Document:

<PAGE>
                                                                     EXHIBIT 4.9

                                 THINKBOX INC.

     ---------------------------------------------------------------------
                  SERIES C PREFERRED STOCK PURCHASE AGREEMENT
     ---------------------------------------------------------------------

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----

1.   Purchase and Sale of Series C Preferred Stock............................1

     1.1   Sale and Issuance of Series C Preferred............................1
     1.2   Initial Payment....................................................1
     1.3   CompassLearning Payment............................................1
     1.4   WRC Payments.......................................................2
     1.5   Continued Funding Payments.........................................2
     1.6   Post-Exercise Funding..............................................2
     1.7   Termination of Funding.............................................3
     1.8   Company Legal Fees.................................................3

2.   WRC Option...............................................................4

     2.1   WRC Option.........................................................4
     2.2   Option Consideration...............................................4
     2.3   Termination of WRC Option..........................................4
     2.4   Merger Agreement...................................................4

3.   Company Repurchase Option................................................4

4.   Definitions..............................................................5

     4.1  Company Material Adverse Effect.....................................5
     4.2  Continued Funding...................................................5
     4.3  Company Knowledge...................................................5

5.   Representations and Warranties of the Company to WRC.....................5

     5.1   Corporate Organization and Authority...............................5
     5.2   Capitalization.....................................................6
     5.3   Subsidiaries.......................................................7
     5.4   Authorization......................................................7
     5.5   Validity of Series C Preferred.....................................7
     5.6   No Conflict with Other Instruments; Compliance with Laws...........8
     5.7   Agreements; Actions................................................8
     5.8   Litigation........................................................10
     5.9   Title to Property and Assets; Leases..............................11
     5.10  Patents and Other Proprietary Rights..............................11
     5.11  Confidential Information and Intellectual Property Assignments....12
     5.12  Registration Rights...............................................12
     5.13  Brokers and Finders...............................................13
     5.14  Governmental Consents.............................................13
     5.15  Corporate Documents...............................................13
     5.16  Minute Books......................................................13

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                           Page
                                                                           ----

     5.17  Disclosure........................................................13
     5.18  No Conflict of Interest...........................................13
     5.19  Financial Statements; Undisclosed Liabilities; Absence
           of Changes........................................................14
     5.20  Taxes.............................................................14
     5.21  Permits...........................................................16
     5.22  Employee Benefits.................................................16
     5.23  Employee and Labor Matters........................................17
     5.24  Insurance.........................................................17
     5.25  Effect of Transaction.............................................17
     5.26  Operating Deficits................................................17
     5.27  Information Supplied..............................................18

6.   Representations and Warranties of WRC...................................18

     6.1   Organization, Standing and Power..................................18
     6.2   Authorization.....................................................18
     6.3   Capital Structure.................................................18
     6.4   Brokers and Finders...............................................19
     6.5   Securities Laws...................................................19
     6.6   Legends...........................................................20
     6.7   Tax Advisors......................................................21
     6.8   SEC Documents; WRC Financial Statements...........................21
     6.9   No Material Adverse Change........................................22
     6.10  Litigation........................................................22
     6.11  Information Supplied..............................................22

7.   Conditions of WRC's Obligations at the Closings.........................22

     7.1   Representations and Warranties....................................22
     7.2   Performance.......................................................22
     7.3   Blue Sky Compliance...............................................23
     7.4   Rights Agreement, Co-Sale Agreement...............................23
     7.5   Proceedings Satisfactory..........................................23
     7.6   Certified Charter Documents.......................................23
     7.7   Amended and Restated Certificate of Incorporation.................23
     7.8   Opinion of Company Counsel........................................23
     7.9   Conversion Shares.................................................23
     7.10  CompassLearning...................................................23
     7.11  Voting Agreement..................................................23
     7.12  No Litigation.....................................................23
     7.13  Credit Agreement..................................................24
     7.14  Delivery of Shares................................................24

                                      -iii-

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                           Page
                                                                           ----

8.   Conditions of the Company's Obligations at the Closings.................24

     8.1   Representations and Warranties....................................24
     8.2   Rights Agreement, Right of First Refusal and Co-Sale..............24
     8.3   Performance.......................................................24
     8.4   Amended and Restated Certificate of Incorporation.................25
     8.5   Blue Sky Compliance...............................................25
     8.6   Payment of Purchase Price.........................................25
     8.7   Weekly Reader.....................................................25
     8.8   Voting Agreement..................................................25

9.   Covenants of the Company................................................25

     9.1   Access............................................................25
     9.2   Conduct of Business...............................................25
     9.3   Advise of Changes.................................................27
     9.4   Use of Proceeds...................................................28
     9.5   Effectiveness of the Merger Agreement.............................28

10.  Indemnification.........................................................28

     10.1  Indemnification...................................................28
     10.2  Adjustment For Indemnification by the Company.....................29
     10.3  Procedures Relating to Indemnification............................29
     10.4  Reduction of Payments, Continued
           Funding and Post-Exercise Funding.................................31

11.  Additional Agreements...................................................31

     11.1  Reasonable Best Efforts...........................................31
     11.2  Frustration of Closing Conditions.................................31

12.  Termination.............................................................31

     12.1  Termination.......................................................31
     12.2  Other Agreements; Material To Be Returned.........................32
     12.3  Effect of Termination.............................................33

13.  Miscellaneous...........................................................33

     13.1  Entire Agreement; Successors and Assigns..........................33
     13.2  Transfers and Assignments.........................................33
     13.3  Governing Law.....................................................33
     13.4  Counterparts......................................................33
     13.5  Headings..........................................................34
     13.6  Notices...........................................................34
     13.7  Survival of Representations and Warranties........................34

                                       -iv-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

                                                                           Page
                                                                           ----

     13.8  Amendment of Agreement............................................34
     13.9  Finders Fees......................................................34
     13.10 Expenses..........................................................34
     13.11 Aggregation of Stock..............................................34
     13.12 Severability......................................................34
     13.13 Attorneys' Fees and Expenses......................................35
     13.14 Delays or Omissions...............................................35
     13.15 Enforcement.......................................................35
     13.16 Solicitation of Employees.........................................35

                                      -v-
<PAGE>

                                    EXHIBITS

 Exhibit A   --   Schedule of Payments
 Exhibit B   --   Second Amended and Restated Certificate of Incorporation
 Exhibit C   --   First Amended and Restated Investors' Rights Agreement
 Exhibit D   --   First Amended and Restated Right of First Refusal
                  and Co-Sale Agreement
 Exhibit E   --   Form of Legal Opinion
 Exhibit F   --   Option Payment Schedule
 Exhibit G   --   Irrevocable Proxy and Voting Agreement
 Exhibit H   --   License Agreement
 Exhibit I   --   Amendment to Distribution Agreement
 Exhibit J   --   Merger Agreement
 Exhibit K   --   Form of Confidential Information and Intellectual
                  Property Assignment Agreement
 Exhibit L   --   Consent Solicitation and Information Statement

                                      -vi-
<PAGE>

                   SERIES C PREFERRED STOCK PURCHASE AGREEMENT

         THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
made as of May __, 2001 (the "Effective Date"), by and among ThinkBox Inc., a
Delaware corporation (the "Company"), and WRC Media Inc., a Delaware corporation
("WRC").

                                R E C I T A L S:
                                ---------------

         A.  The Board of Directors of the Company has adopted the Second
Amended and Restated Certificate of Incorporation (the "Certificate") attached
hereto as Exhibit B, which, among other matters, establishes the rights,
preferences and privileges of the Company's Series C Preferred Stock ("Series C
Preferred").

         B.  The Company desires to sell shares of Series C Preferred to
WRC and WRC desires to purchase shares of Series C Preferred, on the terms and
subject to the conditions set forth in this Agreement.

         C.  In connection with the sale by the Company of shares of Series
C Preferred to WRC, the Company wishes to grant WRC and WRC wishes to acquire an
option to acquire the Company, on the terms and subject to the conditions set
forth in this Agreement.

         THE PARTIES AGREE AS FOLLOWS:

         1. Purchase and Sale of Series C Preferred Stock.

            1.1 Sale and Issuance of Series C Preferred. The Company shall sell
to WRC and WRC shall purchase from the Company, the number of shares of Series C
Preferred set forth on Exhibit A in exchange for the payments set forth on
Exhibit A and the rights granted to the Company pursuant to the License
Agreement (the "License Agreement") attached hereto as Exhibit H, on the terms
and subject to the conditions set forth in this Agreement. The shares of Series
C Preferred sold to WRC are referred to as the "Shares."

            1.2 Initial Payment. The initial purchase and sale of the Shares
shall take place on the initial closing date of the sale by the Company to WRC
of the Shares pursuant to this Agreement, or on such other date as the Company
and WRC mutually agree, but in no event later than three (3) business days from
the Effective Date (the "Initial Closing Date"). At the initial closing (the
"Initial Closing"), WRC shall deliver to the Company (a) an executed counterpart
of this Agreement and (b) a check, wire transfer or cancellation of indebtedness
(or any combination thereof) in the aggregate amount specified for the initial
payment pursuant to the Schedule of Payments attached as Exhibit A hereto.

<PAGE>

            1.3 CompassLearning Payment. In consideration for the Company
extending the distribution agreement dated September 15, 2000, between the
Company and CompassLearning Inc. (the "Distribution Agreement") as provided in
Section 7.10 of this Agreement, WRC has made a payment by cash or wire transfer
to the Company in the amount of $350,000 on March 16, 2001 (the "CompassLearning
Payment"). The Company shall issue to WRC 1,267,569 Shares at the Initial
Closing for the CompassLearning Payment.

            1.4 WRC Payments. WRC shall make payments to the Company pursuant to
the Schedule of Payments attached as Exhibit A hereto (the "Payments"), and the
Company shall, on the dates and for the amounts set forth on Exhibit A (each
such payment being a "Monthly Payment Closing" and the date of each Monthly
Payment Closing being a "Monthly Payment Closing Date"), sell to WRC the number
of shares of Series C Preferred set forth on Exhibit A. All such sales shall be
made on the terms and conditions set forth in this Agreement. Any shares of
Series C Preferred sold pursuant to this Section 1.4 shall be deemed to be
"Shares" for all purposes under this Agreement. The Shares issued to WRC in
return for the Payments, the CompassLearning Payment and the Company Legal Fees
(as defined in Section 1.8) shall represent, in the aggregate, 38% of the
Capital Stock (as defined below) of the Company on a fully-diluted basis.

            1.5 Continued Funding Payments. In exchange for any Continued
Funding (as defined in Section 4.2), no later than 14 months from the Effective
Date, the Company shall issue to WRC the number of additional shares of Series C
Preferred that will provide WRC with the additional percentage ownership of the
Company equal to (i) the aggregate Continued Funding divided by (ii) the total
value of the Company as determined by multiplying the consideration WRC would
pay in connection with the WRC Option and as set forth on Exhibit F hereto by
1.4925. Any shares of Series C Preferred sold pursuant to this Section 1.5 shall
be deemed to be "Shares" for all purposes under this Agreement.

            1.6 Post-Exercise Funding. From the date of the Option Exercise to
the later of the date that is 12 months subsequent to the date of the Initial
Closing or the Option Closing Date (as defined in Section 2.1), WRC shall
continue to make monthly payments to the Company and to fund the projected
operating deficits of the Company, consistent with past practice and future
needs (the "Post-Exercise Funding"), as such payments and projected operating
deficits are mutually agreed to by WRC and the Company and detailed in Section
5.26 of the Company Disclosure Letter (as defined in Section 5) (each such
payment being a "Post-Exercise Funding Closing" and the date of each
Post-Exercise Funding Closing being a "Post-Exercise Funding Closing Date"). In
exchange for any Post-Exercise Funding, no later than 14 months from the
Effective Date, the Company shall issue to WRC the number of additional shares
of Series C Preferred that will provide WRC with the additional percentage
ownership of the Company equal to (i) the aggregate Post-Exercise Funding
divided by (ii) the total value of the Company as determined by multiplying the
consideration WRC would pay in connection with the WRC Option and as set forth
on Exhibit F hereto by 1.4925. Any shares of Series C Preferred sold pursuant to
this Section 1.6 shall be deemed to be "Shares" for all purposes under this
Agreement. Post-Exercise Funding shall terminate upon the termination of this
Agreement.

                                                                             -2-
<PAGE>

            1.7 Termination of Funding.

                (a) WRC Voluntary Termination. WRC may terminate the Payments,
Continued Funding or Post-Exercise Funding at any time upon fifteen (15) days'
prior written notice to the Company. Except as provided in Section 1.7(b), upon
such termination (i) WRC shall make a payment to the Company by cash or wire
transfer in the amount of $714,286 within ten (10) days of such termination;
(ii) the Company shall sell to WRC the shares of Series C Preferred equal to the
number of shares which it would receive in the aggregate at two Monthly Payment
Closings and (iii) except in the case of termination of Post-Exercise Funding,
the WRC Option (as defined in Section 2.1) shall terminate immediately.

                (b) Termination for Breach. To terminate the Payments, Continued
Funding or Post-Exercise Funding for material breach by the Company of any of
its representations, warranties or covenants under this Agreement, WRC must
first provide written notice of such material breach (the "Notice of Breach").
If the Company has not cured such material breach within 30 days of receipt of
the Notice of Breach, WRC may terminate the Payments, Continued Funding or
Post-Exercise Funding without regard to clauses (i) and (ii) of Section 1.7(a);
provided, however, that WRC may suspend the Payments, Continued Funding or
Post-Exercise Funding pending the cure of such material breach by the Company.
In addition, except in the case of termination of Post-Exercise Funding, the WRC
Option (as defined in Section 2.1) shall not terminate if the Company cures such
material breach (i) within 60 days of receipt of the Notice of Breach or (ii)
within 90 days of receipt of the Notice of Breach, if such Notice of Breach is
received during the Option Term (as defined in Section 2.1) (each, a "Cure
Period"); provided, however, in the event that the Company determines within
five days of receipt of the Notice of Breach that the Company is incapable of
curing such material breach, the Company shall notify WRC in writing of such
determination within such five-day period and the WRC Option shall terminate (i)
30 days after receipt of the Notice of Breach or (ii) 60 days after receipt of
the Notice of Breach, if such Notice of Breach is received during the Option
Term.

            1.8 Company Legal Fees. In addition to any other payments made by
WRC pursuant this Section 1, WRC shall pay to the Company an amount equal to the
fees and expenses of the Company's legal counsel, Wilson Sonsini Goodrich &
Rosati, P.C. and Kaye Scholer LLP, incurred in connection with the Agreements
(as defined in Section 5.1(b)) and the transactions contemplated thereby, in the
amount of $200,000 (the "Company Legal Fees"). Such payment shall be paid to the
Company at the Initial Closing in accordance with Section 13.10 hereof. The
Company shall issue to WRC 724,325 Shares at the Initial Closing in connection
with WRC's payment of the Company Legal Fees.

                                                                             -3-
<PAGE>

         2. WRC Option.

            2.1 WRC Option. During the six-month term beginning October 15, 2001
and ending April 15, 2002, which term shall be extended by any Cure Period
pursuant to Section 1.7(b) (the "Option Term"), WRC shall have an option (the
"WRC Option") to acquire in a single transaction all of the then outstanding
shares of capital stock of the Company not already owned by WRC through a merger
of the Company with and into TBI Acquisition Corp., a Delaware corporation ("WRC
Sub") (or as otherwise structured by WRC as permitted under the Merger Agreement
(as defined in Section 2.4)) (the "Merger"), pursuant to the execution of the
Merger Agreement (the "Closing" as defined in the Merger Agreement being the
"Option Closing" on the "Option Closing Date"). The Merger is intended to be a
tax-free reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"). To exercise the WRC Option, WRC
must have, on the date of exercise, (a) made all Payments as set forth on
Exhibit A; (b) provided uninterrupted Continued Funding if the Option is
exercised after October 15, 2001 and (c) provided written notice to the Company
of its election to exercise the WRC Option (the "Option Exercise"). Upon the
Option Exercise, Continued Funding shall cease and the Option Term shall end.

            2.2 Option Consideration. The consideration to be paid by WRC in
connection with the Merger shall be in the form of WRC common stock, in the
amounts and pursuant to the table set forth on Exhibit F hereto.

