Document:

Exhibit 10.1 

SECURITIES PURCHASE AGREEMENT

Dated as of November 15, 2007

AMONG

THESTREET.COM, INC.

TCV VI, L.P.

AND

TCV MEMBER FUND, L.P.

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE I

	
PURCHASE AND
 SALE OF SHARES

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
 

	
1.1

	
 

	
PURCHASE
 AND SALE

	
 

	
1

	
 

	
1.2

	
 

	
CLOSING

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
ARTICLE II

	
REPRESENTATIONS
 AND WARRANTIES OF THE COMPANY

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
 

	
2.1

	
 

	
ORGANIZATION
 AND CORPORATE POWER

	
 

	
2

	
 

	
2.2

	
 

	
AUTHORIZATION,
 ETC.

	
 

	
2

	
 

	
2.3

	
 

	
GOVERNMENT
 APPROVALS

	
 

	
3

	
 

	
2.4

	
 

	
AUTHORIZED
 AND OUTSTANDING STOCK

	
 

	
3

	
 

	
2.5

	
 

	
SUBSIDIARIES

	
 

	
4

	
 

	
2.6

	
 

	
SECURITIES
 LAW COMPLIANCE

	
 

	
4

	
 

	
2.7

	
 

	
SEC DOCUMENTS;
 FINANCIAL INFORMATION

	
 

	
4

	
 

	
2.8

	
 

	
INTERNAL
 CONTROLS

	
 

	
5

	
 

	
2.9

	
 

	
DISCLOSURE
 CONTROLS

	
 

	
5

	
 

	
2.10

	
 

	
ABSENCE
 OF CERTAIN EVENTS; NO MATERIAL ADVERSE
 CHANGE

	
 

	
5

	
 

	
2.11

	
 

	
LITIGATION

	
 

	
7

	
 

	
2.12

	
 

	
COMPLIANCE
 WITH LAWS; PERMITS

	
 

	
7

	
 

	
2.13

	
 

	
TAXES

	
 

	
7

	
 

	
2.14

	
 

	
INTELLECTUAL
 PROPERTY

	
 

	
7

	
 

	
2.15

	
 

	
CONTRACTS
 AND COMMITMENTS

	
 

	
8

	
 

	
2.16

	
 

	
EMPLOYEE
 MATTERS

	
 

	
8

	
 

	
2.17

	
 

	
NO BROKERS
 OR FINDERS

	
 

	
8

	
 

	
2.18

	
 

	
TRANSACTIONS
 WITH AFFILIATES

	
 

	
9

	
 

	
2.19

	
 

	
INSURANCE

	
 

	
9

	
 

	
2.20

	
 

	
INVESTMENT
 COMPANY ACT

	
 

	
9

	
 

	
2.21

	
 

	
INVESTMENT
 COMPANY ACT

	
 

	
9

	
 

	
2.22

	
 

	
NASDAQ

	
 

	
9

	
 

	
2.23

	
 

	
DELAWARE
 SECTION 203

	
 

	
9

	
 

	
 

	
 

	
 

	
 

	
ARTICLE III

	
REPRESENTATIONS
 AND WARRANTIES OF EACH PURCHASER

	
 

	
10

	
 

	
 

	
 

	
 

	
 

	
 

	
3.1

	
 

	
ORGANIZATION
 AND POWER

	
 

	
10

	
 

	
3.2

	
 

	
AUTHORIZATION,
 ETC.

	
 

	
10

	
 

	
3.3

	
 

	
GOVERNMENT
 APPROVALS

	
 

	
10

	
 

	
3.4

	
 

	
INVESTMENT
 REPRESENTATIONS

	
 

	
11

	
 

	
3.5

	
 

	
NO BROKERS
 OR FINDERS

	
 

	
11

	
 

	
3.6

	
 

	
SHORT
 SALES

	
 

	
11

	
 

	
3.7

	
 

	
NO BENEFICIAL
 OWNERSHIP

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
ARTICLE IV

	
COVENANTS OF
 THE PARTIES

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
 

	
4.1

	
 

	
LEGENDS

	
 

	
12

	
 

	
4.2

	
 

	
RESTRICTIONS
 ON ACTIONS

	
 

	
12

	
 

	
4.3

	
 

	
SHORT
 SALES

	
 

	
13

i

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
4.4

	
 

	
CONFIDENTIAL
 INFORMATION

	
 

	
13

	
 

	
4.5

	
 

	
SPECIFIC
 PERFORMANCE

	
 

	
14

	
 

	
4.6

	
 

	
BOARD
 OF DIRECTORS

	
 

	
14

	
 

	
 

	
 

	
 

	
 

	
ARTICLE V

	
CONDITIONS
 TO THE PURCHASERS’ OBLIGATION

	
 

	
15

	
 

	
 

	
 

	
 

	
 

	
 

	
5.1

	
 

	
REPRESENTATIONS
 AND WARRANTIES

	
 

	
15

	
 

	
5.2

	
 

	
COVENANTS

	
 

	
15

	
 

	
5.3

	
 

	
CERTIFIED
 BYLAWS

	
 

	
15

	
 

	
5.4

	
 

	
SERIES
 B PREFERRED STOCK CERTIFICATES

	
 

	
15

	
 

	
5.5

	
 

	
AMENDMENT
 NO. 2 TO RIGHTS AGREEMENT

	
 

	
15

	
 

	
5.6

	
 

	
INVESTOR
 RIGHTS AGREEMENT

	
 

	
15

	
 

	
5.7

	
 

	
LEGAL
 OPINION

	
 

	
15

	
 

	
5.8

	
 

	
CERTIFICATE
 OF DESIGNATION

	
 

	
15

	
 

	
5.9

	
 

	
WARRANTS

	
 

	
15

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VI

	
CONDITIONS
 TO THE COMPANY’S OBLIGATION

	
 

	
16

	
 

	
 

	
 

	
 

	
 

	
 

	
6.1

	
 

	
REPRESENTATIONS
 AND WARRANTIES; PERFORMANCE

	
 

	
16

	
 

	
6.2

	
 

	
COVENANTS

	
 

	
16

	
 

	
6.3

	
 

	
CONSIDERATION
 FOR THE SHARES

	
 

	
16

	
 

	
6.4

	
 

	
INVESTOR
 RIGHTS AGREEMENT

	
 

	
16

	
 

	
6.5

	
 

	
CERTIFICATE
 OF DESIGNATION

	
 

	
16

	
 

	
6.6

	
 

	
WARRANTS

	
 

	
16

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VII

	
MISCELLANEOUS

	
 

	
16

	
 

	
 

	
 

	
 

	
 

	
 

	
7.1

	
 

	
SURVIVAL
 OF REPRESENTATIONS

	
 

	
16

	
 

	
7.2

	
 

	
SHARES
 OWNED BY AFFILIATES

	
 

	
16

	
 

	
7.3

	
 

	
COUNTERPARTS

	
 

	
17

	
 

	
7.4

	
 

	
GOVERNING
 LAW

	
 

	
17

	
 

	
7.5

	
 

	
ENTIRE
 AGREEMENT; NO THIRD PARTY BENEFICIARY

	
 

	
18

	
 

	
7.6

	
 

	
EXPENSES

	
 

	
18

	
 

	
7.7

	
 

	
NOTICES

	
 

	
18

	
 

	
7.8

	
 

	
SUCCESSORS
 AND ASSIGNS

	
 

	
19

	
 

	
7.9

	
 

	
HEADINGS

	
 

	
19

	
 

	
7.10

	
 

	
AMENDMENTS
 AND WAIVERS

	
 

	
19

	
 

	
7.11

	
 

	
INTERPRETATION;
 ABSENCE OF PRESUMPTION

	
 

	
19

	
 

	
7.12

	
 

	
SEVERABILITY

	
 

	
20

	
 

	
7.13

	
 

	
SCHEDULES

	
 

	
20

ii

	
 

	
 

	
 

	
SCHEDULES

	
 

	
Schedule 1.1

	
 

	
Purchased
 Shares and Warrant Shares

	
Schedule of
 Exceptions

	
 

	
EXHIBITS

	
 

	
 

	
 

	
Exhibit A

	
 

	
Definitions

	
Exhibit B-1

	
 

	
Form of
 Certificate of Designation, Preferences and Rights of the Series B Preferred
 Stock

	
Exhibit B-2

	
 

	
Form of
 Warrant

	
Exhibit C

	
 

	
Investor
 Rights Agreement

	
Exhibit D

	
 

	
Amendment
 No. 2 to Rights Agreement

	
Exhibit E

	
 

	
Form of
 Opinion of Company Counsel

iii

SECURITIES PURCHASE AGREEMENT

          This
Securities Purchase Agreement dated as of November 15, 2007 (this “Agreement”)
is among TheStreet.com, Inc.,
a Delaware corporation (the “Company”), TCV VI, L.P., a Delaware
limited partnership (“TCV VI”), and TCV Member Fund, L.P.,
a Delaware limited partnership (“TCV Member Fund” and, together with TCV VI, the “Purchasers”).
Capitalized terms used but
not defined herein have the meanings assigned to them in Exhibit A. 

          The
Purchasers desire to purchase from the Company, and the Company desires to
issue and sell to the Purchasers, (i) an aggregate of 5,500 shares (the “Purchased
Shares”) of the Company’s Series B
Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”),
and (ii) one or more warrants (the “Warrants”) to purchase an aggregate of
1,157,083 shares (the “Warrant Shares”) of Common Stock all on the
terms and subject to the conditions hereinafter set forth.

          In
consideration of the premises and the mutual representations, warranties,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

ARTICLE I

PURCHASE AND SALE OF SHARES

          Section
1.1 Purchase and Sale. Subject to the terms and
conditions hereinafter set forth, at the Closing the Company shall issue and
sell the Purchased Shares and the Warrants to the Purchasers and the Purchasers
shall purchase the Purchased Shares and the Warrants from the Company for the
aggregate purchase price set forth on Schedule 1.1. The number of
Purchased Shares and the number of Warrant Shares to be purchased by each
Purchaser is set forth opposite each Purchaser’s name on Schedule 1.1.
The Series B Preferred Stock shall have the rights, terms and privileges set
forth in the Certificate of Designation, Preferences and Rights of the Series B
Preferred Stock (the “Certificate of Designation”) attached as Exhibit B-1
and the Warrants shall be in the form attached as Exhibit B-2. 

          Section
1.2 Closing. On the terms and subject to
the satisfaction or waiver of the conditions set forth in this Agreement, the
closing of the sale and purchase of the Purchased Shares and the Warrants (the
“Closing”) shall take place at the offices
of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York,
at 10:00 A.M., on November 15, 2007. The date on which the Closing is to occur
is herein referred to as the “Closing Date.” At the Closing, the Company will deliver the Purchased Shares and
the Warrants being acquired by each Purchaser in the form of one or more
certificates issued in such Purchaser’s name upon receipt by the Company of
payment of the full purchase price therefor by or on behalf of such Purchaser
to the Company by certified check or by wire transfer of immediately available
funds to an account designated in writing by the Company.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          The
Company represents and warrants to the Purchasers that, except as set forth in
the SEC Documents or on the Schedule of Exceptions to this Agreement:

          Section
2.1 Organization and Power. The Company and each of its
Subsidiaries is a corporation or limited liability company duly incorporated or
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation and has all requisite corporate
or limited liability company power and authority to own its properties and to
carry on its business as presently conducted and as proposed to be conducted.
The Company and each of its Subsidiaries is duly licensed or qualified to do
business as a foreign corporation or limited liability company in each
jurisdiction wherein the character of its property or the nature of the
activities presently conducted by it, makes such qualification necessary,
except where the failure to so qualify has not had and would not individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect.

