Exhibit 10.2

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December __,
2005, by and among Cape Coastal Trading Corporation, a Delaware corporation (the
“Company”), uBid, Inc., a Delaware corporation with headquarters located at 8550
West Bryn Mawr Avenue, Suite 200, Chicago, IL 60631 (“uBid”) and the investors
listed on the Schedule of Investors attached hereto as Exhibit A-1 or A-2, as
such Exhibits may be amended from time-to-time (individually, an “Investor” and
collectively, the “Investors”).
 
WHEREAS:
 
A.  The Company and uBid are parties to a Merger Agreement and Plan of
Reorganization (the “Merger Agreement”) pursuant to which, in exchange for
certain consideration payable to the security holders of uBid prior to the
Merger (the “uBid Stockholders”), a wholly-owned subsidiary of the Company will
be merged with and into uBid, with uBid as the surviving entity (the “Merger”),
which, as a result of the Merger, uBid will be a wholly-owned subsidiary of the
Company. The targeted closing date for the Merger is December 22, 2005, subject
to extension by the Company in its discretion up to and including December 30,
2005 (the “First Closing Date”).
 
B. The Company and each Investor is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”),
and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act.
  
C. Each Investor, severally and not jointly, wishes to purchase, and the Company
wishes to sell, upon the terms and conditions stated in this Agreement, (i) that
aggregate number of shares of the Common Stock, par value $0.001 per share, of
the Company (the “Common Stock”), set forth opposite such Investor’s name in
column two (2) on the Schedule of Investors in Exhibit A-1 (“Initial Common
Shares”) and (ii) initial warrants, in substantially the form attached hereto as
Exhibit F (the “Initial Warrants”) to acquire up to that number of additional
shares of Common Stock set forth opposite such Investor’s name in column three
(3) on the Schedule of Investors (as exercised, collectively, the “Initial
Warrant Shares”).

D. Subject to the terms and conditions set forth in this Agreement, the
Investors shall have the right to purchase in Second Closing (as defined in
Section 2.1(b) below) (i) that aggregate number of shares of the Common Stock,
par value $0.001 per share, of the Company, set forth opposite such Investor’s
name in column two (2) on the Schedule of Investors in Exhibit A-2 (“Additional
Common Shares” and collectively with the Initial Common Shares, the “Common
Shares”) and (ii) warrants, in substantially the form attached hereto as Exhibit
F (the “Additional Warrants” and collectively with the Initial Warrants, the
"Warrants") to acquire up to that number of additional shares of Common Stock
set forth opposite such Investor’s name in column three (3) on the Schedule of
Investors (as exercised, collectively, the “Additional Warrant Shares” and
collectively with the Initial Warrant Shares, the "Warrant Shares").
 

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E. The aggregate number of shares of Common Stock that shall be sold in the
First Closing shall be at least 10,000,000 shares of Common Stock, with the
aggregate number of Common Shares to be sold to Investors in both the First
Closing and the Second Closing not to exceed 13,000,000 shares of Common Stock.
 
F. The Common Shares, the Warrants and the Warrant Shares issued pursuant to
this Agreement are collectively are referred to herein as the “Securities”.

G. At the time of the First Closing, 8,800,000 of shares of Common Stock will be
issued to the uBid Stockholders in connection with the Merger, with 600,667
additional shares to be issued, in accordance with the Merger Agreement (as
defined below). If more than $45,500,000 of Securities are sold pursuant to this
Agreement, in accordance with the Merger Agreement, cash proceeds from the sale
of such Securities, net of expenses related thereto, will be used to purchase
certain shares of Common Stock issued pursuant to the Merger Agreement, up to
$12,000,000 in total, if 13,000,000 shares of Common Stock are sold pursuant to
this Agreement.
 
H. The Company and McGuireWoods LLP (the “Escrow Agent”) have entered into an
Escrow Agreement (the “Escrow Agreement”) to provide for the safekeeping of
funds received and documents executed in connection with the Offering. Such
funds shall be held in escrow until the Closing and delivered by the Escrow
Agent on behalf of the Investors to the Company upon the satisfaction of the
Company’s closing conditions.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:
 
ARTICLE I
DEFINITIONS
 
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings indicated:
 
“Advice” has the meaning set forth in Section 6.5.
 
“Additional Common Shares” has the meaning set forth in recitals to this
Agreement.

“Additional Purchase Price” has the meaning set forth in Section 2.1.

“Additional Warrant Shares” has the meaning set forth in recitals to this
Agreement.

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.
 
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“Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to
remain closed.
 
“Closing” has the meaning set forth in Section 2.1(c).
 
“Closing Date” has the meaning set forth in Section 2.3.

“Closing Price” means, for any date, the closing price per share of the Common
Stock for such date (or the nearest preceding date) on the primary Eligible
Market or exchange on which the Common Stock is then listed or quoted.
 
“Company Counsel” means McGuireWoods LLP, counsel to the Company.
 
“Common Shares” has the meaning set forth in recitals to this Agreement.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share.
 
“Current Trading Market” is the NASD OTC Bulletin Board.

“Designated Investor” means Smithfield Fiduciary, LLC.

“Designated Investor Counsel” means Schulte Roth & Zabel, LLP.
 
“Disclosure Materials” has the meaning set forth in Section 3.1(g).
 
“Effective Date” means the date that the Registration Statement is first
declared effective by the SEC.
 
“Effectiveness Period” has the meaning set forth in Section 6.1.
 
“Eligible Market” means any of the New York Stock Exchange, the American Stock
Exchange, The NASDAQ National Market, The NASDAQ Capital Market.
 
“Event” has the meaning set forth in Section 6.1.
 
“Event Payments” has the meaning set forth in Section 6.1.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Excluded Events” has the meaning set forth in Section 6.1.
 
“Excluded Investors” means SG Cowen & Co., LLC and its Affiliates.
 
“Filing Date” means 45 days after the First Closing Date.

“First Closing” has the meaning set forth in Section 2.1(a).

“First Closing Date” has the meaning set forth in recitals to this Agreement.

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“Indemnified Party” has the meaning set forth in Section 6.4.
 
“Indemnifying Party” has the meaning set forth in Section 6.4.
 
“Intellectual Property Rights” has the meaning set forth in Section 3.1(s).
 
“Initial Common Shares” has the meaning set forth in recitals to this Agreement.

“Initial Purchase Price” has the meaning set forth in Section 2.1.

“Initial Warrant Shares” has the meaning set forth in recitals to this
Agreement.

“Lien” means any lien, charge, claim, security interest, encumbrance, right of
first refusal or other restriction.
 
“Losses” means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including, without limitation, costs of preparation and
reasonable attorneys’ fees.
 
“Material Adverse Effect” has the meaning set forth in Section 3.1(b).
 
“Material Permits” has the meaning set forth in Section 3.1(u).
 
“Person” means any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, or
joint stock company.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened in writing.
 
“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus including post effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

“Purchase Price” has the meaning set forth in Section 2.1.
 
“Registrable Securities” means the (i) Common Shares and the Warrant Shares
issued or issuable pursuant to the Transaction Documents, (ii) the Merger Shares
and Contingent Shares issued pursuant to the Merger Agreement (as such terms are
defined in the Merger Agreement), and (iii) the shares of Common Stock issuable
pursuant to warrants assumed pursuant to the Merger Agreement and the warrants
to be issued to the Placement Agents, together with any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization,
exchange or similar event with respect to the foregoing.
 
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“Registration Statement” means each registration statement required to be filed
under Article VI, including (in each case) the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
 
“Required Effectiveness Date” means 120 days after the First Closing Date,
provided that if the Registration Statement will not be reviewed by the SEC, the
Required Effectiveness Date shall be 90 days after the First Closing Date.
 
“Rule 144,” “Rule 415” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the SEC pursuant to the Securities Act, as such
Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC having substantially the same effect as such Rule.
 
“SEC” means the Securities and Exchange Commission.

“Second Closing” has the meaning set forth in Section 2.1(b).

“Second Closing Date” has the meaning set forth in Section 2.3.

“Second Closing Notice” has the meaning set forth in Section 2.3.
 
“SEC Reports” has the meaning set forth in Section 3.1(g).
 
“Securities” has the meaning set forth in the Preamble.
 
“Shares” means shares of the Company’s Common Stock.
 
