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Exhibit 10.14

PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

    THIS PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT is made as of
December 22, 2000 by and among MedicaLogic/Medscape, Inc., an Oregon corporation
(the "Company"), and the Investors listed on Schedule A attached hereto (the
"Investors").

    THE PARTIES HEREBY AGREE AS FOLLOWS:

    1.  Purchase and Sale of Preferred Stock and Warrants.  

    1.1  Sale and Issuance of Preferred Stock and Warrants.  

    (a) The Company shall adopt and file with the Secretary of State of Oregon
on or before the Closing (as defined below) the articles of amendment of its
1999 Restated Articles of Incorporation, as amended (the "Amended Articles") in
the form attached hereto as Exhibit A.

    (b) Subject to the terms and conditions of this Agreement, the Investors
severally and not jointly agree to purchase at the Closing, and the Company
agrees to sell and issue to the Investors at the Closing, (i) that number of
shares of the Company's Series 1 Convertible Redeemable Preferred Stock (the
"Series 1 Preferred Stock") set forth opposite each Investor's name on
Schedule A hereto for the purchase price set forth thereon, and (ii) a warrant
to purchase that number of shares of the Company's Common Stock (the "Common
Stock") set forth opposite each Investor's name on Schedule A hereto for the
purchase price set forth thereon, such warrant to be in substantially the form
attached hereto as Exhibit B (the "Warrants"). The rights, privileges and
preferences of the Series 1 Preferred Stock will be as stated in the Amended
Articles.

    1.2  Closings.  Unless this Agreement shall have terminated pursuant to
Section 7, and subject to the satisfaction or waiver of the conditions set forth
in Sections 5 and 6, the purchase and sale of the Series 1 Preferred Stock and
Warrants shall take place at one or more closings at the offices of Stoel Rives
LLP, 900 SW Fifth Avenue, Suite 2300, Portland, Oregon at such times and places
as the Company and the Investors mutually agree upon orally or in writing (which
times and places are designated as a "Closing"). At the Closing the Company
shall deliver to each Investor purchasing Series 1 Preferred Stock and Warrants
at such Closing Warrants and stock certificates representing the number of
shares of Series 1 Preferred Stock and Warrants that such Investor is purchasing
against payment of the purchase price therefor by check or wire transfer in
immediately available funds.

    2.  Representations and Warranties of the Company.  The Company hereby
represents and warrants to the Investors that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished to the Investors,
specifically identifying the relevant subparagraph hereof, which exceptions
shall be deemed to be representations and warranties as if made hereunder:

    2.1  Organization, Valid Existence and Qualification.  The Company is a
corporation duly organized and validly existing under the laws of the state of
Oregon and has all requisite corporate power and authority to carry on its
business as now conducted. Each of the corporations or other persons in which
the Company, directly or indirectly, holds 50% or more of (i) the voting power
of the outstanding voting equity securities or (ii) the outstanding economic
equity interest (each, a "Subsidiary") is a corporation duly organized or
limited liability company duly formed and validly existing under the laws of the
state of its incorporation or formation, and has all requisite corporate or
limited liability company power and authority to carry on its business as now
conducted. The Company and each of its Subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business requires such qualification.

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    2.2  Subsidiaries.  Neither the Company nor any Subsidiary presently owns or
controls, directly or indirectly, any interest in any other corporation,
association or other entity. Neither the Company nor any Subsidiary is a
participant in any joint venture, partnership, or similar arrangement.

    2.3  Authorization.  All corporate action on the part of the Company, its
officers, directors and shareholders necessary for (a) the authorization,
execution and delivery of this Agreement and the 2000 Second Amended and
Restated Investor Rights Agreement of even date herewith, by and among the
Company and the Investors (as defined therein) (the "Investors' Rights
Agreement") and the Warrants (collectively, the "Transaction Documents"),
(b) the performance of all obligations of the Company hereunder and thereunder,
(c) the authorization, issuance (or reservation for issuance), sale and delivery
of the Series 1 Preferred Stock and Warrants being sold pursuant to this
Agreement and the Common Stock issuable upon conversion of the Series 1
Preferred Stock (the "Conversion Shares") and the exercise of the Warrants (the
"Warrant Shares" and, together with the Conversion Shares, the "Shares"), and
(d) the authorization and adoption of the Amended Articles has been taken or
will be taken prior to the Closing, and the Transaction Documents constitute
valid and legally binding obligations of the Company, enforceable in accordance
with their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Investor Rights Agreement may be limited by applicable federal
or state securities laws.

    2.4  Valid Issuance of Preferred and Common Stock.  

    (a) The Series 1 Preferred Stock that is being purchased by the Investors
pursuant to this Agreement, when issued, sold and delivered in accordance with
the terms of this Agreement for the consideration expressed herein, will be duly
and validly issued, fully paid, and nonassessable, will be issued in compliance
with the registration and qualification requirements of all applicable federal
and state securities laws and will be free and clear of all Liens (as defined in
Section 2.6) other than restrictions on transfer under the Amended Articles,
this Agreement and the other Transaction Documents and under applicable state
and federal securities laws. The Shares have been duly and validly reserved for
issuance and, (i) in the case of the Conversion Shares, upon issuance in
accordance with the terms of the Amended Articles and, (ii) in the case of the
Warrant Shares, upon issuance in accordance with the terms of the Warrants, will
be duly and validly issued, fully paid, and nonassessable and will be free and
clear of all Liens other than restrictions on transfer under this Agreement and
the other Transaction Documents and under applicable state and federal
securities laws.

