Document:

EX-10.13

 

EXHIBIT 10.13

SYNACOR, INC.

SERIES C PREFERRED

STOCK PURCHASE AGREEMENT

CLOSING DATE: OCTOBER 19, 2006

SUBSEQUENT CLOSING DATE: NOVEMBER 2, 2006

 

 

TABLE OF CONTENTS

Page

	 	 	 	 	 
	1. Purchase and Sale of Stock
	 	 	1	 
	1.1 Sale and Issuance of Series C Preferred Stock
	 	 	1	 
	1.2 Closing
	 	 	1	 
	1.3 Subsequent Closing
	 	 	2	 
	 
	 	 	 	 
	2. Representations and Warranties of the Company
	 	 	2	 
	2.1 Organization, Good Standing and Qualification
	 	 	2	 
	2.2 Corporate Power
	 	 	2	 
	2.3 Capitalization and Voting Rights
	 	 	2	 
	2.4 Subsidiaries
	 	 	4	 
	2.5 Authorization
	 	 	4	 
	2.6 Valid Issuance of Preferred and Common Stock
	 	 	5	 
	2.7 Governmental Consents
	 	 	5	 
	2.8 Offering
	 	 	5	 
	2.9 Litigation
	 	 	5	 
	2.10 Patents and Trademarks
	 	 	6	 
	2.11 Confidentiality Agreements
	 	 	6	 
	2.12 Compliance with Other Instruments
	 	 	7	 
	2.13 Agreements; Action
	 	 	7	 
	2.14 Related-Party Transactions
	 	 	8	 
	2.15 Related Persons
	 	 	8	 
	2.16 Disclosure
	 	 	8	 
	2.17 Registration Rights
	 	 	8	 
	2.18 Corporate Documents
	 	 	8	 
	2.19 Title to Property and Assets
	 	 	9	 
	2.20 Small Business Concern
	 	 	9	 
	2.21 Financial Statements
	 	 	9	 
	2.22 Changes
	 	 	10	 
	2.23 Employee Benefit Plans
	 	 	11	 
	2.24 Tax Returns, Payments and Elections
	 	 	11	 
	2.25 Insurance
	 	 	11	 
	2.26 Minute Books
	 	 	12	 
	2.27 Labor Agreements and Actions; Employee Compensation
	 	 	12	 
	2.28 Other Agreements of Employees
	 	 	12	 
	2.29 Section 83(b) Elections
	 	 	12	 
	2.30 Qualified Small Business Stock
	 	 	12	 
	2.31 Qualified Business
	 	 	13	 
	2.32 Accounts Payable; Accounts Receivable
	 	 	13	 
	2.33 Performance of Software
	 	 	13	 
	2.34 Solvency
	 	 	13	 
	2.35 Officers and Directors
	 	 	13	 
	2.36 Foreign Corrupt Practices Act
	 	 	14	 
	2.37 Representations Complete
	 	 	14	 

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Page

	 	 	 	 	 
	2.38 Schedule Disclosure
	 	 	14	 
	 
	 	 	 	 
	3. Representations and Warranties of the Investors
	 	 	14	 
	3.1 Authorization
	 	 	14	 
	3.2 Purchase Entirely for Own Account
	 	 	14	 
	3.3 Disclosure of Information
	 	 	15	 
	3.4 Investment Experience
	 	 	15	 
	3.5 Accredited Investor
	 	 	15	 
	3.6 Restricted Securities
	 	 	15	 
	3.7 Further Limitations on Disposition
	 	 	15	 
	3.8 Legends
	 	 	16	 
	3.9 Exculpation Among Investors
	 	 	16	 
	 
	 	 	 	 
	4. Conditions of Investors’ Obligations at Closing
	 	 	16	 
	4.1 Representations and Warranties
	 	 	16	 
	4.2 Performance
	 	 	16	 
	4.3 Compliance Certificate
	 	 	16	 
	4.4 Qualifications
	 	 	17	 
	4.5 Proceedings and Documents
	 	 	17	 
	4.6 Secretary’s Certificate
	 	 	17	 
	4.7 Nondisclosure and Development Agreements
	 	 	17	 
	4.8 Board of Directors
	 	 	17	 
	4.9 Opinion of Company Counsel
	 	 	17	 
	4.10 Investors’ Rights Agreement
	 	 	17	 
	4.11 Stock Restriction, First Refusal and Co-Sale Agreement
	 	 	17	 
	4.12 Voting Agreement
	 	 	17	 
	4.13 Management Rights Letter
	 	 	18	 
	4.14 Indemnification Agreements
	 	 	18	 
	4.15 Certificate of Incorporation
	 	 	18	 
	4.16 Approval of Stock Option Plan Increase
	 	 	18	 
	4.17 SBIC Forms
	 	 	18	 
	4.18 Satisfaction of Debt
	 	 	18	 
	 
	 	 	 	 
	5. Conditions of the Company’s Obligations at Closing
	 	 	18	 
	5.1 Representations and Warranties
	 	 	18	 
	5.2 Payment of Purchase Price
	 	 	18	 
	5.3 Qualifications
	 	 	18	 
	 
	 	 	 	 
	6. Post Closing Covenants
	 	 	19	 
	6.1 Use of Proceeds
	 	 	19	 
	6.2 Key Man Insurance
	 	 	19	 
	6.3 D&O Insurance
	 	 	19	 
	 
	 	 	 	 
	7. Miscellaneous
	 	 	19	 
	7.1 Survival of Warranties
	 	 	19	 
	7.2 Successors and Assigns
	 	 	19	 
	7.3 Governing Law
	 	 	19	 

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Page

	 	 	 	 	 
	7.4 Counterparts
	 	 	19	 
	7.5 Titles and Subtitles
	 	 	19	 
	7.6 Notices
	 	 	20	 
	7.7 Finder’s Fee
	 	 	20	 
	7.8 Expenses
	 	 	20	 
	7.9 Amendments and Waivers
	 	 	20	 
	7.10 Severability
	 	 	20	 
	7.11 Aggregation of Stock
	 	 	21	 
	7.12 Entire Agreement
	 	 	21	 
	7.13 Publicity
	 	 	21	 
	7.14 Arbitration
	 	 	21	 

	 	 	 
	SCHEDULE A

	 	Schedule of Investors
	 
	 	 
	EXHIBIT A

	 	Fourth Amended and Restated Certificate of Incorporation
	EXHIBIT B

	 	Third Amended and Restated Investors’ Rights Agreement
	EXHIBIT C

	 	Third Amended and Restated Stock Restriction, First Refusal and Co-Sale Agreement
	EXHIBIT D

	 	Third Amended and Restated Voting Agreement
	EXHIBIT E

	 	Opinion of Counsel for the Company
	EXHIBIT F

	 	Management Rights Letter
	EXHIBIT G

	 	Indemnification Agreement
	EXHIBIT H

	 	SBIC Letter

iii 

 

SYNACOR, INC.

SERIES C PREFERRED STOCK PURCHASE AGREEMENT

          THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”) is made as of the
19th day of October, 2006, by and among SYNACOR, INC., a Delaware corporation (the
“Company”), and the investors listed on Schedule A hereto, each of which is herein
referred to as an “Investor.”

          THE PARTIES HEREBY AGREE AS FOLLOWS:

          1. Purchase and Sale of Stock.

               1.1 Sale and Issuance of Series C Preferred Stock.

                    (a) The Company shall adopt and file with the Secretary of State of the State of Delaware on
or before the Closing (as defined below) the Fourth Amended and Restated Certificate of
Incorporation in the form attached hereto as Exhibit A (the “Restated
Certificate”).

                    (b) On or prior to the Closing (as defined below), the Company shall have authorized (i) the
sale and issuance to the Investors of up to 2,740,407 shares of its Series C Preferred Stock (the
“Shares”) at a purchase price of $6.34 per share pursuant to this Agreement and (ii) the
issuance of the shares of Common Stock to be issued upon conversion of the Shares (the
“Conversion Shares”). The Shares and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the Restated Certificate.

                    (c) Subject to the terms and conditions of this Agreement, each Investor agrees, severally and
not jointly, to purchase at the Closing or pursuant to Section 1.3, and the Company agrees to sell
and issue to each Investor at the Closing or pursuant to Section 1.3, that number of Shares set
forth opposite such Investor’s name on Schedule A hereto for $6.34 per share (the “Series C
Purchase Price”).

               1.2 Closing. The purchase and sale of the Shares shall take place at the offices of
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP (“Gunderson Dettmer”), 220 West
42nd Street, 20th Floor, New York, NY 10036, at 10 A.M. (local time), on the
date hereof, or at such other time and place as the Company and Investors acquiring in the
aggregate a majority of the Shares sold pursuant to this Agreement agree upon orally or in writing
(which time and place are designated as the “Closing”). At the Closing the Company shall
deliver to each Investor participating therein (x) any certificates, instruments and documents
referred to in Section 4 below and (y) a share certificate representing the Shares that such
Investor is purchasing against payment of the purchase price therefor by check, wire transfer,
cancellation of indebtedness, or any combination thereof. In the event that payment by an Investor
is made, in whole or in part, by cancellation of indebtedness, then such Investor shall surrender
to the Company for cancellation at the Closing any evidence of such indebtedness or shall execute
an instrument of cancellation in form and substance acceptable to the Company.

 

 

The Company and each Investor that holds a promissory note issued by the Company pursuant to
that certain Note and Warrant Purchase Agreement dated November 18, 2002 among the Company and the
lenders named on the Schedule of Lenders attached thereto (the “2002 Note and Warrant Purchase
Agreement”) hereby agree that any cash payable in lieu of fractional shares upon conversion of
such promissory notes will be credited against the total cash purchase price for the Shares to be
purchased by such Investor for cash, as set forth on Schedule A and for the values listed
on Schedule A.

               1.3 Subsequent Closing. Of the 2,740,407 Shares authorized for sale pursuant to this
Agreement, Advantage Capital New York Partners I, L.P. and Advantage Capital New York Partners II,
L.P. (collectively, “Advantage”) will purchase, and the Company will issue and sell to
Advantage, the number of Shares reflected on Schedule A hereto no later than the third
business day after Advantage’s receipt of a Non-Objection Letter from the New York State Department
of Insurance (a “Non-Objection Letter”); provided, however, that
Advantage’s obligation to purchase Shares hereunder shall terminate if Advantage has not received a
Non-Objection Letter on or before December 1, 2006 (the “Commitment Termination Date”).
Such purchase of Shares shall be made on the terms and conditions set forth in this Agreement,
including, without limitation, the Series C Purchase Price and the satisfaction of the
representations and warranties by Advantage set forth in Section 3. Notwithstanding anything
contained herein to the contrary, the Commitment Termination Date may be extended with the mutual
consent of the Company’s Board of Directors and Advantage.

          2. Representations and Warranties of the Company. The Company hereby represents and
warrants to each Investor that, except as set forth on a Schedule of Exceptions (the “Schedule
of Exceptions”) furnished each Investor which exceptions shall be deemed to be representations
and warranties as if made hereunder:

               2.1 Organization, Good Standing and Qualification. The Company and its wholly-owned
subsidiaries CHEK International Holdings, Inc. and MyPersonal.com, Inc. (each a “Subsidiary” and
together the “Subsidiaries”) are corporations duly organized, validly existing and in good
standing under the laws of the State of Delaware and have all requisite corporate power and
authority to carry on its business as now conducted. Each of the Company and the Subsidiaries is
duly qualified to transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its respective business or
properties.

               2.2 Corporate Power. The Company has all requisite legal and corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements (as defined in Section
2.5), to sell and issue the Shares, to issue the Conversion Shares and to carry out and perform its
obligations under the terms of this Agreement and the Ancillary Agreements.

               2.3 Capitalization and Voting Rights. The authorized capital of the Company consists,
or will consist immediately prior to the Closing, of:

                    (a) Preferred Stock. 12,520,389 shares of Preferred Stock, par value $0.01 (the
“Preferred Stock”), of which (i) 5,709,638 shares have been designated Series A

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Preferred Stock (the “Series A Preferred Stock”), 5,530,150 of which are issued and
outstanding and 18,358 of which are issuable upon conversion of accrued but unpaid interest under
the 2002 Note and Warrant Purchase Agreement, (ii) 570,344 shares have been designated Series A-1
Preferred Stock (the “Series A-1 Preferred Stock”), all of which are issued and
outstanding, (iii) 3,500,000 shares have been designated Series B Preferred Stock (the “Series
B Preferred Stock”), 2,737,500 of which are issued and outstanding and (iv) 2,740,407 shares
have been designated Series C Preferred Stock (the “Series C Preferred Stock”), none of
which are outstanding and all of which may be sold pursuant to this Agreement. The rights,
privileges and preferences of the Preferred Stock will be as stated in the Company’s Restated
Certificate.

                    (b) Common Stock. 20,000,000 shares of common stock, par value $0.01 (“Common
Stock”), of which 162,998 shares are issued and outstanding.

                    (c) The outstanding shares of Common Stock, Series A Preferred Stock, Series A-1 Preferred
Stock, Series B Preferred Stock and subject in part to the truth and accuracy of representations
and warranties made by purchasers of such shares, the Series C Preferred Stock, are all duly and
validly authorized and issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Securities Act of 1933, as amended (the
“Act”) and any relevant state securities laws, or pursuant to valid exemptions therefrom.

                    (d) Immediately after the Closing, the capitalization of the Company (taking into account the
issuance and sale of the Shares and all other transactions contemplated hereby to occur prior to
the Closing) will be as set forth on Section 2.3 of the Schedule of Exceptions.

                    (e) Except for (i) the conversion privileges of the Preferred Stock, (ii) the rights provided
in Section 2.4 of that certain Third Amended and Restated Investors’ Rights Agreement in the form
attached hereto as Exhibit B (the “Investors’ Rights Agreement”), (iii) warrants to
purchase 598,592 shares of Common Stock, (iv) currently outstanding options to purchase 380 shares
of Common Stock granted to employees and other service providers pursuant to the Synacor, Inc. 1999
Stock Option Plan (the “1999 Stock Plan”), (v) currently outstanding options to purchase
2,380,339 shares of Common Stock granted to employees and other service providers pursuant to the
Synacor, Inc. 2000 Stock Plan (the “2000 Stock Plan” and, together with the 1999 Stock
Plan, the “Option Plans”) and (vi) the right to convert accrued interest under the 2002
Note and Warrant Purchase Agreement, there are not outstanding any options, warrants, rights
(including conversion or preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. The Company has reserved an aggregate of 3,075,185
shares of its Common Stock for purchase upon exercise of options under the 2000 Stock Plan. The
Company has reserved an aggregate of 3,054 shares of its Common Stock for purchase upon exercise of
options under the 1999 Stock Plan; however, the Company may not grant any new options from its 1999
Stock Plan. The total number of shares permitted to be issued under the Option Plans equals
3,078,239. Other than the Ancillary Agreements, the Company is not a party or subject to any
agreement or understanding, and, to the Company’s knowledge, there is no (i) proxy, stockholder
agreement or other agreement or understanding between any persons and/or entities, which affects or
relates to the transfer, voting or giving of written consents with respect to any security or by a
director of the

3

 

Company or (ii) co-sale, right of first refusal, first offer or other similar agreement with
any other person or entity.

