{"id":43664,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-purchase-agreement-drugstore-com-inc-and-amazon-com-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-purchase-agreement-drugstore-com-inc-and-amazon-com-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-purchase-agreement-drugstore-com-inc-and-amazon-com-inc.html","title":{"rendered":"Stock Purchase Agreement – Drugstore.com Inc. and Amazon.com Inc."},"content":{"rendered":"\n DRUGSTORE.COM, INC.\n\n STOCK PURCHASE AGREEMENT\n\n This Stock Purchase Agreement (this \"Agreement\") is made as of July 30,\n2000 by and among drugstore.com, inc., a Delaware corporation (the \"Company\"),\nand the investors listed on Schedule I attached hereto (each a \"Purchaser\" and\ntogether the \"Purchasers\").\n\n The parties hereby agree as follows:\n\n 1. PURCHASE AND SALE OF COMMON STOCK.\n\n 1.1 SALE AND ISSUANCE OF COMMON STOCK.\n\n 1.2 Subject to the terms and conditions of this Agreement, each of\nthe Purchasers agrees to purchase and the Company agrees to sell and issue to\nsuch Purchaser that number of shares of Common Stock, par value $0.0001, of the\nCompany (the \"Common Stock\"), determined by dividing the Purchase Commitment\nlisted opposite such Purchaser's name on Schedule I by $4.9375. The Company\nshall have the right to amend Schedule I hereto to add additional Purchasers at\nany time prior to the Closing, and any such Purchasers shall become parties to\nthis Agreement. The shares of Common Stock issued to the Purchasers pursuant to\nthis Agreement are hereinafter referred to as the \"Stock.\"\n\n (a) The Common Stock shall have the rights and restrictions as\nset forth in the Amended and Restated Certificate of Incorporation of\ndrugstore.com, inc. (the \"Restated Certificate\") attached hereto as Exhibit A.\n\n (b) The parties hereto acknowledge that, concurrently herewith,\nthe Company is entering into a Series 1 Preferred Stock Purchase Agreement with\nthe several purchasers listed on Schedule I thereto (the \"Preferred Stock\nPurchase Agreement\"), pursuant to which such purchasers have agreed to purchase,\nsubject to the terms and conditions of the Preferred Stock Purchase Agreement,\nat least 45,939 shares of Series 1 Preferred Stock, par value $0.0001 per share,\nof the Company (the \"Series 1 Preferred Stock\"), having the rights, privileges,\npreferences and restrictions set forth in the Certificate of Designations of the\nSeries 1 Preferred Stock attached hereto as Exhibit B (the \"Certificate of\nDesignations.\") Upon the receipt of the approval of the stockholders of the\nCompany, the shares of Series 1 Preferred Stock shall be converted into shares\nof Common Stock.\n\n 1.3 CLOSING; DELIVERY.\n\n (a) The purchase and sale of the Stock shall take place at the\noffices of Simpson Thacher & Bartlett (or such other location mutually agreeable\nto the parties hereto) no later than 5 business days after the satisfaction or\n(subject to applicable law) waiver of the\n\n\n 2\n\nconditions set forth in Sections 4 and 5 (excluding conditions that, by their\nterms, cannot be satisfied until the Closing) (which time and place are\ndesignated as the \"Closing\").\n\n (b) At the Closing, the Company shall deliver to each Purchaser a\ncertificate or certificates for the number of shares of the Stock to be\npurchased by such Purchaser pursuant to this Agreement against delivery of the\nconsideration therefor, by wire transfer of immediately available funds to the\nCompany'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 a\ncorporation duly organized, validly existing and in good standing under the laws\nof its state of incorporation; (ii) has the power and authority to own, lease\nand operate its properties and carry on its business as now conducted; and (iii)\nis duly qualified, licensed to do business and in good standing as a foreign\ncorporation in each jurisdiction where the failure to be so qualified could\nreasonably 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 250,000,000\nshares of Common Stock and 10,000,000 shares of Preferred Stock, $0.0001 per\nshare (the \"Preferred Stock\"). The Common Stock has the rights, preferences and\nprivileges set forth in the Company's Restated Certificate, and the Preferred\nStock has the rights, preferences and privileges set forth in the Certificate of\nDesignations.\n\n (b) As of the date of this Agreement, 52,962,714 shares of Common\nStock and no shares of Preferred Stock are issued and outstanding. All of the\noutstanding shares of Common Stock have been, and when issued and paid for in\naccordance with the terms of this Agreement the Stock will be, validly issued,\nduly authorized, fully paid and nonassessable, and issued in compliance with all\napplicable federal and state securities laws (in the case of the issuance of the\nStock, based in part upon the representations of the Purchasers in Sections 3.4,\n3.5, 3.6, 3.7 and 3.8). All of the shares of Series 1 Preferred Stock, when\nissued and paid for in accordance with the terms of the Preferred Stock Purchase\nAgreement, 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 Preferred Stock Purchase Agreement).\n\n (c) As of the date of this Agreement (i) 17,509,148 shares of\nCommon Stock are reserved for issuance under the Company's 1998 Stock Plan (of\nwhich 8,000 shares have been issued pursuant to restricted stock agreements,\n890,839 shares are issuable under outstanding options that are currently\nexercisable, 10,367,423 shares are issuable under other outstanding options that\nare not currently exercisable and 6,250,886 shares remain available for future\ngrants), (ii) 32,404 shares of Common Stock are reserved for issuance under the\nCompany's Beauty.com Inc. Stock Plan (of which 9,606 shares are issuable under\noutstanding options, all of which are currently exercisable and 22,798 remain\navailable for\n\n\n\n\n 2\n 3\n\nfuture grants) and (iii) 1,000,000 shares of Common Stock are reserved for\nissuance under the Company's 1999 Employee Stock Purchase Plan (of which 87,719\nhave been issued to date).