    (b) The issuance of the Series 1 Preferred Stock and the Warrants is not
subject to any preemptive rights or similar rights and the issuance of the
Conversion Shares upon the conversion of the Series 1 Preferred Stock and the
Warrant Shares upon the exercise of the Warrants will not be subject to any
preemptive rights or similar rights. The Company has denied preemptive rights to
its shareholders as contemplated by Section 60.174 of the Business Corporation
Act of Oregon, as amended. There are no approvals or consents required by
Section 60.810 or Section 60.835 of the Oregon Business Corporation Act in order
to consummate the transactions contemplated by the Transaction Documents.

    2.5  Capitalization.  

    (a) At the Closing the authorized capital stock of the Company shall consist
of 100,000,000 shares of Common Stock, 50,000,000 shares of preferred stock, of
which 5,766,666 shares shall have been designated Series 1 Preferred Stock. At
December 17, 2000, 55,719,682

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shares of Common Stock (which includes shares of restricted Common Stock
described below) and no shares of preferred stock were issued and outstanding.
At December 17, 2000, 2,287,844 shares of Common Stock remained available for
issuance under the Company's 1999 Employee Stock Purchase Plan. At December 17,
2000, the aggregate number of shares of restricted stock and options to purchase
shares of Common Stock available to be issued or granted pursuant to any stock
option plan or stock incentive plan of the Company or any Subsidiary was
959,779. At December 17, 2000, options to purchase 9,143,282 shares of Common
Stock were outstanding and 2,210,750 shares of restricted Common Stock had been
issued under such plans. Except for the Series 1 Preferred Stock and the
Warrants, shares issuable under the Company's 1999 Employee Stock Purchase Plan
and the stock options referred to in the preceding sentence (as may be updated
pursuant to Section 5.16), there are no options, warrants, conversion
privileges, subscription or purchase rights or other rights presently
outstanding to purchase or otherwise acquire (x) any authorized but unissued,
unauthorized or treasury shares of the Company's capital stock or (y) any
securities of the Company convertible into or exercisable or exchangeable for
shares of Common Stock, and there are no commitments, contracts, agreements,
arrangements or understanding by the Company to issue any such securities.

    (b) The Company owns all of the issued and outstanding capital stock of the
Subsidiaries, free and clear of all Liens. All of such shares of capital stock
are duly authorized, validly issued, fully paid and nonassessable, and were
issued in compliance with the registration and qualification requirements of all
applicable federal and state and foreign securities laws. There are no options,
warrants, conversion privileges, subscription or purchase rights or other rights
presently outstanding to purchase or otherwise acquire any authorized but
unissued, unauthorized or treasury shares of capital stock or other securities
of, or any proprietary interest in, any of the Subsidiaries, and there is no
outstanding security of any kind convertible into or exchangeable for such
shares or proprietary interest.

    2.6  No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
Company's issuance of the Series 1 Preferred Stock and Warrants and the
reservation for issuance and issuance of the Shares) will not (i) result in a
violation of the Company's 1999 Restated Articles of Incorporation, as amended
by the Amended Articles and as in effect on the date hereof, or the Company's
Bylaws, as amended and as in effect on the date hereof (the "Bylaws") or
(ii) conflict with, or constitute a breach or default (or an event which with
notice or lapse of time or both would result in a breach or default) under, or
result in the creation of any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences)
(each, a "Lien"), or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which the Company or any Subsidiary is a party (except for possible
conflicts, breaches, defaults, terminations, amendments or other events that
would not result in a material adverse development in the business, properties,
operations, financial condition, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole (a "Material Adverse Effect")),
or result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations), applicable to the
Company or any Subsidiary or by which any property or asset of the Company or
any Subsidiary is bound or affected. Except as specifically contemplated by this
Agreement in connection with (i) the listing of the Shares on Nasdaq National
Market ("Nasdaq"), (ii) registration of the resale of the Series 1 Preferred
Stock and the Shares under the Securities Act of 1933, as amended (the "Act"),
as contemplated by the Investors' Rights Agreement, and (iii) the filing of one
of more Forms D with respect to the Series 1

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Preferred Stock and the Shares as required under Regulation D, the Company is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency or any regulatory
or self-regulatory agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof. The Company is not, and upon consummation of
the transactions contemplated by the Transaction Documents will not be, in
violation of the listing requirements of Nasdaq.

    2.7  Offering.  Assuming the accuracy of the Investors' representations set
forth in Section 3 of this Agreement, the offer, sale and issuance of the Units
as contemplated by this Agreement are exempt from the registration requirements
of the Act and from the qualification requirements of the Oregon Securities Law,
and neither the Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemption.

    2.8  SEC Documents; Financial Statements.  As of the Closing, the Company
shall have filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Securities and Exchange Commission ("SEC")
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "1934 Act") (all of the foregoing filed prior to the date hereof
and all exhibits included therein and financial statements and schedules thereto
and documents incorporated by reference therein being hereinafter referred to as
the "SEC Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and fairly present in all material respects the
financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Investors which is
not included in the SEC Documents contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which they are or
were made, not misleading.

