{"id":43501,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/preferred-stock-purchase-agreement-drugstore-com-inc-and.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"preferred-stock-purchase-agreement-drugstore-com-inc-and","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/preferred-stock-purchase-agreement-drugstore-com-inc-and.html","title":{"rendered":"Preferred Stock Purchase Agreement – Drugstore.com Inc. and Amazon.com Inc."},"content":{"rendered":"\n DRUGSTORE.COM, INC.\n\n PREFERRED STOCK PURCHASE AGREEMENT\n\n This Preferred Stock Purchase Agreement (this \"Agreement\") is made as\nof July 30, 2000 by and among drugstore.com, inc., a Delaware corporation (the\n\"Company\"), and the investors listed on Schedule I attached hereto (each a\n\"Purchaser\" and together the \"Purchasers\").\n\n The parties hereby agree as follows:\n\n 1. PURCHASE AND SALE OF PREFERRED STOCK.\n\n 1.1 SALE AND ISSUANCE OF PREFERRED STOCK.\n\n (a) Subject to the terms and conditions of this\nAgreement, each of the Purchasers agrees to purchase and the Company agrees to\nsell and issue to such Purchaser that number of shares of Series 1 Preferred\nStock, par value $0.0001, of the Company (the \"Preferred Stock\"), determined by\ndividing the Purchase Commitment listed opposite such Purchaser's name on\nSchedule 1 by $493.75. The Company shall have the right to amend Schedule I\nhereto to add additional Purchasers at any time prior to the Closing, and any\nsuch Purchasers shall become parties to this Agreement.\n\n (b) The Preferred Stock shall have the rights and\nrestrictions as set forth in the Certificate of Designation of Series 1\nPreferred Stock of drugstore.com, inc. (the \"Certificate of Designation\")\nattached hereto as Exhibit A.\n\n (c) The parties hereto acknowledge that, concurrently\nherewith, the Company is entering into a Common Stock Purchase Agreement with\nthe several purchasers listed on Schedule I thereto (the \"Common Stock Purchase\nAgreement\"), pursuant to which such purchasers have agreed to purchase, subject\nto the terms and conditions of the Common Stock Purchase Agreement, at least\n8,101,265 shares of Common Stock, par value $0.0001 per share, of the Company\n(the \"Common Stock\"), having the rights and restrictions set forth in the\nAmended and Restated Certificate of Incorporation of drugstore.com, inc.\nattached hereto as Exhibit B (the \"Restated Certificate.\"). The Common Stock to\nbe issued pursuant to the Common Stock Purchase Agreement shall hereinafter be\nreferred to as the \"Stock\".\n\n 1.2 CLOSING; DELIVERY.\n\n (a) The purchase and sale of the Preferred Stock\nshall take place at the offices of Simpson Thacher & Bartlett (or such other\nlocation mutually agreeable to the parties hereto) no later than 5 business days\nafter the satisfaction or (subject to applicable law) waiver of the conditions\nset forth in Sections 4 and 5 (excluding conditions that, by their terms, cannot\nbe satisfied until the Closing) (which time and place are designated as the\n\"Closing\").\n 2\n (b) At the Closing, the Company shall deliver to each\nPurchaser a certificate or certificates for the number of shares of the\nPreferred Stock to be purchased by such Purchaser pursuant to this Agreement\nagainst delivery of the consideration therefor, by wire transfer of immediately\navailable funds to the Company's bank account.\n\n 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby\nrepresents and warrants to each Purchaser that:\n\n 2.1 GOOD STANDING. Each of Company and its Subsidiaries (i) is\na corporation duly organized, validly existing and in good standing under the\nlaws of its state of incorporation; (ii) has the power and authority to own,\nlease and operate its properties and carry on its business as now conducted; and\n(iii) is duly qualified, licensed to do business and in good standing as a\nforeign corporation in each jurisdiction where the failure to be so qualified\ncould reasonably be expected to have a material adverse effect on the business,\nassets, operations or financial condition of the Company (\"Material Adverse\nEffect\").\n\n 2.2 CAPITALIZATION.\n\n (a) The authorized capital of the Company consists of\n250,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock,\n$0.0001 per share (the \"Preferred Stock\"). The Common Stock has the rights,\npreferences and privileges set forth in the Company's Restated Certificate, and\nthe Preferred Stock has the rights, preferences and privileges set forth in the\nCertificate of Designations\n\n (b) As of the date of this Agreement, 52,962,714\nshares of Common Stock and no shares of Preferred Stock are issued and\noutstanding. All of the outstanding shares of Common Stock have been, and when\nissued and paid for in accordance with the terms of the Common Stock Purchase\nAgreement the Stock will be, validly issued, duly authorized, fully paid and\nnonassessable, and issued in compliance with all applicable federal and state\nsecurities laws (based in part upon the representations of the purchasers\nthereof contained in the Common Stock Purchase Agreement). All of the shares of\nSeries 1 Preferred Stock, when issued and paid for in accordance with the terms\nof this Agreement, will be validly issued, duly authorized, fully paid and\nnonassessable, and issued in compliance with all applicable federal and state\nsecurities laws (based in part upon the representations of the Purchasers\ncontained in Sections 3.4, 3.5, 3.6, 3.7 and 3.8).\n\n (c) As of the date of this Agreement (i) 17,509,148\nshares of Common Stock are reserved for issuance under the Company's 1998 Stock\nPlan (of which 8,000 shares have been issued pursuant to restricted stock\nagreements, 890,839 shares are issuable under outstanding options that are\ncurrently exercisable, 10,367,423 shares are issuable under other outstanding\noptions that are not currently exercisable and 6,250,886 shares remain available\nfor future grants), (ii) 32,404 shares of Common Stock are reserved for issuance\nunder the Company's Beauty.com Inc. Stock Plan (of which 9,606 shares are\nissuable under outstanding options, all of which are currently exercisable and\n22,798 remain available for future grants) and (iii) 1,000,000 shares of Common\nStock are reserved for issuance under the Company's 1999 Employee Stock Purchase\nPlan (of which 87,719 have been issued to date).\n\n\n\n 2\n 3\n (d) Except for the conversion privileges of the\nPreferred Stock and except as set forth in (i) the warrant to purchase 500,000\nshares of Common Stock issued on June 26, 2000 to Tel-Drug, Inc. (the \"Tel-Drug\nWarrant\") and (ii) the warrant to purchase 2,500,000 shares of Common Stock\nissued on July 30, 2000 to Amazon.com, Inc. (the \"Amazon Warrant\"), as of the\ndate of this Agreement there are no outstanding options, warrants, rights\n(including conversion or preemptive rights and rights of first refusal or\nsimilar rights) or agreements, oral or in writing, for the purchase or\nacquisition from the Company of any shares of its capital stock.\n\n (e) The Company's only subsidiaries are DS Pharmacy,\nInc., DS Non-Pharmaceutical Sales, Inc., DS Distribution, Inc., DSGC Idaho,\nInc., Beauty.com, Inc. and Beauty.com Sales, Inc. (each a \"Subsidiary\" and\ntogether, the \"Subsidiaries\").