\n\n (d) Except for the conversion privileges of the Series 1\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 Stock shall constitute 14.25% of the Common Stock\noutstanding as of the date of this Agreement, assuming (i) all warrants for\nCommon Stock outstanding as of the date of this Agreement have been exercised\nfor Common Stock, (ii) all options to purchase Common Stock outstanding as of\nthe date of this Agreement that are exercisable as of the date of this Agreement\nhave been exercised for Common Stock and (iii) all other rights outstanding as\nof the date of this Agreement to acquire Common Stock or securities convertible\ninto Common Stock have been exercised for or converted into Common Stock. The\nCompany's only subsidiaries are DS Pharmacy, Inc., DS Non-Pharmaceutical Sales,\nInc., DS Distribution, Inc., DSGC Idaho, Inc., Beauty.com, Inc. and Beauty.com\nSales, Inc. (each a \"Subsidiary\" and together, the \"Subsidiaries\").\n\n 2.3 AUTHORIZATION. All corporate action on the part of the Company,\nits officers, directors and stockholders necessary for the authorization,\nexecution and delivery of this Agreement and the Preferred Stock Purchase\nAgreement (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 Series 1 Preferred Stock has been\ntaken or will be taken prior to the Closing (subject, in the case of the\nconversion of the Series 1 Preferred Stock into Common Stock, to the receipt of\nthe Stockholder Approval (as defined herein)), and the Agreements, when executed\nand delivered by the Company, will constitute valid and legally binding\nobligations of the Company, enforceable against the Company in accordance with\ntheir 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 2.4 VALID ISSUANCE OF STOCK. The Stock that will be issued to the\nPurchaser at Closing will have been duly and validly reserved for issuance and,\nwhen issued and delivered in accordance with the terms hereof, will be duly\nauthorized, validly issued, fully paid and nonassessable, and free of\nrestrictions on transfer other than restrictions on transfer under this\nAgreement and applicable state and federal securities laws. Based in part upon\nthe representations of the Purchasers in this Agreement, the Stock will be\nissued in compliance with all applicable federal and state securities laws. The\nCommon Stock issuable upon conversion of the Series 1 Preferred Stock has been\nduly and validly reserved for issuance, and\n\n\n\n\n 3\n 4\n\nupon issuance in accordance with the terms of the Certificate of Designations,\nwill be duly authorized, validly issued, fully paid and nonassessable and free\nof restrictions on transfer other than restrictions on transfer under the\nPreferred Stock Purchase Agreement and applicable federal and state securities\nlaws and will be issued in compliance with all applicable federal and state\nsecurities laws.\n\n 2.5 LITIGATION. There is no action, suit, proceeding or investigation\npending or, to the Company's knowledge, currently threatened against the Company\nor any of its subsidiaries that (i) questions the validity of the Agreements or\nthe right of the Company or any of its subsidiaries, as applicable, to enter\ninto them, or to consummate the transactions contemplated hereby or thereby nor\nis the Company aware that there is any basis for the foregoing or (ii) if\nadversely determined, would have a Material Adverse Effect. Neither the Company\nnor any of its subsidiaries is a party or subject to the provisions of any\norder, writ, injunction, judgment or decree of any court or government agency or\ninstrumentality that (i) challenges the validity of the Agreements or the right\nof the Company or any of its subsidiaries, as applicable, to enter into this\nAgreement, or to consummate the transactions contemplated hereby and thereby or\n(ii) would have a Material Adverse Effect.\n\n 2.6 LIABILITIES. The Company and its subsidiaries, on a consolidated\nbasis, have no liabilities and there are no contingent liabilities, required by\ngenerally accepted accounting principles to be disclosed on a balance sheet but\nthat are not disclosed on the Company's audited balance sheet as of January 2,\n2000 and\/or on the Company's unaudited balance sheet as of July 2, 2000 except\nliabilities that would not have a Material Adverse Effect. Subsequent to July 2,\n2000, the Company and its subsidiaries, on a consolidated basis, have not\nincurred any liabilities or any contingent liabilities required by generally\naccepted accounting principles to be disclosed on the Company's balance sheet\nexcept liabilities that would not have a Material Adverse Effect.\n\n 2.7 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and\nperformance 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 all\nagreements 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\n\n\n\n\n 4\n 5\n\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 that\nhave been delivered to the Investors (including those for the period ended July\n2, 2000), (i) are in accordance with the books and records of Company and its\nSubsidiaries, 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 therein and the results of operations, changes in financial\npositions or cash flows, as the case may be, for the periods presented therein\n(except, in the case of financial statements for the period ended July 2, 2000,\nfor normal year-end audit adjustments). None of the Company or any of the\nCompany's Subsidiaries has any contingent obligations, liability for taxes or\nother outstanding obligations that are material in the aggregate, except as\ndisclosed in the unaudited financial statements for the period ended July 2,\n2000 (except for normal year-end audit adjustments). None of the Company or its\nSubsidiaries has any contingent obligations or liability for taxes that are\nmaterial in the aggregate and that would be required to be reflected or reserved\nagainst in the latest balance sheet of the Company, except as disclosed in the\nunaudited financial statements for the period ended July 2, 2000 (except for\nnormal year-end audit adjustments).