          Section
2.2 Authorization, Etc. The Company has all
necessary corporate power and authority and has taken all necessary corporate
action required for the due authorization, execution, delivery and performance
by the Company of this Agreement and the Investor Rights Agreement and any
other agreements or instruments executed by the Company in connection herewith
or therewith (collectively, the “Related Agreements”), and the consummation by the
Company of the transactions contemplated hereby and thereby, the filing of the
Certificate of Designation with the Secretary of State of the State of Delaware
and for the due authorization, issuance, sale and delivery of the Purchased
Shares and the Warrants and the reservation, issuance and delivery of the
Conversion Shares and the Warrant Shares. The authorization, execution,
delivery and performance by the Company of this Agreement and the Related
Agreements to which it is or will be a party, and the consummation by the
Company of the transactions contemplated hereby and thereby, including the
filing of the Certificate of Designation and the issuance of the Purchased
Shares, the Conversion Shares and the Warrant Shares do not and will not:
(a) violate or result in the breach of any provision of the certificate of
incorporation and bylaws of the Company; or (b) with such exceptions that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect, whether after the giving of notice or the lapse of time or
both: (i) violate any provision of, constitute a breach of, or default under,
or result in or permit the cancellation, termination or acceleration of any
material judgment, order, writ, decree or contract required to be filed as an
exhibit to one of the SEC Documents; (ii) other than in connection with or
in compliance with the provisions of the HSR Act in connection with any
exercise of the Warrants, violate any provision of, constitute a breach of, or
default under, any applicable state, federal or local law, rule or regulation;
or (iii) result in the creation of any Lien upon any assets of the Company or
any of its Subsidiaries or the suspension, revocation, material impairment,
forfeiture or nonrenewal of any franchise, permit, license or other right
granted by a governmental authority to the Company or any of its Subsidiaries,
other than Liens under federal or state securities laws. The issuance of the
Purchased Shares does not require any further corporate action and is not
subject to any preemptive right under the Company’s certificate of
incorporation or any contract to which the Company is a party. This Agreement
has been, and each of the Related Agreements to which the Company will, at the
Closing be party will be, duly executed and delivered by the Company. Assuming
due execution and delivery thereof by each of the other parties thereto, this
Agreement and the Related Agreements to which the Company is a party will each
be a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be limited
by applicable laws relating to bankruptcy, insolvency, reorganization,
moratorium or other similar legal requirement relating to or affecting
creditors’

-2-

rights
generally and except as such enforceability is subject to general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law). 

          Section
2.3 Government Approvals. No consent, approval,
license or authorization of, or designation, declaration or filing with, any
court or governmental authority is or will be required on the part of the
Company in connection with the execution, delivery and performance by the
Company of this Agreement and the Related Agreements to which the Company is a
party, or in connection with the issuance of the Purchased Shares, the
Warrants, the Conversions Shares or the Warrant Shares, except for (a) the
filing of the Certificate of Designation with the Secretary of State of the
State of Delaware; (b) those which have already been made or granted;
(c) the filing of a current report on Form 8-K with the SEC;
(d) filings with applicable state securities commissions; (e) the
listing of the Conversion Shares and the Warrant Shares with the Nasdaq Stock Market;
(f) in compliance with the provisions of the HSR Act in connection with any
exercise of the Warrants; and (g) those where the failure to obtain such
consent, approval or license or make such filings would not be material to the
Company and its Subsidiaries taken as a whole.

          Section
2.4 Authorized and Outstanding Stock.

                    (a)
The authorized capital stock of the Company (immediately prior to the Closing)
consists of 100,000,000 shares of Common Stock and 10,000,000 shares of
preferred stock, par value $0.01 per share (“Preferred Stock”), and 5,500 shares of
Preferred Stock have been designated as the Series B Preferred Stock and
1,000,000 shares of Preferred Stock have been designated as Series A Junior
Participating Preferred Stock.

                    (b)
As of November 13, 2007, the issued and outstanding capital stock of the
Company consists of 30,097,473 shares of Common Stock. There are no outstanding
shares of Preferred Stock. In addition, options to purchase an aggregate of
1,816,009 shares of Common Stock have been granted and are unexercised under
the Stock Plans, and unvested restricted stock units (or RSUs) for an aggregate
of 264,046 shares have been granted under the Stock Plans. All of the issued
and outstanding shares of capital stock of the Company are, and when issued in
accordance with the terms hereof, the Purchased Shares will be, duly authorized
and validly issued and fully paid and non-assessable. The shares of Common
Stock issuable upon conversion of the Purchased Shares (the “Conversion
Shares”) and upon exercise of the
Warrants have been reserved for issuance and, when issued upon conversion thereof
in accordance with the terms of the Certificate of Designation or the Warrants,
as the case may be, will be validly issued and fully paid and non-assessable
and will not be subject to any preemptive right or any restrictions on transfer
under applicable law or any contract to which the Company is a party, other
than those under applicable state and federal securities and antitakeover laws,
the Investor Rights Agreement and the Rights Agreement. When issued in
accordance with the terms hereof, the Purchased Shares will be free and clear
of all Liens imposed by or through the Company, except for restrictions imposed
by Federal or state securities or “blue sky” laws and except for those imposed
pursuant to this Agreement or the Investor Rights Agreement. The designations,
powers, preferences, rights, qualifications, limitations and restrictions in
respect of each class or series of capital stock of the Company are as set
forth in the Company’s restated certificate of incorporation, as amended.

-3-

                    (c)
Except as provided in this Agreement: (i) no subscription, warrant, option,
convertible security or other right issued by the Company to purchase or
acquire any shares of capital stock of the Company is authorized or
outstanding; (ii) there is not any commitment of the Company to issue any
subscription, warrant, option, convertible security or other such right or to
issue or distribute to holders of any shares of its capital stock any evidences
of indebtedness or assets of the Company; (iii) the Company has no obligation
to purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof; and (iv) there are no agreements between the Company and
any holder of its capital stock relating to the acquisition, disposition or
voting of the capital stock of the Company. No person or entity is entitled to
any preemptive right granted by the Company with respect to the issuance of any
capital stock of the Company. Except as provided in the Investor Rights
Agreement, no person or entity has been granted rights by the Company with
respect to the registration of any capital stock of the Company under the
Securities Act of 1933, as amended (the “Securities Act”).

          Section
2.5 Subsidiaries. The Company has no
subsidiaries nor any investment or other interest in, or any outstanding loan
or advance equal to or greater than $1,000,000 to or from, any Person. The
Company owns of record and beneficially, free and clear of all Liens of any
nature, all of the issued and outstanding capital stock of each of the Material
Subsidiaries. All of the issued and outstanding capital stock or equity interests
of the Material Subsidiaries has been duly authorized and validly issued, and
in the case of corporations, is fully paid and non-assessable. There are no
outstanding rights, options, warrants, preemptive rights, conversion rights,
rights of first refusal or similar rights for the purchase or acquisition from
any Material Subsidiary of any securities of the Material Subsidiaries nor are
there any commitments to issue or execute any such rights, options, warrants,
preemptive rights, conversion rights or rights of first refusal.

          Section
2.6 Securities Law Compliance. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Section 3.4
(Investment Representations), the offer and sale of the Purchased Shares
pursuant to this Agreement will be exempt from the registration requirements of
the Securities Act. The Company has not, in connection with the transactions
contemplated by this Agreement, engaged in: (a) any form of general
solicitation or general advertising (as those terms are used within the meaning
of Rule 502(c) promulgated under the Securities Act); (b) any action involving
a “public offering” within the meaning of Section 4(2) of the Securities Act; or
(c) any action that would require the registration under the Securities Act of
the offering and sale of the Purchased Shares or the Warrants pursuant to this
Agreement. As used herein, the terms “offer” and “sale” have the meanings
specified in Section 2(3) of the Securities Act.

          Section
2.7 SEC Documents; Financial Information. Since January 1, 2006, the
Company has timely filed all reports, schedules, registration statements and
other documents (including all amendments, exhibits and schedules thereto)
required to be filed by the Company with the SEC pursuant to the Exchange Act
and the Securities Act. As of their respective filing dates, the SEC Documents
complied in all material respects with the requirements of the Securities Act,
the Exchange Act and the rules and regulations of the SEC thereunder applicable
to such SEC Documents, and as of their respective dates none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated

-4-

therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company and its Subsidiaries included in the SEC Documents
(the “Financial
Statements”) comply as of their
respective dates in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q promulgated by the SEC), and
present fairly in all material respects as of their respective dates the
consolidated financial position of the Company and its Subsidiaries as at the
dates thereof and the consolidated results of their operations and their
consolidated cash flows for each of the respective periods, in conformity with
GAAP. The Company satisfies the “registrant requirements” for use of Form S-3
set forth in General Instruction I.A to Form S-3 promulgated by the SEC.

          Section
2.8 Internal Controls. The Company and each of its Subsidiaries
maintains a system of internal control over financial reporting that the
Company believes are sufficient to provide reasonable assurance that: (a)
transactions are executed in accordance with management’s general or specific
authorization; (b) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability
for assets; and (c) access to assets is permitted only in accordance with
management’s general or specific authorization. The Company believes that its
auditors and the Audit Committee of the Board of Directors have been advised
of: (x) any significant deficiencies in the design or operation of the
Company’s internal control over financial reporting that are reasonably likely
to adversely affect the Company’s ability to record, process, summarize and
report financial data; and (y) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company’s internal control over financial reporting. Any material weaknesses in
the Company’s internal control over financial reporting as of the date the last
evaluation was conducted have been identified for the Company’s auditors.

          Section
2.9 Disclosure Controls. The Company has established
and maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15 and 15d-15 under the Exchange Act). Such disclosure controls and
procedures are designed to provide reasonable assurance that material
information relating to the Company, including its Subsidiaries, that is
required to be disclosed by the Company in the reports that it furnishes or
files under the Exchange Act is reported within the time periods specified in
the rules and forms of the SEC and that such material information is communicated
to the Company’s management to allow timely decisions regarding required
disclosure. 

          Section
2.10 Absence of Certain Events; No Material Adverse Change.
Since September 30, 2007, the Company and its Subsidiaries each has
conducted its business operations in the ordinary course and there has not
occurred any event, development, circumstance or condition that, individually
or in the aggregate, has had or is reasonably likely to have a Material Adverse
Effect. Without limiting the generality of the foregoing, since
September 30, 2007 there has not occurred:

                    (a)
any purchase, sale, transfer, assignment, conveyance or pledge of the assets or
properties of the Company or any of its Subsidiaries, except in the ordinary
course of business;

-5-

                    (b)
any incurrence of indebtedness for borrowed money, notes, mortgages or purchase
money indebtedness of the Company or its Subsidiaries in excess of $1,000,000
in the aggregate;

                    (c)
any waiver or modification by the Company or any of its Subsidiaries of any
right or rights of substantial value or of a material debt owed to it other
than in the ordinary course of business;

                    (d)
any material change in the accounting principles, methods, practices or
procedures followed by the Company in connection with the business of the
Company and its Subsidiaries or any material change in the depreciation or
amortization policies or rates theretofore adopted by the Company in connection
with the business of the Company and its Subsidiaries, any change in the
Company’s independent public accounting firm, disagreement with its independent
public accounting firm over the Company’s and its Subsidiaries’ application of
accounting principles or with the preparation of any of their financial
statements that was required to be disclosed in the SEC Documents, notification
to the Company’s audit committee of any irregularity with respect to the
Company’s or its Subsidiaries’ financial statements, books and records or
method of accounting; 

                    (e)
except as contemplated by this Agreement, any declaration, setting aside or
payment of any dividends (or, in the case of a limited liability company, other
distributions) in respect of the outstanding shares of capital stock (or, in
the case of a limited liability company, other equity interests) of the Company
or any of its Subsidiaries (other than (i) the Company’s regular quarterly
dividend of $0.025 per share and (ii) dividends declared or paid by
wholly-owned Subsidiaries to the Company or another wholly-owned Subsidiary of
the Company) or any other change in the authorized capitalization of the
Company or any of its Subsidiaries or any direct or indirect redemption,
purchase or other acquisition of any such stock by the Company; 

                    (f)
any written notice from the SEC in connection with any investigation or action
by the SEC that seeks to, or could reasonably be expected to result in, the
restatement by the Company of any of its current or previously disclosed
financial statements, and to the actual knowledge of any of the executive
officers of the Company, no such investigation or action has been threatened by
the SEC;

                    (g)
any material change in any compensation agreement or arrangement with any
executive officer or director of the Company, other than in the ordinary course
of business; 

                    (h)
any resignation or termination of employment of Mr. James Cramer or any of the
Company’s other executive officers; 

                    (i)
any loans or guarantees made by the Company or any of its Subsidiaries to or
for the benefit of their employees, officers or directors or any members of
their immediate families, other than (i) travel advances and other advances
made in the ordinary course of business and (ii) loans to employees, officers
or directors in connection with the exercise of stock options granted pursuant
to the Stock Plans; or

                    (j)
any arrangement, contract or commitment to do any of the foregoing.