                    (f) All outstanding securities of the Company, including, without limitation, all outstanding
shares of the capital stock of the Company, all shares of the capital stock of the Company issuable
upon the conversion or exercise of all convertible or exercisable securities and all other
securities that the Company is obligated to issue, are subject to a one hundred eighty (180) day
“market stand-off” restriction upon an initial public offering of the Company’s securities pursuant
to a registration statement filed with the Securities and Exchange Commission (“SEC”)
pursuant to the Act in a form substantially identical to Section 1.13 of the Investors’ Rights
Agreement.

                    (g) Section 2.3(g) of the Schedule of Exceptions sets forth a complete list of each security
of the Company owned by any officer, director or, in the Company’s reasonable belief, key employee
of the Company, or by any Affiliate (as defined in Section 7.11) or any member of the immediate
family of any such individual, together with a description of the material terms of the vesting
provisions and, to the Company’s knowledge, the rights of first refusal and rights of repurchase
applicable to each such security. Except as contemplated by this Agreement or as set forth on the
Schedule of Exceptions, there are no agreements, written or oral, between the Company and any
holder of its capital stock, or, to the knowledge of the Company, among any holder of its capital
stock, relating to the acquisition, disposition, or voting of the capital stock of the Company.

                    (h) The Company has not: (i) issued any securities in violation of the requirements of Section
5 of the Act or any other law; (ii) violated any rule, regulation or requirement under the
Securities Act or Exchange Act; (iii) issued any securities in violation of any state securities
laws; or (iv) redeemed any securities in violation of any applicable state or federal securities
law or any agreement or contract governing the redemption of such securities.

               2.4 Subsidiaries. Except for the Subsidiaries, the Company does not presently own or
control, directly or indirectly, any interest in any other corporation, association, or other
business entity. The Company is not a participant in any joint venture, partnership, or similar
arrangement.

               2.5 Authorization. All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and delivery of this
Agreement, the Investors’ Rights Agreement, that certain Third Amended and Restated Stock
Restriction, First Refusal and Co-Sale Agreement in the form attached hereto as Exhibit C
(the “First Refusal and Co-Sale Agreement”) and that certain Third Amended and Restated
Voting Agreement in the form attached hereto as Exhibit D (the “Voting Agreement”,
and together with the Investors’ Rights Agreement and the First Refusal and Co-Sale Agreement, the
“Ancillary Agreements”), the performance of all obligations of the Company hereunder and
thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the
Shares being sold hereunder and the Conversion Shares has been taken or will be taken prior to the
Closing, and this Agreement and the Ancillary Agreements constitute valid and legally binding
obligations of the Company, enforceable in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of

4

 

general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in the Investors’ Rights
Agreement may be limited by applicable federal or state securities laws.

               2.6 Valid Issuance of Preferred and Common Stock. The Shares being purchased by the
Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement
for the consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than restrictions on transfer
under this Agreement and the Ancillary Agreements and under applicable state and federal securities
laws. The Conversion Shares have been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Restated Certificate, will be duly and validly issued, fully paid,
and nonassessable and will be free of restrictions on transfer other than restrictions on transfer
under this Agreement and the Ancillary Agreements and under applicable state and federal securities
laws.

               2.7 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection with the consummation
of the transactions contemplated by this Agreement, except (i) the filing of the Restated
Certificate with the Secretary of State of the State of Delaware which will be filed by the Company
prior to the Closing; (ii) the filing pursuant to the Regulation D, promulgated by the Securities
and Exchange Commission under the Act, which filing will be effected within 15 days of the sale of
the Shares hereunder, (iii) the filings required by applicable state “blue sky” securities laws,
rules and regulations which will be filed by the Company in a timely manner following the Closing,
and (iv) such other post closing filings as may be required.

               2.8 Offering. Subject in part to the truth and accuracy of each Investor’s
representations set forth in Section 3 of this Agreement, the offer, sale and issuance of the
Shares as contemplated by this Agreement are exempt from the registration requirements of any
applicable state and federal securities laws, and neither the Company nor any authorized agent
acting on its behalf will take any action hereafter that would cause the loss of such exemption.

               2.9 Litigation. There is no action, suit, proceeding or investigation pending or, to
the Company’s knowledge, currently threatened against the Company that questions the validity of
this Agreement or any Ancillary Agreement, or the right of the Company to enter into such
agreements, or to consummate the transactions contemplated hereby or thereby, or that might result,
either individually or in the aggregate, in any material adverse changes in the assets, condition
or affairs of the Company or any Subsidiary, financially or otherwise, or any change in the current
equity ownership of the Company or any Subsidiary, nor is the Company or any Subsidiary aware that
there is any basis for the foregoing. The foregoing includes, without limitation, actions, suits,
proceedings or investigations pending or threatened (or any basis therefor known to the Company or
any Subsidiary) involving the prior employment of any of the Company’s or the Subsidiaries’
employees, their use in connection with the Company’s or any Subsidiary’s business of any
information or techniques allegedly proprietary to any of their former employers, or their
obligations under any agreements with prior

5

 

employers. Neither the Company nor any Subsidiary is a party or subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the Company or any
Subsidiary currently pending or that the Company or any Subsidiary intends to initiate.

               2.10 Patents and Trademarks. The Company and each Subsidiary has sufficient title and
ownership of or licenses to all patents, trademarks, service marks, trade names, domain names,
copyrights, trade secrets, information, proprietary rights and processes (collectively,
“IP”) necessary for its respective business as now conducted and as proposed to be
conducted without any violation or infringement of the rights of others, except for such items as
have yet to be conceived or developed or that are expected to be available for licensing on
reasonable terms from third parties. Section 2.10 of the Schedule of Exceptions contains a
complete list of patents and pending patent applications and registrations and applications for
trademarks, copyrights and domain names of, or exclusively licensed to, the Company and each
Subsidiary. There are no outstanding options, licenses, agreements, claims, encumbrances or shared
ownership of interests of any kind relating to anything referred to above in this Section 2.10 that
is to any extent owned by or exclusively licensed to the Company or any Subsidiary, nor is the
Company or any Subsidiary bound by or a party to any options, licenses or agreements of any kind
with respect to the patents, trademarks, service marks, trade names, domain names, copyrights,
trade secrets, licenses, information, proprietary rights and/or processes of any other person or
entity, except, in either case, for standard “off-the-shelf” end-user, object code, internal-use
software license and support/maintenance agreements. Neither the Company nor any Subsidiary has
received any communications alleging that the Company or any Subsidiary has violated any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary
rights of any other person or entity and neither the Company nor any Subsidiary is aware of any
potential basis for such an allegation or of any specific reason to believe that such an allegation
may be forthcoming. Neither the Company nor any Subsidiary is aware of any infringement upon or
misappropriation of any IP of the Company or any Subsidiary. Neither the Company nor any
Subsidiary is aware that any of its employees is 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 best
efforts to promote the interests of the Company or such Subsidiary or that would conflict with the
Company’s or any Subsidiary’s business as presently conducted or as proposed to be conducted.
Neither the execution nor delivery of this Agreement or the Ancillary Agreements, nor the carrying
on of the Company’s or any Subsidiary’s business by its respective employees, nor the conduct of
the Company’s or any Subsidiary’s business as proposed, will, to the Company’s knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees is now obligated.
Neither the Company nor any Subsidiary believes it is or will be necessary to utilize any
inventions of any of its employees made prior to or outside the scope of their employment by the
Company or such Subsidiary.

               2.11 Confidentiality Agreements. Since November 18, 2002, each employee, officer and
consultant of the Company and each Subsidiary has executed a Confidentiality Agreement or
Consulting Agreement, as applicable, in substantially the forms previously provided to counsel for
the Investors. Neither the Company nor any Subsidiary is

6

 

aware that any of its respective employees, officers or consultants is in violation thereof,
and the Company and each Subsidiary will use its commercially reasonable efforts to prevent any
such violation.

               2.12 Compliance with Other Instruments. The Company is not in violation or default of
any provision of its Restated Certificate or Bylaws, or in any material respect of any instrument,
judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to
its knowledge, of any provision of any federal or state statute, rule or regulation applicable to
the Company. The execution, delivery and performance of this Agreement and the Ancillary
Agreements, and the consummation of the transactions contemplated hereby and thereby will not
result in any such violation or default or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision, instrument,
judgment, order, writ, decree or contract or an event that results in the creation of any lien,
charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment,
forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to
the Company, its business or operations or any of its assets or properties.

               2.13 Agreements; Action.

                    (a) Except for agreements explicitly contemplated hereby and by the Ancillary Agreements,
there are no agreements, understandings or proposed transactions between the Company or any
Subsidiary and any of their officers, directors, Affiliates, or any Affiliate thereof.

                    (b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company or any Subsidiary is a party or by which
it is bound that may involve (i) obligations (contingent or otherwise) of, or payments to the
Company or any Subsidiary in excess of, $50,000, or (ii) any material license of any patent,
copyright, trade secret or other proprietary right to or from the Company or any Subsidiary (other
than (A) the license of the Company’s software and products in object code form in the ordinary
course of business pursuant to standard end-user agreements the form of which has been provided to
special counsel for the Investors or (B) the license to the Company or any Subsidiary of standard,
generally commercially available, “off-the-shelf” third party products that are not and will not to
any extent be part of any product, service or intellectual property offering of the Company or any
Subsidiary).

                    (c) Neither the Company nor any Subsidiary has (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series of its capital
stock, (ii) incurred any indebtedness for money borrowed or any other liabilities individually in
excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than
$25,000, in excess of $100,000 in the aggregate, (iii) made any loans or advances to any person,
other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of
any of its assets or rights, other than the sale of its inventory in the ordinary course of
business.

7

 

                    (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions involving the same
person or entity (including persons or entities the Company or any Subsidiary has reason to believe
are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.

               2.14 Related-Party Transactions.

                    (a) No employee, officer, or director of the Company or any Subsidiary (a “Related
Party”) or member of such Related Party’s immediate family, or any corporation, partnership or
other entity in which such Related Party is an officer, director or partner, or in which such
Related Party has significant ownership interests or otherwise controls, is indebted to the Company
or any Subsidiary, nor is the Company or any Subsidiary indebted (or committed to make loans or
extend or guarantee credit) to any of them. To the Company’s knowledge, none of such persons has
any direct or indirect ownership interest in any Subsidiary or any Person (as defined in Section
7.11) with which the Company or any Subsidiary has a business relationship, or any firm or
corporation that competes with the Company or any Subsidiary, except that employees, officers, or
directors of the Company and members of such Related Party’s immediate families may own stock in
publicly traded companies that may compete with the Company. No Related Party or member of their
immediate family is directly or indirectly interested in any material contract with the Company or
any Subsidiary.

                    (b) The following persons, in each person’s capacity as an individual, are not direct
stockholders of the Company: Allen F. Grum, Luiz F. Kahl, Erland E. Kailbourne, Ross B. Kenzie,
Willis S. McLeese, Reginald B. Newman, Daniel P. Penberthy and Jayne K. Rand.

               2.15 Related Persons. To the Company’s knowledge, no director or officer of the
Company or any Subsidiary, and no relative by blood or marriage of any director or officer of the
Company or any Subsidiary, is employed directly or indirectly by or with, or has any financial
interest in, the Company, any Subsidiary or any supplier, service organization, customer or other
entity that has or is presently expected to have a business relationship with the Company or any
Subsidiary.

               2.16 Disclosure. The Company has fully provided each Investor with all the
information that such Investor has requested for deciding whether to purchase the Shares. No
certificates made or delivered in connection with this Agreement or the Ancillary Agreements
contain any untrue statement of a material fact or, to the Company’s knowledge omits to state a
material fact necessary to make the statements herein or therein not misleading.

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

               2.18 Corporate Documents. Except for amendments necessary to satisfy the
representations, warranties or conditions contained in this Agreement (the form of

8

 

which amendments has been approved by the Investors), the Restated Certificate and Bylaws of
the Company are in the form previously provided to the Investors.

               2.19 Title to Property and Assets. The Company owns its property and assets free and
clear of all mortgages, liens, loans and encumbrances, except such encumbrances and liens that
arise in the ordinary course of business and do not materially impair the Company’s ownership or
use of such property or assets. With respect to the property and assets it leases, the Company is
in compliance with such leases and holds a valid leasehold interest free of any liens, claims or
encumbrances. The Subsidiaries do not own or lease any property.

               2.20 Small Business Concern. The Company acknowledges that one or more of the
Investors are small business investment companies (an “SBIC”) licensed by the U.S. Small
Business Administration (the “SBA”), and represents and warrants to each such Investor that
is an SBIC that the Company, taken together with its “affiliates” (as that term is defined in 13
C.F.R. §121.103), is a “Small Business Concern” within the meaning of 15 U.S.C. §622(5), that is
Section 103(5) of the Small Business Investment Act of 1958, as amended (the “SBIC Act”),
and the regulations thereunder, including 13 C.F.R. §107, and meets the applicable size eligibility
criteria set forth in 13 C.F.R. §121.301(c)(1) or the industry standard covering the industry in
which the Company is primarily engaged as set forth in 13 C.F.R. §121.301(c)(2). Neither the
Company nor any of its subsidiaries presently engages in any activities for which an SBIC is
prohibited from providing funds by the SBIC Act, including 13 C.F.R. §107. The information set
forth in the Small Business Administration Forms 480, 652 and Part A of Form 1031 regarding the
Company and its affiliates, when delivered to each Investor that is an SBIC, will be accurate and
complete.