            2.3 Termination of WRC Option. WRC's rights under the WRC Option
shall terminate upon the earlier of the termination of Continued Funding or the
Payments, in each case pursuant to Section 1.7 above.

            2.4 Merger Agreement. On the date hereof, the Agreement and Plan of
Reorganization (the "Merger Agreement") attached hereto as Exhibit J shall be
entered into by the Company, WRC, WRC Sub and the shareholders of the Company.
The execution and delivery of the Merger Agreement shall not become effective
until the Option Exercise.

         3. Company Repurchase Option. If (i) the WRC Option is not exercised on
or before the last day of the Option Term, (ii) WRC fails to provide (except
pursuant to Section 1.7(b)) or terminates the Payments or any Continued Funding
pursuant to Section 1.7(a) or (iii) WRC terminates the Post-Exercise Funding
pursuant to Section 1.7(a) or fails to provide the Post-Exercise Funding within
30 days after receipt of written notice from the Company to WRC of such failure,
the Company shall have an option to repurchase (the "Repurchase Option") all
shares of the Company's capital stock then owned by WRC at the original purchase
price of such shares, plus 7% interest compounded annually. The Repurchase
Option shall be exercisable during the period beginning on the earlier of (i)
the day after the last day of the Option Term and (ii) the termination of the
WRC Option, and ending six months after the beginning of the term of the
Repurchase Option. A termination of Payments, Continued Funding or Post-Exercise
Funding for material breach pursuant to Section 1.7(b) shall not affect the
Repurchase Option if the Company cures such material breach within the
applicable 30-day period).

                                                                             -4-
<PAGE>

         4. Definitions. For purposes of this Agreement:

            4.1 Company Material Adverse Effect. "Company Material Adverse
Effect" shall mean an effect which is materially adverse as to (i) the business,
prospects, assets, condition (financial or otherwise) or results of operations
of the Company, (ii) the ability of the Company to perform its obligations under
this Agreement or (iii) the ability of the Company to consummate the Agreements
(as defined in Section 5.1(b)) and the transactions contemplated thereby.

            4.2 Continued Funding. "Continued Funding" shall mean monthly
payments paid by WRC to the Company beginning November 15, 2001 through the end
of the Option Term in amounts equal to the monthly Payments, each such payment
being a "Monthly Continued Funding Closing" and, together with the Initial
Closing and the Monthly Payment Closings and the Post-Exercise Funding Closings,
the "Closings," and the date of each Monthly Continued Funding Closing being a
"Monthly Continued Funding Closing Date" and, together with the Initial Payment
Date and the Monthly Payment Dates and the Post-Exercise Funding Closing Dates,
the "Closing Dates."

            4.3 Company Knowledge. "To the knowledge of the Company" or similar
phrases shall mean to the knowledge of Brian A. Napack, after reasonable due
inquiry by Mr. Napack.

         5. Representations and Warranties of the Company to WRC. Except as set
forth in the letter dated as of the date of this Agreement, from the Company to
WRC (the "Company Disclosure Letter"), the Company hereby represents, warrants
and covenants to WRC that:

            5.1 Corporate Organization and Authority. The Company:

                (a) is a corporation duly incorporated, validly existing,
authorized to exercise all its corporate powers, rights and privileges, and is
in good standing in the State of Delaware and has full corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to conduct its businesses as presently
conducted, other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, has not had and
could not reasonably be expected to have a Company Material Adverse Effect;

                (b) has all requisite corporate power and corporate authority to
execute and deliver this Agreement, the First Amended and Restated Investors'
Rights Agreement (the "Rights Agreement") attached hereto as Exhibit C, the
First Amended and Restated Right of First Refusal and Co-Sale Agreement (the
"Co-Sale Agreement") attached hereto as Exhibit D, the Irrevocable Proxy and
Voting Agreement (the "Voting Agreement") attached hereto as Exhibit G, the
License Agreement and the Merger Agreement (this Agreement, the Rights
Agreement, the Co-Sale Agreement, the Voting Agreement, the License Agreement
and the Merger Agreement are collectively referred to as the "Agreements") and
consummate the transactions contemplated hereby and thereby and to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted; and

                                                                             -5-
<PAGE>

                (c) is qualified as a foreign corporation and is in good
standing in each jurisdiction where the nature of its business or its ownership
or leasing of its properties make such qualification necessary or the failure to
so qualify has had or could reasonably be expected to have a Company Material
Adverse Effect.

            5.2 Capitalization. Immediately prior to the Initial Closing, the
authorized capital of the Company shall consist of:

                (a) Preferred Stock. 33,040,000 shares of Preferred Stock, par
value $0.001 per share ("Preferred Stock"); 1,750,000 of which are designated
Series A Preferred Stock ("Series A Preferred"), of which 973,947 are issued and
outstanding; 4,290,000 of which are designated Series B Preferred Stock ("Series
B Preferred"), of which 2,737,185 shares are issued and outstanding; and
27,000,000 of which are designated Series C Preferred Stock, none of which are
issued and outstanding.

                (b) Common Stock. 45,000,000 shares of Common Stock par value
$0.001 per share ("Common Stock" and, together with the Preferred Stock,
"Capital Stock"), of which 9,912,390 shares are issued and outstanding. The
Company has reserved 1,500,000 shares of Common Stock for issuance pursuant to
the Stock Plan, 1,031,636 of which shares of Common Stock or options therefor
are issued and outstanding.

                (c) Other. Except as set forth above and except as set forth in
Section 5.2 of the Company Disclosure Letter, no shares of Capital Stock or
other voting securities of the Company are issued, reserved for issuance or
outstanding. All outstanding shares of Capital Stock are duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the General Corporation Law of the State of Delaware (the "DGCL"), the
Certificate, the Bylaws of the Company or any Contract (as defined in Section
5.6) to which the Company is a party or otherwise bound. There are not any
bonds, debentures, notes or other indebtedness of the Company having the right
to vote (or convertible into, or exchangeable for, securities having the right
to vote) on any matters on which holders of Common Stock may vote ("Voting
Company Debt"). Except as set forth above, as of the date of this Agreement,
there are not any options, warrants, rights, convertible or exchangeable
securities, "phantom" stock rights, stock appreciation rights, stock-based
performance units, commitments, Contracts, arrangements or undertakings of any
kind to which the Company is a party or by which it is bound (i) obligating the
Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of Capital Stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any Capital Stock of or
other equity interest in, the Company or any Voting Company Debt, (ii)
obligating the Company to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking
or (iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to holders
of Common Stock. As of the date of this Agreement, there are not any outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company. Section 5.2 of Company
Disclosure Letter sets forth the name of each registered holder of Capital Stock
and the number of shares of Common Stock and/or Preferred Stock owned by such
holder.

                                                                             -6-
<PAGE>

            5.3 Subsidiaries. The Company does not own, have any investment in,
or control, directly or indirectly, any subsidiaries, associations or other
business entities. The Company is not a participant in any joint venture or
partnership.

            5.4 Authorization. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of, and performance of all obligations under the
Agreements, and for the issuance and delivery of the Shares and of the Common
Stock issuable upon conversion of the Shares, has been taken. The Agreements
constitute legally binding, valid obligations of the Company enforceable against
the Company in accordance with their 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 Rights Agreement may be limited by applicable
federal or state securities laws. The Board of Directors of the Company has duly
and unanimously adopted resolutions (i) approving this Agreement and the other
transactions contemplated hereby and (ii) adopting this Agreement. The only vote
of holders of Company securities necessary to approve and adopt this Agreement
and the transactions contemplated hereby is the adoption of this Agreement and
the transactions contemplated hereby by (i) the holders of a majority of the
shares of Common Stock, voting as a separate class, (ii) the holders of a
majority of the shares of Series A Preferred, voting together as a separate
class and (iii) the holders of a majority of the shares of Series B Preferred,
voting together as a separate class.

            5.5 Validity of Series C Preferred. The Shares, when issued, sold,
and delivered in accordance with the terms and for the consideration expressed
in this Agreement, shall be duly and validly issued (including, without
limitation, issued in compliance with applicable federal and state securities
laws), fully paid and non-assessable and free from any liens or encumbrances,
other than those accepted or imposed by the holders thereof, and applicable
state and federal securities laws restrictions on transfer to which such Shares
are subject. The Common Stock issuable upon conversion of the Shares, assuming
such Common Stock is issued to WRC or WRC Sub or qualified transferees, upon
issuance in accordance with the Certificate, shall be duly and validly issued
(including, without limitation, issued in compliance with all applicable federal
and state securities laws), fully paid and non-assessable and free from any
liens or encumbrances other than those accepted or imposed by the holders
thereof and the applicable state and federal securities laws restrictions on
transfer to which such Shares are subject.

                                                                             -7-
<PAGE>

            5.6 No Conflict with Other Instruments; Compliance with Laws. The
execution, delivery and performance of the Agreements, and the consummation of
the transactions contemplated hereby and thereby and compliance with the terms
hereof and thereof, will not result in any violation of, or be in conflict with,
or constitute a default under, with or without the passage of time or the giving
of notice, or give rise to a right of termination, cancellation or acceleration
of any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien (as defined in Section 5.9) upon
any of the properties or assets of the Company under, any provision of (i) its
Certificate or Bylaws, (ii) any contract, lease, license, indenture, note, bond,
agreement, permit, concession, franchise or other instrument (a "Contract") to
which the Company is a party or by which any of its properties or assets is
bound or (iii) subject to the filings and other matters referred to in Section
5.14, any judgment, order or decree ("Judgment") or statute, law (including
common law), ordinance, rule or regulation ("Applicable Law") applicable to the
Company or its properties or assets, other than any such items that,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Company Material Adverse Effect.

                (a) The Company is in compliance with all Applicable Laws,
including those relating to occupational health and safety or the environment
except where the failure to be in compliance has not had and could not
reasonably be expected to have a Company Material Adverse Effect. None of the
Company and its affiliates has received within the past two years any written or
oral communication from any person that alleges that the Company is not in
compliance in any material respect with any Applicable Law. This Section 5.6
does not relate to matters with respect to Taxes, which are the subject of
Section 5.20.

            5.7 Agreements; Actions.

                (a) There are no agreements, understandings, arrangements or
proposed transactions between the Company and any of its employees, officers,
directors, affiliates or any affiliate thereof.

                (b) There are no agreements, understandings, instruments,
contracts, arrangements or proposed transactions to which the Company is a party
or by which it is bound that involve any:

                    (i) obligations of, or payments to, the Company in excess of
$50,000;

                    (ii) covenant not to compete or other covenant of the
Company restricting the development, manufacture, marketing or distribution of
the products and services of the Company;

                                                                             -8-
<PAGE>

                    (iii) collective bargaining unit;

                    (iv) employment agreement or employment contract (written or
oral) that is not terminable by the Company by notice of not more than 30 days
without payment or penalty;

                    (v) Contract with (A) any shareholder or affiliate of the
Company or (B) any current or former officer, director or employee of the
Company or any of its affiliates (other than employment agreements covered by
clause (i) above), other than agreements entered in connection with the
Company's offerings of Preferred Stock between the Company and the purchasers of
such stock, copies of which have been delivered to WRC;

                    (vi) lease, sublease or similar agreement with any person
under which the Company is a lessor or sublessor of, or makes available for use
to any person, any portion of any premises occupied by the Company pursuant to
the lease of any real property by the Company (the "Lease") or otherwise;

                    (vii) license, sublicense, option or other agreement
relating in whole or in part to the Intellectual Property set forth in Section
5.10 of Company Disclosure Letter (including any license or other agreement
under which the Company is licensee or licensor of any such Intellectual
Property);

                    (viii) (A) Contract under which the Company has borrowed any
money from, or issued any note, bond, debenture or other evidence of
indebtedness to, any person or (B) other note, bond, debenture or other evidence
of indebtedness issued to any person;

                    (ix) Contract (including any so-called take-or-pay or
keepwell agreement) under which (A) any person has directly or indirectly
guaranteed indebtedness, liabilities or obligations of the Company or (B) the
Company has directly or indirectly guaranteed indebtedness, liabilities or
obligations of any other person (in each case other than endorsements for the
purpose of collection in the ordinary course of business);

                    (x) Contract under which the Company has, directly or
indirectly, made any advance, loan, extension of credit or capital contribution
to, or other investment in, any person;

                    (xi) a mortgage, pledge, security agreement, deed of trust
or other instrument granting a lien or other encumbrance upon any property or
asset of the Company;

                    (xii) Contract providing for indemnification of any person
with respect to liabilities relating to any current or former business of the
Company or any predecessor person;

                                                                             -9-
<PAGE>

                    (xiii) power of attorney (other than a power of attorney
given in the ordinary course of the Company's business with respect to routine
tax matters);

                    (xiv) confidentiality agreement, except for the agreements
referenced in Section 5.11 of this Agreement and all confidentiality agreements
entered into in the ordinary course of business and which do not relate to any
business combination transaction or sale of any material assets;

                    (xv) Contract for the sale of any asset (other than
inventory sales in the ordinary course of business) or the grant of any
preferential rights to purchase any asset or requiring the consent of any party
to the transfer thereof;

                    (xvi) Contract with or license by or from any Governmental
Entity (as defined in Section 5.14);

                    (xvii) currency exchange, interest rate exchange, commodity
exchange or similar agreement or instrument;

                    (xviii) Contract for any joint venture, partnership or
similar arrangement;

                    (xix) any other material agreement or agreement not in the
ordinary course of business.

                (c) All agreements, contracts, leases, licenses and commitments
on instruments of the Company listed in Company Disclosure Letter (collectively
the "Company Contracts") are valid, binding and in full force and effect and are
enforceable by the Company in accordance with their terms. The Company has
performed all material obligations required to be performed by it under the
Company Contracts, and it is not (with or without the lapse of time or the
giving of notice, or both) in material breach or default in any respect
thereunder and, to the knowledge of the Company, no other party to any Company
Contract is (with or without the lapse of time or the giving of notice, or both)
in material breach or default in any respect thereunder. The Company has not
received any notice of the intention of any party to terminate any Company
Contract. Complete and correct copies of all Company Contracts, together with
all modifications and amendments thereto, have been delivered to WRC.

                (d) The Company has not (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) made any loans or advances to any person, other than
ordinary advances for travel expenses, (iii) sold, exchanged or otherwise
disposed of any of its material assets or rights or (iv) agreed to any of the
foregoing.

                                                                            -10-
<PAGE>

            5.8 Litigation. There is no legal action, proceeding or
investigation pending or, to the Company's knowledge, threatened, that questions
the validity of the Agreements, or the right of the Company to enter into the
Agreements or to consummate the transactions contemplated hereby and thereby, or
that, as of the day hereof, relates to or involves more than $50,000 or that
could be reasonably excepted to have, either individually or in the aggregate, a
Company Material Adverse Effect, nor is the Company aware that there is any
basis for the foregoing. The Company has no current intention to commence
litigation against any other party, nor is the Company a party to any pending
litigation or arbitration. The Company is not a party or subject to or in
default under any Judgment. There is no pending or, to the knowledge of the
Company, threatened investigation of or affecting the Company or its business or
assets as of the date hereof or that could reasonably be expected to have a
Company Material Adverse Effect.

            5.9 Title to Property and Assets; Leases. The Company has good and
marketable title to, or valid leasehold interests in, all its properties and
assets except for such as have been disposed of in the ordinary course of
business. All such assets and properties, other than assets and properties in
which the Company has leasehold interests, are free and clear of all mortgages,
liens, security interests, charges, easements, leases, subleases, covenants,
rights of way, options, claims, restrictions or encumbrances of any kind
(collectively, "Liens") other than (a) liens imposed by law and incurred in the
ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like and (b) liens for current taxes
not delinquent. This Section 5.9 does not relate to Intellectual Property, which
is the subject of Section 5.10. With respect to the property and assets it
leases, the Company is in compliance with such leases and, to its knowledge,
holds a valid leasehold interest free of any liens, claims or encumbrances.