-6-

          Section
2.11 Litigation. With such exceptions that,
individually or in the aggregate, are not reasonably expected to have a
Material Adverse Effect, there is no litigation or governmental proceeding
pending or, to the knowledge of the Company, threatened, against the Company or
any of its Subsidiaries or affecting any of the properties or assets of the
Company or any of its Subsidiaries. Neither the Company nor any Subsidiary is
in default with respect to any order, writ, injunction, decree, ruling or
decision of any court, commission, board or other government agency that is
expressly applicable to the Company or any Subsidiary or any of their assets or
property.

          Section
2.12 Compliance with Laws; Permits. The Company is not, and will
not at the Closing be, in violation of or default under any provision of its
restated certificate of incorporation or bylaws, each as in effect at the
Closing. With such exceptions that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect the Company and its Subsidiaries
are in compliance with each judgment, decree, judicial order, statute and
regulation (whether issued under domestic, foreign or international law) by
which any of them is bound or to which any of them or any of their respective
properties are subject. The Company and each of its Subsidiaries has all
franchises, permits, licenses and other rights granted by governmental
authorities that are required to permit it to own its property and to conduct
its business as it is presently conducted other than franchises, permits,
licenses and other privileges granted by governmental authorities that if not
held by the Company or such Subsidiary have not had and would not, individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect.
All such franchises, permits, licenses and other rights and privileges granted
by governmental authorities are in full force and effect and, to the knowledge
of the Company, no suspension or cancellation of any of them is threatened.

          Section
2.13 Taxes. The Company and each of its
Subsidiaries has filed all Tax returns required to be filed within the
applicable periods for such filings (with due regard to any extension) and has
paid all Taxes required to be paid, except for any such failures to file or pay
that would not individually or in the aggregate have a Material Adverse Effect.
No material deficiencies for any Tax are currently assessed against the Company
or any of its Subsidiaries, and no Tax returns of the Company or any of its
Subsidiaries have been audited during the last three years, and, there is no
such audit pending or, to the knowledge of the Company, contemplated. There is
no outstanding claim by an authority in a jurisdiction where the Company does
not file tax returns that it is or may be subject to the imposition of any
material tax by that jurisdiction. 

          Section
2.14 Intellectual Property. All Intellectual Property
Rights purported to be owned by the Company or any of its Subsidiaries that
were developed, worked on or otherwise held by any employee, officer,
consultant or otherwise are owned free and clear by the Company or one of its
Subsidiaries (as the case may be) by operation of law or have been validly
assigned to the Company one of its Subsidiaries (as the case may be) other than
those Intellectual Property Rights where the failure to own or assign such
rights would not, individually or in its aggregate be reasonably likely to have
a Material Adverse Effect. The Intellectual Property Rights are sufficient in
all material respects to carry on the business of the Company and each of its
Subsidiaries as presently conducted and as proposed to be conducted. To the
knowledge of the Company, with such exceptions as are not, individually or in
the aggregate reasonably likely to have a Material Adverse Effect, the
Intellectual Property Rights purported to be owned by the

-7-

Company or any
of its Subsidiaries do not infringe the intellectual property rights of any
third party. Neither the Company nor any of its Subsidiaries has received since
the later of January 1, 2005 and (with respect to each Subsidiary of the
Company that was acquired from one or more third parties) the date such
Subsidiary was acquired from such third party(ies) any written notice or other
written claim from any third party: (i) asserting that any of the
Intellectual Property Rights purported to be owned by the Company or any of its
Subsidiaries infringe any intellectual property rights of such third party;
(ii) challenging the validity, effectiveness or ownership by the Company or its
Subsidiaries of any of the Intellectual Property Rights; or (iii) asserting
that the Company or its Subsidiaries is in material default with respect to any
license granting Intellectual Property Rights to the Company or its
Subsidiaries.

          Section
2.15 Contracts and Commitments. All of the material
contracts of the Company or any of its Subsidiaries that are required to be
described in the SEC Documents, or to be filed as exhibits thereto, are in full
force and effect and upon consummation of the transactions contemplated by this
Agreement and the Related Agreements, shall continue in full force and effect,
without penalty or adverse consequence. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any other party is in
material breach of or in material default under any such contract.

          Section
2.16 Employee Matters. The Company has described
in, or filed as an exhibit to, the SEC Documents filed prior to the date of
this Agreement all of the following types of documents, agreements, plans or
arrangements that are required by federal securities laws to be described in,
or filed as an exhibit to, the SEC Documents: employment agreements, consulting
agreements, deferred compensation, pension or retirement agreements or
arrangements (including all “employee pension benefit plans” as defined in
Section 3(2) of ERISA, bonus, incentive or profit-sharing plans or
arrangements, or labor or collective bargaining agreements in effect by the
Company and its Subsidiaries) (the “ERISA Documents”). Except for any compliance
failures that, individually or in the aggregate, are not reasonably likely to
have a Material Adverse Effect, (a) the Company and its Subsidiaries are in
compliance in all material respects with all applicable laws and regulations
relating to labor, employment, fair employment practices, terms and conditions
of employment, and wages and hours, and with the terms of the ERISA Documents;
and (b) each such ERISA Document is in compliance in all material respects with
all applicable requirements of ERISA. To the Company’s knowledge, none of the
Company’s or its Subsidiaries’ employees are obligated under any contract
(including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her
employment obligations to the Company or its Subsidiaries or that would
conflict with the Company’s and its Subsidiaries’ business as now conducted or
proposed to be conducted, except for such contracts and other agreements,
judgments, decrees and orders that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

          Section
2.17 No Brokers or Finders. No Person has or will have,
as a result of the transactions contemplated by this Agreement, any right,
interest or claim against or upon the Company, any of its Subsidiaries or any
Purchaser for any commission, fee or other compensation as a finder or broker
because of any act or omission by the Company or any of its Subsidiaries.

-8-

          Section
2.18 Transactions with Affiliates. Except as disclosed in
the Proxy Statement, as of April 23, 2007 (the date the Proxy Statement was
filed with the SEC), there were no loans, leases or other agreements,
understandings or continuing transactions between the Company or any of its
Subsidiaries, on the one hand, and any officer or director of the Company or
any of its Subsidiaries or any Person that the Company believes is the owner of
five percent or more of the outstanding Common Stock or any respective family
member or Affiliate of such officer, director or stockholder, on the other
hand, that were required by federal securities laws to be disclosed in the
Proxy Statement.

          Section
2.19 Insurance. The Company and each of
its Subsidiaries maintains insurance covering its properties, operations,
personnel and businesses as the Company deems adequate. All such insurance is
fully in force, except where the failure to be in full force has not had and
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.

          Section
2.20 Investment Company Act. The Company is not, and
immediately after giving effect to the sale of the Purchased Shares in
accordance with this Agreement and the application of the proceeds thereof will
not be required to be registered as, an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act.

          Section
2.21 Investment Advisers Act. The Company is not ineligible pursuant to Section 9(a) or
9(b) of the Investment Company Act to serve as an investment adviser to a
registered investment company. As of the date of the Company’s most recent
Uniform Application for Investment Adviser Registration on Form ADV and, to the
knowledge of the Company, since that date, no “affiliated person” (as defined
in the Investment Company Act) of the Company is or was ineligible pursuant to
Section 9(a) or 9(b) of the Investment Company Act to serve as an “affiliated
person” of an investment adviser to a registered investment company. No
“associated person” (as defined in the Advisers Act) of the Company is
ineligible pursuant to Section 203 of the Advisers Act to serve as an
“associated person” of a registered investment adviser. As of the date of the
Company’s most recent Uniform Application for Investment Adviser Registration
on Form ADV and, to the knowledge of the Company, since that date, each
“investment advisory representative” (as defined in the Advisers Act) of the
Company is or was licensed under all applicable state securities or “blue sky”
laws.

          Section
2.22 Nasdaq. As of the date hereof,
the Company’s Common Stock is listed on the Nasdaq Global Market, and no event
has occurred, and the Company is not aware of any event that is reasonably
likely to occur, that would result in the Common Stock being delisted from the
Nasdaq Global Market.

          Section
2.23 Delaware Section 203. The Board of Directors
of the Company (or a committee thereof), at a meeting duly called and held on
November 15, 2007, has approved for purposes of Section 203 of the Delaware
General Corporation Law: (a) the sale and issuance of the Purchased Shares and
the Warrants to the Purchasers hereunder and the issuance of the Conversion
Shares upon conversion of the Purchased Shares and the issuance of the Warrant
Shares upon exercise of the Warrants; and (b) in the event the Purchasers are
not “interested stockholders” (as defined in Section 203 of the Delaware General
Corporation Law) immediately 

-9-

after giving effect to their acquisition of the
Purchased Shares, a transaction in compliance with Section 4.2(a) in which
either (or both) of the Purchasers become “interested stockholders.”

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

          Each
Purchaser, severally and not jointly, represents and warrants to the Company
that:

          Section
3.1 Organization and Power. Such Purchaser is a limited partnership
duly formed, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite limited partnership power
and authority to own its properties and to carry on its business as presently
conducted. 

          Section
3.2 Authorization, Etc. Such
Purchaser has all necessary limited partnership power and authority, and has
taken all necessary limited partnership action required for the due
authorization, execution, delivery and performance by such Purchaser of this
Agreement and the Related Agreements to which it is a party and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby. The authorization, execution, delivery and performance by such
Purchaser of this Agreement and the Related Agreements to which it is or will
be a party, and the consummation by such Purchaser of the transactions
contemplated hereby and thereby do not and will not: (a) violate or result in
the breach of any provision of the certificate of limited partnership and
limited partnership agreement of such Purchaser; or (b) with such exceptions
that, individually or in the aggregate, are not reasonably likely to have a
material adverse effect on its ability to perform its obligations under this
Agreement and the Related Agreements to which it is a party, whether after the
giving of notice or the lapse of time or both: (i) violate any provision of,
constitute a breach of, or default under, or result in or permit the cancellation,
termination or acceleration of any material contract to which such Purchaser is
a party; or (ii) violate any provision of, constitute a breach of, or default
under, any applicable law. This Agreement has been, and each of the Related
Agreements to which such Purchaser will, at the Closing be party will be, duly
executed and delivered by such Purchaser. Assuming due execution and delivery
thereof by the other Persons contemplated to be party thereto, this Agreement
and the Related Agreements will each be a valid and binding obligation of such
Purchaser enforceable against such Purchaser in accordance with its terms,
except as such enforceability may be limited by applicable laws relating to
bankruptcy, insolvency, reorganization, moratorium or other similar legal
requirement relating to or affecting creditors’ rights generally and except as
such enforceability is subject to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).

