Document:

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                                                                   EXHIBIT 10.40

                          SECURITIES PURCHASE AGREEMENT

        THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of June 12, 2000, by and between Pets.com, Inc., a Delaware corporation
(the "Company"), and Discovery.com, Inc., a Delaware corporation ("Purchaser").

                                    RECITALS:

        WHEREAS, the Company, P-Sub Corporation, the Company's wholly owned
subsidiary (the "Subsidiary") and PetStore.com, Inc., a Delaware corporation
("PetStore") have entered into a certain asset purchase agreement dated June 12,
2000 (the "Asset Purchase Agreement") providing for the sale to the Subsidiary
of certain of the assets of PetStore (the "Transaction"); and

        WHEREAS, in addition, the Purchaser has agreed to invest $3,000,000 in
the Company.

        NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows.

1.      Authorization and Sale of Shares.

        1.1 Authorization of the Shares. On or before the Closing Date (as
defined in Section 2.2 below), the Company will have authorized the issuance and
sale of, pursuant to the terms and conditions of this Agreement, 1,430,700
Shares. "SHARES" means the total number of shares of Common Stock of the Company
("Common Stock") and, if applicable as provided below, non-voting Series A
Redeemable Preferred Stock, that are sold to Purchaser under this Agreement. To
the extent that the number of shares of Common Stock issued to PetStore and
reserved for issuance to PetStore warrantholders pursuant to the Asset Purchase
Agreement plus the number of Shares to be issued to Purchaser under this
Agreement represent less than 19.90% of the total voting stock of the Company
outstanding immediately prior to the Closing under the Asset Purchase Agreement,
the Shares issued under this Agreement shall be entirely Common Stock. To the
extent, however, that the sum of the number of shares of Common Stock issued to
PetStore and reserved for issuance to PetStore warrantholders pursuant to the
Asset Purchase Agreement and the number of Shares that would be issued to
Purchaser under this Agreement exceeds 19.90% of the total voting stock of the
Company outstanding immediately prior to the Closing under the Asset Purchase
Agreement, then the number of Shares to be issued under this Agreement which
exceed this percentage shall be non-voting Series A Redeemable Preferred Stock
of the Company have the rights, preferences and privileges set forth in the
Certificate of Designation attached to this Agreement as Exhibit A (the
"Certificate of Designation"). No fractional shares will be issued or sold
pursuant to this Agreement.

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        1.2 Sale of the Shares. Subject to the terms and conditions of this
Agreement, the Purchaser agrees to purchase at the Closing, and the Company
agrees to sell and issue to the Purchaser at Closing, the Shares for
consideration consisting solely of the number of Shares multiplied by the Price
(the "Shares Consideration"). The Company will not take any position on any tax
return inconsistent with this position.

2.      Closing; Closing Date; Deliveries at Closing.

        2.1 Closing. The completion of the purchase and sale of the Shares (the
"Closing") shall be held at the offices of Venture Law Group, 2775 Sand Hill
Road, Menlo Park, CA 94025 at 10:00 a.m. Pacific time, or at such other time as
may be mutually agreed orally or in writing by the parties hereto, on the
Closing Date. The parties agree that the Closing may be effected by facsimile.

        2.2 Closing Date. Subject to the terms and conditions of this Agreement,
the Closing (the "Closing Date") shall occur on the day on which the Closing as
defined and set forth in the Asset Purchase Agreement occurs unless otherwise
agreed orally or in writing by the Company and the Purchaser.

        2.3 Delivery of the Shares at the Closing. At the Closing, the Company
shall deliver to the Purchaser one or more stock certificates registered in the
name of the Purchaser, or in such nominee name(s) as designated by the Purchaser
in writing, representing the Shares bearing an appropriate legend referring to
the fact that the Shares were sold in reliance upon the exemption from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), provided by Section 4(2) thereof and Rule 505 thereunder.

        2.4 Registration Rights. The Company hereby covenants and agrees to
grant to a single transferee of Purchaser piggyback registration rights with
respect to a total of 1,430,700 shares of the Company's Common Stock (including
with respect to shares of Common Stock into which shares of Series A Preferred
Stock issued may subsequently be converted, and as such number may be increased,
decreased or otherwise adjusted in the event of a recapitalization or similar
event with respect to the Company's capital structure, the "Registrable
Shares"). Such piggyback registration rights shall be granted to such transferee
pursuant to an amendment, in the form of Exhibit C attached hereto ("Amendment
No. 1"), to that certain Amended and Restated Investors' Rights Agreement, dated
as of January 18, 2000, between the Company and the signatories thereto
("Investors' Rights Agreement"); which Amendment No. 1, as executed by the Prior
Rights Holders (as defined in Amendment No. 1), shall be delivered to the
Purchaser at the Closing and, upon acquisition by any such transferee, an
executed original thereof shall be delivered to the Company.

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3.      Representations and Warranties of the Company.

        In order to induce the Purchaser to enter into this Agreement and to
perform its obligations hereunder, the Company hereby represents and warrants to
the Purchaser, at and as of the date of this Agreement and as of the Closing
date, as follows:

               3.1 Organization. The Company and Subsidiary are each
corporations duly formed, validly existing and in good standing under the laws
of the State of Delaware.

               3.2 Company's and Subsidiary's Capital Stock.

                      (a) The authorized capital stock of the Company consists
of: (i) 150,000,000 shares of Common Stock, par value $0.00125 per share, of
which 29,224,237 shares are issued and outstanding as of June 7, 2000 and are
fully paid and non-assessable; (ii) 5,000,000 shares of Preferred Stock, par
value $0.00125 per share, of which no shares are issued and outstanding as of
June 7, 2000. The Company has reserved (i) an aggregate of 5,815,328 shares of
Common Stock issuable to employees and consultants pursuant to the Company's
1999 Stock Plan (the "Plan"), of which, as of June 7, 2000, 929,618 shares have
been issued pursuant to restricted stock purchase grants, 2,089,108 shares have
been issued pursuant to the exercise of options granted under the Plan,
2,782,290 shares are issuable upon exercise of outstanding options, and 14,312
shares are eligible for future grant under such Plan, and (ii) an aggregate of
400,000 shares of Common Stock issuable to employees and consultants pursuant to
the Company's 2000 Employee Stock Purchase Plan, of which no shares are issuable
upon exercise of outstanding options as of June 7, 2000 under such plans, and
there are no other options or warrants to purchase shares of Common Stock
outside of such plans. Except as described in this Section 3.2 or as set forth
on Schedule 3.2, there are no outstanding subscriptions, options, rights,
warrants, convertible securities, preemptive rights or other agreements (other
than the Asset Purchase Agreement and this Agreement) or calls, demands or
commitments of any kind relating to the issuance, sale or transfer of any
capital stock or other equity securities of the Company, whether directly or
upon the exercise or conversion of other securities. There are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of the Company's capital stock or to provide funds to, or
make any investment (in the form of a loan, capital contribution or otherwise)
in, any other. For the purposes of this Agreement, "Person" means any
individual, corporation, partnership, limited liability company, joint venture,
association, joint stock company, trust, unincorporated organization or other
entity or organization, including any government or political subdivision or any
agency or instrumentality thereof. Upon issuance, the Shares will be duly and
validly issued, fully paid, non-assessable and free and clear of all liens
(except liens for Taxes not yet due and payable), mortgages, pledges,
imperfections of title, security interests, restrictions, prior assignments,
easements, leases, licenses or sublicenses, options, rights of first refusal or
first offer, and encumbrances (collectively, "Liens") and preemptive rights.

                      (b) The authorized capital stock of the Subsidiary
consists of 1000 shares of Common Stock, par value $0.001 per share, of which
1000 shares are issued and

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outstanding as of the date of this Agreement and are fully paid and
non-assessable. The Subsidiary is a wholly-owned subsidiary of the Company.

               3.3 Authorization, Validity and Enforceability. The Company and
Subsidiary each have full corporate power and authority to execute, deliver and
perform its obligations under this Agreement and each of the other documents in
connection with the Transaction to which it is a party (collectively, the
"Transaction Documents"). The execution, delivery and performance by the Company
and Subsidiary of the Transaction Documents to which it is a party and the
consummation by the Company and Subsidiary of the transactions contemplated by
the Transaction Documents to which it is a party have been duly authorized by
all necessary corporate action on the part of the Company and Subsidiary, and no
other corporate proceedings on the part of the Company and Subsidiary are
necessary to authorize the Transaction Documents to which it is a party or the
transactions contemplated thereby. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company and each of the other Transaction Documents to which each of the
Company and Subsidiary are a party will, upon due execution and delivery
thereof, constitute the legal, valid and binding obligation of the Company and
Subsidiary respectively, in each case enforceable against the Company or
Subsidiary respectively, in accordance with the terms hereof or thereof, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditor's rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or equity).

               3.4 No Violation or Breach. The execution, delivery and
performance by the Company and Subsidiary of the Transaction Documents to which
it is a party, and the consummation of the transactions contemplated thereby, do
not and will not conflict with, result in a violation or breach of, constitute a
default (or an event which with the giving of notice or the lapse of time or
both would constitute a default) or give rise to any right of termination or
acceleration of any right or obligation of the Company or Subsidiary under, or
result in the creation or imposition of any Lien upon any assets or properties
of the Company or Subsidiary by reason of the terms of, (a) the certificate of
incorporation, bylaws and other charter or organizational documents of the
Company or Subsidiary, (b) any contract, agreement, lease, license, mortgage,
note, bond, debenture, indenture or other instrument or obligation to which the
Company or Subsidiary is a party or by or to which it or its assets or
properties may be bound or subject, (c) any order, writ, judgment, injunction,
award, decree, law, statute, rule or regulation applicable to it or (d) any any
license, permit, order, consent, approval, registration, authorization or
qualification with or under any foreign, federal, state or local law or
governmental or regulatory body (any of the foregoing, a "Permit") of the
Company or Subsidiary.

