 30-day period, the Indemnified\nParty shall, subject to the other terms of this Article VIII, be paid the amount\nof the Losses related to such Claim or the uncontested portion thereof. The\nShareholder Representative shall not object to any Claim unless (i) it believes\nin good faith that the Indemnified Party is not entitled to be indemnified with\nrespect to the Losses specified therein, or (ii) it lacks sufficient information\nto assess the validity or amount of the Claim. If the Shareholder Representative\nobjects to a Claim on the basis that it lacks sufficient information, it shall\npromptly request from the Indemnified Party any additional information\nreasonably necessary in order for it to assess such Claim and the Indemnified\nParty shall, to the extent the Indemnified Party reasonably can, provide\nadditional information reasonably requested. Upon receipt of such additional\ninformation, the Shareholder Representative shall review it as soon as \n\n                                      -59-\n   66\n\nreasonably practicable and notify the Indemnified Party of any withdrawal or\nmodification of the objection. If the Indemnified Party and the Shareholder\nRepresentative are unable to reach agreement with respect to any contested\nClaims within 45 days of the delivery of the Representative Notice, the matter\nshall be settled by binding arbitration in Portland, Oregon as set forth below.\nAll claims shall be settled in accordance with the Commercial Arbitration Rules\nthen in effect of the American Arbitration Association (the \"AAA Rules\"). The\nShareholder Representative and the Indemnified Party shall each designate one\narbitrator within 15 days after the termination of such 45-day period. The\nShareholder Representative and the Indemnified Party shall cause such designated\narbitrators mutually to agree upon and designate a third arbitrator; provided,\nhowever, that (i) failing such agreement within 70 days of delivery of the\nRepresentative Notice, the third arbitrator shall be appointed in accordance\nwith the AAA Rules and (ii) if either the Shareholder Representative or the\nIndemnified Party fails to timely designate an arbitrator, the dispute shall be\nresolved by the one arbitrator timely designated. All of the fees and expenses\nof the arbitrators shall be paid from proceeds of the Pledged Shares in the\nevent that Amazon.com or the Purchaser is the prevailing party in a dispute, and\nall such fees and expenses shall be paid by Amazon.com in the event that the\nshareholders or the Shareholder is the prevailing party in a dispute. The\nShareholder Representative and the Indemnified Party shall cause the arbitrators\nto decide the matter to be arbitrated pursuant hereto within 30 days after the\nappointment of the last arbitrator. The arbitrators' decision shall relate\nsolely to whether the Indemnified Party is entitled to be indemnified for the\ncontested Claim, or the contested portion thereof, pursuant to the applicable\nterms of this Agreement. The final decision of the majority of the arbitrators\nshall be furnished to the Shareholder Representative and the Indemnified Party\nin writing and shall constitute the conclusive determination of the issue in\nquestion binding upon the Shareholder Representative, the Shareholders, and the\nIndemnified Party, and shall not be contested by any of them. Such decision may\nbe used in a court of law only for the purpose of seeking enforcement of the\narbitrators' decision.\n\n        (c)     (i)     Subject to the rights of or duties to any insurer or \nother third party having potential liability therefor, the Shareholder\nRepresentative shall have the right, upon written notice given to the\nIndemnified Party within 30 days after receipt of the notice from the\nIndemnified Party of any Third Party Claim, to assume the defense or handling of\nsuch Third Party Claim, at the indemnifying party's sole expense, in which case\nthe provisions of Section 8.4(b)(ii) hereof shall govern; provided, however,\nthat, notwithstanding the foregoing, Amazon.com may elect to assume the defense\nand handle any such Third Party Claim if it determines in good faith that the\nresolution of such Third Party Claim could result in an adverse impact on the\nbusiness, operations, \n\n                                      -60-\n   67\n\nassets, liabilities (absolute, accrued, contingent or otherwise), condition\n(financial or otherwise) or prospects of Amazon.com, in which case the\nprovisions of Section 8.4(d)(ii) hereof shall govern.