“Subsidiary” means any Person in which the Company, directly or indirectly, owns
capital stock or holds an equity or similar interest.
 
“Trading Day” means (a) any day on which the Common Stock is listed or quoted
and traded on its primary Trading Market, (b) if the Common Stock is not then
listed or quoted and traded on any Eligible Market, then a day on which trading
occurs on the NASDAQ National Market (or any successor thereto), or (c) if
trading ceases to occur on the NASDAQ National Market (or any successor
thereto), any Business Day.
 
“Trading Market” means the Current Trading Market, the NASDAQ National Market or
any other Eligible Market.
 
“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto, the Warrants and the Transfer Agent Instructions.
 
“Transfer Agent” means Pacific Stock Transfer and Trust, or any successor
transfer agent for the Company.
 
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“Transfer Agent Instructions” means, with respect to the Company, the
Irrevocable Transfer Agent Instructions, in the form of Exhibit E, executed by
the Company and delivered to and acknowledged in writing by the Transfer Agent.
 
“Warrants” has the meaning set forth in recitals to this Agreement.
 
“Warrant Shares” has the meaning set forth in recitals to this Agreement.
 
ARTICLE II
PURCHASE AND SALE
 
2.1 Closings.

(a) First Closing. Subject to the terms and conditions set forth in this
Agreement, the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company on the First Closing
Date, such number of Common Shares and Warrants set forth opposite such
Investor’s name on Exhibit A-1 for the First Closing hereto under the headings
“Common Shares” and “Warrants” (the “First Closing”).

(b) Second Closing. Subject to the terms and conditions set forth in this
Agreement, the Company shall issue and sell to each Investor electing to
participate in such Second Closing pursuant to Section 2.2 below, and each such
Investor so participating in the Second Closing shall, severally and not
jointly, purchase from the Company on such Second Closing Date (as defined
below), up to such number of Common Shares and Warrants set forth opposite such
Investor’s name on Exhibit A-2 for the Second Closing hereto under the headings
“Common Shares” and “Warrants” (the “Second Closing”) from those Common Shares
and Warrants that the Company elects to offer in the Second Closing.
Notwithstanding the foregoing, the aggregate number of Common Shares to be sold
to Investors in both the First Closing and the Second Closing shall not exceed
13,000,000 Common Shares.

(c) Closing. The First Closing and the Second Closings are each referred to in
this Agreement as a “Closing.” The date and time of each Closing shall occur on
the applicable Closing Date at the offices of McGuireWoods LLP, 1345 Avenue of
the Americas, New York, NY 10105.

(d) Purchase Price. The purchase price for each Investor of the Initial Common
Shares and the related Initial Warrants to be purchased by each such Investor at
the First Closing shall be the amount set forth opposite such Investor's name on
Exhibit A-1 for the First Closing (the "Initial Purchase Price"). Each Investor
shall pay such purchase price for the Additional Common Shares and the related
Additional Warrants as set forth opposite such Investor's name on Exhibit A-2
for the Second Closing at the Second Closing (the "Additional Purchase Price",
and together with the Initial Purchase Price, the "Purchase Price").
 
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2.2 First Closing Date. Subject to the terms and conditions set forth in this
Agreement, the date and time of the First Closing shall be the First Closing
Date (or such later date as is mutually agreed to by the Company and each
Investor).

2.3 Second Closing Date. Subject to the terms and conditions set forth in this
Agreement, the date and time of the Second Closings (each, a "Second Closing
Date," and together with the First Closing Date, each a "Closing Date" and
collectively, the "Closing Dates") shall be 10:00 a.m., New York City Time, on
the date specified in Section 2.3(c) by the Company in the manner set forth
below with respect to Additional Common Shares and Additional Warrants that the
Company elects to offer in the Second Closing.

(a) Each Investor participating in the First Closing shall have the right
participate in the Second Closing on a pro rata basis (pro rata among such
Investors based on the relative number of Common Shares purchased by each in the
First Closing). To exercise such participation right, such Investor
participating in the First Closing that wishes to participate in the Second
Closing shall provide written notice thereof to the Company on or before the
thirtieth (30th) day after the First Closing Date, which notice shall specify
the number of Common Shares (up to such Investor’s pro rata portion).

(b) If one or more Investors participating in the First Closing do not exercise
their rights to participate in the Second Closing by giving written notice
thereof by the thirtieth (30th) day after the First Closing Date (or waive in
writing their right to so participate), the Company, in its discretion, may
accept subscriptions for Common Shares and Warrants, on the same terms and
conditions, from one or more additional persons who may become additional
Investors by executing this Agreement or a counterpart signature page hereto.

(c) The Second Closing Date shall be the fortieth (40th) day after the First
Closing Date, or if such date is not be a Business Day, the last Business Day
prior thereto, provided, however, that if Investors have subscribed for the
purchase of all Common Shares offered in the Second Closing, or if the Company
elects not seek additional Investors to purchase any amounts not subscribed to
by the Investors participating in the First Closing, the Company may, by written
notice to all Investors participating in the Second Closing set forth an earlier
date for the Second Closing Date, provided that such Investors are given at
least two (2) Business Days written notice of such date.

2.4 Closing Deliveries.
 
(a) At each Closing, the Company shall deliver or cause to be delivered to each
Investor the following:
 
(i) one or more stock certificates, free and clear of all restrictive and other
legends (except as expressly provided in Section 4.1(b) hereof), evidencing such
number of Company Shares equal to the number of Shares set forth opposite such
Investor’s name on Exhibit A-1 or A-2, as applicable, hereto under the heading
“Common Shares”, registered in the name of such Investor;
 
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(ii) a Warrant, issued in the name of such Investor, pursuant to which such
Investor shall have the right to acquire such number of Warrant Shares set forth
opposite such Investor’s name on Exhibit A-1 or A-2, as applicable, hereto under
the heading “Warrant Shares”;
 
(iii) a legal opinion of Company Counsel dated as of the date of the First
Closing, in the form of Exhibit C hereto executed by such counsel and delivered
to the Investors; and
 
(iv) duly executed Transfer Agent Instructions in the form of Exhibit E hereto
acknowledged by the Company’s transfer agent.
 
(b) On the First Closing Date, each Investor shall deliver or cause to be
delivered to the Company the Initial Purchase Price set forth opposite such
Investor’s name on Exhibit A-1 hereto under the heading “Purchase Price” (i) by
paying United States dollars and in immediately available funds, by wire
transfer to an account designated in writing to such Investor by the Company for
such purpose; (ii) by tendering to the Company a promissory note issued by uBid
in exchange for Securities or (iii) any combination of (i) and (ii) above. On
the Second Closing Date, each Investor shall pay the Additional Purchase Price
set forth opposite such Investor’s name on Exhibit A-2 to the Company for the
Additional Common Shares to be issued and sold to such Investor at the
Additional Closing (i) by paying United States dollars and in immediately
available funds, by wire transfer to an account designated in writing to such
Investor by the Company for such purpose; (ii) by tendering to the Company a
promissory note issued by uBid exchange for Securities or (iii) any combination
of (i) and (ii) above.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company. The Company hereby represents
and warrants to the Investors as of the date hereof and as of each Closing Date
as follows (which representations and warranties shall be deemed to apply to
each subsidiary of the Company, including, without limitation, uBid, after
giving effect to the Merger):
 
(a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than
those listed in Schedule 3.1(a) hereto. Except as disclosed in Schedule 3.1(a)
hereto, the Company owns, directly or indirectly, all of the capital stock or
comparable equity interests of each Subsidiary free and clear of any Lien and
all the issued and outstanding shares of capital stock or comparable equity
interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.
 
(b) Organization and Qualification. Each of the Company and the Subsidiaries is
an entity duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization (as applicable), with
the requisite legal authority to own and use its properties and assets and to
carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified to
do business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not, individually or
in the aggregate, (i) materially and adversely affect the legality, validity or
enforceability of any Transaction Document, (ii) have or result in a material
adverse effect on the results of operations, assets, business or financial
condition of the Company and the Subsidiaries, taken as a whole on a
consolidated basis, or (iii) materially and adversely impair the Company’s
ability to perform fully on a timely basis its obligations under any of the
Transaction Documents (any of (i), (ii) or (iii), a “Material Adverse Effect”).
 