               3.5 Consent and Approvals. No consent, approval, authorization,
license or order of, registration or filing with, or notice to, any federal,
state, local, foreign or other court, administrative agency or commission, other
governmental authority or regulatory body (each, a "Governmental Authority") or
any other Person (such consents, approvals, authorizations, licenses, orders,
registrations, filings or notices referred to collectively herein as "Consents")
is

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necessary to be obtained, made or given by the Company or Subsidiary in
connection with the execution, delivery and performance by the Company and
Subsidiary of this Agreement or any other Transaction Document to which it is a
party or the consummation by the Company and Subsidiary of the transactions
contemplated hereby or thereby. There are no contracts, agreements or other
arrangements by which the Company or Subsidiary or any of its assets or
properties maybe bound that contain (i) any change in control provisions that
will become applicable or inapplicable as a result of the consummation of the
transactions contemplated by this Agreement or any other Transaction Document,
or (ii) any other provisions which will result in a material change of the terms
of such contract, agreement or other arrangement to the Company or Subsidiary
relative to the benefit or terms to the Purchaser as a result of the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document.

               3.6 Legal Proceedings. There is no pending or, to the knowledge
of the Company or Subsidiary, threatened action, suit, claim, proceeding or
investigation before any Governmental Authority against or involving the Company
or Subsidiary that has not been disclosed in the Company's public filings with
the Securities and Exchange Commission ("SEC"). Each of the Company and
Subsidiary are not bound by or subject to any order, judgment, injunction, award
or decree of any Governmental Authority or arbitration tribunal.

               3.7 Brokers. Except for Merrill Lynch Pierce, Fenner & Smith
Incorporated, no broker, finder or investment banker has been retained or
authorized to act on behalf of the Company or Subsidiary who is or might be
entitled to any brokerage, finder's or other fee, commission or compensation in
connection with the transactions contemplated by this Agreement or any of the
other Transaction Documents.

               3.8 SEC Documents; Financial Statements. As of their respective
filing dates (i) each quarterly and other report and registration statement
(without exhibits) filed by the Company with the SEC since January 1, 2000 (the
"Company SEC Documents"), complied in all material respects with the applicable
requirements of the Securities Act of 1933 and the Securities Exchange Act of
1934, as the case may be, and (ii) none of the Company SEC Documents contained
as of the date when made any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected by a Company SEC Document
subsequently which has been filed with the SEC prior to the date of this
Agreement. The financial statements of the Company included in the Company SEC
Documents (the "Company Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
conformity with GAAP consistently applied (except as may be indicated in the
notes thereto or, in the case of unaudited financial statements, as permitted by
the rules and regulations of the SEC) and present fairly, in all material
respects, the financial position of the Company at 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, recurring and certain non-recurring
audit adjustments and the unaudited statements may not include all footnotes
required to comply with GAAP).

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               3.9 Absence of Certain Changes or Events. Except as set forth in
Schedule 4.9, since March 31, 2000, the Company has not: (a) declared or paid
any dividend or made any other payment or distribution in respect of its capital
stock; (b) purchased or redeemed, directly or indirectly, any of its capital
stock except for purchases of shares held by employees or consultants in
connection with their termination of employment with the Company; (c) paid,
discharged or satisfied any Lien (other than a Lien then required to be paid,
discharged or satisfied), claim, liability or obligation (whether fixed,
accrued, contingent or otherwise, whether due or to become due), other than a
claim, liability or obligation that is a current liability shown on the balance
sheet of the Company dated as of March 31, 2000 (the "Company Recent Balance
Sheet") or incurred since the date of the Company Recent Balance Sheet in the
ordinary course of business; (d) canceled or compromised any debt or claim, or
waived or released any material right, other than adjustments in the ordinary
course of business which, in the aggregate, are not material; (e) sold,
assigned, transferred, conveyed, leased, pledged, encumbered or otherwise
disposed of any of its assets (real or personal, tangible or intangible) except
in the ordinary course of business; (f) changed accounting methods other than in
accordance with GAAP; (g) made any capital expenditures or additions to
property, plant or equipment or acquired of any other property or assets (other
than raw materials and supplies) at a cost in excess of $15 million in the
aggregate; (h) incurred or assumed any indebtedness for money borrowed or
guaranteed any indebtedness or other obligation of another Person in excess of
$15 million in the aggregate; (i) incurred any liability or obligation other
than certain general and administrative expenses not involving expenditures in
excess of $15 million in the aggregate; (j) agreed or otherwise committed,
whether in writing or otherwise, to do, or taken any action or omitted to take
any action that would result in, any of the foregoing; or (k) the Company has
not suffered a material adverse change in its operations or financial condition
since March 31, 2000 to the date of this Agreement.

               3.10 Tax Matters. All Tax Returns (including Tax Returns relating
to Estimated Tax and Information Returns and Reports ) required to be filed by
the Copany in any jurisdiction have been properly prepared and timely filed and
all Taxes upon the Company or upon any of the Company's properties, income or
franchises, which are shown to be due and payable in such Tax returns have been
paid except for such Taxes the payment of which is being contested by the
Company in good faith by appropriate proceedings and with respect to which the
Company has set aside on its books reserves deemed by it to be adequate and has
reflected such reserves in the Company Recent Balance Sheet or except where such
failure would not have a material adverse effect. There are no pending tax
examinations of or tax claims asserted against the Company or any assets or
properties of the Company which could adversely affect the Purchaser.

               "Tax" or "Taxes" means any tax, charge, fees, levy, duty, and
other similar governmental assessment, including, without limitation, net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits, license,
withholding, payroll, employment (including, without limitation, unemployment
insurance assessment), excise, goods and services tax, capital tax, business
tax, severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, whether federal, state, local or foreign,
any governmental fee or other like

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assessment or charge of any kind whatsoever, together with any interest, fine,
penalty, addition to tax or additional amount imposed by any Taxing Authority.

               "Tax Returns" mean reports, returns, and statements required to
be supplied to a Taxing Authority in connection with Taxes.

               "Taxing Authority" means a Governmental Authority responsible for
the imposition or collection of any Tax.

               3.11 Assets and Revenues. The Company is its own "ultimate parent
entity" as such term is defined in 16 C.F.R. Section 801.1(a)(3). The Company,
on a consolidated basis, does not (i) have assets having an aggregate book value
of $100 million or more based on its most recent regularly prepared balance
sheet or (ii) sales of $100 million or more in its most recent fiscal year. The
representation and warranty is made solely for the purpose of determining the
applicability to the transactions contemplated by this Agreement of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

               3.12 Full Disclosure. Neither this Agreement, nor any
representation or warranty contained in this Agreement, nor any other agreement
(including the Transaction Documents), exhibit, schedule, or certificate being
entered into or delivered pursuant hereto, when read as a whole, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained herein or therein not
misleading.

4.      Representations and Warranties of the Purchaser.

        In order to induce the Company to enter into this Agreement and to
perform its obligations hereunder, the Purchaser hereby represents and warrants
to the Company, at and as of the date of this Agreement and at and as of the
Closing Date, as follows:

        4.1 Organization. The Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.

        4.2 Authority. The Purchaser has all requisite corporate power and
authority to enter into this Agreement, to purchase and hold the Shares and to
consummate the other transactions to be consummated by the Purchaser
contemplated by this Agreement. The execution and delivery of this Agreement,
the purchase of the Shares and the consummation of the other transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of the Purchaser. This Agreement has been duly
executed and delivered by the Purchaser, and constitutes the valid and binding
obligation of the Purchaser, enforceable in accordance with its terms, except to
the extent limited by (i) the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium, fraudulent transfer or
other laws affecting or relating to the rights of creditors generally, (ii) the
rules governing the availability of specific performance, injunctive relief or
other equitable remedies and general principles of equity, regardless of whether
arising prior to, or after, the date hereof or considered

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in a proceeding in equity or at law, or (iii) the effect of federal and state
securities laws and principles of public policy on rights of indemnity and
contribution.

        4.3 No Conflict. The execution and delivery by the Purchaser of this
Agreement does not, and consummation of the transactions contemplated by this
Agreement will not conflict with, or result in any violation or breach of any
provision of, the charter documents of the Purchaser.

        4.4 Required Filings and Consents. No Consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to the Purchaser in connection with the
execution and delivery of this Agreement, the purchase of the Shares to be
purchased by the Purchaser or the consummation of the other transactions to be
consummated by the Purchaser contemplated hereby, except for such filings as may
be required under applicable federal, state and foreign securities and antitrust
laws, and such Consents, authorizations, filings, approvals and registrations
which, if not obtained or made, could not be expected to have a material adverse
effect on the Purchaser's ability to consummate the transactions contemplated
pursuant to this Agreement.

        4.5 Accredited Investor; Access to Company Information. The Purchaser is
an "accredited investor" as defined in Rule 501(a) under the Securities Act. The
Purchaser believes that it has received all the information it considers
necessary or appropriate for deciding whether to purchase the Shares. The
Purchaser further represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
Shares and the business, properties, prospects and financial condition of the
Company; provided, however, that the foregoing shall not diminish or detract
from the Purchaser's ability to rely upon any of the Company's representations
or warranties. The Purchaser 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 merits and risks of the investment
in the Shares. The Purchaser is not acquiring the Shares with a view towards
distribution in violation of the Securities Act, provided that, the Purchaser
may decide to sell some or all of the shares to a single transferee, as
discussed in Section 4.6.