            5.10 Patents and Other Proprietary Rights.

                 (a) All patents, trademarks (registered or unregistered), trade
names, service marks and copyrights and applications therefor and other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection (collectively, "Intellectual Property"),
owned, used, filed by or licensed to the Company (other than customary end-user
license agreements for commercially available software and except for such
Intellectual Property the failure of which to own, license or otherwise have the
right to use, individually or in the aggregate, could not reasonably be expected
to have a Company Material Adverse Effect) are set forth in a true and complete
list in Section 5.10 of the Company Disclosure Letter. Except as set forth in
Company Disclosure Letter, the Company owns, and the Company has the right to
use, execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any other person, the
Intellectual Property and the consummation of the transactions contemplated
hereby will not conflict with, alter or impair any such rights. The Company has
all rights to Intellectual Property as are necessary in connection with the
business of the Company as presently conducted and as is proposed to be
conducted.

                                                                            -11-
<PAGE>

                 (b) The Company has not granted any options, licenses or
agreements of any kind relating to Intellectual Property listed in Section 5.10
of Company Disclosure Letter or the marketing or distribution thereof. The
Company is not a party to any options, licenses or agreements of any kind
relating to the Intellectual Property of any other person. Subject to the rights
of third parties set forth in Section 5.10 of Company Disclosure Letter, all
Intellectual Property owned by the Company and licensed by the Company is free
and clear of the claims of others and of all liens, security interests and
encumbrances whatsoever. The conduct of the business of the Company as presently
conducted does not, and to the Company's knowledge, the conduct of such business
as proposed to be conducted will not, violate, conflict with or infringe the
Intellectual Property of any other person. Except as set forth in Section 5.10
of Company Disclosure Letter, (i) no claims are pending or, to the knowledge of
the Company, threatened, against the Company by any person with respect to the
ownership, validity, enforceability, effectiveness or use of any Intellectual
Property and (ii) the Company has not received any communications alleging that
the Company has violated any rights relating to Intellectual Property of any
person. To the knowledge of the Company, no person has violated or infringed any
of the Company's rights relating to the Intellectual Property.

                 (c) The Intellectual Property has been maintained in confidence
in accordance with protection procedures customarily used in the industry of the
Company to protect rights of like importance. All former and current members of
management and key personnel of the Company, including all former and current
employees, agents, consultants and independent contractors who have contributed
to or participated in the conception and development of software or other
Intellectual Property (collectively, "Personnel"), have executed and delivered
to the Company a proprietary information agreement restricting such person's
right to disclose proprietary information of the Company. All former and current
Personnel either (i) have been party to a "work-for-hire" arrangement or
agreement with the Company, in accordance with applicable Federal and state law,
that has accorded the Company full, effective, exclusive and original ownership
of all tangible and intangible property thereby arising or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company full, effective and exclusive ownership of all
tangible and intangible property thereby arising. No former or current Personnel
have any claim against the Company in connection with such person's involvement
in the conception and development of any Intellectual Property and no such claim
has been asserted or is threatened. None of the current officers and employees
of the Company have any patents issued or applications pending for any device,
process, design or invention of any kind now used or needed by the Company in
the furtherance of its business operations, which patents or applications have
not been assigned to the Company, with such assignment duly recorded in the
United States Patent Office.

            5.11 Confidential Information and Intellectual Property Assignments.
Each employee of the Company has executed and delivered to the Company an
Confidential Information and Intellectual Property Assignment Agreement in
substantially the form attached as Exhibit K. The Company is not aware that any
of its employees are in violation thereof, and the Company will use commercially
reasonable efforts to prevent any such violation.

            5.12 Registration Rights. Except as provided in the Rights
Agreement, the Company is under no contractual obligation to register under the
Securities Act of 1933, as amended (the "Securities Act"), any of its currently
outstanding securities or any of its securities that may subsequently be issued.

                                                                            -12-
<PAGE>

            5.13 Brokers and Finders. The Company has not retained any
investment banker, broker or finder in connection with the sale of the Shares
and owes no advisement, broker's or finder's fee. The estimated fees and
expenses incurred and to be incurred by the Company in connection with the
Agreements and the other transactions contemplated thereby (including the fees
of the Company's legal counsel to be paid pursuant to Section 13.10) are set
forth in Section 5.13 of the Company Disclosure Letter.

            5.14 Governmental Consents. No consent, approval, permit, order or
authorization ("Consent") of, or registration, qualification, designation,
declaration or filing with or permit from, any federal, state, local, provincial
or Foreign governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity") on the part of the Company is required in connection with
the execution, delivery and performance of the Agreements or the consummation of
the transactions contemplated thereby, except for (i) qualification (or taking
such action as may be necessary to secure an exemption from qualification) under
the California Corporate Securities Laws and other applicable blue sky laws of
the Shares (and the shares of Common Stock issuable upon conversion thereof),
(ii) compliance with and filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), if applicable, (iii) any
applicable requirements of the Securities Act, (iv) such filings as may be
required in connection with the taxes described in Section 5.20, (v) the filing
and recordation of appropriate merger documents as required by the DGCL and (vi)
such other items as are set forth in Section 5.14 of Company Disclosure Letter.

            5.15 Corporate Documents. The Company has delivered to WRC true and
complete copies of its Certificate and Bylaws.

            5.16 Minute Books. The minute books of the Company made available to
WRC contain a complete summary of all meetings of directors and stockholders
since the time of incorporation and accurately reflect in all material respects
all actions taken during such meetings.

            5.17 Disclosure. The Company has provided WRC with all the
information that WRC has requested for deciding whether to acquire the Shares.
No representation or warranty of the Company contained in this Agreement and the
exhibits attached hereto or any certificate furnished or to be furnished to WRC
at the Closings (when read together) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. The financial projections relating to the Company
delivered to WRC were prepared on the basis of assumptions the Company
reasonably believed in good faith at the time of preparation to be reasonable
and the Company has no knowledge of any fact or information that would lead it
to believe that such assumptions are incorrect or misleading in any material
respect.

                                                                            -13-
<PAGE>

            5.18 No Conflict of Interest. The Company is not indebted, directly
or indirectly, to any of its officers or directors or to their respective
spouses or children, in any amount whatsoever other than in connection with
expenses or advances of expenses incurred in the ordinary course of business or
for the relocation expenses of employees. To the Company's knowledge, none of
the Company's officers or directors, or any members of their immediate families,
are, directly or indirectly, indebted to the Company (other than in connection
with purchases of the Company's stock) or have any direct or indirect ownership
interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation that
competes with the Company except that officers, directors, or stockholders of
the Company may own stock in (but not exceeding two percent of the outstanding
capital stock of) any publicly traded company that may compete with the Company.
To the Company's knowledge, none of the Company's officers or directors or any
members of their immediate families are, directly or indirectly, interested in
any material contract with the Company. The Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.

            5.19 Financial Statements; Undisclosed Liabilities; Absence of
Changes.

                 (a) Section 5.19 of Company Disclosure Letter sets forth the
income statements of the Company for the month and year ended December 31, 1999
(the "1999 Income Statement") and for the month and year ended December 31, 2000
(the "Income Statement") and the balance sheets of the Company as of December
31, 1999 (the "1999 Balance Sheet") and as of December 31, 2000 (the "Balance
Sheet", together with the 1999 Balance Sheet, the 1999 Income Statement and
Income Statement, the "Financial Statements"). The Financial Statements have
been prepared in conformity with GAAP consistently applied (except in each case
as described in the notes thereto) and on that basis fairly present in all
material respects the financial condition and results of operations of the
Company as of the respective dates thereof and for the respective periods
indicated.

                 (b) The Company does not have any liabilities or obligations of
any nature (whether accrued, absolute, contingent, unasserted or otherwise) that
have had or could reasonably be expected to have a Company Material Adverse
Effect, except (i) as disclosed, reflected or reserved against in the Balance
Sheet and the notes thereto, (ii) for items set forth in Section 5.19(b) of
Company Disclosure Letter and (iii) for liabilities and obligations incurred in
the ordinary course of business of the Company consistent with past practice
since the date of the Balance Sheet and not in violation of this Agreement.

                 (c) Since the date of the Balance Sheet, there has not been any
material adverse change in the business, prospects, assets, condition (financial
or otherwise) or results of operations of the Company. Since the date of the
Balance Sheet, the Company has caused its business to be conducted in the
ordinary course and in substantially the same manner as previously conducted and
has made all reasonable efforts to preserve the relationships of its business
with customers, suppliers and others with whom its business deals. Since the
date of the Balance Sheet, the Company has not taken any action that, if taken
after the date of this Agreement, would constitute a breach of Section 9.2.

                                                                            -14-
<PAGE>

            5.20 Taxes.

                 (a) The Company has timely filed all Tax Returns required to be
filed by it, and all such Tax Returns are true, complete and correct in all
material respects. All Taxes required to be paid by the Company have been timely
paid, except to the extent that any failure to pay, individually or in the
aggregate, has not had and could not reasonably be expected to have a Company
Material Adverse Effect or such unpaid taxes have been fully reserved on the
Financial Statements of the Company. All Taxes required to be withheld by the
Company have been withheld and have been duly and timely paid to the proper
governmental entity, except to the extent that any failure to withhold,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Company Material Adverse Effect.

                 (b) The Financial Statements of the Company reflect an adequate
reserve for all Taxes payable by the Company for all periods and portions
thereof through the date of such Financial Statements. No deficiency with
respect to any Taxes has been proposed, asserted or assessed against the
Company, and no requests for waivers of the time to assess any such Taxes have
been made or are pending. No Tax Returns of the Company have ever been audited
or examined, nor is any Tax Return of the Company presently under audit or
examination, by any governmental entity. No written or unwritten notice of any
such audit or examination has been received by the Company.

                 (c) No assessment for Taxes has ever been made against the
Company. The relevant statute of limitations has not closed with respect to the
federal, foreign and state and local Tax Returns of the Company for any period.

                 (d) There are no material Liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of the Company. The Company
has no liability for the payment of Taxes of any other entity as a result of
being a member of an affiliated, combined, consolidated or unitary group. The
Company is not bound by any Tax sharing (or similar) agreement with another
person with respect to Taxes. No power of attorney with respect to any Taxes has
been executed or filed with any governmental entity by or on behalf of the
Company.

                 (e) The Company will not be required to include in a taxable
period ending after the Effective Date taxable income attributable to income
that accrued in a prior taxable period but was not recognized in any prior
taxable period as a result of the installment method of accounting, the
long-term contract method of accounting, the cash method of accounting or
Section 481 of the Code, or any comparable provision of state, local, or foreign
Tax law, or for any other reason.

                 (f) No consent under Section 341 of the Code has been made with
respect to the Company or any property held by the Company. No property of the
Company is "tax exempt use property" within the meaning of Section 168(h) of the
Code, and the Company is not a party to any lease made pursuant to Section
168(f)(8) of the Internal Revenue Code of 1954. None of the assets of the
Company is subject to a lease under Section 7701(h) of the Code or under any
predecessor section thereof.

                                                                            -15-
<PAGE>

                 (g) For purposes of this Agreement:

                 "Taxes" includes all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, federal or other governmental
entity, or in connection with any agreement with respect to Taxes, including all
interest, penalties and additions imposed with respect to such amounts.

         "Tax Return" means all federal, state, local, provincial and foreign
Tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.

            5.21 Permits. Section 5.21 of the Company Disclosure Letter sets
forth all certificates, licenses, permits, authorizations and approvals
("Permits") issued or granted to the Company by Governmental Entities. Except as
set forth in Section 5.21 of the Company Disclosure Letter, (i) all such Permits
are validly held by the Company, and the Company has complied in all material
respects with all terms and conditions thereof, (ii) neither the Company nor, to
the Company's knowledge, any affiliate of the Company has received notice of any
suit, action or proceeding ("Proceeding") relating to the revocation or
modification of any such Permits the loss of which, individually or in the
aggregate, has had and could reasonably be expected to have a Company Material
Adverse Effect and (iii) none of such Permits will be subject to suspension,
modification, revocation or nonrenewal as a result of the execution and delivery
of this Agreement or the consummation of the transactions.

            5.22 Employee Benefits.

                 (a) Section 5.22 of the Company Disclosure Letter contains a
true and complete list of each benefit, employment, personal services,
compensation, change in control, severance, time-off and perquisite agreement,
plan, policy and other arrangement, relating to one or more employees, directors
and/or independent contractors, maintained by the Company or any of its
subsidiaries, or with respect to which the Company or any of its subsidiaries
has or could have any liability (each a "Benefit Plan"). The Company has
provided WRC with respect to any Benefit Plan true, correct and complete copies
of (1) each of such Benefit Plan (or, in the case of any unwritten Benefit
Plans, written descriptions thereof), (2) the most recent annual report on Form
5500 filed with the Internal Revenue Service (the "IRS") (if any such report was
required), (3) the most recent summary plan description or similar document that
was required to be or was otherwise provided to plan participants or
beneficiaries and (4) each trust agreement and insurance annuity contract.

                 (b) Each Benefit Plan is now and has always been operated (i)
in accordance with its terms and the provisions of any applicable law as in
effect from time to time, including, but not limited to, the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and (ii) in order to minimize
tax liability, the Code. No condition exists with respect to a Benefit Plan that
presents a risk to the Company of incurring any liability under any such law.

                                                                            -16-
<PAGE>

                 (c) No Benefit Plan (i) provides for defined benefit pension
benefits, (ii) provides any benefits other than on a self-pay basis following
termination of service or employment, (iii) provides any benefit, payment or
right (or increased or accelerated benefit payment or right) with respect to the
transactions contemplated by this Agreement or (iv) is a "multiple employer
plan" or a "multiemployer plan" each within the meaning of ERISA.

            5.23 Employee and Labor Matters.

                 (a) (i) None of the Company's employees are represented by a
union and (ii) to the knowledge of the Company, no union organizational campaign
is in progress as of the date hereof with respect to the employees of the
Company and no question concerning representation of such employees exists. The
Company and each of its subsidiaries have complied in all respects with all
applicable employment and labor laws and there are no pending or threatened
charges against the Company or any of its subsidiaries or any of their current
or former employees. Neither the Company nor any of its subsidiaries has
received notice of the intention of any governmental entity responsible for the
enforcement of labor or employment laws to conduct an investigation of the
Company or any of its subsidiaries.

                 (b) The Company has provided to WRC the name and address of
each employee, officer and consultant of the Company as of the date of this
Agreement with a current annual salary (including bonus) of $75,000 or greater,
including a description of applicable bonus or benefit plans.

            5.24 Insurance. The Company maintains policies of fire and casualty,
liability and other forms of insurance in such amounts, with such deductibles
and against such risks and losses as are, in the Company's judgment, reasonable.
The insurance policies maintained by the Company are listed in Section 5.24 of
Company Disclosure Letter. All such policies are in full force and effect, all
premiums due and payable thereon have been paid (other than retroactive or
retrospective premium adjustments that are not yet, but may be, required to be
paid with respect to any period ending prior to the Effective Date under
comprehensive general liability and workmen's compensation insurance policies),
and no notice of cancellation or termination has been received with respect to
any such policy which has not been replaced on substantially similar terms prior
to the date of such cancellation. The Company has conducted its business in a
manner so as to conform in all material respects to all applicable provisions of
such insurance policies.

            5.25 Effect of Transaction. No creditor, employee, client, customer
or other person having a material business relationship with the Company has
informed the Company that such person intends to materially change such
relationship because of the transactions contemplated by the Agreements.

            5.26 Operating Deficits. Set forth in Section 5.26 of the Company
Disclosure Letter are the Company's projected operating deficits from the date
of this Agreement to 12 months from the date hereof and the schedule of
Post-Exercise Funding payments.

                                                                            -17-
<PAGE>

            5.27 Information Supplied. Other than information supplied by WRC to
the Company in writing or incorporated by reference by such information, none of
the information included in or incorporated by reference in the Consent
Solicitation and Information Statement attached as Exhibit L hereto (the
"Information Statement") prepared by the Company and delivered in connection
with the solicitation by the Company of the consents of its shareholders
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.

         6. Representations and Warranties of WRC. WRC represents, warrants and
covenants to the Company as follows (provided, however, that the
representations, warranties and covenants in Sections 6.3, 6.8, 6.9 and 6.10
shall be effective only as of the Option Exercise):

            6.1 Organization, Standing and Power. WRC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. WRC has the corporate power to own its properties and to carry on its
business as now being conducted and is duly qualified to do business and is in
good standing in each jurisdiction in which the failure to be so qualified would
have a material adverse effect on WRC and WRC Sub as a whole. WRC Sub is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and has the corporate power to own its properties and to carry on
its business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on WRC and WRC Sub as a whole.

