Document:

Exhibit
10.21

Form of Series A
Preferred Stock Purchase Agreement, dated March 4, 2002 among Overstock.com,
Inc., The Gordon S. Macklin Family Trust, Haverford Internet LLC, John J. Byrne
Jr. and twelve other purchasers of Series A Preferred Stock as set forth below:

 

	
   

  	
  Purchaser

  	
  No. of
  Shares

  	
  Aggregate
  Purchase Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Gordon S. Macklin Family Trust

  	
  29,018

  	
  $200,000

  	
   

  
	
   

  	
  Haverford Internet LLC

  	
  145,090

  	
  $1,000,000

  	
   

  
	
   

  	
  John J. Byrne Jr.

  	
  145,090

  	
  $1,000,000

  	
   

  
	
   

  	
  Contex Limited

  	
  72,545

  	
  $500,000

  	
   

  
	
   

  	
  Rope Ferry Associates, Ltd.

  	
  145,090

  	
  $1,000,000

  	
   

  
	
   

  	
  Others

  	
  421,779

  	
  $2,907,000

  	
   

  

 

 

 

 

 

 

OVERSTOCK.COM, INC.

 

6322 South 3000 East, Suite 100

Salt Lake City, Utah 84121

T:  (801) 947-3100

F:  (801) 944-4629

 

 

FORM
OF SERIES A PREFERRED STOCK PURCHASE AGREEMENT

March
4, 2002

 

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1 Authorization and
  Sale of Series A Preferred Stock

  	
   

  
	
  1.1

  	
  Authorization

  	
   

  
	
  1.2

  	
  Sale and Issuance of Shares

  	
   

  
	
  SECTION 2 Closing Dates;
  Delivery

  	
   

  
	
  2.1

  	
  Closing

  	
   

  
	
  2.2

  	
  Delivery

  	
   

  
	
  SECTION 3 Representations
  and Warranties of the Company

  	
   

  
	
  3.1

  	
  Organization and Standing

  	
   

  
	
  3.2

  	
  Minute Books

  	
   

  
	
  3.3

  	
  Corporate Power

  	
   

  
	
  3.4

  	
  Subsidiaries

  	
   

  
	
  3.5

  	
  Capitalization

  	
   

  
	
  3.6

  	
  Authorization

  	
   

  
	
  3.7

  	
  Financial
  Statements

  	
   

  
	
  3.8

  	
  Changes

  	
   

  
	
  3.9

  	
  Material
  Obligations

  	
   

  
	
  3.10

  	
  Material
  Contracts

  	
   

  
	
  3.11

  	
  Intellectual
  Property

  	
   

  
	
  3.12

  	
  Title to
  Properties and Assets; Liens

  	
   

  
	
  3.13

  	
  Compliance

  	
   

  
	
  3.14

  	
  Litigation

  	
   

  
	
  3.15

  	
  Governmental
  Consent

  	
   

  
	
  3.16

  	
  Offering

  	
   

  
	
  3.17

  	
  Registration Rights

  	
   

  
	
  3.18

  	
  Brokers or
  Finders

  	
   

  
	
  3.19

  	
  Tax
  Returns and Payments

  	
   

  
	
  3.20

  	
  Employees

  	
   

  
	
  3.21

  	
  Employee
  Benefit Plans

  	
   

  
	
  3.22

  	
  Obligations to Related
  Parties

  	
   

  
	
  3.23

  	
  Insurance

  	
   

  
	
  3.24

  	
  Disclosure

  	
   

  
	
  3.25

  	
  Environmental and Safety
  Laws

  	
   

  
	
  3.26

  	
  Section
  83(b) Elections

  	
   

  
	
  3.27

  	
  Permits

  	
   

  
	
  SECTION 4 Representations
  and Warranties of the Investors

  	
   

  
	
  4.1

  	
  No Registration

  	
   

  
	
  4.2

  	
  Investment
  Intent

  	
   

  
	
  4.3

  	
  Investment
  Experience

  	
   

  
	
  4.4

  	
  Speculative Nature of
  Investment

  	
   

  

 

2

 

	
  4.5

  	
  Access to Data

  	
   

  
	
  4.6

  	
  Accredited
  Investor

  	
   

  
	
  4.7

  	
  Residency

  	
   

  
	
  4.8

  	
  Restriction
  on Resales

  	
   

  
	
  4.9

  	
  No Public
  Market

  	
   

  
	
  4.10

  	
  Authorization

  	
   

  
	
  4.11

  	
  Brokers
  or Finders

  	
   

  
	
  4.12

  	
  Legends

  	
   

  
	
  SECTION 5 Covenants of the
  Company

  	
   

  
	
  5.1

  	
  Invention Assignment
  Agreements

  	
   

  
	
  5.2

  	
  Authorized
  Number of Series A Preferred

  	
   

  
	
  SECTION 6 Conditions to
  Investors’ Obligations to Close

  	
   

  
	
  6.1

  	
  Representations and
  Warranties

  	
   

  
	
  6.2

  	
  Covenants

  	
   

  
	
  6.3

  	
  Compliance with
  Securities Laws

  	
   

  
	
  6.4

  	
  Articles
  of Amendment

  	
   

  
	
  6.5

  	
  Rights
  Agreement

  	
   

  
	
  6.6

  	
  Closing
  Deliverables

  	
   

  
	
  6.7

  	
  Consents
  and Waivers

  	
   

  
	
  6.8

  	
  Completion of Due Diligence

  	
   

  
	
  6.9

  	
  Proceedings and Documents

  	
   

  
	
  SECTION 7 Conditions to
  Company’s Obligation to Close

  	
   

  
	
  7.1

  	
  Representations and
  Warranties

  	
   

  
	
  7.2

  	
  Covenants

  	
   

  
	
  7.3

  	
  Compliance with
  Securities Laws

  	
   

  
	
  7.4

  	
  Articles
  of Amendment

  	
   

  
	
  7.5

  	
  Rights
  Agreement

  	
   

  
	
  7.6

  	
  Consents
  and Waivers

  	
   

  
	
  7.7

  	
  Proceedings and Documents

  	
   

  
	
  SECTION 8
  Miscellaneous

  	
   

  
	
  8.1

  	
  Amendment

  	
   

  
	
  8.2

  	
  Notices

  	
   

  
	
  8.3

  	
  Governing Law

  	
   

  
	
  8.4

  	
  Brokers
  or Finders

  	
   

  
	
  8.5

  	
  Survival

  	
   

  
	
  8.6

  	
  Successors and Assigns

  	
   

  
	
  8.7

  	
  Entire
  Agreement

  	
   

  
	
  8.8

  	
  Delays or
  Omissions

  	
   

  
	
  8.9

  	
  Severability

  	
   

  

 

3

 

	
  8.10

  	
  Counterparts

  	
   

  
	
  8.11

  	
  Telecopy Execution
  and Delivery

  	
   

  
	
  8.12

  	
  Jurisdiction; Venue

  	
   

  
	
  8.13

  	
  Jury
  Trial

  	
   

  
	
  8.14

  	
  Further Assurances

  	
   

  
	
  8.15

  	
  Exculpation
  Among Investors

  	
   

  

 

SCHEDULES

 

	
  I

  	
  Schedule of Investors

  
	
  II

  	
  Schedule of Exceptions

  
	
  III

  	
  Form of proprietary
  rights and confidentiality agreement to be executed by employees and
  consultants

  

 

EXHIBITS

 

	
  A

  	
  Form of Articles of
  Amendment to the Amended and Restated Articles of Incorporation

  
	
  B

  	
  Form of Investor Rights
  Agreement

  
	
  C

  	
  Form of Articles of
  Incorporation

  
	
  D

  	
  Form of Compliance
  Certificate

  
	
  E

  	
  Form of Secretary’s
  Certificate

  

 

 

4

 

OVERSTOCK.COM,
INC.

SERIES A PREFERRED STOCK
PURCHASE AGREEMENT

THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of March 4, 2002,
by and among Overstock.com, Inc., a Utah corporation (the “Company”), and each of the persons and entities
listed on the Schedule of Investors attached hereto as Schedule I (each, an “Investor” and
collectively, the “Investors”).

SECTION 1

Authorization and Sale of Series A Preferred
Stock

1.1          Authorization.  The Company will, prior to
the Closing (as defined below), authorize (i) the sale and issuance of up to
30,838,816  shares (the “Shares”) of the
Company’s Series A Preferred Stock, without par value (the “Series A Preferred”),
having the rights, privileges, preferences and restrictions set forth in the
Articles of Amendment to the Amended and Restated Articles of Incorporation of
the Company in the form attached as Exhibit A (the “Articles of Amendment”)
and (ii) the issuance of the Conversion Stock (as defined in Section 3.3).