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(c) Authorization; Enforcement. The Company has the requisite corporate
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents to which it is a party and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of each of
the Transaction Documents to which it is a party by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company and no
further consent or action is required by the Company, its Board of Directors or
its stockholders. Each of the Transaction Documents to which it is a party has
been (or upon delivery will be) duly executed by the Company and is, or when
delivered in accordance with the terms hereof, will constitute, the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors rights generally, and (ii) the effect of
rules of law governing the availability of specific performance and other
equitable remedies. Assuming the accuracy of the Investors representations
contained in Section 3.2 hereof, the offer and issuance by the Company of the
Securities is exempt from registration under the Securities Act.
 
(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents to which it is a party by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby do not, and will
not, (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound, or affected, except to the extent that such conflict, default,
termination, amendment, acceleration or cancellation right could not reasonably
be expected to have a Material Adverse Effect, or (iii) result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations and the rules and regulations of any self-regulatory organization to
which the Company or its securities are subject, including all applicable
Trading Markets), or by which any property or asset of the Company or a
Subsidiary is bound or affected, except to the extent that such violation could
not reasonably be expected to have a Material Adverse Effect.
 
(e) Authorization of Securities. The Securities (including the Warrant Shares)
are duly authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and
non-assessable, free and clear of all Liens and shall not be subject to
preemptive or similar rights of stockholders (other than those imposed by the
Investors). The Company has reserved from its duly authorized capital stock the
maximum number of shares of Common Stock issuable upon exercise of the Warrants.
 
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(f) Capitalization. The aggregate number of shares and type of all authorized,
issued and outstanding classes of capital stock, options and other securities of
the Company (whether or not presently convertible into or exercisable or
exchangeable for shares of capital stock of the Company) as of the date of this
Agreement and assuming the sale of 10,000,000 of Securities pursuant to this
Agreement is set forth in Schedule 3.1(f) hereto. All outstanding shares of
capital stock are duly authorized, validly issued, fully paid and non-assessable
and have been issued in compliance with all applicable securities laws. Except
as disclosed in Schedule 3.1(f) hereto, and other than pursuant to Securities
issued pursuant to this Agreement, the Company has not issued any other options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or entered into any agreement giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or securities
or rights convertible or exchangeable into shares of Common Stock. Except as set
forth on Schedule 3.1(f) hereto, and except for customary adjustments as a
result of stock dividends, stock splits, combinations of shares,
reorganizations, recapitalizations, reclassifications or other similar events,
there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security
holders) and the issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than the Investors) and will not result in a right of any holder of securities
to adjust the exercise, conversion, exchange or reset price under such
securities. To the knowledge of the Company, except as specifically disclosed in
the SEC Reports or in Schedule 3.1(f) hereto, no Person or group of Related
Persons beneficially owns (as determined pursuant to Rule 13d-3 under the
Exchange Act), or has the right to acquire, by agreement with or by obligation
binding upon the Company, beneficial ownership of in excess of 5% of the
outstanding Common Stock, ignoring for such purposes any limitation on the
number of shares of Common Stock that may be owned at any single time.
 
(g) SEC Reports; Financial Statements. The Company has filed all reports
required to be filed by it under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the
foregoing materials (together with any materials filed by the Company under the
Exchange Act, whether or not required) being collectively referred to herein as
the “SEC Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension (the SEC Reports together with this Agreement and the Schedules
to this Agreement and the Supplemental Private Placement Memorandum dated
December 15, 2005, as updated pursuant to the Addendum thereto dated December
21, 2005, are collectively referred to as the “Disclosure Materials”). The
Company has made available to the Investors or their respective representatives
true, correct and complete copies of the SEC Reports not available on the EDGAR
system. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the SEC promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing. The financial statements Company
included in the SEC reports and the financial statements of uBid included in the
Disclosure Materials, as applicable, have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto, and fairly present in all
material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, year-end audit adjustments. Except as set forth on
Schedule 3.1(g), all material agreements to which the Company or any Subsidiary
is a party or to which the property or assets of the Company or any Subsidiary
are subject are included as part of or specifically identified in the SEC
Reports.
 
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(h) Absence of Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, the Disclosure Materials, or in Schedule 3.1(h) hereto or
incident to the transactions contemplated hereby or in connection with the
Merger, (i) there has been no event, occurrence or development that,
individually or in the aggregate, has had or that could result in a Material
Adverse Effect, (ii) neither the Company nor its Subsidiaries have incurred any
material liabilities other than (A) trade payables and accrued expenses incurred
in the ordinary course of business consistent with past practice and
indebtedness disclosed therein and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be
disclosed in filings made with the SEC, (iii) neither the Company nor its
Subsidiaries have altered their method of accounting or the identity of its
auditors, except as disclosed in its SEC Reports, (iv) neither the Company nor
its Subsidiaries have declared or made any dividend or distribution of cash or
other property to their stockholders, in their capacities as such, or purchased,
redeemed or made any agreements to purchase or redeem any shares of their
capital stock (except for repurchases by the Company or its Subsidiaries of
shares of capital stock held by employees, officers, directors, or consultants
pursuant to an option of the Company or its Subsidiaries to repurchase such
shares upon the termination of employment or services), and (v) except as
reflected therein, neither the Company nor its Subsidiaries have issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock-based plans. Neither the Company nor its Subsidiaries
have taken any steps to seek protection pursuant to any bankruptcy law nor does
the Company or its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact that would reasonably lead a creditor to do so. Neither
the Company nor its Subsidiaries are Insolvent (as defined below) as of the date
hereof, and after giving effect to the transactions contemplated hereby to occur
at the applicable Closing, will not be Insolvent. For purposes of this Section
3.1(h), “Insolvent” means (i) the present fair saleable value of the Company’s
assets is less than the amount required to pay the Company’s total Indebtedness
(as defined in Section 3.1(aa)), (ii) the Company is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, (iii) the Company intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) the Company has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.
 
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(i) Absence of Litigation. Except as set forth on Schedule 3.1(i) hereto, there
is no action, suit, claim, arbitration or proceeding, or, to the Company’s
knowledge, inquiry or investigation, before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries that could, individually or in the aggregate, have a Material
Adverse Effect.  

(j) Compliance. Neither the Company nor any Subsidiary, except in each case as
could not, individually or in the aggregate, reasonably be expected to have or
result in a Material Adverse Effect, (i) is in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received written notice of a claim
that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority.
 
(k) Title to Assets. The Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them that is material to the
business of the Company and the Subsidiaries and good and marketable title in
all personal property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens, except
for Liens that do not, individually or in the aggregate, have or result in a
Material Adverse Effect. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases of which the Company and the Subsidiaries are in material
compliance.
 
(l) No General Solicitation; Placement Agent’s Fees. Neither the Company, any of
its Affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities. The
Company shall be responsible for the payment of any placement agent’s, financial
advisory or brokers’ fees (other than for persons engaged by any Investor or its
investment advisor) relating to or arising out of the issuance of the Securities
pursuant to this Agreement. The Company shall pay, and hold each Investor
harmless against, any liability, loss or expense (including, without limitation,
reasonable attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim for fees arising out of the issuance of the Securities
pursuant to this Agreement. The Company acknowledges that uBid has engaged SG
Cowen & Co., LLC as the lead placement agent and Think Equity Partners LLC as a
co-agent (the “Placement Agents”) in connection with the sale of the Securities
by the Company. Other than the Placement Agents, neither the Company nor uBid
has engaged any placement agent or other agent in connection with the sale of
the Securities.
 
(m)  Private Placement. Neither the Company nor, any Person acting on the
Company’s behalf has sold or offered to sell or solicited any offer to buy the
Securities by means of any form of general solicitation or advertising. Neither
the Company nor any of its Affiliates nor, any Person acting on the Company’s
behalf has, directly or indirectly, at any time within the past six months, made
any offer or sale of any security or solicitation of any offer to buy any
security under circumstances that would (i) eliminate the availability of the
exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale by the Company of the Securities as
contemplated hereby, or (ii) cause the offering of the Securities pursuant to
the Transaction Documents to be integrated with prior offerings by the Company
for purposes of any applicable law, regulation or stockholder approval
provisions, including, without limitation, under the rules and regulations of
any Trading Market. The Company is not required to be registered as, and is not
an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company is not required to be registered
as, a United States real property holding corporation within the meaning of the
Foreign Investment in Real Property Tax Act of 1980.
 