        4.6 Restricted Stock. Purchaser understands that the Shares being
purchased hereunder are "restricted securities" under applicable U.S. federal
and state securities laws and that, pursuant to these laws, Purchaser must hold
the Shares unless and until 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. Purchaser acknowledges
that except as provided pursuant to the terms of the Amendment No. 1 to the
Amended and Restated Investors' Rights Agreement the Company has no obligation
to register or qualify the Shares for resale. Purchaser further acknowledges
that if an exemption from registration or qualification is available, including
without limitation any exemption that may be available pursuant to Rule 144 of
the Securities Act, it may be conditioned on various requirements including, but
not limited to, the time and manner of sale, the holding period for the Shares,
and requirements relating to the Company which are outside of Purchaser's
control, and which the Company is under no obligation and may not be able to
satisfy. Notwithstanding the foregoing, Purchaser has apprised

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the Company, and by execution and delivery of this Agreement, the Company hereby
acknowledges and consents that the Purchaser may decide to sell and assign some
or all the Shares to a single transferee immediately upon receipt by Purchaser
thereof. The Company further covenants to cause the Shares to be reregistered on
its books and records in the name of the transferee upon such sale by Purchaser
thereto. The Company further covenants and agrees that an opinion of counsel, as
required by the legend set forth in Section 4.7 below, shall not be required in
connection with such sale.

        4.7 Legends. Purchaser understands that the Shares, and any securities
issued in respect of or exchange for the Shares, may bear one or all of the
following legends:

               (a) "THE SHARES 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 SATISFACTORY TO THE PURCHASER 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.

        4.8 Corporate Securities Law. THE SALE OF THE SHARES THAT IS THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA. THE ISSUANCE OF SUCH SECURITIES OR THE
RECEIPT OF ANY PART OF THE ASSETS FOR SUCH SECURITIES PRIOR TO SUCH
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.

        4.9 No Hedging or Short Sales. Except as otherwise provided for in this
Agreement, Purchaser hereby agrees that from the date of this Agreement and
continuing through the first year anniversary of the date hereof, or such longer
period as required by any U.S. federal or state securities laws, Purchaser shall
not directly or indirectly engage in short sales, derivative transactions or any
similar hedging techniques or strategies involving any of the Shares.

        4.10 Brokers or Finders. The Purchaser has not employed any broker,
finder, consultant or other intermediary that would have a valid claim against
the Company for a fee or commission in connection with the transactions
contemplated hereby.

5. Conditions to the Obligations of the Purchaser. The obligations of the
Purchaser pursuant to Sections 1 and 2 of this Agreement are subject to the
fulfillment on or prior to the Closing

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Date of the following conditions, each of which may be waived in whole or part
by the Purchaser:

        5.1 Representations and Warranties. The representations and warranties
made by the Company pursuant to this Agreement shall have been true and correct
when made, and shall be true and correct on the Closing Date.

        5.2 Covenants. The Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.

        5.3 Closing Certificate. The President or Chief Financial Officer of the
Company shall deliver to the Purchaser at the Closing a certificate certifying
that the conditions specified in Sections 5.1 and 5.2 have been fulfilled, that
there shall have been no material adverse change in the business, operations,
properties, assets or financial condition of the Company since the date of this
Agreement and that the representations and warranties are true and correct as of
the Closing Date.

        5.4 No Injunction or Litigation. As of the Closing Date, there shall not
be any claim or judgment of any nature or type threatened, pending or made by or
before any Governmental Entity that questions or challenges the lawfulness of
the transactions contemplated by this Agreement under any law or regulation or
seeks to delay, restrain or prevent such transactions.

        5.5 Government Approvals. All Consents, approvals or authorizations of,
and declarations, filings or registrations with, all Governmental Entities
required for the consummation of the transactions contemplated in Sections 1 and
2 of this Agreement shall have been obtained or made on terms reasonably
satisfactory to the Purchaser and shall be in full force and effect.

        5.6 Legal Opinion. The Company shall have delivered to the Purchaser an
opinion of counsel, dated the Closing Date, substantially in the form of Exhibit
B hereto, except for the addition of standard qualifications of counsel.

        5.7 Nasdaq Listing. The Company shall have filed a Notification For
Listing of Additional Shares with Nasdaq covering the Shares.

        5.8 Asset Purchase Agreement. The Company, the Subsidiary and PetStore
shall have closed the transactions contemplated by the Asset Purchase Agreement.

        5.9 Hart-Scott Rodino Act. All applicable waiting periods under the HSR
Act shall have expired or early termination shall have been granted by both the
Federal Trade Commission and the Department of Justice.

        5.10 Certificate of Designation. If applicable in accordance with
Section 1.1, the Certificate of Designation shall have been filed with the
Secretary of State of the State of Delaware.

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        5.11 Amendment to Investors' Rights Agreement. The Company and the
requisite holders of the Company's Common Stock shall have executed Amendment
No. 1, and an executed original of the same shall have been delivered to the
Purchaser.

6. Conditions to the Company's Obligations. The obligation of the Company
pursuant to Sections 1 and 2 of this Agreement are subject to the fulfillment on
or prior to the Closing Date of each of the following conditions, each of which
may be waived in whole or part by the Company:

        6.1 Representations and Warranties. The representations and warranties
of the Purchaser pursuant to this Agreement shall have been true and correct
when made, and shall be true and correct on the Closing Date.

        6.2 Covenants. The Purchaser shall have performed all obligations and
conditions herein required to be performed or observed by the Purchaser on or
prior to the Closing Date.

        6.3 No Injunction or Litigation. As of the Closing Date, there shall not
be any claim or judgment of any nature or type threatened, pending or made by or
before any Governmental Entity that questions or challenges the lawfulness of
the transactions contemplated by this Agreement under any law or regulation or
seeks to delay, restrain or prevent such transactions.

        6.4 Government Approvals. All Consents, approvals or authorizations of,
and declarations, filings or registrations with, all Governmental Entities
required for the consummation of the transactions contemplated in Sections 1 and
2 of this Agreement shall have been obtained or made on terms reasonably
satisfactory to the Company and shall be in full force and effect.

        6.5 Asset Purchase Agreement. The Company, Subsidiary and PetStore shall
have closed the transactions contemplated by the Asset Purchase Agreement.

        6.6 Hart Scott Rodino Act. All applicable waiting periods under the HSR
Act shall have expired or early termination shall have been granted by both the
Federal Trade Commission and the Department of Justice.

        6.7 Certificate of Designation. If applicable in accordance with Section
1.1, the Certificate of Designation shall have been filed with the Secretary of
State of the State of Delaware.

        6.8 Amendment to Investors' Rights Agreement. The Company and the
requisite holders of the Company's Common Stock shall have executed Amendment
No. 1, and an executed original of the same shall have been delivered to
Purchaser.

                                      -11-
<PAGE>   12

7.      Certain Covenants.

        7.1 [*] In the event the Company [*] to [*] under this Agreement, the
Company shall include a [*] in its [*] and [*] to send to [*] in connection with
its next [*] of [*] of its [*] to [*] of [*] of the [*] of the [*] the Company's
[*]. The Company shall [*] such [*] to its [*] and shall [*] held by it [*] of
such [*].

        7.2 Nondisclosure. The Company and the Purchaser agree to protect the
Confidential Information (as defined below) of the other party from
misappropriation and unauthorized use or disclosure, and at a minimum, will take
precautions at least as great as those taken to protect its own confidential
information of a similar nature. Without limiting the foregoing, the Receiving
Party (as defined below) will: (a) use such Confidential Information solely for
the purposes for which it has been disclosed; and (b) disclose such Confidential
Information only to those of its employees, agents, consultants, and others who
have a need to know the same for the purpose of performing this Agreement and
who are informed of and agree to a duty of nondisclosure. The Receiving Party
may also disclose Confidential Information of the Disclosing Party (as defined
below) to the extent necessary to comply with applicable law or legal process,
provided that the Receiving Party uses reasonable efforts to give the Disclosing
Party prompt advance notice thereof. Upon request of the other party, each party
shall return to the other all materials, in any medium, which contain, embody,
reflect or reference all or any part of any Confidential Information of the
other party.

        For the purposes of this Section 7.2, the following terms have the
following meanings:

"CONFIDENTIAL INFORMATION" means non-public information and know-how of the
Disclosing Party which, by the nature of the circumstances surrounding
disclosure, ought in good faith to be treated as proprietary and/or
confidential, or which has been or is designated as proprietary and/or
confidential. Confidential Information does not include information that the
Receiving Party can show: (a) was known by the Receiving Party prior to
disclosure thereof by the Disclosing Party; (b) was in or entered the public
domain through no fault of the Receiving Party; (c) is independently developed
by the Receiving Party without reference to any Confidential Information of the
Disclosing Party; or (d) came into the possession of the Receiving Party in the
ordinary course of business from sources not owing a duty of confidentiality to
the Disclosing Party with respect to that information.

"DISCLOSING PARTY" means a party that discloses Confidential Information to the
other party in connection with this Agreement.

"RECEIVING PARTY" means a party that receives Confidential Information from the
other party in connection with this Agreement.