1.2          Sale and Issuance of Shares.  Subject to the terms and conditions of this
Agreement, each of the Investors severally agrees to purchase, and the Company
agrees to severally sell and issue to each Investor, the number of Shares set
forth in the column designated “Number of Series A Shares” opposite such
Investor’s name on Schedule I, at a cash purchase
price of $0.2432 per share.  The
Company’s agreement with each Investor is a separate agreement, and the sale of
the Shares to each Investor is a separate sale.

SECTION 2

Closing Dates; Delivery

2.1          Closing.

(a)   The purchase, sale and issuance of the Shares
shall take place at one or more closings (each of which is referred to in this
Agreement as a “Closing”).  The initial Closing (the “Initial Closing”)
shall take place on March 4, 2002 (the “Initial Closing Date”) at the offices of
Wilson Sonsini Goodrich & Rosati, Professional Corporation,
2795 E. Cottonwood Parkway, Suite 300, Salt Lake City, Utah
84121, at 10:00 a.m. local time, or at such other date, time and place as
the Company and the Investors shall agree, and the subsequent Closing(s) shall
take place on such date(s), times(s) and place(s) as shall be approved by the
Company and the Investors participating in such subsequent Closing(s), provided
that such date(s) shall be no later than 5 days following the date of the
Initial Closing (each such closing date is referred to in this Agreement as a “Closing Date”).

(b)   The Company may sell and issue up to the
balance of the authorized shares of Series A Preferred not sold at the
Initial Closing to such additional investors in subsequent Closings in the
Company’s sole discretion, and such additional investors shall, upon execution
and delivery of the 

 

1

 

relevant signature pages,
become “Investors”
under the Investor Rights Agreement to be entered into by and among the
Company, the Investors (as defined therein) and the Common Holders (as defined
therein) in substantially the form attached as Exhibit B (the “Rights Agreement”)
without having to obtain the signature, consent or permission of any of the
previous Investors.  All such sales and
issuances shall be made on the terms and conditions set forth in this
Agreement.

(c)   Any Investors purchasing Series A
Preferred at each subsequent Closing will execute counterpart signature pages
to this Agreement, and such Investors will, upon delivery to the Company of
such signature pages, become parties to, and be bound by, this Agreement.  Immediately after each subsequent Closing, Schedule I
will be amended to list the Investors purchasing shares of Series A
Preferred hereunder and the number of shares of Series A Preferred
purchased by each Investor under this Agreement at each such subsequent
Closing.  The Company will promptly furnish
to each Investor copies of the amendments to Schedule I
referred to in the preceding sentence. 
The Investors in each subsequent Closing will also execute counterpart
signature pages to and deliver, and become parties to and bound by, the Rights
Agreement.

(d)   Any shares of Series A Preferred sold
and issued at subsequent Closing(s) shall be deemed to be “Shares” for all purposes under this Agreement
and any purchasers thereof shall be deemed to be “Investors” for all purposes under this
Agreement.  The Company will deliver an
updated Schedule of Exceptions (as such term is defined below) to each Investor
that participates in a subsequent Closing, and will deliver a copy thereof to
all other Investors for informational purposes; however, the Schedule of Exceptions
the Company delivers at the Closing in which the Investor purchases Shares will
govern the purchase of such Shares.

2.2          Delivery.  At each
Closing, the Company will deliver to each Investor in such Closing a
certificate registered in such Investor’s name representing the number of
Shares that such Investor is purchasing in such Closing against payment of the
purchase price therefor as set forth in the column designated “Purchase Price”
opposite such Investor’s name on Schedule I, by (a) check payable
to the Company or wire transfer in accordance with the Company’s instructions,
(b) cancellation of indebtedness, or (c) any combination of the
foregoing, as applicable.

SECTION 3

Representations and
Warranties of the Company

Except as set forth on
the Schedule of Exceptions attached as Schedule II (the “Schedule of Exceptions”)
delivered to the Investors in connection with this Agreement, the Company
represents and warrants to the Investors as of the date of this Agreement as
follows:

3.1          Organization and Standing.  The Company is a corporation duly organized
and existing under, and by virtue of, the laws of the State of Utah and is in
good standing under such laws.  The
Company has the requisite corporate power and authority to own and operate its
properties and assets, and to carry on its business as presently conducted and
as presently proposed to be conducted. 
The Company is presently qualified to do business as a foreign
corporation in each jurisdiction where the failure to be so qualified could reasonably
be expected to have a material adverse effect on the Company’s assets, business
or financial condition or prospects (a “Material Adverse Effect”).

 

2

 

3.2          Minute Books.  The corporate minute books of the Company which are available
to the Investors upon request contains minutes of all meetings of directors and
shareholders (including all actions by written consent without a meeting by
directors and shareholders) since the date of incorporation, and reflects all
actions taken by the Company’s board of directors (and any committee thereof)
and shareholders with respect to all transactions referred to in such minutes
accurately in all material respects.

3.3          Corporate Power.  Upon the Initial Closing, the Company will have all requisite
legal and corporate power and authority to execute and deliver this Agreement
and the Rights Agreement, to sell and issue the Shares hereunder, to issue the
shares of the common stock of the Company, without par value (the “Common Stock”),
issuable upon conversion of the Shares (the “Conversion Stock” and together with the
Shares, the “Securities”),
and to carry out and perform its obligations under the terms of this Agreement
and the Rights Agreement (together sometimes collectively referred to herein as
the “Agreements”).

3.4          Subsidiaries.  The Company does not own or control, directly or indirectly,
any interest in any corporation, partnership, limited liability company,
association or other business entity.

3.5          Capitalization.

(a)   The authorized capital stock of the Company
consists of 450,000,000 shares of Common Stock, of which 316,711,578 shares are
issued and outstanding, and 50,000,000 shares of Preferred Stock, 30,838,816  of which are designated Series A
Preferred and none of which are issued and outstanding prior to the Initial
Closing.  The Common Stock shall have
the rights, preferences, privileges and restrictions set forth in the Amended
and Restated Articles of Incorporation of the Company attached hereto as Exhibit C (the “Articles of Incorporation”).  The Series A Preferred shall have the
rights, preferences, privileges and restrictions set forth in the Articles of
Amendment.

(b)   The outstanding shares have been duly
authorized and validly issued in compliance with applicable laws, and are fully
paid and nonassessable.

(c)   The Company has reserved:

(i)    30,838,816  shares of Series A Preferred for issuance pursuant to this
Agreement;

(ii)   30,838,816 shares of Common Stock (as may be
adjusted in accordance with the provisions of the Articles of Amendment) for
issuance upon conversion of the Series A Preferred;

(iii)  49,674,295 shares of Common Stock authorized
for issuance to employees, consultants and directors pursuant to the
Overstock.com, Inc., 1999 Stock Plan, under which options to purchase
40,135,612 shares are issued and outstanding as of the date of this Agreement;

(iv)  9,438,435 shares of Common Stock authorized
for issuance to employees, consultants and directors pursuant to the
Overstock.com, Inc., 2001 Stock Purchase Plan;

 

3

 

(v)   3,542,190 shares of Common Stock for issuance
upon exercise of outstanding options assumed in connection with the acquisition
of Gear.com; and

(vi)  31,801,634 shares of Common Stock for issuance
upon exercise of outstanding warrants.

(d)   The Shares, when issued and delivered and
paid for in compliance with the provisions of this Agreement will be validly
issued, fully paid and nonassessable. 
The Conversion Stock has been duly and validly reserved and, when issued
in compliance with the provisions of this Agreement, the Articles of
Incorporation, the Articles of Amendment and applicable law, will be validly
issued, fully paid and nonassessable. 
The Securities will be free of any liens or encumbrances, other than any
liens or encumbrances created by or imposed upon the Investors; provided,
however, that the Securities are subject to restrictions on transfer
under U.S. state and/or federal securities laws and as set forth herein and in
the Agreements.  Except as set forth in
the Agreements, the Securities are not subject to any preemptive rights, rights
of first refusal or voting agreements.

(e)   Except for the conversion privileges of the
Series A Preferred and the rights provided pursuant to the Rights
Agreement and as contemplated above, there are no options, warrants or other
rights (including, without limitation, conversion or preemptive rights and
rights of first refusal) to the purchase any of the Company’s authorized and
unissued capital stock, nor are there any proxy or shareholder agreements, or
agreements of any kind for the purchase or acquisition from the Company of any
of its securities.

(f)    The offer and sale of all of the Company’s
equity securities issued prior to the Closing Date complied with or were exempt
from registration or qualification under applicable federal and state
securities laws.

