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EXHIBIT 1
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of July 30,
2000 by and among ▇▇▇▇▇▇▇▇▇.▇▇▇, inc., a Delaware corporation (the "Company"),
and the investors listed on Schedule I attached hereto (each a "Purchaser" and
together the "Purchasers").
The parties hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
1.1 SALE AND ISSUANCE OF COMMON STOCK.
1.2 Subject to the terms and conditions of this Agreement, each of
the Purchasers agrees to purchase and the Company agrees to sell and issue to
such Purchaser that number of shares of Common Stock, par value $0.0001, of the
Company (the "Common Stock"), determined by dividing the Purchase Commitment
listed opposite such Purchaser's name on Schedule I by $4.9375. The Company
shall have the right to amend Schedule I hereto to add additional Purchasers at
any time prior to the Closing, and any such Purchasers shall become parties to
this Agreement. The shares of Common Stock issued to the Purchasers pursuant to
this Agreement are hereinafter referred to as the "Stock."
(a) The Common Stock shall have the rights and restrictions as
set forth in the Amended and Restated Certificate of Incorporation of
▇▇▇▇▇▇▇▇▇.▇▇▇, inc. (the "Restated Certificate") attached hereto as Exhibit A.
(b) The parties hereto acknowledge that, concurrently herewith,
the Company is entering into a Series 1 Preferred Stock Purchase Agreement with
the several purchasers listed on Schedule I thereto (the "Preferred Stock
Purchase Agreement"), pursuant to which such purchasers have agreed to purchase,
subject to the terms and conditions of the Preferred Stock Purchase Agreement,
at least 45,939 shares of Series 1 Preferred Stock, par value $0.0001 per share,
of the Company (the "Series 1 Preferred Stock"), having the rights, privileges,
preferences and restrictions set forth in the Certificate of Designations of the
Series 1 Preferred Stock attached hereto as Exhibit B (the "Certificate of
Designations.") Upon the receipt of the approval of the stockholders of the
Company, the shares of Series 1 Preferred Stock shall be converted into shares
of Common Stock.
1.3 CLOSING; DELIVERY.
(a) The purchase and sale of the Stock shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ (or such other location mutually agreeable
to the parties hereto) no later than 5 business days after the satisfaction or
(subject to applicable law) waiver of the
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conditions set forth in Sections 4 and 5 (excluding conditions that, by their
terms, cannot be satisfied until the Closing) (which time and place are
designated as the "Closing").
(b) At the Closing, the Company shall deliver to each Purchaser a
certificate or certificates for the number of shares of the Stock to be
purchased by such Purchaser pursuant to this Agreement against delivery of the
consideration therefor, by wire transfer of immediately available funds to the
Company's bank account.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Purchaser that:
2.1 GOOD STANDING. Each of Company and its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation; (ii) has the power and authority to own, lease
and operate its properties and carry on its business as now conducted; and (iii)
is duly qualified, licensed to do business and in good standing as a foreign
corporation in each jurisdiction where the failure to be so qualified could
reasonably be expected to have a material adverse effect on the business,
assets, operations or financial condition of the Company ("Material Adverse
Effect").
2.2 CAPITALIZATION.
(a) The authorized capital of the Company consists of 250,000,000
shares of Common Stock and 10,000,000 shares of Preferred Stock, $0.0001 per
share (the "Preferred Stock"). The Common Stock has the rights, preferences and
privileges set forth in the Company's Restated Certificate, and the Preferred
Stock has the rights, preferences and privileges set forth in the Certificate of
Designations.
(b) As of the date of this Agreement, 52,962,714 shares of Common
Stock and no shares of Preferred Stock are issued and outstanding. All of the
outstanding shares of Common Stock have been, and when issued and paid for in
accordance with the terms of this Agreement the Stock will be, validly issued,
duly authorized, fully paid and nonassessable, and issued in compliance with all
applicable federal and state securities laws (in the case of the issuance of the
Stock, based in part upon the representations of the Purchasers in Sections 3.4,
3.5, 3.6, 3.7 and 3.8). All of the shares of Series 1 Preferred Stock, when
issued and paid for in accordance with the terms of the Preferred Stock Purchase
Agreement, will be validly issued, duly authorized, fully paid and
nonassessable, and issued in compliance with all applicable federal and state
securities laws (based in part upon the representations of the purchasers
thereof contained in the Preferred Stock Purchase Agreement).
(c) As of the date of this Agreement (i) 17,509,148 shares of
Common Stock are reserved for issuance under the Company's 1998 Stock Plan (of
which 8,000 shares have been issued pursuant to restricted stock agreements,
890,839 shares are issuable under outstanding options that are currently
exercisable, 10,367,423 shares are issuable under other outstanding options that
are not currently exercisable and 6,250,886 shares remain available for future
grants), (ii) 32,404 shares of Common Stock are reserved for issuance under the
Company's ▇▇▇▇▇▇.▇▇▇ Inc. Stock Plan (of which 9,606 shares are issuable under
outstanding options, all of which are currently exercisable and 22,798 remain
available for
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future grants) and (iii) 1,000,000 shares of Common Stock are reserved for
issuance under the Company's 1999 Employee Stock Purchase Plan (of which 87,719
have been issued to date).