               2.21 Financial Statements. The Company has delivered to each Investor its
consolidated audited financial statements (balance sheet and income and cash flow statements,
including notes thereto) at December 31, 2004 and December 31, 2005 and for the fiscal years then
ended, and its consolidated unaudited financial statements (balance sheet and income statement) as
at and for the eight-month period ended August 31, 2006 (the “Financial Statements”). The
Financial Statements have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and with each other, except that the
unaudited Financial Statements may not contain all footnotes required by generally accepted
accounting principles. The Financial Statements fairly present the financial condition and
operating results of the Company as of the dates, and for the periods, indicated therein, subject
in the case of the unaudited Financial Statements to normal year-end audit adjustments. Except as
set forth in the Financial Statements, the Company has no material liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to
August 31, 2006 (the “Financial Statement Date”) and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Financial Statements, which, in both cases,
individually or in the aggregate, are not material to the financial condition or operating results
of the Company. Except as disclosed in the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation. The Company maintains and
will continue to maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.

9

 

               2.22 Changes. Since the Financial Statement Date there has not been:

                    (a) any change in the assets, liabilities, financial condition or operating results of the
Company from that reflected in the Financial Statements, except changes in the ordinary course of
business that have not been, in the aggregate, materially adverse;

                    (b) any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the assets, properties, financial condition, operating results, prospects or
business of the Company (as such business is presently conducted and as it is proposed to be
conducted);

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

                    (d) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company, except in the ordinary course of business and that is not material to
the assets, properties, financial condition, operating results or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);

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

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

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

                    (h) any resignation or termination of employment of any key officer of the Company; and the
Company does not know of the impending resignation or termination of employment of any such
officer;

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

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

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

                    (l) any declaration, setting aside or payment or other distribution in respect of any of the
Company’s capital stock, or any direct or indirect redemption, purchase or other acquisition of any
of such stock by the Company;

10

 

                    (m) to the Company’s knowledge, any other event or condition of any character that might
materially and adversely affect the assets, properties, financial condition, operating results or
business of the Company (as such business is presently conducted and as it is proposed to be
conducted); or

                    (n) any agreement or commitment by the Company to do any of the things described in this
Section 2.22.

               2.23 Employee Benefit Plans. Neither the Company nor any Subsidiary has any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.

               2.24 Tax Returns, Payments and Elections. The Company has filed all tax returns and
reports (including information returns and reports) as required by law. These returns and reports
are true and correct in all material respects except to the extent that a reserve has been
reflected on the Financial Statements in accordance with generally accepted accounting principles.
The Company has paid all taxes and other assessments due, except those contested by it in good
faith that are listed in Section 2.24 of the Schedule of Exceptions and except to the extent that a
reserve has been reflected on the Financial Statements in accordance with generally accepted
accounting principles. The provision for taxes of the Company as shown in the Financial Statements
is adequate for taxes due or accrued as of the date thereof. The Company has not elected pursuant
to the Internal Revenue Code of 1986, as amended (the “Code”), to be treated as a
Subchapter S corporation or a collapsible corporation pursuant to Section 1362(a) or Section 341(f)
of the Code, nor has it made any other elections pursuant to the Code (other than elections that
relate solely to methods of accounting, depreciation or amortization) that would have a material
effect on the Company, its financial condition, its business as presently conducted or proposed to
be conducted or any of its properties or material assets. The Company has never had any tax
deficiency proposed or assessed against it and has not executed any waiver of any statute of
limitations on the assessment or collection of any tax or governmental charge. None of the
Company’s federal income tax returns and none of its state income or franchise tax or sales or use
tax returns has ever been audited by governmental authorities. Since the Financial Statement Date,
the Company has not incurred any taxes, assessments or governmental charges other than in the
ordinary course of business and the Company has made adequate provisions on its books of account
for all taxes, assessments and governmental charges with respect to its business, properties and
operations for such period. The Company has withheld or collected from each payment made to each
of its employees, the amount of all taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be
withheld or collected therefrom, and has paid the same to the proper tax receiving officers or
authorized depositories.

               2.25 Insurance. The Company has in full force and effect workers’ compensation
insurance required by the applicable law, fire and casualty insurance policies, with extended
coverage customary for companies similarly situated and, in the case of fire and casualty
insurance, sufficient in amount (subject to reasonable deductibles) to allow it to replace any of
its properties that might be damaged or destroyed.

11

 

               2.26 Minute Books. The minute books of the Company provided or made available to the
Investors contain a complete summary of all meetings and actions taken by written consent of
directors and any committee thereof and stockholders since the time of incorporation and reflect
all transactions referred to in such minutes or consents accurately in all material respects. The
stock ledger of the Company as provided to counsel to the Investors is complete and reflects all
issuances, transfers, repurchases and cancellations of shares of capital stock of the Company.

               2.27 Labor Agreements and Actions; Employee Compensation. Neither the Company nor any
Subsidiary is bound by or subject to (and none of their assets or properties is bound by or subject
to) any written or oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the Company’s knowledge, has sought to represent any
of the employees, representatives or agents of the Company or any Subsidiary. There is no strike
or other labor dispute involving the Company or any Subsidiary pending, or to the Company’s
knowledge, threatened, that could have a material adverse effect on the assets, properties,
financial condition, operating results, prospects or business of the Company or any Subsidiary (as
such businesses are presently conducted and as it is proposed to be conducted), nor is the Company
or any Subsidiary aware of any labor organization activity involving its employees. Neither the
Company nor any Subsidiary is aware that any officer or key employee, or that any group of key
employees, intends to terminate their employment with the Company or such Subsidiary, nor does the
Company or any Subsidiary have a present intention to terminate the employment of any of the
foregoing. The employment of each officer and employee of the Company and each Subsidiary is
terminable at the will of the Company. To the knowledge of the Company, the Company and each
Subsidiary has complied in all material respects with all applicable state and federal equal
employment opportunity and other laws related to employment. Neither the Company nor any
Subsidiary is a party to or bound by any currently effective employment contract, severance
agreement, deferred compensation agreement, bonus plan, incentive plan, profit sharing plan,
retirement agreement, or other employee compensation agreement.

               2.28 Other Agreements of Employees. To the Company’s knowledge, no officer, director,
stockholder, or employee of the Company or any Subsidiary is a party to or bound by any agreement,
contract, or commitment that would reasonably be expected to materially and adversely affect the
business, operations or prospects of the Company or any Subsidiary, or the right of any such person
to participate in the Company’s or any Subsidiary’s affairs and perform the duties of his office
or capacity in connection therewith, or that obligates any such person to perform any duty for any
prior employer or principal.

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

               2.30 Qualified Small Business Stock. As of the Closing: (i) the Company will be an
eligible corporation as defined in Section 1202(e)(4) of Code, (ii) the Company will not have made
any purchases of its own stock during the one-year period preceding the Closing having an aggregate
value exceeding 5% of the aggregate value of all its

12

 

stock as of the beginning of such period and (iii) the Company’s aggregate gross assets, as
defined by Code Section 1202(d)(2), at no time between the inception of the Company and through the
Closing have exceeded or will exceed $50 million, taking into account the assets of any
corporations required to be aggregated with the Company in accordance with Code Section 1202(d)(3);
provided however, that in no event shall the Company be liable to the Investors for
any damages arising from any subsequently proven or identified error in the Company’s determination
with respect to the applicability or interpretation of Section 1202 unless such determination shall
have been given by the Company in a manner either negligent or fraudulent.

               2.31 Qualified Business. The Company is a “Qualified Business” as defined under
Section 11(a)(6) of the New York Tax Law.

               2.32 Accounts Payable; Accounts Receivable. All accounts payable and accounts
receivable of the Company arose in bona fide arm’s-length transactions in the ordinary course of
business. Section 2.32 of the Schedule of Exceptions contains a complete and accurate aging report
of the Company’s accounts payable and accounts receivable as of August 31, 2006.

               2.33 Performance of Software. To the knowledge of the Company, the services that the
Company has distributed (whether pursuant to a pre-commercial evaluation or otherwise) to third
parties perform in substantial and material conformance with any published specifications or
end-user documentation or other information provided to customers of the Company in connection with
the services.

               2.34 Solvency. The Company has not: (a) made a general assignment for the benefit of
creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by its creditors; (c) suffered the appointment of a receiver to take possession of all, or
substantially all, of its assets; (d) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets; (e) admitted in writing its inability to pay its debts as they
come due; or (f) made an offer of settlement, extension or composition to its creditors generally.

               2.35 Officers and Directors. To the knowledge of the Company, none of its officers or
directors during the previous five (5) years has been: (a) convicted in a criminal proceeding or
named as a subject of a pending criminal proceeding (excluding traffic violations and other minor
offenses); (b) subject to any order, judgment, or decree (not subsequently reversed, suspended or
vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from, or
otherwise imposing limits or conditions on his, engaging in any securities, investment advisory,
banking, insurance or other type of business or acting as an officer or director of a public
company; or (c) found by a court of competent jurisdiction in a civil action or by the Securities
and Exchange Commission or the Commodity Futures Trading Commission to have violated any federal or
state commodities, securities or unfair trade practices law, which such judgment or finding has not
been subsequently reversed, suspended, or vacated.

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               2.36 Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries
has, to the knowledge of the Company, taken any action which would cause it to be in violation of
the Foreign Corrupt Practices Act of 1977, as amended, or any rules and regulations thereunder. To
the knowledge of the Company, there is not now, and there has never been, any employment by the
Company or beneficial ownership in the Company by any governmental or political official in any
country in the world.

               2.37 Representations Complete. No representation or warranty of the Company made in
this Agreement or any Ancillary Agreement, or in any schedule, document or certificate furnished
pursuant to this Agreement or any Ancillary Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact necessary to make any
statement of fact contained herein or therein not misleading. There is no fact or circumstance
which is not disclosed in this Agreement or the schedules hereto which could reasonably be expected
to have a material adverse effect on the Company’s financial condition, operating results, assets,
supplier relations, customer relations, employee relations or business prospects.

               2.38 Schedule Disclosure. The Schedule of Exceptions shall be organized in accordance
with the numbered and lettered paragraphs of this Agreement; provided that any fact or item that is
disclosed in any section of the Schedule of the Exceptions in a way as to make its relevance or
applicability to information called for in any other section of the Schedule of Exceptions
reasonably apparent shall be deemed to be disclosed in such other section, notwithstanding the
omission to a reference or cross-reference thereto.

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

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

               3.2 Purchase Entirely for Own Account. This Agreement is made with such Investor in
reliance upon such Investor’s representation to the Company, which by such Investor’s execution of
this Agreement such Investor hereby confirms, that the Shares to be received by such Investor and
the Conversion Shares (collectively, the “Securities”) will be acquired for investment for
such Investor’s own account, not as a nominee or agent, and not with a view to the distribution of
any part thereof, and that such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this Agreement, such Investor
further represents that such Investor does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such person or to any
third person, with respect to any of the Securities.

14

 

               3.3 Disclosure of Information. Such Investor believes it has received all the
information it considers necessary or appropriate for deciding whether to purchase the Shares.
Such Investor further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of the Shares and the
business, properties, prospects and financial condition of the Company. The foregoing, however,
does not limit or modify the representations and warranties of the Company in Section 2 of this
Agreement or the right of the Investors to rely thereon.

               3.4 Investment Experience. Such Investor is an investor in securities of companies in
the development stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment, and has such knowledge and experience in financial or business matters that
it is capable of evaluating the merits and risks of the investment in the Shares. If other than an
individual, such Investor also represents it has not been organized for the purpose of acquiring
the Shares.

               3.5 Accredited Investor. Such Investor is an “accredited investor” within the meaning
of SEC Rule 501 of Regulation D, as presently in effect.

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

               3.7 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, such Investor further agrees not to make any disposition of all or
any portion of the Securities unless and until:

                    (a) There is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with such registration statement; or

                    (b) (i) Such Investor shall have notified the Company of the proposed disposition and shall
have furnished the Company with a reasonably detailed statement of the circumstances surrounding
the proposed disposition, and (ii) if reasonably requested by the Company, such Investor shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such
disposition will not require registration of such shares under the Act. It is agreed that the
Company will not require opinions of counsel for transactions made pursuant to Rule 144.

                    (c) Notwithstanding the provisions of subsections (a) and (b) above, no such registration
statement or opinion of counsel shall be necessary for a transfer (i) by an Investor that is a
partnership to a partner of such partnership or a retired partner of such partnership who retires
after the date hereof, or to the estate of any such partner or retired partner or the transfer by
gift, will or intestate succession of any partner to his or her spouse or to the

15

 

siblings, lineal descendants or ancestors of such partner or his or her spouse or (ii) by an
Investor to any Affiliate, in each case, if the prospective transferee agrees in all such instances
in writing to be subject to the terms hereof to the same extent as if he or she were an original
Investor hereunder.

               3.8 Legends. It is understood that the certificates evidencing the Securities may
bear one or all of the following legends:

                    (a) “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT. THIS CERTIFICATE MUST BE SURRENDERED TO THE CORPORATION OR ITS TRANSFER AGENT AS
A CONDITION PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY SECURITIES
REPRESENTED BY THIS CERTIFICATE.”

                    (b) Any legend required by applicable state “blue sky” securities laws, rules and regulations.

               3.9 Exculpation Among Investors. Each Investor acknowledges that it is not relying
upon any person, firm or corporation, other than the Company and its officers and directors, in
making its investment or decision to invest in the Company. Each Investor agrees that no Investor,
nor the respective controlling persons, officers, directors, partners, agents, or employees of any
Investor, shall be liable to any other Investor for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the purchase of the Securities.

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

               4.1 Representations and Warranties. The representations and warranties of the Company
contained in Section 2 shall be true on and as of the Closing.

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

               4.3 Compliance Certificate. The President of the Company shall deliver to each
Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2
have been fulfilled and stating that there has been no material adverse change in the business,
affairs, operations, properties, assets or condition of the Company since the date of the Financial
Statements.

16

 

               4.4 Qualifications. All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be
duly obtained and effective as of the Closing.

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

               4.6 Secretary’s Certificate. The Secretary or Assistant Secretary of the Company
shall deliver to each Investor at the Closing a certificate stating that the copies of the
Company’s Restated Certificate and Bylaws and Board of Directors and stockholder resolutions
relating to the sale of the Shares attached thereto are true and complete copies of such documents
and resolutions.

               4.7 Nondisclosure and Development Agreements. Each key manager, as determined by the
Board of Directors, each founder, officer, and key employee of the Company shall have entered into
a non-disclosure and development agreement substantially in the form previously provided or made
available to the Investors.