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -12-
<PAGE>   13

               7.3 Board Representation. In connection with the Asset Purchase
Agreement and the agreement of Purchaser to the transfer of certain material
agreements to the Company from PetStore, the Company hereby acknowledges that as
of the date of this Agreement (i) the authorized size of the Board of Directors
of the Company is five members, (ii) the members of the Board of Directors are
Julia L. Wainwright, John B. Balousek, Mark J. Britto and John R. Hummer, (iii)
there is one vacancy on the Company's Board of Directors, and (iv) the Company's
By-laws authorize Board members to fill vacancies on the Board of Directors
without shareholder approval. The Company hereby agrees that on the Closing
Date, the Company's Board of Directors will fill the vacancy on the Board with
the Purchaser's designee who shall be Michela English or such other reasonable
candidate (who shall be at the level of senior vice president of Purchaser or
higher) designated by the Purchaser ("Purchaser Designee") and that the
Purchaser Designee shall have all the rights associated with being a Board
member, including but not limited to, the right to vote at meetings of the
Board; and that at the Company's next annual meeting of shareholders, the
Purchaser Designee shall be included in the Company's slate of nominees for
election to the Board at the meeting of shareholders. The Company will also
obtain prior to Closing a voting agreement reasonably satisfactory to Purchaser
and effective as of the Closing from a majority of the holders of its voting
stock (determined based on the number of shares of voting stock outstanding
after Closing) under which such holders will agree to vote all shares of the
Company's voting stock held by them at each annual and special meeting at which
directors of the Company are to be elected to appoint the Purchaser Designee to
the Company's Board of Directors. The voting agreement will terminate on the
earlier of (i) the date on which the Tenancy and Promotion Agreement entered
into between the Company and Purchaser as of the same date as this Agreement is
terminated, (ii) the date on which Purchaser has transferred, sold or otherwise
disposed of more than twenty-five percent (25%) of the shares of Pets.com Common
Stock originally acquired by it from Petstore.com, Inc. upon distribution, if
any, of those shares of Pets.com Common Stock received by Petstore.com under the
Asset Purchase Agreement, excluding for the purposes of this calculation any
shares Purchaser has pledged to Imperial Creditcorp, Inc.under a guarantee
agreement, or (iii) the consummation of the sale of all or substantially all of
the Company's assets or a merger, reorganization or other recapitalization or
transaction or series of related transactions in which the Company's
stockholders prior to such transaction hold less than 50% of the voting power.

               7.4 Confidentiality; Publicity. Neither the Company nor the
Purchaser shall issue any press release or other public announcement regarding,
or otherwise disclose, this Agreement or the transactions contemplated herein,
or make any filing of this Agreement or other agreements relating to the
transactions contemplated herein, without the written consent of the other,
which consent will not be unreasonably withheld; provided, however, that if a
party is required by applicable law to provide public disclosure of this
Agreement or the transactions contemplated herein, such party shall use all
reasonable efforts to coordinate the disclosure with the other party before
issuance, including, but not limited to the submission to the Securities
Exchange Commission (and any other applicable regulatory or judicial authority)
of an application for confidential treatment of certain terms (which terms shall
be agreed upon by the Purchaser and the Company) of this Agreement. Each party
shall provide to the other for review a copy of any proposed disclosure of this
Agreement or its terms and any application for confidential treatment at least
five (5) business days before any such disclosure or application is made and to
comply

                                      -13-
<PAGE>   14

with all reasonable requests from the other party to minimize the extent and
scope of any such disclosure.

        7.5 Covenants to Satisfy Conditions. Each of the Company and the
Purchaser shall use commercially reasonable efforts to satisfy or cause to be
satisfied all of the conditions precedent to the other party's obligations that
are set forth in Section 5 or 6, as the case may be.

        7.6 Further Assurances. Each party agrees from time to time to do and
perform such other and future acts and execute and deliver any and all such
other instruments as may be required by law or reasonably requested by the other
party to establish, maintain or protect the rights and remedies of the
requesting party or to carry out and effect the intent and purpose of this
Agreement.

8.      Miscellaneous.

        8.1 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California applicable to contracts
executed in and to be performed in that state.

        8.2 Survival. The representations and warranties made herein shall
survive until the first anniversary of the Closing. The covenants and agreements
made herein shall survive the Closing in accordance with their terms.

        8.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto. It is expressly acknowledged that the Purchaser may assign its
rights hereunder to any affiliate (as such term is defined in Rule 144 of the
Securities Act) thereof provided such affiliates agrees in writing to be bound
by the terms and conditions of this Agreement.

        8.4 Entire Agreement. This Agreement and the other documents referred to
herein constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.

        8.5 Amendment; Waiver. Any term of this Agreement may be amended and the
observance of any term 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 Purchaser.

        8.6 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any of the Shares, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy of such holder 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 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 holder of any

                                      -14-
<PAGE>   15

breach or default under this Agreement, or any waiver on the part of any holder
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
holder, shall be cumulative and not alternative.

        8.7 Notices and Other Communications. Every notice or other
communication required or contemplated by this Agreement by either party shall
be delivered either by (i) personal delivery, (ii) postage prepaid return
receipt requested registered or certified mail or the equivalent of registered
or certified mail under the laws of the country where mailed, (iii) nationally
recognized overnight courier, such as Federal Express or UPS, or (iv) facsimile
with confirmation of successful transmission and with a confirmation copy sent
simultaneously by postage prepaid, return receipt requested, registered or
certified mail, in each case addressed to the Company or the Purchaser as the
case may be at the following address:

To the Company:          Pets.com, Inc.
                         435 Brannan Street
                         San Francisco, CA  94107
                         Attn:  Chief Executive Officer
                         Facsimile: (415) 222-9998

With copies to:          Venture Law Group
                         2775 Sand Hill Road
                         Menlo Park, CA  94025
                         Attn:  John V. Bautista
                         Facsimile:  650-233-8386

To the Purchaser:        Discovery.com, Inc.
                         7700 Wisconsin Avenue
                         Bethesda, MD  20814
                         Attn: Michela English
                         Facsimile:  301-986-4971

With a copy to:          Greenberg Traurig, LLP
                         200 Park Avenue
                         New York, NY  10166
                         Attn:  Alayne Serle, Esq.
                         Facsimile:  212-801-6400

or at such other address as the intended recipient previously shall have
designated by written notice to the other party (with copies to counsel as may
be indicated on the signature page). Notice by registered or certified mail
shall be effective on the date it is officially recorded as delivered to the
intended recipient by return receipt or equivalent, and in the absence of such
record of delivery, the effective date shall be the fifth business day after it
was deposited in the mail. All notices delivered in person or sent by courier
shall be effective on the date of personal

                                      -15-
<PAGE>   16

delivery; notices delivered by facsimile with confirmation of successful
transmission and with simultaneous confirmation copy by registered or certified
mail shall be effective on the date sent. Notice not given in writing shall be
effective only if acknowledged in writing by a duly authorized representative of
the party to whom it was given.

        8.8 Specific Performance. Each of the parties hereto acknowledges and
agrees that the other party hereto would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
hereto agrees the other party hereto will be entitled to an injunction to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions of this Agreement in any competent
court having jurisdiction over the parties, in addition to any other remedy to
which they might be entitled at law or in equity. In any such action
specifically to enforce any such term or provision of this Agreement, the
parties hereby waive any claim or defense therein that an adequate remedy at law
or in damages exists.

        8.9 Severability of this Agreement. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. Furthermore the court shall have the power to replace the
invalid or unenforceable part or provision with a provision that accomplishes,
to the extent possible, the original business purpose of such part or provision
in a valid and enforceable manner. Such replacement shall apply only with
respect to the particular jurisdiction in which the adjudication is made.

        8.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. Execution and delivery of this Agreement by
exchange of facsimile copies bearing the facsimile signature of a party hereto
shall constitute a valid and binding execution and delivery of this Agreement by
such party. Such facsimile copies shall constitute enforceable original
documents.

        8.11 No Third-Party Rights. Nothing in this Agreement is intended, nor
shall be construed, to confer upon any Person or entity other than the parties
and their respective successors and assigns any right or remedy under or by
reason of this Agreement, except as expressly provided in this Agreement;
provided, that the Company hereby confirms and agrees that the representations
and warranties made by the Company herein are made as well for the benefit of,
and may be relied on by, the single transferee to whom Purchaser may decide to
sell and assign some or all of the Shares, as discussed in Section 4.6.

        8.12 No Agency, Etc. None of the provisions of this Agreement shall be
construed to mean that any party is appointed or is in any way authorized to act
as an agent of any other party. This Agreement does not constitute, create, give
effect to, or otherwise recognize a joint venture, partnership, or formal
business organization of any kind.

        8.13 Construction of Agreement. This Agreement has been negotiated by
the parties and their attorneys, and the language hereof shall not be construed
for or against any party. The

                                      -16-
<PAGE>   17

titles and headings herein are for reference purposes only and shall not in any
manner limit the construction of this Agreement, which shall be considered as a
whole.

        8.14 Termination. This Agreement may be terminated as follows:

               (a) The Purchaser may terminate this Agreement in the event that
the conditions set forth in Section 5 have not been satisfied or waived on or
before July 31, 2000 through no fault of the Purchaser;

               (b) The Company may terminate this Agreement in the event that
the conditions set forth in Section 6 have not been satisfied or waived on or
before July 31, 2000 through no fault of the Company;

        No termination pursuant to this Section 8.14 shall relieve any party of
liability for breach of this Agreement prior to such termination.

        Either the Company or the Purchaser may terminate this Agreement if the
other (a) has a receiver or administrative receiver appointed for it or over its
undertakings or assets, (b) passes a resolution for winding up or a court of
competent jurisdiction makes an order to that effect and such order is not
discharged within ninety (90) days, (c) enters into any voluntary arrangement
with its creditors for the benefit of its creditors, (d) becomes subject to an
administration order, or (e) ceases to carry on its business.