(d) Except for the conversion privileges of the Series 1
Preferred Stock and except as set forth in (i) the warrant to purchase 500,000
shares of Common Stock issued on June 26, 2000 to Tel-Drug, Inc. (the "Tel-Drug
Warrant") and (ii) the warrant to purchase 2,500,000 shares of Common Stock
issued on July 30, 2000 to ▇▇▇▇▇▇.▇▇▇, Inc. (the "Amazon Warrant"), as of the
date of this Agreement there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, oral or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock.
(e) The Stock shall constitute 14.25% of the Common Stock
outstanding as of the date of this Agreement, assuming (i) all warrants for
Common Stock outstanding as of the date of this Agreement have been exercised
for Common Stock, (ii) all options to purchase Common Stock outstanding as of
the date of this Agreement that are exercisable as of the date of this Agreement
have been exercised for Common Stock and (iii) all other rights outstanding as
of the date of this Agreement to acquire Common Stock or securities convertible
into Common Stock have been exercised for or converted into Common Stock. The
Company's only subsidiaries are DS Pharmacy, Inc., DS Non-Pharmaceutical Sales,
Inc., DS Distribution, Inc., DSGC Idaho, Inc., ▇▇▇▇▇▇.▇▇▇, Inc. and ▇▇▇▇▇▇.▇▇▇
Sales, Inc. (each a "Subsidiary" and together, the "Subsidiaries").
2.3 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Preferred Stock Purchase
Agreement (collectively, the "Agreements") and the performance of all
obligations of the Company hereunder and thereunder and the authorization,
issuance and delivery of the Stock and the Series 1 Preferred Stock has been
taken or will be taken prior to the Closing (subject, in the case of the
conversion of the Series 1 Preferred Stock into Common Stock, to the receipt of
the Stockholder Approval (as defined herein)), and the Agreements, when executed
and delivered by the Company, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors' rights generally, as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and except as may be limited by Section 6.2(c).
2.4 VALID ISSUANCE OF STOCK. The Stock that will be issued to the
Purchaser at Closing will have been duly and validly reserved for issuance and,
when issued and delivered in accordance with the terms hereof, will be duly
authorized, validly issued, fully paid and nonassessable, and free of
restrictions on transfer other than restrictions on transfer under this
Agreement and applicable state and federal securities laws. Based in part upon
the representations of the Purchasers in this Agreement, the Stock will be
issued in compliance with all applicable federal and state securities laws. The
Common Stock issuable upon conversion of the Series 1 Preferred Stock has been
duly and validly reserved for issuance, and
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upon issuance in accordance with the terms of the Certificate of Designations,
will be duly authorized, validly issued, fully paid and nonassessable and free
of restrictions on transfer other than restrictions on transfer under the
Preferred Stock Purchase Agreement and applicable federal and state securities
laws and will be issued in compliance with all applicable federal and state
securities laws.
2.5 LITIGATION. There is no action, suit, proceeding or investigation
pending or, to the Company's knowledge, currently threatened against the Company
or any of its subsidiaries that (i) questions the validity of the Agreements or
the right of the Company or any of its subsidiaries, as applicable, to enter
into them, or to consummate the transactions contemplated hereby or thereby nor
is the Company aware that there is any basis for the foregoing or (ii) if
adversely determined, would have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries is a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality that (i) challenges the validity of the Agreements or the right
of the Company or any of its subsidiaries, as applicable, to enter into this
Agreement, or to consummate the transactions contemplated hereby and thereby or
(ii) would have a Material Adverse Effect.
2.6 LIABILITIES. The Company and its subsidiaries, on a consolidated
basis, have no liabilities and there are no contingent liabilities, required by
generally accepted accounting principles to be disclosed on a balance sheet but
that are not disclosed on the Company's audited balance sheet as of January 2,
2000 and/or on the Company's unaudited balance sheet as of July 2, 2000 except
liabilities that would not have a Material Adverse Effect. Subsequent to July 2,
2000, the Company and its subsidiaries, on a consolidated basis, have not
incurred any liabilities or any contingent liabilities required by generally
accepted accounting principles to be disclosed on the Company's balance sheet
except liabilities that would not have a Material Adverse Effect.
2.7 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of the Agreements and the consummation of the transactions
contemplated hereby and thereby will not result in any violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under or cause acceleration under any provision of the
Restated Certificate or the bylaws of the Company or any instrument, judgment,
order, writ, decree or contract to which the Company or any of its Subsidiaries
is a party or by which it is bound, or any provision of any federal or state
statute, rule or regulation applicable to the Company or any of its
Subsidiaries, the effect of which would (i) have a Material Adverse Effect, (ii)
materially and adversely affect the ability of the Company and its Subsidiaries
to perform their respective obligations under the Agreements or (iii) result in
the creation of any material lien, charge or encumbrance upon any assets of the
Company or any of its Subsidiaries.