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(n) Listing and Maintenance Requirements. The Company has not, in the twelve
months preceding the date hereof, received notice (written or oral) from any
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is in compliance with all such
listing and maintenance requirements.
 
(o) Registration Rights. Except as described in Schedule 3.1(o), the Company has
not granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the
SEC or any other governmental authority that have not been satisfied or waived.
 
(p) Application of Takeover Protections. Except as described in Schedule 3.1(p),
there is no control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s charter documents or the laws of its
state of incorporation (“Takeover Protections”) that is or could become
applicable to any of the Investors as a result of the Investors and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including, without limitation, as a result of the Company’s issuance
of the Securities and the Investors’ ownership of the Securities. The Company
and its board of directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation or the laws of
the jurisdiction of its incorporation which is or could become applicable to any
Investor as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Securities and any
Investor’s ownership of the Securities.
 
(q) Disclosure. The Company confirms that neither it nor any officers, directors
or Affiliates, has provided any of the Investors (other than Excluded Investors)
or their agents or counsel with any information that constitutes or might
constitute material, nonpublic information (other than the existence and terms
of the issuance of Securities, as contemplated by this Agreement). The Company
understands and confirms that each of the Investors will rely on the foregoing
representations in effecting transactions in securities of the Company (other
than Excluded Investors). All disclosure provided by the Company to the
Investors regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on the behalf
of the Company are true and correct in all material respects and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. To the Company’s
knowledge, no event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed. The Company
acknowledges and agrees that no Investor (other than Excluded Investors) makes
or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in the Transaction
Documents.
 
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(r) Acknowledgment Regarding Investors’ Purchase of Securities. Based upon the
assumption that the transactions contemplated by this Agreement are consummated
in all material respects in conformity with the Transaction Documents, the
Company acknowledges and agrees that each of the Investors (other than Excluded
Investors) is acting solely in the capacity of an arm’s length purchaser with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that no Investor (other than
Excluded Investors) is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by any Investor (other than Excluded
Investors) or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to the Investors’ purchase of the Securities. The
Company further represents to each Investor that the Company’s decision to enter
into this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
 
(s) Patents and Trademarks. The Company and its Subsidiaries own, or possess
adequate rights or licenses to use, all trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
other intellectual property rights (“Intellectual Property Rights”) necessary to
conduct their respective businesses as presently conducted. Except as set forth
on Schedule 3.1(s), there is no current claim, action or proceeding, or to the
knowledge of the Company, being threatened or brought, against the Company or
its Subsidiaries regarding its Intellectual Property Rights. The Company is
unaware of any facts or circumstances, which might give rise to any of the
foregoing infringements or claims, actions or proceedings. The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties. Except as set
forth in Schedule 3.1(s), since April 2003, none of the uBid’s Intellectual
Property Rights have expired, terminated or have been abandoned, or are expected
to expire or terminate without renewal, or be abandoned, within three years from
the date of this Agreement, except for such expirations or terminations without
renewal, or abandonments, in either case which would not, individually or in the
aggregate have a Material Adverse Effect.
 
(t) Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses and location in which the
Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary
has any knowledge that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.
 
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(u) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits does not, individually or in the aggregate, have or
result in a Material Adverse Effect (“Material Permits”), and neither the
Company nor any Subsidiary has received any written notice of proceedings
relating to the revocation or modification of any Material Permit.
 
(v) Transactions With Affiliates and Employees. Except as set forth in Schedule
3.1(v), none of the officers, directors or employees of the Company is a party
to any transaction that would be required to be reported on Form 10-KSB with the
Company or any of its Subsidiaries (other than for ordinary course services as
employees, officers or directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director or employee or, to the Company’s
knowledge, any corporation, partnership, trust or other entity in which any such
officer, director, or employee has a substantial interest or is an officer,
director, trustee or partner.
 
(w) Internal Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
 
(x) Sarbanes-Oxley Act. The Company is in compliance with applicable
requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and
regulations promulgated by the SEC thereunder, except where such noncompliance
would not have, individually or in the aggregate, a Material Adverse Effect.
 
(y) Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

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(z) OFAC. Neither the Company nor any of its Subsidiaries (i) is a Person whose
property or interest in property is blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise
associated with any such Person in any manner violative of Section 2 of such
executive order, or (iii) is a Person on the list of Specially Designated
Nationals and Blocked Persons or subject to the limitations or prohibitions
under any other U.S. Department of Treasury’s Office of Foreign Assets Control
regulation or executive order.

(aa) Patriot Act. To the extent applicable, both the Company and its
Subsidiaries are in compliance, in all material respects, with the (i) Trading
with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act
of 2001).
 
(bb) Indebtedness. Except as disclosed in Schedule 3.1 (bb), neither the Company
nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined
below), (ii) is in violation of any term of or in default under any contract,
agreement or instrument relating to any Indebtedness, except where such
violations and defaults would not result, individually or in the aggregate, in a
Material Adverse Effect, or (iii) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect. Schedule 3.1(bb) provides a detailed description of the material
terms of any such outstanding Indebtedness. For purposes of this Agreement: (x)
“Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through (G)
above; (y) “Contingent Obligation” means, as to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; and (z)
“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

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(cc) Employee Relations. Neither Company nor any of its Subsidiaries is a party
to any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that their relations with their employees
are good. No executive officer of the Company or any of its Subsidiaries (as
defined in Rule 501(f) of the Securities Act) has notified the Company or any
such Subsidiary that such officer intends to leave the Company or any such
Subsidiary or otherwise terminate such officer’s employment with the Company or
any such Subsidiary. No executive officer of the Company or any of its
Subsidiaries, to the knowledge of the Company or any such Subsidiary, is now, or
expects to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract, agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any such Subsidiary to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance
with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. There are no material complaints or charges
against the Company or its Subsidiaries pending or, to the knowledge of the
Company and its Subsidiaries, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by the Company
or its Subsidiaries of any individual.
 
(dd) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with any and all Environmental Laws (as hereinafter defined), (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval
where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so
comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state,
local or foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
 
(ee) Subsidiary Rights. Except as set forth in Schedule 3.1(ee), the Company or
one of its Subsidiaries has the unrestricted right to vote, and (subject to
limitations imposed by applicable law) to receive dividends and distributions
on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.
 
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(ff) Tax Status. The Company and each of its Subsidiaries (i) has made or filed
all foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

(gg) Manipulation of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company or to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) except for the actions
taken by the Placement Agents in connection with the transactions contemplated
hereby, paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company, none of which shall be
in violation of any applicable securities laws.
 
3.2 Representations and Warranties of the Investors. Each Investor hereby, as to
itself only and for no other Investor, represents and warrants to the Company as
follows:
 
(a) Organization; Authority. Such Investor is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The purchase by such Investor of the Securities hereunder has been duly
authorized by all necessary action on the part of such Investor. This Agreement
has been duly executed and delivered by such Investor and constitutes the valid
and binding obligation of such Investor, enforceable against it in accordance
with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors rights generally, and (ii) the effect of
rules of law governing the availability of specific performance and other
equitable remedies.
 
(b) No Public Sale or Distribution; Investment Intent. Such Investor is
(i) acquiring the Common Shares and the Warrants and (ii) upon exercise of the
Warrants will acquire the Warrant Shares issuable upon exercise thereof, in the
ordinary course of business for its own account and not with a view towards, or
for resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered under the Securities Act or under an exemption from
such registration and in compliance with applicable federal and state securities
laws, and such Investor does not have a present arrangement to effect any
distribution of the Securities to or through any person or entity; provided,
however, that by making the representations herein, such Investor does not agree
to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act.
 
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(c) Investor Status. At the time such Investor was offered the Securities, it
was, and at the date hereof it is, an “accredited investor” as defined in Rule
501(a) under the Securities Act.
 
(d) Experience of such Investor. Such Investor, either alone or together with
its representatives has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. Such Investor is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.
 