\n\n 2.3 AUTHORIZATION. All corporate action on the part of the\nCompany, its officers, directors and stockholders necessary for the\nauthorization, execution and delivery of this Agreement and the Common Stock\nPurchase Agreement (collectively, the \"Agreements\") and the performance of all\nobligations of the Company hereunder and thereunder and the authorization,\nissuance and delivery of the Stock and the Preferred Stock has been taken or\nwill be taken prior to the Closing (subject, in the case of the conversion of\nthe Preferred Stock into Common Stock, to the receipt of the Stockholder\nApproval (as defined herein)), and the Agreements, when executed and delivered\nby the Company, will constitute valid and legally binding obligations of the\nCompany, enforceable against the Company in accordance with their terms except\nas limited by applicable bankruptcy, insolvency, reorganization, moratorium,\nfraudulent conveyance, and other laws of general application affecting\nenforcement of creditors' rights generally, as limited by laws relating to the\navailability of specific performance, injunctive relief, or other equitable\nremedies, and except as may be limited by Section 6.2(c).\n\n 2.4 VALID ISSUANCE OF PREFERRED STOCK. The Preferred Stock\nthat will be issued to the Purchasers at Closing will have been duly and validly\nreserved for issuance and, when issued and delivered in accordance with the\nterms hereof, will be duly authorized, validly issued, fully paid and\nnonassessable and free of restrictions on transfer other than restrictions on\ntransfer under this Agreement and applicable state and federal securities laws.\nBased in part upon the representations of the Purchasers in this Agreement, the\nPreferred Stock will be issued in compliance with all applicable federal and\nstate securities laws. The Common Stock issuable upon conversion of the\nPreferred Stock has been duly and validly reserved for issuance, and upon\nissuance in accordance with the terms of the Certificate of Designations, will\nbe duly authorized, validly issued, fully paid and nonassessable and free of\nrestrictions on transfer other than restrictions on transfer under this\nAgreement and applicable federal and state securities laws and will be issued in\ncompliance with all applicable federal and state securities laws.\n\n 2.5 LITIGATION. There is no action, suit, proceeding or\ninvestigation pending or, to the Company's knowledge, currently threatened\nagainst the Company or any of its subsidiaries that (i) questions the validity\nof the Agreements or the right of the Company or any of its subsidiaries, as\napplicable, to enter into them, or to consummate the transactions\n\n\n\n 3\n 4\ncontemplated hereby or thereby nor is the Company aware that there is any basis\nfor the foregoing or (ii) if adversely determined would have a Material Adverse\nEffect. Neither the Company nor any of its subsidiaries is a party or subject to\nthe provisions of any order, writ, injunction, judgment or decree of any court\nor government agency or instrumentality that (i) challenges the validity of the\nAgreements or the right of the Company or any of its subsidiaries, as\napplicable, to enter into this Agreement, or to consummate the transactions\ncontemplated hereby and thereby or (ii) would have a Material Adverse Effect.\n\n 2.6 LIABILITIES. The Company and its subsidiaries, on a\nconsolidated basis, have no liabilities and there are no contingent liabilities,\nrequired by generally accepted accounting principles to be disclosed on a\nbalance sheet but that are not disclosed on the Company's audited balance sheet\nas of January 2, 2000 and\/or on the Company's unaudited balance sheet as of July\n2, 2000 except liabilities that would not have a Material Adverse Effect.\nSubsequent to July 2, 2000, the Company and its subsidiaries, on a consolidated\nbasis, have not incurred any liabilities or any contingent liabilities required\nby generally accepted accounting principles to be disclosed on the Company's\nbalance sheet except liabilities that would not have a Material Adverse Effect.\n\n 2.7 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery\nand performance of the Agreements and the consummation of the transactions\ncontemplated hereby and thereby will not result in any violation or be in\nconflict with or constitute, with or without the passage of time and giving of\nnotice, either a default under or cause acceleration under any provision of the\nRestated Certificate or the bylaws of the Company or any instrument, judgment,\norder, writ, decree or contract to which the Company or any of its Subsidiaries\nis a party or by which it is bound, or any provision of any federal or state\nstatute, rule or regulation applicable to the Company or any of its\nSubsidiaries, the effect of which would (i) have a Material Adverse Effect, (ii)\nmaterially and adversely affect the ability of the Company and its Subsidiaries\nto perform their respective obligations under the Agreements or (iii) result in\nthe creation of any material lien, charge or encumbrance upon any assets of the\nCompany or any of its Subsidiaries.\n\n 2.8 MATERIAL AGREEMENTS. The Company has filed with the SEC\nall agreements in existence as of the date of this Agreement that (a) define or\naffect the rights of security holders of the Company in their capacity as\nsecurity holders including, but not limited to, such security holders' voting\nrights, registration rights or standstill rights or obligations, other than (i)\nthe Agreement dated June 23, 2000 between the Company and WellPoint Health\nNetworks Inc., (ii) the Tel-Drug Warrant and (iii) the Amazon Warrant or (b) are\nrequired to be filed under Item 601 of Regulation S-K.\n\n 2.9. FINANCIAL STATEMENTS. The financial statements of Company\nthat have been delivered to the Investors (including those for the period ended\nJuly 2, 2000), (i) are in accordance with the books and records of Company and\nits Subsidiaries, which have been maintained in accordance with good business\npractice; (ii) have been prepared in conformity with GAAP (except as discussed\ntherein, the absence of footnotes for all unaudited periods and, in the case of\naudited financial statements, as approved by the relevant firm of accountants);\nand (iii) fairly present the consolidated financial position of Company as of\nthe dates presented\n\n\n\n 4\n 5\n\ntherein and the results of operations, changes in financial positions or cash\nflows, as the case may be, for the periods presented therein (except, in the\ncase of financial statements for the period ended July 2, 2000, for normal\nyear-end audit adjustments). None of the Company or any of the Company's\nSubsidiaries has any contingent obligations, liability for taxes or other\noutstanding obligations that are material in the aggregate, except as disclosed\nin the unaudited financial statements for the period ended July 2, 2000 (except\nfor normal year-end audit adjustments). None of the Company or its Subsidiaries\nhas any contingent obligations or liability for taxes that are material in the\naggregate and that would be required to be reflected or reserved against in the\nlatest balance sheet of the Company, except as disclosed in the unaudited\nfinancial statements for the period ended July 2, 2000 (except for normal\nyear-end audit adjustments).\n\n 2.10. INVESTMENT COMPANY. None of Company or its Subsidiaries\nis subject to regulation under the Investment Company Act of 1940, or to any\nfederal or state statute or regulation limiting its ability to incur\nindebtedness.\n\n 2.11. SEC REPORTING; INFORMATION PROVIDED. As of the date each\nwas filed, none of the Company's registration statements, reports or other\nfilings made with the Securities and Exchange Commission, contained any untrue\nstatement of a material fact or omitted to state a material fact necessary to\nmake the statements therein, in light of the circumstances under which they were\nmade, not misleading. Neither this agreement nor any document, certificate or\ninstrument furnished to any of the Purchasers by or on behalf of the Company\nwhen taken in conjunction with any supplemental or revised information furnished\nto any of the Purchasers in writing prior to the date hereof contains any untrue\nstatement of a material fact or omits, or will omit, to state a material fact\nnecessary to make the statements in such documents, certificates, instruments or\nother information provided, in light of the circumstances in which they were\nmade, not misleading, except that with respect to any projected financial\ninformation, the Company only represents that it was prepared in good faith and\nthe Company reasonably believes that the assumptions made in preparing such\nprojections were reasonable as of the date of such projections.