          Section
3.3 Government Approvals. No consent, approval, license or
authorization of, or designation, declaration or filing with, any court or
governmental authority is or will be required on the part of such Purchaser in
connection with the execution, delivery and performance by such Purchaser of
this Agreement and the Related Agreements to which it is a party, except for:
(a) those which have already been made or granted; (b) the filing with the SEC
of a Schedule 13D or Schedule 13G and a Form 3 to report such Purchaser’s
ownership of the Purchased Shares; and (c) those where the failure to obtain
such consent, approval or license would not have a material adverse effect on
the ability of the Purchasers to perform their obligations hereunder.

-10-

          Section
3.4 Investment Representations. 

                    (a)
Such Purchaser is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act.

                    (b)
Such Purchaser has been advised by the Company that neither the Purchased
Shares nor the Warrants have been registered under the Securities Act, that the
Purchased Shares and the Warrants will be issued on the basis of the statutory
exemption provided by Section 4(2) under the Securities Act or Regulation D
promulgated thereunder, or both, relating to transactions by an issuer not
involving any public offering and under similar exemptions under certain state
securities laws, that this transaction has not been reviewed by, passed on or
submitted to any federal or state agency or self-regulatory organization where
an exemption is being relied upon, and that the Company’s reliance thereon is based
in part upon the representations made by such Purchaser in this Agreement and
the Related Agreements. Such Purchaser acknowledges that it has been informed
by the Company of, or is otherwise familiar with, the nature of the limitations
imposed by the Securities Act and the rules and regulations thereunder on the
transfer of securities.

                    (d)
Such Purchaser is purchasing the Purchased Shares and the Warrants for its own
account and not with a view to, or for sale in connection with, any
distribution thereof in violation of federal or state securities laws.

                    (e)
By reason of its business or financial experience, such Purchaser has the
capacity to protect its own interest in connection with the transactions
contemplated hereunder.

                    (f)
The Company has provided to such Purchaser all documents and information that
such Purchaser has requested relating to an investment in the Company. Such
Purchaser recognizes that investing in the Company involves substantial risks,
and has taken full cognizance of and understands all of the risk factors
related to the acquisition of the Purchased Shares and the Warrants. Such
Purchaser has carefully considered and has, to the extent it believes such
discussion necessary, discussed with the Purchaser’s professional legal, tax
and financial advisers the suitability of an investment in the Company, and
such Purchaser has determined that the acquisition of the Purchased Shares and
the Warrants is a suitable investment for the Purchaser. Such Purchaser has not
relied on the Company for any tax or legal advice in connection with the
purchase of the Purchased Shares or the Warrants. In evaluating the suitability
of an investment in the Company, such Purchaser has not relied upon any
representations (other than the representations and warranties of the Company
set forth in Article II) or other information from the Company or any of its
agents. 

          Section
3.5 No Brokers or Finders. No Person has or will have, as a result of
the transactions contemplated by this Agreement, any right, interest or claim
against or upon the Company, any of its Subsidiaries or any Purchaser for any
commission, fee or other compensation as a finder or broker because of any act
or omission by such Purchaser.

          Section
3.6 Short Sales. Neither such Purchaser
nor any of its Restricted Affiliates has engaged in any Short Sales since June
7, 2007.

-11-

          Section
3.7 No Beneficial Ownership. Neither Purchaser
beneficially owns (as such term is defined in Rule 13d-3 under the Exchange
Act) any Common Stock or is the record owner of any Common Stock.

ARTICLE IV

COVENANTS OF THE PARTIES

          Section
4.1 Legends. Each Purchaser
acknowledges and agrees that the Purchased Shares and the Warrants will bear a
legend in substantially the following form:

	
 

	
 

	
 

	
“The shares represented by this certificate have not
  been registered under the Securities Act of 1933, as amended, and have been
  acquired for investment and not with a view to, or in connection with, the
  sale or distribution thereof. Such shares may not be sold, offered for sale,
  pledged or hypothecated in the absence of an effective registration statement
  thereunder or an exemption from such registration.”

          Section
4.2 Restrictions on Actions.

                    (a)
Each Purchaser agrees that until the earlier of the seventh anniversary of the
date of this Agreement and the date on which such Purchaser no longer owns any
Purchased Shares, Conversion Shares, Warrants or Warrant Shares (the “Restricted
Period”), without the prior written
consent of the Board of Directors of the Company, it will not at any time, nor
will it cause, suffer or permit any of its Restricted Affiliates to, acquire
directly or indirectly, by purchase or otherwise, record ownership or
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act )
more than 35% the Company’s outstanding Common Stock; provided, however,
that a Purchaser becoming a beneficial owner of more than 35% as a result of
the Company taking any direct or indirect action that results in the number of
outstanding shares of capital stock being reduced (e.g. stock repurchases)
shall not be a breach of this Section 4.2. 

                    (b)
The Purchasers agree that, during the Restricted Period without the prior
written consent of the Board of Directors of the Company, neither of them will
at any time, nor will a Purchaser cause, suffer or permit any of its Restricted
Affiliates to, directly or indirectly: (i) make, or in any way participate in,
any solicitation of proxies to vote any securities of the Company under any
circumstances for a change in the directors or management of the Company, or in
connection with a merger or acquisition of the Company, or deposit any
securities of the Company in a voting trust or subject them to a voting
agreement or other agreement of similar effect (it is understood and agreed
that this clause (i) shall not prohibit any Purchaser or any of their
respective Restricted Affiliates from voting any securities of the Company in
their discretion); (ii) form, join or in any way participate in a “group”
(within the meaning of Section 13(d)(3) of the Exchange Act) with respect to
any of securities of the Company that describes any plans or proposals required
to be disclosed in response to any of clauses (a) through (j) of Item 4 of any
Schedule 13D (or any amendment thereto); (iii) publicly propose to enter into,
directly or indirectly, any merger, consolidation, business combination or
other similar transaction involving the Company; (iv) formulate or disclose any
intention, plan or arrangement to change the directors or management of the
Company; or (v) advise, assist or encourage any other Persons in connection
with any of the foregoing. (It is understood and agreed that nothing

-12-

in this Section 4.2(b) shall prohibit the Series B
Designee from taking any action, or refraining from taking any action, required
in connection with his or her fiduciary duties.)

                    (c)
The provisions of Section 4.2(a) and (b) shall terminate in the event that the
Board of Directors of the Company shall: (i) approve a tender offer for a
majority of the outstanding capital stock of the Company; (ii) liquidate the
Company or sell all or substantially all of the assets of the Company to
another Person; (iii) approve a merger or consolidation of the Company with any
other Person that would result in the voting securities of the Company
outstanding immediately prior thereto representing less than a majority of the
voting power to elect a majority of the board of directors or similar body of
the Person surviving such merger or resulting from such consolidation; or (iv)
sell or otherwise issue to any Person voting securities of the Company that
would result in such Person having a majority of the combined voting power of
the voting securities of the Company. For purposes hereof, “voting power” means
the power to vote in the election of directors generally.

                    (d)
The provisions of Section 4.2(a) and (b) be reinstated and shall apply in full
force according to their terms in the event that: (i) if the provisions of
Section 4.2(a) and (b) shall have terminated as a result of a tender offer
under clause (c)(i) above, such tender offer (as originally made or as extended
or modified) shall have terminated (without any securities being accepted
thereunder for purchase) prior to the commencement of a tender offer by any
Purchaser or any of its Restricted Affiliates that would have been permitted
pursuant to clause (c)(i) as a result of such third-party tender offer; (ii)
any tender offer by any Purchaser or any of its Restricted Affiliates (as
originally made or as extended or modified) that was permitted to be made
pursuant to clause (c)(ii) through (iv) shall have terminated (without any
securities being accepted thereunder for purchase); or (iii) if the provisions
of Section 4.2(a) and (b) shall have terminated as a result of clause (c)(i),
(iii) or (iv), the Board of Directors of the Company shall have determined to
rescind or abandon the previous action described in clause (c)(ii) through (iv)
(and no such action shall have closed). Upon reinstatement of the provisions of
Section 4.2(a) and (b), the preceding provisions of this Section 4.2 shall
continue to govern, including, without limitation, those that provide for the
termination of any of the provisions of this Section 4.3 in the event that any
of the events described in clause (c) shall occur.

          Section
4.3 Short Sales. Each Purchaser agrees
that, for so long as such Purchaser or any of its Restricted Affiliates owns
any Purchased Shares, Conversion Shares, Warrants or Warrant Shares it will
not, and it will not cause, suffer or permit any of its Restricted Affiliates
to, enter into any Short Sales. 

          Section
4.4 Confidential Information. 

                    (a)
From and after the consummation of the Closing, each Purchaser shall, and shall
use its commercially reasonable efforts to cause its Affiliates,
Representatives and Permitted Disclosees to, maintain the confidentiality of,
and not use for the benefit of itself or others, any confidential financial,
business-related and other information concerning the Company or its
Subsidiaries, whether furnished before or after the Closing Date, whether oral
or written, and regardless of the manner or form in which it is furnished,
together with notes, analyses, compilations, studies or other documents
prepared by the Company or any of its Subsidiaries or any of their
Representatives (collectively, the “Confidential Information”);

-13-

provided,
however, that: (i) each Purchaser shall be liable in the event any of
its Affiliates, Representatives or Permitted Disclosees shall not maintain the
confidentiality of, or use for the benefit of itself or others, any
Confidential Information even though such Purchaser is only required to use
commercially reasonable efforts to cause them to comply herewith; and (ii) this
Section 4.4(a) shall not restrict: (A) any disclosure of information required
to be disclosed by applicable law, rule, regulation or court or other
governmental order (but only such portion of the Confidential Information that
they are legally required to disclose), but if permitted by applicable law, the
Purchasers shall give the Company notice and a reasonable opportunity to
contest such disclosure or seek an appropriate protective order; or (B) any
disclosure of information that: (I) is publicly available as of the Closing
Date; (II) after the Closing Date, becomes publicly available through no fault
of any of the Purchasers or their Affiliates or Representatives; (III) is
received by the Purchasers from a third party not, to the knowledge of the
Purchasers, subject to any obligation of confidentiality with respect to such
information; or (IV) was known by such Purchaser on a non-confidential basis
from a source that was entitled to disclose it to such Purchaser.
Notwithstanding the foregoing, each Purchaser will advise its Affiliates,
Representatives and Permitted Disclosees that such Confidential Information is
confidential and that by receiving such Confidential Information such
Affiliate, Representative or Permitted Disclosee is agreeing to maintain the confidentiality
of, and not to use for the benefit of itself or others, any Confidential
Information.

                    (b)
Nothing contained in this Section 4.4 shall prevent any Purchaser or any
Permitted Disclosee from entering into any business, entering into any
agreement with a third party, or investing in or engaging in investment
discussions with any other Person (whether or not competitive with the
Company); provided, however, that neither such Purchaser nor any
of its Affiliates, Representatives or Permitted Disclosee discloses or
otherwise makes use of, except as permitted in accordance with this Section
4.4, any Confidential Information in connection with such activities.

          Section
4.5 Specific Performance. The Purchasers agree
that irreparable damage would occur and that the Company would not have any
adequate remedy at law in the event that any of the provisions of Sections 4.2
(Restrictions on Actions), 4.3 (Short Sales) or 4.4 (Confidential Information)
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the Purchasers agree that the Company shall without the
necessity of proving the inadequacy of money damages or posting a bond be
entitled to an injunction or injunctions to prevent breaches of such Sections
and to enforce specifically the terms, provisions and covenants contained
therein, this being in addition to any other remedy to which they are entitled
at law or in equity.

          Section
4.6 Board of Directors. Promptly after the
Closing, once Jay Hoag shall become a member of the Board of Directors of the
Company as the Series B Designee (as such term is defined in the Certificate of
Designation), the Company shall cause the Series B Designee to be covered by
any directors and officers insurance policy maintained by the Company from time
to time at all times that a Series B Designee serves on the Company’s Board of
Directors.