(e) Access to Information. Such Investor acknowledges that it has reviewed the
Disclosure Materials and has been afforded: (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information (other than material non-public
information) about the Company and the Subsidiaries and their respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such Investor
or its representatives or counsel shall modify, amend or affect such Investor’s
right to rely on the truth, accuracy and completeness of the Disclosure
Materials and the Company’s representations and warranties contained in the
Transaction Documents.
 
(f) No Governmental Review. Such Investor understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
 
(g) No Conflicts. The execution, delivery and performance by such Investor of
this Agreement and the consummation by such Investor of the transactions
contemplated hereby will not (i) result in a violation of the organizational
documents of such Investor or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Investor
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
such Investor, except in the case of clauses (ii) and (iii) above, for such that
are not material and do not otherwise affect the ability of such Investor to
consummate the transactions contemplated hereby.
 
(h) Illegal Transactions. Such Investor has not directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with such
Investor, engaged in any transactions in the securities of the Company
(including, without limitations, any Short Sales involving the Company’s
securities) since the time that the name of the Company was disclosed to
Investors by the Company, a Placement Agent(s) or any other Person regarding an
investment in the Company, excluding any bridge notes or bridge warrants issued
to such Investor, if applicable. Such Investor covenants that neither it nor any
Person acting on its behalf or pursuant to any understanding with it will engage
in any transactions in the securities of the Company (including Short Sales)
prior to the time that the transactions contemplated by this Agreement are
publicly disclosed, excluding conversion of any such bridge notes, if
applicable. As used in this Agreement, “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps and
similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker-dealers or foreign regulated brokers.
 
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(i) No Legal, Tax or Investment Advice. Such Investor understands that nothing
in this Agreement or any other materials presented by or on behalf of the
Company to the Investor in connection with the purchase of the Securities
constitutes legal, tax or investment advice. Such Investor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Securities. Such
Investor understands that the Placement Agents have acted solely as the agent of
the Company in this placement of the Securities, and that the Placement Agents
make no representation or warranty with regard to the merits of this transaction
or as to the accuracy of any information such Investor may have received in
connection therewith. Such Investor acknowledges that he has not relied on any
information or advice furnished by or on behalf of the Placement Agents.

(j) Registration Questionnaire. Each Investor has completed or caused to be
completed the Questionnaires and Certificates attached hereto as Exhibit B (B-1
to B-3) and on the signature page for use in preparation of the Registration
Statement and the answers to the Questionnaires and Certificates and on such
signature page are true and correct in all material respects as of the date of
this Agreement and will be true and correct in all material respects as of the
effective date of the Registration Statement; provided that such Investor shall
be entitled to update such information by providing written notice thereof to
the Company prior to the effective date of the Registration Statement.
 
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
 
4.1 Transfer Restrictions.
 
(a) The Investors covenant that the Securities will only be disposed of pursuant
to an effective registration statement under, and in compliance with the
requirements of, the Securities Act or pursuant to an available exemption from
the registration requirements of the Securities Act, and in compliance with any
applicable state securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or to the Company, or
pursuant to Rule 144(k) except as otherwise set forth herein, the Company
requires the transferor to provide to the Company an opinion of counsel selected
by the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration under the Securities Act. Notwithstanding the foregoing, the
Company hereby consents to and agrees to register on the books of the Company
and with its transfer agent, without any such legal opinion, except to the
extent that the transfer agent requests such legal opinion, any transfer of
Securities by an Investor to an Affiliate of such Investor, provided that the
transferee certifies to the Company that it is an “accredited investor” as
defined in Rule 501(a) under the Securities Act and provided that such Affiliate
does not request any removal of any existing legends on any certificate
evidencing the Securities.
 
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(b) The Investors agree to the imprinting, so long as is required by this
Section 4.1(b), of the following legend on any certificate evidencing
Securities:
 
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.
 
Certificates evidencing Securities shall not be required to contain such legend
or any other legend (i) if the Securities are registered for resale under the
Securities Act or any sale of such Securities pursuant to Rule 144, (ii) if such
Securities are eligible for sale under Rule 144(k), or (iii) if such legend is
not required under applicable requirements of the Securities Act (including
controlling judicial interpretations and pronouncements issued by the Staff of
the SEC). The Company shall cause its counsel to issue the legal opinion
included in the Transfer Agent Instructions to the Transfer Agent on the
Effective Date. Following the Effective Date or at such earlier time as a legend
is no longer required for certain Securities, the Company will no later than
three (3) Trading Days following the delivery by an Investor to the Transfer
Agent of a legended certificate representing such Securities or an exercise
notice pursuant to a Warrant, deliver or cause to be delivered to such Investor
a certificate representing such Securities that is free from all restrictive and
other legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section.
 
If within three (3) Trading Days after the Transfer Agent’s receipt of a
legended certificate representing such Securities or an exercise notice pursuant
to a Warrant, the Company’s Transfer Agent shall fail to issue and deliver to
such Investor a certificate representing such Securities that is free from all
restrictive and other legends, and if on or after such Trading Day the Investor
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Investor of shares of Common Stock that
the Investor anticipated receiving from the Company without any restrictive
legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after
the Investor’s request and in the Investor’s discretion, either (i) pay cash to
the Investor in an amount equal to the Investor’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to
deliver such certificate shall terminate, or (ii) promptly honor its obligation
to deliver to the Investor a certificate or certificates representing such
shares of Common Stock and pay cash to the Investor in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the closing bid price on the date of delivery
of such legended certificate.
 
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(c) The Company will not object to and shall permit (except as prohibited by
law) an Investor to pledge or grant a security interest in some or all of the
Securities in connection with a bona fide margin agreement or other loan or
financing arrangement secured by the Securities, and if required under the terms
of such agreement, loan or arrangement, the Company will not object to and shall
permit (except as prohibited by law) such Investor to transfer pledged or
secured Securities to the pledgees or secured parties. Except as required by
law, such a pledge or transfer would not be subject to approval of the Company,
no legal opinion of the pledgee, secured party or pledgor shall be required in
connection therewith, and no notice shall be required of such pledge. Each
Investor acknowledges that the Company shall not be responsible for any pledges
relating to, or the grant of any security interest in, any of the Securities or
for any agreement, understanding or arrangement between any Investor and its
pledgee or secured party. At the appropriate Investor’s expense, the Company
will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or
transfer of the Securities, including the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) of the Securities Act or other
applicable provision of the Securities Act to appropriately amend the list of
Selling Stockholders thereunder. Provided that the Company is in compliance with
the terms of this Section 4.1(c), the Company’s indemnification obligations
pursuant to Section 6.4 shall not extend to any Proceeding or Losses arising out
of or related to this Section 4.1(c).
 
4.2 Furnishing of Information. As long as any Investor owns Securities, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act. Upon the reasonable
request of any Investor, the Company shall deliver to such Investor a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request to satisfy the
provisions of this Section 4.2.
 
4.3 Integration. The Company shall not, and shall use its commercially
reasonably efforts to ensure that no Affiliate thereof shall, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Investors or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market.
 
4.4 Reservation of Securities. The Company shall maintain a reserve from its
duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full
under the Transaction Documents. In the event that at any time the then
authorized shares of Common Stock are insufficient for the Company to satisfy
its obligations in full under the Transaction Documents, the Company shall
promptly take such actions as may be required to increase the number of
authorized shares.
 