               4.8 Board of Directors. The Company and its stockholders shall have taken all
necessary corporate action such that, immediately following the Closing, the Board of Directors of
the Company shall be constituted as set forth in the Voting Agreement.

               4.9 Opinion of Company Counsel. Each Investor shall have received from Gunderson
Dettmer, counsel for the Company, an opinion, dated as of the Closing, in the form attached hereto
as Exhibit E.

               4.10 Investors’ Rights Agreement. The Company and the other parties thereto (other
than such Investor) sufficient to amend and restate the Second Amended and Restated Investors’
Rights Agreement dated October 1, 2004 shall have executed and delivered the Investors’ Rights
Agreement in the form attached as Exhibit B.

               4.11 Stock Restriction, First Refusal and Co-Sale Agreement. The Company and the
other parties thereto (other than such Investor) sufficient to amend and restate the Second Amended
and Restated Stock Restriction, First Refusal and Co-Sale Agreement dated October 1, 2004 shall
have executed and delivered the First Refusal and Co-Sale Agreement in the form attached hereto as
Exhibit C.

               4.12 Voting Agreement. The Company and the other parties thereto (other than such
Investor) sufficient to amend and restate the Second Amended and Restated Voting Agreement dated
October 1, 2004 shall have executed and delivered the Voting Agreement in the form attached hereto
as Exhibit D.

17

 

               4.13 Management Rights Letter. The Company shall have entered into a Management
Rights Letter, in the form attached hereto as Exhibit F, with the Investors requesting the
same.

               4.14 Indemnification Agreements. The Company shall have entered into prior to the
closing an indemnification agreement in substantially the form attached hereto as Exhibit G
with each member of the Board of Directors as of and immediately following the Closing.

               4.15 Certificate of Incorporation. The Restated Certificate shall have been accepted
for filing by the Secretary of State of the State of Delaware.

               4.16 Approval of Stock Option Plan Increase. The Board of Directors of the Company
and the Company’s stockholders shall have duly and validly approved an increase in the number of
shares reserved for issuance under the 2000 Stock Plan such that the aggregate number of shares of
Common Stock authorized to be issued under the 2000 Stock Plan shall be 3,075,185 shares as of the
Closing.

               4.17 SBIC Forms. On or before the closing of the transactions contemplated by this
Agreement, each Investor that is an SBIC shall have received the following SBA documents: (a) SBA
Form 480 (Size Status Declaration), (b) SBA Form 652 (Assurance of Compliance) completed and
executed by the Company and (c) SBA Form 1031 (Portfolio Finance Report), Parts A and B completed
by the Company. The Company shall have executed the SBIC Letter in the form attached hereto as
Exhibit H.

               4.18 Satisfaction of Debt. The Investors shall have received evidence reasonably
satisfactory to them that the obligations of the Company under the 2002 Note and Warrant Purchase
Agreement have been satisfied in full and such Agreement has been terminated.

          5. Conditions of the Company’s Obligations at Closing. The obligations of the Company
to each Investor under this Agreement are subject to the fulfillment on or before the Closing of
each of the following conditions by that Investor:

               5.1 Representations and Warranties. The representations and warranties of the
Investors contained in Section 3 shall be true on and as of the Closing.

               5.2 Payment of Purchase Price. The Investors shall have delivered the purchase price
specified in Section 1.1(c).

               5.3 Qualifications. All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be
duly obtained and effective as of the Closing.

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          6. Post Closing Covenants.

               6.1 Use of Proceeds. The Company shall use proceeds from the sale of the Shares for
(a) the repayment in full of outstanding principal and interest accrued on that certain Promissory
Note issued by the Company on November 18, 2002 to Erie County Industrial Land Development
Corporation, (b) working capital and general corporate purposes including expansion and new product
development, growth in sales and marketing and (c) such other purposes as the Board of Directors
shall so determine.

               6.2 Key Man Insurance. The Company shall maintain term life insurance on the lives of
certain key employees of the Company, as determined by the Board of Directors, in the amount of
$1,000,000 each. Such policies shall name the Company as loss payee and shall not be cancelable by
the Company without prior approval of the Board of Directors.

               6.3 D&O Insurance. The Company shall establish D&O insurance, including prior acts
coverage so long as, in the opinion of the Board of Directors of the Company, the cost of such
prior acts coverage is not prohibitive, on terms and conditions satisfactory to the Investors.

          7. Miscellaneous.

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

               7.2 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

               7.3 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of New York as applied to agreements among New York residents entered into and to be
performed entirely within New York.

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

               7.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.

19

 

               7.6 Notices. All notices and other communications given or made pursuant hereto shall
be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business
hours of the recipient; if not, then on the next business day, (iii) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one
(1) day after deposit with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the respective parties
at the addresses set forth on the signature pages attached hereto (or at such other addresses as
shall be specified by notice given in accordance with this Section 7.6).

               7.7 Finder’s Fee. Each party represents that it neither is nor will be obligated for
any finders’ fee or commission in connection with this transaction. Each Investor agrees to
indemnify and to hold harmless the Company from any liability for any commission or compensation in
the nature of a finders’ fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners, employees, or
representatives is responsible.

               The Company agrees to indemnify and hold harmless each Investor from any liability for any
commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending
against such liability or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.

               7.8 Expenses. Irrespective of whether the Closing is effected, the Company shall pay
all costs and expenses that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement. If the Closing is effected, the Company shall, at the Closing, pay
the legal, accounting, consulting and out-of-pocket expenses incurred by North Atlantic Venture
Fund III and North Atlantic SBIC IV, L.P. with respect to the negotiating, execution and delivery
of this Agreement, including the costs incurred with respect to the review of this Agreement by the
other Investors; provided, that such fees and expenses shall not exceed $60,000 in the
aggregate. If any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the Ancillary Agreements or the Restated Certificate, the prevailing party shall be
entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

               7.9 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the holders of at least fifty-five percent (55%) of the Conversion Shares issued or issuable
upon conversion of the Shares purchased hereunder. Any amendment or waiver effected in accordance
with this section shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.

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

20

 

               7.11 Aggregation of Stock. All shares of the Preferred Stock and Conversion Shares
held or acquired by Affiliated Persons (including Affiliated venture capital funds) shall be
aggregated together for the purpose of determining the availability of any rights under this
Agreement. The term “Affiliate” shall mean, with respect to any individual or entity
(including any firm, company, general partnership, limited partnership, joint venture association,
corporation, limited liability company, trust, business trust, estate or governmental body or
authority) (“Person”), any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. The term “control”
(including, with correlative meanings, the terms “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such Person, whether by
ownership of voting securities or other ownership interests, by control or otherwise. The term
“Affiliate” shall include, with respect to a limited partnership or limited liability
company, a fund or entity managed by the same manager or managing member or general partner or
management company or by an entity controlling, controlled by or under common control with such
manager, managing member, general partner or management company. Two or more Persons that are
Affiliates are deemed to be “Affiliated” for purposes hereof.

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

               7.13 Publicity. Each party hereto may publicly disclose the transactions described in
this Agreement in the ordinary course of business.

               7.14 Arbitration. Any controversy between the parties hereto involving any claim
arising out of or relating to the termination of this Agreement, will be submitted to and be
settled by final and binding arbitration in New York, New York, in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association (the “AAA”), and
judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction
thereof; provided, however, that (i) this Section 7.14 shall not apply to
Intel Capital Corporation (“Intel Capital”) and its Affiliates, and (ii) this Section
7.14 shall apply to any transferee of Shares that is not a partner or Affiliate of Intel
Capital. Such arbitration shall be conducted by three (3) arbitrators chosen by the Company and
the Investors, or failing such agreement, an arbitrator experienced in the sale of similarly sized
companies appointed by the AAA. There shall be limited discovery prior to the arbitration hearing
as follows: (a) exchange of witness lists and copies of documentary evidence and documents relating
to or arising out of the issues to be arbitrated, (b) depositions of all party witnesses, and (c)
such other depositions as may be allowed by the arbitrators upon a showing of good cause.
Depositions shall be conducted in accordance with the New York Code of Civil Procedure, the
arbitrator(s) shall be required to provide in writing to the parties the basis for the award or
order of such arbitrator(s), and a court reporter shall record all hearings, with such record
constituting the official transcript of such proceedings.

(Remainder of page intentionally left blank)

21

 

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

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	SYNACOR, INC.
	 
	 	 	 	 
	 
	 	By	 	/s/ Ron Frankel
	 
	 	 	 
	 
	 	 	 	Ron Frankel
	 
	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 
	Address:	 	40 LaRiviere Drive, Suite 300
	 	 	Buffalo, NY 14202
	 
	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	INTEL CAPITAL CORPORATION
	 
	 	 	 	 
	 
	 	By	 	/s/ James W. McCall
	 
	 	 	 
	 	 	Name: James W. McCall
	 	 	Title: Assistant Treasurer
	 
	 	 	 	 
	Address:	 	c/o Intel Corporation

	 	 	Attn: Intel Capital Portfolio Manager

2200 Mission College Blvd., M/S RN6-46

Santa Clara, CA 95052

Facsimile: (408) 765-6038
	 
	 	 	 	 
	 	 	With a copy by e-mail to:

portfolio.manager@intel.com
	 
	 	 	 	 
	 	 	SIGNATURE PAGE TO THE SERIES C PREFERRED
STOCK PURCHASE AGREEMENT BY AND AMONG SYNACOR,
INC. AND THE INVESTORS LISTED ON THE SIGNATURE
PAGES HERETO.

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	NORTH ATLANTIC VENTURE FUND III,
	 	 	a Limited Partnership
	 
	 	 	 	 
	 
	 	By:	 	North Atlantic Investors III, LLC,
	 
	 	 	 	its General Partner
	 
	 	 	 	 
	 
	 	By:	 	/s/ Mark J. Morrissette
	 
	 	 	 
	 	 	Name: Mark J. Morrissette
	 	 	Title: General Partner
	 
	 	 	 	 
	Address:	 	2 City Center
	 	 	Portland, ME 04101
	 
	 	 	 	 
	 	 	NORTH ATLANTIC SBIC IV, L.P.
	 
	 	 	 	 
	 
	 	By:	 	North Atlantic Investors SBIC IV, LLC,
	 
	 	 	 	its General Partner
	 
	 	 	 	 
	 
	 	By:	 	/s/ Mark J. Morrissette
	 
	 	 	 
	 	 	Name: Mark J. Morrissette
	 	 	Title: General Partner
	 
	 	 	 	 
	Address:
	 	2 City Center
	 
	 	Portla	 	nd, ME 04101

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	MITSUI INCUBASE CORPORATION
	 
	 	 	 	 
	 
	 	By:	 	/s/ Yoshiaki Baba
	 
	 	 	 
	 	 	Name: Yoshiaki Baba
	 	 	Title: President & CEO
	 
	 	 	 	 
	Address:	 	20400 Stevens Creek Blvd. Suite 300
	 	 	Cupertino CA 95014

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	ADVANTAGE CAPITAL NEW YORK PARTNERS I, L.P.
	 
	 	 	 	 
	 
	 	By:	 	Advantage Capital New York GP-I, LLC,
 Its General Partner
	 
	 	 	 	 
	 
	 	By	 	/s/ M. Scott Murphy
	 
	 	 	 
	 
	 	 	 	M. Scott Murphy
	 
	 	 	 	Vice President
	 
	 	 	 	 
	Address:	 	5 Warren Street, Suite 204
	 	 	Glens Falls, NY 12801
	 
	 	 	 	 
	 	 	ADVANTAGE CAPITAL NEW YORK PARTNERS II, L.P.
	 
	 	 	 	 
	 
	 	By:	 	Advantage Capital New York GP-II, LLC,
	 
	 	 	 	Its General Partner
	 
	 	 	 	 
	 
	 	By	 	/s/ M. Scott Murphy
	 
	 	 	 
	 
	 	 	 	M. Scott Murphy
	 
	 	 	 	Vice President
	 
	 	 	 	 
	Address:	 	5 Warren Street, Suite 204
	 	 	Glens Falls, NY 12801

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	ACCESS TECHNOLOGY CAPITAL, LLC
	 
	 	 	 	 
	 
	 	By	 	/s/ Peter L. Thoren
	 
	 	 	 
	 	 	Name: Peter Thoren
	 	 	Title: Vice President
	 
	 	 	 	 
	Address:	 	730 Fifth Avenue, 20th Floor
	 	 	New York, NY 10019

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	CRYSTAL INTERNET VENTURE FUND II (BVI), L.P.
	 
	 	 	 	 
	 	 	CRYSTAL INTERNET VENTURE FUND II (BVI), CRYSTAL VISION, L.P.
	 
	 	 	 	 
	 
	 	By:	 	Crystal Venture II, Ltd.
	 
	 	Their:	 	General Partner
	 
	 	 	 	 
	 
	 	By	 	/s/ Joseph Tzeng
	 
	 	 	 
	 	 	Name: Joseph Tzeng
	 	 	Title: President
	 
	 	 	 	 
	Address:
	 	1120 Chester Avenue, Suite 418
	 	 	Cleveland, OH 44114

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	RAND CAPITAL SBIC, L.P.
	 
	 	 	 	 
	 
	 	By:	 	Rand Capital Management, LLC,
	 
	 	 	 	its General Partner
	 
	 	 	 	 
	 
	 	By	 	/s/ Dan Penberthy
	 
	 	 	 
	 	 	Name: Dan Penberthy
	 	 	Title: Manager
	 
	 	 	 	 
	Address:	 	2200 Rand Building
	 	 	Buffalo, NY 14203

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	PACVEN WALDEN VENTURES IV, L.P.
	 
	 	 	 	 
	 
	 	By	 	/s/ Lip-Bu Tan
	 
	 	 	 
	 	 	Name: Lip-Bu Tan
	 	 	Title: Director
	 
	 	 	 	 
	 	 	of Pacven Walden Management Co., Ltd.
	 	 	as General Partner of Pacven Walden Management II, L.P.
	 	 	as General Partner of Pacven Walden Ventures IV, L.P.
	 
	 	 	 	 
	Address:	 	One California Street, 28th Floor
	 	 	San Francisco, CA 94111
	 
	 	 	 	 
	 	 	PACVEN WALDEN VENTURES IV ASSOCIATES FUND, L.P.
	 
	 	 	 	 
	 
	 	By	 	/s/ Lip-Bu Tan
	 
	 	 	 
	 	 	Name: Lip-Bu Tan
	 	 	Title: Director
	 
	 	 	 	 
	 	 	of Pacven Walden Management Co., Ltd.
	 	 	as General Partner of Pacven Walden Management
II, L.P.
	 	 	as General Partner of Pacven Walden Ventures IV
Associates Fund, L.P.