3.6          Authorization.  All corporate action on the part of the
Company, its directors and its shareholders necessary for the authorization,
execution and delivery of the Agreements by the Company, the authorization,
sale, issuance and delivery of the Securities, and the performance of all of
the Company’s obligations under the Agreements has been taken or will be taken
prior to the Initial Closing.  The
Agreements, when executed and delivered by the Company, shall constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except (i) as limited by laws of general
application relating to bankruptcy, insolvency and the relief of debtors,
(ii) as limited by rules of law governing specific performance, injunctive
relief or other equitable remedies and by general principles of equity, and
(iii) to the extent the indemnification provisions contained in the Rights
Agreement may further be limited by applicable laws and principles of public
policy.

3.7          Financial Statements.  A copy of the Company’s unaudited balance
sheet and statement of operations of the Company as of and for the period ended
December 31, 2001 (the “Financial Statements”) are available to the Investors
upon request.  The Financial Statements
have been prepared in accordance with generally accepted accounting principles
(“GAAP”)
applied on a consistent basis throughout the periods indicated, except that the
unaudited Financial Statements may not contain all footnotes required by
GAAP.  The Financial Statements are
correct in all material respects and present fairly the financial condition and
operating results of the Company as of the dates and during the periods 

 

4

 

indicated.  The
Company maintains and will continue to maintain a standard system of accounting
consistently applied in accordance with GAAP.

3.8          Changes.  Since
December 31, 2001, there has not been:

(a)   any material change in the assets,
liabilities, financial condition or operating results of the Company from those
reflected in the Financial Statements;

(b)   any damage, destruction or loss, whether or
not covered by insurance, that could reasonably be expected to have a Material
Adverse Effect;

(c)   any waiver by the Company of a valuable right
or of a material debt owed to it;

(d)   any satisfaction or discharge of any lien,
claim or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and that could not be reasonably expected to have a
Material Adverse Effect;

(e)   any material change or amendment to a
material agreement by which the Company or any of its assets or properties is
bound or subject;

(f)    any loans made by the Company to its
employees, officers or directors, or any members of their immediate families,
other than travel advances and other advances made in the ordinary course of
its business;

(g)   any actual or threatened resignation or
termination of any executive officers or key employees of the Company;

(h)   any material change in any compensation
arrangement or agreement with any employee;

(i)    any sale, assignment or transfer of any
patents, trademarks, copyrights, trade secrets or other material intangible
assets;

(j)    any material mortgage, pledge, transfer of a
security interest in, or lien, created by the Company, with respect to any of
its material properties or assets, except liens for taxes not yet due or
payable;

(k)   any declaration or payment of any dividend or
other distribution by the Company;

(l)    receipt of notice that there has been a loss
of, or material order cancellation by, any major customer of the Company;

(m)  to its actual knowledge, any other event or
condition of any character that is reasonably likely to have a Material Adverse
Effect; or

(n)   any agreement or commitment by the Company to
do any of the things described in this Section 3.8.

 

5

 

3.9          Material Obligations.  The Company has no material liabilities or
obligations, absolute or contingent (individually or in the aggregate), except
(i) liabilities and obligations which have been incurred in the ordinary
course of business which have not been, either individually or in the
aggregate, material to the financial condition or operating results of the
Company, (ii) liabilities and obligations set forth in the Financial
Statements and (iii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under GAAP to be reflected
in the Financial Statements. Except as disclosed in the Financial Statements,
the Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.

3.10        Material Contracts.  Section 3.10 of the Schedule of
Exceptions sets forth all contracts, agreements and instruments to which the
Company is a party or by which it is bound that involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $50,000,
(ii) with the exception of standard end-user license and
support/maintenance agreements, the license of any patent, copyright, trade
secret or other proprietary right to or from the Company or (iii) provisions
that materially and adversely restrict or affect the development, manufacture
or distribution of the Company’s products or services (the “Material Contracts”).  All of the Material Contracts are valid,
binding and in full force and effect in all material respects, subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies and to general principles of equity.  The Company is not in material default under
any of such Material Contracts, and, to the Company’s knowledge, the other
party to each Material Contract is not in material default under such Material
Contract.  The Company is not a party to
and is not bound by any contract, agreement or instrument, or subject to any
restriction under its Articles of Incorporation or Bylaws, that materially and
adversely affects its business as now conducted or as presently proposed to be
conducted, its properties or its financial condition.

3.11        Intellectual Property.

(a)   The Company owns or possesses sufficient
legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses (software or otherwise), information,
processes and similar proprietary rights (“Intellectual Property”) necessary to the business of the
Company as presently conducted, without any conflict with or infringement of
the rights of others.  Section 3.11
of the Schedule of Exceptions contains a complete list of (i) the
Company’s registered patents, trademarks, copyrights and domain names and
pending patent, trademark and copyright applications and (ii) with the
exception of standard end-user license agreements, support/maintenance
agreements and agreements entered in the ordinary course of the Company’s
business, all outstanding options, licenses or agreements relating to the
Company’s Intellectual Property or any options, licenses or agreements with
respect to the Intellectual Property of any other person or entity by which the
Company is bound or to which it is a party. 
The Company has not received any written communication alleging that the
Company has violated any of the Intellectual Property of any other person or
entity.  The Company is not to its
knowledge obligated to make any payments by way of royalties, fees or otherwise
to any owner or licensor of or claimant to any Intellectual Property with
respect to the use thereof in connection with the conduct of its business as
presently conducted or as proposed to be conducted.  There are no agreements, understandings, instruments, contracts,
judgments, orders or decrees to which the Company is a party or by which it is
bound which involve indemnification by the Company with respect to
infringements of Intellectual Property.

 

6

 

(b)   The Company is not aware that any of its
employees is obligated under any contract or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
materially interfere with the use of his or her efforts to promote the
interests of the Company or that would conflict with the Company’s business as
presently conducted or as proposed to be conducted.  Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company’s business by the employees of the Company, nor the
conduct of the Company’s business as presently conducted or as proposed to be
conducted, will, to the Company’s knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees
is now obligated.  It is not necessary,
and will not become necessary, for the Company to use any inventions of any of
its employees made prior to their employment by the Company.

(c)   Each employee of the Company has executed a
confidential information and invention assignment agreement.  No such employee has excluded works or
inventions made prior to his or her employment with the Company from his or her
assignment of inventions pursuant to such employee’s confidential information
and invention assignment agreement which works or inventions are necessary to
the business of the Company as presently conducted.  Each consultant to the Company and each member of the Board of
Directors of the Company has entered into an agreement containing appropriate
confidentiality and invention assignment provisions.

3.12        Title to Properties and Assets; Liens.  The Company has good and marketable title to
its properties and assets, and has good title to all its leasehold interests,
in each case subject to no material mortgage, pledge, lien, lease, encumbrance
or charge, other than (i) for liens for current taxes not yet due and
payable, (ii) for liens imposed by law and incurred in the ordinary course
of business for obligations not past due, (iii) for liens in respect of
pledges or deposits under workers’ compensation laws or similar legislation,
and (iv) possible minor liens, encumbrances and defects in title which do
not in any case materially detract from the value of the property subject
thereto or materially impair the operations of the Company, and which have not
arisen otherwise than in the ordinary course of business.  The Company is in compliance with all of its
leases of tangible property and assets.

3.13        Compliance.

(a)   The Company is not in violation of any
material term of its Articles of Incorporation or Bylaws, each as amended to
date, or of any term or provision of any material mortgage, indebtedness,
indenture, contract, agreement or instrument to which it is party or by which
it is bound or, to the Company’s knowledge, of any federal or state judgment,
order, writ or decree to which it is a party or by which it is bound.  The execution, delivery and performance of
and compliance with the Agreements, and the issuance of the Securities, will
not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving notice, either a default under any such
material provision, instrument, judgment, order, writ, decree, contract or
agreement or an event that results in the creation of any material mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of the
Company or the suspension, revocation, impairment, forfeiture or nonrenewal of
any material permit, license, authorization or approval held by the Company,
its business or operations or any of its assets or properties.

 

7

 

(b)   The Company is not in violation of any
federal or state statute, rule or regulation applicable to the Company, except
for any violation could not be reasonably expected to have a Material Adverse
Effect.

3.14        Litigation.  There
are no actions, suits, proceedings or investigations pending against the
Company or its properties (nor is the Company aware of any threat thereof)
before any court or governmental agency. 
The foregoing includes, without limitation, any action, suit, proceeding
or investigation pending or, to the Company’s knowledge, currently threatened
involving the prior employment of any of the Company’s employees, any such
employee’s use in connection with the Company’s business of any information or
techniques allegedly proprietary to any of their former employers or their
obligations under any agreement with their former employers.  The Company is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. 
There is no action, suit proceeding or investigation by the Company
currently pending or that the Company currently intends to initiate.