-14-

ARTICLE V

CONDITIONS TO THE PURCHASERS’ OBLIGATION

          The
obligations of the Purchasers to consummate the transactions contemplated
hereby are subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions precedent:

          Section
5.1 Representations and Warranties. Each of the
representations and warranties of the Company contained in Article II of this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date, except for representations and
warranties that speak as of a specific date or time other than the Closing Date
(which need only be true and correct in all material respects as of such date
or time); provided, however, that if a representation or warranty
is qualified by “materiality” or “Material Adverse Effect” or similar
qualifier, such representation or warranty (as so qualified) shall be true and
correct in all respects.

          Section
5.2 Covenants. The Company shall have
performed and complied in all material respects with all other covenants and
agreements required by this Agreement to be performed or complied with by it at
or prior to the Closing.

          Section
5.3 Certified Bylaws. The Purchasers shall
have received a copy of the Company’s bylaws, certified by its Secretary.

          Section
5.4 Series B Preferred Stock Certificates. The Company shall have
delivered one or more stock certificates to each Purchaser representing the
portion of the Purchased Shares to be purchased by such Purchaser.

          Section
5.5 Amendment No. 2 to Rights Agreement. The Company and American
Stock Transfer & Trust Company shall have executed Amendment No. 2 to
Rights Agreement in the form attached as Exhibit D.

          Section
5.6 Investor Rights Agreement. The Company shall have
entered into the Investor Rights Agreement. 

          Section
5.7 Legal Opinion. The Company shall have
provided an opinion addressed to the Purchasers rendered by its General Counsel
in form and substance reasonably satisfactory to the Purchasers, in
substantially the form attached hereto as Exhibit E. 

          Section
5.8 Certificate of Designation. The Certificate of
Designation shall have been duly filed with the Secretary of State of the State
of Delaware. 

          Section
5.9 Warrants. The Company shall have
entered into and delivered the Warrants to the Purchasers.

-15-

ARTICLE VI

CONDITIONS TO THE COMPANY’S OBLIGATION

          The
obligations of the Company to consummate the transactions contemplated hereby
are subject to the satisfaction, on or prior to the Closing Date, of each of
the following conditions precedent:

          Section
6.1 Representations and Warranties; Performance. Each of the representations
and warranties of the Purchasers contained in Article III of this Agreement
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had
been made on and as of the Closing Date, except for representations and
warranties that speak as of a specific date or time other than the Closing Date
(which need only be true and correct in all material respects as of such date
or time); provided, however, that if a representation or warranty
is qualified by “materiality” or “material adverse effect” or similar
qualifier, such representation or warranty (as so qualified) shall be true and
correct in all respects.

          Section
6.2 Covenants. The Purchasers shall
have performed and complied in all material respects with all other covenants
and agreements required by this Agreement to be performed or complied with by
them at or prior to the Closing. 

          Section
6.3 Consideration for the Shares. Each Purchaser shall
have paid the purchase price of the Purchased Shares to be purchased by such
Purchaser in full at the Closing either by certified check or by wire transfer
of immediately available funds to an account designated in writing by the
Company.

          Section
6.4 Investor Rights Agreement. The Purchasers shall
have entered into the Investor Rights Agreement. 

          Section
6.5 Certificate of Designation. The Certificate of
Designation shall have been duly filed with the Secretary of State of the State
of Delaware. 

          Section
6.6 Warrants. The Purchasers shall
have entered into and delivered the Warrants to the Company.

ARTICLE VII

MISCELLANEOUS

          Section
7.1 Survival of Representations. The representations,
warranties, covenants and agreements made herein or in any certificates or
documents executed in connection herewith shall survive the execution and
delivery hereof and the Closing of the transactions contemplated hereby.
Notwithstanding the foregoing, the representations and warranties contained in
or made pursuant to this Agreement shall terminate on, and no claim or action
with respect thereto may be brought after, the date that is 10 days after the
date on which the Company files with the SEC its annual report on Form 10-K for
the year ending December 31, 2008.

          Section
7.2 Shares Owned by Affiliates. For the purposes of
applying all provisions of this Agreement which condition the receipt of
information or access to information or exercise

-16-

of any rights upon ownership of a specified number or
percentage of shares, the shares owned of record by any Affiliate of a
Purchaser shall be deemed to be owned by such Purchaser.

          Section
7.3 Counterparts.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement, and will become effective when one or
more counterparts have been signed by a party and delivered to the other
parties. Copies of executed counterparts transmitted by telecopy, telefax or
other electronic transmission service shall be considered original executed
counterparts for purposes of this Section 7.3, provided that receipt of copies
of such counterparts is confirmed.

          Section
7.4 Governing Law.

                    (a)
Except to the extent the DGCL is mandatorily applicable, this Agreement and any
disputes arising hereunder or controversies related hereto shall be governed by
and construed in accordance with the internal laws, and not the laws of
conflicts, of the State of New York that apply to contracts made and performed
entirely within such state.

                    (b)
Any action, suit or other proceeding with respect to this Agreement and any
matter arising out of or in connection with this Agreement shall be brought
exclusively in the state courts sitting in the State of Delaware or federal
courts sitting in the State of Delaware. By execution and delivery of this
Agreement, each party hereto hereby accepts for itself and in respect of such
Person’s property, generally and unconditionally, the sole and exclusive
jurisdiction of the aforesaid courts and appellate courts thereof. Each party
hereto irrevocably consents to service of process in any action, suit or other
proceeding in any of the aforementioned courts by the mailing of copies thereof
by registered or certified mail, postage prepaid, or by recognized overnight
delivery service, to such party at such party’s address referred to in Section
7.7. Each party hereto hereby irrevocably and unconditionally waives any
objection which such Person may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement brought in the courts referred to above and hereby further
irrevocably waives and agrees, to the extent permitted by applicable law, not
to plead or claim in any such court that any such action, suit or other
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of any party hereto to serve process in
any other manner permitted by law. Notwithstanding anything in this Section
7.4(b) to the contrary, each party agrees that a final judgment in any such
action, suit or other proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. 

                    (c)
To the extent that any party hereto has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself, or to such Person’s
property, each such party hereto hereby irrevocably waives such immunity in
respect of such Person’s obligations with respect to this Agreement.

                    (d)
Waiver of Jury Trial. EACH PARTY HERETO, FOR ITSELF AND ITS AFFILIATES,
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER
PROCEEDING (WHETHER BASED ON

-17-

CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
TO THE ACTIONS OF THE PARTIES HERETO OR THEIR RESPECTIVE AFFILIATES PURSUANT TO
THIS AGREEMENT OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF.

          Section
7.5 Entire Agreement; No Third Party Beneficiary. This Agreement and the
Related Agreements contain the entire agreement by and among the parties with
respect to the subject matter hereof and all prior negotiations, writings and
understandings relating to the subject matter of this Agreement, including the
letter of intent dated October 9, 2007 between the Company and TCV VI and the
Confidentiality Letter dated July 11, 2007 between the Company and TCMI, Inc.
are merged in and are superseded and canceled by, this Agreement and the
Related Agreements. This Agreement is not intended to confer upon any Person
not a party hereto (or their successors and permitted assigns) any rights or
remedies hereunder.

          Section
7.6 Expenses. Whether or not the
Closing shall occur, all fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, including accounting
and legal fees shall be paid by the party incurring such expenses, except that
the Company shall pay up to $125,000 of the reasonable and documented
out-of-pocket fees and expenses incurred by the Purchasers, including, without
limitation, the reasonable and documented fees and expenses of counsel for the
Purchasers.

          Section
7.7 Notices. All notices and other
communications hereunder will be in writing and given by certified or
registered mail, return receipt requested, nationally recognized overnight
delivery service, such as Federal Express or facsimile (or like transmission)
with confirmation of transmission by the transmitting equipment or personal
delivery against receipt to the party to whom it is given, in each case, at
such party’s address or facsimile number set forth below or such other address
or facsimile number as such party may hereafter specify by notice to the other
parties hereto given in accordance herewith. Any such notice or other
communication shall be deemed to have been given as of the date so personally
delivered or transmitted by facsimile or like transmission, on the next
business day when sent by overnight delivery services or five days after the
date so mailed if by certified or registered mail.

	
 

	
 

	
 

	
If to the Company, to:

	
 

	
 

	
 

	
TheStreet.com, Inc.

	
 

	
14 Wall Street, 14th Floor

	
 

	
New York, NY 10005

	
 

	
Fax No.: (212) 321-5013

	
 

	
Attention: Chief Executive Officer

	
 

	
 

	
 

	
with a copy to:

	
 

	
 

	
 

	
Hughes Hubbard & Reed LLP

	
 

	
One Battery Park Plaza

	
 

	
New York, NY 10004

	
 

	
Fax No.: (212) 422-4726 

	
 

	
Attention: Kenneth A. Lefkowitz

-18-

	
 

	
 

	
 

	
If to a Purchaser, to:

	
 

	
 

	
 

	
Technology Crossover Ventures

	
 

	
528 Ramona Street 

	
 

	
Palo Alto, CA 94301

	
 

	
Fax No.: (650) 614-8222

	
 

	
Attention: Carla S. Newell

	
 

	
 

	
 

	
with a copy to:

	
 

	
 

	
 

	
Latham & Watkins LLP

	
 

	
140 Scott Drive 

	
 

	
Menlo Park, CA 94025 

	
 

	
Fax No.: (650) 463-2600

	
 

	
Attention: Peter F. Kerman

          Section
7.8 Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Any purported assignment or delegation in violation of this
Agreement shall be null and void ab initio.

          Section
7.9 Headings. The Section, Article and
other headings contained in this Agreement are inserted for convenience of
reference only and will not affect the meaning or interpretation of this
Agreement.

          Section
7.10 Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by each party
hereto. Any party hereto may, only by an instrument in writing, waive
compliance by any other party or parties hereto with any term or provision
hereof on the part of such other party or parties hereto to be performed or
complied with. No failure or delay of any party in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor will any single or
partial exercise of any right or power, or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The waiver by any party
hereto of a breach of any term or provision hereof shall not be construed as a
waiver of any subsequent breach. The rights and remedies of the parties
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have hereunder.

          Section
7.11 Interpretation; Absence of Presumption.

                    (a)
For the purposes hereof: (i) words in the singular shall be held to include the
plural and vice versa and words of one gender shall be held to include the
other gender as the context requires; (ii) the terms “hereof,” “herein,” and
“herewith” and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the Schedules
and Exhibits) and not to any particular provision of this Agreement, and
Article, Section, paragraph, Exhibit and Schedule references are to the
Articles, Sections, paragraphs, Exhibits, and Schedules to this Agreement
unless otherwise specified; (iii) the word “including” and words of similar import
when used in this Agreement shall mean “including, without

-19-

limitation,” unless the context otherwise requires or
unless otherwise specified; and (iv) the word “or” shall not be exclusive. 

                    (b)
With regard to each and every term and condition of this Agreement and any and
all agreements and instruments subject to the terms hereof, the parties hereto
understand and agree that the same have or has been mutually negotiated,
prepared and drafted, and if at any time the parties hereto desire or are
required to interpret or construe any such term or condition or any agreement
or instrument subject hereto, no consideration will be given to the issue of
which party hereto actually prepared, drafted or requested any term or
condition of this Agreement or any agreement or instrument subject hereto.

          Section
7.12 Severability.
Any provision hereof that is held to be invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, shall be ineffective only to
the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof, provided, however,
that the parties will attempt in good faith to reform this Agreement in a manner
consistent with the intent of any such ineffective provision for the purpose of
carrying out such intent.