 

 

	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 
	 	 	JORON MANAGEMENT LLC
	 
	 	 	 	 
	 
	 	By	 	/s/ Jordan Levy
	 
	 	 	 
	 	 	Name: Jordan Levy
	 	 	Title: Manager
	 
	 	 	 	 
	Address:	 	50 Fountain Plaza, Suite 1320
	 	 	Buffalo, NY 14202
	 
	 	 	 	 
	 	 	/s/ Jeremy M. Jacobs, Jr.
	 	 	 
	 	 	Jeremy M. Jacobs, Jr.
	 
	 	 	 	 
	Address:	 	c/o Delaware North Co.
	 	 	40 Fountain Plaza

Buffalo, NY 14202

Attn: Mike GallagherEX-10.18.1

 

EXHIBIT
10.18.1

SUBLEASE

     THIS SUBLEASE (this “Sublease”) is made and entered as of this 3rd day of March 2006 by and
between LUDLOW TECHNICAL PRODUCTS CORPORATION, a New York corporation formerly known as Graphic
Controls Corporation (“Sublandlord”), with an address at c/o Tyco Healthcare Group LP 15 Hampshire
Street, Mansfield, MA 02048, and SYNACOR, INC., a Delaware corporation (“Subtenant”), with an
address at 40 La Riviere Drive, Buffalo, New York 14202.

WITNESSETH:

          A. Sublandlord is the tenant under that certain Property Lease dated March 13, 1998 (the
“Original Lease”), with Waterfront Associates, LLC, as successor by conversion to Waterfront
Associates (“Landlord”), as landlord, covering Building No. 3, Waterfront Village Center, 40 La
Riviere Drive, Buffalo, New York 14202, as amended by that certain First Amendment to Lease dated
April 29, 1998, that Second Amendment to Lease dated April 21, 1999, and that Third Amendment to
Lease dated July 30, 1999 (collectively, the three amendments are the “Amendments”). As amended,
the Original Lease is referred to herein as the “Lease.”

          B. Under the terms and conditions of this Sublease, Subtenant desires to sublease from
Sublandlord approximately 20,027 rentable square feet located on the third (3rd) floor
of the Building (the “Premises”), which Premises is shown cross-hatched on Exhibit A
attached hereto and incorporated herein.

     NOW THEREFORE, in consideration of the mutual covenants set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Sublandlord and Subtenant agree as follows:

ARTICLE 1

DEFINITIONS; RECITALS

     Section 1.1
Definitions. Capitalized terms used herein and not otherwise defined
shall have the same meanings given to them in the Lease. For the purposes of this Sublease, unless
the context otherwise requires:

          (a) “Base Building Systems” shall mean the mechanical, gas, utility, electrical, sanitary,
heating, air conditioning, ventilating, elevator, plumbing, sprinkler, cabling and wiring,
life-safety and other service systems of the Building, excluding (i) the distribution portions of
such systems within the Premises, and (ii) any supplemental HVAC and other systems installed by
Subtenant within the Premises.

          (b) “Building” shall mean the building known as Building No. 3, Waterfront Village Center, 40
LaRiviere Drive, Buffalo, New York 14202, which Building includes approximately 102,816 rentable
square feet of space.

Page 1 of 27

 

          (c) “Common Areas” shall mean the Land and all portions of the Building not intended as
leasable area, including without limitation the parking facilities, the lobby, public corridors and
equipment rooms.

          (d) “Land” shall mean the parcel of land situated in the City of Buffalo, the County of Erie
and State of New York, more particularly described on Exhibit B attached hereto.

          (e) “Property” shall mean the Land and Building.

          (f) “Sublandlord’s Representatives” shall mean Sublandlord’s employees, agents, contractors,
and invitees.

          (g) “Subtenant’s Property” shall mean all trade fixtures, furniture, and equipment installed
at the sole expense of Subtenant and which are not replacements of any property of Sublandlord,
whether any such replacement is made at Subtenant’s expense or otherwise. Subtenant’s Property
shall not include items which become affixed to the Premises and cannot be removed without causing
material damage to the Building.

          (h) “Subtenant’s Representatives” shall mean Subtenant, Subtenant’s subtenants and
assignees, if applicable, and Subtenant’s employees, agents, contractors, licensees, and
invitees.

          (i) “Subtenant’s Share” shall mean 19.5%, which is the number of rentable square feet
in the Premises divided by the number of rentable square feet in the Building.

          (j) “Unavoidable Delays” shall mean any and all delays beyond a party’s reasonable
control, including without limitation, governmental restrictions, governmental regulations,
controls, order of civil, military or naval authority, governmental preemption, strikes, labor
disputes, lock-outs, shortage of labor or materials, inability to obtain materials or reasonable
substitutes therefore, default of any building or construction contractor or subcontractor, Acts of
God, fire, earthquake, floods, explosions, actions of the elements, extreme weather conditions,
enemy action, civil commotion, riot or insurrection, fire or other unavoidable casualty.
Notwithstanding anything herein to the contrary, a monetary default by Subtenant is never an
Unavoidable Delay.

     Section 1.2 Recitals. The recitals set forth above are incorporated into this Sublease by
reference as if fully set forth herein.

ARTICLE 2

DEMISE; TERM

     Section 2.1 Demise. Conditioned upon receipt by Sublandlord of Landlord’s written consent
executed in substantially the form attached hereto as Exhibit C, Sublandlord hereby
subleases and demises to Subtenant, and Subtenant hereby takes and hires from Sublandlord, the
Premises on the terms and conditions and subject to the provisions hereinafter set forth herein.

     Section 2.2 Commencement Date. The term (the “Term”) of this Sublease shall
commence on April 1, 2006 (the “Commencement Date”).

Page 2 of 27

 

     Section 2.3 Expiration Date. Subject to the terms, covenants, or conditions of
this Sublease, the Term shall end on the earlier of: (a) March 31, 2016, or (b) five days before
the expiration or earlier termination, for any reason whatsoever, of the Lease. The date of
expiration of this Sublease shall be referred to herein as the “Expiration Date.”

     Section 2.4 Termination by Subtenant. Provided that Subtenant is not in default
when Subtenant delivers the early termination notice or on the cancellation note, Subtenant may, at
its sole option, terminate this Sublease effective as of March 31, 2011 (the “Cancellation Date”).
To exercise such termination right, Subtenant must no later than June 30, 2010, give notice thereof
to Sublandlord together with Subtenant’s payment to Sublandlord of $120,000.00 (the “Cancellation
Fee”) in lawful money of the United States of America. As a condition to the effectiveness of
Subtenant’s cancellation right, Subtenant shall pay to Sublandlord prior to the Cancellation Date
any past-due amounts then outstanding under the Sublease. If Subtenant fails timely to deliver the
Cancellation Fee or the cancellation notice or is otherwise unable to comply with or exercise this
cancellation option, then Subtenant’s right to cancel this Lease under this section shall expire;
time is of the essence with respect thereto.

     Section 2.5 Delivery Date. Sublandlord and Subtenant presently anticipate that
possession of the Premises will be tendered to Subtenant in the condition required by this Sublease
on or about April 1, 2006 (the “Estimated Delivery Date”). If Sublandlord is unable to tender
possession of the Premises in such condition to Subtenant by the Estimated Delivery Date, then (a)
the validity of this Sublease shall not be affected or impaired thereby,
(b) Sublandlord shall not be in default hereunder or be liable for damages therefor, and
(c) Subtenant shall accept possession of the Premises when Sublandlord tenders possession
thereof to Subtenant. By occupying the Premises, Subtenant shall be deemed to have accepted the
Premises in their condition as of the date of such occupancy, subject to the performance of
punch-list items that remain to be performed by Sublandlord, if any.

ARTICLE 3

CONDITION OF THE PREMISES; USE

     Section 3.1 AS-IS Condition of Premises. Except as otherwise expressly provided
to the contrary herein, Subtenant accepts the Premises “AS-IS” in its presently existing condition.
Subtenant acknowledges that (a) it was given a full opportunity to inspect the Premises; (b) as of
the Commencement Date, Subtenant has inspected the Premises; (c) neither Sublandlord nor its agents
or employees have made any representations or warranties as to the condition of the Premises, or
the suitability or fitness of the Premises for the conduct of Subtenant’s business or for any other
purpose; and (d) subject to the provisions of Section 3.2 below, neither Sublandlord nor its agents
or employees agreed to undertake any alterations or construct any tenant improvements in the
Premises.

     Section 3.2 Sublandlord’s Preparation; Subtenant’s Early Entry. Notwithstanding
anything herein to the contrary, Sublandlord shall deliver the Premises to the Subtenant with all
Base Building Systems serving the Premises in working order and condition, with functioning light
bulbs in each light fixture located therein, and free of damaged ceiling tiles. In addition,
subject to Landlord’s consent, either (i) Sublandlord shall repaint the existing painted walls in
the Premises with Building-standard paint in Subtenant’s choice of color in Building-standard

Page 3 of 27

 

quantities, in which case Subtenant shall select the color choice and provide notice thereof to
Landlord on or before March 6, 2006; or (ii) under the terms and conditions of this Sublease,
Subtenant may enter the Premises before the Commencement Date (“Subtenant’s Early Entry”) solely
for the purposes of performing such repainting itself and re-carpeting the Premises, provided that
Sublandlord has approved the contractor performing the work, which approval shall not be
unreasonably withheld. If Subtenant elects to do such painting itself, then before doing any work,
Subtenant shall submit to Sublandlord an estimate prepared by a contractor for the cost of the
repainting. Sublandlord shall reimburse Subtenant for the actual cost of such repainting or
$9,000, whichever amount is less. Subtenant shall be responsible for any costs above that cap
amount. Subtenant’s Early Entry shall be governed by the terms of this Sublease, including without
limitation the requirement that Subtenant maintain the insurance coverage required under Article 10
hereof. Before Subtenant’s Early Entry, Subtenant shall furnish to Sublandlord a certificate
evidencing the required insurance coverage. Except as set forth in Section 4.1, Subtenant shall not
be required to pay any Rent prior to the Commencement Date. If Subtenant decides to repaint the
Premises itself, then Subtenant shall provide notice to Sublandlord of such election no later than
March 6, 2006.

     Section 3.3 Permitted Uses. Subtenant shall use and occupy the Premises for
general office and administrative uses consistent with first class office buildings in Buffalo, New
York, and for no other purpose whatsoever. Subtenant shall not use or occupy or suffer or permit
the use or occupancy of the Premises or any part thereof in any manner which, in Sublandlord’s
judgment, shall adversely affect or interfere with any services required to be furnished by
Sublandlord to Subtenant or to any other subtenant or occupant of any part of the Building, or with
the proper and economical rendition of any such service or with the use or enjoyment of any part of
the Building by Sublandlord, or by any other subtenant or occupant. Subtenant shall comply with all
laws relating to the use, condition, access to, and occupancy of the Premises and will not commit
waste.

     Section 3.4 Access. Subject to any reasonable security procedures that may be
instituted by Sublandlord and/or Landlord from time to time, Subtenant shall have access to the
Premises and the parking areas twenty-four (24) hours per day, seven (7) days per week and 52 weeks
per year.

ARTICLE 4

RENT

     Section 4.1 Fixed and Additional Rent. Subtenant shall pay to Sublandlord,
without notice, billing, demand, deduction, or set off, in lawful money of the United States of
America, at the address of Sublandlord first above written or at such place as Sublandlord may
designate, the following:

          (a) Annual
fixed rent (“Fixed Rent”) in the amount of $280,378,00, payable in equal monthly
installments of $23,364.84 each for the period commencing on
July 1, 2006 (the “Rent Commencement
Date”) until the Expiration Date. Fixed Rent is payable in equal monthly installments in advance on
the first day of each and every calendar month during such period.

Page 4 of 27

 

             (b)     Additional
rent (“Additional Rent”)consisting of all other sums
of money as shall become due and payable by Subtenant hereunder (for
default in the payment of which Sublandlord shall have the same
remedies as for a default in the payment of Fixed Rent), commencing on
the Commencement Date. Unless otherwise specified herein, Additional
Rent shall be payable within ten (10) days after receipt of an invoice from Sublandlord.

     Fixed Rent and Additional Rent are herein collectively called “Rent.” There shall
be no abatement of, deduction from, counterclaim or setoff against Rent, except as
otherwise specifically provided in this Sublease. If the Term commences on a day other
than the first day of a calendar month or ends on a day other than the last day of a
calendar month, then Rent (and all other sums or charges due or payable by Subtenant
to Sublandlord hereunder) for the first and last fractional months of the Term shall
be appropriately prorated. The first monthly installment of Fixed Rent shall be
payable contemporaneously with the execution of this Sublease; thereafter, Fixed Rent
shall be payable on the first day of each month beginning on the first day of the
second full calendar month following the Rent Commencement Date.

     Section 4.2 Late Charge. If Subtenant shall fail to pay when due any
Rent, Subtenant shall pay with the next installment a late charge equal to five
percent (5%) of the unpaid Rent. In addition, all past-due payments required of
Subtenant hereunder shall bear interest from the date due until paid at the lesser of
eighteen percent (18%) per annum or the maximum lawful rate of interest. In no event,
however, shall the charges permitted under this section (to the extent such charges
are considered to be interest under applicable law) exceed the maximum lawful rate of
interest.

ARTICLE 5

UTILITIES AND SERVICES

     Section 5.1 Services. Subject to the terms of this Sublease,
Sublandlord shall use all reasonable efforts to furnish to Subtenant (1) water at
those points of supply provided for general use of subtenants of the Building; (2)
heated and refrigerated air conditioning (“HVAC”) as appropriate, (a) at such
temperatures and in such amounts as are standard, as reasonably determined by
Sublandlord, for comparable buildings in the vicinity of the Building and (b) as
specified in Section 5.2; (3) elevators for ingress and egress to the floor on which
the Premises is located, in common with other subtenants, provided that Sublandlord
may reasonably limit the number of operating elevators during non-business hours and
holidays; and (4) electrical current during normal business hours for equipment that
does not require more than one hundred ten (110) volts and whose electrical energy
consumption does not exceed normal office usage.