\n\n 2.12. ABSENCE OF CERTAIN CHANGES. Since July 2, 2000, no event\nhas occurred and no condition exists which would have a Material Adverse Effect,\nother than (i) any change in the price of the Common Stock or (ii) changes in\ngeneral economic conditions or conditions affecting the Company's industry\ngenerally.\n\n 2.13. REAL PROPERTY HOLDING COMPANY. The Company is not, and\nhas not been, a \"United States real property holding corporation\" within the\nmeaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended\n(the \"Code\"), during the applicable period described in Section 897(c)(1)(A)(ii)\nof the Code.\n\n 2.14 FORM S-3 ELIGIBILITY. The Company and the transactions\ncontemplated by Section 6.2 of this Agreement meet the requirements for using\nForm S-3 under the Securities Act for resale.\n\n\n\n 5\n 6\n 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser\nhereby represents and warrants to the Company with respect to itself that:\n\n 3.1 AUTHORIZATION. Such Purchaser has full power and authority\nto enter into and deliver this Agreement, and this Agreement, when executed and\ndelivered by the Purchaser, will constitute a valid and legally binding\nobligation of the Purchaser, enforceable against the Purchaser in accordance\nwith its terms except as limited by applicable bankruptcy, insolvency,\nreorganization, moratorium, fraudulent conveyance, and other laws of general\napplication affecting enforcement of creditors' rights generally, as limited by\nlaws relating to the availability of specific performance, injunctive relief, or\nother equitable remedies, and except as may be limited by Section 6.2(c)..\n\n 3.2 LITIGATION. There is no action, suit, proceeding or\ninvestigation pending or, to the Purchaser's knowledge, currently threatened\nagainst the Purchaser or any of its subsidiaries that questions the validity of\nthis Agreement or the right of the Purchaser or any of its subsidiaries, as\napplicable, to enter into this Agreement, or to consummate the transactions\ncontemplated hereby nor is the Purchaser aware that there is any basis for the\nforegoing. Neither the Purchaser nor any of its subsidiaries is a party or\nsubject to the provisions of any order, writ, injunction, judgment or decree of\nany court or government agency or instrumentality that challenges the validity\nof this Agreement or the right of the Purchaser or any of its subsidiaries, as\napplicable, to enter into this Agreement, or to consummate the transactions\ncontemplated hereby.\n\n 3.3 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery\nand performance of this Agreement and the consummation of the transactions\ncontemplated hereby will not result in any violation or be in conflict with or\nconstitute, with or without the passage of time and giving of notice, either a\ndefault under any provision of the governing documents of the Purchaser or any\ninstrument, judgment, order, writ, decree or contract to which the Purchaser or\nany of its subsidiaries is a party or by which it is bound, or any provision of\nany federal or state statute, rule or regulation applicable to the Purchaser or\nany of its subsidiaries, the effect of which would have a material adverse\neffect on the ability of the Purchaser and its subsidiaries to perform their\nrespective obligations under this Agreement or result in the creation of any\nlien, charge or encumbrance upon any assets of the Purchaser or any of its\nsubsidiaries.\n\n 3.4 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made\nwith the Purchaser in reliance upon the Purchaser's representation to the\nCompany, which by the Purchaser's execution of this Agreement, the Purchaser\nhereby confirms, that the Preferred Stock to be acquired by the Purchaser will\nbe acquired for investment for the Purchaser's own account, not as a nominee or\nagent, and not with a view to the resale or public distribution of any part\nthereof in violation of any requirements of the Securities Act of 1933, as\namended (the \"Securities Act\") or applicable state securities laws. The\nPurchaser has no present intention of selling, granting any participation in, or\notherwise distributing any Preferred Stock purchased hereunder, including,\nwithout limitation, entering into any arrangement that transfers to another, in\nwhole or in part, any of the economic consequences of ownership of the Stock,\nwhether any such transaction is to be settled by delivery of Preferred Stock,\nCommon Stock or\n\n\n\n 6\n 7\nother securities, in cash or otherwise. By executing this Agreement, the\nPurchaser further represents that the Purchaser does not presently have any\ncontract, undertaking, agreement or arrangement with any person to sell,\ntransfer or grant participation to such person or to any third person, with\nrespect to any of the Preferred Stock or the Common Stock issuable upon\nconversion thereof.\n\n 3.5 DISCLOSURE OF INFORMATION. The Purchaser (i) has had an\nopportunity to discuss the Company's business, management, financial affairs and\nthe terms and conditions of the offering of the Preferred Stock with the\nCompany's management and (ii) has had an opportunity to review the Company's\nfacilities. The Purchaser understands that such discussions and reviews, as well\nas any written information delivered by the Company to the Purchaser, were\nintended to describe the aspects of the Company's business that it believes to\nbe material.\n\n 3.6 RESTRICTED SECURITIES. The Purchaser understands that the\nPreferred Stock has not been, and will not be, registered under the Securities\nAct, by reason of a specific exemption from the registration provisions of the\nSecurities Act that depends upon, among other things, the bona fide nature of\nthe investment intent and the accuracy of the Purchaser's representations as\nexpressed herein. The Purchaser understands that the shares of Preferred Stock\nare \"restricted securities\" under applicable U.S. federal and state securities\nlaws and that, pursuant to these laws, the Purchaser must hold the shares of\nPreferred Stock indefinitely unless they are registered with the Securities and\nExchange Commission and qualified by state authorities, or an exemption from\nsuch registration and qualification requirements is available. The Purchaser\nacknowledges that the Company has no obligation to register or qualify the\nPreferred Stock for resale except with regards to the Common Stock issuable upon\nconversion of the Preferred Stock as set forth in Section 6.2 hereof. The\nPurchaser further acknowledges that if an exemption from registration or\nqualification is available, it may be conditioned on various requirements\nincluding, but not limited to, the time and manner of sale, the holding period\nfor the Preferred Stock, and on requirements relating to the Company that are\noutside of the Purchaser's control, and that the Company is under no obligation,\nand may not be able, to satisfy.\n\n 3.7 LEGENDS. The Purchaser understands that the Preferred\nStock, and any securities issued in respect thereof, may bear one or all of the\nfollowing legends:\n\n (a) \"THE SECURITIES REPRESENTED BY THIS CERTIFICATE\nHAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN\nACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE\nOR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN\nEFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A\nFORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER\nTHE SECURITIES ACT OF 1933.