          Section
7.13 Schedules. The Schedule of
Exceptions to this Agreement (the “Schedule of Exceptions”) shall be arranged in
sections and subsections corresponding to the numbered section and lettered
subsections of this Agreement. Any information disclosed in any such section or
subsection shall be deemed fully disclosed for the purposes of all of the other
such sections and subsections and shall be deemed to qualify all
representations and warranties of the Company if the applicability of such
information to such other section or subsection is reasonably apparent on its
face. Neither the specification (directly or indirectly by reference to a
defined term hereof) of any dollar amount in the representations and warranties
set forth in Article II nor the inclusion of any items in the Schedule of
Exceptions shall be deemed to constitute an admission by the Company or the
Purchasers, or otherwise imply, that any such amount or such items so included
are material for the purposes of this Agreement. The inclusion of, or reference
to, any item within any particular section or subsection to the Schedule of
Exceptions does not constitute an admission by the Company or the Purchasers
that such item meets any or all of the criteria set forth in this Agreement for
inclusion in such section or subsection.

[The next page is
the signature page]

-20-

          The
parties have caused this Securities Purchase Agreement to be executed as of the
date first written above.

	
 

	
 

	
 

	
 

	
THESTREET.COM, INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
Name:  Thomas
  J. Clarke, Jr.

	
 

	
 

	

Title:    Chairman
  of the Board

	
 

	
 

	
             and Chief
  Executive Officer

	
 

	
 

	
 

	
 

	
TCV VI, L.P.

	
 

	
 

	
 

	
 

	
By:

	
   Technology Crossover Management 

	
 

	
 

	
   VI, L.L.C.

	
 

	
Its:

	
   General Partner

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
TCV MEMBER FUND, L.P.

	
 

	
 

	
 

	
 

	
By:

	
  Technology Crossover Management 

	
 

	
 

	
  VI, L.L.C.

	
 

	
Its:

	
  General Partner

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

S-1

EXHIBIT A

DEFINED TERMS

          1. The
following capitalized terms have the meanings indicated:

          “Advisers Act” means the Investment
Advisers Act of 1940, as amended.

          “Affiliate” of any Person means any
Person,
directly or indirectly, controlling, controlled by or under common control with
such Person.

          “Code” means the Internal Revenue Code of
1986, as amended.

          “Common Stock” means the Company’s
common
stock, $0.01 par value per share.

          “DGCL” means the Delaware
General Corporation Law.

          “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

          “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

          “GAAP” means generally accepted
accounting
principles as in effect in the United States.

          “HSR Act” means the United States
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and rules and
regulations promulgated thereunder.

          “Intellectual Property Rights” means all
registered copyrights, copyright registrations and copyright applications,
trademark registrations and applications for registration, patents and patent
applications, trademarks, service marks, trade names and Internet domain names
that are used by the Company or any of its Subsidiaries in their business as
presently conducted, including all (i) databases, computer programs and other
computer software user interfaces, know-how, trade secrets, customer lists,
proprietary technology, processes and formulae, source code, object code,
algorithms, development tools, instructions and templates created by or on
behalf of the Company or any of its Subsidiaries and (ii) inventions,
trade dress, logos and designs created by or on behalf or any of the Company or
any of its Subsidiaries.

          “Investment Company Act” mean the
Investment
Company Act of 1940, as amended.

          “Investor Rights Agreement”
means the Investor Rights Agreement among the Company and each of the
Purchasers in the form attached to the Agreement as Exhibit C.

          “Lien” means any mortgage, pledge,
security
interest or other encumbrance.

          “Material Adverse Effect” means a
material
adverse effect upon the business, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole.

          “Material Subsidiaries”
means Promotions.com LLC, a Delaware limited liability company, Corsis
Technology Group II, LLC, a New York limited liability company, SP-TSC

A-1

Holdings LLC,
a Delaware limited liability company, Stockpickr LLC, a Delaware limited
liability company, BFPC Newco LLC, a Delaware
limited liability company, Bankers Financial Products Corporation, a Wisconsin
corporation, and BankingMyWay.com LLC, a Wisconsin limited liability company.

          “Permitted Disclosee” means
any former partners of a Purchaser who retained an economic interest in such
Purchaser, and any current or prospective partner, limited partner, general
partner or management company of such Purchaser (or any employee or
representative of any of the foregoing).

          “Person” means an individual,
corporation,
partnership, limited liability company, joint venture, trust or unincorporated
organization or a government or agency or political subdivision thereof.

          “Proxy Statement” means the
Company’s definitive proxy statement for its 2007 annual meeting of
stockholders, as filed with the SEC on April 23, 2007.

          “Restricted Affiliate” means:
(a) any Person who is directly or indirectly responsible for the formation,
management, operations, oversight or administration of the Purchasers
(including, without limitation, any principals, partners or employees of any
such Person); (b) any investment fund directly or indirectly formed or
controlled by any one or more Persons referred to in the preceding clause (a);
and (c) any direct or indirect Subsidiary of any Person referred to in the
preceding clauses (a) or (b) in which any one or more such Persons have the
right to elect (directly or indirectly) a majority of the board of directors
(or a comparable governing body with a different name) of such Subsidiary or
own a majority of the voting securities entitled
to elect the board of directors (or comparable governing body with a different
name) of such Subsidiary.

          “Representative” means, with
respect to a particular Person, any director, officer, manager, partner,
employee, agent, consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors. 

          “Rights Agreement” means the
Rights Agreement dated as of May 14, 1999 (as amended on August 7, 2000)
between the Company and American Stock Transfer & Trust Company, a New York
banking corporation, as rights agent. 

          “SEC” means the United States
Securities and Exchange Commission.

          “SEC Documents” means all reports,
schedules, registration statements and other documents (including all amendments,
exhibits and schedules thereto) filed by the Company with the SEC on or after
January 1, 2006.

          “Short
Sale” means: (a) a sale
of Common Stock that is marked as a short sale; (b) any entering into or
establishment of any arrangement constituting a “put equivalent position,” as
defined by Rule 16a-1(h) promulgated under the Exchange Act; (c) entering into
any swap, option or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of Common Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise; or (d) the
announcement of any intent to do any of the foregoing. Notwithstanding

A-2

the foregoing,
the parties agree that, except as otherwise provided in this Agreement, nothing in
Section 4.3 shall restrict the ability of a Purchaser or any of its Restricted
Affiliates to outright sell, distribute or transfer the Purchased Shares, the
Conversion Shares and the Warrant Shares.

          “Stock Plans” means the
Company’s Amended and Restated 1998 Stock Incentive Plan and the Company’s 2007
Performance Incentive Plan.

          “Subsidiary” has the meaning
assigned to such term in Rule 1-02(x) of Regulation S-X promulgated by the SEC.

          “Tax” and “Taxes”
means all federal, state, local and foreign taxes, including, without
limitation, income, franchise, property, sales, withholding, payroll and employment
taxes.

A-3

 

	
 

	
 

	
 

	
 

	
2.

	
The
 following terms are defined in the Sections of the Agreement indicated:

INDEX OF TERMS

	
 

	
 

	
 

	
 

	
 

	
Term 

	
 

	
 

	
Page 

	
 

	

	
 

	
 

	

	
 

	
Agreement

	
 

	
 

	
Preamble

	
 

	
Certificate
 of Designation

	
 

	
 

	
1.1

	
 

	
Closing

	
 

	
 

	
1.2

	
 

	
Closing Date

	
 

	
 

	
1.2

	
 

	
Company

	
 

	
 

	
Preamble

	
 

	
Confidential
 Information

	
 

	
 

	
4.4

	
(a)

	
Conversion
 Shares

	
 

	
 

	
2.4

	
(b)

	
ERISA
 Documents

	
 

	
 

	
2.16

	
 

	
Financial
 Statements

	
 

	
 

	
2.7

	
 

	
Preferred
 Stock

	
 

	
 

	
2.4

	
(a)

	
Purchased
 Shares

	
 

	
 

	
Recitals

	
 

	
Purchasers

	
 

	
 

	
Preamble

	
 

	
Related
 Agreements

	
 

	
 

	
2.2

	
 

	
Restricted
 Period

	
 

	
 

	
4.2

	
 

	
Schedule of
 Exceptions

	
 

	
 

	
7.13

	
 

	
Securities
 Act

	
 

	
 

	
2.4

	
(c)

	
Series B
 Preferred Stock

	
 

	
 

	
Recitals

	
 

	
TCV IV

	
 

	
 

	
Preamble

	
 

	
TCV Member
 Fund

	
 

	
 

	
Preamble

	
 

	
Warrant
 Shares

	
 

	
 

	
Recitals

	
 

	
Warrants

	
 

	
 

	
Recitals

	
 

A-4

SCHEDULE 1.1

PURCHASED SHARES AND WARRANT SHARES

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Purchaser

	
 

	
Number of

 Purchased Shares

	
 

	
Number of

 Warrant Shares

	
 

	
Aggregate

 Purchase Price

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	
 

	
TCV VI, L.P.

	
 

	
 

	
5,455.95095

	
 

	
 

	
1,147,816

	
 

	
$

	
54,559,509.50

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
TCV Member
 Fund, L.P.

	
 

	
 

	
44.04905

	
 

	
 

	
9,267

	
 

	
$

	
440,490.50

	
 

	
 

	
 

	

	

	
 

	

	

	
 

	

	

	
 

	
Total

	
 

	
 

	
5,500.00000

	
 

	
 

	
1,157,083

	
 

	
$

	
55,000,000.00

	
 

	
 

	
 

	

	

	
 

	

	

	
 

	

	

	
 

Schedule of Exceptions

          This
is the “Schedule of Exceptions” referred to in the Securities Purchase
Agreement dated as of November 15, 2007 (the “Purchase Agreement”) among
TheStreet.com, Inc., a Delaware corporation, TCV VI, L.P., a Delaware limited
partnership, and TCV Member Fund, L.P., a Delaware limited partnership.
Capitalized terms used but not defined herein have the meanings assigned to
them in the Purchase Agreement.

	
 

	
 

	
 

	
Section 2.2

	
Authorization,
  Etc.

	
 

	
 

	
 

	
 

	
1.

	
The Amended
  and Restated Registration Rights Agreement dated as of December 21, 1998
  among TheStreet.com, Inc. and the several persons named therein, as amended
  on August 7, 2000, requires the consent of the parties thereto with respect
  to the transactions contemplated by the Purchase Agreement. The Company has
  obtained such consents.

	
 

	
 

	
 

	
 

	
2.

	
See Section
  2.3(a) through (g) of the Purchase Agreement.

	
 

	
 

	
Section 2.4

	
Authorized
  and Outstanding Stock

	
 

	
 

	
 

	
 

	
1.

	
TheStreet.com
  2007 Performance Incentive Plan approved by shareholders May 24, 2007. 

	
 

	
 

	
 

	
 

	
2.

	
TheStreet.com,
  Inc. Option to Purchase Common Stock dated November 1, 2007 (Investor Larry
  Starkweather; 175,600 shares at $12.57).

	
 

	
 

	
 

	
 

	
3.

	
The Amended
  and Restated Registration Rights Agreement dated December 21, 1998, as
  amended. 

	
 

	
 

	
 

	
 

	
4.

	
Shares
  issued pursuant to (i) Membership Interest Purchase Agreement, dated as of
  April 25, 2007 between SP-TSC Holdings LLC and A.R. Partners LLC, (ii)
  Membership Interest Purchase Agreement, dated as of August 2, 2007, among TP
  Newco LLC, David Barnett and Gregg Alwine, and (iii) Stock Purchase
  Agreement, dated as of November 1, 2007, among BFPC Newco LLC, Larry
  Starkweather, Kyle Selberg, Rachelle Zorn and Robert Quinn (the “BFPC
  Purchase Agreement”).

	
 

	
 

	
 

	
 

	
5.