    2.9  Absence of Certain Changes.  Since the Company's Form 10-Q for the
quarter ended September 30, 2000 (the "Most Recent Filing"), there has been no
material adverse change and no development that would result in a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings.

    2.10  Liabilities.  Neither the Company nor any Subsidiary has any direct or
indirect obligation or liability and, to the Company's knowledge, there is no
existing condition, event or arrangement that could reasonably be expected to
give rise to such an obligation or liability, other than (a) those provided for
in the financial statements included in the SEC Documents and (b) those incurred
since the Most Recent Filing in the ordinary course of business consistent with
past practices.

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    2.11  Material Contracts.  Each of the agreements, contracts, leases and
other commitments listed as an exhibit to any SEC Document filed since
January 1, 2000 (each, a "Material Contract") is a legal, valid and binding
agreement of the Company or a Subsidiary, and is in full force and effect,
except to the extent such agreement has been fully performed or terminated
pursuant to its terms, and, to the Company's knowledge, no party thereto is in
default or breach, and there exists no event or circumstance that with notice or
lapse of time or both would constitute a default or breach thereunder, except in
each case for those defaults and breaches which could not reasonably be
expected, either individually or in the aggregate, to result in a Material
Adverse Effect.

    2.12  Absence of Litigation.  Except as set forth in the SEC Documents,
there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of the Company's or any Subsidiary's officers or
directors in their capacities as such that would have a Material Adverse Effect
and, to the knowledge of the Company, there is no reasonable basis for any of
the foregoing.

    2.13  Intellectual Property.  

    (a) The Company or one of its Subsidiaries owns, or has a valid license to
use, all patents, trademarks, service marks, trade names, copyrights, trade
secrets, domain names, software, technology, know-how and other intellectual
property (the "Intellectual Property") necessary to or used in the conduct of
the business of the Company and its Subsidiaries as now conducted and as
proposed to be conducted. All Intellectual Property owned by the Company or any
of its Subsidiaries is owned by them free and clear of all Liens. To the
knowledge of the Company, the conduct of the business of the Company and its
Subsidiaries does not conflict with or infringe upon any Intellectual Property
rights of any other person and no claims of conflict or infringement are pending
or threatened against the Company or any of its Subsidiaries which, in any
event, would reasonably be expected to have a Material Adverse Effect.

    (b) All of the Intellectual Property licenses, sublicenses, distributor
agreements and other agreements under which the Company or any Subsidiary is
either a licensor, licensee or distributor (excluding those related to
off-the-shelf software commercially available on a retail basis and used solely
on the computers of the Company and/or any Subsidiary) are valid, enforceable
and in full force and effect, and neither the Company nor any Subsidiary is
required to pay any royalty payment pursuant to any such agreement (except for
such agreements that were entered into in the ordinary course of business
consistent with past practice). Except as set forth in the SEC Documents, no
former employer of any employee of the Company or any Subsidiary, and no current
or former client of any consultant of the Company or any Subsidiary, has made a
claim against the Company or any Subsidiary or, to the Company's knowledge,
against any other person, that such employee or consultant is utilizing
Intellectual Property of such former employer or client.

    (c) The Company has policies and procedures that provide that all employees
of the Company and each Subsidiary execute and deliver proprietary invention
agreements with the Company, and be obligated under the terms thereof to assign
all inventions made by them during the course of employment to the Company or
such Subsidiary, and the Company uses its best efforts to abide by those
policies and procedures.

    2.14  Compliance with Other Instruments.  Neither the Company nor any
Subsidiary is in violation or default in any respect (i) of any provision of its
1999 Restated Articles of Incorporation, as amended by the Amended Articles
(when filed), or Bylaws, or (ii) of any judgment, order, writ, decree to which
it is a party or by which it is bound, or of any provision of

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any federal or state statute, rule or regulation applicable to it, or (iii) of
any agreement, indenture or instrument to which it is a party (except for
violations or defaults with respect to clauses (ii) and (iii) that would not
have a Material Adverse Effect). The execution, delivery and performance of the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument, judgment, order, writ, decree or
contract or an event that results in the creation of any Lien upon any assets of
the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal
of any material permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties (except
for violations, conflicts, defaults, liens, damages, encumbrances, suspensions,
revocations, impairments or forfeitures that would not, either individually or
in the aggregate, have a Material Adverse Effect).

    2.15  Related-Party Transactions.  Except as set forth in the SEC Documents,
no 5% or greater shareholder of the Company, officer, or director of the Company
or any Subsidiary or member of his or her immediate family is indebted to the
Company in any material amount, nor is the Company indebted (or committed to
make loans or extend or guarantee credit) to any of them in any material amount.
To the best of the Company's knowledge, none of the Company's officers or
directors has any direct or indirect ownership interest in any firm or
corporation with which the Company or any Subsidiary is affiliated or with which
the Company or any Subsidiary has a business relationship, or any firm or
corporation that competes with the Company or any Subsidiary, except that
officers or directors of the Company and members of their immediate families may
own less than 2% of the outstanding stock in a publicly traded company that may
compete with the Company. No member of the immediate family of any officer or
director of the Company is directly or indirectly interested in any material
contract with the Company. None of the foregoing transactions is currently
contemplated by the Company.