\n\n                (ii)    The Shareholder Representative shall select counsel\nreasonably acceptable to the Indemnified Party in connection with conducting the\ndefense or handling of such Third Party Claim, and the Shareholder\nRepresentative shall defend or handle the same in consultation with the\nIndemnified Party and shall keep the Indemnified Party timely apprised of the\nstatus of such Third Party Claim. The Shareholder Representative shall not,\nwithout the prior written consent of the Indemnified Party, agree to a\nsettlement of any Third Party Claim, unless (A) the settlement provides an\nunconditional release and discharge of the Indemnified Party and the Indemnified\nParty is reasonably satisfied with such discharge and release and (B) the\nIndemnified Party shall not have reasonably objected to any such settlement on\nthe ground that the circumstances surrounding the settlement could result in an\nadverse impact on the business, operations, assets, liabilities (absolute,\naccrued, contingent or otherwise), condition (financial or otherwise) or\nprospects of the Indemnified Party. The Indemnified Party shall cooperate with\nthe Shareholder Representative and shall be entitled to participate in the\ndefense or handling of such Third Party Claim with its own counsel and at its\nown expense.\n\n        (d)     (i)     If (A) the Shareholder Representative does not give \nwritten notice to the Indemnified Party pursuant to Section 8.4(c)(i) within 30\ndays after receipt of the notice from the Indemnified Party of any Third Party\nClaim of the indemnifying party's election to assume the defense or handling of\nsuch Third Party Claim or (B) Amazon.com elects to assume the defense and the\nhandling of such Third Party Claim pursuant to Section 8.4(c)(ii), the\nprovisions of Section 8.4(d)(ii) hereof shall govern.\n\n                (ii)    The Indemnified Party may, at the indemnifying party's\nexpense (which shall be paid from time to time by the Shareholder Representative\nas such expenses are incurred by the Indemnified Party), select counsel in\nconnection with conducting the defense or handling of such Third Party Claim and\ndefend or handle such Third Party Claim in such manner as it may deem\nappropriate; provided, however, that the Indemnified Party shall keep the\nShareholder Representative timely apprised of the status of such Third Party\nClaim and shall not settle such Third Party Claim without the prior written\nconsent of the Shareholder Representative, which consent shall not be\nunreasonably withheld. If the Indemnified Party defends or handles such Third\nParty Claim, the Shareholder Representative shall cooperate with the Indemnified\nParty and shall be entitled to participate in the defense or handling of such\nThird Party Claim with its own counsel and at its own expense.\n\n                                      -61-\n   68\n\n        (e)     Notwithstanding anything to the contrary herein, with respect to\nany claim that is made by any taxing authority which, if successful, might\nresult in an indemnity payment to any Indemnified Party hereunder (a \"Tax\nClaim\") (other than a Tax Claim relating solely to Taxes of the Company for any\nTax period of the Company that begins before the Closing Date and ends after the\nClosing Date (a \"Straddle Period\")), the Shareholder Representative, after\nconsulting in good faith with such Indemnified Party and subject to the\nrequirement that the Shareholder Representative keep such Indemnified Party\nfully informed and allow such Indemnified Party to participate in any proceeding\ninvolved, shall control all proceedings taken in connection with such Tax Claim\n(including selection of counsel) and, without limiting the foregoing, may in its\nsole discretion pursue or forego any and all administrative appeals,\nproceedings, hearings and conferences with any taxing authority with respect\nthereto, and may, in its sole good faith discretion, either pay the Tax claimed\nand sue for a refund where applicable law permits such refund suits or contest\nthe Tax Claim in any permissible manner. The Shareholder Representative and\nAmazon.com shall jointly control all proceedings taken in connection with any\nTax Claim relating solely to Taxes of the Company for a Straddle Period. In no\ncase shall Amazon.com, the Company, any of their Subsidiaries or any of their\nrespective officers, directors, employees, stockholders, agents or\nrepresentatives settle or otherwise compromise any Tax Claim without the\nShareholder Representative's written consent, which shall not be unreasonably\nwithheld, unless and to the extent such Indemnified Party waives the relevant\nindemnity payment and releases the shareholders from the relevant indemnity\nobligation. Neither party shall settle a Tax Claim relating solely to Taxes of\nthe Company for any Straddle Period without the other party's prior written\nconsent, which shall not be unreasonably withheld, unless and to the extent such\nIndemnified Party waives the relevant indemnity payment and releases the\nshareholders from the relevant indemnity obligation. Amazon.com, the Company,\nthe Shareholder Representative and each of their respective Affiliates shall\ncooperate in contesting any Tax Claim, which cooperation shall include, without\nlimitation, the retention and (upon request) the provision of records and\ninformation which are reasonably relevant to such Tax Claim, and making\nemployees available on a mutually convenient basis to provide additional\ninformation or explanation or any material provided hereunder or to testify at\nproceedings relating to such Tax Claim.