\n\n 2.10. INVESTMENT COMPANY. None of Company or its Subsidiaries is\nsubject 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 was\nfiled, none of the Company's registration statements, reports or other filings\nmade with the Securities and Exchange Commission, contained any untrue statement\nof a material fact or omitted to state a material fact necessary to make the\nstatements therein, in light of the circumstances under which they were made,\nnot 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 has\noccurred 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\n\n\n 5\n 6\n\n 2.13. REAL PROPERTY HOLDING COMPANY. The Company is not, and has not\nbeen, a \"United States real property holding corporation\" within the meaning of\nSection 897(c)(2) of the Internal Revenue Code of 1986, as amended (the \"Code\"),\nduring the applicable period described in Section 897(c)(1)(A)(ii) of 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 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 to\nenter 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 investigation\npending or, to the Purchaser's knowledge, currently threatened against the\nPurchaser or any of its subsidiaries that questions the validity of this\nAgreement 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 and\nperformance 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 with\nthe Purchaser in reliance upon the Purchaser's representation to the Company,\nwhich by the\n\n\n\n\n 6\n 7\n\nPurchaser's execution of this Agreement, the Purchaser hereby confirms, that the\nStock to be acquired by the Purchaser will be acquired for investment for the\nPurchaser's own account, not as a nominee or agent, and not with a view to the\nresale or public distribution of any part thereof in violation of any\nrequirements of the Securities Act of 1933, as amended (the \"Securities Act\") or\napplicable state securities laws. The Purchaser has no present intention of\nselling, granting any participation in, or otherwise distributing any Stock\npurchased hereunder, including, without limitation, entering into any\narrangement that transfers to another, in whole or in part, any of the economic\nconsequences of ownership of the Stock, whether any such transaction is to be\nsettled by delivery of Common Stock or other securities, in cash or otherwise.\nBy executing this Agreement, the Purchaser further represents that the Purchaser\ndoes not presently have any contract, undertaking, agreement or arrangement with\nany person to sell, transfer or grant participation to such person or to any\nthird person, with respect to any of the Stock.\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 Stock with the Company's\nmanagement and (ii) has had an opportunity to review the Company's facilities.\nThe Purchaser understands that such discussions and reviews, as well as any\nwritten information delivered by the Company to the Purchaser, were intended to\ndescribe the aspects of the Company's business that it believes to be material.\n\n 3.6 RESTRICTED SECURITIES. The Purchaser understands that the Stock\nhas not been, and will not be, registered under the Securities Act, by reason of\na specific exemption from the registration provisions of the Securities Act that\ndepends upon, among other things, the bona fide nature of the investment intent\nand the accuracy of the Purchaser's representations as expressed herein. The\nPurchaser understands that the shares of Stock are \"restricted securities\" under\napplicable U.S. federal and state securities laws and that, pursuant to these\nlaws, the Purchaser must hold the shares of Stock indefinitely unless they are\nregistered with the Securities and Exchange Commission and qualified by state\nauthorities, or an exemption from such registration and qualification\nrequirements is available. The Purchaser acknowledges that the Company has no\nobligation to register or qualify the Stock for resale except as set forth in\nSection 6.2 hereof. The Purchaser further acknowledges that if an exemption from\nregistration or qualification is available, it may be conditioned on various\nrequirements including, but not limited to, the time and manner of sale, the\nholding period for the Stock, and on requirements relating to the Company that\nare outside of the Purchaser's control, and that the Company is under no\nobligation, and may not be able, to satisfy.\n\n 3.7 LEGENDS. The Purchaser understands that the Stock, and any\nsecurities issued in respect thereof, may bear one or all of the following\nlegends:\n\n (a) \"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN\nREGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR\nINVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR\nDISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN\nEFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A\nFORM\n\n\n\n\n 7\n 8\n\nSATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE\nSECURITIES ACT OF 1933.\"\n\n (b) Any legend required by the \"Blue Sky\" laws of any state to\nthe extent such laws are applicable to the shares represented by the certificate\nso legended.\n\n 3.8 ACCREDITED INVESTOR. The Purchaser is an accredited investor as\ndefined in Rule 501(a) of Regulation D promulgated under the Securities Act.\n\n 4. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT CLOSING. The obligations\nof the Purchasers to the Company under this Agreement are subject to the\nfulfillment, 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 with\nall 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 Stock issuable pursuant to this\nAgreement shall have been duly authorized and reserved for issuance at the\nClosing.\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, if any,\nof any governmental authority or regulatory body of the United States or of any\nstate that are required in connection with the lawful issuance and sale of the\nStock pursuant to this Agreement shall be obtained and effective as of the\nClosing including, without limitation, the expiration or termination of all\nwaiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976,\nas amended (the \"HSR Act\").\n\n 4.6 OPINION OF COMPANY COUNSEL. The Purchasers at the Closing shall\nhave 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 PREFERRED STOCK PURCHASE AGREEMENT. The Company and the\npurchasers parties thereto shall have executed and delivered the Preferred Stock\nPurchase Agreement covering the purchase of at least 45,939 shares of Series 1\nPreferred Stock.\n\n\n\n\n 8\n 9\n\n 4.8 DELIVERY OF LOCKUP AGREEMENTS. Each person listed on Exhibit D\nhereto shall have executed and delivered to the Company a lockup agreement in\nthe form attached hereto as Exhibit F (each, a \"Lockup Agreement.\")\n\n 4.9 DELIVERY OF VOTING AGREEMENTS. Each person listed on Exhibit E\nhereto shall have executed and delivered to the Purchasers a voting agreement in\nthe form attached hereto an Exhibit G (each, a \"Voting Agreement\") to the effect\nthat such person will vote its shares of Common Stock at the Stockholder Meeting\n(as defined) in favor of the approval of the issuance of the Common Stock\nissuable upon conversion of the Series A Preferred Stock. The persons delivering\nVoting Agreements shall represent a majority of the Common Stock.