            6.2 Authorization. When executed and delivered by WRC, and assuming
due execution and delivery by the Company, the Agreements will constitute valid
obligations of WRC, enforceable in accordance with their 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 Rights Agreement may be
limited by applicable federal or state securities laws. WRC has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby has been duly
authorized by all necessary corporate action on the part of WRC. This Agreement
constitutes the valid and binding obligation of WRC, enforceable in accordance
with its terms. At the time of the Option Closing: (i) the execution and
delivery of the Merger Agreement and the consummation of the transactions
contemplated thereby shall have been duly authorized by all necessary corporate
action on the part of WRC Sub and (ii) the Merger Agreement shall constitute the
valid and binding obligation of WRC Sub, enforceable in accordance with its
terms.

                                                                            -18-
<PAGE>

            6.3 Capital Structure.

                (a) The authorized stock of WRC consists of 20,000,000 shares of
common stock, of which 6,851,821 shares were issued and outstanding as of March
31, 2001, and 20,000,000 shares of preferred stock, of which 3,000,000 shares
were issued and outstanding as of March 31, 2001. All such shares have been duly
authorized, and all such issued and outstanding shares have been validly issued,
are fully paid and nonassessable and are free of any liens or encumbrances other
than any liens or encumbrances created by or imposed upon the holders thereof.
The authorized capital stock of WRC Sub consists of 1,000 shares of common
stock, 1,000 shares of which, as of the date hereof, are issued and outstanding
and are held by WRC and all such issued and outstanding shares are validly
issued, are fully paid and nonassessable and are free of any liens or
encumbrances other than any liens or encumbrances created by or imposed upon the
holders thereof.

                (b) The shares of WRC common stock to be issued pursuant to the
Merger, when issued, will be duly authorized, validly issued, fully paid,
non-assessable and issued in compliance with applicable federal and state
securities laws.

            6.4 Brokers and Finders. WRC has not retained any investment banker,
broker or finder in connection with the transactions contemplated by this
Agreement.

            6.5 Securities Laws.

                (a) This Agreement is made with WRC in reliance upon WRC's
representation to the Company, which by WRC's execution of this Agreement WRC
hereby confirms, that the Shares and the Common Stock issuable upon conversion
thereof (collectively, the "Securities") to be received by WRC will be acquired
for investment for WRC's own account, not as a nominee or agent, and not with a
view to the sale or distribution of any part thereof, and that WRC has no
current intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, WRC further represents that
WRC has no 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.

                (b) WRC understands and acknowledges that the offering of the
Securities pursuant to this Agreement will not be registered under the
Securities Act. WRC represents that it is an accredited investor within the
definition of Regulation D of the Securities Act. WRC represents that it is
experienced in evaluating and investing in private placement transactions of
securities of companies in a similar stage of development and acknowledges that
WRC is able to fend for itself, can bear the economic risk of its investment,
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the investment in the Shares.
WRC has not been organized for the purpose of acquiring the Shares.

                                                                            -19-
<PAGE>

                (c) WRC covenants that in no event will it dispose of any of the
Securities (other than if a Registration Statement is in effect with respect to
such shares of the Securities or a disposition pursuant to Rule 144 ("Rule 144")
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act or any similar or analogous rule) unless and until (i) WRC
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition that are necessary to the availability of an exemption
under the Securities Act other than Rule 144 and (ii) if requested by the
Company, WRC shall have furnished the Company with an opinion of counsel
reasonably satisfactory in form and substance to the Company and the Company's
counsel, to the effect that (x) such disposition will not require registration
under the Securities Act and (y) all appropriate actions necessary for
compliance with the Securities Act and any applicable state, local or foreign
law have been taken. Notwithstanding the limitations set forth in the foregoing
sentence, WRC may transfer Securities to its constituent stockholders, members,
partners or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such stockholder, member or partner or retired
partner or transfer by gift, will or intestate succession to any such
stockholder's, member's or partner's spouse or lineal descendants or ancestors
or to an affiliate of such corporation, limited liability company or partnership
without the necessity of registration or opinion of counsel if the transferee
agrees in writing to be subject to the terms of the Agreements to the same
extent as if such transferee were WRC; provided, however, that WRC hereby
covenants not to effect such transfer if such transfer either would invalidate
the securities laws exemptions pursuant to which the Securities were originally
offered and sold or would itself require registration under the Securities Act
or applicable state securities laws. Any certificate evidencing the Securities
transferred as above provided shall bear the appropriate restrictive legend set
forth in Section 6.6 below, provided, however, that any legend endorsed on a
certificate pursuant to Section 6.6(a) hereof shall be removed (i) if the
Securities represented by such certificate shall have been effectively
registered and sold under the Securities Act or otherwise lawfully sold in a
public transaction or (ii) if such Securities may be transferred in compliance
with Rule 144(k) promulgated under the Securities Act. Any legend endorsed on a
certificate pursuant to Section 6.6(b) hereof shall be removed if the Company
receives an order of the appropriate state authority authorizing such removal.

                (d) WRC represents that: (i) it has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its prospective investment in the Securities; (ii) it has
received all the information it has requested from the Company and considers
necessary or appropriate for deciding whether to purchase the Securities; (iii)
it has the ability to bear the economic risks of its prospective investment;
(iv) it understands that no public market currently exists for any of the
Company's securities, and that the Company has made no assurances that a public
market will ever exist for the Securities; and (v) it is able, without
materially impairing its financial condition, to hold the Securities for an
indefinite period of time and to suffer complete loss of its investment.

            6.6 Legends. WRC understands that each certificate representing the
Shares, and the shares of Common Stock issuable upon conversion of the Shares,
and any securities issued in respect thereof or exchange therefor shall bear
legends in substantially the following forms:

                (a) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY
NOT BE TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS
TO SUCH TRANSFER OR SUCH TRANSFER MAY BE MADE PURSUANT TO RULE 144 OR IN THE
OPINION OF COUNSEL FOR THE COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN
ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."

                                                                            -20-
<PAGE>

                (b) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RIGHTS, INCLUDING RESTRICTIONS ON TRANSFER, AS SET FORTH IN AN
INVESTORS' RIGHTS AGREEMENT ENTERED INTO BY THE HOLDER OF THESE SHARES, THE
ISSUER AND CERTAIN STOCKHOLDERS OF THE ISSUER. A COPY OF SUCH AGREEMENT MAY BE
EXAMINED AT THE PRINCIPAL OFFICE OF THE CORPORATION."

                (c) Any certificates evidencing the Securities shall also bear
any legend required by the State of Delaware or required pursuant to any state,
local or foreign law governing such securities.

            6.7 Tax Advisors. WRC has reviewed with its own tax advisors the
federal, state and local tax consequences of WRC's investment in the Shares,
where applicable, and the transactions contemplated by the Agreements. Except
with respect to the representations set forth in Section 5.20 of this Agreement
and Section 2.19 of the Merger Agreement, WRC is relying solely on its advisors
and not on any statements or representations of the Company or any of its agents
and understands that WRC (and not the Company) shall be responsible for WRC's
tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement. Nothing in this Section 6.7 shall affect the
obligation to make reasonable representations as requested by Cravath, Swaine &
Moore (or other satisfactory counsel) in connection with the delivery of the
opinion to WRC under Section 7.3(e) of the Merger Agreement.

            6.8 SEC Documents; WRC Financial Statements. WRC has furnished or
made available to the Company true and complete copies of all reports or
registration statements filed by it with the Securities and Exchange Commission
(the "SEC") since May 15, 2001, all in the form so filed (all of the foregoing
being collectively referred to as the "SEC Documents"). As of their respective
filing dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Securities Exchange Act of 1934 (the
"Exchange Act") as the case may be, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading, except to the
extent corrected by a document subsequently filed with the SEC. The financial
statements of WRC, including the notes thereto, included in the SEC Documents
(the "WRC Financial Statements") comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles consistently applied (except as may be indicated
in the notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC) and present fairly in all material respects the
consolidated financial position of WRC at the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal audit adjustments). There has been
no change in WRC accounting policies except as described in the notes to the WRC
Financial Statements; provided, however, WRC may have restated or may restate
one or more of the WRC Financial Statements to reflect acquisitions entered into
subsequent to the respective dates thereof.

                                                                            -21-
<PAGE>

            6.9 No Material Adverse Change. Since the date of the balance sheet
included in WRC's most recently filed report on Form 10-K filed with the SEC on
March 30, 2001, WRC has conducted its business in the ordinary course and there
has not occurred: (a) any material adverse change in the financial condition,
liabilities, assets or business of WRC; (b) any amendment or change in the
Certificate of Incorporation or Bylaws of WRC (other than restatements of the
Certificate or Incorporation which did not require stockholders' approval and
other than amendments or changes disclosed in writing by WRC to the Company); or
(c) any damage to, destruction or loss of any assets of WRC (whether or not
covered by insurance) that materially and adversely affects the financial
condition or business of WRC.

            6.10 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which WRC has received any notice
of assertion against WRC, which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay any of the transactions contemplated by this
Agreement.

            6.11 Information Supplied. The information supplied by WRC to the
Company in writing or incorporated by reference by such information, as
incorporated into the Information Statement, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.

         7. Conditions of WRC's Obligations at the Closings. The obligation of
WRC to consummate each Closing (or, as specified, a particular Closing) is
subject to the satisfaction (or waiver by WRC) as of such Closing of the
following conditions:

            7.1 Representations and Warranties. The representations and
warranties of the Company in this Agreement which are qualified as to
materiality shall be true and correct, and the representations and warranties of
the Company in this Agreement which are not so qualified shall be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the date of each Closing as though made on such date (or, in the case
of each representation and warranty which expressly speaks as of an earlier
date, as of the earlier date as of which such representation and warranty
speaks). With respect to each Closing, the Company shall have delivered to WRC a
certificate on its behalf dated the date of such Closing, and signed by an
authorized officer representing and confirming that the foregoing condition has
been satisfied.

            7.2 Performance. The Company shall have performed or fulfilled in
all material respects all agreements, covenants, obligations and conditions
contained herein required to be performed or fulfilled by the Company by the
time of each Closing. The Company shall have delivered to WRC a certificate on
its behalf dated the date of such Closing and signed by an authorized officer
representing and confirming that the foregoing condition has been satisfied.

                                                                            -22-
<PAGE>

            7.3 Blue Sky Compliance. The Company shall have complied with and be
effective under all state securities or Blue-Sky laws applicable to the offer
and sale of the Shares to WRC at each Closing.

            7.4 Rights Agreement, Co-Sale Agreement. The Company and the other
parties to the Rights Agreement and Co-Sale Agreement shall have entered into
the Rights Agreement and Co-Sale Agreement, respectively.

            7.5 Proceedings Satisfactory. All corporate and legal proceedings
taken by the Company in connection with the transactions contemplated by this
Agreement and all documents and papers relating to such transactions shall be
reasonably satisfactory to WRC and its counsel.

            7.6 Certified Charter Documents. There shall have been delivered to
WRC a copy of the Certificate and Bylaws of the Company (as amended and restated
through the Initial Closing Date), certified by the Secretary of the Company as
true and correct copies thereof as of the Initial Closing Date.

            7.7 Amended and Restated Certificate of Incorporation. The
Certificate shall have been filed with and accepted by the Delaware Secretary of
State.

            7.8 Opinion of Company Counsel. WRC shall have received from Wilson
Sonsini Goodrich & Rosati, P.C., counsel for the Company, an opinion, dated as
of the Initial Closing, in substantially the form attached hereto as Exhibit E.

            7.9 Conversion Shares. The shares of Common Stock issuable upon
conversion of the Shares shall be duly uthorized and reserved.

            7.10 CompassLearning. The Company shall have entered into an
amendment to the Distribution Agreement, in the form attached hereto as Exhibit
I, to extend the original term of the Distribution Agreement to three years.

            7.11 Voting Agreement. The stockholders of the Company shall have
entered into the Voting Agreement attached hereto as Exhibit G.

            7.12 No Litigation.

                 (a) There shall not be pending or threatened any suit, action
or proceeding by (x) any Governmental Entity or (y) any other third party (in
the case of (y) which has a reasonable likelihood of success), (i) seeking to
restrain or prohibit the acquisition by WRC of any Capital Stock or any other
transaction contemplated by the Agreements or seeking to obtain from WRC any
damages that are material in relation to the value of the Company, taken as a
whole, (ii) seeking to prohibit or limit the ownership or operation by WRC of
any material portion of the business or assets of WRC or the Company, or to
compel WRC to dispose of or hold separate any material portion of the business
or assets of WRC or the Company, in each case as a result of any of the
transactions contemplated by the Agreements, (iii) seeking to impose limitations
on the ability of WRC to acquire or hold, or exercise full rights of ownership
of, the Capital Stock or (iv) seeking to prohibit WRC from effectively
controlling in any material respect the Capital Stock.

                                                                            -23-
<PAGE>

                 (b) No action shall have been taken, or any statute, rule,
regulation or order shall have been enacted, entered or enforced or deemed
applicable to the transactions contemplated by the Agreements, and no temporary
restraining order or preliminary or permanent injunction or other order shall
have been issued by any Governmental Entity (each, an "Injunction") (i) granting
any of the relief referred to in clauses (i) through (ii) of Section 7.12(a)
above or (ii) which otherwise could reasonably be expected to have a Company
Material Adverse Effect.

            7.13 Credit Agreement. As of the Initial Closing, WRC shall have
received all waivers, consents and amendments under the Credit Agreement dated
as of November 17, 1999 and amended and restated on May 9, 2001, among Weekly
Reader Corporation and CompassLearning, Inc. (formerly known as JLC Learning
Corporation), as borrowers, WRC, as guarantor, the various lenders party
thereto, Credit Suisse First Boston (as successor in interest to DLJ Capital
Funding, Inc.), Bank of America, N.A. and General Electric Capital Corporation,
as WRC, in its sole discretion, believes necessary or desirable in connection
with the consummation of the Agreements and the other transactions contemplated
thereby and the prevention of a default following the consummation of the
Agreements (including, without limitation, under the financial covenants
applicable to WRC's consolidated financial results).

            7.14 Delivery of Shares. The Company shall have delivered to WRC a
certificate evidencing the Shares being issued to WRC applicable to the Monthly
Payment Closing as set forth on Exhibit A hereto.

         8. Conditions of the Company's Obligations at the Closings. The
obligation of the Company to consummate each Closing is subject to the
satisfaction (or waiver by the Company) as of such Closing of the following
conditions:

            8.1 Representations and Warranties. The representations, warranties
and covenants of WRC contained in Section 6 shall be true and correct in all
material respects on and as of each Closing with the same effect as though said
representations, warranties and covenants had been made on and as of each
Closing.

            8.2 Rights Agreement, Right of First Refusal and Co-Sale. WRC shall
have entered into the Rights Agreement and the Co-Sale Agreement.

            8.3 Performance. WRC shall have performed or fulfilled in all
material respects all agreements, covenants, obligations and agreements
contained herein required to be performed or fulfilled by WRC by the time of
such Closing.

                                                                            -24-
<PAGE>

            8.4 Amended and Restated Certificate of Incorporation. The
Certificate shall have been filed with and accepted by the Delaware Secretary of
State.

            8.5 Blue Sky Compliance. The Company shall have complied with and be
effective under all state securities or blue sky laws applicable to the offer
and sale of the Shares to WRC and required to be complied with prior to Closing.

            8.6 Payment of Purchase Price. WRC shall have delivered the purchase
price applicable to the Monthly Payment Closing as set forth on Exhibit A
hereto.

            8.7 Weekly Reader. The Company and WRC shall have entered into the
License Agreement attached hereto as Exhibit H, pursuant to which WRC will grant
to the Company all necessary rights to use the Weekly Reader name and content in
the Company's programs.

            8.8 Voting Agreement. The stockholders of the Company shall have
entered into the Voting Agreement attached hereto as Exhibit G.