\"\n\n (b) Any legend required by the \"Blue Sky\" laws of any\nstate to the extent such laws are applicable to the shares represented by the\ncertificate so legended.\n\n\n\n 7\n 8\n 3.8 ACCREDITED INVESTOR. The Purchaser is an accredited\ninvestor as defined in Rule 501(a) of Regulation D promulgated under the\nSecurities Act.\n\n 4. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT CLOSING. The\nobligations of the Purchasers to the Company under this Agreement are subject to\nthe fulfillment, on or before the Closing, of each of the following conditions,\nunless otherwise waived by each Purchaser:\n\n 4.1 REPRESENTATIONS AND WARRANTIES. The representations and\nwarranties of the Company shall be true and correct on and as of the date of the\nClosing with the same effect as though such representations and warranties had\nbeen made on and as of the date of the Closing (except with respect to the\nrepresentations and warranties contained in Section 2.2(b), 2.2(c) and the first\nsentence of Section 2.2(e), which shall be true and correct in all material\nrespects as of the date of the Closing).\n\n 4.2 PERFORMANCE. The Company shall have performed and complied\nwith all covenants, agreements, obligations and conditions contained in this\nAgreement that are required to be performed or complied with by it on or before\nthe Closing and the Company shall have obtained any and all consents, permits\nand waivers necessary or appropriate for consummation of the transactions\ncontemplated by the Agreements.\n\n 4.3 RESERVATION OF SHARES. The Preferred Stock issuable\npursuant to this Agreement shall have been duly authorized and reserved for\nissuance at the Closing. The Common Stock issuable upon conversion of the\nPreferred Stock pursuant to the Certificate of Designations shall have been duly\nauthorized and reserved for issuance at the Closing.\n\n 4.4 COMPLIANCE CERTIFICATE. The President of the Company shall\ndeliver to the Purchasers at the Closing a certificate certifying that the\nconditions specified in Sections 4.1, 4.2 and 4.3 have been fulfilled.\n\n 4.5 QUALIFICATIONS. All authorizations, approvals or permits,\nif any, of any governmental authority or regulatory body of the United States or\nof any state that are required in connection with the lawful issuance and sale\nof the Preferred Stock pursuant to this Agreement shall be obtained and\neffective as of the Closing including, without limitation, the expiration or\ntermination of all waiting periods under the Hart-Scott-Rodino Antitrust\nImprovement Act of 1976, as amended (the \"HSR Act\").\n\n 4.6 OPINION OF COMPANY COUNSEL. The Purchasers at the Closing\nshall have received from Simpson Thacher & Bartlett, counsel for the Company, an\nopinion dated as of the Closing covering the matters set forth on Exhibit C.\n\n 4.7 COMMON STOCK PURCHASE AGREEMENT. The Company and the\npurchasers parties thereto shall have executed and delivered the Common Stock\nPurchase Agreement covering the purchase of at least 8,101,265 shares of Common\nStock.\n\n 4.8 DELIVERY OF VOTING AGREEMENTS. Each person listed on\nExhibit D hereto shall have executed and delivered to the Purchasers a voting\nagreement in the form attached hereto an Exhibit E (each, a \"Voting Agreement\")\nto the effect that such person will\n\n\n\n 8\n 9\nvote its shares of Common Stock at the Stockholder Meeting (as defined) in favor\nof the approval of the issuance of the Common Stock issuable upon conversion of\nthe Preferred Stock. The persons delivering Voting Agreements shall represent a\nmajority of the Common Stock.\n\n 4.9. MINIMUM INVESTMENT AT CLOSING. At the Closing, Purchasers\ninvesting at least $62,682,825 in the aggregate in the Company under the\nAgreements shall have wired their respective investments in the Company into an\nescrow account maintained by Brobeck, Phleger & Harrison or an escrow agent\nmutually agreeable to the Company and purchasers of the majority of the\nPreferred Stock for delivery to the Company, or shall be otherwise legally\nobligated to wire such amounts to the Company, before any Purchaser is obligated\nto close.\n\n 4.10. OPINION OF GENERAL COUNSEL TO THE COMPANY. The\nPurchasers at the Closing shall have received from the General Counsel of the\nCompany an opinion dated as of the Closing covering the matters set forth on\nExhibit F.\n\n 5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations\nof the Company to the Purchasers under this Agreement are subject to the\nfulfillment, on or before the Closing, of each of the following conditions,\nunless otherwise waived:\n\n 5.1 REPRESENTATIONS AND WARRANTIES. The representations and\nwarranties of the Purchasers contained in Section 3 shall be true and correct in\nall material respects on and as of the date of the Closing with the same effect\nas though such representations and warranties had been made on and as of the\ndate of the Closing (except to the extent such representations and warranties\nspeak as of the date of this Agreement, in which case they shall be true and\ncorrect in all material respects on and as of the date of this Agreement).\n\n 5.2 PERFORMANCE. All covenants, agreements and conditions\ncontained in this Agreement to be performed by the Purchasers on or prior to the\nClosing shall have been performed or complied with in all material respects.\n\n 5.3 COMPLIANCE CERTIFICATE. A senior executive officer of each\nof the Purchasers shall deliver to the Company at the Closing a certificate\ncertifying that the conditions specified in Sections 5.1 and 5.2 have been\nfulfilled.\n\n 5.4 QUALIFICATIONS. All authorizations, approvals or permits,\nif any, of any governmental authority or regulatory body of the United States or\nof any state that are required in connection with the lawful issuance and sale\nof the Preferred Stock pursuant to this Agreement shall be obtained and\neffective as of the Closing including, without limitation, the expiration or\ntermination of all waiting periods under the HSR Act.\n\n 5.5 COMMON STOCK PURCHASE AGREEMENT. The Company and the\npurchasers parties thereto shall have executed and delivered the Common Stock\nPurchase Agreement covering the purchase of at least 8,101,265 shares of Common\nStock.\n\n\n\n 9\n 10\n 5.6 DELIVERY OF VOTING AGREEMENTS. Each person listed on\nExhibit D hereto shall have executed and delivered to the Purchasers a Voting\nAgreement. The persons delivering Voting Agreements shall represent a majority\nof the Common Stock.\n\n 6. COVENANTS.\n\n 6.1 HSR ACT FILINGS. As soon as practicable after the\nexecution of this Agreement, the Company and each relevant Purchaser will\nseparately file with the Antitrust Division of the United States Department of\nJustice and the United States Federal Trade Commission pursuant to the HSR Act\nall requisite documents and notifications in order to provide for the issuance\nand sale of the Preferred Stock pursuant to this Agreement. The parties will\ncooperate and coordinate with one another in exchanging information and\nproviding reasonable assistance as the other party may request in connection\nwith the foregoing.