\n\n 4.10. 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 a majority of the Stock for\ndelivery to the Company (or with respect to amounts to be wired by Hearst\nCommunications Corp., as may be mutually agreed between Hearst Communications\nCorp. and the Purchasers), before any Purchaser is obligated to close.\n\n 4.11 OPINION OF GENERAL COUNSEL TO THE COMPANY. The Purchasers at the\nClosing shall have received from the General Counsel of the Company an opinion\ndated as of the Closing covering the matters set forth on Exhibit H.\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 contained\nin this Agreement to be performed by the Purchasers on or prior to the Closing\nshall have been performed or complied with in all material respects.\n\n 5.3 COMPLIANCE CERTIFICATE. A senior executive officer of each of the\nPurchasers shall deliver to the Company at the Closing a certificate certifying\nthat the conditions specified in Sections 5.1 and 5.2 have been fulfilled.\n\n 5.4 QUALIFICATIONS. All authorizations, approvals or permits, if any,\nof any governmental authority or regulatory body of the United States or of any\nstate that are required in connection with the lawful issuance and sale of the\nStock pursuant to this Agreement shall be obtained and effective as of the\nClosing including, without limitation, the expiration or termination of all\nwaiting periods under the HSR Act.\n\n\n\n\n 9\n 10\n\n 5.5 PREFERRED STOCK PURCHASE AGREEMENT. The Company and the\npurchasers parties thereto shall have executed and delivered the Preferred Stock\nPurchase Agreement covering the purchase of at least 45,939 shares of Series 1\nPreferred Stock.\n\n 5.6 DELIVERY OF LOCKUP AGREEMENTS. Each person listed on Exhibit D\nhereto shall have executed and delivered to the Company a Lockup Agreement.\n\n 5.7 DELIVERY OF VOTING AGREEMENTS. Each person listed on Exhibit D\nhereto shall have executed and delivered to the Purchasers a Voting Agreement.\nThe persons delivering Voting Agreements shall represent a majority of the\nCommon Stock.\n\n 6. COVENANTS.\n\n 6.1 HSR ACT FILINGS. As soon as practicable after the execution of\nthis Agreement, the Company and each relevant Purchaser will separately file\nwith the Antitrust Division of the United States Department of Justice and the\nUnited States Federal Trade Commission pursuant to the HSR Act all requisite\ndocuments and notifications in order to provide for the issuance and sale of the\nStock pursuant to this Agreement. The parties will cooperate and coordinate with\none another in exchanging information and providing reasonable assistance as the\nother party may request in connection with the foregoing.\n\n 6.2 REGISTRATION RIGHTS. (a) The Company hereby agrees: (i) to use\nits 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 Stock by the Purchasers and resales of the\nCommon Stock issuable upon conversion of the Series 1 Preferred Stock pursuant\nto the Preferred Stock Purchase Agreement, (ii) to use its best efforts to cause\nthe Registration Statement to be declared effective as soon as reasonably\npracticable but in any event within 60 days of the Closing and (iii) to maintain\nthe effectiveness of the Registration Statement until the earlier of (x) the\neighteen month anniversary of the effective date of the Registration Statement\nand (y) the date on which all shares of Stock have been resold by the\nPurchasers. At any time when the Registration Statement is effective, the Board\nof Directors of the Company may determine, as indicated in a certificate signed\nby any Director of the Company, the Chief Financial Officer of the Company or\nthe Secretary of the Company, to suspend offers and sales by Purchasers under\nthe Registration Statement if an event has occurred or is reasonably likely to\noccur that would require additional disclosure by the Company and that the\nCompany has a bona fide business purpose for keeping confidential, and the\nnondisclosure of which would reasonably be expected to cause the Registration\nStatement to fail to comply with applicable disclosure requirements. The Company\nshall give the Purchasers written notice of the Board of Directors'\ndetermination and the Purchasers agree to suspend offers and sales under the\nRegistration Statement until the Company has delivered a subsequent notice to\nthe Purchasers revoking its prior notice; provided, however, that the eighteen\nmonth period during which the Registration Statement is required to be effective\nshall be extended by the number of days of such suspensions. The Company may not\nrevoke the ability of Purchasers to make offers and sales under the Registration\nStatement more than three times or for more than 90 days in the aggregate.\n\n (b) For the period during which the Registration Statement is\neffective, the\n\n\n\n\n 10\n 11\n\nCompany shall:\n\n (i) furnish to the Purchaser with respect to the Stock\n registered under the Registration Statement (and to each\n underwriter, if any, of such Stock) such reasonable number of\n copies of prospectuses in order to facilitate the public sale or\n other disposition of all or any of the Stock by the Purchaser;\n provided, however, that the obligation of the Company to deliver\n copies of prospectuses to the Purchaser shall be subject to the\n receipt by the Company of reasonable assurances from the\n Purchaser that the Purchaser will comply with the applicable\n provisions of the Securities Act and of such other securities or\n blue sky laws as may be applicable in connection with any use of\n such prospectuses;\n\n (ii) during the period when such prospectuses are required\n to be delivered under the Securities Act or the Securities\n Exchange Act of 1934, as amended (the \"Exchange Act\"), file all\n documents required to be filed with the Commission pursuant to\n Section 13, 14 or 15 of the Exchange Act within the time periods\n required by the Exchange Act and the rules and regulations\n promulgated thereunder;\n\n (iii) file documents required of the Company for normal\n blue sky clearance in states specified in writing by the\n Purchaser; provided, however, that the Company shall not be\n required to qualify to do business or consent to service of\n process in any jurisdiction in which it is not now so