        8.15 Attorneys' Fees. If any action or proceeding shall be commenced to
enforce this Agreement or any right arising in connection with this Agreement,
the prevailing party in such action or proceeding shall be entitled to recover
from the other party, the reasonable attorneys' fees, costs and expenses
incurred by such prevailing party in connection with such action or proceeding
or negotiation to avoid such action or proceeding.

                            [Signature Page Follows]

                                      -17-
<PAGE>   18

IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement
as of the date first set forth above.

                                        PETS.COM, INC.

                                        By:     /s/  Paul Manca
                                           -------------------------------------

                                        Name:        Paul Manca
                                             -----------------------------------

                                        Title:       Chief Financial Officer
                                              ----------------------------------

                                        DISCOVERY.COM, INC.

                                        By:     /s/  Michela English
                                           -------------------------------------

                                        Name:        Michela English
                                             -----------------------------------

                                        Title:       President and COO
                                              ----------------------------------<PAGE>   1

                                                                   EXHIBIT 10.41

                         TENANCY AND PROMOTION AGREEMENT

        TENANCY AND PROMOTION AGREEMENT, dated as of June 12, 2000 (this
"Agreement"), by and between Discovery.com, Inc., a Delaware corporation with
offices at 7700 Wisconsin Avenue, Bethesda, Maryland, 20813 ("DCOM") and
Pets.com, Inc., a Delaware corporation with offices at 435 Brannan Street, Suite
100, San Francisco, California 94107 (the "Company").

                                 R E C I T A L S

        WHEREAS, the Company is an online retailer of pet products, information
and resources;

        WHEREAS, Petstore.com, Inc., a Delaware corporation ("Petstore"), and
the Company are parties to that certain Asset Purchase Agreement dated of even
date herewith (the "Purchase Agreement"), pursuant to which the Company is
purchasing the assets of Petstore (the "Purchase");

        WHEREAS, on April 6, 2000 DCOM terminated that certain (a) Content and
Trademark Sublicense and Services Agreement between DCOM and Petstore, dated as
of October 27, 1999, and (b) Advertising and Promotion Agreement between DCOM
and Petstore, dated as of October 27, 1999; and

        WHEREAS, DCOM and Company have agreed, strictly conditioned and
effective solely upon the closing of the Purchase in accordance with the
Purchase Agreement, to enter into this Tenancy and Promotion Agreement.

        NOW, THEREFORE, in consideration of the foregoing, and for other
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:

        1. GENERAL DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:

               1.1 "Ad Placement" shall have the meaning set forth in Paragraph
2.2(b).

               1.2 "Ad Spots" shall have the meaning set forth in Paragraph
2.2(a)(i).

               1.3 "Affiliate" shall mean any Person that directly or indirectly
(through one or more intermediaries) controls, is controlled by, or is under
common control with such Person concerned.

<PAGE>   2

               1.4 "Animal Planet Network" shall mean the television network
owned by an affiliate of DCOM and currently known as "Animal Planet."

               1.5 "Co-branded Ads" shall have the meaning set forth in
Paragraph 2.2(a)(ii).

               1.6 "Company Competitors" shall mean the following entities: [*]
and [*]. The exclusivity that accrues to the Company hereunder with respect to
the Company Competitors shall also apply with respect to wholly-owned
subsidiaries and successors of the Company Competitors, only to the extent that
substantially all of the retail pet supplies business of a Company Competitor
accrues to such subsidiary or successor and/or that the retail pet supplies
business of such a subsidiary or successor is the principal business operated by
such subsidiary or successor. (Example 1: if Bloomingdale's buys [*] pet home
furnishings business, Bloomingdale's will not be deemed a successor because it
has not purchased substantially all of [*] retail pet supplies business. Example
2: if Procter & Gamble acquires [*] and is therefore a "successor" of [*], P&G
does not become a Company Competitor hereunder, because the retail sale of pet
supplies is not P&G's principal business.) Upon written notice to DCOM, the
Company may from time to time substitute in the current list of Company
Competitors other entities for whom the retail sale of pet supplies constitutes
at least 20 percent of the total revenues of such entity, subject to approval of
DCOM, which such approval shall not be unreasonably withheld.

               "Confidential Information" shall have the meaning set forth in
Paragraph 9.12.

               1.8 "Content" shall mean the written and graphical content
provided by the Company to DCOM relating to pets and animals and as further
described in Attachment E.

               1.9 "Contract Year" shall mean each annual period during the Term
beginning on the date of this Agreement and ending on the anniversary of such
date.

               1.10 "Discovery Networks" shall mean the following Discovery
Communications, Inc. network properties: Discovery Channel, TLC, Animal Planet,
Travel Channel, Discovery Health Channel and Digital Networks.

               1.11 "Exclusivity Period" shall have the meaning set forth in
Paragraph 4.1.

               1.12 "Indemnified Party" shall have the meaning set forth in
Paragraph 7.2.

               1.13 "Indemnifying Party" shall have the meaning set forth in
Paragraph 7.2.

               1.14 "Internet" shall mean a global network of interconnected
computer networks, each using the Transmission Control Protocol/Internet
Protocol and/or such other standard network interconnection protocols as may be
adopted from time to time, which is used to transmit content that is directly or
indirectly delivered to a computer or other digital electronic device for
display to an end-user, whether such content is delivered through on-line
browsers,

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -2-
<PAGE>   3

off-line browsers, or through "push" technology, electronic mail, broadband
distribution, satellite, wireless or otherwise.

               1.15 "Internet Site" or "website" shall mean any site or service
delivering content on or through the Internet, including, without limitation,
any on-line service such as America Online, CompuServe, Prodigy and the
Microsoft Network.

               1.16 "Merger" shall have the meaning set forth in the Recitals.

               1.17 "Person" shall mean any individual, partnership, corporation
or organized group of persons, including agencies and other instrumentalities of
governments and states.

               1.18 "Petstore" shall have the meaning set forth in the Recitals.

               1.19 "Prevailing E-commerce Tenancy Market Rate" shall have the
meaning set forth in Paragraph 4.3.

               1.20 "Prevailing Market Rate" shall have the meaning set forth in
Paragraph 2.2(b).

               1.21 "Promotion" shall have the meaning set forth in Paragraph
2.1.

               1.22 "Share Price Floor" shall have the meaning set forth in
Paragraph 9.1.

               1.23 "Tenancy Period" shall have the meaning set forth in
Paragraph 4.1.

               1.24 "Term" shall have the meaning set forth in Paragraph 3.

               1.25 "Website" shall mean the Company's website Pets.com
accessible through the URL http://www.pets.com, and any successors thereof
subject to Section 9.1 hereof.

        2.     COMMITMENT.

               2.1 DCOM Commitment of Advertising and Promotion.

                      DCOM hereby covenants and commits to deliver to the
Company advertising time and related promotion of the Website (collectively,
"Promotion"), in an aggregate value of [*] per Contract Year of the Term. The
timing and placement of promotion of the Website shall be subject to
availability and shall be at the reasonable discretion of DCOM. The actual costs
incurred by DCOM or paid by DCOM to third parties for producing any
advertisements or promotions, if any are incurred by DCOM, shall be at a
mutually agreed upon (between DCOM and the Company) written rate and shall be,
as agreed upon in writing by the parties, either (i) reimbursed by the Company
on a fairly allocated basis taking into consideration the overall message of the
advertisement and the portion thereof directed toward the promotion of the
Website, or (ii) shall be applied on a fairly allocated basis to the aggregate
value of the

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -3-
<PAGE>   4

Promotion delivered to the Company by DCOM pursuant to this Agreement. DCOM will
not incur any such production costs without the prior written approval of
Company, provided Company may not withhold approval of such costs solely in an
effort to cause DCOM to breach its obligations under this Agreement. It is
understood that such production costs will be incurred by DCOM only to the
extent that the Company and DCOM agree to develop new creative for either the
Co-branded Ads or the Ad Spots or the parties agree to integrate the Pets.com
brand, trademarks or other messaging into the Co-branded Ads in a new or
non-traditional format.

               2.2 Delivery of Advertising and Promotion.

                      (a) The Promotion to be delivered pursuant to this
Agreement shall be delivered as follows:

                             (i) Approximately [*] per Contract Year in
Company-branded interstitial advertising spots for Company and the Website shall
be provided on the Discovery Networks (the "Ad Spots"). The value of each such
Ad Spot shall be determined based on the Prevailing Market Rate (as defined
below) for such Promotions. Subject to the terms and conditions of the Discovery
Networks' standard network sponsorship contracts and any other standard
advertising terms and conditions, the content of such Ad Spots shall be at the
discretion of the Company. Determinations regarding placement of the Ad Spots
shall be subject to availability of inventory and to DCOM's reasonable
discretion.

                             (ii) Approximately [*] per Contract Year in
co-branded interstitial advertising (the "Co-branded Ads") shall be provided on
the Discovery Networks and/or other broadcast media outlets, including without
limitation, broadcast or cable television and radio. The Co-branded Ads shall be
produced by DCOM and shall promote the pets content and commerce portion of the
Discovery.com website, including promotion of the Company as the provider of pet
supplies. Each Co-branded Ad shall be valued at [*] of the Prevailing Market
Rate for such Promotion. The content and placement of the Co-branded Ads shall
be at the sole discretion of DCOM.