2.8 MATERIAL AGREEMENTS. The Company has filed with the SEC all
agreements in existence as of the date of this Agreement that (a) define or
affect the rights of security holders of the Company in their capacity as
security holders including, but not limited to, such security holders' voting
rights, registration rights or standstill rights or obligations, other than (i)
the Agreement dated June 23, 2000 between the Company and WellPoint Health
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Networks Inc., (ii) the Tel-Drug Warrant and (iii) the Amazon Warrant or (b) are
required to be filed under Item 601 of Regulation S-K.
2.9. FINANCIAL STATEMENTS. The financial statements of Company that
have been delivered to the Investors (including those for the period ended July
2, 2000), (i) are in accordance with the books and records of Company and its
Subsidiaries, which have been maintained in accordance with good business
practice; (ii) have been prepared in conformity with GAAP (except as discussed
therein, the absence of footnotes for all unaudited periods and, in the case of
audited financial statements, as approved by the relevant firm of accountants);
and (iii) fairly present the consolidated financial position of Company as of
the dates presented therein and the results of operations, changes in financial
positions or cash flows, as the case may be, for the periods presented therein
(except, in the case of financial statements for the period ended July 2, 2000,
for normal year-end audit adjustments). None of the Company or any of the
Company's Subsidiaries has any contingent obligations, liability for taxes or
other outstanding obligations that are material in the aggregate, except as
disclosed in the unaudited financial statements for the period ended July 2,
2000 (except for normal year-end audit adjustments). None of the Company or its
Subsidiaries has any contingent obligations or liability for taxes that are
material in the aggregate and that would be required to be reflected or reserved
against in the latest balance sheet of the Company, except as disclosed in the
unaudited financial statements for the period ended July 2, 2000 (except for
normal year-end audit adjustments).
2.10. INVESTMENT COMPANY. None of Company or its Subsidiaries is
subject to regulation under the Investment Company Act of 1940, or to any
federal or state statute or regulation limiting its ability to incur
indebtedness.
2.11. SEC REPORTING; INFORMATION PROVIDED. As of the date each was
filed, none of the Company's registration statements, reports or other filings
made with the Securities and Exchange Commission, contained any untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Neither this agreement nor any document, certificate or
instrument furnished to any of the Purchasers by or on behalf of the Company
when taken in conjunction with any supplemental or revised information furnished
to any of the Purchasers in writing prior to the date hereof contains any untrue
statement of a material fact or omits, or will omit, to state a material fact
necessary to make the statements in such documents, certificates, instruments or
other information provided, in light of the circumstances in which they were
made, not misleading, except that with respect to any projected financial
information, the Company only represents that it was prepared in good faith and
the Company reasonably believes that the assumptions made in preparing such
projections were reasonable as of the date of such projections.
2.12. ABSENCE OF CERTAIN CHANGES. Since July 2, 2000, no event has
occurred and no condition exists which would have a Material Adverse Effect,
other than (i) any change in the price of the Common Stock or (ii) changes in
general economic conditions or conditions affecting the Company's industry
generally.
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2.13. REAL PROPERTY HOLDING COMPANY. The Company is not, and has not
been, a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code"),
during the applicable period described in Section 897(c)(1)(A)(ii) of the Code.
2.14 FORM S-3 ELIGIBILITY. The Company and the transactions
contemplated by Section 6.2 of this Agreement meet the requirements for using
Form S-3 under the Securities Act for resale.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby represents and warrants to the Company with respect to itself that:
3.1 AUTHORIZATION. Such Purchaser has full power and authority to
enter into and deliver this Agreement, and this Agreement, when executed and
delivered by the Purchaser, will constitute a valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors' rights generally, as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and except as may be limited by Section 6.2(c)..
3.2 LITIGATION. There is no action, suit, proceeding or investigation
pending or, to the Purchaser's knowledge, currently threatened against the
Purchaser or any of its subsidiaries that questions the validity of this
Agreement or the right of the Purchaser or any of its subsidiaries, as
applicable, to enter into this Agreement, or to consummate the transactions
contemplated hereby nor is the Purchaser aware that there is any basis for the
foregoing. Neither the Purchaser nor any of its subsidiaries is a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality that challenges the validity
of this Agreement or the right of the Purchaser or any of its subsidiaries, as
applicable, to enter into this Agreement, or to consummate the transactions
contemplated hereby.
3.3 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in any violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any provision of the governing documents of the Purchaser or any
instrument, judgment, order, writ, decree or contract to which the Purchaser or
any of its subsidiaries is a party or by which it is bound, or any provision of
any federal or state statute, rule or regulation applicable to the Purchaser or
any of its subsidiaries, the effect of which would have a material adverse
effect on the ability of the Purchaser and its subsidiaries to perform their
respective obligations under this Agreement or result in the creation of any
lien, charge or encumbrance upon any assets of the Purchaser or any of its
subsidiaries.
3.4 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with
the Purchaser in reliance upon the Purchaser's representation to the Company,
which by the
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Purchaser's execution of this Agreement, the Purchaser hereby confirms, that the
Stock to be acquired by the Purchaser will be acquired for investment for the
Purchaser's own account, not as a nominee or agent, and not with a view to the
resale or public distribution of any part thereof in violation of any
requirements of the Securities Act of 1933, as amended (the "Securities Act") or
applicable state securities laws. The Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing any Stock
purchased hereunder, including, without limitation, entering into any
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.