qualified\n or has not so consented;\n\n (iv) authorize for listing on the Nasdaq National Market\n the shares of Stock by filing with the Nasdaq National Market a\n Notification of Listing of Additional Shares (or such other form,\n if any, as may be required by the Nasdaq National Market) as soon\n as reasonably practicable after the filing of the Registration\n Statement or otherwise in accordance with the rules and\n regulations of the 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 Stock pursuant to\n the Registration Statement, other than fees and expenses, if any,\n of counsel or other advisers to the Purchaser or underwriting\n discounts, brokerage fees and commissions incurred by the\n Purchaser, 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\n of the Purchasers and each of their respective directors,\n officers, members and partners, and each person, if any, who\n controls any Purchaser within the meaning of the Securities Act,\n against any losses, claims, damages, liabilities or expenses,\n joint or several, to which such Purchasers and each of their\n respective directors, officers, members and partners, or such\n controlling person may become subject, under the Securities Act,\n the Exchange Act, or any other federal or state statutory law or\n regulation, or at common law or otherwise (including in\n settlement of any litigation, if such settlement is effected\n\n\n\n\n 11\n 12\n\n with the written consent of the Company), 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 statement or alleged untrue statement of any material fact\n contained in or incorporated by reference in the Registration\n Statement, including the prospectus, financial statements and\n schedules, and all other documents filed as a part thereof, as\n amended at the time of effectiveness of the Registration\n Statement, including the preliminary or final prospectus any\n information deemed to be a part thereof as of the time of\n effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant\n to Rule 434, of the rules and regulations of the Commission under\n the Securities Act (the \"Regulations\"), or the prospectus, in the\n form first filed with the Commission pursuant to Rule 424(b) of\n the Regulations, or filed as part of the Registration Statement\n at the time of effectiveness if no Rule 424(b) filing is required\n (the \"Prospectus\"), or any amendment or supplement thereto, or\n arise out of or are based upon the omission or alleged omission\n to state in any of them a material fact required to be stated\n 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\n any failure of the Company to perform its obligations under or a\n violation of the Securities Act, the Exchange Act or any state\n securities law, and will reimburse each Purchaser and each of\n their respective directors, officers, members and partners, and\n each such controlling person for any legal and other expenses as\n such expenses are reasonably incurred by such Purchaser or such\n controlling person in connection with investigating, defending,\n settling, compromising or paying any such loss, claim, damage,\n liability, expense or action; provided, however, that the Company\n will not be liable in any such case to the extent that any such\n loss, claim, damage, liability or expense arises out of or is\n based upon (i) an untrue statement or alleged untrue statement or\n 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\n therein, or (ii) the failure of such Purchaser to comply with the\n covenants and agreements contained in this Section 6.2 respecting\n the sale of the Stock, or (iii) any statement or omission in any\n Prospectus that is corrected in any subsequent Prospectus that\n was delivered to the Purchaser prior to the pertinent sale or\n sales by the Purchaser.\n\n (ii) Each Purchaser will severally indemnify and hold\n harmless the Company, each of its directors, each of its officers\n who signed the Registration Statement and each person, if any,\n who controls the Company within the meaning of the Securities\n Act, against any losses, claims, damages, liabilities or expenses\n to which the Company, each of its directors, each of its officers\n who signed the Registration Statement or controlling person may\n become subject, under the Securities Act, the Exchange Act, or\n any other federal or state statutory law or regulation, or at\n common law or otherwise (including in settlement of any\n litigation, if such settlement is effected with the written\n consent of such Purchaser) insofar as such losses, claims,\n damages, liabilities or expenses (or actions in respect thereof\n as contemplated below) arise out of or are based upon any untrue\n or alleged untrue statement of any material fact contained in the\n Registration Statement, including the prospectus, financial\n statements and\n\n\n\n\n 12\n 13\n\n schedules, and all other documents filed as a part thereof, as\n amended at the time of effectiveness of the Registration\n Statement, including any information deemed to be a part thereof\n as of the time of effectiveness pursuant to paragraph (b) of Rule\n 430A, or pursuant to Rule 434 of the Regulations, or the\n Prospectus, or any amendment or supplement thereto, or arise out\n of or are based upon the omission or alleged omission to state\n therein 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\n arise out of or are based in whole or in part on any failure of\n such Purchaser to perform its obligations under the Securities\n Act, the Exchange Act or any state securities law, and will\n 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\n expenses are reasonably incurred by such Purchaser or such\n controlling person in connection with investigating, defending,\n settling, compromising or paying any such loss, claim, damage,\n liability, expense or action, in each case to the extent, but\n only to the extent, that such untrue statement or alleged untrue\n statement or omission or alleged omission was made in the\n Registration Statement, the Prospectus, or any amendment or\n supplement thereto, in reliance upon and in conformity with\n 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\n any action, such indemnified party will, if a claim in respect\n thereof is to be made against an indemnifying party under this\n Section 6.2(c) promptly notify the indemnifying party in writing\n thereof; but the omission so to notify the indemnifying party\n