         9. Covenants of the Company. The Company covenants and agrees as
follows:

            9.1 Access. During the period from the date of this Agreement to the
earlier of the termination of this Agreement and the Option Closing and except
as required pursuant to any confidentiality agreement or similar agreement or
arrangement to which the Company is a party (in which case the Company shall use
all commercially reasonable efforts to provide acceptable alternative
arrangements, not in violation of such agreement or arrangement, for disclosure
to WRC or its advisors) or pursuant to applicable law, WRC and each of its
employees and other representatives shall hold in confidence all such
confidential information as required and in accordance with the Mutual
Nondisclosure Agreement previously executed between WRC and the Company (the
"Confidentiality Agreement"). The Company shall give to WRC and its employees,
counsel, accountants, investment bankers and other necessary representatives and
advisors (collectively, "Representatives") reasonable access upon reasonable
prior notice to all offices and other facilities used by the Company and to all
books, records, agreements, documents, information, personnel, data and files to
the extent relating to the Company, and during such period shall furnish to the
Representatives any information concerning the Company as they may reasonably
request (including, to the extent practicable, by electronic means). No
investigation by WRC and no other receipt of information by WRC shall operate as
a waiver or otherwise affect any representation or warranty of the Company or
any covenant or other provision in this Agreement.

            9.2 Conduct of Business. Except for matters set forth in Section 9.2
of Company Disclosure Letter or otherwise expressly permitted by this Agreement,
during the period from the date of this Agreement to the earlier of (i) the
termination of this Agreement, (ii) the Option Closing and (iii) the termination
of the WRC Option pursuant to Section 2.3, the Company shall conduct its
business in the usual, regular and ordinary course in substantially the same
manner as previously conducted and use all reasonable best efforts to maintain
its assets in good operating order and condition, preserve intact its current
business organization, keep available the services of its current officers and
employees and keep its relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with them to the end
that its goodwill and ongoing business shall not be materially impaired at the
Option Closing. In addition, and without limiting the generality of the
foregoing, except for matters set forth in Section 9.2 of the Company Disclosure
Letter or otherwise expressly permitted by this Agreement, from the date of this
Agreement to the earlier of (i) the termination of this Agreement, (ii) the
Option Closing and (iii) the termination of the WRC Option pursuant to Section
2.3, the Company shall not do any of the following without the prior written
consent of WRC:

                                                                            -25-
<PAGE>

                (a) (i) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, (ii) split, combine
or reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities; except for
repurchases of up to $25,000 in stock, in the aggregate, upon the termination of
services of an employee, consultant or other service provider to the Company at
the price originally paid by such service provider for such stock (in accordance
with the terms of the agreement under which such stock was issued);

                (b) issue, deliver, sell or grant (i) any shares of its capital
stock, (ii) any voting securities, (iii) securities convertible into or
exchangeable for, or any options, warrants or rights to acquire, any such
shares, voting securities or convertible or exchangeable securities that exceed,
in each case and collectively, an aggregate of 750,000 shares (except as
provided in the Company's capitalization table attached as Exhibit A to the
Company Disclosure Letter); provided, however, that to the extent that such
shares may be issued, delivered or sold pursuant to this Section 9.2(b), such
shares must be issued, delivered or sold in a manner which does not cause an
adjustment to the Conversion Price (as defined in the Certificate) of the Series
C Preferred or (iv) any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock-based performance units;

                (c) amend its Certificate or Bylaws in a manner that adversely
affects the ability of the Company or WRC to consummate the Option Closing;

                (d) adopt or amend in any material respect any employee benefit
plan or enter into any collective bargaining agreement or other Contract with
any labor organization, union or association, except in each case as required by
Applicable Law;

                (e) grant to any officer or employee any material increase in
compensation or benefits; except for increases of up to 15% in the aggregate in
the payroll of the Company;

                (f) incur or assume any liabilities, obligations or indebtedness
for borrowed money or guarantee any such liabilities, obligations or
indebtedness; provided, however, after a termination or suspension of the
Payments, Continued Funding or Post-Exercise Funding pursuant to Section 1.7,
the Company may, beginning five days after such termination or suspension, incur
indebtedness for borrowed money up to the amount of such terminated or suspended
Payment, Continued Funding or Post-Exercise Funding.

                                                                            -26-
<PAGE>

                (g) permit, allow or suffer any asset to become subjected to any
Lien of any nature whatsoever that would have been required to be set forth in
Section 5.9 or 5.10 of Company Disclosure Letter if existing on the date of this
Agreement;

                (h) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value;

                (i) pay, loan or advance any amount to, or sell, transfer or
lease any of its assets to, or enter into any agreement or arrangement with, any
of the Company's affiliates;

                (j) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any business or
business organization or otherwise acquire any assets except assets that are
acquired in the ordinary course of the Company's business consistent with past
practice and that are not material, individually or in the aggregate, to the
Company;

                (k) make or incur any capital expenditures that, in the
aggregate, are in excess of $250,000;

                (l) sell, lease, license or otherwise dispose of any of its
assets, except inventory sold in the ordinary course of business and consistent
with past practice;

                (m) enter into any lease of real property;

                (n) modify, amend, terminate or permit the lapse of the Lease or
other material agreement relating to, real property or modify, amend or
terminate any Company Contract, except in the ordinary course of business and in
a manner consistent with past practice or contemplated in the 12-Month Budget or
Monthly Budget as provided in accordance with Section 9.4;

                (o) enter into any Contract except Contracts that are (i)
entered into in the ordinary course of business, (ii) consistent with past
practice and (iii) contemplated in the 12-Month Budget or Monthly Budget as
provided in accordance with Section 9.4;

                (p) make or change any material Tax election or settle or
compromise any material Tax liability; or

                (q) authorize any of, or commit or agree to take, whether in
writing or otherwise, to do any of, the foregoing actions.

                                                                            -27-
<PAGE>

            9.3 Advise of Changes. The Company shall promptly advise WRC in
writing of the occurrence of any matter or event that is material to the
business, assets, condition (financial or otherwise), prospects, working
capital, liabilities or results of operations of the Company, including material
breaches of WRC's obligations under this Agreement.

            9.4 Use of Proceeds.

                (a) At the Initial Closing, the Company shall provide WRC with a
budget mutually acceptable to WRC and the Company (the "12-Month Budget") for
the use of proceeds to be received by the Company from WRC pursuant to this
Agreement ("Proceeds") detailing the projected monthly departmental use of
Proceeds (excluding payment of legal fees pursuant to Section 16.10). The
12-Month Budget may be revised upon the mutual consent of WRC and the Company.

                (b) At least seven (7) days prior to each Closing Date
subsequent to the Initial Closing Date, the Company shall prepare and submit to
WRC a departmental budget detailing the proposed use of Proceeds for the 30-day
period following such Closing (the "Monthly Budget").

                (c) To the extent that the budget for any department on the
Monthly Budget (i) deviates from the amount allocated to that month on the
12-Month Budget by more than 20% and (ii) exceeds the amount allocated to that
month on the 12-Month Budget by more than $50,000, WRC shall have the right to
object to such budgeted item.

                (d) WRC agrees that if objection to a budget item pursuant to
Section 9.4(c) is not given within five (5) days after WRC's receipt of the
Monthly Budget, the Company may assume approval and operate within the proposed
Monthly Budget. The Company shall eliminate or revise any item in a Monthly
Budget which is disapproved by WRC in a timely fashion pursuant to this Section
9.4(d) to the extent necessary to obtain WRC's approval.

                (e) The Monthly Budgets, after approval or lack of objection
within five (5) days of receipt by WRC, shall be used by the Company as a guide
for the use of Proceeds by the Company. Any changes to such approved Monthly
Budgets for which WRC would have had a right to object under Section 9.4(c)
above must be approved by WRC.

            9.5 Effectiveness of the Merger Agreement. Upon the Option Exercise,
the execution and delivery of the Merger Agreement shall become effective.

         10. Indemnification.

             10.1 Indemnification. Except as otherwise provided in this Section
10, the Company (the "Indemnifying Party") agrees to indemnify, defend and hold
harmless WRC and its affiliates and its respective officers, directors, agents,
employees, subsidiaries, partners, members and controlling persons (each, an
"Indemnified Party") to the fullest extent permitted by law from and against any
losses or claims thereof (including, without limitation, any claim by a third
party), damages, expenses (including reasonable fees and disbursements of
counsel incurred by the Indemnified Party in any action between the Indemnifying
Party and the Indemnified Party or between the Indemnified Party and any third
party or otherwise) or other liabilities (collectively, "Losses") resulting from
or arising out of (i) any breach of any representation or warranty (it being
understood that for purposes of such right of indemnification, the
representations and warranties of the Company shall be deemed not qualified by
any references therein to materiality generally or to whether or not any breach
would result or could reasonably be expected to result in a Company Material
Adverse Effect) in this Agreement or in any certificate delivered by or on
behalf of the Company hereunder, or (ii) any breach by the Company of any
covenant or agreement of the Company in this Agreement. In connection with the
obligation of the Indemnifying Party to indemnify for Losses as set forth above,
the Indemnifying Party shall, contingent upon presentation of appropriate
invoices containing reasonable detail, reimburse each Indemnified Party for all
such expenses (including reasonable fees, disbursements and other charges of
counsel incurred by the Indemnified Party in any action between the Indemnifying
Party and the Indemnified Party or between the Indemnified Party and any third
party or otherwise), provided, however, that the Indemnifying Party shall not be
required to indemnify or hold harmless any person, and shall not have any
liability, under this Section 10 unless the aggregate of all Losses relating
thereto for which Indemnifying Party would, but for this proviso, be liable
exceeds on a cumulative basis an amount equal to $75,000, and then only to the
extent of any such excess. The Indemnifying Party shall not have liability for
any Losses in the aggregate in excess of the aggregate of the CompassLearning
Payment, the Company Legal Fees, the Payments, the Continued Funding and the
Post-Exercise Funding paid by WRC to the Company.

                                                                            -28-
<PAGE>

             10.2 Adjustment For Indemnification by the Company. Any amount
payable by the Indemnifying Party to WRC pursuant to Section 10.1 shall be
adjusted in order to reflect the size of WRC's ownership share of the Company
whereby the adjusted amount payable by the Company shall equal the amount
initially payable before adjustment by the Company divided by (1-x), where x
represents the size of WRC's ownership share of the Company expressed as the
fraction of the total Capital Stock owned by WRC.

             10.3 Procedures Relating to Indemnification. Each Indemnified Party
shall, promptly after the receipt of notice of the commencement of any claim
against such Indemnified Party by a third party in respect of which indemnity
may be sought from the Indemnifying Party hereunder, notify the Indemnifying
Party in writing of the commencement thereof. The omission or delay of any
Indemnified Party to so notify the Indemnifying Party of any such action shall
not relieve the Indemnifying Party from any liability which it may have to such
Indemnified Party (a) other than pursuant to this Section 10 or (b) under this
Section 10 unless, and only to the extent that, such omission results in the
Indemnifying Party's forfeiture of rights or defenses. In case any such claim
shall be brought against any Indemnified Party by a third party, and the
Indemnified Party shall notify the Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled to participate in the defense
thereof, and if it so chooses, to assume the defense thereof at its own expense,
upon written confirmation that such Indemnifying Party agrees to indemnify the
Indemnified Party for any Losses arising out of or in connection with such
claim, with counsel satisfactory to such Indemnifying Party in its reasonable
judgment; provided, however, that any Indemnified Party may retain separate
counsel to participate in such defense at its own expense, and in the event the
Indemnifying Party does not provide the written confirmation required by this
sentence, the Indemnified Party may retain counsel to defend such claim and
shall be entitled to reimbursement of the reasonable fees and disbursements of
such counsel in accordance with this Section 10. Notwithstanding the foregoing,
in any claim in which both the Indemnifying Party, on the one hand, and an
Indemnified Party, on the other hand, are, or are reasonably likely to become, a
party, such Indemnified Party shall have the right to employ separate counsel
and to control its own defense of such claim if, in the opinion of counsel to
such Indemnified Party, either (x) one or more defenses are available to the
Indemnified Party that are not available to the Indemnifying Party or (y) a
conflict or potential conflict exists between the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that the Indemnifying
Party (i) shall not be liable for the reasonable fees and expenses of more than
one counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified
Parties for all of such reasonable fees and expenses of such counsel incurred in
any action contemplated in (x) or (y) above between the Indemnifying Party and
the Indemnified Parties or between the Indemnified Parties and any third party,
as such expenses are incurred. The Indemnifying Party agrees that it will not,
without the prior written consent of the Indemnified Parties, settle, compromise
or consent to the entry of any judgment in any pending or threatened claim
relating to the matters contemplated hereby (if any Indemnified Party is a party
thereto or has been threatened to be made or would reasonably be expected to be
made a party thereto) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising or
that may arise out of such claim. The Indemnifying Party shall not be liable for
any settlement of any claim effected against an Indemnified Party without its
written consent. The rights accorded to an Indemnified Party hereunder shall be
in addition to any rights that any Indemnified Party may have by separate
agreement (including, without limitation, the Investors' Rights Agreement dated
as of the date hereof among the Company and certain investors listed therein) or
pursuant to the federal securities laws.

                                                                            -29-
<PAGE>

             Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any claim brought against any Indemnified
Party by a third party (and shall be liable for the reasonable fees and expenses
of counsel incurred by the Indemnified Party in defending such claim) if such
claim seeks an order, injunction or other equitable relief or relief for other
than money damages against the Indemnified Party that the Indemnified Party
reasonably determines, after conferring with its counsel, cannot be separated
from any related claim for money damages. If such equitable relief or other
relief portion of such claim can be so separated from that for money damages,
the Indemnifying Party shall be entitled to assume the defense of the portion
relating to money damages.

             In the event any Indemnified Party should have an indemnification
claim against the Indemnifying Party under this Section 10 that does not involve
a claim by a third party being asserted against or sought to be collected from
such Indemnified Party, the Indemnified Party shall deliver notice of such claim
to the Indemnifying Party. The failure by an Indemnified Party to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to such Indemnified Party, except to the extent that the
Indemnifying Party has been actually and materially prejudiced by such failure.
If the Indemnifying Party does not notify the Indemnified Party within ten (10)
business days following its receipt of such notice that the Indemnifying Party
disputes such claim, such claim specified by the Indemnified Party in such
notice shall be conclusively deemed a liability of the Indemnifying Party under
this Section 10 and the Indemnifying Party shall pay the amount of such
liability to the Indemnified Party on demand, or in the case of any notice in
which the amount of the claim is estimated, on such later date when the amount
of such claim is finally determined. If the Indemnifying Party disputes its
liability with respect to such claim in a timely manner, the Indemnified Party
and the Indemnifying Party shall proceed in good faith to negotiate a resolution
of such dispute.

                                                                            -30-
<PAGE>

             10.4 Reduction of Payments, Continued Funding and Post-Exercise
Funding. WRC is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply all or a portion of the
Payments, Continued Funding or Post-Exercise Funding at any time held against
any indemnification obligation set forth in any claim delivered pursuant to this
Section 10 by any Indemnified Party specified in Section 10.1. The rights of any
Indemnified Party under the preceding sentence are in addition to any other
rights and remedies (including other rights of setoff) that such person may
have.

         11. Additional Agreements.

             11.1 Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement, each party shall use all reasonable best efforts to cause
each Closing to occur, including using its reasonable best efforts to obtain all
material consents, permits, authorizations and approvals of, and to make all
necessary filings, notifications or registrations with, all Governmental
Entities and other persons which are necessary for the consummation of the
transactions contemplated by the Agreements, provided however that the foregoing
shall not be deemed to require WRC or the Company to expend a material amount of
funds to comply with the foregoing.

             11.2 Frustration of Closing Conditions. Neither WRC nor the Company
may rely on the failure of any condition set forth in Sections 7 and 8 to be
satisfied if such failure was caused by such party's failure to act in good
faith or to use its reasonable efforts, as and to the extent required by Section
11.1, to cause each Closing to occur.