\n\n8.5     REMEDIES; SPECIFIC PERFORMANCE\n\n        Except as otherwise provided, the indemnification provisions of this\nArticle VIII are the sole and exclusive remedy of any party to this Agreement\nfor a breach of any representation, warranty or covenant contained herein.\nNotwithstanding the preceding sentence, each of the parties acknowledges and\nagrees that the other \n\n                                      -62-\n   69\n\nparties hereto would be damaged irreparably in the event any of the provisions\nof this Agreement are not performed in accordance with their specific terms or\notherwise are breached. Accordingly, each of the parties hereto agrees that the\nother parties hereto shall be entitled to an injunction to prevent breaches of\nthe provisions of this Agreement and to enforce specifically this Agreement and\nthe terms and provisions hereof (including the indemnification provisions\nhereof) in any competent court having jurisdiction over the parties, in addition\nto any other remedy to which they may be entitled at law or in equity.\n\n                              ARTICLE IX -- GENERAL\n\n9.1     TAX MATTERS\n\n        (a)     The parties shall not take a position on any tax returns\ninconsistent with the treatment of the Merger for tax purposes as a\nreorganization within the meaning of Section 368(a) of the Code unless, subject\nto the provisions of Section 8.4, compelled by any taxing authority.\n\n        (b)     Amazon.com shall prepare or cause to be prepared and file or\ncause to be filed all Tax Returns for the Company for all periods ending on or\nprior to the Closing Date which are filed after the Closing Date. Amazon.com\nshall permit the Shareholder Representative to review and approve promptly upon\nreceipt each such Tax Return described in the preceding sentence prior to filing\nand shall make such revisions to such Tax Returns as are reasonably requested by\nthe Shareholder Representative. In no event shall such Tax Returns be filed by\nAmazon.com without the prior approval of the Shareholder Representative, which\napproval shall be given or withheld promptly upon receipt and which shall not be\nunreasonably withheld.\n\n        (c)     Amazon.com shall prepare or cause to be prepared and file or\ncause to be filed any Tax Returns of the Company for any Straddle Period.\nAmazon.com shall permit the Shareholder Representative to review and approve\npromptly upon receipt each such Tax Return described in the preceding sentence\nto the extent such Tax Return relates to the portion of a Straddle Period ending\non the Closing Date (the \"Pre-Closing Partial Period\") and shall make such\nrevisions to such Tax Returns (to the extent such revisions relate to the\nPre-Closing Partial Period) as are reasonably requested by the Shareholder\nRepresentative. In no event shall such Tax Returns relating to the Pre-Closing\nPartial Period be filed by Amazon.com without the prior approval of the\nShareholder Representative, which approval shall be given or withheld promptly\nupon request and which shall not be unreasonably withheld. For purposes of\nallocating Taxes to the Pre-Closing Partial Period, to the extent permitted by\nlaw and administrative practice, the Straddle Period shall be treated as closing\non (and \n\n                                      -63-\n   70\n\nincluding) the Closing Date. In the case of any Taxes that are payable for a\nStraddle Period that is not treated under the preceding sentence as closing on\nthe Closing Date, the portion of such Tax related to the Pre-Closing Partial\nPeriod shall be deemed to be: (i) in the case of real, personal and intangible\nProperty Taxes (\"Property Taxes\") of the Company for the Pre-Closing Partial\nPeriod, the amount of such Tax for the Straddle Period shall be equal to the\namount of such Property Taxes for the entire Straddle Period multiplied by a\nfraction, the numerator of which is the number of days during the Straddle\nPeriod that are in the Pre-Closing Partial Period and the denominator of which\nis the number of days in the Straddle Period, and (ii) the Taxes of the Company\nother than property Taxes for the Pre-Closing Partial Period shall be computed\nas if such taxable period ended as of the close of business on the Closing Date.