3.15        Governmental Consent.  No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the part
of the Company is required in connection with the valid execution and delivery
of this Agreement, or the offer, sale or issuance of the Securities, or the
consummation of any other transaction contemplated by this Agreement, except (i) filing
of the Articles of Amendment with the Utah Department of Commerce, Division of
Corporations and Commercial Code (the “Utah Division of Corporations”), and
(ii) qualification (or taking such action as may be necessary to secure an
exemption from qualification, if available) of the offer and sale of the
Securities, under applicable U.S. federal and state securities laws.

3.16        Offering.  Subject to
the accuracy of the Investors’ representations and warranties in
Section 4, the offer, sale and issuance of the Securities constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act of 1933, as amended (the “Securities Act”) and from the registration or
qualification requirements of applicable state securities laws.

3.17        Registration Rights.  Except as set forth in the Rights Agreement,
the Company is not under any obligation and has not granted any rights which
have not been terminated to register under the Securities Act any of its
outstanding securities or any of its securities that may hereafter be issued.

3.18        Brokers or Finders.  The Company has not engaged any brokers,
finders or agents, and the Investors have not incurred, and will not incur,
directly or indirectly, as a result of any action taken by the Company, any
liability for brokerage or finders’ fees or agents’ commissions or any similar
charges in connection with the Agreements.

3.19        Tax Returns and Payments.  The Company has filed all tax returns required
to be filed by it with appropriate federal, state and local governmental
agencies.  These returns and reports are
true and correct in all material respects. 
All taxes shown to be due and payable on such returns, any assessments
imposed, and all other taxes due and payable by the Company on or before the
Initial Closing have been paid or will be paid prior to the time they become
delinquent.  The Company has not been
advised in writing (i) that any of its returns have been or are being
audited as of the date hereof, or (ii) of any deficiency in assessment or
proposed judgment with respect to its federal, state or local taxes.  The Company has withheld or collected from
each payment made to each of its employees, the amount 

 

8

 

of all taxes (including, but not limited to, federal
income taxes, Federal Insurance contribution Act taxes and Federal Unemployment
Tax Act taxes) required to be withheld or collected therefrom, and has paid the
same to the proper tax receiving officers or authorized depositaries.

3.20        Employees.  The
Company is not bound by or subject to (and none of its assets or properties is
bound by or subject to) any written or oral, express or implied, contract,
commitment or arrangement with any labor union, and no labor union has
requested or, to the Company’s knowledge, has sought to represent any of its
employees, representatives or agents of the Company.  There is no strike or labor dispute currently ongoing or, to the
Company’s knowledge, threatened between it and its employees.  To the Company’s knowledge, there are no
union organization activities currently ongoing or threatened between it and
its employees. None of the Company’s employees belongs to any union or
collective bargaining unit.  To the
Company’s knowledge, the Company has complied in all material respects with all
applicable state and federal equal opportunity and other laws related to
employment.  To the Company’s knowledge,
no employee of the Company is or will be in violation of any judgment, decree,
or order, or any term of any employment contract, patent disclosure agreement,
or other contract or agreement relating to the relationship of any such
employee with the Company, or with any other third party, because of the nature
of the business presently conducted or presently proposed to be conducted by
the Company.  Subject to general
principles related to wrongful termination of employees, the employment of each
employee of the Company is terminable at will. 
The Company does not have a present intention to terminate the employment
of any executive officer or key employee of the Company.  The Company is not a party to or bound by
any currently effective employment contract, deferred compensation agreement,
bonus plan, incentive plan, profit sharing plan, retirement agreement, or other
employee compensation agreement.

3.21        Employee Benefit Plans.  The Company does not have any “employee benefit plan”
as defined in the Employee Retirement Income Security Act of 1974, as amended.

3.22        Obligations to Related Parties.  No employee, officer, director or shareholder
of the Company or member of his or her immediate family is indebted to the
Company, nor is the Company indebted (or committed to make loans or extend or
guarantee credit) to any of them other than (i) for payment of salary for
services rendered, (ii) reimbursement for reasonable expenses incurred on
behalf of the Company and (iii) for other standard employee benefits made
generally available to all employees (including stock option agreements
outstanding under any stock option plan approved by the Company’s Board of
Directors and stock purchase agreements approved by the Company’s Board of
Directors).  To the Company’s knowledge,
none of such persons has any direct or indirect ownership interest in any firm
or corporation with which the Company is affiliated or with which the Company
has a material business relationship, or any firm or corporation that competes
with the Company, except in connection with the ownership of stock in
publicly-traded companies.  No employee,
officer, director or shareholder, nor any member of their immediate families,
is, directly or indirectly, interested in any material contract with the
Company (other than such contracts as relate to any such person’s ownership of
capital stock or other securities of the Company).

3.23        Insurance.  The
Company has in full force and effect fire and casualty insurance policies and
insurance against other hazards, risks and liabilities to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated.

 

9

 

3.24        Disclosure.  The
Company has provided each Investor with all the information reasonably
available to it that such Investor has requested for deciding whether to
purchase the Shares.  Neither the
Agreements nor any other documents or certificates delivered in connection
herewith, when taken as a whole, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.  The Company does
not represent or warrant that it will achieve any financial projections
provided to the Investors and represents only that such projections were
prepared in good faith and are based on reasonable assumptions.

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

3.26        Section
83(b) Elections. 
To the Company’s knowledge, all individuals who have purchased unvested
shares of the Company’s Common Stock have timely filed elections under Section
83(b) of the Code and any analogous provisions of applicable state tax laws.

3.27        Permits.  The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
presently conducted by it, the lack of which could result in a Material Adverse
Effect, and the Company believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as presently
proposed to be conducted.  The Company
is not in default in any material respect under any of such franchises,
permits, licenses or other similar authority.

SECTION 4

Representations and
Warranties of the Investors

Each Investor severally
represents and warrants to the Company with respect to the purchase of the
Securities as follows:

4.1          No Registration.  Such Investor understands that the Securities have not been,
nor will be, registered under the Securities Act or applicable state law by reason
of a specific exemption from the registration provisions of the Securities Act
and applicable state law, the availability of which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of such
Investor’s representations as expressed herein or otherwise made pursuant
hereto.

4.2          Investment Intent.  Such Investor is acquiring the Securities for
investment for such Investor’s own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof,
within the meaning of the Securities Act or applicable state law.

4.3          Investment Experience.  Such Investor has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that such Investor is capable of evaluating
the merits and risks of such Investor’s investment in the Company and has the
capacity to protect such Investor’s own interests.

 

10

 

4.4          Speculative Nature of Investment.  Such Investor acknowledges that such
Investor’s investment in the Company is highly speculative and entails a
substantial degree of risk and that such Investor is in a position to lose the
entire amount of such investment.

4.5          Access to Data.  Such Investor has had an opportunity to discuss the Company’s
business, management and financial affairs with the Company’s management.  Such Investor has also had an opportunity to
ask questions of officers of the Company, which questions were answered to its
satisfaction.  Such Investor understands
that such discussions, as well as any information issued by the Company, were
intended to describe certain aspects of the Company’s business and prospects,
but were not necessarily a thorough or exhaustive description.

4.6          Accredited Investor.  Such Investor is an “accredited investor” within the meaning of
Regulation D, Rule 501(a), promulgated by the Securities and Exchange
Commission.  If such Investor is an
entity, such Investor has not been organized for the purpose of purchasing the
Shares or if such Investor has been organized for the purpose of purchasing the
Shares, all of the equity owners of such Investor are accredited investors
within the meaning of Rule 501.

4.7          Residency.  The
residency of such Investor (or, in the case of a partnership or corporation,
such entity’s principal place of business) is correctly set forth on Schedule I.

4.8          Restriction on Resales.  Such Investor acknowledges that the Securities
must be held indefinitely unless subsequently registered under the Securities
Act and applicable state laws or unless an exemption from such registration is
available.  The Company has no present
intention of registering the Shares. 
Such Investor further understands that there is no assurance that any
exemption from registration under the Securities Act and applicable state laws
will be available or, if available, that such exemption will allow such
Investor to dispose of or otherwise transfer any or all of the Securities under
the circumstances, in the amounts or at the times such Investor might
propose.  Investor understands and
acknowledges the limitations on sale of the Shares imposed by Rule 144
under the Securities Act for sales made in reliance on such rule.

4.9          No Public Market.  Such Investor understands and acknowledges that no public
market now exists for any of the securities issued by the Company and that the
Company has made no assurances that a public market will ever exist for the
Company’s securities.