         12. Termination.

             12.1 Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Option Closing Date:

                  (i) by mutual written consent of the Company and WRC;

                  (ii) by WRC upon written notice to the Company if any of the
conditions to any Closing set forth in Section 7 shall have become incapable of
fulfillment and shall not have been waived in writing by WRC;

                                                                            -31-
<PAGE>

                  (iii) by the Company upon written notice to WRC if any of the
conditions to any Closing set forth in Section 8 shall have become incapable of
fulfillment and shall not have been waived in writing by the Company;

                  (iv) by either the Company or WRC upon written notice to the
other such party if the Initial Closing does not occur on or prior to May 31,
2001; provided, however that the right to terminate this Agreement pursuant to
this Section 12.1(iv) shall not be available to any party hereto if the failure
to consummate the Initial Closing by such date was caused by the breach of this
Agreement by such party; or

                  (v) (a) by the Company, if WRC breaches or fails to perform in
any respect any of its representations, warranties or covenants contained in
this Agreement and such breach or failure to perform (x) would give rise to the
failure of a condition set forth in Section 8.1 or Section 8.3 and (y) cannot be
or has not been cured within 30 days after such breach or failure to perform or
(b) by WRC, if the Company breaches or fails to perform in any respect any of
its representations, warranties or covenants contained in this Agreement and
such breach or failure to perform (1) would give rise to the failure of a
condition set forth in Section 7.1 or Section 7.2 and (2) cannot be or has not
been cured within 30 days after such breach or failure to perform; or

                      (b) by either the Company or WRC if any Injunction
granting any of the relief set forth in clauses (i) through (iv) of Section
7.12(a) shall be in effect and shall have become a final non-appealable final
order, decree or ruling, provided that the party seeking to terminate this
Agreement pursuant to this clause shall have used reasonable efforts to prevent
the entry of and to remove such Injunction.

             12.2 Other Agreements; Material To Be Returned.

                  (a) In the event that this Agreement is terminated by the
Company or WRC pursuant to Section 12.1, the transactions contemplated by the
Agreements shall be terminated, without further action by any party hereto, and
each of the Company and WRC shall immediately enter into, or cause its relevant
affiliates to enter into, written consents to terminate each of the other
agreements; provided, however that the License Agreement shall be governed by
sections 3.8 and 12.1 thereof in the event that this Agreement is terminated and
the Distribution Agreement shall not be terminated or affected by this Section
12.2(a).

                  (b) Furthermore, in the event that this Agreement is
terminated as provided herein:

                      (i) WRC shall return all documents and other material
received from the Company or any of its respective representatives relating to
the Purchase or the Option or the transactions contemplated by the Agreements,
whether obtained before or after the execution of this Agreement, to the Company
or, at its option, destroy such documents and material;

                                                                            -32-
<PAGE>

                      (ii) WRC agrees that all confidential information received
by WRC or its representatives with respect to the Purchase or the Option or the
Agreements or the transactions contemplated thereby shall be treated in
accordance with the Confidentiality Agreement, which shall remain in full force
and effect notwithstanding the termination of this Agreement;

                      (iii) The Company shall return all documents and other
material received from WRC or any of its representatives relating to WRC or the
transactions contemplated by the Agreements, whether obtained before or after
the execution of this Agreement, to WRC, or at its option, destroy such
documents and material; and

                      (iv) The Company agrees that all confidential information
received by the Company or its representatives with respect to WRC or the
Agreements or the transactions contemplated thereby shall be kept confidential
notwithstanding the termination of this Agreement.

             12.3 Effect of Termination. Upon the termination hereof, this
Agreement shall become void and of no further force and effect, except for the
provisions of (i) Sections 1.5 and 1.6 relating to the issuance of Shares to
WRC, (ii) Sections 5.13 and 6.4 relating to brokers, (iii) Section 13.10
relating to certain expenses and (iv) this Section 12. Nothing in this Section
12 shall be deemed to release either party from any liability for any breach by
such party of the terms and provisions of this Agreement or to impair the right
of any party to compel specific performance by any other party of its
obligations under this Agreement.

         13. Miscellaneous.

             13.1 Entire Agreement; Successors and Assigns. The Agreements
constitute the entire agreement between the Company and WRC relative to the
subject matter hereof. Any previous agreement between the Company and WRC is
superseded by this Agreement. Subject to the exceptions specifically set forth
in this Agreement, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective executors, administrators, heirs,
successors and assigns of the parties.

             13.2 Transfers and Assignments. Neither this Agreement nor any
rights or obligations hereunder may be assigned or otherwise transferred by any
party (including by operation of law) without the prior written consent of the
other parties hereto, and any assignment or transfer without such consent shall
be null and void and of no effect.

             13.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the laws that might otherwise govern under applicable principles of conflict
of laws thereof.

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

                                                                            -33-
<PAGE>

             13.5 Headings. The headings of the sections of this Agreement are
for convenience and shall not by themselves determine the interpretation of this
Agreement.

             13.6 Notices. Any notice required or permitted hereunder shall be
given in writing and shall be conclusively deemed effectively given (i) three
days after sending by first class U.S. mail postage prepaid, (ii) upon personal
delivery or (iii) one day after the sending if sent by commercial overnight
courier addressed to the Company at 801 North Brand Boulevard, Suite 680,
Glendale, CA 91203, Attention: Brian A. Napack, President with a copy to Wilson
Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, CA 94304,
Attention: Michael J. Danaher, and if to WRC, at 512 Seventh Avenue, 21st Floor,
New York, NY 10016, Attention: Charles Laurey, Director, with a copy to Cravath,
Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, NY 10019-7475,
Attention: Julie T. Spellman or at such other address as the Company or WRC may
designate.

             13.7 Survival of Representations and Warranties. The warranties,
representations and covenants of the parties contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
each Closing, and such warranties, representations and covenants of the Company
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of WRC; provided, however, that such representations and
warranties need only be accurate as of the date of such execution and delivery
and as of each Closing.

             13.8 Amendment of Agreement. Any provision of this Agreement may be
amended, waived or terminated by a written instrument signed by the Company and
WRC.

             13.9 Finders Fees. Each of the Company and WRC will indemnify the
other against all liabilities incurred by the indemnifying party with respect to
claims related to investment banking or finders fees in connection with the
transactions contemplated by this Agreement, arising out of arrangements between
the party asserting such claims and the indemnifying party, and all costs and
expenses (including reasonable fees of counsel) of investigating and defending
such claims.

             13.10 Expenses. Each of the Company and WRC shall bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, unless the parties mutually agree otherwise;
provided, however, that WRC shall pay to the Company the Company Legal Fees at
the Initial Closing. At the Initial Closing, the Company shall, out of Proceeds
received at the Initial Closing, pay (by check or wire transfer) the Company
Legal Fees.

             13.11 Aggregation of Stock. All shares held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.

             13.12 Severability. If any provision of this Agreement is held to
be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.

                                                                            -34-
<PAGE>

             13.13 Attorneys' Fees and Expenses. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party is
entitled.

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

             13.15 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Delaware state court or any
Federal court located in the State of Delaware, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal jurisdiction
of any Delaware state court or any Federal court located in the State of
Delaware in the event any dispute arises out of this Agreement or any
transaction contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, (c) agrees that it will not bring any action relating
to this Agreement or any transaction contemplated by this Agreement in any court
other than any Delaware state court or any Federal court sitting in the State of
Delaware and (d) waives any right to trial by jury with respect to any action
related to or arising out of this Agreement or any transaction contemplated by
this Agreement.

             13.16 Solicitation of Employees. The parties agree that without the
prior written consent of the parties, and until the later of the date that is
(i) 12 months following the termination of this Agreement or (ii) 12 months
following the Initial Closing Date if there is an Option Exercise, neither party
shall either directly or indirectly solicit, induce, recruit or encourage any of
the other party's employees to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage or take away
employees of the other party; provided, however that the foregoing provision
shall not prevent either party from employing any such person who contacts a
party hereto on his or her own initiative without any direct or indirect
solicitation from such party, and provided further that the foregoing provision
shall not prohibit (a) any advertisement or general solicitation (or any hiring
thereto) that is not specifically targeted at such persons or (b) the
solicitation or employment of any person who is not employed by a party hereto
on the date the other party first solicits him or her.

                                                                            -35-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

THE COMPANY:                          THINKBOX INC.
                                      a Delaware corporation

                                      By:
                                          --------------------------------------
                                          Brian A. Napack
                                          President and Chief Executive Officer

  [Signature Page to ThinkBox Inc. Series C Preferred Stock Purchase Agreement]

<PAGE>

WRC:
                                      WRC MEDIA INC.
                                      a Delaware corporation

                                      By:
                                          --------------------------------------
                                          Charles L. Laurey
                                          Secretary

  [Signature Page to ThinkBox Inc. Series C Preferred Stock Purchase Agreement]

<PAGE>

                                    EXHIBIT A

                              Schedule of Payments

<PAGE>

                                    EXHIBIT B

            Second Amended and Restated Certificate of Incorporation

<PAGE>

                                    EXHIBIT C

             First Amended and Restated Investors' Rights Agreement

<PAGE>

                                    EXHIBIT D

     First Amended and Restated Right of First Refusal and Co-Sale Agreement

<PAGE>

                                    EXHIBIT E

                                  Legal Opinion

<PAGE>

                                    EXHIBIT F

                             Option Payment Schedule

<PAGE>

                                    EXHIBIT G

                     Irrevocable Proxy and Voting Agreement

<PAGE>

                                    EXHIBIT H

                                License Agreement

<PAGE>

                                    EXHIBIT I

                       Amendment to Distribution Agreement

<PAGE>

                                    EXHIBIT J

                                Merger Agreement

<PAGE>

                                    EXHIBIT K

 Form of Confidential Information and Intellectual Property Assignment Agreement

<PAGE>

                                    EXHIBIT L

                 Consent Solicitation and Information Statement<PAGE>

                                                                   EXHIBIT 10.19
================================================================================

                          AGREEMENT AND PLAN OF MERGER

                            Dated as of May 9, 2001,

                                     Among

                                WRC MEDIA INC.,

                              CU ACQUISITION, INC.

                                      And

                                  CHILDU, INC.

================================================================================
<PAGE>

                               TABLE OF CONTENTS

                                      Page

                                    ARTICLE I
                                   The Merger

SECTION 1.01. The Merger ....................................................  2
SECTION 1.02. Closing .......................................................  2
SECTION 1.03. Effective Time ................................................  2
SECTION 1.04. Effect ........................................................  2
SECTION 1.05. Certificate of Incorporation and By-laws ......................  2
SECTION 1.06. Directors .....................................................  3
SECTION 1.07. Officers ......................................................  3

                                   ARTICLE II

                       Effect on the Capital Stock of the
               Constituent Corporations; Exchange of Certificates

SECTION 2.01. Effect on Capital Stock .......................................  3
SECTION 2.02. Issuance of Parent Common Stock ...............................  7

                                   ARTICLE III

                  Representations and Warranties of the Company

SECTION 3.01. Organization, Standing and Power .............................   9
SECTION 3.02. Equity Interests; Subsidiaries ...............................   9
SECTION 3.03. Capital Structure ............................................  10
SECTION 3.04. Authority; Execution and Delivery; ...........................  10
              Enforceability
SECTION 3.05. No Conflicts; Consents .......................................  11
SECTION 3.06. Financial Statements; Undisclosed
              Liabilities;
              Absence of Changes ...........................................  12
SECTION 3.07. Title to Properties ..........................................  13
SECTION 3.08. Intellectual Property ........................................  13

<PAGE>
                                                                               2

SECTION 3.09. Contracts ...................................................   15
SECTION 3.10. Permits .....................................................   17
SECTION 3.11. Compliance with Applicable Laws .............................   18
SECTION 3.12. Taxes .......................................................   18
SECTION 3.13. Litigation ..................................................   19
SECTION 3.14. Benefit Plans ...............................................   19
SECTION 3.15. Employee and Labor Matters ..................................   19
SECTION 3.16. Insurance ...................................................   20
SECTION 3.17. Transactions with Affiliates ................................   20
SECTION 3.18. Brokers; Schedule of Fees and Expenses ......................   20
SECTION 3.19. Effect of Transaction .......................................   20
SECTION 3.20. Disclosure ..................................................   21
SECTION 3.21. Sufficiency of Assets .......................................   21

                                   ARTICLE IV
                Representations and Warranties of Parent and Sub

SECTION 4.01. Organization, Standing and Power ............................   21
SECTION 4.02. Capital Structure ...........................................   22
SECTION 4.03. Authority; Execution and Delivery; and Enforceability .......   22
SECTION 4.04. No Conflicts; Consents ......................................   23
SECTION 4.05. Activities of Sub ...........................................   23
SECTION 4.06. Financial Statements; Undisclosed Liabilities;
                Absence of Changes ........................................   24

SECTION 4.07. Brokers, Schedule of Fees and Expenses ......................   24
SECTION 4.08. Disclosure ..................................................   24

                                    ARTICLE V
                    Covenants Relating to Conduct of Business

SECTION 5.01. Conduct of Business .........................................   25
SECTION 5.02. Advise of Changes ...........................................   27

<PAGE>

                                                                               3
                                   ARTICLE VI

                              Additional Agreements

SECTION 6.01. Shareholder Approval ........................................   27
SECTION 6.02. Access to Information .......................................   27
SECTION 6.03. Commercially Reasonable Efforts .............................   27
SECTION 6.04. Company Stock Options .......................................   28
SECTION 6.05. Fees and Expenses ...........................................   28
SECTION 6.06. Public Announcements ........................................   28

                                   ARTICLE VII

                              Conditions Precedent

SECTION 7.01. Conditions to Each Party's Obligation To Effect The Merger ..   29
SECTION 7.02. Conditions to Obligations of Parent and Sub .................   29
SECTION 7.03. Conditions to Obligations of the Company ....................   31

                                  ARTICLE VIII

                        Termination, Amendment and Waiver

SECTION 8.01. Termination .................................................   32
SECTION 8.02. Effect of Termination .......................................   33
SECTION 8.03. Amendments and Waivers ......................................   33

                                   ARTICLE IX

                               General Provisions

SECTION 9.01. Notices .....................................................   33
SECTION 9.02. Definitions .................................................   35
SECTION 9.03. Interpretation; Disclosure Letters ..........................   35
SECTION 9.04. Severability ................................................   35
SECTION 9.05. Counterparts ................................................   35
SECTION 9.06. Entire Agreement; No Third-Party Beneficiaries ..............   36

<PAGE>
                                                                               4

                                                                               4
SECTION 9.07. Governing Law ...............................................   36
SECTION 9.08. Assignment ..................................................   36
SECTION 9.09. Enforcement .................................................   36

EXHIBITS

EXHIBIT A      Contingent Share Calculation
EXHIBIT B      Fair Market Value Calculation
EXHIBIT C      Form of Stockholders Agreement

<PAGE>

                  AGREEMENT AND PLAN OF MERGER dated as of May 9, 2001, among
WRC MEDIA INC., a Delaware corporation ("Parent"), CU ACQUISITION, INC., a
Florida corporation ("Sub"), and a wholly owned subsidiary of Parent, and
CHILDU, INC., a Florida corporation (the "Company").

                  WHEREAS the Board of Directors of the Company has approved the
merger (the "Merger") of Sub into the Company on the terms and subject to the
conditions set forth in this Agreement;

                  WHEREAS pursuant to the Merger each issued share of common
stock, par value $.01 per share, of the Company (the "Company Common Stock") and
preferred stock, par value $.01 per share, of the Company (the "Company
Preferred Stock" and, together with the Company Common Stock, the "Company
Capital Stock") not owned directly or indirectly by the Company shall be
converted into a contingent right to receive a number of shares of common stock
of Parent (the "Parent Common Stock") to be determined, subject to the terms and
conditions of Section 2.01(c), including the recognition by the Company of
certain levels of Revenues (as defined herein) for 2001;

                  WHEREAS following the Merger, in connection with the
contingent right to receive Parent Common Stock as set forth above, Parent has
agreed to provide funding to the Company for up to $5,871,907 of the Company's
existing or committed obligations and liabilities;

                  WHEREAS concurrently within the Merger, Parent and all the
holders (the "Group One Lenders") of the promissory notes (the "Group One
Notes") dated August 23, 1999, under the Loan Agreement dated August 23, 1999
(as amended) by and between the individuals, trust and limited partnership party
thereto and the Company are entering into an exchange agreement (the "Group One
Exchange Agreement") pursuant to which Parent will exchange (the "Group One Note
Exchange") 162,500 shares of Parent Common Stock for all the outstanding Group
One Notes;

                  WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.