    2.16  Permits.  The Company and each of its Subsidiaries have all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted or proposed to be conducted by
it, the lack of which could result in a Material Adverse Effect. The Company is
not in default in any material respect under any of such franchises, permits,
licenses, or other similar authority.

    2.17  Outstanding Borrowing.  Except as set forth in the SEC Documents and
incurred in the ordinary course of business consistent with past practices,
since the Most Recent Filing, neither the Company nor any Subsidiary has (a) any
obligation for borrowed money (including, without limitation, reimbursement or
other obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured), (b) any obligation to pay the deferred
purchase price of property or services, except trade accounts payable and
accrued commercial or trade liabilities arising in the ordinary course of
business, (c) any payment obligation, whether periodic or upon the occurrence of
a contingency, under any interest rate or currency swap, cap, collar or similar
agreement or hedging device, (d) indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such party (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) any obligation under leases which have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases, (f) any indebtedness secured by any Lien (other than Liens in
favor of lessors under leases other than leases included in clause (e)) on any
property or asset owned or held by such party regardless of whether the
indebtedness secured thereby shall have been assumed by that party or is
nonrecourse to the credit of that party, and (g) any direct or indirect
liability with respect to any obligation of a third party of the type described
in clauses (a) through (e) of this section (the "Primary Obligation"), whether
or not contingent, (i) to purchase, repurchase or otherwise acquire

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such Primary Obligation or any property constituting direct or indirect security
therefor, (ii) to advance or provide funds for the payment or discharge of any
such Primary Obligation or to maintain working capital or equity capital of the
third party or to otherwise maintain the net worth or solvency of any balance
sheet item, level of income or financial condition of such third party, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such Primary Obligation of the ability of such third party to
make payment of such Primary Obligation, or (iv) to otherwise assure or hold
harmless the owner of any such Primary Obligation against loss or failure or
inability to perform in respect thereof.

    2.18  Environmental and Safety Laws.  The Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.

    2.19  Manufacturing and Marketing Rights.  The Company has not granted
rights to manufacture, produce, assemble, license, market or sell its products
to any other person and is not bound by any agreement that affects the Company's
exclusive right to develop, manufacture, assemble, distribute, market or sell
its products.

    2.20  Disclosure.  Neither the Transaction Documents nor any other
statements or certificates made or delivered in connection therewith contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements made herein or therein not misleading.

    2.21  Registration Rights.  Except as provided in the Investor Rights
Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.

    2.22  Title to Property and Assets.  The Company and each Subsidiary owns
their respective properties and assets free and clear of all Liens, except such
Liens that arise in the ordinary course of business and do not materially impair
the Company's ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in compliance with such leases
and, to the best of the Company's knowledge, such leases are in full force and
effect and the Company holds a valid leasehold interest free of any Liens. No
other property or assets are necessary to the conduct of their respective
businesses, as presently conducted or as proposed to be conducted.

    2.23  Taxes.  

    (a) The Company and each of its Subsidiaries has timely filed all income,
franchise and other material tax returns, reports, forms and other such
documents ("Tax Returns") required to be filed by it prior to the date hereof.
Such Tax Returns are true and correct in all material respects. The Company and
each of its Subsidiaries has paid or caused to be paid all Tax liabilities for
all fiscal years that have not been examined and closed by any Tax authority (or
closed by applicable statutes). No additional Tax assessment, Tax deficiency
(whether assessed or unassessed) or claim for additional Taxes (including
interest thereon and penalties in connection therewith) has been heretofore
proposed or threatened by any Tax authority and no audit is in progress and no
extension of time is in force with respect to any date on which any Tax Return
is to be filed and no waiver or agreement is in force for the extension of time
for the assessment or payment of any Tax. Neither the Company nor any Subsidiary
has made an election under Section 341(f) of the Code

    (b) There are no Liens for Taxes (other than for taxes not yet due and
payable) upon the assets of the Company or any Subsidiary.

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    (c) Neither the Company or any Subsidiary (i) is a party to or bound by, or
has any obligations under, any tax allocation, sharing, indemnity or similar
agreement or arrangement, (ii) is or has been a member of any consolidated,
combined or unitary group of corporations, other than a group of which the
Company is the common parent, for purposes of filing tax returns or paying taxes
and (iii) other than as a result of being a member of a consolidated, combined
or unitary group of corporations of which the Company is the common parent, is
liable for the taxes of any other Person, under Treasury Regulations
section 1.1502-6 (or any similar provision of foreign, state or local law) or as
a transferee, successor or otherwise.

    (d) Neither the Company nor any Subsidiary is a party to any agreement,
contract, arrangement or plan that has resulted or would result, separately or
in the aggregate, in the payment of any "excess parachute payments" within the
meaning of section 280G of the Code or any similar provision of foreign, state
or local law as a result of a transaction occurring on or before the date
hereof.

    (e) Neither the Company nor any Subsidiary has ever been a "United States
real property holding corporation" (a "USRPHC") as that term is defined in
Section 897(c)(2) of the Code and the treasury regulations promulgated
thereunder (the "Treasury Regulations").