     Section 5.2
After-Hours HVAC. If Subtenant desires any HVAC service
at any time other than between 8:00 a.m. and 6:00 p.m. on weekdays (which term means
all days except Saturdays, Sundays or holidays), then such service shall be supplied
to Subtenant upon the written request of Subtenant delivered to Sublandlord before
3:00 p.m. on the business day preceding such extra usage, and Subtenant shall pay to
Sublandlord the cost of such service within thirty (30) days after Sublandlord has
delivered to Subtenant an invoice therefor. The costs charged for such service shall
be based upon Sublandlord’s reasonable estimate of the costs for such after-hours HVAC
and shall include any costs incurred by Sublandlord in providing after-hour HVAC
service to Subtenant (including without limitation costs for electricity, water,

Page 5 of 27

 

Sewage, water treatment, labor, metering, filtering, and maintenance
reasonably allocated by Sublandlord to providing such service).

     Section 5.3 Excess Utility and Water Use. Sublandlord shall not be
required to furnish electrical current for equipment that requires more than one
hundred ten (110) volts or other equipment whose electrical energy consumption exceeds
normal office usage. If Subtenant’s requirements for or consumption of electricity
exceed the electricity to be provided by Sublandlord as described above, then
Sublandlord shall, at Subtenant’s expense, make reasonable efforts to supply such
service through the then-existing feeders and risers serving the Building and the
Premises, and Subtenant shall pay to Sublandlord the cost of such service within
thirty (30) days after Sublandlord has delivered to Subtenant an invoice therefor,
Sublandlord may determine the amount of such additional consumption and potential
consumption by any verifiable method, including installation of a separate meter in
the Premises installed, maintained, and read by Sublandlord, at Subtenant’s expense.
Subtenant shall not install any electrical equipment requiring special wiring or
requiring voltage in excess of one hundred ten (110) volts unless approved in
advance by Sublandlord. Subtenant shall not install any electrical equipment requiring
voltage in excess of Building capacity unless approved in advance by Sublandlord,
which approval may be withheld in Sublandlord’s sole discretion. The use of
electricity in the Premises shall not exceed the capacity of existing feeders and
risers to or wiring in the Premises. Any risers or wiring required to meet Subtenant’s
excess electrical requirements shall, upon Subtenant’s written request, be installed
by Sublandlord, at Subtenant’s cost, if, in Sublandlord’s judgment, the same are
necessary and shall not cause permanent damage to the Building or the Premises, cause
or create a dangerous or hazardous condition, entail excessive or unreasonable
alterations, repairs, or expenses, or interfere with or disturb other subtenants of
the Building. If Subtenant uses machines or equipment in the Premises which affect the
temperature otherwise maintained by the air conditioning system or otherwise overload
any utility, Sublandlord may install supplemental air conditioning units or other
supplemental equipment (the “Supplemental Unit”) in the Premises, and the cost
thereof, including the cost of the Supplemental Unit, and the cost of the
installation, operation, use, and maintenance, shall be paid by Subtenant to
Sublandlord within thirty (30) days after Sublandlord has delivered to Subtenant an
invoice therefor. No Supplemental Unit may be installed without Sublandlord’s consent.
If any Supplemental Unit is installed in the Premises, then Subtenant shall pay to
Sublandlord an additional charge for excess and extra utility usage associated with
such Supplemental Unit (the “Utility Charge”). Sublandlord shall, in good faith,
determine the Utility Charge, and upon receipt of notice of the Utility Charge,
Subtenant shall pay the Utility Charge to Sublandlord as additional rent, together
with each monthly payment of Fixed Rent.

     If Subtenant requires, uses or consumes water for any purpose in addition to the
ordinary lavatory and drinking purposes, Sublandlord may install a water meter and
thereby measure Subtenant’s consumption of water for all purposes. Subtenant shall pay
to Sublandlord the cost of any such meter and its installation, and Subtenant, at its
expense, shall keep any such meter and any related equipment in good working order and
repair. Subtenant shall pay for water consumed as shown on said meter and sewer
charges thereon, as and when bills are rendered.

     Section 5.4 Cleaning; Trash. Subtenant shall, at its expense, keep
the Premises in a neat and clean condition at all times, utilizing a recognized
cleaning contractor approved by

Page 6 of 27

 

Sublandlord, which approval shall not be unreasonably withheld or delayed.
Sublandlord shall provide trash disposal from one or more central trash depositories
within the Common Areas.

     Section 5.5 Security. In no event shall Sublandlord be required to
provide any security services to the Premises. Subtenant shall supply such security
services to the Premises as Subtenant requires, subject to Sublandlord’s prior
approval of plans. If Sublandlord or Landlord shall, at their discretion, supply any
security services to the Building and/or the parking areas, same shall not guarantee
the safety of Subtenant or Subtenant’s Representatives, or its or their property.

     Section 5.6 Parking. Subtenant shall have the non-exclusive right,
together with the other tenants and occupants of the Building and other buildings
comprising Waterfront Village Center and their employees, agents, licensees and
invitees, to use the parking areas servicing the Building and any driveways
appurtenant thereto for the purposes of egress and ingress, parking of vehicles for
Subtenant’s Representatives and the loading and unloading of vehicles in connection
with and incidental to the business conducted by Subtenant in the Premises, all
without additional charge; provided however that Subtenant’s Representatives shall not
occupy more than an aggregate of ninety (90) parking spaces at any time. If for any
reason, Sublandlord is unable to provide all or any portion of the parking spaces to
which Subtenant is entitled hereunder, then Subtenant shall have no claims against
Sublandlord because of Sublandlord’s failure or inability to provide Subtenant with
such parking spaces. Sublandlord shall not be responsible for enforcing Subtenant’s
parking rights against any third parties. Subtenant shall cause Subtenant’s
Representatives to comply with all reasonable rules and regulations that Sublandlord
and/or Landlord may promulgate with respect to parking in the parking areas, including
without limitation, a system of stickers, access cards or other system intended to
regulate and control access to such parking areas.

     Section 5.7 Interruption of Services. Sublandlord does not warrant
that any of the services referred to in this Article, or any other services which
Sublandlord may supply, will be free from interruption, and Subtenant acknowledges
that any one or more such services may become unavailable or may be suspended by
reason of accident, repairs, inspections, alterations or improvements necessary to be
made, or by Unavoidable Delays. In the absence of gross negligence or willful
misconduct on the part of Sublandlord, any such unavailability, interruption, or
discontinuance of service shall not render Sublandlord liable for any damages caused
thereby, be deemed an eviction or constructive eviction, be deemed a disturbance of
Subtenant’s use and possession of the Premises, or any part thereof, constitute a
breach of implied warranty, nor relieve Subtenant from performance of Subtenant’s
obligations under this Sublease. Sublandlord shall, however, use reasonable efforts to
restore any service so interrupted.

ARTICLE 6

OPERATING EXPENSES

     Section 6.1 Definitions. As used herein:

          (a) The
term “Base Expenses” shall mean the Operating Expenses for the Base
Year. If less than 95% of the rentable area of the Building shall be occupied at any
time

Page 7 of 27

 

during the Base Year, then the Operating Expenses for the Base Year (and for each
Operational Year in which actual occupancy of the Building shall be below 95% for any
part thereof) shall be equitably adjusted by Sublandlord to the amount such expenses
would have been had the Building been 95% occupied at all times during the applicable
year.

          (b) The term “Base Impositions” shall mean the Impositions paid by
Sublandlord in the Base Year.

          (c) “Base Year” shall be calendar year 2006.

          (d) The term “Operating Expenses” shall mean all costs incurred by
Sublandlord with respect to the operation, maintenance, repair, lighting, and cleaning
of the Property, including, without limitation, the costs incurred for air
conditioning; cleaning the Common Areas; window washing; elevators; porter and matron
service; cost of electric current used throughout the Property; steam; all utilities;
protection and security services, if any; repairs or replacements; maintenance; all
insurance costs; supplies, wages, salaries, disability benefits, pensions,
hospitalization, retirement plans and group insurance respecting service and
maintenance employees; uniforms and working clothes for such employees and the
cleaning thereof, expenses imposed pursuant to any collective bargaining agreement
with respect to such employees; the current amortized portion of capital expenses
incurred with respect to the Property, together with interest at the lesser of 10% per
annum or the maximum rate of interest permitted by law; payroll, social security,
unemployment and other similar taxes with respect to such employees; compensation paid
to independent contractors performing any of the operation, maintenance or repair
functions; sales, use and other similar taxes; water rates and sewer rents; management
fees; legal and accounting fees; permit and license fees; the cost of changes to
comply with governmental requirements; maintenance of sprinkler, electrical, plumbing
and mechanical systems; removal of snow, ice, trash and debris; and repairs and
utility and other consultants’ fees.

     Notwithstanding anything herein to the contrary, the term “Operating Expenses”
shall not include: (i) brokerage fees, leasing commissions, advertising costs or other
expenses incurred by Sublandlord in connection with the subleasing of space in the
Building; (ii) damage and repairs attributable to fire or other casualty, or to
eminent domain; (iii) Sublandlord’s general overhead expenses unless directly related
to the Property; (iv) costs (including permits, licensing and inspection fees)
incurred in renovating or otherwise improving, decorating, painting, or altering space
for subtenants or other occupants, or of vacant space (excluding Common Areas) in the
Building; (v) rent payable by Sublandlord under the Lease; (iv) interest or penalties
resulting solely from late payment by Sublandlord; (vii) costs for any items that
Sublandlord is actually reimbursed by insurance, condemnation, governmental
authorities or otherwise; (viii) legal and other fees associated with collecting rents
or settling disputes with other subtenants; or (ix) any cost or charge for electric
current or other utilities that is separately metered and billed directly to other
subtenants. Notwithstanding anything contained herein to the contrary, all capital
expenses will be amortized over the useful life of the improvement or equipment, as
reasonably determined by Sublandlord.

          (e) The term “Impositions” shall have the same meaning as in Section 6,01(a)
of the Lease.

Page 8 of 27

 

          (f) “Operational Year” shall mean each twelve (12)-month period after the
Base Year.

          (g) The term “Sublandlord’s Statement” shall mean a writing containing a
computation of any Additional Rent due pursuant to this Article.

          (h) “Subtenant’s Estimated Share” shall mean Subtenant’s Share multiplied by
Sublandlord’s written estimate of increase of Operating Expenses for the applicable
Operational Year over the Base Expenses. Subtenant’s Estimated Share shall be divided
by twelve (12) and shall be payable by Subtenant to Sublandlord on the first of each
month of the applicable year, as Additional Rent.

     Section 6.2 Increase in Impositions.

          (a) If Impositions with respect to the Property are increased, during any
Operational Year, over Impositions paid by Sublandlord during the Base Year, then
Subtenant shall pay to Sublandlord, without setoff or deduction of any kind, as
Additional Rent, an amount equal to Subtenant’s Share of such increase. Payment of
such increase shall be made in the installments provided by the taxing or other
governmental authority within twenty (20) days after Subtenant receives from
Sublandlord notice of such increase and a bill for Subtenant’s Share thereof, together
with a copy of the applicable bill(s) received by Sublandlord from the taxing or other
governmental authority. If Sublandlord shall be required under a creditor arrangement
(or under the Lease) to make Imposition deposits monthly or otherwise, Subtenant shall
make the same installment payments to Sublandlord of its share of same. If Sublandlord
receives a refund of any portion of Impositions that were included in the Impositions
paid by Subtenant, then Sublandlord shall reimburse Subtenant its pro rata share of
the net refund, less any expenses that Sublandlord reasonably incurred to obtain the
refund.

          (b) Subtenant shall pay to Sublandlord as Additional Rent the Impositions
attributable to improvements made to the Premises by Subtenant from time to time.

          (c) There is currently in effect with respect to the Property a Payment In Lieu
of Taxes Agreement (“PILOT Agreement”) with the Erie County Industrial Development
Agency, as described in Section 24.01(d) of the Lease. Sublandlord makes no
representation that the PILOT Agreement shall remain in effect for any part of the
Term, but Subtenant shall cooperate with Sublandlord’s efforts to maintain such status
with respect to part or all of the Building, To the extent that the PILOT Agreement
shall not remain in effect, Impositions shall exceed the Impositions under the PILOT
Agreement.

     Section 6.3 Increase in Operating Expenses.

          (a) Within a reasonable period of time after the expiration of the Base
Year and each Operational Year, Sublandlord shall furnish to Subtenant a written
statement prepared by Sublandlord of the Operating Expenses incurred for such
year. Sublandlord shall use good faith efforts to deliver such statement to
Subtenant within one hundred twenty (120) days after the expiration of the Base
Year and each Operational Year. Within thirty (30) days after receipt of such
statement for any Operational Year setting forth Subtenant’s Share of any increase
of

Page 9 of 27

 

Operating Expenses during such Operational Year over the Operating Expenses in
the Base Year (said increase being referred to herein as the “Cost Increase”),
Subtenant shall pay same (less the amount of Subtenant’s Estimated Share paid by
Subtenant on account thereof) to Sublandlord as Additional Rent.

          (b) Commencing with the first Operational Year, Sublandlord may make a good faith
estimate of the Additional Rent to be due by Subtenant for any calendar year or part
thereof during the Term. During each calendar year or partial calendar year of the
Term after the Base Year, Subtenant shall pay to Sublandlord, in advance concurrently
with each monthly installment of Fixed Rent, an amount equal to the estimated
Additional Rent for such calendar year or part thereof divided by the number of months
therein. From time to time, Sublandlord may estimate and re-estimate the Additional
Rent to be due by Subtenant and deliver a copy of the estimate or re-estimate to
Subtenant. Thereafter, the monthly installments of Additional Rent payable by
Subtenant shall be appropriately adjusted in accordance with the estimations so that,
by the end of the calendar year in question, Subtenant shall have paid all of the
Additional Rent as estimated by Sublandlord, Any amounts paid based on such an
estimate shall be subject to adjustment as herein provided when actual Operating
Expenses are available for each calendar year.

          (c) If Sublandlord’s Statement at the end of the Operational Year just completed
shall indicate that Subtenant’s Estimated Share exceeded Subtenant’s Share of the Cost
Increase, Sublandlord shall issue a credit to Subtenant for the amount of such excess
against the subsequent payments of Additional Rent due hereunder. If Sublandlord’s
Statement shall indicate that Subtenant’s Share of the Cost Increase exceeded
Subtenant’s Estimated Share for the completed Operational Year, then Subtenant shall
pay the amount of such excess to Sublandlord within thirty (30) days after demand. If
Sublandlord’s Statement is furnished to Subtenant after the commencement of an
Operational Year, then there shall be promptly paid by Subtenant to Sublandlord or
vice versa, as the case may be, an amount equal to the portion of such payment or
credit allocable to the part of such Operational Year which shall have elapsed prior
to the first day of the calendar month following the calendar month in which said
Sublandlord’s Statement is furnished to Subtenant.