4.10        Authorization.

(a)   Such Investor has all requisite power and
authority to execute and deliver the Agreements, to purchase the Shares
hereunder and to carry out and perform its obligations under the terms of the
Agreements.  All action on the part of
such Investor necessary for the authorization, execution, delivery and
performance of the Agreements, and the performance of all of such Investor’s
obligations under the Agreements, has been taken or will be taken prior to the
Closing.

(b)   The Agreements, when executed and delivered
by such Investor, will constitute valid and legally binding obligations of such
Investor, enforceable in accordance with their terms except: (i) to the
extent that the indemnification provisions contained in the Rights Agreement may
be limited by applicable law and principles of public policy, (ii) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ 

 

11

 

rights generally, and
(iii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or by general
principles of equity.

(c)   No consent, approval, authorization, order,
filing, registration or qualification of or with any court, governmental
authority or third person is required to be obtained by such Investor in
connection with the execution and delivery of the Agreements or the performance
of such Investor’s obligations hereunder or thereunder.

4.11        Brokers or Finders.  Such Investor has not engaged any brokers,
finders or agents, and neither the Company nor any other Investor has, nor
will, incur, directly or indirectly, as a result of any action taken by such
Investor, any liability for brokerage or finders’ fees or agents’ commissions
or any similar charges in connection with the Agreements.

4.12        Legends.  Such
Investor understands and agrees that the certificates evidencing the
Securities, or any other securities issued in respect of the Securities upon
any stock split, stock dividend, recapitalization, merger, consolidation or
similar event, shall bear the legends required by the other Agreements,
including legends relating to restrictions on transfer under federal and state
securities laws and legends required under applicable state securities laws.

SECTION 5

Covenants of the Company

5.1          Invention Assignment Agreements.  To the
extent an employee of the Company has not executed the form of confidential
information and invention assignment agreement in the form attached hereto as Schedule III, the Company shall use its
best efforts to have such employee execute such confidential information and
invention assignment agreement.

5.2          Authorized Number of Series A
Preferred. 
The Company hereby covenants that it shall not sell any shares of Series
A Preferred other than as provided pursuant this Agreement.

SECTION 6

Conditions to Investors’
Obligations to Close

An Investor’s obligation
to purchase the Shares at a Closing is subject to the fulfillment on or before
such Closing of each of the following conditions, unless waived by the
applicable Investor purchasing the Shares in such Closing:

6.1          Representations and Warranties.  The representations and warranties made by the
Company in Section 3 (as modified by the disclosures on the Schedule of
Exceptions) shall be true and correct in all material respects as of the
Closing Date.

6.2          Covenants.  All
covenants, agreements and conditions contained in this Agreement to be
performed by the Company on or prior to the Closing shall have been performed
or complied with in all material respects.

 

12

 

6.3          Compliance with Securities Laws.  The Company shall be reasonably satisfied that
the offer and sale of the Securities shall be qualified or exempt from
registration or qualification under all applicable federal and state securities
laws.  The Company shall have obtained
all necessary Blue Sky law permits and qualifications, or have the availability
of exemptions therefrom, required by any state for the offer and sale of the
Securities.

6.4          Articles of Amendment.  The Articles of Amendment shall have been duly
authorized, executed and filed with and accepted by the Utah Division of
Corporations.

6.5          Rights Agreement.  The Company, the Investors and the Common
Holders (each as defined in the Rights Agreement) shall have executed and
delivered the Rights Agreement.

6.6          Closing Deliverables.  The Company shall have delivered to counsel to
the Investors the following:

(a)   a certificate executed by the President of
the Company on behalf of the Company, in substantially the form attached as Exhibit D,
certifying the satisfaction of the conditions to closing listed in
Sections 6.1 and 6.2.

(b)   a certificate of the Secretary of State of
Utah, dated within five (5) days prior to the Initial Closing Date, with
respect to the good standing of the Company.

(c)   a certificate of the Company executed by the
Company’s Secretary, in substantially the form attached as Exhibit E,
attaching and certifying to the truth and correctness of (1) the Articles
of Incorporation, (2) the Articles of Amendment, (3) the Bylaws and
(4) the resolutions adopted by the Company’s board of directors in
connection with the transactions contemplated by this Agreement.

6.7          Consents and Waivers.  The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreements.

6.8          Completion of Due Diligence.  The Investors shall have completed any and all
due diligence of the Company in connection with their purchase of Shares to the
Investors’ satisfaction.

6.9          Proceedings
and Documents. 
All corporate and other proceedings in connection with the transactions
contemplated by the Agreements at the Closing, and all documents and
instruments incident thereto, shall be reasonably satisfactory  in form and substance to Investors’ counsel.

SECTION 7

Conditions to Company’s
Obligation to Close

The Company’s obligation
to sell and issue the Shares at a Closing is subject to the fulfillment on or
before such Closing of the following conditions, unless waived by the Company:

 

13

 

7.1          Representations and Warranties.  The representations and warranties made by
each Investor in Section 4 shall be true and correct in all material
respects when made and shall be true and correct in all material respects as of
the Closing Date.

7.2          Covenants.  All
covenants, agreements and conditions contained in the Agreements to be
performed by each Investor on or prior to the Closing Date shall have been
performed or complied with in all material respects as of the Closing Date.

7.3          Compliance with Securities Laws.  The Company shall be satisfied that the offer
and sale of the Securities shall be qualified or exempt from registration or
qualification under all applicable federal and state securities laws.  The Company shall have obtained all
necessary Blue Sky law permits and qualifications, or have the availability of
exemptions therefrom, required by any state for the offer and sale of the
Securities

7.4          Articles of Amendment.  The Articles of Amendment shall have been duly
authorized, executed and filed with and accepted by the Utah Division of
Corporations.

7.5          Rights Agreement.  The Company, the Investors and the Common
Holders (each as defined in the Rights Agreement) shall have executed and
delivered the Rights Agreement.

7.6          Consents and Waivers.  The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreements.

7.7          Proceedings and Documents.  All corporate and other proceedings in
connection with the transactions contemplated by the Agreements at the
respective Closing, and all documents and instruments incident to such
transactions, shall have been reasonably approved by counsel to the Company.

SECTION 8

Miscellaneous

8.1          Amendment. 
Except as expressly provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument referencing this Agreement and signed by the Company and the
Investors holding a majority of the Common Stock issued or issuable upon
conversion of the Shares issued pursuant to this Agreement (excluding any of
such shares that have been sold to the public or pursuant to Rule 144); provided,
however, that Investors purchasing shares in a Closing after the
Initial Closing may become parties to this Agreement in accordance with
Section 2.1 without any amendment of this Agreement pursuant to this
paragraph or any consent or approval of any other Investor; and
provided, further, that if any amendment, waiver, discharge or
termination operates in a manner that treats any Investor materially different
from other Investors, the consent of such Investor shall also be required for
such amendment, waiver, discharge or termination.  Any such amendment, waiver, discharge or termination effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities have been converted or exchanged or for
which such securities have been exercised) and each future holder of all such
securities.  Each 

 

14

 

Investor acknowledges that by the operation of this
paragraph, the holders of a majority of the Common Stock issued or issuable
upon conversion of the Shares issued pursuant to this Agreement (excluding any
of such shares that have been sold to the public or pursuant to Rule 144)
will have the right and power to diminish or eliminate all rights of such
Investor under this Agreement.

8.2          Notices.  All notices
and other communications required or permitted hereunder shall be in writing
and shall be mailed by registered or certified mail, postage prepaid, facsimile
or otherwise delivered by hand or by messenger addressed:

(a)   if to an Investor, at the Investor’s address
or facsimile number as shown in the Company’s records, as may be updated in
accordance with the provisions hereof;

(b)   if to any other holder of any Securities, at
such address or facsimile number as shown in the Company’s records, or, until any
such new holder furnishes an address or facsimile number to the Company, then
to and at the address or facsimile number of the last holder of such Securities
for which the Company has contact information in its records; or

(c)   if to the Company, one copy should be sent to
its address or facsimile number set forth on the cover page of this Agreement
and addressed to the attention of the President, or at such other address or
facsimile number as the Company shall have furnished to the Investors, with a copy
to Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Attention: Robert G. O’Connor, 2795 E. Cottonwood Parkway,
Suite 300, Salt Lake City, Utah 84121, facsimile number 801.993.6499.

Each such notice or other
communication shall for all purposes of this Agreement be treated as effective
or having been given when delivered if delivered personally, or, if sent by
mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon
confirmation of facsimile transfer.

8.3          Governing Law.  This Agreement shall be governed in all respects by the
internal laws of the State of Utah as applied to agreements entered into among
Utah residents to be performed entirely within Utah, without regard to
principles of conflicts of law.