    (f)  There are no (i) outstanding rulings of, or requests for rulings with,
the Internal Revenue Service or any other Tax authority addressed to the Company
or any Subsidiary, that are, or if issued would be, binding on the Company or
any Subsidiary, (ii) closing agreements with any Tax authority and (iii) other
binding agreements entered into with any Tax authority. The Company and each
Subsidiary have provided the Investors with copies of any such rulings, ruling
requests, closing agreement or other binding agreements.

    (g) Neither the Company nor any Subsidiary has been a "distributing
corporation" or a "controlled corporation" (within the meaning of Section 355 of
the Code) in a distribution of stock qualifying for tax-free treatment under
Section 355 of the Code in the two years prior to the date of this Agreement.

    (h) As used in this Agreement, "Tax" or "Taxes" means any federal, state,
county, local, foreign and other taxes (including, without limitation, income,
profits, premium, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing, except that they do not contain footnotes or normal
period-end adjustments.

    2.24  Insurance.  The Company and each of its Subsidiaries has in full force
and effect insurance policies in such amounts and against such risks as are
customarily maintained and insured against by comparable businesses. The Company
has in full force and effect products liability and errors and omissions
insurance in amounts customary for companies similarly situated. All such
policies are listed on the Schedule of Exceptions, together with the effective
date and coverage amounts with respect thereto.

    2.25  Labor Agreements and Actions.  Neither the Company nor any Subsidiary
is bound by or subject to (and none of its assets or properties is bound by or
subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
best of the Company's knowledge, has sought to represent any of the employees,
representatives or agents of the Company or any Subsidiary. There is no strike
or other labor dispute involving the Company or any Subsidiary pending, or to
the best of the

8

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Company's knowledge, threatened, that could have a Material Adverse Effect, nor
is the Company aware of any labor organization activity involving its employees.
To the best of the Company's knowledge, no officer or key employee, or any group
of key employees, intends to terminate their employment with the Company or any
Subsidiary. The employment of each officer and employee of the Company or any
Subsidiary is terminable at the will of the Company or any Subsidiary, and
neither the Company nor any Subsidiary has an employment agreement with any
officer. The Company and each Subsidiary has complied in all respects with all
applicable state and federal equal employment opportunity and other laws related
to employment.

    2.26  "Company's Knowledge" Defined.  As used in this Section 2, the terms
"to the best of the Company's knowledge," "to the best knowledge of the
Company," or "known to the Company" shall mean the knowledge of the Company, its
Subsidiaries and the officers, directors and management of each, after careful
consideration of the matters set forth in the representation that is so
qualified.

    2.27  Eligibility.  As of December 9, 2000, the Company will be eligible to
register the resale of the Unit Shares on a registration statement on Form S-3
under the Act.

    2.28  Employee Benefit Plans.  The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974,
as amended.

    3.  Representations and Warranties of the Investors.  Each Investor
severally and not jointly hereby represents and warrants that:

    3.1  Authorization.  Such Investor has full power and authority to enter
into the Transaction Documents to which it is a party, and each such agreement
constitutes its valid and legally binding obligation enforceable in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Investor Rights Agreement may be limited by applicable federal or state
securities laws.

    3.2  Purchase Entirely for Own Account.  This Agreement is made with the
Investors in reliance upon such Investor's representations to the Company, that
the Series 1 Preferred Stock and Warrant to be received by such Investor and the
Shares (the "Securities") will be acquired for investment for such Investor's
own account in the ordinary course of business, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that such
Investor has no present intention, agreements or understandings, directly or
indirectly, of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, such Investor further represents that it
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Securities.

    3.3  Disclosure of Information.  Such Investor represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Series 1 Preferred Stock and Warrant
and the business, properties, prospects and financial condition of the Company.
The foregoing, however, does not limit or modify the representations and
warranties of the Company in Section 2 of this Agreement or the right of such
Investor to rely thereon.

    3.4  Investment Experience.  Such Investor is an investor in securities of
companies in the development stage and acknowledges that it can bear the
economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the

9

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merits and risks of the investment in the Series 1 Preferred Stock and Warrants.
Such Investor has not been organized for the purpose of acquiring the Series 1
Preferred Stock and Warrants.

    3.5  Accredited Investor.  Such Investor is an "accredited investor" within
the meaning of Rule 501 promulgated under the Act, as presently in effect.

    3.6  Restricted Securities.  Such Investor understands that the Securities
it is purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold, without registration under
the Act, only in certain limited circumstances. In this connection, such
Investor represents that it is familiar with Rule 144 promulgated under the Act,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.

    3.7  Further Limitations on Disposition.  Without in any way limiting the
representations set forth above, such Investor (and, by accepting delivery of
the Securities, each transferee) further agrees not to make any disposition of
all or any portion of the Securities that are "restricted securities" under the
Act unless, if reasonably requested by the Company, such Investor shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company that such disposition will not require registration of such shares under
the Act. Such opinion shall not be required if there is then in effect a
Registration Statement under the Act covering such proposed disposition and such
disposition is made in accordance with such Registration Statement.