By executing this Agreement, the Purchaser further represents that the Purchaser
does not presently have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to any of the Stock.
3.5 DISCLOSURE OF INFORMATION. The Purchaser (i) has had an
opportunity to discuss the Company's business, management, financial affairs and
the terms and conditions of the offering of the Stock with the Company's
management and (ii) has had an opportunity to review the Company's facilities.
The Purchaser understands that such discussions and reviews, as well as any
written information delivered by the Company to the Purchaser, were intended to
describe the aspects of the Company's business that it believes to be material.
3.6 RESTRICTED SECURITIES. The Purchaser understands that the Stock
has not been, and will not be, registered under the Securities Act, by reason of
a specific exemption from the registration provisions of the Securities Act that
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Purchaser's representations as expressed herein. The
Purchaser understands that the shares of Stock are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the Purchaser must hold the shares of Stock indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Stock for resale except as set forth in
Section 6.2 hereof. The Purchaser further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on various
requirements including, but not limited to, the time and manner of sale, the
holding period for the Stock, and on requirements relating to the Company that
are outside of the Purchaser's control, and that the Company is under no
obligation, and may not be able, to satisfy.
3.7 LEGENDS. The Purchaser understands that the Stock, and any
securities issued in respect thereof, may bear one or all of the following
legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM
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SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933."
(b) Any legend required by the "Blue Sky" laws of any state to
the extent such laws are applicable to the shares represented by the certificate
so legended.
3.8 ACCREDITED INVESTOR. The Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
4. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT CLOSING. The obligations
of the Purchasers to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived by each Purchaser:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company shall be true and correct on and as of the date of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing (except with respect to the
representations and warranties contained in Section 2.2(b), 2.2(c) and the first
sentence of Section 2.2(e), which shall be true and correct in all material
respects as of the date of the Closing).
4.2 PERFORMANCE. The Company shall have performed and complied with
all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing and the Company shall have obtained any and all consents, permits
and waivers necessary or appropriate for consummation of the transactions
contemplated by the Agreements.
4.3 RESERVATION OF SHARES. The Stock issuable pursuant to this
Agreement shall have been duly authorized and reserved for issuance at the
Closing.
4.4 COMPLIANCE CERTIFICATE. The President of the Company shall
deliver to the Purchasers at the Closing a certificate certifying that the
conditions specified in Sections 4.1, 4.2 and 4.3 have been fulfilled.
4.5 QUALIFICATIONS. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Stock pursuant to this Agreement shall be obtained and effective as of the
Closing including, without limitation, the expiration or termination of all
waiting periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement Act of 1976,
as amended (the "HSR Act").
4.6 OPINION OF COMPANY COUNSEL. The Purchasers at the Closing shall
have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, an
opinion dated as of the Closing covering the matters set forth on Exhibit C.
4.7 PREFERRED STOCK PURCHASE AGREEMENT. The Company and the
purchasers parties thereto shall have executed and delivered the Preferred Stock
Purchase Agreement covering the purchase of at least 45,939 shares of Series 1
Preferred Stock.
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4.8 DELIVERY OF LOCKUP AGREEMENTS. Each person listed on Exhibit D
hereto shall have executed and delivered to the Company a lockup agreement in
the form attached hereto as Exhibit F (each, a "Lockup Agreement.")
4.9 DELIVERY OF VOTING AGREEMENTS. Each person listed on Exhibit E
hereto shall have executed and delivered to the Purchasers a voting agreement in
the form attached hereto an Exhibit G (each, a "Voting Agreement") to the effect
that such person will vote its shares of Common Stock at the Stockholder Meeting
(as defined) in favor of the approval of the issuance of the Common Stock
issuable upon conversion of the Series A Preferred Stock. The persons delivering
Voting Agreements shall represent a majority of the Common Stock.
4.10. MINIMUM INVESTMENT AT CLOSING. At the Closing, Purchasers
investing at least $62,682,825 in the aggregate in the Company under the
Agreements shall have wired their respective investments in the Company into an
escrow account maintained by ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ or an escrow agent
mutually agreeable to the Company and purchasers of a majority of the Stock for
delivery to the Company (or with respect to amounts to be wired by Hearst
Communications Corp., as may be mutually agreed between Hearst Communications
Corp. and the Purchasers), before any Purchaser is obligated to close.
4.11 OPINION OF GENERAL COUNSEL TO THE COMPANY. The Purchasers at the
Closing shall have received from the General Counsel of the Company an opinion
dated as of the Closing covering the matters set forth on Exhibit H.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to the Purchasers under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchasers contained in Section 3 shall be true and correct in
all material respects on and as of the date of the Closing with the same effect
as though such representations and warranties had been made on and as of the
date of the Closing (except to the extent such representations and warranties
speak as of the date of this Agreement, in which case they shall be true and
correct in all material respects on and as of the date of this Agreement).
5.2 PERFORMANCE. All covenants, agreements and conditions contained
in this Agreement to be performed by the Purchasers on or prior to the Closing
shall have been performed or complied with in all material respects.