8.4          Brokers or Finders.  The Company shall indemnify and hold harmless
each Investor from any liability for any commission or compensation in the
nature of a brokerage or finder’s fee or agent’s commission (and the costs and
expenses of defending against such liability or asserted liability) for which
such Investor or any of its constituent partners, members, officers, directors,
employees or representatives is responsible to the extent such liability is
attributable to any inaccuracy or breach of the representations and warranties
contained in Section 3.18.

8.5          Expenses.  The
parties will each bear their own expenses in connection with the transactions
contemplated by this Agreement.

8.6          Survival.  The
representations, warranties, covenants and agreements made in this Agreement
shall survive any investigation made by any party hereto and the closing of the
transactions contemplated hereby.

 

15

 

8.7          Successors and Assigns.  This Agreement, and any and all rights, duties
and obligations hereunder, shall not be assigned, transferred, delegated or
sublicensed by any Investor without the prior written consent of the
Company.  Any attempt by an Investor
without such permission to assign, transfer, delegate or sublicense any rights,
duties or obligations that arise under this Agreement shall be void.  Subject to the foregoing and except as otherwise
provided herein, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties.

8.8          Entire
Agreement.  This Agreement, the other
Agreements and the exhibits and schedules hereto and thereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner with regard to the subjects hereof or thereof by any
warranties, representations or covenants except as specifically set forth
herein or therein.

8.9          Delays or Omissions.  Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to
this Agreement upon any breach or default of any other party under this
Agreement shall impair any such right, power or remedy of such non-defaulting
party, nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.  Any waiver, permit, consent
or approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing.  All remedies, either under this Agreement or
by law or otherwise afforded to any party to this Agreement, shall be
cumulative and not alternative.

8.10        Severability.  Unless otherwise expressly provided herein, the rights of the
Investors hereunder are several rights, not rights jointly held with any of the
other Investors.  In the event that any
provision of this Agreement becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable or void, this Agreement shall continue in full
force and effect without said provision, and the parties agree to negotiate, in
good faith, a legal and enforceable substitute provision which most nearly
effects the parties’ intent in entering into this Agreement.

8.11        Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.

8.12        Telecopy Execution and Delivery.  A facsimile, telecopy or other reproduction of
this Agreement may be executed by one or more parties hereto, and an executed
copy of this Agreement may be delivered by one or more parties hereto by
facsimile or similar electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all
purposes.  At the request of any party
hereto, all parties hereto agree to execute an original of this Agreement as
well as any facsimile, telecopy or other reproduction hereof.

 

16

 

8.13        Jurisdiction; Venue.  With respect to any disputes arising out of or
related to this Agreement, the parties consent to the exclusive jurisdiction
of, and venue in, the state courts in Salt Lake County in the State of Utah (or
in the event of exclusive federal jurisdiction, the courts of the District of
Utah).

8.14        Jury Trial.  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS
AGREEMENT.

8.15        Further Assurances.  Each party hereto agrees to execute and
deliver, by the proper exercise of its corporate, limited liability company,
partnership or other powers, all such other and additional instruments and
documents and do all such other acts and things as may be necessary to more
fully effectuate this Agreement.

8.16        Exculpation Among Investors.  Each Investor acknowledges that the Investor
is not relying upon any other Investor, or any officer, director, shareholder,
employee, agent, partner or controlling person of any such other Investor, in
making its investment or decision to invest in the Company or in monitoring
such investment.  Each Investor agrees
that no other Investor, nor any officer, director, shareholder, employee, agent,
partner or controlling person of any such other Investor, shall be liable for
any action heretofore or thereafter taken or omitted to be taken by any of them
relating to or in connection with the Company or the Securities.  Without limiting the foregoing, no Investor
nor any of its any officers, directors, shareholders, employees, agents,
partners or controlling persons or other holder of any Securities shall have
any obligation, liability or responsibility whatsoever for the accuracy,
completeness or fairness of any or all information about the Company or any
subsidiary or their respective properties, business or financial and other
affairs, acquired by such Investor or holder from the Company or any subsidiary
or the respective officers, directors, employees, agents, representatives,
counsel or auditors thereof, and in turn provided to another Investor or
holder, nor shall any such Investor have any obligation or responsibility
whatsoever to provide any such information to any other Investor or holder or
to continue to provide any such information if any information is so provided.

 

(SIGNATURE
PAGES FOLLOW)

 

17

 

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

	
   

  	
   

  	
   

  
	
   

  	
  “COMPANY”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OVERSTOCK.COM, INC.

  	
   

  
	
   

  	
  a
  Utah corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick M. Byrne

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  Patrick
  M. Byrne

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:
  

  	
  President
  and Chief Executive Officer

  	
   

  
						

 

 

 

 

(SIGNATURE
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19<Page>

                                                                       EXECUTION

                               AMENDMENT NO. 6 TO
                           LOAN AND SECURITY AGREEMENT

     THIS AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT ("Amendment No. 6"),
dated as of January 4, 2002, is by and among The Doe Run Resources Corporation,
a New York corporation ("Doe Run"), Fabricated Products, Inc., a Delaware
corporation ("Fabricated Products", and together with Doe Run, collectively,
"Borrowers") and Congress Financial Corporation, a Delaware corporation
("Lender").

                              W I T N E S S E T H:

     WHEREAS, Lender has entered into financing arrangements with Borrowers
pursuant to which Lender has made and may make loans and advances and provide
other financial accommodations to Borrowers as set forth in the Loan and
Security Agreement, dated March 12, 1998, by and among Lender and Borrowers, as
amended pursuant to Amendment No. 1 to Loan and Security Agreement, dated
September 1, 1998, Amendment No. 2 to Loan and Security Agreement, dated as of
January 13, 1999, Amendment No. 3 to Loan and Security Agreement, dated as of
February 1, 1999, Amendment No. 4 to Loan and Security Agreement, dated as of
June 11, 1999, and Amendment No. 5 to Loan and Security Agreement, dated
January 26, 2001 (as further amended hereby and as the same may hereafter be
further amended, modified, supplemented, extended, renewed, restated or
replaced, the "Loan Agreement") and the agreements, documents and instruments
referred to therein or at any time executed and/or delivered in connection
therewith or related thereto (all of the foregoing, together with the Loan
Agreement, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the "Financing Agreements");

     WHEREAS, The Renco Group, Inc., a New York corporation ("Renco Group") is
pledging certain cash collateral to Lender to secure the obligations of
Borrowers to Lender pursuant to the Financing Agreements;

     WHEREAS, Borrowers and Renco Group have requested that Lender make
additional loans available to Borrowers based on such cash collateral secured by
it as well as all of the other collateral granted to Lender;

     WHEREAS, subject to the terms and conditions contained herein, in the Loan
Agreement and in the other Financing Agreements, Lender is willing to make
additional loans available to Borrowers based on the amount of such cash
collateral from time to time held by Lender in accordance with the terms of the
Renco Cash Collateral Agreement (as defined below);

     WHEREAS, in addition to pledging cash collateral to Lender, Renco Group is
also guaranteeing certain obligations of Borrower to Lender as set forth in the
Renco Guarantee (as defined below); and

     WHEREAS, in connection with such additional loans to be made available to
Borrowers

<Page>

and the Renco Guarantee, Borrowers have requested that Lender agree to certain
amendments to the Loan Agreement and Lender is willing to agree to such
amendments, subject to the terms and conditions contained herein;

     NOW, THEREFORE, in consideration of the mutual conditions and agreements
and covenants set forth herein, and for other good and valuable consideration,
the adequacy and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

Section 1. DEFINITIONS.

     8.1  ADDITIONAL DEFINITIONS. As used herein, the following terms shall have
the respective meanings given to them below and the Loan Agreement shall be
deemed and is hereby amended to include, in addition and not in limitation of,
each of the following definitions:

        (a) "AMENDMENT NO. 6" shall mean this Amendment No. 6 to Loan and
Security Agreement by and among Borrowers and Lender, as the same now exists and
may hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced.

        (b) "EXISTING DEFAULTS" shall mean, collectively, any Event of Default
arising under the Loan Agreement as a result of the failure of Borrowers to
maintain Consolidated Net Worth in the amounts required under Section 6.10
thereof for the period through and including February 27, 2002, and the failure
of Borrowers to maintain the EBITDA in the amounts required under Section 6.24
thereof for the period through and including February 27, 2002.

        (c) "RENCO CASH COLLATERAL" shall mean, at any time and from time to
time the cash collateral delivered in immediately available funds by Renco Group
to and held by Lender to secure the Obligations pursuant to and in accordance
with the terms of the Renco Cash Collateral Agreement to the extent that there
are no limitations or restrictions on the rights of Lender with respect to such
cash collateral.