	
Escrow
  Agreement, dated as of August 2, 2007, among TP Newco LLC, Gregg Alwine and
  JP Morgan Chase Bank, N.A., as escrow agent

	
 

	
 

	
 

	
 

	
6.

	
Go2Net, Inc.
  and Vulcan Ventures Inc. were each granted rights by the Company with respect
  to the registration of Common Stock under the Securities Act pursuant to the
  Securities Purchase Agreement, dated as of August 7, 2000, among the Company,
  Go2Net, Inc. and Vulcan Ventures Inc. To the Company’s knowledge, as of the
  date of the Purchase Agreement, Go2Net, Inc. and Vulcan Ventures Inc. do not
  beneficially own any capital stock of the Company.

	
 

	
 

	
 

	
 

	
7.

	
The Options
  and other securities referenced in Section 2.4(a) and (b) of the Purchase
  Agreement.

	
 

	
Section 2.5

	
Subsidiaries

Schedule
Exceptions to SPA (executed)

	
 

	
 

	
 

	
 

	
1.

	
Subsidiaries
  of the Company:

	
 

	
 

	
 

	
Promotions.com
  LLC, a Delaware limited liability company;

	
 

	
 

	
Corsis
  Technology Group II, LLC, a New York limited liability company; 
SP-TSC
  Holdings LLC, a Delaware limited liability company;

	
 

	
 

	
Stockpickr
  LLC, a Delaware limited liability company;

	
 

	
 

	
BFPC Newco LLC, a Delaware limited liability company;

	
 

	
 

	
Bankers Financial Products Corporation, a Wisconsin corporation;
  
BankingMyWay.com LLC, a Wisconsin limited liability company;

	
 

	
 

	
TheStreet.com
  Ratings, Inc., a Delaware corporation;

	
 

	
 

	
SmartPortfolio.com,
  Inc., a Delaware corporation; and

	
 

	
 

	
Independent
  Research Group LLC, a Delaware limited liability company.

	
 

	
 

	
 

	
 

	
Section 2.10  Absence of
  Certain Events; No Material Adverse Change

	
 

	
 

	
 

	
 

	
 

	
1.

	
Resignation
  of President and Chief Operating Officer James Lonergan effective October 12,
  2007.

	
 

	
 

	
 

	
 

	
2.

	
The
  transactions contemplated by the following:

	
 

	
 

	
 

	
 

	
 

	
 

	
a.

	
The BFPC
  Purchase Agreement;

	
 

	
 

	
 

	
 

	
 

	
 

	
b.

	
Escrow
  Agreement, by and among the BFPC Newco LLC (“BFPC”), Larry Starkweather, as
  the Agent, and JP Morgan Chase Bank, N.A., as the escrow agent;

	
 

	
 

	
 

	
 

	
 

	
 

	
c.

	
Employment
  Agreement, dated as of November 1, 2007, between the Company and Larry
  Starkweather;

	
 

	
 

	
 

	
 

	
 

	
 

	
d.

	
Assignment,
  Assumption, and Amendment to Employment Agreement, by and among the Company,
  BFPC, and Kyle Selberg;

	
 

	
 

	
 

	
 

	
 

	
 

	
e.

	
Assignment,
  Assumption, and Amendment to Employment Agreement, by and among the Company,
  BFPC and Rachelle Zorn;

	
 

	
 

	
 

	
 

	
 

	
 

	
f.

	
Assignment,
  Assumption, and Amendment to Employment Agreement, by and among the Company,
  BFPC and Robert Quinn;

	
 

	
 

	
 

	
 

	
 

	
 

	
g.

	
Option to
  Purchase Common Stock in the Company, granted to Larry Starkweather;

	
 

	
 

	
 

	
 

	
 

	
 

	
h.

	
Stock
  Subscription Agreement, by and between BFPC and Kyle Selberg, dated as of
  October 31, 2007;

	
 

	
 

	
 

	
 

	
 

	
 

	
i.

	
Stock
  Subscription Agreement, by and between BFPC and Rachelle Zorn, dated as of
  October 31, 2007; and

	
 

	
 

	
 

	
 

	
 

	
 

	
j.

	
Stock
  Subscription Agreement, by and between BFPC and Robert Quinn, dated as of
  October 31, 2007.

	
 

	
 

	
Section 2.11  Litigation

          1. IPO Securities Litigation

          In
December 2001, the Company was named as a defendant in a securities class
action filed in United States District Court for the Southern District of New
York related to its initial public offering (“IPO”) in May 1999. The lawsuit
also named as individual defendants certain of 

its former officers and
directors, James J. Cramer, a current director, and certain of the underwriters
of the IPO, including The Goldman Sachs Group, Inc., Hambrecht & Quist LLC
(now part of JP Morgan Chase & Co.), Thomas Weisel Partners LLC, Robertson
Stephens Inc. (an investment banking subsidiary of BankBoston Corp., later
FleetBoston Corp., which ceased operations in 2002), and Merrill Lynch Pierce
Fenner & Smith, Inc. Approximately 300 other issuers and their underwriters
have had similar suits filed against them, all of which are included in a
single coordinated proceeding in the District (the “IPO Litigations”). The
complaints allege that the prospectus and the registration statement for the
IPO failed to disclose that the underwriters allegedly solicited and received
“excessive” commissions from investors and that some investors in the IPO
allegedly agreed with the underwriters to buy additional shares in the
aftermarket in order to inflate the price of the Company’s stock. An amended
complaint was filed April 19, 2002. The Company and the officers and directors
were named in the suits pursuant to Section 11 of the Securities Act of 1933,
Section 10(b) of the Exchange Act of 1934, and other related provisions. The
complaints seek unspecified damages, attorney and expert fees, and other
unspecified litigation costs. 

          On
July 1, 2002, the underwriter defendants in the consolidated actions moved to
dismiss all of the IPO Litigations, including the action involving the Company.
On July 15, 2002, the Company, along with other non-underwriter defendants in
the coordinated cases, also moved to dismiss the litigation. On February 19,
2003, the district court ruled on the motions. The district court granted the
Company’s motion to dismiss the claims against it under Rule 10b-5, due to the
insufficiency of the allegations against the Company. The motions to dismiss
the claims under Section 11 of the Securities Act were denied as to virtually
all of the defendants in the consolidated cases, including the Company. In
addition, the individual defendants in the IPO Litigations, including Mr.
Cramer, signed a tolling agreement and were dismissed from the action without
prejudice on October 9, 2002. 

          In
June 2003, a proposed collective settlement of this litigation was structured
between the plaintiffs, the issuer defendants in the consolidated actions, the
issuer officers and directors named as defendants, and the issuers’ insurance
companies. On or about June 25, 2003, a committee of the Company’s Board of
Directors conditionally approved the proposed settlement. The settlement
agreements collectively provide as follows: 

          The
Company and the other issuer defendants would assign their interests in claims
against the underwriters for excess compensation in connection with their IPOs
to the plaintiffs, and agree not to assert certain other claims against the
underwriters, such as underpricing, indemnification and antitrust claims,
except in certain defined circumstances. A number of issuers’ assigned claims
have been asserted already; these were dismissed by the district court on
February 24, 2006. The dismissal is currently on appeal to the Second Circuit
Court of Appeals, although the plaintiffs have indicated their intent to
withdraw the appeal in light of recent events, detailed below. The Company and
the other issuer defendants would also cooperate with the plaintiffs to provide
the plaintiffs with informal discovery as the litigation continues as to the
underwriter defendants. Further, the plaintiffs would receive an undertaking
from the insurers of the Company and the other issuer defendants guaranteeing
that the plaintiff class would recover, in the aggregate, $1 billion from their
various suits against the underwriters (including the claims assigned by the
issuer defendants). The Company’s per capita portion of the maximum amount
payable to the plaintiffs under the settlement, assuming the entire $1 billion
is payable, would be approximately $3–4 million. The plaintiffs’ actual recoveries
from the underwriter defendants (through settlements or damages assessed as a
result of litigation) would be applied against the guarantee; and to the extent
that the underwriter defendants settle all of the cases for at least $1
billion, no payment would be required under the issuer defendants’ settlement.
In exchange for 

the consideration described
above, the plaintiffs would release the non-bankrupt issuer defendants from all
claims against them (the bankrupt issuers would receive a covenant not to sue)
and their individual defendants. Under the terms of the settlement agreements,
all costs and expenses of the settlement (including legal expenses after June
1, 2003) would be borne by the insurance carriers of the Company and the other
issuer defendants using each issuer defendant’s existing insurance coverage,
with deductibles waived. 

          The
plaintiffs have continued to litigate against the underwriter defendants. The
district court directed that the litigation proceed within a number of “focus
cases” rather than in all of the 310 cases that have been consolidated. The
Company’s case is not one of these focus cases. On October 13, 2004, the
district court certified the focus cases as class actions. The underwriter
defendants appealed that ruling, and on December 5, 2006, the Court of Appeals
for the Second Circuit reversed the district court’s class certification
decision. On April 6, 2007, the Second Circuit denied plaintiffs’ petition for
rehearing. In light of the Second Circuit opinion, counsel to the issuers has
informed the district court that the settlement with the plaintiffs described
above cannot be approved because the defined settlement class, like the
litigation class, cannot be certified with the Court of Appeals. Because the
Company’s settlement with the plaintiffs involves the certification of the case
as a class action as part of the approval process, the impact of this ruling on
the Company’s settlement is unclear. The settlement was terminated pursuant to
a Stipulation and Order dated June 25, 2007.

          We
cannot predict whether we will be able to renegotiate a settlement that
complies with the Second Circuit’s mandate. If we cannot, we intend to defend
the action vigorously. Any unfavorable outcome of this litigation could have an
adverse impact on the Company’s business, financial condition, results of
operations, and cash flows. 

          2.
IPO Securities Litigation Section
16(b) Claim

          On August 1, 2007, the Company received
a
letter from counsel to Vanessa Simmonds demanding that the Company’s Board of Directors prosecute a claim
against the Company’s
IPO underwriters, in addition to certain of its officers, directors and
principal shareholders as identified in the IPO prospectus, for violations of
Section 16(b) of the Securities Exchange Act of 1934. The letter alleges that these entities
and individuals, by coordinating their efforts to acquire and dispose of the
Company ’s securities
in connection with its IPO, constituted a group owning in excess of 10% of the
Company ’s outstanding
common stock under Exchange Act rules, and were therefore subject to short
swing trading prohibition of Section 16(b) during the period from May 11, 1999
(the date of the IPO) through May 10, 2000. Accordingly, the letter alleges, the group members should
be compelled to disgorge the profits they made through purchases and sales of
Company stock during the period. 

          Statutorily,
60 days after issuing the demand letter, a cause of action automatically
vested in Ms. Simmonds to bring this suit derivatively
if the Company did not bring suit. After considering the demand, the Special
Litigation Committee of the Company’s Board of Directors determined that the
claim was without merit and that it was not in the best interest of the Company
to bring suit against the underwriters and directors as demanded by Ms.
Simmonds. On its face, the claim appears to be
quite weak: (i) the
underlying conduct took place more than seven years ago, and therefore may be
time-barred, (ii) underwriters are specifically exempted from the provisions of
Section 16(b), and (iii) shares held by the Company’s directors and officers were locked up
for at least six months following the date of the IPO, and therefore could not
have been used to obtain short-swing profits.

          On
October 10, 2007, the Company received a formal Complaint filed by Vanessa
Simmonds in the United States District Court in the Western District of
Washington. The Complaint does not specify the amount of damages claimed. In
addition, as described above, the claims are weak and the Company is named only
as a Nominal Defendant. For these
reasons, a loss contingency for potential damages or settlement costs relating
to this potential claim is not probable or reasonably estimable under the
guidance of SFAS No. 5.