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4.5 Securities Laws Disclosure; Publicity. The Company shall, on or before 8:30
a.m., New York time, on the first Trading Day following execution of this
Agreement, issue a press release acceptable to the Designated Investor
disclosing all material terms of the transactions contemplated hereby. In
accordance with timing and form required by the Exchange Act, on or prior to the
4th Business Day after the First Closing Date, the Company shall file a Current
Report on Form 8-K with the SEC (the “8-K Filing”) describing the material terms
of the transactions contemplated by the Transaction Documents and including as
exhibits to such Current Report on Form 8-K Filing this Agreement and the form
of Warrants.  From and after the filing of the 8-K Filing with the SEC, no
Investor shall be in possession of any material, nonpublic information received
from the Company, any of its Subsidiaries or any of its respective officers,
directors, employees or agents, that is not disclosed in the 8-K Filing. 
Thereafter, the Company shall timely file any filings and notices required by
the SEC or applicable law with respect to the transactions contemplated hereby
and provide copies thereof to the Investors promptly after filing.  Except with
respect to the 8-K Filing and the press release referenced above (a copy of
which will be provided to the Designated Investor for their review as early as
practicable prior to its filing), the Company shall, at least two (2) Trading
Days prior to the filing or dissemination of any disclosure required by this
paragraph, provide a copy thereof to the Designated Investor for their review;
provided, however, to the extent such disclosures specifically identifies a
specific Investor, the Company shall provide such Investor an opportunity to
review the disclosure.  The Company shall consult with the Designated Investor
in issuing any press releases or otherwise making public statements or filings
and other communications with the SEC or any regulatory agency or Trading Market
with respect to the transactions contemplated hereby, and the Company shall not
issue any such press release or otherwise make any such public statement, filing
or other communication without the prior consent of the Designated Investor,
except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public
statement, filing or other communication.  Each Investor shall consult with the
Company in issuing any press releases or otherwise making public statements or
filings and other communications with the SEC or any regulatory agency or
Trading Market with respect to the transactions contemplated hereby, and no
Investor shall issue any such press release or otherwise make any such public
statement, filing or other communication without the prior consent of the
Company, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement, filing or other communication.  Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Investor, or
include the name of any Investor in any press release without the prior written
consent of such Investor.  The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents not to, provide any Investor with any material nonpublic information
regarding the Company or any of its Subsidiaries from and after the issuance of
the above referenced press release without the express written consent of such
Investor.
 
4.6 Use of Proceeds. The Company may only use the net proceeds from the sale of
the Securities as set forth on Schedule 4.6. Pending these uses, the Company
intends to invest the net proceeds from this offering in short-term,
interest-bearing, investment-grade securities, or as otherwise pursuant to the
Company’s customary investment policies.
 
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ARTICLE V
CONDITIONS
 
5.1 Conditions Precedent to the Obligations of the Investors. The obligation of
each Investor to acquire Securities at each Closing is subject to the
satisfaction or waiver by such Investor, at or before such Closing, of each of
the following conditions:
 
(a) Representations and Warranties. The representations and warranties of the
Company shall be true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) as of the date
when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date. Such Investor shall have received a certificate, executed by the Chief
Executive Officer of the Company and uBid, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
such Investor in the form attached hereto as Exhibit G.
 
(b) Performance. The Company and each other Investor shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by it at or prior to the Closing.

(c) The Company shall have delivered to the Designated Investor a certificate
evidencing the formation and good standing of the Company and each of its
Subsidiaries in each such entity’s jurisdiction of formation issued by the
Secretary of State (or comparable office) of such jurisdiction, as of a date
within 10 days of the Closing Date.

(d) The Company shall have delivered to the Designated Investor a certificate
evidencing the Company’s qualification as a foreign corporation and good
standing issued by the Secretary of State (or comparable office) of each
jurisdiction in which the Company, as applicable, conducts business, as of a
date within 10 days of the Closing Date.

(e) The Company shall have delivered to the Designated Investor a certified copy
of the Certificate of Incorporation of the Company as certified by the Secretary
of State of its state of incorporation within ten (10) days of the Closing Date.

(f) Both the Company and uBid shall have delivered to such Investor a
certificate, executed by the Secretary of the Company dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3.1(c) as adopted by the
Company’s Board of Directors in a form reasonably acceptable to such Investor,
(ii) the Certificate of Incorporation, as in effect at the Closing and (iii) the
Bylaws, as in effect at the Closing, in the form attached hereto as Exhibit H.

(g) The Common Shares (i) shall be designated for quotation or listed on the
Current Trading Market and (ii) shall not have been suspended, as of the Closing
Date, by the SEC or the Current Trading Market from trading on the Current
Trading Market nor shall suspension by the SEC or the Current Trading Market
have been threatened, as of the Closing Date, either (A) in writing by the SEC
or the Current Trading Market or (B) by failing to satisfy any requirements for
trading on the Current Trading Market.
 
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(h) The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities.

(i) each Investor shall have purchased and paid for the Common Shares and
Warrants being purchased by it on the Closing Date, and the aggregate purchase
price paid by all of the Investors for the Common Shares and Warrants being
purchased by them on the First Closing shall be at least $45,000,000.

(j) Contemporaneously with the First Closing, the Merger shall have been
consummated;

(k) The stockholders of the Company set forth on Schedule 6.6 shall have agreed
to be subject to the lock-up provisions set forth in the Form of Lock-Up
Agreement attached hereto as Exhibit I; and

(l) The Company shall have delivered to such Investor such other documents
relating to the transactions contemplated by this Agreement as such Investor or
its counsel may reasonably request.
 
5.2 Conditions Precedent to the Obligations of the Company. The obligation of
the Company to sell the Securities at each Closing is subject to the
satisfaction or waiver by the Company, at or before such Closing, of each of the
following conditions:
 
(a) Representations and Warranties. The representations and warranties of the
Investors contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date; and
 
(b) Performance. The Investors shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by the
Investors at or prior to the Closing.
 
ARTICLE VI
REGISTRATION RIGHTS
 
6.1 Shelf Registration.
 
(a) As promptly as possible, and in any event on or prior to the Filing Date,
the Company shall prepare and file with the SEC a “Shelf” Registration Statement
covering the resale of all Registrable Securities for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form S-1 and shall contain (except if otherwise directed by the Investors or the
SEC) the “Plan of Distribution” attached hereto as Exhibit D. The Company shall
undertake to register the Registrable Securities on Form S-3 as soon as such
form is available, provided that the Company shall maintain the effectiveness of
the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the SEC or the Company is no longer obligated to maintain a
registration statement for the Registrable Securities pursuant to the terms
hereof.
 
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(b) The Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective by the SEC as promptly as possible after the
filing thereof, but in any event prior to the Required Effectiveness Date, and
shall use its reasonable best efforts to keep the Registration Statement
continuously effective under the Securities Act until the earlier of the date
that all Registrable Securities covered by such Registration Statement have been
sold or can be sold publicly under Rule 144(k) (the “Effectiveness Period”).
 
(c) The Company shall notify the Investors in writing on the Business Day it
receives notification from the SEC that the Registration Statement has been
declared effective, or the following Business Day if the notification is
received after 2:00 p.m., New York City time; provided that the Company shall
notify all Investors on the same Business Day.
 
(d) Should an Event (as defined below) occur, then upon the occurrence of such
Event, and on every monthly anniversary thereof until the applicable Event is
cured, as partial relief for the damages suffered therefrom by the Investors
(which remedy shall not be exclusive of any other remedies available under this
Agreement, at law or in equity), the Company shall pay to each Investor an
amount in cash, as liquidated damages and not as a penalty, equal to 1.0% of (i)
the number of Securities held by such Investor as of the date of such Event,
multiplied by (ii) the purchase price paid by such Investor for such Securities
then held. The payments to which an Investor shall be entitled pursuant to this
Section 6.1(d) are referred to herein as “Event Payments”. Any Event Payments
payable pursuant to the terms hereof shall apply on a pro-rata basis for any
portion of a month prior to the cure of an Event. In the event the Company fails
to make Event Payments in a timely manner, such Event Payments shall bear
interest at the rate of 1.0% per month (prorated for partial months) until paid
in full. All pro rated calculations made pursuant to this paragraph shall be
based upon the actual number of days in such pro rated month.
 
For such purposes, each of the following shall constitute an “Event”:
 
(i) the Registration Statement is not filed on or prior to the Filing Date or is
not declared effective on or prior to the Required Effectiveness Date; provided,
however if the Company files a Registration Statement without affording the
Designated Investor the opportunity to review and comment the same prior to
filing as required herein, the Company shall not be deemed to have satisfied
this requirement;
 
(ii) except (A) as provided for in Section 6.1(e), (B) if the Company is
involved in a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the
Exchange Act, or (C) a merger or consolidation of the Company or a sale of more
than one-half of the assets of the Company in one or a series of related
transactions, unless following such transaction or series of transactions, the
holders of the Company’s securities prior to the first such transaction continue
to hold at least 50% of the voting rights and equity interests of the surviving
entity or acquirer (clauses (B) and (C), collectively, the “Excluded Events”),
after the Effective Date, an Investor is not permitted to sell Registrable
Securities under the Registration Statement (or a subsequent Registration
Statement filed in replacement thereof) for any reason (other than the fault of
such Investor) for five or more Trading Days (whether or not consecutive);
 
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(iii) except as a result of the Excluded Events, the Common Stock is not listed
or quoted, or is suspended from trading, on an Eligible Market for a period of
three Trading Days (which need not be consecutive Trading Days) during the
Effectiveness Period;
 
(iv) the Company fails for any reason to deliver a certificate evidencing any
Securities to an Investor within three Trading Days after delivery of such
certificate is required pursuant to any Transaction Document or the exercise
rights of the Investors pursuant to the Warrants are otherwise suspended for any
reason; or
 
(v) the Company fails to have available a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock available to issue
Warrant Shares upon any exercise of the Warrants or, except as a result of the
Excluded Events, during the Effectiveness Period, any Shares or Warrant Shares
are not listed on an Eligible Market.
 