        (d) "RENCO CASH COLLATERAL AGREEMENT" shall mean the Cash Collateral
Pledge Agreement, dated of even date herewith, by and between Renco Group and
Lender, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

        (e) "RENCO GUARANTEE" shall mean the Limited Guarantee, dated of even
date herewith, by Renco Group in favor of Lender, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

        (f) "SUPPLEMENTAL LOANS" shall mean the loans hereafter made by Lender
to or for the benefit of Borrowers on a revolving basis (involving advances,
repayments and readvances) as set forth in Section 2 of this Amendment No. 6.

        (g) "SUPPLEMENTAL LOAN LIMIT" shall mean $5,000,000.

<Page>

        (h) "SUPPLEMENTAL LOAN TERMINATION DATE" shall mean the earlier of: the
date that Lender is not holding any Renco Cash Collateral pursuant to and in
accordance with the terms of the Renco Cash Collateral Agreement or any such
Renco Cash Collateral is subject to any claim or limitation or restriction with
respect to the rights of Lender, or the date an Event of Default or any act,
condition or event which with notice or passage of time or both should
constitute an Event of Default exists or has occurred and is continuing or the
effective date of any termination or non-renewal of the Financing Agreements.

     1.2   AMENDMENT TO DEFINITIONS.

        (a) All references to the term "Financing Agreements" in the Loan
Agreement shall be deemed and each such reference is hereby amended to include,
in a addition and not in limitation, the following (as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced): this Amendment No. 6, the Renco Guarantee, the Renco Cash Collateral
Agreement, and all other agreements documents and instruments at any time
executed and/or delivered by any Borrower or any other person in connection with
any of the foregoing.

        (b) All references to the term "Interest Rate" herein, in the Loan
Agreement and in any of the other Financing Agreements shall be amended such
that: the reference to "three-quarters (3/4%)" shall be deleted and replaced
with "one (1%)" and the reference to "two and three quarters (2 3/4%)" shall be
deleted and replaced with the "three (3%)".

        (c) All references to the term "Loans" herein, in the Loan Agreement and
in any of the other Financing Agreements shall be deemed and each such reference
is hereby amended to include, in addition and not in limitation, the
Supplemental Loans.

        (d) All references to the term "Maximum Credit" herein, in the Loan
Agreement and in any of the other Financing Agreements shall be deemed and each
such reference is hereby amended to mean "75,000,000."

        (e) All references to the term "Obligations" herein, in the Loan
Agreement and in any of the other Financing Agreements shall be deemed and each
such reference is hereby amended to include, in addition and not in limitation,
the obligations of Borrowers to Lender arising pursuant to or in connection with
the Supplemental Loans, including principal, interest, fees, costs expenses and
other charges in respect thereof.

     1.3   INTERPRETATION. For purposes of this Amendment, all terms used
herein, including but not limited to, those terms used or defined in the
recitals hereto shall have the respective meanings assigned thereto in the Loan
Agreement.

Section 2. SUPPLEMENTAL LOANS.

<Page>

     2.1   In addition to the Loans which may be made by Lender to Borrowers
pursuant to Sections 2.1 and 2.2 of the Loan Agreement, on or after the date
hereof, upon the request of Borrowers made at any time after the date hereof and
prior to the Supplemental Loan Termination Date, and subject to and upon the
terms and conditions contained herein and in the Loan Agreement and the other
Financing Agreements, Lender agrees to make the Supplemental Loans to Borrowers
from time to time prior to the Supplemental Loan Termination Date in an amount
requested by Borrowers, up to the amount outstanding at any one time equal to
the Supplemental Loan Limit.

     2.2   Except in Lender's discretion, Borrowers shall not have any right to
request, and Lender shall not make, any Supplemental Loans in excess of the
Supplemental Loan Limit or at any time on or after the Supplemental Loan
Termination Date.

     2.3  Without limiting any other rights of Lender under the Loan Agreement
or otherwise, Lender may, at its option, apply any payments it receives from
Borrowers (whether identified as payments of the Supplemental Loans or
otherwise) to any of the Obligations (including Loans other than the
Supplemental Loans or any other Obligations) in such order and manner as Lender
may determine. The Supplemental Loans shall be secured by all of the Collateral.

     2.4   All interest charges related to the Supplemental Loans shall be
computed as provided in the Financing Agreements and paid monthly to Lender on
the first day of each calendar month for the preceding month's calendar
interest, or at Lender's option, charged to Borrowers' account(s) maintained by
Lender as of the first day of each calendar month and deemed paid by the first
amounts subsequently credited thereto.

     2.5   Notwithstanding anything to the contrary contained herein or in the
Loan Agreement or the other Financing Agreements, unless sooner demanded by
Lender in accordance with the terms of the Loan Agreement or the other Financing
Agreements, each Borrower further agrees that all outstanding and unpaid
Obligations arising pursuant to the Supplemental Loans (including without
limitation, principal, interest, fees, costs, expenses and other charges in
respect thereof payable by Borrowers to Lender) shall automatically, without
notice or demand, be absolutely and unconditionally due and payable and
Borrowers shall pay to Lender in immediately available funds all such
Obligations on the Supplemental Loan Termination Date PROVIDED, THAT, except as
Lender may otherwise agree, Borrowers may only use proceeds of any Loans or
Collateral to repay the Obligations arising pursuant to the Supplemental Loans
if each of the following conditions is satisfied as determined by Lender: as of
such date, Excess Availability shall be not less than $1,000,000 after giving
effect to such payment, for each of the ninety (90) consecutive days immediately
prior to such date, Excess Availability shall have been not less than
$1,000,000, and as of such date and after giving effect thereto, no Event of
Default or act, condition or event which with notice or passage of time or both
would constitute an Event of Default shall exist or have occurred and be
continuing including, any of the Existing Defaults. Such Obligations shall be
due and owing on the Supplemental Loan Termination Date regardless of whether
Borrowers are permitted to make payments in respect to such Obligations in
accordance with the previous sentence. Interest shall accrue and be due, until
and including the

<Page>

next Business Day, if the amount paid by Borrowers to the bank account
designated by Lender for such purpose is received in such bank account later
than 11:00 a.m., New York City time.

     2.6   Each Borrower acknowledges and agrees that, notwithstanding anything
to the contrary contained in the Loan Agreement or the Financing Agreements, the
failure of Borrowers to pay all of such Obligations arising pursuant to the
Supplemental Loans on or before the Supplemental Loan Termination Date, shall
constitute an Event of Default regardless of whether Borrowers are permitted to
make payments in respect of such Obligations in accordance with Section 2.5
hereof. Without limiting any other rights of Lender with respect to the
establishment of reserves or otherwise, each Borrower acknowledges that Lender
may from time to time, at its option, establish reserves in the amount equal to
the then accrued and unpaid interest in respect of the Supplemental Loans.

     2.7   Each Borrower acknowledges and agrees that, in the event that after
the payment of any of the Obligations arising pursuant to the Supplemental
Loans, Lender determines that the conditions for such payment set forth in
Section 2.5 above were not satisfied, such Obligations arising pursuant to the
Supplemental Loans shall be reinstated and continue as if any such payment had
not been received.

Section 3. AMENDMENTS.

     3.1   LOANS. Section 2.1(b) of the Loan Agreement is hereby amended to
delete the reference to the figure "$50,000,000" contained therein and
substitute the following therefor: "$35,000,000".

     3.2   RESERVES. Section 2.4(b) of the Loan Agreement is hereby amended to
add a new provision to the end of such section as follows:

           "; PROVIDED THAT such amount shall be reduced to $3,000,000 on the
           date hereof for the period through and including February 14, 2002,
           and shall increase by $750,000 on each of February 15, 2002 and
           March 1, 2002 and shall increase by $500,000 on March 15, 2002 and
           shall be $5,000,000 at all times on and after March 15, 2002."

Section 4. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrowers to Lender pursuant to the other Financing Agreements, each of
Borrowers, jointly and severally, hereby represents, warrants and covenants with
and to Lender as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):

     4.1   This Amendment has been duly executed and delivered by Borrowers and
is in full force and effect as of the date hereof and the agreements and
obligations of Borrowers contained herein constitute legal, valid and binding
obligations of Borrowers enforceable against

<Page>

Borrowers in accordance with their respective terms.

     4.2   In addition to all other terms, conditions and provisions set forth
in the other Financing Agreements, as soon as possible, but in any event, by no
later than January 31, 2002, Borrowers shall deliver or cause to be delivered to
Lender, each in form and substance reasonably satisfactory to Lender, original
Deposit Account Control Agreements in favor of Lender with respect to each of
Borrowers deposit accounts listed on Exhibit A hereto, each duly authorized,
executed and delivered by such Borrower and the financial institution which
maintains such deposit account for such Borrower.