    3.8  Legends.  It is understood that the certificates evidencing the
Securities may bear legends similar to the following:

    (a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. EACH INVESTOR
SHOULD BE AWARE THAT IT MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
ACT, UNLESS THE SECURITIES ARE RESOLD IN COMPLIANCE WITH RULE 144, AND ANY
APPLICABLE STATE SECURITIES LAWS.

    (b) A FULL STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF THE SHARES OF EACH CLASS OF STOCK OF THE ISSUER, THE VARIATIONS
IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES OF
PREFERRED STOCK SO FAR AS FIXED AND DETERMINED, AND THE AUTHORITY OF THE BOARD
OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE RECORD HOLDER OF THIS CERTIFICATE TO THE
SECRETARY OF THE ISSUER AT ITS PRINCIPAL OFFICE.

    (c) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS AS SET FORTH IN A UNIT PURCHASE AGREEMENT TO WHICH THE
ORIGINAL HOLDER OF THESE SHARES IS A

10

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PARTY, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.

    4.  Covenants of the Company.  

    4.1  Conduct of Business.  From the date of this Agreement until the
Closing, the Company will (a) conduct its business in a reasonable and prudent
manner and in accordance with its normal practices; (b) engage in no transaction
(including, without limitation, capital expenditures) out of the ordinary course
of its business and consistent with past practices; (c) not dispose of any of
its assets or properties except to the extent these are used, retired or
replaced in the ordinary course of its business; (d) conduct its business in
accordance with all applicable laws, regulations and ordinances; (e) maintain
and keep in force any governmental licenses, permits, authorizations, consents
or approvals required by the Company to own its assets and properties or to
carry on its business as currently conducted; (f) maintain and keep in force its
Intellectual Property rights; (g) perform all material obligations required to
be performed by it under any of the Material Contracts; (h) refrain from
entering into transactions with affiliates of the Company; (i) not pay dividends
to, or redeem the shares of, stockholders of the Company other than pursuant to
existing restricted stock purchase agreement with current or former employees;
and (j) not amend the 1999 Restated Articles of Incorporation or Bylaws of the
Company.

    4.2  Anti-dilution.  

    (a) The Company shall not, without first obtaining shareholder approval,
issue shares of Common Stock or Other Securities (as defined in the Amended
Articles) for a per share consideration less than (i) the then-current
Conversion Price (as defined in the Amended Articles) or (ii) the Fair Market
Price (as defined in the Amended Articles) of the Common Stock at the time of
such issuance, if such issuance would violate Nasdaq Marketplace
Rule 4460(i)(1)(D)(i).

    (b) The Company shall use its best efforts to obtain the shareholder
approval necessary to allow it to make any adjustments (i) to the Conversion
Price or otherwise required by the anti-dilution provisions set forth in the
Amended Articles and (ii) the Exercise Price (as defined in the Warrant) or
otherwise required by the anti-dilution provisions set forth in the Warrant
without any subsequent shareholder approval, in compliance with Nasdaq
Marketplace Rule 4460(i)(1)(D)(i), at its next regularly scheduled annual
meeting of shareholders following the Closing.

    4.3  Registration.  The Company shall use its efforts to prepare and file
with the SEC, within sixty (60) days after the Closing and after giving
Investors' legal counsel reasonable time to review and comment, a registration
statement to register the resale of the Shares by the Investors from time to
time under the Act. This filing and registration shall be treated as a request
for registration pursuant to Section 1.2(a)(iii) of the Investors' Rights
Agreement and shall otherwise be governed by the terms and conditions set forth
in the Investors' Rights Agreement.

    5.  Conditions of Investors' Obligations at Closing.  The obligations of the
Investors under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
in writing thereto:

    5.1  Representations and Warranties.  The representations and warranties of
the Company contained in Section 2 shall be true in all material respects on and
as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.

11

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    5.2  Performance.  The Company shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.

    5.3  Compliance Certificate.  The President of the Company shall deliver to
the Investors at the Closing a certificate stating that the conditions specified
in Sections 5.1 and 5.2 have been fulfilled and stating that there shall have
been no material adverse change in the business, affairs, prospects, operations,
properties, assets or condition of the Company since the date of the financial
statements contained in the Most Recent Filing.

    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
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing.

    5.5  Proceedings and Documents.  All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Investors, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request.

    5.6  Board of Directors.  The directors of the Company as of Closing shall
consist of the following individuals, and may include up to two other
individuals to be appointed by the Board of Directors:

Bruce Fried
C. Martin Harris, M.D.
Ronald H. Kase
Mark Leavitt, M.D.
Arthur Leibowitz, M.D.
George Lundberg, M.D.
David C. Moffenbeier
Neal Moszkowski
Mark A. Stevens

    5.7  Articles of Amendment.  The Company shall have filed the Amended
Articles with the Secretary of State of Oregon and the Investors shall have
received evidence of such filing prior to the Closing.

    5.8  Opinion of Company Counsel.  The Investors shall have received from
Stoel Rives LLP, counsel for the Company, an opinion, dated as of the Closing,
in the form attached hereto as Exhibit C.

    5.9  Certificate of Existence.  The Company shall have delivered to the
Investors a certificate dated as of a recent date issued by the Secretary of
State of the State of Oregon to the effect that the Company is validly existing.