                      (b) The value of all Promotion provided hereunder shall be
charged at the "Prevailing Market Rate" for such Promotion, excluding barter,
which will be the market rate less any agency or other commissions (where
applicable) for spots purchased on the Discovery Networks and such other
broadcast stations, networks, cable networks, radio stations or print media
during the time period in which the Promotion occurs. With respect to the
Promotion delivered on the Discovery Networks and DCOM's websites, DCOM will use
commercially reasonable best efforts to obtain marketplace rates at least as
favorable as those provided to third parties making comparable purchases. DCOM
will provide the Company within thirty (30) days after the end of each Contract
Year a statement, certified by an officer of DCOM, summarizing the value of the
Promotion DCOM has delivered for the Website (the "Ad Placements") during such
Contract Year. Each such report shall summarize the Ad Placements delivered over
the

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -4-
<PAGE>   5

previous Contract Year, the Prevailing Market Rate for such Promotion and the
total value of the Ad Placements provided during such Contract Year. The
Prevailing Market Rate of any particular Ad Placement will be demonstrated by
DCOM upon the Company's request, provided such requests shall not be of an
unreasonable frequency or require an unreasonable level of detail.

               2.3 Subject to availability of inventory (and in the event
designated inventory is unavailable, substitution of substantially equivalent
inventory), the interstitial advertising plan for the first Contract Year is
attached hereto as Attachment A. The parties acknowledge and agree that the
information contained in Attachment A is proprietary and confidential and the
parties agree to maintain it in strict confidence, provided however, the Company
may publish Attachment A to the extent explicitly required by a governmental
agency, in which such event, the Company shall promptly notify DCOM, and the
parties shall cooperate to obtain as much confidential treatment as possible for
Attachment A under the circumstances.

               2.4 Each party agrees to designate and maintain a primary point
of contact regarding interstitial advertising under this Agreement within 30
days of execution of this Agreement.

               2.5 The parties agree to discuss the following additional mutual
promotional initiatives, it being understood that neither party is obligated to
implement any such promotional initiative: e-mail offers to the parties'
respective customer lists, catalog inserts in the Discovery Channel Catalog and
the Company's magazine, in-store promotions, inclusion of in-box promotions in
DCOM and Company boxes and joint sponsorships.

        3.     TERM.

        The term of this Agreement (the "Term") shall begin only upon the
closing of the Purchase provided such closing takes place on or before July 31,
2000 and shall continue in full force and effect for a period of four (4)
consecutive years, unless this Agreement is terminated earlier in accordance
with the terms and conditions stated herein. In the event the closing of the
Purchase does not take place on or before July 31, 2000, or in the event the
Purchase Agreement is terminated in accordance with its terms, this Agreement
shall automatically terminate and the parties shall have no further liability or
obligation to one another in any respect.

        4.     EXCLUSIVE PET SUPPLIES E-COMMERCE TENANCY.

               4.1 DCOM shall provide the Company with a one-year exclusive pet
supplies tenancy (the "Exclusivity Period") pursuant to which the Company shall
be the exclusive retail provider of pet supplies on the websites Discovery.com
and AnimalPlanet.com, with three (3) twelve (12)-month renewal options,
exercisable at the Company's option, upon written notice to DCOM at least ninety
days prior to the end of the preceding twelve (12) month period (the Exclusivity
Period, as may be extended by the Company, is referred to as the "Tenancy
Period"). DCOM shall not include advertisements (advertisements being defined as
buttons or banner advertisements), branded content or promotions (promotions
being defined as gift-with-purchases, dollar- or percentage-off discounts and
free give-aways) of any Company Competitor

                                      -5-
<PAGE>   6

on the [*] during the Tenancy Period or on the [*] under (but apart from) the
Discovery.com web portal solely during the first year of the Term; provided,
however, that the foregoing prohibition shall not apply to (a) run-of-site
banner advertisements of Company Competitors or (b) sponsorships of
network-related programming or content areas by Company Competitors.

               4.2 Except as explicitly provided in Section 4.1, it is
understood and agreed that nothing contained herein shall preclude or in any way
limit DCOM or its affiliated entities, including without limitation the
Discovery Networks, from accepting paid advertising or sponsorships from any
third party advertiser whatsoever, on any media of DCOM or its affiliated
entities. For purposes of the exclusivity described in Section 4.1 above, it is
understood that DCOM may merchandise and sell on Discovery.com or
AnimalPlanet.com animal and pet related: books, videos, clothing, merchandise or
novelty items, including but not limited to such items that contain Discovery
television network or program related logos, trademarks or slogans (for example,
pet training videos and books, Animal Planet Sports frisbees or Travel Channel
pet carriers), provided, however, that such merchandise shall not promote, or
contain branding of, any Company Competitor except to the extent any such item
also contains a trademark or logo of DCOM or its parent or affiliates. Such
animal or pet-related sales by DCOM or its contractors/partners shall be
incidental, i.e., not the principal line of products offered in any area of
Discovery.com or AnimalPlanet.com. The Company acknowledges and agrees that one
of the services provided by Discovery.com, currently in the Web Express area, is
to identify and provide links to other leading websites, including pet
e-commerce sites.

               4.3 The tenancy payment during the first Contract Year will be at
a [*] discount off the "Prevailing E-commerce Tenancy Market Rate" for such
tenancy. The tenancy payment in years [*] of the Tenancy Period, if the
Exclusivity Period is extended by the Company pursuant to Section 4.1, will be
as follows:

                      [*]

               The "Prevailing E-commerce Tenancy Market Rate" as used in this
paragraph shall be the then-prevailing CPM market rate for the actual number of
impressions delivered (subject to the cap described below). The tenancy payment
in years two through four shall be made annually within 30 days of the end of
the applicable Contract Year based on the actual number of impressions delivered
during the preceding 12-month period. The tenancy payment in years two through
four will be capped at the then-prevailing CPM market rate multiplied by the
number of projected impressions set forth in the agreed marketing plan for each
upcoming Contract Year as specified in Section 4.4 below, discounted as
described above in this Section 4.3.

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -6-
<PAGE>   7

               4.4 During the first Contract Year, DCOM will place promotional
buttons, text links and product promotions throughout Discovery.com and
AnimalPlanet.com as set forth in Attachment B. The parties acknowledge and agree
that the information contained in Attachment B is proprietary and confidential
and the parties agree to maintain it in strict confidence, provided however, the
Company may publish Attachment B to the extent explicitly required by a
governmental agency, in which such event, the Company shall promptly notify
DCOM, and the parties shall cooperate to obtain as much confidential treatment
as possible for Attachment B under the circumstances. The Company acknowledges
and agrees that the specific form, placement and positioning of such buttons,
text links and product promotions may be subject to change, such modifications
to be in DCOM's reasonable discretion, provided that such changes are made in
consultation with the Company and that at any given time during the Tenancy
Period, the volume and configuration of such promotional buttons, text links and
product promotions remain comparable in scope to those listed in Exhibit B. At
least 120 days prior to the end of each Contract Year, DCOM will provide the
Company with a proposed online marketing plan for the upcoming Contract Year.
The parties will negotiate in good faith with respect to such online marketing
plan for the upcoming Contract Year with the goal of finalizing such marketing
plan prior to the latest date by which the Company must exercise its right to
extend the Exclusivity Period for an additional year under Section 4.1, it being
understood that the scope of the proposed online marketing plan for the [*]
Contract Years will be at least as broad in scope as the plan attached hereto as
Exhibit B. The parties acknowledge and agree that the ultimate decisions with
respect to general website design and layout and the specific form, placement
and positioning of the online Company promotions hereunder shall be determined
by DCOM in its reasonable discretion in accordance herewith. In the event
promotional inventory more desirable than the promotional inventory set forth in
the online marketing plan for any Contract Year becomes generally available on
Discovery.com and AnimalPlanet.com, DCOM will consult in good faith with the
Company regarding an opportunity to substitute such promotional inventory.

               4.5 During the Tenancy Period, the Company shall be included as a
branded department [*], appearing throughout Discovery.com. While DCOM may in
its sole discretion modify the placement of the [*] box throughout Discovery.com
and this placement will be subject to change over time, the [*] box currently
has the following placements: [*].

               4.6 DCOM currently anticipates that the [*], including a branded
partner link, will also be added, at DCOM's sole discretion, to other prominent
areas of Discovery.com including the: [*].

               4.7 The promotions set forth in Exhibit B will generally direct
users directly to the Website (except that the unbranded "pets" tab will direct
users to the AnimalPlanet.com website where the Company will have a branded
presence), provided however, the parties agree that DCOM may frame the Website
displaying the top hat and bottom hat navigational bars of

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -7-
<PAGE>   8

the Discovery.com website when end-users click-through the Company promotions on
Discovery.com to the Website. In addition, with respect to specific product
offers that have been integrated into Discovery.com (including without
limitation AnimalPlanet.com) content pages by mutual agreement of the parties,
DCOM may in its sole discretion create and host bridge pages, product pages or
special offer pages (to be shown to the Company in advance of transmission to
the public) to which the above-described links will direct users (the "Bridge
Pages").

               4.8 Third-party advertising will not be sold on the Bridge Pages
unless and until such Bridge Pages account for at least 5 percent of the total
page views on Discovery.com, in which such event DCOM shall have the sole right
to sell and serve all advertising on the Bridge Pages, provided, however, that
no advertising from a Company Competitor will run on such Bridge Pages except
for any run-of-site banners. All page views on the Bridge Pages shall be
attributed to DCOM.

               4.9 Each party agrees to designate and maintain a primary point
of contact regarding online promotion under this Agreement within 30 days of
execution of this Agreement.