5.3 COMPLIANCE CERTIFICATE. A senior executive officer of each of the
Purchasers shall deliver to the Company at the Closing a certificate certifying
that the conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4 QUALIFICATIONS. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Stock pursuant to this Agreement shall be obtained and effective as of the
Closing including, without limitation, the expiration or termination of all
waiting periods under the HSR Act.
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5.5 PREFERRED STOCK PURCHASE AGREEMENT. The Company and the
purchasers parties thereto shall have executed and delivered the Preferred Stock
Purchase Agreement covering the purchase of at least 45,939 shares of Series 1
Preferred Stock.
5.6 DELIVERY OF LOCKUP AGREEMENTS. Each person listed on Exhibit D
hereto shall have executed and delivered to the Company a Lockup Agreement.
5.7 DELIVERY OF VOTING AGREEMENTS. Each person listed on Exhibit D
hereto shall have executed and delivered to the Purchasers a Voting Agreement.
The persons delivering Voting Agreements shall represent a majority of the
Common Stock.
6. COVENANTS.
6.1 HSR ACT FILINGS. As soon as practicable after the execution of
this Agreement, the Company and each relevant Purchaser will separately file
with the Antitrust Division of the United States Department of Justice and the
United States Federal Trade Commission pursuant to the HSR Act all requisite
documents and notifications in order to provide for the issuance and sale of the
Stock pursuant to this Agreement. The parties will cooperate and coordinate with
one another in exchanging information and providing reasonable assistance as the
other party may request in connection with the foregoing.
6.2 REGISTRATION RIGHTS. (a) The Company hereby agrees: (i) to use
its best efforts to file a resale shelf registration statement (the
"Registration Statement") under the Securities Act as soon as reasonably
practicable covering resales of the Stock by the Purchasers and resales of the
Common Stock issuable upon conversion of the Series 1 Preferred Stock pursuant
to the Preferred Stock Purchase Agreement, (ii) to use its best efforts to cause
the Registration Statement to be declared effective as soon as reasonably
practicable but in any event within 60 days of the Closing and (iii) to maintain
the effectiveness of the Registration Statement until the earlier of (x) the
eighteen month anniversary of the effective date of the Registration Statement
and (y) the date on which all shares of Stock have been resold by the
Purchasers. At any time when the Registration Statement is effective, the Board
of Directors of the Company may determine, as indicated in a certificate signed
by any Director of the Company, the Chief Financial Officer of the Company or
the Secretary of the Company, to suspend offers and sales by Purchasers under
the Registration Statement if an event has occurred or is reasonably likely to
occur that would require additional disclosure by the Company and that the
Company has a bona fide business purpose for keeping confidential, and the
nondisclosure of which would reasonably be expected to cause the Registration
Statement to fail to comply with applicable disclosure requirements. The Company
shall give the Purchasers written notice of the Board of Directors'
determination and the Purchasers agree to suspend offers and sales under the
Registration Statement until the Company has delivered a subsequent notice to
the Purchasers revoking its prior notice; provided, however, that the eighteen
month period during which the Registration Statement is required to be effective
shall be extended by the number of days of such suspensions. The Company may not
revoke the ability of Purchasers to make offers and sales under the Registration
Statement more than three times or for more than 90 days in the aggregate.
(b) For the period during which the Registration Statement is
effective, the
10
11
Company shall:
(i) furnish to the Purchaser with respect to the Stock
registered under the Registration Statement (and to each
underwriter, if any, of such Stock) such reasonable number of
copies of prospectuses in order to facilitate the public sale or
other disposition of all or any of the Stock by the Purchaser;
provided, however, that the obligation of the Company to deliver
copies of prospectuses to the Purchaser shall be subject to the
receipt by the Company of reasonable assurances from the
Purchaser that the Purchaser will comply with the applicable
provisions of the Securities Act and of such other securities or
blue sky laws as may be applicable in connection with any use of
such prospectuses;
(ii) during the period when such prospectuses are required
to be delivered under the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), file all
documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the rules and regulations
promulgated thereunder;
(iii) file documents required of the Company for normal
blue sky clearance in states specified in writing by the
Purchaser; provided, however, that the Company shall not be
required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified
or has not so consented;
(iv) authorize for listing on the Nasdaq National Market
the shares of Stock by filing with the Nasdaq National Market a
Notification of Listing of Additional Shares (or such other form,
if any, as may be required by the Nasdaq National Market) as soon
as reasonably practicable after the filing of the Registration
Statement or otherwise in accordance with the rules and
regulations of the Nasdaq National Market; and
(v) bear all expenses in connection with the procedures in
this Section 6.2 and the registration of the Stock pursuant to
the Registration Statement, other than fees and expenses, if any,
of counsel or other advisers to the Purchaser or underwriting
discounts, brokerage fees and commissions incurred by the
Purchaser, if any.
(c) For purposes of this Section 6.2(c), the term "Registration
Statement" shall include any preliminary or final prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 6.2(a).