\n\n 6.2 REGISTRATION RIGHTS. (a) The Company hereby agrees: (i) to\nuse its best efforts to file a resale shelf registration statement (the\n\"Registration Statement\") under the Securities Act as soon as reasonably\npracticable covering resales of the Common Stock to be issued upon conversion of\nthe Preferred Stock (such shares of Common Stock, the \"Conversion Stock\") by the\nPurchasers and the Stock to be issued pursuant to the Common Stock Purchase\nAgreement, (ii) to use its best efforts to cause the Registration Statement to\nbe declared effective as soon as reasonably practicable but in any event within\n60 days of Closing and (iii) to maintain the effectiveness of the Registration\nStatement until the earlier of (x) the eighteen month anniversary of the\neffective date of the Registration Statement and (y) the date on which all\nshares of Conversion Stock have been resold by the Purchasers. At any time when\nthe Registration Statement is effective, the Board of Directors of the Company\nmay determine, as indicated in a certificate signed by any Director of the\nCompany, the Chief Financial Officer of the Company or the Secretary of the\nCompany, to suspend offers and sales by Purchasers under the Registration\nStatement if an event has occurred or is reasonably likely to occur that would\nrequire additional disclosure by the Company and that the Company has a bona\nfide business purpose for keeping confidential, and the nondisclosure of which\nwould reasonably be expected to cause the Registration Statement to fail to\ncomply with applicable disclosure requirements. The Company shall give the\nPurchasers written notice of the Board of Directors' determination and the\nPurchasers agree to suspend offers and sales under the Registration Statement\nuntil the Company has delivered a subsequent notice to the Purchasers revoking\nits prior notice; provided, however, that the eighteen month period during which\nthe Registration Statement is required to be effective shall be extended by the\nnumber of days of such suspensions. The Company may not revoke the ability of\nPurchasers to make offers and sales under the Registration Statement more than\nthree times or for more than 90 days in the aggregate.\n\n (b) For the period during which the Registration Statement is\neffective, the Company shall:\n\n (i) furnish to the Purchaser with respect to the Conversion\n Stock registered under the Registration Statement (and to each\n underwriter, if any, of such Conversion Stock) such reasonable number\n of copies of prospectuses in order to facilitate the\n\n\n\n 10\n 11\n public sale or other disposition of all or any of the Conversion\n Stock by the Purchaser; provided, however, that the obligation of the\n Company to deliver copies of prospectuses to the Purchaser shall be\n subject to the receipt by the Company of reasonable assurances from\n the Purchaser that the Purchaser will comply with the applicable\n provisions of the Securities Act and of such other securities or blue\n sky laws as may be applicable in connection with any use of such\n prospectuses;\n\n (ii) during the period when such prospectuses are required to\n be delivered under the Securities Act or the Securities Exchange Act\n of 1934, as amended (the \"Exchange Act\"), file all documents required\n to be filed with the Commission pursuant to Section 13, 14 or 15 of\n the Exchange Act within the time periods required by the Exchange Act\n and the rules and regulations promulgated thereunder;\n\n (iii) file documents required of the Company for normal blue\n sky clearance in states specified in writing by the Purchaser;\n provided, however, that the Company shall not be required to qualify\n to do business or consent to service of process in any jurisdiction\n in which it is not now so qualified or has not so consented;\n\n (iv) authorize for listing on the Nasdaq National Market the\n shares of Conversion Stock by filing with the Nasdaq National Market\n a Notification of Listing of Additional Shares (or such other form,\n if any, as may be required by the Nasdaq National Market) as soon as\n reasonably practicable after the filing of the Registration Statement\n or otherwise in accordance with the rules and regulations of the\n Nasdaq National Market; and\n\n (v) bear all expenses in connection with the procedures in\n this Section 6.2 and the registration of the Conversion Stock\n pursuant to the Registration Statement, other than fees and expenses,\n if any, of counsel or other advisers to the Purchaser or underwriting\n discounts, brokerage fees and commissions incurred by the Purchaser,\n if any.\n\n (c) For purposes of this Section 6.2(c), the term \"Registration\nStatement\" shall include any preliminary or final prospectus, exhibit,\nsupplement or amendment included in or relating to the Registration Statement\nreferred to in Section 6.2(a).\n\n (i) The Company agrees to indemnify and hold harmless each of\n the Purchasers and each of their respective directors, officers,\n members and partners, and each person, if any, who controls any\n Purchaser within the meaning of the Securities Act, against any\n losses, claims, damages, liabilities or expenses, joint or several,\n to which such Purchasers and each of their respective directors,\n officers, members and partners, or such controlling person may become\n subject, under the Securities Act, the Exchange Act, or any other\n federal or state statutory law or regulation, or at common law or\n otherwise (including in settlement of any litigation, if such\n settlement is effected with the written consent of the Company),\n insofar as such losses, claims, damages, liabilities or expenses (or\n actions in respect thereof as contemplated below) arise out of or are\n based upon any untrue statement or alleged untrue statement of any\n material fact contained in or incorporated by reference in the\n Registration Statement, including the\n\n\n\n 11\n 12\n prospectus, financial statements and schedules, and all other\n documents filed as a part thereof, as amended at the time of\n effectiveness of the Registration Statement, including the\n preliminary or final prospectus any information deemed to be a part\n thereof as of the time of effectiveness pursuant to paragraph (b) of\n Rule 430A, or pursuant to Rule 434, of the rules and regulations of\n the Commission under the Securities Act (the \"Regulations\"), or the\n prospectus, in the form first filed with the Commission pursuant to\n Rule 424(b) of the Regulations, or filed as part of the Registration\n Statement at the time of effectiveness if no Rule 424(b) filing is\n required (the \"Prospectus\"), or any amendment or supplement thereto,\n or arise out of or are based upon the omission or alleged omission to\n state in any of them a material fact required to be stated therein or\n necessary to make the statements in any of them, in light of the\n circumstances under which they were made, not misleading, or arise\n out of or are based in whole or in part on any failure of the Company\n to perform its obligations under or a violation of the Securities\n Act, the Exchange Act or any state securities law, and will reimburse\n each Purchaser and each of their respective directors, officers,\n members and partners, and each such controlling person for any legal\n and other expenses as such expenses are reasonably incurred by such\n Purchaser or such controlling person in connection with\n investigating, defending, settling, compromising or paying any such\n loss, claim, damage, liability, expense or action; provided, however,\n that the Company will not be liable in any such case to the extent\n that any such loss, claim, damage, liability or expense arises out of\n or is based upon (i) an untrue statement or alleged untrue statement\n or omission or alleged omission made in the Registration Statement,\n the Prospectus or any amendment or supplement thereto in reliance\n upon and in conformity with written information furnished to the\n Company by or on behalf of the Purchaser expressly for use therein,\n or (ii) the failure of such Purchaser to comply with the covenants\n and agreements contained in this Section 6.2 respecting the sale of\n the Stock, or (iii) any statement or omission in any Prospectus that\n is corrected in any subsequent Prospectus that was delivered to the\n Purchaser prior to the pertinent sale or sales by the Purchaser.