    5.10  Secretary's Certificate.  The Company shall have delivered to the
Investors a certificate executed by the Secretary of the Company dated as of the
Closing, certifying the following matters: (a) resolutions adopted by the
Company's Board of Directors relating to the transactions contemplated by this
Agreement; (b) Amended Articles of the Company; (c) Bylaws of the Company;
(d) incumbency of officers of the Company; and (e) such other matters as the
Investors may reasonably request.

    5.11  Investor Rights Agreement.  The Company, the Investors and the holders
of a majority of the outstanding Registrable Securities (as defined in the 2000
Amended and Restated Investor

12

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Rights Agreement, dated May 19, 2000, among the Company and the shareholders
signatory thereto) shall have entered into the Investor Rights Agreement in the
form attached as Exhibit D.

    5.12  Minimum Investment.  The Company shall have received an aggregate
minimum investment from the Investors of $17,000,000.

    5.13  Nasdaq Approval.  The Investors shall have received reasonably
satisfactory evidence that Nasdaq has approved (i) the proposals set forth by
the Company in (a) the letter dated December 6, 2000 and (b) the letter dated
December 11, 2000 from the Company to the office of Nasdaq Listing
Qualifications and (ii) the Shares for listing on the Nasdaq National Market.

    5.14  Due Diligence.  The Investor's counsel shall be reasonably satisfied
with the results of its due diligence inquiry regarding the outstanding
litigation of the Company and its Subsidiaries.

    5.15  Adverse Change.  There shall have been no material adverse change in
the Company's business from that reported in the Most Recent Filing prior to the
Closing. For purposes of this Section 5.13, "material adverse change" means a
circumstance, fact, change, development or effect (i) that has been, could or
could reasonably be expected to be materially adverse to the properties,
business, prospects, results of operations or condition, financial or otherwise,
of the Company taken as a whole or (ii) that adversely effects the ability of
the Company to consummate the transactions contemplated by the Transaction
Documents or materially impairs or delays the ability of the Company to effect
the Closing or (iii) that could reasonably be expected to require a material
expenditure by any of the Company, a Subsidiary or the Investors.

    5.16  Capitalization Schedule.  The Company shall have delivered to the
Investors a schedule reasonably satisfactory to the Investors reflecting, after
giving effect to the transactions contemplated by this Agreement, (i) the
Company's authorized, issued and outstanding shares of Common Stock and Series 1
Preferred Stock and (ii) the aggregate number of shares of restricted stock and
options to purchase shares of Common Stock which may be issued and which have
been granted pursuant to any stock option plan or stock incentive plan of the
Company or any Subsidiary or are issuable pursuant to the Company's 1999
Employee Stock Purchase Plan. The information in such Schedule shall be as of
the Closing.

    5.17  Viacom Waiver.  The Investors shall have received a copy of a waiver,
in form reasonably satisfactory to Investor's counsel, executed by Viacom
waiving its right of participation in the transactions contemplated by this
Agreement.

    6.  Conditions of the Company's Obligations at Closing.  The obligations of
the Company to the Investors under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by the Investors:

    6.1  Representations and Warranties.  The representations and warranties of
the Investors contained in Section 3 shall be true on and as of the Closing with
the same effect as though such representations and warranties had been made on
and as of the Closing.

    6.2  Payment of Purchase Price.  The Investors shall have delivered the
purchase price specified in Section 1.

    6.3  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
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing.

13

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    6.4  Minimum Investment.  The Company shall have received an aggregate
minimum investment from the Investors of $17,000,000.

    7.  Termination.  

    7.1  Right to Termination.  This Agreement may be terminated and the
proposed transactions abandoned:

    (a) At any time, by mutual written consent of the Company and Investors
committed to purchase a majority of the Series 1 Preferred Stock;

    (b) At the option of an Investor and by notice to the Company stating the
reasons for such action, (i) in the event the Closing shall not have occurred by
January 31, 2001 (or any other date that the parties may designate by mutual
agreement) by reason of the failure of any of the conditions set forth in
Section 5 or (ii) at any time prior to the Closing, in the event of a material
breach of any of the representations or warranties by the Company set forth in
Section 2 or a material breach of any of the covenants of the Company set forth
in Section 4; or

    (c) At the option of the Company and by notice to the Investors stating the
reasons for such action, (i) in the event the Closing shall not have occurred by
January 31, 2001 (or any other date that the parties may designate by mutual
agreement) by reason of the failure of any of the conditions set forth in
Section 6 or (ii) at any time prior to the Closing, in the event of a material
breach of any of the representations or warranties of the Investors set forth in
Section 3.

    7.2  Effect of Termination.  Termination by a party pursuant to subsection
7.1(b) or subsection 7.1(c) shall not adversely affect such party's other
available rights and remedies. The rights and remedies of the party terminating
this Agreement pursuant to subsection 7.1(b) or subsection 7.1(c), whether
contained in this Agreement or conferred pursuant to applicable law or in
equity, shall be cumulative and concurrent and may be pursued singly,
successively or together, at the discretion of the holder thereof.

    8.  Miscellaneous.  

    8.1  Survival of Warranties.  The warranties, representations and covenants
of the Company and the Investors contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing and
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of the Investors or the Company.