     4.3   In addition to all other terms, conditions and provisions set forth
in the other Financing Agreements, on February 28, 2002, Borrowers shall deliver
or cause to be delivered to Lender, in form and substance satisfactory to
Lender, the form of certificate attached as Exhibit B hereto, duly authorized,
executed and delivered by Borrowers.

     4.4   No Event of Default or act, condition or event, which with notice or
passage of time or both would constitute an Event of Default, exists or has
occurred and is continuing other than the Existing Defaults.

Section 5. ADDITIONAL EVENTS OF DEFAULT. The parties hereto acknowledge, confirm
and agree that the failure of Borrowers to comply with the representations,
warranties, covenants, conditions and agreements contained herein shall
constitute an Event of Default under the Financing Agreements. In addition, any
or all of the following shall constitute an Event of Default under the Financing
Agreements: (a) the Renco Guarantee or the Renco Cash Collateral Agreement
ceases to be in full force and effect or shall be void or invalid or the
validity thereof shall be contested by Renco Group or Borrowers, or (b) Renco
Group fails to perform any of the terms, covenants, conditions or provisions of
the Renco Guarantee or the Renco Cash Collateral Agreement or any other
agreement of such party in favor of Lender in connection with the financing
arrangements between Borrowers and Lender, or (c) Renco Group fails to honor any
demand for payment thereunder in accordance with its terms, or deny it has any
further liability or obligation thereunder or shall revoke, terminate, or
purport to revoke or terminate the Renco Guarantee or the Renco Cash Collateral
Agreement or (d) any injunctive relief or restraining order is sought or granted
which does or would, if granted limit or impair the right of Lender to receive
payment under the Renco Guarantee or the Renco Cash Collateral Agreement in
accordance with the terms thereof or retain any funds drawn or paid thereunder
or (e) any limitation or restriction on the rights of Lender with respect to the
Renco Cash Collateral exists or has occurred or (f) Borrowers fail to deliver to
Lender the certificate described in Section 4.3 hereof by no later than the
close of business on February 28, 2002.

Section 6. CONDITIONS PRECEDENT. The effectiveness of the terms and conditions
contained herein shall be subject to the satisfaction of each of the following
conditions, in form and substance satisfactory to Lender:

     6.1   Lender shall have received the Renco Guarantee, duly authorized,
executed and

<Page>

delivered by Renco Group;

     6.2   Lender shall have received the Renco Cash Collateral Agreement by
Renco Group in favor of Lender, duly authorized, executed and delivered by Renco
Group;

     6.3   Lender shall have received not less than $5,000,000 of Renco Cash
Collateral in accordance with the terms of the Renco Cash Collateral Agreement;

     6.4   Lender shall have received evidence that all corporate proceedings
with respect to the Renco Cash Collateral Pledge Agreement and the Renco
Guarantee have been taken by Renco Group and such agreements are duly
authorized, executed and delivered by Renco Group, including an opinion letter
from counsel to Renco Group;

     6.5   Lender shall have received an original of this Amendment No. 6, duly
authorized, executed and delivered by Borrowers and Renco Group to Lender;

     6.6   Lender shall have received all consents of participants required for
the amendments provided for herein;

     6.7   Lender shall have received the fee referred to in Section 7 hereof;
and

     6.8   no Event of Default or act, condition or event which with notice or
passage of time or both would constitute an Event of Default shall exist or have
occurred and be continuing on the date hereof after giving effect to the
amendment to the Loan Agreement made by the provisions of this Amendment No. 6
other than the Existing Defaults.

Section 7. AMENDMENT FEE. In consideration of the amendments set forth herein,
Borrowers shall on the date hereof, pay to Lender, and Lender may, at its
option, charge the account of Borrowers maintained by Lender, a fee in the
amount of $100,000, which fee shall constitute part of the Obligations and is
fully earned as of the date hereof.

Section 8. WAIVER OF EVENTS OF DEFAULT.

     8.1   Subject to the terms and conditions contained herein, Lender hereby
waives any Event of Default arising under the Loan Agreement as a result of the
Existing Defaults for the period from the date hereof through and including
February 27, 2002; PROVIDED, THAT, such waiver shall automatically and without
further action by the parties hereto be deemed rescinded and terminated and of
no force and effect on and after February 28, 2002, except as Lender may
otherwise expressly agree in writing, it being understood and agreed that the
effect of such recission and termination shall be to permit Lender to exercise
its rights and remedies in accordance with the terms of the Loan Agreement with
respect to the Existing Defaults immediately on February 28, 2002 without any
further notice or passage of time.

     8.2   Lender has not waived and is not by this Amendment waiving, and has
no present

<Page>

intention of waiving, any other Events of Default, which may have occurred prior
to the date hereof, or may be continuing on the date hereof or any Event of
Default which may occur after the date hereof (other than the Existing
Defaults), whether the same or similar to the Existing Defaults or otherwise.
Lender reserves the right, in its discretion, to exercise any or all of its or
their rights and remedies arising under the Financing Agreements applicable or
otherwise, as a result of any other Events of Default which may have occurred
prior to the date hereof, or are continuing on the date hereof, or any Event of
Default which may occur after the date hereof (other than the Existing
Defaults), whether the same or similar to the Event of Default described above
or otherwise, including any Events of Default pursuant to the failure of
Borrowers to comply with Sections 6.10 and 6.24 of the Loan Agreement at any
time after February 27, 2002 as a result of the recession and termination of the
waiver provided for in Section 8.1 above. Nothing contained herein shall be
construed as a waiver of the failure of Borrowers to comply with such sections
after such date.

Section 9. MISCELLANEOUS.

     9.1   EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, no
other waivers, changes or modifications to the Financing Agreements are intended
or implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of
effective date hereof. Any acknowledgment or waiver contained herein shall not
be construed to constitute a waiver to any other or further action by Borrowers
or to entitle Borrowers to any other waiver. The Loan Agreement and this
Amendment No. 6 shall be read and construed as one agreement. To the extent of
conflict between the terms of this Amendment and the other Financing Agreements,
the terms of this Amendment No. 6 shall control.

     9.2   FURTHER ASSURANCES. The parties hereto shall execute and deliver such
additional documents and take such additional actions as may be necessary to
effectuate the provisions and purposes of this Amendment No. 6.

     9.3   GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York without regard to principals of conflicts
of law or other rule of law that would result in the application of the law of
any jurisdiction other than the State of New York.

     9.4   BINDING EFFECT. This Amendment No. 6 shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors and
assigns.

     9.5   COUNTERPARTS. This Amendment No. 6 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 6, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties thereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<Page>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 6 to
be duly executed and delivered by their authorized officers as of the date and
year first above written.

                                  CONGRESS FINANCIAL CORPORATION

                                  By:

                                  Title:

                                  THE DOE RUN RESOURCES
                                   CORPORATION

                                  By:

                                  Title:

                                  FABRICATED PRODUCTS, INC.

                                  By:

                                  Title:

ACKNOWLEDGED:

THE RENCO GROUP, INC.

By:
   -------------------------------

Title:
      ----------------------------   ---------------

<Page>

                                    EXHIBIT A
                                       TO
                                 AMENDMENT NO. 6

                       LIST OF BORROWERS' DEPOSIT ACCOUNTS

                               [See attached list]

                                        1
<Page>

                                    EXHIBIT B
                                       TO
                                 AMENDMENT NO. 6

                        [Form of Section 4.3 Certificate]

     I, the ____________ of The Doe Run Resources Corporation and Fabricated
Products, Inc., hereby certify to Congress Financial Corporation that as of
February 28, 2002, no Event of Default exists or has occurred and is continuing
[other than {describe any existing default}]. The undersigned acknowledges that
the Loans and Letter of Credit Accommodations by Lender to Borrowers are based
upon Lender's reliance on the information contained herein.

     All capitalized terms used in this Certificate shall have the meaning
assigned to them in the Loan and Security Agreement, dated as of March 12, 1998,
by and among The Doe Run Resources Corporation, Fabricated Products, Inc. and
Congress Financial Corporation

                                  THE DOE RUN RESOURCES
                                   CORPORATION

                                  By:

                                  Title:

                                  FABRICATED PRODUCTS, INC.

                                  By:

                                  Title:

STATE OF _________ )
                   ) ss.:
COUNTY OF ________ )

     On this ____ day of __________, 2002, before me personally came
_____________________, to me known, who stated that he is the
____________________ of THE DOE RUN RESOURCES CORPORATION and the _____________
of FABRICATED PRODUCTS, INC., the corporation described in and which executed
the foregoing instrument; and that he signed his name thereto by order of the
Board of Directors of said corporation.

                                       ------------------
                                       Notary Public

                                        1

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