\n\n (ii) Each Purchaser will severally indemnify and hold harmless\n the Company, each of its directors, each of its officers who signed\n the Registration Statement and each person, if any, who controls the\n Company within the meaning of the Securities Act, against any losses,\n claims, damages, liabilities or expenses to which the Company, each\n of its directors, each of its officers who signed the Registration\n Statement or controlling person may become subject, under the\n Securities Act, the Exchange Act, or any other federal or state\n statutory law or regulation, or at common law or otherwise (including\n in settlement of any litigation, if such settlement is effected with\n the written consent of such Purchaser) insofar as such losses,\n claims, damages, liabilities or expenses (or actions in respect\n thereof as contemplated below) arise out of or are based upon any\n untrue or alleged untrue statement of any material fact contained in\n the Registration Statement, including the prospectus, financial\n statements and schedules, and all other documents filed as a part\n thereof, as amended at the time of effectiveness of the Registration\n Statement, including any information deemed to be a part thereof as\n of the time of effectiveness pursuant to paragraph (b) of Rule 430A,\n or pursuant to Rule 434, of the Regulations, or the Prospectus, or\n any amendment or\n\n\n\n 12\n 13\n supplement thereto, or arise out of or are based upon the omission or\n alleged omission to state therein a material fact required to be\n stated therein or necessary to make the statements in any of them, in\n light of the circumstances under which they were made, not\n misleading, or arise out of or are based in whole or in part on any\n failure of such Purchaser to perform its obligations under the\n Securities Act, the Exchange Act or any state securities law, and\n will reimburse the Company, each of its directors, each of its\n officers who signed the Registration Statement and each such\n controlling person for any legal and other expenses as such expenses\n are reasonably incurred by such Purchaser or such controlling person\n in connection with investigating, defending, settling, compromising\n or paying any such loss, claim, damage, liability, expense or action,\n in each case to the extent, but only to the extent, that such untrue\n statement or alleged untrue statement or omission or alleged omission\n was made in the Registration Statement, the Prospectus, or any\n amendment or supplement thereto, in reliance upon and in conformity\n with written information furnished to the Company by or on behalf of\n any Purchaser expressly for use therein.\n\n (iii) Promptly after receipt by an indemnified party under\n this Section 6.2(c) of notice of the threat or commencement of any\n action, such indemnified party will, if a claim in respect thereof is\n to be made against an indemnifying party under this Section 6.2(c)\n promptly notify the indemnifying party in writing thereof; but the\n omission so to notify the indemnifying party will not relieve it from\n any liability which it may have to any indemnified party for\n contribution or otherwise than under the indemnity agreement\n contained in this Section 6.2(c) or to the extent it is not\n prejudiced as a result of such failure. In case any such action is\n brought against any indemnified party and such indemnified party\n seeks or intends to seek indemnity from an indemnifying party, the\n indemnifying party will be entitled to participate in, and, to the\n extent that it may wish, jointly with all other indemnifying parties\n similarly notified, to assume the defense thereof with counsel\n reasonably satisfactory to such indemnified party; provided, however,\n if the defendants in any such action include both the indemnified\n party and the indemnifying party and the indemnified party shall have\n reasonably concluded that there may be a conflict between the\n positions of the indemnifying party and the indemnified party in\n conducting the defense of any such action or that there may be legal\n defenses available to it and\/or other indemnified parties which are\n different from or additional to those available to the indemnifying\n party, the indemnified party or parties shall have the right to\n select separate counsel to assume such legal defenses and to\n otherwise participate in the defense of such action on behalf of such\n indemnified party or parties. Upon receipt of notice from the\n indemnifying party to such indemnified party of its election so to\n assume the defense of such action and approval by the indemnified\n party of counsel, the indemnifying party will not be liable to such\n indemnified party under this Section 6.2(c) for any legal or other\n expenses subsequently incurred by such indemnified party in\n connection with the defense thereof unless (i) the indemnified party\n shall have employed such counsel in connection with the assumption of\n legal defenses in accordance with the proviso to the preceding\n sentence (it being understood, however, that the indemnifying party\n shall not be liable for the expenses of more than one separate\n counsel, approved by such indemnifying party, representing all of the\n indemnified parties who are parties to such action) or (ii) the\n indemnifying party\n\n\n\n 13\n 14\n shall not have employed counsel reasonably satisfactory to the\n indemnified party to represent the indemnified party within a\n reasonable time after notice of commencement of action, in each of\n which cases the reasonable fees and expenses of counsel shall be at\n the expense of the indemnifying party.\n\n (iv) If the indemnification provided for in this Section 6.2\n is required by its terms but is for any reason held to be unavailable\n to or otherwise insufficient to hold harmless an indemnified party\n under paragraphs (i), (ii) or (iii) of this Section 6.2(c) in respect\n to any losses, claims, damages, liabilities or expenses referred to\n herein, then each applicable indemnifying party shall contribute to\n the amount paid or payable by such indemnified party as a result of\n any losses, claims, damages, liabilities or expenses referred to\n herein in such proportion as is appropriate to reflect the relative\n fault of the indemnifying party on the one hand and the indemnified\n party on the other in connection with the statements or omissions\n that resulted in such loss, claim, damage, liability or expense as\n well as any other relevant equitable considerations. The relative\n fault of the Company and such Purchaser shall be determined by\n reference to, among other things, whether the untrue or alleged\n statement of a material fact or the omission or alleged omission to\n state a material fact relates to information supplied by the Company\n or by such Purchaser and the parties' relative intent, knowledge,\n access to information and opportunity to correct or prevent such\n statement or omission. The amount paid or payable by a party as a\n result of the losses, claims, damages, liabilities and expenses\n referred to above shall be deemed to include, subject to the\n limitations set forth in paragraph (iii) of this Section 6.2(c), any\n legal or other fees or expenses reasonably incurred by such party in\n connection with investigating or defending any action or claim. The\n provisions set forth in paragraph (iii) of this Section 6.2(c) with\n respect to the notice of the threat or commencement of any threat or\n action shall apply if a claim for contribution is to be made under\n this paragraph (iv); provided, however, that no additional notice\n shall be required with respect to any threat or action for which\n notice has been given under paragraph (iii) for purposes of\n indemnification. Notwithstanding the provisions of this Section\n 6.2(c)(iv), no Purchaser shall be required to contribute any amount\n in excess of the net proceeds of the offering received by such\n Purchaser, except in the case of willful fraud by such Purchaser. No\n person guilty of fraudulent misrepresentation (within the meaning of\n Section 11(f) of the Securities Act) shall be entitled to\n contribution from any person who was not guilty of such fraudulent\n misrepresentation. The Purchasers' obligations to contribute pursuant\n to this Section 6.2(c)(iv) are several and not joint.