<PAGE>
                                                                               2

                  NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                                   The Merger

                  SECTION 1.01. The Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Florida
Business Corporation Act (the "FBCA"), Sub shall be merged with and into the
Company at the Effective Time (as defined in Section 1.03). At the Effective
Time, the separate corporate existence of Sub shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation"). At the
election of Parent, any direct or indirect subsidiary of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties shall execute an appropriate amendment to this Agreement in order to
reflect the foregoing. The Merger, the issuance by Parent of Parent Common Stock
in connection with the Merger (the "Share Issuance"), the Group One Note
Exchange and the other transactions contemplated by this Agreement are referred
to in this Agreement collectively as the "Transactions".

                  SECTION 1.02. Closing. The closing (the "Closing") of the
Merger shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York 10019 at 10:00 a.m. on the fourth business day
following the satisfaction (or, to the extent permitted by Law, waiver by all
parties) of the conditions set forth in Article VII. The date on which the
Closing occurs is referred to in this Agreement as the "Closing Date".

                  SECTION 1.03. Effective Time. Prior to the Closing, the
Company shall prepare, and on the Closing Date or as soon as practicable
thereafter, the Company shall file with the Secretary of State of the State of
Florida, a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the FBCA and shall make all other filings or recordings required
under the FBCA. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with such Secretary of State, or at such
other time as Parent and the Company shall agree and specify in the Certificate
of Merger (the time the Merger becomes effective being the "Effective Time").

                  SECTION 1.04. Effect. The Merger shall have the effect set
forth in Section 1106 of the FBCA.

                  SECTION 1.05. Certificate of Incorporation and By-laws. (a)
The Certificate of Incorporation of the Surviving Corporation shall be the
Certificate of Incorporation of the Sub as in effect immediately prior to the
Effective Time until thereafter changed or amended as provided therein or by
applicable Law.

<PAGE>
                                                                               3

                  (b) The By-laws of Sub as in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.

                  SECTION 1.06. Directors. The directors of Sub immediately
prior to the Effective Time shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.

                  SECTION 1.07. Officers. The officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected or appointed and qualified, as the case
may be.

                                   ARTICLE II

                       Effect on the Capital Stock of the
               Constituent Corporations; Exchange of Certificates

                  SECTION 2.01. Effect on Capital Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holder of any
shares of Company Capital Stock or any shares of capital stock of Sub:

                  (a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.

                  (b) Cancelation of Treasury Stock and Parent-Owned Stock. Each
share of Company Capital Stock that is owned by the Company, Parent or Sub shall
no longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and no Parent Common Stock or other consideration shall be
delivered or deliverable in exchange therefor.

<PAGE>
                                                                               4

                  (c) Conversion of Company Capital Stock. (1) Subject to
Sections 2.01(b), 2.01(d), 2.01(e) and 2.02(d), each issued share of Company
Capital Stock shall be converted into and shall be cancelled in exchange for the
right to receive Contingent Shares. "Contingent Shares" mean (i) with respect to
each share of Company Common Stock that number (which may be zero or a fraction)
of fully paid and non-assessable shares of Parent Common Stock with a Fair
Market Value as of the Calculation Date equal to an amount determined pursuant
to Exhibit A hereto (as adjusted pursuant to Section 2.02(h)) and (ii) with
respect to each share of Company Preferred Stock that number (which may be zero
or a fraction) of fully paid and nonassessable shares of Parent Common Stock
with a Fair Market Value as of the Calculation Date equal to $2.00, in each case
which shall be issued by Parent promptly following the Calculation Date (as
defined below); provided that if the Contingent Consideration (as defined below)
is less than $7,000,000, no Contingent Shares shall be issued with respect to
any shares of Company Capital Stock. The right of each holder of record of such
shares of Company Capital Stock, as of immediately prior to the Effective Time
(a "Contingent Holder"), to receive Contingent Shares pursuant to this Section
2.01(c) and cash in lieu of fractional shares of Parent Common Stock as
contemplated by Section 2.02(d) is referred to as "Merger Consideration". As of
the Effective Time, all such shares of Company Capital Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each Contingent Holder shall cease to have any rights with respect to
such shares of Company Capital Stock held by it, or with respect to the
certificate or certificates (the "Certificates") that represent such shares of
Company Capital Stock, except the right to receive Contingent Shares solely to
the extent provided in this Section 2.01(c) and only to the extent such
Certificate or Certificates have been surrendered in accordance with Section
7.02(i), without interest.

                  (2) "Contingent Consideration" means the amount set forth in
the following table that corresponds to the Revenues of the Company for its
fiscal year ending December 31, 2001:

                                       Contingent
              Revenues                Consideration
              --------                -------------

         less than $5,000,000          $         0
         $5,000,000 to $6,999,999      $ 7,000,000
         $7,000,000 to $8,999,999      $10,000,000
         $9,000,000 to $10,999,999     $12,500,000
         $11,000,000 and greater       $15,000,000

<PAGE>
                                                                               5

                  (3) For purposes of this Section 2.01(c), "Revenues" means the
operating revenues of the Company for its fiscal year ending December 31, 2001,
determined in accordance with generally accepted accounting principles ("GAAP")
applied using the accrual method of revenue recognition and otherwise in the
manner Parent applies such principles to its operations. Parent shall, within 60
days after December 31, 2001, obtain from Arthur Andersen & Co. LLP ("AA") (or
such other firm of independent public accountants as shall at the time be
retained to audit the books and accounts of Parent) a written statement of such
firm setting forth the Revenues of the Company for such year and stating that
such Revenues have been determined in accordance with the provisions of this
Section 2.01(c). Such determination shall be final for all purposes and the date
of such determination by AA or such other firm shall be referred to herein as
the "Calculation Date". Parent shall make such written statement available to
each Contingent Holder upon its written request to Parent. In acting hereunder,
AA or such other firm shall be entitled to the privileges and immunities of
arbitrators.

                  (4) The Company agrees that after the Closing Date, Parent and
its subsidiaries and affiliates (other than the Company) (i) shall have the
right (but not the obligation) to provide products, properties, goods or
services to, or obtain products, properties, goods or services from, the Company
and to engage in other transactions with the Company on terms (A) no less
favorable than those on which they or the Company would engage in such
transactions with third parties or (B) which Parent believes in good faith will
not impair the Company's ability to obtain Revenues of not less than
$11,000,000; (ii) shall not have any obligation to provide capital, funds or
loans to the Company except as expressly provided in Section 2.01(c)(5); and
(iii) shall have the right to pursue their business operations and objectives in
such manner as they shall determine to be in their best interests, whether or
not such operations and objectives may be viewed as competitive with those of
the Company. The Company understands and agrees that Parent and its subsidiaries
and affiliates shall have no obligation to take any action or make any effort
inconsistent with their customary standards of business practice, or to
compromise, limit or restrict any of their business objectives or operations.
The Company and Parent further understand and agree that the profitability of
the Company following the Closing is subject to business risks and competition
from third parties, including forces beyond the control of any party hereto, and
that there is contained in this Agreement no assurance whatsoever as to the
amount of Revenues that the Company will have for its fiscal year ended December
31, 2001. Notwithstanding the foregoing, in the event that Parent, taken
collectively with its subsidiaries as a single combined business, (i) ceases
selling the Company's products or (ii) materially reduces or restricts the
territories within which the Company's products may be sold, in each case, so
that the ability of the Company to obtain the target Revenues is materially
impaired (any such event being referred to herein as an "Acceleration Event"),
then the amount of the Contingent Consideration will be determined based on the
Revenues for the fiscal year ended December 31, 2001 up to the time of the
Acceleration Event, on an annualized basis over a 365 day year, and Revenues
shall be determined pursuant to Section 2.01(c)(3) not later than, and the
Calculation Date shall be, not later than 60 days after the end of the month in
which the Acceleration Event occurred.

<PAGE>
                                                                               6

                  (5) Parent agrees to make available to the Company following
the Closing Date funding as needed by the Company on or prior to December 31,
2001 in an amount up to $5,871,907 (increased by any interest payments required
to be made by the Company with respect to such funding prior to December 31,
2001 thereon) to pay any committed obligations set forth on Section 2.01(c)(5)
of the Company Disclosure Letter.

                  (6) "Fair Market Value" means as of any date, the value of the
Parent Common Stock as determined in good faith by the board of directors of the
Parent reasonably consistent with the procedures set forth in Exhibit B hereto.

                  (7) The right to receive the Contingent Shares may not be
transferred in any manner by a Contingent Holder without the written consent of
Parent and any such transfer in violation of this Section 2.01(c)(7) shall be
null and void.

                  (d) Dissenters Rights. Notwithstanding anything in this
Agreement to the contrary, shares ("Dissenters Shares") of Company Capital Stock
that are outstanding immediately prior to the Effective Time and that are held
by any person who is entitled to demand and properly demands payment of the fair
value of such Dissenter Shares pursuant to, and who complies in all respects
with, Section 1302 of the FBCA ("Section 1302") shall not be converted into
Merger Consideration as provided in Section 2.01(c), but rather the holders of
Dissenters Shares shall be entitled to payment of the fair market value of such
Dissenters Shares in accordance with Section 1302; provided, however, that if
any such holder shall fail to perfect or otherwise shall waive, withdraw or lose
the right to receive payment of fair market value under Section 1302, then the
right of such holder to be paid the fair value of such holder's Dissenters
Shares shall cease and such Dissenters Shares shall be deemed to have been
converted as of the Effective Time into, and to have become exchangeable solely
for the right to receive, Merger Consideration as provided in Section 2.01(c).
The Company shall serve prompt notice to Parent of any demands received by the
Company for appraisal of any shares of Company Capital Stock, and Parent shall
have the right to participate in and direct all negotiations and proceedings
with respect to such demands. Prior to the Effective Time, the Company shall
not, without the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands, or agree to do any of the
foregoing.

                  (e) Notwithstanding anything in this Agreement to the
contrary, Parent shall have no obligation to issue any Contingent Shares to a
Contingent Holder unless such Contingent Holder has previously entered into (i)
the Stockholders Agreement (as defined in Section 7.02(f)), and the Stockholders
Agreement is in full force and effect with respect to such Contingent Holder as
the case may be and (ii) any consents, acknowledgments or other instruments as
may be required under the terms of any other stockholders agreement which Parent
is a party to.

<PAGE>
                                                                               7

                  SECTION 2.02. Issuance of Parent Common Stock. (a) Issuance of
Parent Common Stock. Promptly following the Calculation Date, Parent shall
deliver to the Escrow Agent, with respect to each Contingent Holder, a
certificate representing that number, if any, of whole shares of Parent Common
Stock, registered in the name of the Escrow Agent (or its nominee) as agent for
such Contingent Holder, that such Contingent Holder is entitled to receive
pursuant to Section 2.01(c). Until such time as a certificate representing
Parent Common Stock is issued pursuant to Section 2.01(c) to a Contingent Holder
of a surrendered Certificate, such Parent Common Stock shall be deemed not
outstanding and shall not be entitled to vote on any matter.

                  (b) Distributions with Respect to Contingent Shares. Dividends
or other distributions with respect to Parent Common Stock with a record date on
or prior to the Calculation Date shall not be paid to a Contingent Holder with
respect to the shares of Parent Common Stock issuable to such Contingent Holder
pursuant to Section 2.01(c). Subject to applicable Law, there shall be paid to
each holder of a certificate representing whole shares of Parent Common Stock
issued pursuant to Section 2.01(c), without interest, (i) on a date promptly
following the Calculation Date (the "Payment Date"), the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.02(d) and the amount of dividends or
other distributions with a record date after the Calculation Date with respect
to such whole shares of Parent Common Stock to the extent the payment date with
respect to such dividend or distribution is prior to the Payment Date, and (ii)
at the appropriate payment date, the amount of dividends or other distributions
with a record date after the Calculation Date but prior to the date such shares
are issued pursuant to Section 2.01(c) or (e) and a payment date subsequent to
the Payment Date payable with respect to such whole shares of Parent Common
Stock.

                  (c) No Further Ownership Rights in Company Capital Stock. The
Merger Consideration to which Contingent Holders are entitled (solely to the
extent provided in Section 2.01(c)) in exchange for the cancellation of all the
shares of Company Capital Stock outstanding immediately prior to the Effective
Time shall be deemed provided in full satisfaction of all rights pertaining to
such shares of Company Capital Stock. After the Effective Time there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Company Capital Stock that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, any certificates
formerly representing shares of Company Capital Stock are presented to the
Surviving Corporation or the Parent for any reason, they shall be canceled as
provided in this Article II.

<PAGE>
                                                                               8

                  (d) No Fractional Shares. (1) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
conversion of Company Capital Stock pursuant to Section 2.01(c) and such
fractional share interests shall not entitle the owner thereof to vote or to any
rights of a holder of Parent Common Stock. For purposes of this Section 2.02(d),
all fractional shares to which a single record holder would be entitled pursuant
to Section 2.01(c) shall be aggregated and calculations shall be rounded to
three decimal places.

                  (2) In lieu of any such fractional shares, each holder of
Company Capital Stock who would otherwise be entitled to such fractional shares
shall be entitled to an amount in cash, without interest, rounded to the nearest
cent, equal to the product of (A) the amount of the fractional share interest in
a share of Parent Common Stock to which such holder is entitled under Section
2.01(c) (or would be entitled but for this Section 2.02(d)) and (B) the Fair
Market Value of a share of Parent Common Stock.

                  (3) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Company Capital Stock in lieu
of any fractional share interests in Parent Common Stock, Parent shall make
available such amounts, without interest, to the holders of Company Capital
Stock entitled to receive such cash.

                  (e) Parent, solely at its option and expense, may designate a
bank, trust company or other qualified agent to perform on Parent's behalf the
payment of the Merger Consideration in accordance with this Article II.

                  (f) No Liability. None of Parent, Sub or the Company shall be
liable to any person in respect of any shares of Parent Common Stock (or
dividends or distributions with respect thereto) or cash comprising Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law. If any Merger Consideration has not
been claimed by a Contingent Holder prior to three years after the Effective
Time (or immediately prior to such earlier date on which Merger Consideration or
any dividends or distributions with respect to Parent Common Stock as
contemplated by Section 2.02(b)(i) would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section 3.05)), any such
shares, cash, dividends or distributions, to the extent permitted by applicable
law, become the property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled thereto.

                  (g) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable to any holder of Company
Capital Stock pursuant to this Agreement such amounts of cash or securities as
may be required to be deducted and withheld with respect to the making of such
payment under the Internal Revenue Code of 1986, or under any provision of
state, local or foreign tax Law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority, the Surviving Corporation will be
treated as though it withheld an appropriate amount of the type of consideration
otherwise payable pursuant to this Agreement to any holder of Company Capital
Stock, sold such consideration for an amount of cash equal to the fair market
value of such consideration at the time of such deemed sale and paid such cash
proceeds to the appropriate taxing authority.

<PAGE>
                                                                               9

                  (h) Indemnification. The aggregate number of Contingent Shares
payable to the Contingent Holders pursuant to Section 2.01 shall be reduced by a
number of Contingent Shares with a value equal to the amount of any Losses (as
such term is defined in the Stockholders Agreement), with respect to which the
relevant indemnified party or indemnified parties have not been otherwise
reimbursed pursuant to the terms of the Stockholders Agreement. For purposes of
this Section 2.02(h), each Contingent Share shall be deemed to have a value of
$40.00. Any reduction in such aggregate number of Contingent Shares shall be
allocated pro rata among the Contingent Holders.

                                   ARTICLE III

                  Representations and Warranties of the Company

                  The Company represents and warrants to Parent and Sub as
follows:

                  SECTION 3.01. Organization, Standing and Power. The Company is
duly organized, validly existing and in good standing under the laws of the
state of Florida and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and could not reasonably be
expected to have a material adverse effect on (i) the business, prospects,
assets, condition (financial or otherwise) or results of operations of the
Company on the ability of the Company to perform its obligations under this
Agreement or (ii) on the ability of the Company to consummate the Merger and the
other Transactions (a "Company Material Adverse Effect"). The Company is duly
qualified to do business in each jurisdiction where the nature of its business
or its ownership or leasing of its properties make such qualification necessary
or the failure to so qualify has had or could reasonably be expected to have a
Company Material Adverse Effect. The Company has delivered to Parent true and
complete copies of the articles of incorporation of the Company, as amended to
the date of this Agreement (as so amended, the "Company Charter"), and the
By-laws of the Company, as amended to the date of this Agreement (as so amended,
the "Company By-laws").