(i) The Company agrees to indemnify and hold harmless each
of the Purchasers and each of their respective directors,
officers, members and partners, and each person, if any, who
controls any Purchaser within the meaning of the Securities Act,
against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Purchasers and each of their
respective directors, officers, members and partners, or such
controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected
11
12
with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in or incorporated by reference in the Registration
Statement, including the prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as
amended at the time of effectiveness of the Registration
Statement, including the preliminary or final prospectus any
information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant
to Rule 434, of the rules and regulations of the Commission under
the Securities Act (the "Regulations"), or the prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of
the Regulations, or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) filing is required
(the "Prospectus"), or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state in any of them a material fact required to be stated
therein or necessary to make the statements in any of them, in
light of the circumstances under which they were made, not
misleading, or arise out of or are based in whole or in part on
any failure of the Company to perform its obligations under or a
violation of the Securities Act, the Exchange Act or any state
securities law, and will reimburse each Purchaser and each of
their respective directors, officers, members and partners, and
each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Purchaser or such
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of or is
based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement,
the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of the Purchaser expressly for use
therein, or (ii) the failure of such Purchaser to comply with the
covenants and agreements contained in this Section 6.2 respecting
the sale of the Stock, or (iii) any statement or omission in any
Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Purchaser prior to the pertinent sale or
sales by the Purchaser.
(ii) Each Purchaser will severally indemnify and hold
harmless the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses
to which the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person may
become subject, under the Securities Act, the Exchange Act, or
any other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written
consent of such Purchaser) insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon any untrue
or alleged untrue statement of any material fact contained in the
Registration Statement, including the prospectus, financial
statements and
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schedules, and all other documents filed as a part thereof, as
amended at the time of effectiveness of the Registration
Statement, including any information deemed to be a part thereof
as of the time of effectiveness pursuant to paragraph (b) of Rule
430A, or pursuant to Rule 434 of the Regulations, or the
Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements in any of them, in light of the
circumstances under which they were made, not misleading, or
arise out of or are based in whole or in part on any failure of
such Purchaser to perform its obligations under the Securities
Act, the Exchange Act or any state securities law, and will
reimburse the Company, each of its directors, each of its
officers who signed the Registration Statement and each such
controlling person for any legal and other expenses as such
expenses are reasonably incurred by such Purchaser or such
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
any Purchaser expressly for use therein.
(iii) Promptly after receipt by an indemnified party under
this Section 6.2(c) of notice of the threat or commencement of
any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this
Section 6.2(c) promptly notify the indemnifying party in writing
thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise than under the
indemnity agreement contained in this Section 6.2(c) or to the
extent it is not prejudiced as a result of such failure. In case
any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any
such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this
Section 6.2(c) for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption
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14
of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one
separate counsel, approved by such indemnifying party,
representing all of the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after
notice of commencement of action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense
of the indemnifying party.
(iv) If the indemnification provided for in this Section
6.2 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an
indemnified party under paragraphs (i), (ii) or (iii) of this
Section 6.2(c) in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any losses, claims,
damages, liabilities or expenses referred to herein in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on
the other in connection with the statements or omissions that
resulted in such loss, claim, damage, liability or expense as
well as any other relevant equitable considerations. The relative
fault of the Company and such Purchaser shall be determined by
reference to, among other things, whether the untrue or alleged
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Company or by such Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include,
subject to the limitations set forth in paragraph (iii) of this
Section 6.2(c), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in
paragraph (iii) of this Section 6.2(c) with respect to the notice
of the threat or commencement of any threat or action shall apply
if a claim for contribution is to be made under this paragraph
(iv); provided, however, that no additional notice shall be
required with respect to any threat or action for which notice
has been given under paragraph (iii) for purposes of
indemnification. Notwithstanding the provisions of this Section
6.2(c)(iv), no Purchaser shall be required to contribute any
amount in excess of the net proceeds of the offering received by
such Purchaser, except in the case of willful fraud by such
Purchaser. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 6.2(c)(iv) are several and
not joint.
6.3 STOCKHOLDER MEETING. The Company shall cause (i) a special
meeting of its common stockholders (the "Stockholder Meeting") to be held as
soon as practicable but in no event later than three months from the Closing,
for the purpose of approving the conversion of the Series 1 Preferred Stock
issued pursuant to the Preferred Stock Purchase Agreement into Common Stock or
(ii) holders of the requisite number of shares of Common
14
15
Stock to deliver written consents approving the conversion of the Series 1
Preferred Stock issued pursuant to the Preferred Stock Purchase Agreement into
Common Stock (the action called for in (i) and (ii), the "Stockholder
Approval").
6.4 NO WAIVER OF LOCKUP AGREEMENT. The Company shall not waive any
provision of any Lockup Agreement without having obtained the prior consent of
the holders of at least sixty-seven percent (67%) of the shares of Stock
purchased hereunder; provided, that any Stock purchased hereunder by persons who
have signed a Lockup Agreement shall not be deemed to be shares of Stock for
purposes of this Section 6.4; and provided, further, that the Company shall not
in any event waive any provision of any Lockup Agreement with respect to any
person listed on Exhibit D without concurrently waiving the Lockup Agreement
with respect to all persons listed on Exhibit D.