\n\n 6.3 STOCKHOLDER MEETING. The Company shall cause (i) a special\nmeeting of its common stockholders (the \"Stockholder Meeting\") to be held as\nsoon as practicable but in no event later than three months from the Closing,\nfor the purpose of approving the conversion of the Preferred Stock issued\npursuant to this Agreement into Common Stock or (ii) the holders of the\nrequisite number of shares of Common Stock to deliver written consents approving\nthe conversion of the Preferred Stock into Common Stock (the action called for\nin (i) and (ii), the \"Stockholder Approval\").\n\n\n\n 14\n 15\n 7. MISCELLANEOUS.\n\n 7.1 SURVIVAL OF WARRANTIES. The warranties and representations\nof the Company and the Purchasers contained herein shall terminate on the second\nanniversary of the Closing.\n\n 7.2 TRANSFER; NO THIRD PARTY BENEFICIARIES. This Agreement and\neach party's rights and obligations hereunder shall not be assigned without the\nprior written consent of the other party; provided, that a Purchaser may\ntransfer its rights hereunder to an affiliate, so long as such affiliate agrees\nin writing to be bound by all obligations under this Agreement. Nothing in this\nAgreement, express or implied, is intended to confer upon any party other than\nthe parties hereto or their respective successors and assigns any rights,\nremedies, obligations, or liabilities under or by reason of this Agreement.\n\n 7.3 GOVERNING LAW. This Agreement and all acts and\ntransactions pursuant hereto and the rights and obligations of the parties\nhereto shall be governed by and construed in accordance with the laws of the\nState of Delaware, without giving effect to principles of conflicts of laws.\n\n 7.4 COUNTERPARTS. This Agreement may be executed in two or\nmore counterparts, each of which shall be deemed an original and all of which\ntogether shall constitute one instrument.\n\n 7.5 TITLES AND SUBTITLES. The titles and subtitles used in\nthis Agreement are used for convenience only and are not to be considered in\nconstruing or interpreting this Agreement.\n\n 7.6 NOTICES. Any notice required or permitted by this\nAgreement shall be in writing and shall be deemed sufficient upon delivery, when\ndelivered personally or by overnight courier or sent by telegram or fax, or\nforty-eight (48) hours after being deposited in the U.S. mail, as certified or\nregistered mail, with postage prepaid, addressed to the party to be notified at\nsuch party's address as set forth on the signature page hereto, or as\nsubsequently modified by written notice, and if to the Company, with copies to\nthe General Counsel of the Company at the address of the Company set forth below\nand Simpson Thacher & Bartlett, 3373 Hillview Avenue, Suite 250, Palo Alto, CA\n94304, Attention: William H. Hinman, telecopy no: (650)-251-5002).\n\n 7.7 FINDER'S FEE. Each party represents that it neither is nor\nwill be obligated for any finder's fee or commission in connection with this\ntransaction. Each Purchaser agrees to indemnify and to hold harmless the Company\nfrom any liability for any commission or compensation in the nature of a\nfinder's fee (and the costs and expenses of defending against such liability or\nasserted liability) for which such Purchaser or any of its officers, employees,\nor representatives is responsible. The Company agrees to indemnify and hold\nharmless each Purchaser from any liability for any commission or compensation in\nthe nature of a finder's fee (and the costs and expenses of defending against\nsuch liability or asserted liability) for which the Company or any of its\nofficers, employees or representatives is responsible.\n\n\n\n 15\n 16\n 7.8 FEES AND EXPENSES. Except as otherwise specifically\nprovided herein, the Company and the Purchasers shall pay their respective fees\nand other expenses in connection with the negotiation, execution, delivery and\nperformance of the Agreements.\n\n 7.9 ATTORNEY'S FEES. If any action at law or in equity\n(including arbitration) is necessary to enforce or interpret the terms of any of\nthe Agreements, the prevailing party shall be entitled to reasonable attorney's\nfees, costs and necessary disbursements in addition to any other relief to which\nsuch party may be entitled.\n\n 7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be\namended or waived only with the written consent of the Company and each of the\nPurchasers. Any amendment or waiver effected in accordance with this Section\n7.10 shall be binding upon each Purchaser and each transferee of the Preferred\nStock, each future holder of all such Preferred Stock, each transferee and\nfuture holder of Common Stock issued upon conversion of Preferred Stock and the\nCompany.\n\n 7.11 SEVERABILITY. If one or more provisions of this Agreement\nare held to be unenforceable under applicable law, the parties agree to\nrenegotiate such provision in good faith. In the event that the parties cannot\nreach a mutually agreeable and enforceable replacement for such provision, then\n(a) such provision shall be excluded from this Agreement, (b) the balance of the\nAgreement shall be interpreted as if such provision were so excluded and (c) the\nbalance of the Agreement shall be enforceable in accordance with its terms.\n\n 7.12 DELAYS OR OMISSIONS. No delay or omission to exercise any\nright, power or remedy accruing to any party under this Agreement, upon any\nbreach or default of any other party under this Agreement, shall impair any such\nright, power or remedy of such non-breaching or non-defaulting party nor shall\nit be construed to be a waiver of any such breach or default, or an acquiescence\ntherein, or of or in any similar breach or default thereafter occurring; nor\nshall any waiver of any single breach or default be deemed a waiver of any other\nbreach or default theretofore or thereafter occurring. Any waiver, permit,\nconsent or approval of any kind or character on the part of any party of any\nbreach or default under this Agreement, or any waiver on the part of any party\nof any provisions or conditions of this Agreement, must be in writing and shall\nbe effective only to the extent specifically set forth in such writing. All\nremedies, either under this Agreement or by law or otherwise afforded to any\nparty, shall be cumulative and not alternative.\n\n 7.13 ENTIRE AGREEMENT. This Agreement, and the documents\nreferred to herein, constitute the entire agreement between the parties hereto\npertaining to the subject matter hereof, and any and all other written or oral\nagreements relating to the subject matter hereof existing between the parties\nhereto are expressly canceled.