will not relieve it from any liability which it may have to any\n indemnified party for contribution or otherwise than under the\n indemnity agreement contained in this Section 6.2(c) or to the\n extent it is not prejudiced as a result of such failure. In case\n any such action is brought against any indemnified party and such\n indemnified party seeks or intends to seek indemnity from an\n indemnifying party, the indemnifying party will be entitled to\n participate in, and, to the extent that it may wish, jointly with\n all other indemnifying parties similarly notified, to assume the\n defense thereof with counsel reasonably satisfactory to such\n indemnified party; provided, however, if the defendants in any\n such action include both the indemnified party and the\n 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\n legal defenses available to it and\/or other indemnified parties\n which are different from or additional to those available to the\n indemnifying party, the indemnified party or parties shall have\n the right to select separate counsel to assume such legal\n defenses and to otherwise participate in the defense of such\n action on behalf of such indemnified party or parties. Upon\n receipt of notice from the indemnifying party to such indemnified\n party of its election so to assume the defense of such action and\n approval by the indemnified party of counsel, the indemnifying\n party will not be liable to such indemnified party under this\n Section 6.2(c) for any legal or other expenses subsequently\n incurred by such indemnified party in connection with the defense\n thereof unless (i) the indemnified party shall have employed such\n counsel in connection with the assumption\n\n\n\n\n 13\n 14\n\n of legal defenses in accordance with the proviso to the preceding\n sentence (it being understood, however, that the indemnifying\n party shall not be liable for the expenses of more than one\n separate counsel, approved by such indemnifying party,\n representing all of the indemnified parties who are parties to\n such action) or (ii) the indemnifying party shall not have\n employed counsel reasonably satisfactory to the indemnified party\n to represent the indemnified party within a reasonable time after\n notice of commencement of action, in each of which cases the\n reasonable fees and expenses of counsel shall be at the expense\n of the indemnifying party.\n\n (iv) If the indemnification provided for in this Section\n 6.2 is required by its terms but is for any reason held to be\n unavailable to or otherwise insufficient to hold harmless an\n indemnified party under paragraphs (i), (ii) or (iii) of this\n Section 6.2(c) in respect to any losses, claims, damages,\n liabilities or expenses referred to herein, then each applicable\n indemnifying party shall contribute to the amount paid or payable\n by such indemnified party as a result of any losses, claims,\n damages, liabilities or expenses referred to herein in such\n proportion as is appropriate to reflect the relative fault of the\n indemnifying party on the one hand and the indemnified party on\n the other in connection with the statements or omissions that\n 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\n to state a material fact relates to information supplied by the\n Company or by such Purchaser and the parties' relative intent,\n knowledge, access to information and opportunity to correct or\n prevent such statement or omission. The amount paid or payable by\n a party as a result of the losses, claims, damages, liabilities\n and expenses referred to above shall be deemed to include,\n subject to the limitations set forth in paragraph (iii) of this\n Section 6.2(c), any legal or other fees or expenses reasonably\n incurred by such party in connection with investigating or\n defending any action or claim. The provisions set forth in\n paragraph (iii) of this Section 6.2(c) with respect to the notice\n of the threat or commencement of any threat or action shall apply\n if a claim for contribution is to be made under this paragraph\n (iv); provided, however, that no additional notice shall be\n required with respect to any threat or action for which notice\n 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\n amount in excess of the net proceeds of the offering received by\n such Purchaser, except in the case of willful fraud by such\n Purchaser. No person guilty of fraudulent misrepresentation\n (within the meaning of Section 11(f) of the Securities Act) shall\n be entitled to contribution from any person who was not guilty of\n such fraudulent misrepresentation. The Purchasers' obligations to\n contribute pursuant to this Section 6.2(c)(iv) are several and\n 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 Series 1 Preferred Stock\nissued pursuant to the Preferred Stock Purchase Agreement into Common Stock or\n(ii) holders of the requisite number of shares of Common\n\n\n\n\n 14\n 15\n\nStock to deliver written consents approving the conversion of the Series 1\nPreferred Stock issued pursuant to the Preferred Stock Purchase Agreement into\nCommon Stock (the action called for in (i) and (ii), the \"Stockholder\nApproval\").\n\n 6.4 NO WAIVER OF LOCKUP AGREEMENT. The Company shall not waive any\nprovision of any Lockup Agreement without having obtained the prior consent of\nthe holders of at least sixty-seven percent (67%) of the shares of Stock\npurchased hereunder; provided, that any Stock purchased hereunder by persons who\nhave signed a Lockup Agreement shall not be deemed to be shares of Stock for\npurposes of this Section 6.4; and provided, further, that the Company shall not\nin any event waive any provision of any Lockup Agreement with respect to any\nperson listed on Exhibit D without concurrently waiving the Lockup Agreement\nwith respect to all persons listed on Exhibit D.\n\n 7. MISCELLANEOUS.\n\n 7.1 SURVIVAL OF WARRANTIES. The warranties and representations of the\nCompany 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 each\nparty's rights and obligations hereunder shall not be assigned without the prior\nwritten consent of the other party; provided, that a Purchaser may transfer its\nrights hereunder to an affiliate, so long as such affiliate agrees in writing to\nbe bound by all obligations under this Agreement. Nothing in this Agreement,\nexpress or implied, is intended to confer upon any party other than the parties\nhereto or their respective successors and assigns any rights, remedies,\nobligations, or liabilities under or by reason of this Agreement.