7. MISCELLANEOUS.
7.1 SURVIVAL OF WARRANTIES. The warranties and representations of the
Company and the Purchasers contained herein shall terminate on the second
anniversary of the Closing.
7.2 TRANSFER; NO THIRD PARTY BENEFICIARIES. This Agreement and each
party's rights and obligations hereunder shall not be assigned without the prior
written consent of the other party; provided, that a Purchaser may transfer its
rights hereunder to an affiliate, so long as such affiliate agrees in writing to
be bound by all obligations under this Agreement. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.
7.3 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to principles of conflicts of laws.
7.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
7.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth on the signature page hereto, or as subsequently
modified by written notice, and if to the Company, with copies to the General
Counsel of the Company at the address of the Company set forth below and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 3373
15
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
telecopy no: (▇▇▇)-▇▇▇-▇▇▇▇), and if to any of Integral Capital Partners IV,
L.P., Integral Capital Partners IV MS Side Fund, L.P., Integral Capital Partners
V, L.P. and Integral Capital Partners V Side Fund, L.P. with a copy to ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Street Tower, One Market, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, telecopy no: (415-442-1010), and if to the Baron
Asset Fund or Baron Capital Funds Trust, with a copy to the Baron Asset Fund,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq.
7.7 FINDER'S FEE. Each party represents that it neither is nor will
be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Purchaser or any of its officers, employees,
or representatives is responsible. The Company agrees to indemnify and hold
harmless each Purchaser from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
7.8 FEES AND EXPENSES. The Company and the Purchasers shall pay their
respective fees and other expenses in connection with the negotiation,
execution, delivery and performance of the Agreements, provided that if the
Closing occurs the Company will pay the reasonable fees and expenses of counsel
for the Purchasers up to $20,000 in the aggregate.
7.9 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the Company and each of the
Purchasers. Any amendment or waiver effected in accordance with this Section
7.10 shall be binding upon each Purchaser and each transferee of the Stock, each
future holder of all such Stock, and the Company.
7.11 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
7.12 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter
16
17
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party, shall be cumulative and not alternative.
7.13 ENTIRE AGREEMENT. This Agreement, and the documents referred to
herein, constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.
7.14 CONFIDENTIALITY. Except as provided below, each party hereto
agrees that, except with the prior written permission of the other party, it
shall at all times keep confidential and not divulge, furnish or make accessible
to anyone any confidential information, knowledge or data concerning or relating
to the business or financial affairs of the other party to which such party has
been or shall become privy by reason of the Agreements, discussions or
negotiations relating to the Agreements, the performance of its obligations
thereunder or the ownership of Stock purchased hereunder. Notwithstanding the
foregoing, nothing herein shall prevent any party from disclosing (i) such
information that has been publicly disclosed, (ii) such information that becomes
available to the party on a non-confidential basis from a source other than the
other party hereto, provided that such source is not bound by a confidentiality
agreement with such other party, (iii) information required to be disclosed
pursuant to subpoena or other court process or otherwise required to be
disclosed by law or the regulations of any securities exchange (provided that,
to the extent practicable, advance notice is given to the party whose
confidential information is to be disclosed so that such party can attempt to
obtain a protective order) and (iv) such information that was known to the party
prior to its first receipt from the other party. Notwithstanding the foregoing,
the provisions of this Section 7.14 shall not be applicable to any Purchaser
that has executed a separate Non-Disclosure Agreement with the Company (such
agreement, a "Separate Agreement"), in which case the obligations of such
Purchaser shall continue in accordance with the provisions of such Separate
Agreement; provided, that the definition of "Confidential Information" in such
Separate Agreement shall be deemed to include all non-public information
received by the Purchaser to which such Purchaser shall become privy by reason
of its ownership of Stock purchased hereunder. In the event of an express
inconsistency between a Separate Agreement and this Agreement, then this
Agreement shall govern.
7.15 PUBLICITY. After the execution of this Agreement, any of the
parties may issue a press release disclosing that the Purchasers have agreed to
invest in the Company and the terms of the future relationship between the
parties in a form approved by the other party, which approval will not be
unreasonably withheld, conditioned or delayed. In addition, any party may
disclose such information regarding the Purchasers' investment and the
relationship between the parties as required by law or the regulations of any
securities exchange.
17
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7.16 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(i) at any time by mutual written consent of the Company and each
of the Purchasers; or
(ii) by any party hereto if the Closing does not occur on or
prior to October 31, 2000; (provided, that if on October 31, 2000 any
authorization, approval or permit of any governmental authority or
regulatory body of the United States or of any state that is required in
connection with the lawful issuance and sale of the Stock pursuant to
this Agreement has not been obtained, then no party shall be entitled to
terminate this Agreement pursuant to this clause (ii) until December 15,
2000 and then only if the Closing has not occurred on or prior to such
date).
Upon any such termination, this Agreement shall become void and of no
further effect, except for Sections 7.3, 7.7, 7.8, 7.9, 7.14 and this Section
7.16 which shall survive such termination.
[Signature Pages Follow]
18
19
The parties have executed this Stock Purchase Agreement as of the date
first written above.