     Section 6.4 Sublandlord’s Statement. Sublandlord’s failure to render
Sublandlord’s Statement with respect to any Operational Year, or Sublandlord’s delay
in rendering said Statement beyond a date specified herein, shall not prejudice
Sublandlord’s right to render a Sublandlord’s Statement with respect to that or any
subsequent Operational Year. The obligations of Sublandlord and Subtenant under the
provisions of this Article with respect to any Additional Rent shall survive the
expiration or any sooner termination of the Term.

ARTICLE 7

ASSIGNMENT, MORTGAGING AND SUBLETTING

     Section 7.1
Incorporation By Reference. The terms of Article
14 of the Lease are incorporated by reference, as provided in Section 11.1 herein;
provided however that references therein to obtaining the consent of Landlord shall be
deemed references to obtaining the consent of both Landlord and of Sublandlord to a
proposed assignment, subleasing or other transaction governed by Article 14 of the
Lease.

Page 10 of 27

 

ARTICLE 8

REPAIRS

     Section 8.1 Repairs and Maintenance. Subtenant shall maintain the
Premises in a clean, safe, operable, and good condition, and shall not permit or allow
to remain any waste or damage to any portion of the Premises. At Subtenant’s expense,
Subtenant shall make all repairs and replacements, as and when needed to preserve the
Premises in good working order and condition, including without limitation the Base
Building Systems located within the Premises. Subtenant shall keep and maintain
Subtenant’s Property in good working order and condition. Subtenant shall not be
required to make any structural repairs or structural replacements to the Premises;
provided however that if any such structural repairs or replacements to the Premises,
or if any repairs or replacements to the Common Areas shall be necessitated or caused
by the acts, omissions or negligence of Subtenant or any of Subtenant’s
Representatives, or by the use or occupancy or manner of use or occupancy of the
Premises by Subtenant or Subtenant’s Representatives, then Sublandlord shall make such
repairs or replacements within a reasonable time after notice from Subtenant, and
Subtenant shall reimburse Sublandlord for the cost of same as Additional Rent.
Subtenant shall repair or replace, subject to Sublandlord’s direction and supervision,
any damage to the Building caused by a Subtenant’s Representative. If Subtenant fails
to make such repairs or replacements within fifteen (15) days after the occurrence of
such damage, then Sublandlord may make the same at Subtenant’s cost. If any such
damage occurs outside of the Premises, then Sublandlord may elect to repair such
damage at Subtenant’s expense, rather than having Subtenant repair such damage. The
cost of all maintenance, repair, or replacement work performed by Sublandlord under
this section shall be paid by Subtenant to Sublandlord within twenty (20) days after
Sublandlord has invoiced Subtenant therefor.

     When used in this Article, the term “repairs” shall include all reasonably
necessary and/or appropriate replacements, renewals, alterations, additions and
betterments. The necessity for, appropriateness of and adequacy of repairs to the
Premises and to the Common Areas pursuant to this Article shall be measured by the
standard which is appropriate for buildings of similar construction and location. All
materials and workmanship in connection with repairs shall be at least equal in
quality to the original materials and workmanship.

     Section 8.2 Performance of Work. All work described in this section
shall be performed only by Sublandlord or by contractors and subcontractors approved
in writing by Sublandlord. Subtenant shall cause all contractors and subcontractors to
procure and maintain insurance coverage naming Sublandlord as an additional insured
against such risks, in such amounts, and with such companies as Sublandlord may
reasonably require. Subtenant shall provide Sublandlord with the identities, mailing
addresses and telephone numbers of all persons performing work or supplying materials
prior to beginning such construction, and Sublandlord may post on and about the
Premises notices of non-responsibility pursuant to applicable laws. All such work
shall be performed in accordance with all laws and in a good and workmanlike manner so
as not to damage the Building (including the Premises, the Base Building’s Systems and
the Building’s structure).

     Section 8.3 Mechanic’s Liens. All work performed, materials
furnished, or obligations incurred by or at the request of a Subtenant’s
Representative shall be deemed authorized and ordered by Subtenant only, and Subtenant
shall not permit any mechanic’s liens

Page 11 of 27

 

to be filed against the Premises or the Land in connection therewith. Upon
completion of any such work, Subtenant shall deliver to Sublandlord final lien waivers
from all contractors, subcontractors and materialmen who performed such work. If such
a lien is filed, then Subtenant shall, within ten (10) days after such filing (or such
earlier time period as may be necessary to prevent the forfeiture of the Premises or
any interest of Landlord or Sublandlord therein or the imposition of a civil or
criminal fine with respect thereto), either (1) pay the amount of the lien and cause
the lien to be released of record, or (2) diligently contest such lien and deliver to
Sublandlord a bond or other security reasonably satisfactory to Sublandlord. If
Subtenant fails to timely take either such action, then Sublandlord may pay the lien
claim, and any amounts so paid, including expenses and interest, shall be paid by
Subtenant to Sublandlord within ten (10) days after Sublandlord has invoiced Subtenant
therefor. Subtenant shall defend, indemnify and hold harmless Sublandlord and
Sublandlord’s Representatives from and against all claims, demands, causes of action,
suits, judgments, damages and expenses (including attorneys’ fees) in any way arising
from or relating to the failure by any Subtenant’s Representative to pay for any work
performed, materials furnished, or obligations incurred by or at the request of a
Subtenant’s Representative. This indemnity provision shall survive termination or
expiration of this Lease.

ARTICLE 9

DAMAGE TO OR DESTRUCTION OF THE PREMISES

     Section 9.1 Termination. If the Building or Premises are damaged by
fire or other casualty and Sublandlord or Landlord shall, pursuant to the terms of the
Lease, elect to terminate the Lease, then this Sublease shall cease and terminate on
the date of termination of the Lease, and Rent shall be apportioned from the time of
the damage. Otherwise, this Sublease shall remain in full force and effect, subject to
the terms of the Lease. Sublandlord shall have no obligation hereunder to repair any
portion of the Building or Premises, whether or not this Sublease shall be terminated,
which obligation shall be Landlord’s to the extent required under the Lease.

ARTICLE 10

INSURANCE

     Section 10.1 Required Coverage. Subtenant shall maintain, at its
expense, for the Term, general public liability insurance (naming Sublandlord,
Landlord and designees of each as additional insureds) against claims for personal
injury, death, or property damage occurring upon, in, about, or adjacent to the
Premises, such insurance to afford protection with single limit coverage of at least
$4,000,000. Subtenant shall also maintain, at its sole expense, for the Term, any and
all insurance in the amounts and form required of Sublandlord by and pursuant to the
provisions of the Lease with respect to the Premises and Subtenant’s Property. All
such policies shall be issued by reputable insurance companies approved by Sublandlord
and Landlord and shall be endorsed to provide that they shall not be modified or
cancelled without at least thirty (30) days’ prior written notice to Sublandlord and
Landlord. On or prior to the Commencement Date, Subtenant shall furnish to Sublandlord
said policies or certificates thereof evidencing that the required coverage is being
maintained, together with such evidence as Sublandlord shall deem satisfactory of the
payment of premiums thereon.

Page 12 of 27

 

ARTICLE 11

MASTER LEASE

     Section 11.1 Incorporation of Master Lease. Subtenant hereby
acknowledges and agrees that it has received and reviewed a copy of the Lease. Except
as otherwise set forth below, and to the extent not inconsistent with the provisions
of this Sublease, the terms, provisions, covenants, and conditions of the Lease are
hereby incorporated by reference as if set forth at length herein on the following
basis: Subtenant hereby assumes and agrees to perform all of the obligations of
Sublandlord under the Lease with respect to the Premises, accruing or payable during
the Term in the manner and time required under the Lease. The term “Landlord” therein
shall refer to Sublandlord herein, its successors and assigns; and the term “Tenant”
therein shall refer to Subtenant herein, its permitted successors and assigns; and the
term “Premises” therein shall refer to the Premises. The obligations assumed by
Subtenant hereunder which accrue during the Term shall survive and extend beyond the
termination of this Sublease.

     Section 11.2 Landlord Right. In any case where under the Lease the
Landlord reserves or is granted any right, including, without limitation, the right to
enter the Premises, said right shall inure to the benefit of Landlord as well as
Sublandlord with respect to the Premises.

     Section 11.3 Consent. In any case where under the Lease the consent or
approval of Landlord is required, the consent or approval of both Landlord and
Sublandlord shall be required. In determining whether to grant or withhold any consent
or approval hereunder, Sublandlord may expressly condition the same upon the consent
or approval of Landlord, as applicable. If Subtenant requests the consent of
Sublandlord under any provisions of this Sublease, Subtenant shall, as a condition to
doing any such act and the receipt of such consent, reimburse Sublandlord for any and
all reasonable costs and expenses incurred by Sublandlord in connection therewith,
including, without limitation, reasonable attorneys’ fees.

     Section 11.4 Indemnification Under Lease. Any provisions in the Lease
requiring indemnification by the Sublandlord of Landlord (and its partners,
shareholders, officers, directors, affiliates, agents, employees and contractors) or
releasing Landlord from liability shall be deemed an indemnification or release, as
applicable, running from Subtenant to both Landlord and Sublandlord (and their
partners, shareholders, officers, directors, affiliates, agents, employees and
contractors). Each and every indemnification set forth in this Sublease, or
incorporated into this Sublease from the Lease, shall survive the expiration or
earlier termination of the Term of this Sublease.

     Section 11.5 Time Limits. Wherever there are time limits contained in
the Lease (i) calling or allowing for the service of notice by the Tenant thereunder,
(ii) pertaining to events of default by the Tenant thereunder, or (iii) within which
the Tenant thereunder must perform any act or observe any term, covenant or condition
thereunder, the same shall be deemed amended for the purposes of this Sublease to
provide for time limits of three business days less and deadlines that are three
business days earlier than those provided for in the Lease. To the extent the Lease
requires (x) the Landlord thereunder to serve notice upon Tenant or (y) perform any act
or observe any term, covenant or condition thereunder, the same shall be deemed amended
for the purposes of this Sublease to provide for time limits for Sublandlord of three

Page 13 of 27

 

business days more and deadlines that are three business days later
than those provided for Landlord in the Lease.

     Section 11.6 Landlord Covenants, Representations and Warranties, Any
covenant, representation or warranty made by Landlord in the Lease shall be deemed to
be made by Landlord only and shall in no way be imputed to Sublandlord.

     Section 11.7 Default. Any act or omission by Subtenant that would
constitute a breach or default by the Tenant under the Lease shall constitute a
default on the part of Subtenant hereunder. In addition, Sublandlord shall have the
right to declare a default under this Sublease in the event Subtenant fails to perform
or violates any covenant or condition set forth herein. In the event of any breach or
default by Subtenant hereunder or under the Lease, Sublandlord shall have each and all
of the rights and remedies afforded Landlord under the Lease. In addition to the
rights or remedies afforded Landlord under the Lease, Sublandlord shall have the
right, but not the obligation, (i) to cure any such breach or default by Subtenant
(and enter upon the Premises in connection therewith if necessary), without being
liable for damages, and Subtenant shall thereupon be obligated to reimburse
Sublandlord immediately upon demand for all costs (including costs of settlements,
defense, court costs and attorneys’ fees) that Sublandlord may incur in effecting the
cure of such breach or default, plus interest thereon at the rate of ten percent (10%)
per annum; (ii) terminate this Sublease and Subtenant’s interest in the Premises by
giving Subtenant written notice thereof, in which event Subtenant shall pay to
Sublandlord the sum of (a) all Rent accrued hereunder through the date of termination,
and (b) an amount equal to the total Rent that Subtenant would have been required to
pay for the remainder of the Term; (iii) terminate Subtenant’s right to possess the
Premises without terminating this Sublease by giving written notice thereof to
Subtenant, in which event Subtenant shall pay to Sublandlord (1) all Rent and other
amounts accrued hereunder to the date of termination of possession, (2) all amounts
due from time to time under this Sublease, and (3) all Rent and other net sums
required hereunder to be paid by Subtenant during the remainder of the Term,
diminished by any net sums thereafter received by Sublandlord through reletting the
Premises during such period, after deducting all costs incurred by Sublandlord in
reletting the Premises and (iv) to have any and all rights and remedies now or
hereafter afforded a landlord under applicable law.

     Section 11.8 Not Incorporated. Anything to the contrary
notwithstanding, the following provisions of the Original Lease are not
incorporated by reference:

	 	(a)	 	Sections 1.01, 2.01, 2.02, 5.01, 18.01, 20.12, 20.21 and 25.01;
	 
	 	(b)	 	Article 3             (Rent)

Article 4            (Utilities and Services)

Article 6            (Taxes)

Article 7            (Initial Construction by Sublandlord)

Article 8            (Repairs and Maintenance) 

Article 16          (Subordination to Mortgages)

Article 21          (Subtenants’ Extension Options)

Article 22          (Broker)

Article 24          (Contingencies)

Article 26           (Subtenant’s Right of First Offer); and

Page 14 of 27

 

	 	(c)	 	Exhibits A through E and H

          Anything to the contrary notwithstanding, no provisions of the Amendments are
incorporated by reference, unless (and only to the extent) a provision in one of the
Amendments specifically modifies an incorporated provision of the Original Lease (in
which case only that specific provision in the applicable Amendment is incorporated)

     Section 11.9 Subtenant Action. Subtenant shall not take any action or
fail to take any action in connection with the Premises as a result of which
Sublandlord would be in violation of any of the provisions of the Lease; and Subtenant
hereby agrees to defend, indemnify, and hold Sublandlord harmless from and against all
loss, cost, liability, damage, and expense (including, but not limited to, attorneys’
fees and court costs) caused by or arising out of Subtenant’s act or inaction as a
result of which Sublandlord is alleged and/or determined to be in violation of any of
the provisions of the Lease.

ARTICLE 12

BROKERAGE

     Section 12.1 Representation and Indemnification. Subtenant
represents that in the negotiation of this Sublease it dealt with no real estate
broker or salesman except Pyramid Brokerage, CB Richard Ellis, and Trammel Crow
Company. Sublandlord shall compensate such brokers pursuant to a separate agreement.
Subtenant shall indemnify Sublandlord and hold it harmless from any and all losses,
damages and expenses arising out of any inaccuracy or alleged inaccuracy of the above
representation, including court costs and attorneys’ fees. Sublandlord shall have no
liability for brokerage commissions arising out of a sublease or assignment by
Subtenant, and Subtenant shall and does hereby indemnify Sublandlord and hold
Sublandlord harmless from any and all liability for brokerage commissions arising out
of any such sublease or assignment.