\n\n        (d)     Any refunds of Taxes of the Company that are received by\nAmazon.com or the Company, and any amounts credited against Tax of the Company\nwhich Amazon.com or the Company actually utilizes in reducing its taxes that\nrelate to Tax periods or portions thereof of the Company ending on or before the\nClosing Date shall be for the account of the Shareholders, and Amazon.com shall,\nif the net refund in the aggregate for all Tax Returns for the periods ending on\nor before the Closing Date exceeds $100,000, pay over to the Shareholder\nRepresentative any such refund or the amount of any such credit within fifteen\n(15) days after receipt or utilization of the refund or credit.\n\n        (e)     (i)     Amazon.com, the Company and the Shareholders shall \ncooperate fully, as and to the extent reasonably requested by the other party,\nin connection with the filing of Tax Returns pursuant to this Section 9.1 and\nany audit, litigation or other proceeding with respect to Taxes. Such\ncooperation shall include the retention and (upon the other party's request) the\nprovision of records and information which are reasonably relevant to any such\naudit, litigation or other proceeding and making employees available on a\nmutually convenient basis to provide additional information and explanation of\nany material provided hereunder. The Company and the Shareholders agree (A) to\nretain all books and records with respect to Tax matters pertinent to the\nCompany relating to any taxable period beginning before the Closing Date until\nthe expiration of the statute of limitations (and, to the extent notified by\nAmazon.com or the Shareholder Representative, any extensions thereof) of the\nrespective taxable periods, and to abide by all record retention agreements\nentered into with any taxing authority, and (B) to give the other party\nreasonable written notice prior to transferring, destroying or discarding any\nsuch books and records and, if the other party so requests, the Company or the\nShareholder Representative, as the case may be, shall allow the other party to\ntake possession of such books and records.\n\n                                      -64-\n   71\n\n                (ii)    Amazon.com and the Shareholder Representative further \nagree, upon request, to use their best efforts to obtain any certificate or\nother document from any governmental authority or any other Person as may be\nnecessary to mitigate, reduce or eliminate any Tax that could be imposed\n(including, but not limited to, with respect to the transactions contemplated\nhereby).\n\n                (iii)   Amazon.com and the Shareholder Representative further \nagree, upon request, to provide the other party with all information that either\nparty may be required to report pursuant to Section 6043 of the Code and all\nTreasury Regulations promulgated thereunder.\n\n9.2     EXPENSES\n\n        Regardless of whether the transactions contemplated by this Agreement\nare consummated, each party shall pay its own respective fees and expenses\nincident to the negotiation, preparation and execution of this Agreement and the\nother Operative Documents (including legal and accounting fees and expenses);\nprovided, however that, should any action be brought hereunder, the attorneys'\nfees and expenses of the prevailing party shall be paid by the other party to\nsuch action; and provided further, that the fees and expenses (including,\nwithout limitation, any success fee payable to PricewaterhouseCoopers, LLC)\nincurred by the Company in connection with this Agreement (which shall not\ninclude filing fees related to compliance with the requirements of the\nHart-Scott-Rodino Act, fees incurred in connection with the Company's December\n31, 1998 audit and legal fees incurred with respect to matters unrelated to the\nMerger) in excess of $200,000 shall reduce the Merger Consideration by the\namount in excess of $200,000.\n\n9.3     NOTICES\n\n        Any notice or demand desired or required to be given hereunder shall be\nin writing given by personal delivery, confirmed facsimile transmission, or\novernight courier service, in each case addressed as respectively set forth\nbelow or to such other address as any party shall have previously designated by\nsuch a notice. The effective date of any notice or request shall be the date of\npersonal delivery, the date on which successful facsimile transmission is\nconfirmed or the date actually delivered by a reputable overnight courier\nservice, as the case may be, in each case properly addressed as provided herein\nand with all charges prepaid.