\n\n 7.14 CONFIDENTIALITY. Except as provided below, each party\nhereto agrees that, except with the prior written permission of the other party,\nit shall at all times keep confidential and not divulge, furnish or make\naccessible to anyone any confidential information, knowledge or data concerning\nor relating to the business or financial affairs of the other party to which\nsuch party has been or shall become privy by reason of the Agreements,\ndiscussions or negotiations relating to the Agreements, the performance of its\nobligations\n\n\n\n 16\n 17\nthereunder or the ownership of Stock purchased hereunder. The provisions of this\nSection 7.14 shall be in addition to, and not in substitution for, the\nprovisions of any separate nondisclosure agreement executed by the parties\nhereto with respect to the transactions contemplated by the Agreements.\nNotwithstanding the foregoing, nothing herein shall prevent any party from\ndisclosing (i) such information that has been publicly disclosed, (ii) such\ninformation that becomes available to the party on a non-confidential basis from\na source other than the other party hereto, provided that such source is not\nbound by a confidentiality agreement with such other party, (iii) information\nrequired to be disclosed pursuant to subpoena or other court process or\notherwise required to be disclosed by law or the regulations of any securities\nexchange (provided that, to the extent practicable, advance notice is given to\nthe party whose confidential information is to be disclosed so that such party\ncan attempt to obtain a protective order) and (iv) such information that was\nknown to the party prior to its first receipt from the other party.\n\n 7.15 PUBLICITY. After the execution of this Agreement, any of\nthe parties may issue a press release disclosing that the Purchasers have agreed\nto invest in the Company and the terms of the future relationship between the\nparties in a form approved by the other party, which approval will not be\nunreasonably withheld, conditioned or delayed. In addition, any party may\ndisclose such information regarding the Purchasers' investment and the\nrelationship between the parties as required by law or the regulations of any\nsecurities exchange.\n\n 7.16 TERMINATION. This Agreement may be terminated and the\ntransactions contemplated hereby may be abandoned at any time prior to the\nClosing:\n\n (i) at any time by mutual written consent of the Company and\n each of the Purchasers; or\n\n (ii) by any party hereto if the Closing does not occur on or\n prior to October 31, 2000; (provided, that if on October 31, 2000 any\n authorization, approval or permit of any governmental authority or\n regulatory body of the United States or of any state that is required\n in connection with the lawful issuance and sale of the Stock pursuant\n to this Agreement has not been obtained, then no party shall be\n entitled to terminate this Agreement pursuant to this clause (ii)\n until December 15, 2000 and then only if the Closing has not occurred\n on or prior to such date).\n\n Upon any such termination, this Agreement shall become void and of no\nfurther effect, except for Sections 7.3, 7.7, 7.8, 7.9, 7.14 and this Section\n7.16 which shall survive such termination.\n\n\n [Signature Pages Follow]\n\n\n\n 17\n 18\n The parties have executed this Preferred Stock Purchase Agreement as of\nthe date first written above.\n\n\n\n\n COMPANY:\n\n DRUGSTORE.COM, INC.\n\n By: \/s\/ DAVID ROSTOV\n -------------------------------------\n Name: David Rostov\n Title: Chief Financial Officer\n\n Address: 13920 SE Eastgate Way, Suite 300\n Bellevue, WA 98005\n\n\n\n SIGNATURE PAGE TO THE PREFERRED STOCK PURCHASE AGREEMENT\n\n 19\n PURCHASERS:\n\n KPCB VIII L.P.\n\n By:\n ------------------------------------\n Name:\n ------------------------------------\n Title:\n ----------------------------------\n Address:\n --------------------------------\n --------------------------------\n\n\n SIGNATURE PAGE TO THE PREFERRED STOCK PURCHASE AGREEMENT\n\n 20\n KPCB VIII FOUNDERS FUND, L.P.\n\n By:\n ------------------------------------\n Name:\n ------------------------------------\n Title:\n ----------------------------------\n Address:\n --------------------------------\n --------------------------------\n\n\n\n SIGNATURE PAGE TO THE PREFERRED STOCK PURCHASE AGREEMENT\n\n 21\n VULCAN VENTURES INCORPORATED\n\n By:\n ------------------------------------\n Name:\n ------------------------------------\n Title:\n ----------------------------------\n Address:\n --------------------------------\n --------------------------------\n\n\n\n SIGNATURE PAGE TO THE PREFERRED STOCK PURCHASE AGREEMENT\n\n 22\n L. JOHN DOERR\n\n By:\n ------------------------------------\n Name:\n ------------------------------------\n Title:\n ----------------------------------\n Address:\n --------------------------------\n --------------------------------\n\n\n\n SIGNATURE PAGE TO THE PREFERRED STOCK PURCHASE AGREEMENT\n\n\n 23\n [Other Purchasers].\n\n By:\n ------------------------------------\n Name:\n ------------------------------------\n Title:\n ----------------------------------\n Address:\n --------------------------------\n --------------------------------\n\n\n\n SIGNATURE PAGE TO THE PREFERRED STOCK PURCHASE AGREEMENT\n 24\n SCHEDULE I\n\n\n\n<\/pre>\n
\n\nPurchaser Purchase Commitment
\n——— ——————-
\n
\nKPCB VIII L.P. $14,178,000
\nKPCB Founders Fund, L.P. $822,000
\nL. John Doerr $5,000,000
\nVulcan Ventures Incorporated $2,682,825.00<\/p>\nTotal
\n<\/c><\/s><\/caption>\n<\/table>\n
25
\n EXHIBITS<\/p>\n
Exhibit A – Certificate of Designation of Series 1 Preferred Stock <\/p>\n
Exhibit B – Amended and Restated Certificate of Incorporation of the Company <\/p>\n
Exhibit C – Matters to be covered in legal opinion of Simpson Thacher & Bartlett<\/p>\n
Exhibit D – Persons to deliver Voting Agreements Exhibit E- Form of Voting
\n Agreement <\/p>\n
Exhibit F – Matters to be covered in legal opinion of the General Counsel of the
\n Company<\/p>\n
26
\n EXHIBIT A<\/p>\n
CERTIFICATE OF DESIGNATIONS OF SERIES 1 PREFERRED STOCK<\/p>\n
27
\n EXHIBIT B<\/p>\n
AMENDED AND RESTATED CERTIFICATE
\n OF INCORPORATION OF THE COMPANY<\/p>\n
28
\n EXHIBIT C<\/p>\n
MATTERS TO BE COVERED BY LEGAL OPINION OF
\n SIMPSON THACHER & BARTLETT
\n 29
\n EXHIBIT D<\/p>\n
PERSONS TO DELIVER VOTING AGREEMENTS<\/p>\n
Kleiner Perkins Caufield & Byers VIII, L.P.<\/p>\n
KPCB Life Sciences Zaibatsu Fund II, L.P.<\/p>\n
KPCB VIII Founders Fund, L.P.<\/p>\n
Amazon.com, Inc.<\/p>\n
Maveron Equity Partners, L.P.<\/p>\n
Vulcan Ventures Incorporated<\/p>\n
Rite Investments Corp.<\/p>\n
General Nutrition Investment Company<\/p>\n
Peter Neupert<\/p>\n
Peter Neupert and Sheryl Neupert, Tenants in Common<\/p>\n
Kal Raman<\/p>\n
Mark L. Silverman<\/p>\n
David Rostov<\/p>\n
David Rostov, as custodian<\/p>\n
Judith H. McGarry<\/p>\n
Drugstore.com Foundation<\/p>\n
Hearst Communications, Inc.<\/p>\n
Integral Capital Partners IV, L.P.<\/p>\n
Integral Capital Partners IV MS Side Fund, L.P.<\/p>\n
Integral Capital Partners V, L.P.<\/p>\n
Integral Capital Partners V Side Fund, L.P.<\/p>\n
Baron Asset Fund<\/p>\n
Baron Capital Funds Trust<\/p>\n
30
\nL. John Doerr<\/p>\n
31
\n EXHIBIT E<\/p>\n
FORM OF VOTING AGREEMENT
\n 32
\n EXHIBIT F<\/p>\n
MATTERS TO BE COVERED BY LEGAL OPINION OF<\/p>\n
GENERAL COUNSEL OF THE COMPANY<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6645,7360],"corporate_contracts_industries":[9492,9496],"corporate_contracts_types":[9622,9627],"class_list":["post-43501","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-amazoncom-inc","corporate_contracts_companies-drugstorecom-inc","corporate_contracts_industries-retail__books","corporate_contracts_industries-retail__drug","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43501","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=43501"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43501"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43501"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}