\n\n 7.3 GOVERNING LAW. This Agreement and all acts and transactions\npursuant hereto and the rights and obligations of the parties hereto shall be\ngoverned by and construed in accordance with the laws of the State of Delaware,\nwithout giving effect to principles of conflicts of laws.\n\n 7.4 COUNTERPARTS. This Agreement may be executed in two or more\ncounterparts, 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 this\nAgreement 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 Agreement shall\nbe in writing and shall be deemed sufficient upon delivery, when delivered\npersonally or by overnight courier or sent by telegram or fax, or forty-eight\n(48) hours after being deposited in the U.S. mail, as certified or registered\nmail, with postage prepaid, addressed to the party to be notified at such\nparty's address as set forth on the signature page hereto, or as subsequently\nmodified by written notice, and if to the Company, with copies to the General\nCounsel of the Company at the address of the Company set forth below and Simpson\nThacher & Bartlett, 3373\n\n\n\n\n 15\n 16\n\nHillview Avenue, Suite 250, Palo Alto, CA 94304, Attention: William H. Hinman,\ntelecopy no: (650)-251-5002), and if to any of Integral Capital Partners IV,\nL.P., Integral Capital Partners IV MS Side Fund, L.P., Integral Capital Partners\nV, L.P. and Integral Capital Partners V Side Fund, L.P. with a copy to Brobeck,\nPhleger & Harrison, Spear Street Tower, One Market, San Francisco, CA 94105,\nAttention: Ronald Moskovitz, telecopy no: (415-442-1010), and if to the Baron\nAsset Fund or Baron Capital Funds Trust, with a copy to the Baron Asset Fund,\n767 Fifth Avenue, 49th Floor, New York, NY 10153, Attention: Linda S. Martinson,\nEsq.\n\n 7.7 FINDER'S FEE. Each party represents that it neither is nor will\nbe 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 7.8 FEES AND EXPENSES. The Company and the Purchasers shall pay their\nrespective fees and other expenses in connection with the negotiation,\nexecution, delivery and performance of the Agreements, provided that if the\nClosing occurs the Company will pay the reasonable fees and expenses of counsel\nfor the Purchasers up to $20,000 in the aggregate.\n\n 7.9 ATTORNEY'S FEES. If any action at law or in equity (including\narbitration) is necessary to enforce or interpret the terms of any of the\nAgreements, 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 Stock, each\nfuture holder of all such Stock, and the Company.\n\n 7.11 SEVERABILITY. If one or more provisions of this Agreement are\nheld to be unenforceable under applicable law, the parties agree to renegotiate\nsuch provision in good faith. In the event that the parties cannot reach a\nmutually agreeable and enforceable replacement for such provision, then (a) such\nprovision 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 right,\npower or remedy accruing to any party under this Agreement, upon any breach or\ndefault of any other party under this Agreement, shall impair any such right,\npower or remedy of such non-breaching or non-defaulting party nor shall it be\nconstrued to be a waiver of any such breach or default, or an acquiescence\ntherein, or of or in any similar breach or default thereafter\n\n\n\n\n 16\n 17\n\noccurring; nor shall any waiver of any single breach or default be deemed a\nwaiver of any other breach or default theretofore or thereafter occurring. Any\nwaiver, permit, consent or approval of any kind or character on the part of any\nparty of any breach or default under this Agreement, or any waiver on the part\nof any party of any provisions or conditions of this Agreement, must be in\nwriting and shall be effective only to the extent specifically set forth in such\nwriting. All remedies, either under this Agreement or by law or otherwise\nafforded to any party, shall be cumulative and not alternative.\n\n 7.13 ENTIRE AGREEMENT. This Agreement, and the documents referred to\nherein, constitute the entire agreement between the parties hereto pertaining to\nthe subject matter hereof, and any and all other written or oral agreements\nrelating to the subject matter hereof existing between the parties hereto are\nexpressly canceled.\n\n 7.14 CONFIDENTIALITY. Except as provided below, each party hereto\nagrees that, except with the prior written permission of the other party, it\nshall at all times keep confidential and not divulge, furnish or make accessible\nto anyone any confidential information, knowledge or data concerning or relating\nto the business or financial affairs of the other party to which such party has\nbeen or shall become privy by reason of the Agreements, discussions or\nnegotiations relating to the Agreements, the performance of its obligations\nthereunder or the ownership of Stock purchased hereunder. Notwithstanding the\nforegoing, nothing herein shall prevent any party from disclosing (i) such\ninformation that has been publicly disclosed, (ii) such information that becomes\navailable to the party on a non-confidential basis from a source other than the\nother party hereto, provided that such source is not bound by a confidentiality\nagreement with such other party, (iii) information required to be disclosed\npursuant to subpoena or other court process or otherwise required to be\ndisclosed by law or the regulations of any securities exchange (provided that,\nto the extent practicable, advance notice is given to the party whose\nconfidential information is to be disclosed so that such party can attempt to\nobtain a protective order) and (iv) such information that was known to the party\nprior to its first receipt from the other party. Notwithstanding the foregoing,\nthe provisions of this Section 7.14 shall not be applicable to any Purchaser\nthat has executed a separate Non-Disclosure Agreement with the Company (such\nagreement, a \"Separate Agreement\"), in which case the obligations of such\nPurchaser shall continue in accordance with the provisions of such Separate\nAgreement; provided, that the definition of \"Confidential Information\" in such\nSeparate Agreement shall be deemed to include all non-public information\nreceived by the Purchaser to which such Purchaser shall become privy by reason\nof its ownership of Stock purchased hereunder. In the event of an express\ninconsistency between a Separate Agreement and this Agreement, then this\nAgreement shall govern.