        5.     OBLIGATIONS OF THE COMPANY.

               5.1 User Data. During the Tenancy Period, the Company shall
provide DCOM with all available aggregate data regarding customers driven to the
Website from Discovery.com (including without limitation AnimalPlanet.com). Such
aggregate data shall include the total number of purchasers and the items
purchased and, to the extent such information is gathered by the Company,
information regarding products and services purchased by such users and
demographic information, such as age, gender, education level, survey and
promotion responses and any other information concerning such users as may be
provided by the Company to any other third party. The Company shall further
exert commercially reasonable efforts during the Tenancy Period to implement an
opt-in option for users driven to the Website from Discovery.com (including
without limitation AnimalPlanet.com) whereby such users would be given the
option of allowing the Company to provide their personally identifying
information to DCOM, which such information (including customer name, e-mail
address, street address, survey data and any other data provided by such user)
shall be jointly owned by DCOM and the Company, and the Company shall deliver
such jointly-owned data on a quarterly basis to DCOM during the Tenancy Period.
The Company shall also [*] upon [*] per [*] during the Tenancy Period to all of
the [*] to the [*] from Discovery.com (including without limitation
AnimalPlanet.com), such [*] to be [*] in DCOM's [*] as to [*], provided however,
that DCOM [*] with the Company with respect to the [*] of such [*] and that any
such [*] DCOM desires to [*] between [*] during any [*] shall be [*] only upon
the [*] of the parties. The Company further agrees that if during the Tenancy
Period the Company amends its privacy policy such that personally identifying
customer data of users of the Website could be provided to a third party, or if
the Company provides any such data to any third party, it will also provide such
data to the same extent to DCOM hereunder. DCOM shall own and have rights to use
customer data of customers driven to the Website from Discovery.com and of
customers who opt in to data

                                      -8-
<PAGE>   9

disclosure pursuant to this Section 5.1 to the same extent as the Company
currently or in the future may agree with respect to such ownership and use
rights to comparable user data for any third party.

               5.2 [*] The Company acknowledges that DCOM is in the process of
creating an [*] that will enable users of Discovery.com to make purchases [*].
The Company agrees to take reasonable steps to implement Discovery.com's [*]
subject to satisfactory technology discussions and review by the Company.

               5.3 Customer Service and Order Fulfillment. The Company shall be
solely responsible for (a) processing and fulfilling all orders made through the
Website, (b) all accounting with respect to such orders, and (c) all customer
service and support with respect to such orders, purchases and returns. The
Company shall provide all of the foregoing services at a very high level of
quality consistent with the Discovery and Animal Planet reputation. The Company
is and shall be solely responsible for the security of any transactions
initiated within the Website. During the Term, the Company shall achieve and
maintain the performance, customer service levels, site reliability requirements
and order fulfillment rates set forth in Attachment C, attached hereto and
incorporated by reference. During the Tenancy Period, DCOM shall achieve and
maintain the site reliability requirements set forth in Attachment D, attached
hereto and incorporated by reference. The Company shall not override the browser
back button functionality to prevent users who link to the Website from
Discovery.com (including without limitation AnimalPlanet.com) from returning to
Discovery.com.

               5.4 Company Content.

                      (a) The Company shall deliver to DCOM the Content
described in Attachment E on a regular basis throughout the Tenancy Period in
accordance herewith. The Company will deliver the Content to DCOM in HTML format
or in such other electronic format as may be mutually agreed, via modem or
Internet access (e.g. Internet ftp or Internet e-mail). The initial delivery of
Content hereunder shall include all items specifically listed on Attachment E
and shall be made by the Company no later than July 31, 2000. The Company will
provide additional Content and update existing Content consistent with the scope
of Content described in Attachment E from time to time during the Tenancy
Period. The Company shall cooperate and assist DCOM by promptly responding to
complaints regarding the Content.

                      (b) DCOM shall integrate the Content into Discovery.com
and AnimalPlanet.com so that it reflects the design, look and feel of the
site/pages where the Content is being integrated, and DCOM shall host the
Content. DCOM shall have the right to edit and make technical and other
alterations to the Content provided that DCOM shall not alter the substantive
meaning of any such Content, except in the event DCOM determines that such
Content requires such substantive modification in order to be accurate, in which
event, DCOM shall notify the Company of such modification. The decision to use
or transmit, the frequency of

* CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                      -9-
<PAGE>   10

transmission and actual placement of the Content shall be at the sole discretion
of DCOM, and DCOM shall have sole editorial control over Discovery.com,
AnimalPlanet.com and DCOM's affiliated websites, including the right to approve
any and all Content displayed on Discovery.com (including without limitation
AnimalPlanet.com) in its sole discretion. DCOM shall post a static textual
attribution to the Company at the top-level page where Content is displayed on
Discovery.com and a dynamic link textual attribution at the lowest-level page or
end of such item of Content. (For example, an article provided to DCOM by the
Company hereunder would carry a static textual attribution at the beginning of
the article on Discovery.com, as well as a dynamic "Find Out More" link at the
end of such article.) Such link would direct users to the Website.

                      (c) Pageviews of the Content on Discovery.com and
AnimalPlanet.com shall be attributed to DCOM, and DCOM shall have the right to
sell all advertising, serve all advertising and retain all revenues earned from
advertising on such pages. DCOM will not place or accept advertisements from
Company Competitors on pages of Discovery.com or AnimalPlanet.com containing
Company Content, provided however that such restriction shall not apply to (a)
run-of-site banner advertisements of Company Competitors or (b) sponsorships of
network-related programming or content areas by Company Competitors.

                      (d) The parties shall each promptly inform the other party
of any material claims that arise with respect to the Content, and provide to
the other party all information in its possession pertaining to such claim.

                      (e) DCOM shall have the right to utilize synopses,
excerpts, headlines or teasers from the Content, for the sole purpose of
advertising, promoting or publicizing the Content, DCOM or Discovery.com
(including AnimalPlanet.com) worldwide, in any media, it being understood that
this promotional right shall not be construed as a right on the part of DCOM to
sublicense the Content to third parties for uses not explicitly set forth in
this Agreement.

        6.     LICENSES.

               6.1 Subject to the terms and conditions of this Agreement, the
Company hereby grants to DCOM and its affiliated entities, including without
limitation Discovery Networks, a fully-paid, worldwide (to the extent necessary
to implement this Agreement), limited, non-exclusive, non-transferable right and
license, without right to sub-license, to use, reproduce, incorporate,
integrate, transmit and distribute the Company's trade names, trade dress, and
trademarks solely as is necessary to deliver the advertising and promotion in
accordance with the terms of this Agreement during the Term. Except with respect
to the Co-branded Ads, the Company shall have the right to approve in advance
any such use by DCOM of such intellectual property, and the right to prohibit
any improper use of such intellectual property if the same occurs. With respect
to the Co-branded Ads, the Company shall approve the appearance of its name
and/or logo and such appearance shall be deemed approved for subsequent
Co-branded Ads until such time as the Company may wish to change the appearance
of such name or logo, in which such case adequate notice shall be provided to
DCOM. The

                                      -10-
<PAGE>   11

Company may not withhold approval of the use of its intellectual property solely
in an effort to cause DCOM to breach its obligations under this Agreement. DCOM
acknowledges that, except as expressly set forth above, it may not use the
names, logos, trademarks or other intellectual property of Company and its
Affiliates without the Company's prior written consent.

               6.2 Subject to the terms and conditions of this Agreement, the
Company hereby grants to DCOM and its affiliated entities during the Tenancy
Period, a fully-paid, worldwide, non-exclusive, right and license, without the
right to sublicense, to use, reproduce, incorporate, integrate and distribute on
the web portal Discovery.com (including without limitation AnimalPlanet.com) the
Content listed on Attachment E, attached hereto and incorporated by reference,
and a license and right to use Company's trade names, trade dress, and
trademarks as reasonably necessary with respect to the display and use of the
Content in accordance with the terms of this Agreement. The Company also grants
to DCOM and its affiliated entities during the Tenancy Period, a fully-paid,
worldwide, non-exclusive, right and license, without the right to sublicense, to
use, reproduce, incorporate, integrate and distribute synopses, excerpts,
headlines or teasers from the Content, for the sole purpose of advertising,
promoting or publicizing the Content, DCOM or Discovery.com (including
AnimalPlanet.com) worldwide, in any media in accordance with Section 5.4(e)
hereof.

               6.3 Neither party shall gain any right, title or interest in or
to the other party's intellectual property by virtue of these limited licenses
and any use thereof and all good will inuring to such intellectual property by
virtue of use hereunder shall inure to the owner of such intellectual property.
After the Term, each party shall have a reasonable period of time to dispose of
materials containing the name and marks of the other party, but in no other
event may the parties use such names and marks of the other party after the
Term.

        7.     REPRESENTATIONS AND WARRANTIES; INDEMNITIES.

               7.1 (a) DCOM hereby represents and warrants that:

                      (i) it has full power and authority to enter into and
fully perform this Agreement;

                      (ii) this Agreement has been duly authorized and is
enforceable in accordance with its terms; and

                      (iii) at all times, it will comply, and the Promotions
which are the subject matter of this Agreement, when and in the form provided by
DCOM to the Company, will be in compliance with all applicable federal, state,
local and foreign laws and regulations.