\n\n                                      -65-\n   72\n\n        TO AMAZON.COM OR THE PURCHASER:\n\n                Amazon.com, Inc.\n                P.O. Box 81226\n                Seattle, Washington 98108-1226\n                Fax: (206) 834-7010\n                Attention:  Legal\n\n        with a copy to:\n\n                Perkins Coie LLP\n                1201 Third Avenue, 40th Floor\n                Seattle, Washington 98101-3099\n                Fax: (206) 583-8500\n                Attention:  Scott L. Gelband\n\n        TO THE COMPANY:\n\n                Alexa Internet\n                Presidio Building 37\n                P.O. Box 29141\n                San Francisco, CA  94129\n                Fax: (415) 561-6795\n                Attention:  Brewster Kahle\n\n        with a copy to:\n\n                Latham &amp; Watkins\n                135 Commonwealth Drive\n                Menlo Park, CA  94028\n                Fax:  (650) 463-2600\n                Attention:  Ora T. Fisher\n\n9.4     SEVERABILITY\n\n        If any term or other provision of this Agreement is invalid, illegal or\nincapable of being enforced by any rule of law, or public policy, all other\nconditions and provisions of this Agreement shall nevertheless remain in full\nforce and effect so long as the economic or legal substance of the transactions\ncontemplated hereby is not affected in any manner adverse to any party. Upon\nsuch determination that any term or other provision is invalid, illegal or\nincapable of being enforced, the parties hereto shall negotiate in good faith to\nmodify this Agreement so as to effect the original intent \n\n                                      -66-\n   73\n\nof the parties as closely as possible in a mutually acceptable manner in order\nthat the transactions contemplated hereby be consummated as originally\ncontemplated to the fullest extent possible.\n\n9.5     ENTIRE AGREEMENT\n\n        This Agreement, the Mutual Nondisclosure Agreement and the other\nOperative Documents constitute the entire agreement among the parties with\nrespect to the subject matter hereof and thereof and supersede all prior\nagreements and undertakings, both written and oral, among the parties, or any of\nthem, with respect to the subject matter hereof and thereof.\n\n9.6     ASSIGNMENT\n\n        This Agreement shall not be assigned by operation of law or otherwise;\nprovided, however, that Purchaser's rights and obligations may be assigned to\nand assumed by any other corporation wholly owned (directly or through\nintermediate wholly owned subsidiaries) by Amazon.com.\n\n9.7     PARTIES IN INTEREST\n\n        This Agreement shall be binding upon and inure solely to the benefit of\neach party hereto and their respective successors and permitted assigns, and\nnothing in this Agreement, express or implied, is intended to or shall confer\nupon any other Person any right, benefit or remedy of any nature whatsoever\nunder or by reason of this Agreement except as specifically provided.\n\n9.8     GOVERNING LAW\n\n        This Agreement shall be governed by, and construed in accordance with,\nthe laws of the State of Delaware applicable to contracts executed in and to be\nperformed in that state.\n\n9.9     HEADINGS\n\n        The descriptive headings contained in this Agreement are included for\nconvenience of reference only and shall not affect in any way the meaning or\ninterpretation of this Agreement.\n\n9.10    COUNTERPARTS\n\n        This Agreement may be executed and delivered (including by facsimile\ntransmission) in one or more counterparts, and by the different parties hereto\nin \n\n\n                                      -67-\n   74\n\nseparate counterparts, each of which when executed and delivered shall be\ndeemed to be an original but all of which taken together shall constitute one\nand the same agreement. To expedite the process of entering into this Agreement,\nthe parties acknowledge that Transmitted Copies of this Agreement will be\nequivalent to original documents until such time as original documents are\ncompletely executed and delivered. \"Transmitted Copies\" will mean copies that\nare reproduced or transmitted via photocopy, facsimile or other process of\ncomplete and accurate reproduction and transmission.\n\n9.11    WAIVER OF JURY TRIAL\n\n        Amazon.com, the Company and the Purchaser hereby irrevocably waives all\nright to trial by jury in any action, proceeding or counterclaim (whether based\non contract, tort or otherwise) arising out of or relating to this Agreement or\nthe actions of such parties in the negotiation, administration, performance and\nenforcement thereof.