COMPANY:
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ROSTOV
---------------------------------
Name: ▇▇▇▇▇ Rostov
Title: Chief Financial Officer
Address: ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT
20
PURCHASERS:
Integral Capital Partners IV, L.P.
By: Integral Capital Management IV, LLC, its
General Partner
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ______________________________________
______________________________________
Integral Capital Partners IV MS Side Fund, L.P.
By: Integral Capital Management NBT, LLC, its
General Partner
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ______________________________________
______________________________________
Integral Capital Partners V, L.P.
By: Integral Capital Management V, LLC, its
General Partner
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ______________________________________
______________________________________
Integral Capital Partners V Side Fund, L.P.
By: ICP Management V, LLC, its General Partner
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ______________________________________
______________________________________
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT
21
HEARST COMMUNICATIONS, INC.
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ______________________________________
______________________________________
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT
22
BARON ASSET FUND, on behalf of the Baron
iOpportunity Fund series
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BARON ASSET FUND, on behalf of the Baron
Growth Fund series
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BARON CAPITAL FUNDS TRUST, on behalf of the
Baron Capital Asset Fund series
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT
23
MAVERON EQUITY PARTNERS, L.P.
By: _______________________________________
Name: _______________________________________
Title: _______________________________________
Address: ______________________________________
______________________________________
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT
24
▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Title: Senior Vice President, Marketing
& Cross-Site Merchandising
---------------------------------------
Address:
---------------------------------------
---------------------------------------
SIGNATURE PAGE TO THE COMMON STOCK PURCHASE AGREEMENT
25
SCHEDULE I
Purchaser Purchase Commitment
--------- -------------------
Integral Capital Partners IV, L.P. $10,620,700.75
Integral Capital Partners IV MS Side $50,165.00
Fund, L.P.
Integral Capital Partners V, L.P. $4,278,067.25
Integral Capital Partners V Side $51,068.57
Fund, ▇.▇.
▇▇▇▇▇▇ Communications, Inc. $5,000,000
Baron Asset Fund, on behalf of the $2,000,000
Baron iOpportunity Fund series
Baron Asset Fund, on behalf of the $11,000,000
Baron Growth Fund series
Baron Capital Funds Trust, on behalf $2,000,000
of the Baron Capital Asset Fund Series
Maveron Equity Partners, L.P. $2,000,000
▇▇▇▇▇▇.▇▇▇, Inc. $3,000,000
Total
26
EXHIBITS
Exhibit A - Amended and Restated Certificate of Incorporation of the Company
Exhibit B - Certificate of Designation of Series 1 Preferred Stock
Exhibit C - Matters to be covered in legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit D - Persons that will deliver Lockup Agreements
Exhibit E - Persons that will deliver Voting Agreements
Exhibit F - Form of Lockup Agreement Exhibit G-Form of Voting Agreement
Exhibit H - Matters to be covered in opinion of General Counsel to the Company
27
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION OF THE COMPANY
28
EXHIBIT B
CERTIFICATE OF DESIGNATIONS OF SERIES 1 PREFERRED STOCK
29
EXHIBIT C
MATTERS TO BE COVERED BY LEGAL OPINION OF
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
30
EXHIBIT D
PERSONS THAT WILL SIGN LOCKUP AGREEMENTS
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VIII, L.P.
KPCB Life Sciences Zaibatsu Fund II, L.P.
KPCB VIII Founders Fund, L.P.
▇▇▇▇▇▇.▇▇▇, Inc. (except in respect of 1,066,667 shares of Common Stock)
Maveron Equity Partners, L.P.
Vulcan Ventures Incorporated
Rite Investments Corp.
General Nutrition Investment Company
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Tenants in Common
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Rostov (other than in respect of 40,000 shares)
▇▇▇▇▇ Rostov, as custodian
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (other than in respect of 40,000 shares)
▇▇▇▇▇▇▇▇▇.▇▇▇ Foundation
L. ▇▇▇▇ ▇▇▇▇▇
31
EXHIBIT E
PERSONS THAT WILL SIGN VOTING AGREEMENTS
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VIII, L.P.
KPCB Life Sciences Zaibatsu Fund II, L.P.
KPCB VIII Founders Fund, L.P.
▇▇▇▇▇▇.▇▇▇, Inc.
Maveron Equity Partners, L.P.
Vulcan Ventures Incorporated
Rite Investments Corp.
General Nutrition Investment Company
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Tenants in Common
▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Rostov
▇▇▇▇▇ Rostov, as custodian
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.▇▇▇ Foundation
Hearst Communications, Inc.
Integral Capital Partners IV, L.P.
Integral Capital Partners IV MS Side Fund, L.P.
Integral Capital Partners V, L.P.
Integral Capital Partners V Side Fund, ▇.▇.
▇▇▇▇▇ Asset Fund
32
EXHIBIT E (CONTINUED)
Baron Capital Funds Trust
L. ▇▇▇▇ ▇▇▇▇▇
33
EXHIBIT F
FORM OF LOCKUP AGREEMENT
34
EXHIBIT G
FORM OF VOTING AGREEMENT
35
EXHIBIT H
MATTERS TO BE COVERED BY THE OPINION OF GENERAL COUNSEL
TO THE COMPANY