               (b) The Company represents, warrants and covenants that:

                      (i) it has full power and authority to enter into and
fully perform this Agreement;

                                      -11-
<PAGE>   12

                      (ii) this Agreement has been duly authorized and is
enforceable in accordance with its terms;

                      (iii) the Website shall at all times be produced,
advertised and transmitted in accordance with all applicable federal, state,
local and foreign laws and regulations;

                      (iv) at all times, it will maintain the Website in a
professional and workmanlike manner consistent with generally accepted industry
standards for a leading e-commerce website. The Website will at all times
present accurate content developed by or obtained from reliable sources,
although the Company will not be responsible for problems associated with the
World Wide Web in general;

                      (v) it is the owner of the Content and/or has the right to
grant all rights granted herein, including but not limited to all necessary
literary, artistic, musical and/or intellectual property rights;

                      (vi) the exercise of rights granted herein and the
intellectual property licenses provided by the Company and the use of such
Content and intellectual property by DCOM will not infringe on any rights of any
third party, including but not limited to copyright, trademark, unfair
competition, contract, defamation, privacy or publicity rights, and, to the best
of the Company's knowledge after due inquiry, the Content is true, lawful,
accurate and does not contain material omissions; and

                      (vii) neither products sold by the Company on the Website,
nor use or reliance on the Content and other content transmitted on the Website
shall cause injury to any person or property.

               7.2 Each party to this Agreement (the "Indemnifying Party") shall
at all times indemnify, hold harmless and defend the other party, and in the
case of indemnification of DCOM, including its parent, Discovery Communications,
Inc. ("DCI"), and subsidiaries of DCI, and their respective officers, directors,
members, partners employees and agents and each other Person, if any,
controlling such party (collectively, the "Indemnified Party") from and against
any loss, cost, liability or expense (including court costs and reasonable
attorneys' fees) arising out of or resulting from any third party claim based on
a breach by the Indemnifying Party of any representation, warranty or covenant
contained herein. In the event of any third party claim, the Indemnified Party
shall: (a) promptly notify the Indemnifying Party of the claim; (b) allow the
Indemnifying Party to direct the defense and settlement of such third party
claim with counsel of the Indemnifying Party's choosing; and (c) provide the
Indemnifying Party, at the Indemnifying Party's expense, with information and
assistance that is reasonably necessary for the defense and settlement of the
third party claim. The Indemnified Party reserves the right to retain counsel,
at the Indemnified Party's sole expense, to participate in the defense of any
such claim. The Indemnifying Party shall not settle any such claim or alleged
claim without first obtaining the Indemnified Party's prior written consent,
which consent shall not be unreasonably withheld, if the terms of such
settlement would adversely affect the Indemnified Party's rights under this
Agreement or otherwise. If the Indemnifying Party assumes the defense and
settlement of the

                                      -12-
<PAGE>   13

claim as set forth above, then the Indemnifying Party's only obligation is to
satisfy the claim, judgment or approved settlement.

        8.     REMEDIES.

               8.1 DCOM shall have the right to suspend and/or withdraw
placement of Promotion, and all purchases and sales of advertising and
promotion, and DCOM shall have the right to terminate this Agreement if the
Company: (a) materially breaches this Agreement; (b) becomes insolvent or unable
to pay its debts as they mature or makes an assignment for the benefit of its
creditors; (c) is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing; (d) becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within sixty (60)
days of filing; or (d) is liquidated or dissolved.

               8.2 The Company shall have the right to terminate this Agreement
if DCOM: (a) materially breaches this Agreement; (b) becomes insolvent or unable
to pay its debts as they mature or makes an assignment for the benefit of its
creditors; (c) is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing; (d) becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if such petition or proceeding is not dismissed within sixty (60)
days of filing; or (e) is liquidated or dissolved.

        9.     GENERAL.

               9.1 Except as set forth herein, neither party may assign or
otherwise transfer this Agreement, or its respective rights and obligations
hereunder, in whole or in part without the other party's prior written consent.
Any attempt to assign this Agreement (including without limitation transfers by
operation of law or that otherwise result in the rights or obligations of a
party being enjoyed or fulfilled by a third party) without such consent shall be
void and of no effect ab initio; provided, however, that notwithstanding the
foregoing, DCOM may assign this Agreement to an Affiliate thereof without the
Company's prior approval, and, with DCOM's prior written approval, such approval
not to be unreasonably withheld, the Company may assign or otherwise transfer
this Agreement, in whole, solely in connection with a merger, acquisition or
asset sale of all or substantially all of the Company's business, provided
further that Company may assign this Agreement, in whole, solely in a merger,
acquisition or asset sale of all or substantially all of the Company's business
to Amazon.com, provided that there has not occurred a material change in the
business or ownership structure of either Amazon.com or DCOM between the date of
execution of this Agreement and the date of such requested transfer that would
adversely impact DCOM in the event of such transfer. In the event DCOM does not
approve an assignment or transfer by the Company of this Agreement pursuant to a
sale or

                                      -13-
<PAGE>   14

merger with Amazon.com under this Section 9.1, and the Company proceeds with
such merger or sale to Amazon.com, this Agreement shall automatically terminate
without further obligation on the part of either of the parties, provided
however, that in full consideration therefor DCOM may elect in its discretion
either to (a) deliver for the benefit of Amazon.com's pet supplies business the
remainder of the then-remaining Ad Spots due to the Company under Section
2.2(a)(i) hereof; (b) return that number of shares of the Company then held by
DCOM in an amount the share price of which (on the public market, subject to the
Share Price Floor described below) is equal in value to the dollar value then
remaining of DCOM's obligations under Section 2.2(a)(i) hereof, as such
advertising is valued under this Agreement, provided however, (i) the shares to
be returned by DCOM shall be valued for purposes of this Section 9.1 at no less
than the public market price of the Company's shares on the date of this
Agreement (the "Share Price Floor"), and (ii) DCOM shall be required to return
no more than the total amount of shares of the Company then held by DCOM; or (c)
pay to the Company cash for the dollar value then remaining of DCOM's
obligations under Section 2.2(a)(i) hereof, as such advertising is valued under
this Agreement. In addition, DCOM may, at its election, fulfill any obligation
under the immediately preceding sentence with any combination of the options
described in subsections (a), (b) and (c) thereof.

               9.2 If any provision of this Agreement (or any portion thereof)
or the application of any such provision (or any portion thereof) to any Person
or circumstance shall be held invalid, illegal or unenforceable in any respect
by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.

               9.3 All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:

                      (a)    if to the Company:

                             Pets.com, Inc.
                             435 Brannan Street, Suite 100
                             San Francisco, California 94107
                             Attention:  Chris Deyo

                             with a copy to:

                             Venture Law Group
                             2775 Sand Hill Road
                             Menlo Park, California 94025
                             Attention:  John Bautista

                                      -14-
<PAGE>   15

                      (b)    if to DCOM:

                             Discovery.com, Inc.
                             c/o Discovery Communications, Inc.
                             7700 Wisconsin Avenue
                             Bethesda, Maryland  20819
                             Attention:  General Manager,
                                         AnimalPlanet.com

                             with a copy to:

                             General Counsel
                             (at the same address)

                             and a copy to:

                             Greenberg Traurig
                             200 Park Avenue
                             New York, New York  10166
                             Attention:  Alayne F. Serle, Esq.

               9.4 The parties to this Agreement are independent contractors.
There is no relationship of partnership, joint venture, employment, franchise,
or agency between the parties. Neither party shall have the power to bind the
other party or incur obligations on the other party's behalf without the other
party's prior written consent.

               9.5 No failure of either party to exercise or enforce any of its
rights under this Agreement shall act as a waiver of such right.

               9.6 This Agreement, together with any Exhibits hereto, contains
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof, and supersedes all prior agreements and
understandings relating to such subject matter. Neither party shall be liable or
bound to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein.

               9.7 This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to each of the other parties.

               9.8 This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.

               9.9 This Agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.

                                      -15-
<PAGE>   16

               9.10 This Agreement is for the sole benefit of the parties hereto
and their permitted assigns and nothing herein expressed or implied shall give
or be construed to give to any Person, other than the parties hereto and such
assigns, any legal or equitable rights hereunder.

               9.11 The headings contained in this Agreement or in any Exhibit
or Schedule hereto are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a part
of this Agreement as if set forth in full herein. Any capitalized terms used in
any Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this Agreement
to a Paragraph, Exhibit or Schedule, such reference shall be to a Paragraph of,
or an Exhibit or Schedule to this Agreement unless otherwise indicated.

               9.12 (a) For purposes of this Agreement, "Confidential
Information" means: (i) business or technical information of either party,
including, but not limited to, any information relating to either party's
product plans, designs, costs, product prices and names, finances, marketing
plans, business opportunities, personnel, research, development or know-how;
(ii) any written information designated by either party as confidential or
proprietary or, if orally disclosed, designated as confidential at the time of
disclosure or reduced to writing by the disclosing party within thirty (30) days
of such disclosure; and (iii) the terms and conditions of this Agreement.

                      (b) Neither party shall disclose to any third party any
Confidential Information, unless such Confidential Information (i) is already in
the public domain except as a result of a breach of confidentiality by the
disclosing party, (ii) is at any time disclosed by a third party without any
obligation of confidentiality with respect to such Confidential Information,
(iii) has been developed independently by the other party without use of or
access to Confidential Information of the disclosing party, or (iv) is required
to be disclosed by law, government authority or court of competent jurisdiction,
in which such event the disclosing party shall promptly notify the party whose
Confidential Information is subject to such disclosure.

                                      -16-
<PAGE>   17

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

DISCOVERY.COM, INC.                          PETS.COM, INC.

By:      /s/  Michela Enlgish                By:        /s/  Paul Manca
        ---------------------------                  ---------------------------

Name:         Michela English                Name:           Paul Manca
        ---------------------------                  ---------------------------

Title:        President and COO              Title:          CFO
        ---------------------------                  ---------------------------

                                      -17-

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