\n\n                                      -68-\n   75\n\n        IN WITNESS WHEREOF, the parties hereto have entered into and signed this\nAgreement as of the date and year first above written.\n\n                                        AMAZON.COM, INC.\n\n\n                                        By \/s\/ Randy Tinsley\n                                           -------------------------------------\n                                        Its Treasurer and Vice President\n                                            of Corporate Development\n                                           -------------------------------------\n\n\n\n                                        AI ACQUISITION, INC.\n\n\n                                        By \/s\/ Randy Tinsley\n                                           -------------------------------------\n                                        Its Treasurer and Vice President\n                                            of Corporate Development\n                                           -------------------------------------\n\n\n\n                                        ALEXA INTERNET\n\n\n                                        By \/s\/ Brewster Kahle\n                                           -------------------------------------\n                                        Its President\n                                           -------------------------------------\n\n\n\n                                        SHAREHOLDER\n\n\n                                        By \/s\/ Brewster Kahle\n                                           -------------------------------------\n                                           Brewster Kahle\n   76\n                    AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF\n                                     MERGER\n\n     This Amendment (this \"Amendment\") to the Agreement and Plan of Merger,\ndated as of April 24, 1999, between Amazon.com, Inc. (\"Amazon.com\"), AI\nAcquisition, Inc. (\"Purchaser\"), Alexa Internet and Brewster Kahle (the \"Merger\nAgreement\"), is made as of June 3, 1999 by and among Amazon.com, Purchaser,\nAlexa Internet and Brewster Kahle. Amazon.com, Purchaser, Alexa Internet and\nBrewster Kahle are referred to together as the \"Parties\" or, individually, as a\n\"Party.\"\n\n                                    RECITALS\n\n     1.  Section 1.4 of the Merger Agreement provides that at the Effective\nTime of the Merger, the Articles of Incorporation of the Surviving Corporation\nwill be amended and restated in their entirety to conform to the Articles of\nIncorporation of the Purchaser, and Section 1.5 of the Merger Agreement\nprovides that at the Effective Time of the Merger, the Bylaws of the Purchaser\nshall become the Bylaws of the Surviving Corporation.\n\n     2.  The Parties wish to amend Section 1.4 and 1.5 to provide that the\nArticles of Incorporation and Bylaws of the Purchaser shall be in the forms\nattached as exhibits hereto.\n\n     3.  Section 4.12 of the Merger Agreement provides that it shall be a\ncondition precedent to the obligations of Amazon.com and the Purchaser under\nthe Merger Agreement that Bruce Gilliat, Brewster Kahle, Mark Dirsa, Niall\nO'Driscoll and Kelly Ransom (the \"key Employees\") shall have entered into the\nAmazon.com standard form of Confidentiality, Noncompetition and Invention\nAssignment Agreement, the form of which is attached to the Merger Agreement as\nExhibit 4.12.\n\n     4.  The Parties wish to amend Section 4.12 to provide that it shall be a\ncondition precedent to the obligations of Amazon.com and the Purchaser under\nthe Merger Agreement that the Key Employees shall have entered into the\nagreements described in this Amendment.\n\n     5.  Capitalized terms not otherwise defined herein shall have the meanings\nassigned to those terms in the Merger Agreement.\n\n\n\n   77\n                                   AGREEMENT\n\n\n1.    ARTICLES AND BYLAWS OF THE SURVIVING CORPORATION\n\n      Section 1.4 of the Merger Agreement shall be amended in its entirety to\nread as follows:\n\n            At the Effective Time, the Articles of Incorporation of the\n      Surviving Corporation shall be amended and restated in their entirety in\n      the form set forth as Exhibit A hereto. Thereafter, the Articles of\n      Incorporation of the Surviving Corporation may be amended in accordance\n      with their terms and as provided by law.\n\n      Section 1.5 of the Merger Agreement shall be amended in its entirety to\nread as follows:\n\n            The Board of Directors of the Surviving Corporation shall, effective\n      as of the Effective Time, amend and restate its Bylaws in their entirety\n      in the form set forth as Exhibit B hereto. Thereafter, the Bylaws may be\n      amended or repealed in accordance with their terms and the Articles of\n      Incorporation of the Surviving Corporation and as provided by law.