ARTICLE 13

NOTICES

     Section 13.1 Notices. Any notice, demand, consent, approval,
direction, agreement or other communication required or permitted hereunder or under
any other documents in connection herewith shall be in writing and shall be directed
as follows:

If to Sublandlord:

Ludlow Technical Products Corporation

c/o Tyco Healthcare Group, LP

15 Hampshire Street

Mansfield, MA 02048

Attn: General Counsel

Facsimile: (508) 261-8544

Page 15 of 27

 

With a copy to:

Blackwell Sanders Peper Martin LLP

720 Olive Street, Suite 2400

St. Louis, MO 63101

Attn: Melissa Smith-Groff, Esq.

Facsimile: (314) 345-6060

If to Subtenant:

Synacor, Inc.

40 La Riviere Drive

Buffalo, NY 14202

Attn: Brian C. Neeson, Controller

Facsimile: (716) 332-0081

or to such changed address or facsimile number as a party hereto shall designate to
the other parties hereto from time to time in writing. Notices shall be (i) personally
delivered (including delivery by Federal Express, United Parcel Service or other
comparable nation-wide overnight courier service) to the offices set forth above, in
which case they shall be deemed delivered on the date of delivery (or first business
day thereafter if delivered other than on a business day or after 5:00 p.m. New York
City time to said offices); (ii) sent by certified mail, return receipt requested, in
which case they shall be deemed delivered on the date shown on the receipt unless
delivery is refused or delayed by the addressee in which event they shall be deemed
delivered on the third day after the date of deposit in the U.S. Mail; or (iii) sent
by means of a facsimile transmittal machine, in which case they shall be deemed
delivered at the time and on the date of receipt thereof confirmed by telephonic
acknowledgment or first business day thereafter if receipted other than on a business
day or after 5:00 p.m. New York City time.

ARTICLE 14

SECURITY DEPOSIT

     Section 14.1 Security Deposit. Subtenant shall deposit with
Sublandlord the sum of $23,364.84 (the “Security Deposit”) as security for the
performance by Subtenant of the provisions of this Sublease. If Subtenant defaults
with respect to any provision of this Sublease, including payment of the Rent,
Sublandlord may use, apply, draw upon or retain all or any part of the Security
Deposit to the extent necessary for the payment of any Rent, or to compensate
Sublandlord for any other loss, cost or damage which Sublandlord may suffer by reason
of Subtenant’s default. If any portion of the Security Deposit is so used, applied, or
drawn upon, Subtenant shall, within ten (10) days after notice thereof, deposit cash
with Sublandlord in an amount sufficient to restore the Security Deposit to its
original amount. Subtenant’s failure to do so shall be a breach of this Sublease.
Sublandlord shall not, unless otherwise required by law, be required to keep the
Security Deposit separate from its general funds, nor pay interest to Subtenant. If
Subtenant shall fully and faithfully perform every provision of this Sublease to be
performed by it, the Security Deposit or any balance thereof shall be returned to
Subtenant (or to the last transferee of Subtenant’s interest hereunder) within thirty
(30) days after the expiration of the Term (or sooner termination of this Sublease)
and upon Subtenant’s vacation of the Premises in accordance with this Sublease. If the
Lease is assigned, the Security Deposit shall be

Page 16 of 27

 

transferred to the assignee, and thereupon Sublandlord shall be discharged from
further liability with respect thereto.

ARTICLE 15

RIGHTS OF LANDLORD; LANDLORD’S APPROVAL

     Section 15.1 Rights of Landlord.

          (a) Subtenant acknowledges any rights specifically reserved by Landlord under the
Lease; and Subtenant further acknowledges that its possession and use of the Premises
shall at all times be subject to such rights. Subtenant hereby releases Sublandlord
from all liability in connection with Landlord’s exercise of such rights.

          (b) Sublandlord shall not be liable to Subtenant for Landlord’s failure to
perform any of Landlord’s obligations under the Lease or under law (including without
limitation provide any services; comply with any laws or requirements of governmental
authorities regarding the maintenance or operation of the Premises; provide any
reimbursements, credits, rebates allowance or other concession or pay any costs;
provide any information (including, without limitation, invoices, bills, statements or
other documentation); maintain, repair, restore, alter, service or insure all or any
part of the Premises (including, without limitation, any obligations to rebuild,
repair and restore the Premises after damage or destruction); or indemnify the Tenant
under the Lease), nor shall Sublandlord have any obligation to perform same or to
bring legal proceedings or take any other action against Landlord to assure
performance of Landlord’s obligations under the Lease. Subtenant shall not make any
claim against Sublandlord for any damage which may arise by reason of (x) the failure
of Landlord to keep observe or perform any of its obligations under the Lease; or (y)
the acts or omissions of Landlord or its agents, contractors, employees, invitees or
licensees. Except as otherwise provided herein, whenever Sublandlord shall have the
right to enforce any rights against Landlord or any other party under the Lease
because of the default or breach of Landlord or such other party with respect to the
Premises, and if, within a reasonable period after Subtenant’s request, Sublandlord
fails to enforce such rights, then Subtenant shall have the right, in the name of
Subtenant or, if necessary, in the name of Sublandlord, to enforce any such rights of
Sublandlord with respect to the Premises, Such enforcement shall be at the sole
expense of Subtenant, and Subtenant shall indemnify Sublandlord against all costs and
expenses, including but not limited to reasonable attorneys’ fees, which may be
incurred by Sublandlord in connection with any claim, action, or proceeding so
undertaken by Subtenant. Any amount of recovery obtained by Subtenant shall be the
property of Subtenant, except that Sublandlord shall be compensated therefrom for any
damages sustained by Sublandlord as a consequence of such default or breach on the
part of Landlord or such other party.

          (c) Whenever Subtenant must obtain the consent of Landlord with respect to the
Premises, Sublandlord shall cooperate with Subtenant (at Subtenant’s sole cost and
expense) in obtaining Landlord’s consent. Sublandlord shall forward to Subtenant true
copies of all notices, requests, demands and communications received by Sublandlord
from Landlord (or its agent) with respect to the Premises. If Subtenant shall not give
timely directions to Sublandlord, Sublandlord may give such notice to Landlord as
Sublandlord desires, or no notice or direction with respect to the matter in question.

Page 17 of 27

 

     Section 15.2 Lease Requirements. Without limiting Article 11 of
this Sublease, the following requirements of the Lease shall apply:

          (a) this Sublease is subject to, and does not modify any of, the terms,
covenants, agreements, provisions and conditions of the Lease; and a termination or
expiration of the Lease shall automatically cause a termination of this Sublease as
set forth in Section 2.3;

          (b) Subtenant shall not have the right to a further assignment hereof or
sublease or assignment hereunder, or to allow the Premises to be used by others,
without the prior written consent of Landlord in each instance;

          (c) a consent by Landlord thereto shall not be deemed or construed to modify,
amend or affect any of the terms and provisions of the Lease, or any of Sublandlord’s
obligations thereunder, which shall continue to apply to the premises involved, and
the occupants thereof, as if the Sublease had not been made;

          (d) if Sublandlord defaults in the payment of any fixed monthly rent, additional
rent or other charges due under the Lease, Landlord is authorized to collect any rents
due or accruing from any assignee, subtenant or other occupant of the Premises and to
apply the net amounts collected to the Fixed Rent, Additional Rent, and other charges
reserved under the Lease; and

          (e) the receipt by Landlord of any amounts from an assignee or subtenant, or
other occupant of any part of the Premises, shall not be deemed or construed as
releasing Sublandlord from Sublandlord’s obligations under the Lease or as Landlord’s
acceptance of any such subtenant or occupant as a direct tenant.

     Section 15.3 Landlord’s Approval. Upon execution of this Sublease,
Sublandlord shall submit this Sublease to Landlord for Landlord’s approval, together
with the additional information required by Section 14.04 of the Lease and submitted
by Subtenant. In the event that Landlord fails to approve this Sublease within fifteen
(15) days of the date of receipt of such submission, either party, upon notice to the
other within five (5) business days after the expiration of such fifteen (15) day
period, may elect to terminate this Sublease, whereupon Sublandlord shall promptly
refund any amounts deposited hereunder, and this Sublease shall be of no further force
and effect. The parties hereto shall not bring any claim against each other for any
loss, cost, expense, damage, or injury caused by or arising out of the failure of
Landlord to consent to this Sublease.

ARTICLE 16

RIGHT OF FIRST OFFER

     Section 16.1 Right of First Offer. Subject to then-existing renewal or
expansion options of other subtenants, and provided no default by Subtenant exists,
Sublandlord shall, before offering the same to any party (other than the then-current
subtenant therein), first offer to lease to Subtenant the five different spaces
designated by suite number or floor number, and by square footage on Exhibit D (each,
an “Offer Space”) in an “AS-IS” condition; such offer shall be in writing and specify
the lease terms for the Offer Space, including the rent to be paid for the Offer Space
and the date on which the Offer Space shall be included in the Premises (the “Offer

Page 18 of 27

 

Notice”). Sublandlord shall use good faith in determining the rent amount for the
Offer Space. The Offer Notice shall be substantially similar to the Offer Notice
attached to this Sublease as Exhibit E. Subtenant shall notify Sublandlord in
writing whether Subtenant elects to lease the entire Offer Space on the terms set
forth in the Offer Notice, within ten (10) days after Sublandlord delivers to
Subtenant the Offer Notice. If Subtenant timely elects to lease the Offer Space, then
Sublandlord and Subtenant shall execute an amendment to this Sublease, effective as of
the date the Offer Space is to be included in the Premises, on the terms set forth in
the Offer Notice and, to the extent not inconsistent with the Offer Notice terms, the
terms of this Sublease; however, Subtenant shall accept the Offer Space in an “AS-IS”
condition. Notwithstanding the foregoing, if before Sublandlord’s delivery to
Subtenant of the Offer Notice, Sublandlord has received an offer to lease all or part
of the Offer Space from a third party (a “Third Party Offer”) and such Third Party
Offer includes space in excess of the Offer Space, Subtenant must exercise its rights
hereunder, if at all, as to all of the space contained in the Third Party Offer.

     If Subtenant fails or is unable to timely exercise its right hereunder, then
such right shall lapse, time being of the essence with respect to the exercise
thereof (it being understood that each of Subtenant’s five rights of first offer
hereunder is a one-time right only with respect to each Offer Space), and
Sublandlord may lease all or a portion of the Offer Space to third parties on such
terms as Sublandlord may elect. Subtenant may not exercise its rights under this
Article 16 if a default exists or Subtenant is not then occupying the entire
Premises. For purposes hereof, if an Offer Notice is delivered for less than all of
the Offer Space but such notice provides for an expansion, right of first refusal,
or other preferential right to lease some of the remaining portion of the Offer
Space, then such remaining portion of the Offer Space shall thereafter be excluded
from the provisions of this Sublease. In no event shall Sublandlord be obligated to
pay a commission with respect to any space leased by Subtenant under this Article
16, and Subtenant and Sublandlord shall each indemnify the other against all costs,
expenses, attorneys’ fees, and other liability for commissions or other
compensation claimed by any broker or agent claiming the same by, through, or under
the indemnifying party.

     Subtenant’s rights under this Article 16 shall terminate if (a) this Sublease
or Subtenant’s right to possession of the Premises is terminated, (b) Subtenant
assigns any of its interest in this Sublease or sublets any portion of the
Premises, or (c) less than two full calendar years remain in the initial Term of
this Sublease.

ARTICLE 17

NO RECORDING

     Section 17.1 No Recording. Subtenant shall not record this Sublease or
any memorandum of this Sublease without the prior written consent of Sublandlord,
which consent may be withheld or denied in the sole and absolute discretion of
Sublandlord, and any recordation by Subtenant shall be a material breach of this
Sublease. Subtenant grants to Sublandlord a power of attorney to execute and record a
release releasing any such recorded instrument of record that was recorded without the
prior written consent of Sublandlord.

Page 19 of 27

 

     IN WITNESS WHEREOF Sublandlord has duly executed this Sublease as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	SUBLANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	LUDLOW TECHNICAL PRODUCTS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Chuck J. Dockendorff	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Chuck J. Dockendorff	 	 
	 

	 	Title:
	 	VPO Finance	 	 

	 	 	 
	Comm OF Massachusetts

	 	)     
	 

	 	)  ss.
	COUNTY OF Bristol

	 	)     

     On the 8th day of March, in the year 2006, before me,
the undersigned, a Notary Public in and for said Comm of Massachusetts, personally appeared
Chuck J. Dockendorff, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her capacity,
and that by his/her signature on the instrument, the individual, or the entity upon
behalf of whom the individual acted, executed the instrument, and that such individual
made such appearance before the undersigned in Bristol County, MA.

	 	 	 	 
	 

	 	/s/ Suzanne E. Gaddy	 
	 

	 	Notary Public	
	 

	 	My Commission Expires: 3-22-2007	
	[SEAL]
	 	 	
	
	 	 	

Page 20 of 27

 

     IN WITNESS WHEREOF Sublandlord has duly executed this Sublease as of the
day and year first above written.

	 	 	 	 	 	 	 
	 	 	SUBTENANT:
SYNACOR, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert S. Rusak	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	ROBERT S. RUSAK	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	CFO	 	 
	 

	 	 	 	 	 	 

	 	 	 
	State OF New York

	 	)     
	 

	 	) ss.
	COUNTY OF Erie

	 	)     

     On the 6th day of March, in the year 2006, before me, the undersigned, a Notary
Public in and for said State of New York, personally
appeared      , personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the individual,
or the entity upon behalf of whom the individual acted executed the instrument,
and that such individual made such appearance before the undersigned
in Erie County,
New York.

	 	 	 	 
	 

	 	/s/ Kimberly R. Borowski        	
	 

	 	Notary Public	
	[SEAL]

	 	My Commission Expires: 9/11/2006	
	 
	 	 	
	 

	 	KIMBERLY R. BOROWSKI	
	 

	 	Notary Public, State of New York	
	 

	 	Qualified in Erie County	
	 

	 	My Commission Expires Nov. 9, 2006	

Page 21 of 27

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