(e) Notwithstanding anything in this Agreement to the contrary, after sixty (60)
consecutive Trading Days of continuous effectiveness of the initial Registration
Statement filed and declared effective pursuant to this Agreement, the Company
may, by written notice to the Investors, suspend sales under a Registration
Statement after the Effective Date thereof and/or require that the Investors
immediately cease the sale of shares of Common Stock pursuant thereto and/or
defer the filing of any subsequent Registration Statement if the Company is
engaged in a material merger, acquisition or sale and the Board of Directors
determines in good faith, by appropriate resolutions, that, as a result of such
activity, (A) it would be materially detrimental to the Company (other than as
relating solely to the price of the Common Stock) to maintain a Registration
Statement at such time and (B) it is in the best interests of the Company to
defer proceeding with such registration at such time. Notwithstanding the
foregoing, the Company shall not, and shall cause each of its Subsidiaries and
its and each of their respective officers, directors, employees and agents not
to, provide any Investor with any material nonpublic information regarding the
Company or any of its Subsidiaries about the foregoing merger, sale or
acquisition without the express written consent of such Investor.  Upon receipt
of such notice, each Investor shall immediately discontinue any sales of
Registrable Securities pursuant to such registration until such Investor has
received copies of a supplemented or amended Prospectus or until such Investor
is advised in writing by the Company that the then-current Prospectus may be
used and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus. In no
event, however, shall this right be exercised to suspend sales beyond the period
during which (in the good faith determination of the Company’s Board of
Directors) the failure to require such suspension would be materially
detrimental to the Company. The Company’s rights under this Section 6(e) may be
exercised for a period of no more than twenty (20) days at a time and not more
than three times in any twelve-month period, without such suspension being
considered as part of an Event Payment determination. Immediately after the end
of any suspension period under this Section 6(e), the Company shall take all
necessary actions (including filing any required supplemental prospectus) to
restore the effectiveness of the applicable Registration Statement and the
ability of the Investors to publicly resell their Registrable Securities
pursuant to such effective Registration Statement.
 
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(f) The Company shall not, from the date hereof until the Effective Date of the
Registration Statement, prepare and file with the SEC a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than a Registration
Statement or Form S-8.
 
6.2 Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:
 
(a) (i) Subject to Section 6.1(e), prepare and file with the SEC such
amendments, including post-effective amendments, to each Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective, as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the SEC such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible, and in any event within twelve
(12) Trading Days (except to the extent that the Company reasonably requires
additional time to respond to accounting comments), to any comments received
from the SEC with respect to the Registration Statement or any amendment thereto
and as promptly as reasonably possible provide the Lead Investor Counsel true
and complete copies of all correspondence from and to the SEC relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Investors thereof set forth in the Registration Statement as
so amended or in such Prospectus as so supplemented.
 
(b) Notify each Investor as promptly as reasonably possible of any of the
following events: (i) the SEC notifies the Company whether there will be a
“review” of any Registration Statement; (ii) the SEC comments in writing on any
Registration Statement; (iii) any Registration Statement or any post-effective
amendment is declared effective; (iv) the SEC or any other Federal or state
governmental authority requests any amendment or supplement to any Registration
Statement or Prospectus or requests additional information related thereto;
(v) the SEC issues any stop order suspending the effectiveness of any
Registration Statement or initiates any Proceedings for that purpose; (vi) the
Company receives notice of any suspension of the qualification or exemption from
qualification of any Registrable Securities for sale in any jurisdiction, or the
initiation or threat of any Proceeding for such purpose; or (vii) the financial
statements included in any Registration Statement become ineligible for
inclusion therein or any statement made in any Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference is untrue in any material respect or any revision to a Registration
Statement, Prospectus or other document is required so that it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
 
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(c) Use its reasonable best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of any
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as possible.
 
(d) If requested by an Investor, provide such Investor, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the SEC.
 
(e) Promptly deliver to each Investor, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Investors in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto to the extent permitted by federal and state
securities laws and regulations.
 
(f) (i) In the time and manner required by each Trading Market, prepare and file
with such Trading Market an additional shares listing application covering all
of the Registrable Securities; (ii) take all steps necessary to cause such
Registrable Securities to be approved for listing on each Trading Market as soon
as possible thereafter; (iii) provide to Investor Counsel evidence of such
listing; and (iv) except as a result of the Excluded Events, during the
Effectiveness Period, maintain the listing of such Registrable Securities on
each such Trading Market or another Eligible Market.
 
(g) Prior to any public offering of Registrable Securities, use its reasonable
best efforts to register or qualify or cooperate with the selling Investors in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Investor requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective for so long as required, but
not to exceed the duration of the Effectiveness Period, and to do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
 
(h) Cooperate with the Investors to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be delivered to
a transferee pursuant to a Registration Statement, which certificates shall be
free, to the extent permitted by this Agreement and under law, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Investors may reasonably
request.
 
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(i) Upon the occurrence of any event described in Section 6.2(b)(vii), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
 
(j) Cooperate with any reasonable due diligence investigation undertaken by the
Investors in connection with the sale of Registrable Securities, including,
without limitation, by making available documents and information; provided that
the Company will not deliver or make available to any Investor material,
nonpublic information unless such Investor specifically requests in advance to
receive material, nonpublic information in writing.
 
(k) Comply with all rules and regulations of the SEC applicable to the
registration of the Securities.

(l) If after the execution of this Agreement, any Investor is deemed, or may be
deemed, to be an underwriter, at the reasonable request of any Investor, the
Company shall furnish to such Investor, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the
Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the Investors, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is, at the time
requested, customarily given by counsel to an issuer in an underwritten public
offering, addressed to the Investors.

(m) If after the execution of this Agreement, any Investor is deemed, or may be
deemed, to be an underwriter, the Company shall make available for inspection by
(i) any Investor, (ii) legal counsel for such Investor and (iii) one firm of
accountants or other agents retained by the Investors (collectively, the
“Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree to hold in strict confidence and shall not make any disclosure (except to
an Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the Securities Act, (b) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Nothing herein (or in any other confidentiality agreement
between the Company and any Investor) shall be deemed to limit the Investors’
ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations.
 
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6.3 Registration Expenses. The Company shall pay all fees and expenses incident
to the performance of or compliance with Article VI of this Agreement by the
Company, including without limitation (a) all registration and filing fees and
expenses, including without limitation those related to filings with the SEC,
any Trading Market and in connection with applicable state securities or Blue
Sky laws, (b) printing expenses (including without limitation expenses of
printing certificates for Registrable Securities), (c) messenger, telephone and
delivery expenses, (d) fees and disbursements of counsel for the Company,
(e) fees and expenses of all other Persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement, and
(f) all listing fees to be paid by the Company to the Trading Market. The
Company shall also reimburse each Designated Investor for the fees and
disbursements of the Designated Investor Counsel in connection with
registration, filing or qualification of the Registration Statement which amount
shall be limited to $10,000; provided, however, that such amount shall be
limited to $5,000 if the SEC does not review the Registration Statement.
 