    8.2  Successors and Assigns.  Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties (including transferees
of any Securities). 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, except as expressly provided in this Agreement.

    8.3  Governing Law.  This Agreement shall be governed by and construed under
the laws of the state of Oregon.

    8.4  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

    8.5  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.

14

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    8.6  Notices.  Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon deposit with
the United States Post Office, by registered, certified mail, Federal Express,
or other express courier, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties. Any notice given to the Company under this
Section 6.6 shall be copied via email to legal@medscapeinc.com.

    8.7  Finder's Fee.  Except for the Shemano Group and as otherwise as set
forth in the Schedule of Exceptions, each party represents that it neither is
nor will be obligated for any finders' fee or commission in connection with this
transaction. The Investors agree to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investors or any of their officers, partners,
employees, or representatives is responsible. The Company agrees to indemnify
and hold harmless the Investors from any liability for any commission or
compensation in the nature of a finders' 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.

    8.8  Expenses.  Each of the Company and the Investors shall bear their own
legal and other expenses incurred with respect to this Agreement and the
transactions contemplated hereby; provided, however, that the Company shall pay
up to an aggregate of $75,000 in the reasonable legal fees and expenses of
counsel to the Investors, contingent upon the Closing. The Investors shall
require their counsel to submit all invoices related to this Agreement and the
transactions contemplated hereby to the Company's General Counsel for his
review.

    8.9  Attorneys' Fees.  If any action at law or in equity is necessary to
enforce or interpret the terms of the Transaction Documents, 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.

    8.10  Amendments and Waivers.  Any term of this Agreement may be amended and
the observance of any term or condition of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors
that have purchased, or, prior to the Closing, have agreed to purchase, a
majority of the Shares. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.

    8.11  Severability.  If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

    8.12  Entire Agreement.  This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations, or
covenants except as specifically set forth herein or therein.

    8.13  Restriction on Separate Transfer of Warrants and Series 1 Preferred
Stock.  Until the first anniversary of the Closing, no holder of Series 1
Preferred Stock shall transfer, sell, assign or hypothecate any such shares
without also transferring, selling, assigning or hypothecating (a) Warrants to
purchase a number of shares of Common Stock or (b) a number of shares of Common
Stock issued upon the exercise of Warrants, in either case equal to one-half of
the number of shares of Series 1 Preferred Stock so transferred.

15

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    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

    MEDICALOGIC/MEDSCAPE, INC.
 
 
By:

--------------------------------------------------------------------------------

    Printed Name: David Moffenbeier
Title: Chief Executive Officer
 
 
Address: 20500 NW Evergreen Parkway
Hillsboro, Oregon 97124
INVESTORS:
 
QUANTUM INDUSTRIAL PARTNERS LDC
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: c/o Curacao Corporation Company NV
Kaya Flamboyan 9,
Villemstad, Curacao
Netherlands Antilles
 
 
SFM DOMESTIC INVESTMENTS LLC
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: c/o Soros Private Equity Partners
888 Seventh Avenue
New York, NY 10106

16

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HALIFAX FUND LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
GRUBER & MCBAINE INTERNATIONAL
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
HBK INVESTMENTS LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

17

--------------------------------------------------------------------------------

 
 
COLEMAN SWENSON HOFFMAN
BOOTH IV, LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
CROSSLINK CROSSOVER FUND III, LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
OFFSHORE CROSSLINK CROSSOVER
FUND III, LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

18

--------------------------------------------------------------------------------

 
 
DELTA GROWTH, LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
RITCHIE CAPITAL MANAGEMENT
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
CRANSHIRE CAPITAL
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 
LAGUNITAS PARTNERS LP
 
 
By:

--------------------------------------------------------------------------------

    Its: 

--------------------------------------------------------------------------------

Printed name: 

--------------------------------------------------------------------------------

 
 
Address: 

--------------------------------------------------------------------------------

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19

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SCHEDULE A

SCHEDULE OF INVESTORS

Investor

--------------------------------------------------------------------------------

  Number of
Shares of
Series 1
Preferred Stock

--------------------------------------------------------------------------------

  Number of
Warrants
Shares

--------------------------------------------------------------------------------

  Total Purchase
Price

--------------------------------------------------------------------------------

Quantum Industrial Partners LDC   1,666,666   1,274,509   $ 4,999,998.00 SFM
Domestic Investments LLC   1,666,666   1,274,509     4,999,998.00 Halifax Fund
LP   333,333   254,902     999,999.00 Lagunitas Partners LP   500,000   382,353
    1,500,000.00 Gruber & McBaine International   166,667   127,451    
500,001.00 Montrose Investments Ltd.   666,667   509,804     2,000,001.00
Coleman Swenson Hoffman Booth IV, LP   333,333   254,902     999,999.00
Crosslink Crossover Fund III, LP   88,000   67,295     264,000.00 Offshore
Crosslink Crossover Fund III, LP   6,000   4,588     18,000.00 Delta Growth, LP
  6,000   4,588     18,000.00 Ram Trading, Ltd.   166,667   127,451    
500,001.00 Cranshire Capital   166,667   127,451     500,001.00 TOTAL  
5,766,666   4,409,803   $ 17,299,996.00

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