          3.
Groves Employment Litigation

          On
December 8, 2005, Judy Groves, a former employee of the Company’s registered
broker-dealer subsidiary, Independent Research Group LLC (“IRG”), brought a
lawsuit in New York State Supreme Court against IRG and the Company, alleging
the breach of her employment agreement with IRG. Plaintiff Groves seeks
$212,500, plus interest, costs and attorneys’ fees. Both IRG and the Company
intend to defend the action vigorously. Currently, the action is in the
discovery phase.

Section 2.16  Employee Matters

	
 

	
 

	
 

	
 

	
1.

	
TheStreet.com,
  Inc. 401(k) Savings Plan: Effective 01/01/1997.

	
 

	
 

	
 

	
 

	
2.

	
Corsis
  Technology Group 401(k) Plan: Effective 01/01/2002.

	
 

	
 

	
 

	
 

	
3.

	
Simple IRA
  Bankers Financial Products Corp.: Effective: 03/01/04.exv4w10

 

EXHIBIT 4.10

EXHIBIT A

FORM OF WARRANT

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE 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 APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN 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, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION (OTHER THAN
PURSUANT TO RULE 144(K), UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND
SUCH OTHER APPLICABLE STATE SECURITIES.

SGX PHARMACEUTICALS, INC.

WARRANT

			
	 	 	 
	Warrant No. [___]
	 	Dated: November [___], 2007

     SGX Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby certifies that, for
value received, [Name of Holder] or its registered assigns (the “Holder”), is entitled to purchase
from the Company up to a total of [            
        ] shares of common stock, $0.001 par value per share
(the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the
“Warrant Shares”) at an exercise price equal to Five
Dollars and Seventy Seven Cents ($5.77) per share (as adjusted from
time to time as provided in Section 9, the “Exercise Price”), at any time on or after May
[___], 2008 (the “Initial Exercise
Date”) and through and including the date that is seven
(7) years from the Initial Exercise Date (the “Expiration Date”), and subject to
the following terms and conditions. This Warrant (this “Warrant”) is one of a series of similar
warrants issued pursuant to that certain Securities Purchase Agreement, dated as of November 19,
2007, by and among the Company and the Investors identified therein (the “Purchase Agreement”).
All such warrants are referred to herein, collectively, as the “Warrants.”

 

 

     1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Purchase Agreement.

     2. Registration of Warrant. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of record of
this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

     3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Transfer Agent or to the Company at
its address specified herein. Any such transfer shall be made in accordance with the Purchase
Agreement and in compliance with applicable federal and state securities laws. Upon any such
registration of transfer, a new warrant to purchase Common Stock, in substantially the form of this
Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a Warrant.

     4. Exercise and Duration of Warrants.

          (a) This Warrant shall be exercisable by the registered Holder at any time and from time to
time on or after the Initial Exercise Date and including the Expiration Date. At 6:30 P.M., New
York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value.

          (b) A Holder may exercise this Warrant by delivering to the Company (i) the original Warrant
together with an exercise notice, in the form attached hereto (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of
Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless
exercise” if so indicated in the Exercise Notice and only if a “cashless exercise” may occur at
such time pursuant to Section 10 below), and the date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”

     5. Delivery of Warrant Shares.

          (a) Upon exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered
to or upon the written order of the Holder and in such name or names as the Holder may designate, a
certificate for the Warrant Shares issuable upon such exercise, which certificate shall bear a
restrictive legend unless no such legend is required pursuant to Section 4.1 of the
Purchase Agreement. The Holder, or any Person so designated by the Holder to receive

2

 

Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as
of the Exercise Date.

          (b) This Warrant is exercisable, either in its entirety or, from time to time, for a portion
of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial
exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

          (c) In addition to any other rights available to a Holder, if the Company fails to deliver to
the Holder a certificate representing Warrant Shares by the fifth Trading Day after the date on
which delivery of such certificate is required by this Warrant, and if after such fifth Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving
from the Company (the “Covering Shares”), then the Company shall, within five Trading Days after
the Holder’s request, promptly honor its obligation to deliver to the Holder a certificate or
certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the
excess (if any) of the Holder’s total purchase price (including brokerage commissions, if any) for
the Covering Shares, over the product of (A) the number of Covering Shares, times (B) the Closing
Price on the date of the event giving rise to the Company’s obligation to deliver such certificate.

     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable bond or indemnity, if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and procedures and pay such
other reasonable third-party costs as the Company may prescribe.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (after giving effect to the adjustments
and restrictions of Section 9, if any). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable

3

 

Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable. The Company will take all such action as may be necessary to assure
that such shares of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed.

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9, but in no event shall the Exercise Price be adjusted to an Exercise Price per
share below the par value per share of the Warrant Shares.

          (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.

          (b) Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to holders of Common Stock (i) evidences of its indebtedness, (ii) any
security (other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in
each case, “Distributed Property”), then in each such case the Holder shall be entitled upon
exercise of this Warrant for the purchase of any or all of the Warrant Shares, to receive the
amount of Distributed Property which would have been payable to the Holder had such Holder been the
holder of such Warrant Shares on the record date for the determination of stockholders entitled to
such Distributed Property. The Company will at all times set aside in escrow and keep available
for distribution to such holder upon exercise of this Warrant a portion of the Distributed Property
to satisfy the distribution to which such Holder is entitled pursuant to the preceding sentence.

          (c) Fundamental Transactions. If, at any time while this Warrant is outstanding, (i)
the Company effects any merger or consolidation of the Company with or into another Person, (ii)
the Company effects any sale of all or substantially all of its assets in one or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock owning more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or
Persons making or affiliated with the Persons making the tender or exchange offer) tender or
exchange their shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of

4

 

Common Stock covered by Section 9(a) above) (in any such case, a “Fundamental
Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property as it would have been entitled to
receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon
exercise in full of this Warrant (the “Alternate Consideration”). For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable on one share of
Common Stock in such Fundamental Transaction, and the Company shall apportion such Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof.

          (d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be adjusted proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such adjustment.

          (e) Calculations. All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

          (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will promptly compute such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Transfer Agent.

          (g) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any Subsidiary, the Company shall mail to the Holder, at least ten (10)
days prior to the date on which any such record is to be taken for the purpose of such dividend or
distribution, a notice specifying such date, (ii) enters into any agreement contemplating or

5

 

solicits stockholder approval for any Fundamental Transaction, the Company shall mail to the
Holder, at least ten (10) days prior to the date of the occurrence of such event, a notice
specifying the proposed effective date of such event, or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then the Company shall
deliver to the Holder, at least ten calendar days prior to the date of the occurrence of such
event, a notice specifying the date of such event. The failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be described in such
notice.

     10. Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately
available funds; provided, however, that if at any time after the Required Effectiveness Date, a
Registration Statement covering the resale of the Warrant Shares is not effective on the Exercise
Date, the Holder may satisfy its obligation to pay the Exercise Price through a “cashless
exercise,” in which event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:

	 	 	 
	 

	 	

          where:

	 	 	 
	 

	 	X = the number of Warrant Shares to be
issued to the Holder.
	 
	 	 
	 

	 	Y = the number of Warrant Shares with
respect to which this Warrant is being
exercised.
	 
	 	 
	 

	 	A = the average of the Closing Prices for
the five Trading Days immediately prior to
(but not including) the Exercise Date.
	 
	 	 
	 

	 	B = the Exercise Price.

          For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the Purchase Agreement.

     11. Limitation on Exercise.

          (a) Notwithstanding anything to the contrary contained herein, the number of shares of Common
Stock that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect
hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and
its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the
“Maximum Percentage”) of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations

6

 

promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a
representation by the Holder that it has evaluated the limitation set forth in this paragraph and
determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is
permitted under this paragraph. The Company’s obligation to issue shares of Common Stock in excess
of the limitation referred to in this Section shall be suspended (and shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as such shares of Common
Stock may be issued in compliance with such limitation, but in no event later than the Expiration
Date. By written notice to the Company, the Holder may waive the provisions of this Section or
increase or decrease the Maximum Percentage to any other percentage specified in such notice, but
(i) any such waiver or increase will not be effective until the 61st day after such notice is
delivered to the Company, and (ii) any such waiver or increase or decrease will apply only to the
Holder and not to any other holder of Warrants.

     12. Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant
Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant,
the number of Warrant Shares to be issued will be rounded up to the nearest whole share.

     13. Notices. Any and all notices or other communications or deliveries hereunder
(including without limitation any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 6:30
p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number
specified in the Purchase Agreement on a day that is not a Trading Day or later than 6:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices or communications shall be as
set forth in the Purchase Agreement.

     14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
stockholder services business shall be a successor warrant agent under this Warrant without any
further act. Any such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.

     15. Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the Company and (i)
Holders of Warrants representing a majority of the number of Warrant Shares then issuable upon
Warrants sold pursuant to the Purchase Agreement; provided, that such modification,
amendment or waiver is made with respect to all such Warrants and does not adversely affect the
Holder of this Warrant without adversely affecting all such Holders in a similar manner or (ii) the
Holder of this Warrant.

7

 

     16. Miscellaneous.

          (a) Subject to the restrictions on transfer set forth on the first page hereof, this Warrant
may be assigned by the Holder. This Warrant may not be assigned by the Company except to a
successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to
the benefit of the parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.

          (b) The Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor
on such exercise, (ii) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on
the exercise of this Warrant, and (iii) will not close its stockholder books or records in any
manner which interferes with the timely exercise of this Warrant.

          (c) Governing Law; Venue; Waiver Of Jury Trial. all questions
concerning the construction, validity, enforcement and interpretation of this warrant shall be
governed by and construed and enforced in accordance with the laws of the state of new york. each
party hereby irrevocably submits 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
hereunder or 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 waives, and agrees not to assert in any suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, 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 hereby waives all rights to a trial by jury.

          (d) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

          (e) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and

8

 

provisions of this Warrant shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

9

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 
	 	SGX PHARMACEUTICALS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	W. Todd Myers 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

10

 

FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the
foregoing Warrant)

To SGX Pharmaceuticals, Inc.:

The undersigned is the Holder of Warrant No.                      (the
“Warrant”) issued by SGX Pharmaceuticals,
Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise
defined have the respective meanings set forth in the Warrant.

	1.	 	The Warrant is currently exercisable to purchase a total of                      Warrant Shares.
	 
	2.	 	The undersigned Holder hereby exercises its right to purchase                      Warrant
Shares pursuant to the Warrant.
	 
	3.	 	The Holder intends that payment of the Exercise Price shall be made as (check one):

___
“Cash Exercise” under Section 10

___
“Cashless Exercise” under Section 10

	4.	 	If the holder has elected a Cash Exercise, the holder shall pay the sum of $                     to
the Company in accordance with the terms of the Warrant.

	5.	 	Pursuant to this exercise, the Company shall deliver to the holder                      Warrant
Shares in accordance with the terms of the Warrant.

	6.	 	Following this exercise, the Warrant shall be exercisable to purchase a total of
                     Warrant Shares.

	 	 	 	 	 	 	 	 	 
	Dated:                ,      	 	 	 	Name of Holder:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	(Print)	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)

 

 

ACKNOWLEDGED       AND

AGREED TO this ___

day of                     , 200_

	 	 	 	 	 
	SGX PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:
	 	 	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

 

 

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
               
              
              
               
   the right represented by the within Warrant to purchase
              
       shares of Common Stock of SGX Pharmaceuticals, Inc. to which the within Warrant
relates and appoints            
          attorney to transfer said right on the books of SGX
Pharmaceuticals, Inc. with full power of substitution in the premises.

	 	 	 	 	 
	Dated:    
            ,   
   

	 	 	 	 
	 

	 	 	 	 
	 	 	(Signature must conform in all respects to name of
holder as 

specified on the face of the Warrant)
	 
	 	 	 	 
	 

	 	 	 	 
	 	 	Address of Transferee
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	In the presence of:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]