6.4 Indemnification
 
(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Investor, the
officers, directors, partners, members, agents and employees of each of them,
each Person who controls any such Investor (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, partners, members, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all Losses, as incurred, arising out of or relating to (i) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(iii) any cause of action, suit or claim brought or made against such
Indemnified Party (as defined in Section 6.4(c) below) by a third party
(including for these purposes a derivative action brought on behalf of the
Company), arising out of or resulting from (x) execution, delivery, performance
or enforcement of the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (y) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Securities, or (z) the status of Indemnified Party as holder
of the Securities or (iv) any untrue or alleged untrue statement of a material
fact contained in the Registration Statement, any Prospectus or any form of
Company prospectus or in any amendment or supplement thereto or in any Company
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that
(A) such untrue statements, alleged untrue statements, omissions or alleged
omissions are based solely upon information regarding such Investor furnished in
writing to the Company by such Investor for use therein, or to the extent that
such information relates to such Investor or such Investor’s proposed method of
distribution of Registrable Securities, or (B) in the case of an occurrence of
an event of the type specified in Section 6.2(b)(v)-(vii), the use by such
Investor of an outdated or defective Prospectus after the Company has timely
notified such Investor in writing that the Prospectus is outdated or defective
and prior to the receipt by such Investor of the Advice contemplated in
Section 6.5. The Company shall notify the Investors promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.
 
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(b) Indemnification by Investors. Each Investor shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising solely out of any untrue statement of a material
fact contained in the Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto, or arising solely out of
any omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in the light of the circumstances under which they were
made) not misleading to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished by such
Investor to the Company in writing specifically for inclusion in such
Registration Statement or such Prospectus or to the extent that (i) such untrue
statements or omissions are based solely upon information regarding such
Investor furnished to the Company by such Investor expressly for use therein, or
to the extent that such information relates to such Investor or such Investor’s
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Investor expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 6.2(b)(v)-(vii), the use by such Investor of an
outdated or defective Prospectus after the Company has notified such Investor in
writing that the Prospectus is outdated or defective and prior to the receipt by
such Investor of the Advice contemplated in Section 6.5. In no event shall the
liability of any selling Investor hereunder be greater in amount than the dollar
amount of the net proceeds received by such Investor upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
 
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the failure
of any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
 
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An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding; or (iii) the named parties to any
such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Indemnifying Party). It
being understood, however, that the Indemnifying Party shall not, in connection
with any one such Proceeding be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified Parties, which
firm shall be appointed by a majority of the Indemnified Parties; provided,
however, that in the case a single firm of attorneys would be inappropriate due
to actual or potential differing interests of conflicts between such Indemnified
Parties and any other party represented by such counsel in such Proceeding or
otherwise, then the Indemnifying Party shall be liable for the fees and expenses
of one additional firm of attorneys with respect to such Indemnified Parties.
The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
 
All fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten (10) Trading Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
 
(d) Contribution. If a claim for indemnification under Sections 6.4(a) or  (b)
is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6.4(c), any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section  was available to
such party in accordance with its terms.
 
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The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6.4(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.4(d), no Investor shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Investor from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Investor has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section  11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
 
The indemnity and contribution agreements contained in this Section 6.4 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
 
6.5 Dispositions. Each Investor agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration Statement.
Each Investor further agrees that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Sections 6.2(b)(v), (vi) or
(vii), such Investor will discontinue disposition of such Registrable Securities
under the Registration Statement until such Investor’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement contemplated
by Section 6.2(i), or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
 
6.6 No Piggyback on Registrations. Other than as set forth on Schedule 6.6,
neither the Company nor any of its security holders (other than the Investors in
such capacity pursuant hereto) may include securities of the Company in the
Registration Statement other than the Registrable Securities, and the Company
shall not after the date hereof enter into any agreement providing any such
right to any of its security holders.
 
6.7 Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the SEC a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then the Company shall send to each Investor written notice of such
determination and if, within ten days after receipt of such notice, any such
Investor shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Investor requests to be registered.
 
 
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ARTICLE VII
MISCELLANEOUS
 
7.1 Termination. This Agreement may be terminated by uBid, the Company or any
Investor, by written notice to the other parties, if the First Closing has not
been consummated by the third (3rd) Business Day following the date of this
Agreement; provided that no such termination will affect the right of any party
to sue for any breach by the other party (or parties).
 
7.2 Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Investors such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents.
 
7.3 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section  prior to 6:30 p.m. (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
deposit with a nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The
addresses and facsimile numbers for such notices and communications are those
set forth on the signature pages hereof, or such other address or facsimile
number as may be designated in writing hereafter, in the same manner, by any
such Person.
 
7.4 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and each of the Investors or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates to the rights of the Investors under Article VI may be given
by the holders holding at least two-thirds (2/3) of the Registrable Securities
issued to the Investors to which such waiver or consent relates.
 
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7.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
 
7.6 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign its
rights under this Agreement to any Person to whom such Investor assigns or
transfers any Securities, provided such transferee agrees in writing to be
bound, with respect to the transferred Securities, by the provisions hereof that
apply to the “Investors.” Notwithstanding anything to the contrary herein,
Securities may be assigned to any Person in connection with a bona fide margin
account or other loan or financing arrangement secured by such Securities.
 
7.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that each Indemnified Party is an intended third party
beneficiary of Section 6.4 and (in each case) may enforce the provisions of such
Sections directly against the parties with obligations thereunder, and the
holders of Registrable Securities may enforce the provisions of this Agreement
applicable thereto.
 
7.8 Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF THE STATE
OF DELAWARE SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE
COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE COMPANY AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY
OR ANY INVESTOR HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE
ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE,
AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY
OR ANY INVESTOR, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH
PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
 
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7.9 Survival. The representations and warranties, agreements and covenants
contained herein shall survive the Closing.
 
7.10 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
 
7.11 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 
7.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Investor exercises a right, election, demand or option
owed to such Investor by the Company under a Transaction Document and the
Company does not timely perform its related obligations within the periods
therein provided, then, prior to the performance by the Company of the Company’s
related obligation, such Investor may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights.
 
7.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and the execution by the holder
thereof of a customary lost certificate affidavit of that fact and an agreement
to indemnify and hold harmless the Company for any losses in connection
therewith. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities.
 
7.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Investors
and the Company will be entitled to seek specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation (other than in
connection with any action for temporary restraining order) the defense that a
remedy at law would be adequate.
 
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7.15 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Investor hereunder or any Investor enforces or exercises its
rights hereunder or thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company
by a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
 
7.16 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in any Transaction Document to a number of shares or a price per share
shall be amended to appropriately account for such event.
 
7.17 Independent Nature of Investors’ Obligations and Rights. The obligations of
each Investor under any Transaction Document are separate and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Document. The decision of each Investor to purchase Securities
pursuant to this Agreement has been made by such Investor independently of any
other Investor and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company or of the Subsidiary which may have been made or given
by any other Investor or by any agent or employee of any other Investor, and no
Investor or any of its agents or employees shall have any liability to any other
Investor (or any other person) relating to or arising from any such information,
materials, statements or opinions. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no other
Investor will be acting as agent of such Investor in connection with monitoring
its investment hereunder. Each Investor shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Investor to be joined as an additional party in
any proceeding for such purpose.
 
[SIGNATURE PAGES TO FOLLOW]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

        CAPE COASTAL TRADING CORPORATION  
   
   
    By:       Name: 

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

Geoffrey Alison     Title:  President       

      uBID, INC.  
   
   
    By:       Name: 

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

Robert H. Tomlinson, Jr.     Title:  President & Chief Executive Officer       
        Address for Notice:          8550 West Bryn Mawr    Suite 200   
Chicago, IL 60631          Facsimile No.: 773-272-4055    Telephone No.:
773-272-4461    Attn: Tomlinson        With a copy to: McGuireWoods LLP     
Facsimile: (212) 548-2175     
Telephone: (212) 548-2138 
    Attn:  Louis W. Zehil 

 

 
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Investor Signature Page
 
By its execution and delivery of this signature page, the undersigned Investor
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement dated as of December __, 2005 (the “Purchase
Agreement”) by and among Cape Coastal Trading Corporation, uBid, Inc. and the
Investors (as defined therein), as to the number of shares of Common Stock and
Warrants set forth below, and authorizes this signature page to be attached to
the Purchase Agreement or counterparts thereof.

              Name of Investor:               

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         By:       

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    Name:       Title:               Address:        

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          Telephone No.:                Facsimile No.:       

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      Number of Shares:       

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      Number of Warrants:       

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      Aggregate Purchase Price: $       

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                Agreed to and accepted this        ___ day of December, 2005   
            CAPE COASTAL TRADING CORPORATION                        By:       

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      Name:        Title:       

 
 
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