\n\n 7.15 PUBLICITY. After the execution of this Agreement, any of the\nparties may issue a press release disclosing that the Purchasers have agreed to\ninvest 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\n\n\n 17\n 18\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 each\n 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 in\n connection with the lawful issuance and sale of the Stock pursuant to\n this Agreement has not been obtained, then no party shall be entitled to\n terminate this Agreement pursuant to this clause (ii) until December 15,\n 2000 and then only if the Closing has not occurred on or prior to such\n 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\n\n 18\n 19\n\n\n The parties have executed this Stock Purchase Agreement as of the date\nfirst written above.\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\n SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT\n\n\n 20\n\n PURCHASERS:\n\n Integral Capital Partners IV, L.P.\n By: Integral Capital Management IV, LLC, its\n General Partner\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: ______________________________________\n ______________________________________\n\n Integral Capital Partners IV MS Side Fund, L.P.\n By: Integral Capital Management NBT, LLC, its\n General Partner\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: ______________________________________\n ______________________________________\n\n Integral Capital Partners V, L.P.\n By: Integral Capital Management V, LLC, its\n General Partner\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n\n Address: ______________________________________\n ______________________________________\n\n Integral Capital Partners V Side Fund, L.P.\n By: ICP Management V, LLC, its General Partner\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: ______________________________________\n ______________________________________\n\n\n\n\n SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT\n 21\n\n HEARST COMMUNICATIONS, INC.\n\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: ______________________________________\n ______________________________________\n\n\n\n SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT\n\n 22\n\n BARON ASSET FUND, on behalf of the Baron\n iOpportunity Fund series\n\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: 767 Fifth Avenue, 49th Floor\n New York, NY 10153\n\n\n BARON ASSET FUND, on behalf of the Baron\n Growth Fund series\n\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: 767 Fifth Avenue, 49th Floor\n New York, NY 10153\n\n\n BARON CAPITAL FUNDS TRUST, on behalf of the\n Baron Capital Asset Fund series\n\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: 767 Fifth Avenue, 49th Floor\n New York, NY 10153\n\n\n\n\n SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT\n\n 23\n\n MAVERON EQUITY PARTNERS, L.P.\n\n\n By: _______________________________________\n Name: _______________________________________\n Title: _______________________________________\n\n Address: ______________________________________\n ______________________________________\n\n\n\n\n SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT\n\n 24\n\n AMAZON.COM, INC.\n\n\n\n By: \/s\/ MARK BRITTO\n ---------------------------------------\n Name: Mark Britto\n ---------------------------------------\n Title: Senior Vice President, Marketing\n & Cross-Site Merchandising\n ---------------------------------------\n\n Address: \n ---------------------------------------\n\n ---------------------------------------\n\n\n\n\n SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT\n\n 25\n\n SCHEDULE I\n\n\n\n<\/pre>\n
\n\nPurchaser Purchase Commitment
\n——— ——————-
\n
\nIntegral Capital Partners IV, L.P. $10,620,700.75
\nIntegral Capital Partners IV MS Side $50,165.00
\nFund, L.P.
\nIntegral Capital Partners V, L.P. $4,278,067.25
\nIntegral Capital Partners V Side $51,068.57
\nFund, L.P.
\nHearst Communications, Inc. $5,000,000
\nBaron Asset Fund, on behalf of the $2,000,000
\nBaron iOpportunity Fund series
\nBaron Asset Fund, on behalf of the $11,000,000
\nBaron Growth Fund series
\nBaron Capital Funds Trust, on behalf $2,000,000
\nof the Baron Capital Asset Fund Series
\nMaveron Equity Partners, L.P. $2,000,000
\nAmazon.com, Inc. $3,000,000<\/p>\nTotal
\n<\/c><\/s><\/caption>\n<\/table>\n
26<\/p>\n
EXHIBITS<\/p>\n
Exhibit A – Amended and Restated Certificate of Incorporation of the Company
\nExhibit B – Certificate of Designation of Series 1 Preferred Stock
\nExhibit C – Matters to be covered in legal opinion of Simpson Thacher & Bartlett
\nExhibit D – Persons that will deliver Lockup Agreements
\nExhibit E – Persons that will deliver Voting Agreements
\nExhibit F – Form of Lockup Agreement Exhibit G-Form of Voting Agreement
\nExhibit H – Matters to be covered in opinion of General Counsel to the Company<\/p>\n
27<\/p>\n
EXHIBIT A<\/p>\n
AMENDED AND RESTATED CERTIFICATE
\n OF INCORPORATION OF THE COMPANY<\/p>\n
28<\/p>\n
EXHIBIT B<\/p>\n
CERTIFICATE OF DESIGNATIONS OF SERIES 1 PREFERRED STOCK<\/p>\n
29<\/p>\n
EXHIBIT C<\/p>\n
MATTERS TO BE COVERED BY LEGAL OPINION OF
\n SIMPSON THACHER & BARTLETT<\/p>\n
30<\/p>\n
EXHIBIT D<\/p>\n
PERSONS THAT WILL SIGN LOCKUP 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. (except in respect of 1,066,667 shares of Common Stock)<\/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
David Rostov (other than in respect of 40,000 shares)<\/p>\n
David Rostov, as custodian<\/p>\n
Judith H. McGarry (other than in respect of 40,000 shares)<\/p>\n
Drugstore.com Foundation<\/p>\n
L. John Doerr<\/p>\n
31<\/p>\n
EXHIBIT E<\/p>\n
PERSONS THAT WILL SIGN 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
32<\/p>\n
EXHIBIT E (CONTINUED)<\/p>\n
Baron Capital Funds Trust<\/p>\n
L. John Doerr<\/p>\n
33<\/p>\n
EXHIBIT F<\/p>\n
FORM OF LOCKUP AGREEMENT<\/p>\n
34<\/p>\n
EXHIBIT G<\/p>\n
FORM OF VOTING AGREEMENT<\/p>\n
35<\/p>\n
EXHIBIT H<\/p>\n
MATTERS TO BE COVERED BY THE OPINION OF GENERAL COUNSEL
\n TO 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-43664","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\/43664","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=43664"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43664"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43664"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}