\n\n2.    EMPLOYMENT AND NONCOMPETITION ARRANGEMENTS\n\n      Section 4.12 of the Merger Agreement shall be amended in its entirety to\nread as follows:\n\n            \"Bruce Gilliat, Brewster Kahle, Kelly Ransom, Mark Dirsa and Niall\n      O'Driscoll shall have accepted an oral offer of employment with Amazon.com\n      and shall have executed the Confidentiality and Invention Assignment\n      Agreement in the form attached hereto as Exhibit 4.12A. In addition, Bruce\n      Gilliat and Brewster Kahle shall have executed the Noncompetition\n      Agreement in the form attached hereto as Exhibit 4.12B and Mark Dirsa,\n      Niall O'Driscoll and Kelly Ransom shall have executed the Supplemental\n      Confidentiality Protection Agreement in the form attached hereto as\n      Exhibit 4.12C.\"\n\n3.    EXHIBITS\n\n      Exhibit 4.12 (Form of Confidentiality, Noncompetition and Invention\nAssignment Agreement) shall be removed and replaced by Exhibit 4.12A (Form of\nConfidentiality and Invention Assignment Agreement), Exhibit 4.12B (Form of \n\n\n\n                                      -2-\n   78\nNoncompetition Agreement) and Exhibit 4.12C (Form of Supplemental\nConfidentiality Protection Agreement), each of which is attached to this\nAmendment.\n\n4.    GENERAL PROVISIONS\n\n      4.1   EFFECT OF AMENDMENT\n\n      Except for the amended provisions described herein, all other terms and\nprovisions of the Merger Agreement and the Operative Documents continue in full\nforce and effect according to the provisions thereof and all references therein\nto such Merger Agreement shall henceforth refer to the Merger Agreement as\namended by this Amendment. This Amendment shall be deemed incorporated into,\nand a part of, the Merger Agreement and the other applicable Operative\nDocuments.\n\n      4.2   GOVERNING LAW\n\n      This Amendment shall be governed by, and construed in accordance with,\nthe laws of the State of Delaware applicable to contracts executed in and to be\nperformed entirely in such State, without reference to any rules governing\nconflict of laws.\n\n      4.3   HEADINGS\n\n      The descriptive headings contained in this Amendment are included for\nconvenience of reference only and shall not affect in any way the meaning or\ninterpretation of this Amendment.\n\n      4.4   COUNTERPARTS\n\n      This Amendment may be executed and delivered (including by facsimile\ntransmission) in counterparts, each of which when executed shall be deemed to\nbe an original but all of which taken together shall constitute one agreement.\n\n\n\n                                      -3-\n   79\n     IN WITNESS WHEREOF, the parties hereto have entered into and signed this\nAgreement as of the date and year first above written.\n\n                                   AMAZON.COM, INC.\n\n\n                                   \/s\/ Randolf J. Tinsley\n                                   ----------------------------------------\n                                   By: Randolf J. Tinsley\n                                   Its: Treasurer and Director of Corporate\n                                   Development\n\n\n                                   AI ACQUISITION, INC.\n\n\n                                   \/s\/ Randolf J. Tinsley\n                                   ----------------------------------------\n                                   By: Randolf J. Tinsley\n                                   Its: Treasurer and Director of Corporate\n                                   Development\n\n\n                                   ALEXA INTERNET\n\n\n                                   \/s\/ Brewster Kahle\n                                   ----------------------------------------\n                                   By: Brewster Kahle\n                                   Its: President\n\n\n                                   BREWSTER KAHLE\n\n\n                                   \/s\/ Brewster Kahle\n                                   ----------------------------------------\n                                   Brewster Kahle\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6645],"corporate_contracts_industries":[9492],"corporate_contracts_types":[9622,9626],"class_list":["post-43004","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-amazoncom-inc","corporate_contracts_industries-retail__books","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43004"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43004"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43004"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}