                  SECTION 3.02. Equity Interests; Subsidiaries. The Company does
not own, directly or indirectly, any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
person. The Company has no subsidiaries.
<PAGE>
                                                                              10

                  SECTION 3.03. Capital Structure. The authorized capital stock
of the Company consists of 125,000,000 shares of Company Common Stock and
25,000,000 shares of Company Preferred Stock. 9,375,000 shares of Company Common
Stock are issued and outstanding. No shares of Company Common Stock are subject
to outstanding stock options and 1,000,000 shares of Company Preferred Stock are
issued and outstanding. Except as set forth above, no shares of capital stock or
other voting securities of the Company are issued, reserved for issuance or
outstanding. All outstanding shares of Company Capital Stock are duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the FBCA, the Company Charter, the Company By-laws or any Contract (as defined
in Section 3.05) to which the Company is a party or otherwise bound. Except for
the ownership interests set forth in Section 3.03 of the letter dated as of the
date of this Agreement, from the Company to Parent and Sub (the "Company
Disclosure Letter"), there are not any bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
holders of Company Common Stock may vote ("Voting Company Debt"). Except as set
forth above or in Section 3.03 of the Company Disclosure Letter, as of the date
of this Agreement, there are not any options, warrants, rights, convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company is a party or by which it is bound
(i) obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity interests
in, or any security convertible or exercisable for or exchangeable into any
capital stock of or other equity interest in, the Company or any Voting Company
Debt, (ii) obligating the Company to issue, grant, extend or enter into any such
option, warrant, call, right, security, commitment, Contract, arrangement or
undertaking or (iii) that give any person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of Company Common Stock. As of the date of this Agreement,
there are not any outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company. Section 3.03 of the Company Disclosure Letter sets forth the name of
each registered holder of Company Capital Stock and the number of shares of
Company Common Stock and/or Company Preferred Stock owned by such holder.

                  SECTION 3.04. Authority; Execution and Delivery;
Enforceability. (a) The Company has all requisite corporate power and authority
to execute and deliver this Agreement and to consummate the Transactions. The
execution and delivery by the Company of this Agreement and the consummation by
the Company of the Transactions have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of the Merger,
to receipt of the Company Shareholder Approval (as defined in Section 3.04(c)).
The Company has duly executed and delivered this Agreement, and this Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

<PAGE>
                                                                              11

                  (b) The Board of Directors of the Company (the "Company
Board") have duly and unanimously adopted resolutions (i) approving this
Agreement, the Merger and the other Transactions, (ii) recommending that the
Company's shareholders adopt this Agreement, and (iii) adopting this Agreement.

                  (c) The only vote of holders of Company securities necessary
to approve and adopt this Agreement and the Merger is the adoption of this
Agreement by the holders of a majority of the outstanding shares of the Company
Common Stock and the holders of a majority of the outstanding shares of the
Company Preferred Stock (the "Company Shareholder Approval").

                  SECTION 3.05. No Conflicts; Consents. (a) Except as set forth
in Section 3.05 of the Company Disclosure Letter, the execution and delivery by
the Company of this Agreement, and the consummation of the Merger and the other
Transactions and compliance with the terms hereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancelation or
acceleration of any obligation or to loss of a material benefit under, or to
increased, additional, accelerated or guaranteed rights or entitlements of any
person under, or result in the creation of any Lien (as defined in Section 3.07)
upon any of the properties or assets of the Company under, any provision of (i)
the Company Charter or the Company By-laws, (ii) any contract, lease, license,
indenture, note, bond, agreement, permit, concession, franchise or other
instrument (a "Contract") to which the Company is a party or by which any of its
properties or assets is bound or (iii) subject to the filings and other matters
referred to in Section 3.05(b), any judgment, order or decree ("Judgment") or
statute, law (including common law), ordinance, rule or regulation ("Applicable
Law") applicable to the Company or its properties or assets, other than, in the
case of clause (iii) above, any such items that, individually or in the
aggregate, have not had and could not reasonably be expected to have a Company
Material Adverse Effect.

<PAGE>
                                                                              12

                  (b) No consent, approval, license, permit, order or
authorization ("Consent") of, or registration, declaration or filing with, or
permit from, any Federal, state, local or foreign government or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a "Governmental
Entity") is required to be obtained or made by or with respect to the Company in
connection with (A) the execution, delivery and performance of this Agreement or
the consummation of the Transactions or (B) the conduct by the Company of its
business following the Closing as conducted on the date hereof, other than (i)
compliance with and filings under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), if applicable, (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of Florida and
appropriate documents with the relevant authorities of the other jurisdictions
in which the Company is qualified to do business, (iii) such filings as may be
required in connection with the taxes described in Section 6.09 and (iv) such
other items as are set forth in Section 3.05 of the Company Disclosure Letter.

                  SECTION 3.06. Financial Statements; Undisclosed Liabilities;
Absence of Changes. (a) Section 3.06 of the Company Disclosure Letter sets forth
the income statements of the Company for the period from June 1, 1999 to
December 31, 1999, for the year ended December 31, 2000 and for the four months
ended April 30, 2001 and the balance sheets of the Company as of December 31,
2000 (the "Balance Sheet") and December 31, 1999 and the date hereof (together
with the income statements, the "Financial Statements"). The Financial
Statements have been prepared in conformity with GAAP consistently applied
(except in each case as described in the notes thereto) and on that basis fairly
present the financial condition and results of operations of the Company as of
the respective dates thereof and for the respective periods indicated.

                  (b) The Company does not have any liabilities or obligations
of any nature (whether accrued, absolute, contingent, unasserted or otherwise)
that have had or could reasonably be expected to have a Company Material Adverse
Effect, except (i) as disclosed, reflected or reserved against in the Balance
Sheet and the notes thereto, (ii) for items set forth in Section 3.06(b) of the
Company Disclosure Letter and (iii) for liabilities and obligations incurred in
the ordinary course of business of the Company consistent with past practice
since the date of the Balance Sheet and not in violation of this Agreement.

                  (c) Except as set forth in Section 3.06 of the Company
Disclosure Letter, since the date of the Balance Sheet, there has not been any
material adverse change in the business, prospects, assets, condition (financial
or otherwise) or results of operations of the Company. Except as set forth in
Section 3.06 of the Company Disclosure Letter, since the date of the Balance
Sheet, the Company has caused its business to be conducted in the ordinary
course and in substantially the same manner as previously conducted and has made
all reasonable efforts to preserve the relationships of its business with
customers, suppliers and others with whom its business deals. Except as set
forth in Section 3.06 of the Company Disclosure Letter, since the date of the
Balance Sheet, the Company has not taken any action that, if taken after the
date of this Agreement, would constitute a breach of Section 5.01.

<PAGE>
                                                                              13

                  SECTION 3.07. Title to Properties. (a) Except as set forth in
Section 3.07 of the Company Disclosure Letter, the Company has good and
marketable title to, or valid leasehold interests in, all its properties and
assets except for such as have been disposed of in the ordinary course of
business. All such assets and properties, other than assets and properties in
which the Company has leasehold interests, are free and clear of all mortgages,
liens, security interests, charges, easements, leases, subleases, covenants,
rights of way, options, claims, restrictions or encumbrances of any kind
(collectively, "Liens") other than those set forth in Section 3.07 of the
Company Disclosure Letter.

                  (b) Except as set forth in Section 3.07 of the Company
Disclosure Letter the Company has complied in all material respects with the
terms of the Lease dated March 31, 2000, between WBP One Limited Partnership and
the Company (the "Lease"), and the Lease is in full force and effect. The
Company enjoys peaceful and undisturbed possession under the Lease. Other than
pursuant to the Lease, the Company does not lease, occupy or otherwise use any
other real property in the conduct of its business or otherwise. The Company
does not own any real property.

                  (c) This Section 3.07 does not relate to Intellectual
Property, which is the subject of Section 3.08.

                  SECTION 3.08. Intellectual Property. (a) All patents,
trademarks (regis- tered or unregistered), trade names, service marks and
copyrights and applications therefor and other material intellectual property
and proprietary rights, whether or not subject to statutory registration or
protection (collectively, "Intellectual Property"), owned, used, filed by or
licensed to the Company are set forth in a true and complete list in Section
3.08 of the Company Disclosure Letter. With respect to registered trademarks,
Section 3.08 of the Company Disclosure Letter sets forth a list of all
jurisdictions in which such trademarks are registered or applied for and all
registration and application numbers. Except as set forth in Section 3.08 of the
Company Disclosure Letter, the Company owns, and the Company has the right to
use, execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any other person, all
Intellectual Property listed in Section 3.08 of the Company Disclosure Letter
and the consummation of the transactions contemplated hereby will not conflict
with, alter or impair any such rights. The Company has all rights to
Intellectual Property as are necessary in connection with the business of the
Company as presently conducted and as is proposed to be conducted.

<PAGE>
                                                                              14

                  (b) Except as set forth in Section 3.08 of the Company
Disclosure Letter, the Company has not granted any options, licenses or
agreements of any kind relating to Intellectual Property listed in Section 3.08
of the Company Disclosure Letter or the marketing or distribution thereof. The
Company is not a party to any options, licenses or agreements of any kind
relating to the Intellectual Property of any other person, except as set forth
in Section 3.08 of the Company Disclosure Letter. Subject to the rights of third
parties set forth in Section 3.08 of the Company Disclosure Letter, all
Intellectual Property listed in Section 3.08 of the Company Disclosure Letter is
free and clear of the claims of others and of all liens, security interests and
encumbrances whatsoever. The conduct of the business of the Company as presently
conducted does not, and the conduct of such business as proposed to be conducted
will not, violate, conflict with or infringe the Intellectual Property of any
other person. Except as set forth in Section 3.08 of the Company Disclosure
Letter, (i) no claims are pending or, to the knowledge of the Company,
threatened, against the Company by any person with respect to the ownership,
validity, enforceability, effectiveness or use of any Intellectual Property and
(ii) the Company has not received any communications alleging that the Company
has violated any rights relating to Intellectual Property of any person. To the
knowledge of the Company, except as set forth in Section 3.08 of the Company
Disclosure Letter, no person has violated or infringed any of the Company's
rights relating to the Intellectual Property set forth in Section 3.08 of the
Company Disclosure Letter.

                  (c) The Intellectual Property listed in Section 3.08 has been
maintained in confidence in accordance with protection procedures customarily
used in the industry of the Company to protect rights of like importance. All
former and current members of management and key personnel of the Company,
including all former and current employees, agents, consultants and independent
contractors who have contributed to or participated in the conception and
development of software or other Intellectual Property listed in Section 3.08 of
the Company Disclosure Letter (collectively, "Personnel"), have executed and
delivered to the Company a proprietary information agreement restricting such
person's right to disclose proprietary information of the Company. All former
and current Personnel either (i) have been party to a "work-for-hire"
arrangement or agreement with the Company, in accordance with applicable Federal
and state law, that has accorded the Company full, effective, exclusive and
original ownership of all tangible and intangible property thereby arising or
(ii) have executed appropriate instruments of assignment in favor of the Company
as assignee that have conveyed to the Company full, effective and exclusive
ownership of all tangible and intangible property thereby arising. No former or
current Personnel have any claim against the Company in connection with such
person's involvement in the conception and development of any Intellectual
Property and no such claim has been asserted or is threatened. None of the
current officers and employees of the Company have any patents issued or
applications pending for any device, process, design or invention of any kind
now used or needed by the Company in the furtherance of its business operations,
which patents or applications have not been assigned to the Company, with such
assignment duly recorded in the United States Patent Office.
<PAGE>
                                                                              15

                  SECTION 3.09. Contracts. (a) Except as set forth in Section
3.09 of the Company Disclosure Letter, the Company is not a party to or bound by
any:

                  (i) employment agreement or employment contract (written or
         oral) that is not terminable by the Company by notice of not more than
         30 days without payment or penalty;

                  (ii) covenant not to compete or other covenant of the Company
         restricting the development, manufacture, marketing or distribution of
         the products and services of the Company;

                  (iii) Contract with (A) any shareholder or affiliate of the
         Company or (B) any current or former officer, director or employee of
         the Company or any of its affiliates (other than employment agreements
         covered by clause (i) above);

                  (iv) lease, sublease or similar agreement with any person
         under which the Company is a lessor or sublessor of, or makes available
         for use to any person, any portion of any premises occupied by the
         Company pursuant to the Lease or otherwise;

                  (v) lease, sublease or similar agreement with any person under
         which (A) the Company is lessee of, or holds or uses, any machinery,
         equipment, vehicle or other tangible personal property owned by any
         person or (B) the Company is a lessor or sublessor of, or makes
         available for use by any person, any tangible personal property owned
         or leased by the Company, in any such case with an aggregate future
         liability or receivable, as the case may be, in excess of $50,000 and
         not terminable by the Company by notice of not more than 60 days for a
         cost of less than $20,000;

                  (vi) (A) continuing Contract for the future purchase of
         materials, supplies or equipment, (B) management, service, consulting
         or other similar contract, (C) advertising agreement or arrangement or
         (D) dealer, distributor, franchise or similar agreement, in any such
         case that has an aggregate future liability to any person in excess of
         $50,000 and is not terminable by the Company by notice of not more than
         60 days for a cost of less than $20,000;

                  (vii) license, sublicense, option or other agreement relating
         in whole or in part to the Intellectual Property set forth in Section
         3.08 of the Company Disclosure Letter (including any license or other
         agreement under which the Company is licensee or licensor of any such
         Intellectual Property);

<PAGE>
                                                                              16

                  (viii) (A) Contract under which the Company has borrowed any
         money from, or issued any note, bond, debenture or other evidence of
         indebtedness to, any person or (B) other note, bond, debenture or other
         evidence of indebtedness issued to any person;

                  (ix) Contract (including any so-called take-or-pay or keepwell
         agreement) under which (A) any person has directly or indirectly
         guaranteed indebtedness, liabilities or obligations of the Company or
         (B) the Company has directly or indirectly guaranteed indebtedness,
         liabilities or obligations of any other person (in each case other than
         endorsements for the purpose of collection in the ordinary course of
         business);

                  (x) Contract under which the Company has, directly or
         indirectly, made any advance, loan, extension of credit or capital
         contribution to, or other investment in, any person;

                  (xii) a mortgage, pledge, security agreement, deed of trust or
         other instrument granting a lien or other encumbrance upon any property
         or asset of the Company;

                  (xii) Contract providing for indemnification of any person
         with respect to liabilities relating to any current or former business
         of the Company or any predecessor person;

                  (xiii) power of attorney (other than a power of attorney given
         in the ordinary course of the Company's business with respect to
         routine tax matters);

                  (xiv) confidentiality agreement;

                  (xv) Contract (including a sales order) involving payment by
         the Company of more than, or the delivery by the Company of products or
         services for the payment of more than, $50,000 or extending for a term
         more than 180 days from the date of this Agreement (unless terminable
         without payment or penalty upon no more than 60 days' notice);

                  (xvi) Contract for the sale of any asset (other than inventory
         sales in the ordinary course of business) or the grant of any
         preferential rights to purchase any asset or requiring the consent of
         any party to the transfer thereof;

                  (xvii) Contract with or license by or from any Governmental
         Entity;

<PAGE>
                                                                              17

                  (xviii) currency exchange, interest rate exchange, commodity
         exchange or similar agreement or instrument;

                  (xix) Contract for any joint venture, partnership or similar
         arrangement;

                  (xx) Contract that has an aggregate future liability to any
         person in excess of $50,000 and is not terminable by the Company by
         notice of not more than 60 days for a cost of less than $20,000; or

                  (xxi) Contract other than as set forth above to which the
         Company is a party or by which it or any of its assets or businesses is
         bound or subject that is material to or not in the ordinary course of
         the Company's business.

                  (b) Except as set forth in Section 3.09 of the Company
Disclosure Letter, all agreements, contracts, leases, licenses, commitments on
instruments of the Company listed in the Company Disclosure Letter (collectively
the "Company Contracts") are valid, binding and in full force and effect and are
enforceable by the Company in accordance with their terms. Except as set forth
in Section 3.09 of the Company Disclosure Letter, the Company has performed all
obligations required to be performed by it under the Company Contracts, and it
is not (with or without the lapse of time or the giving of notice, or both) in
breach or default in any respect thereunder and, to the knowledge of the
Company, no other party to any Company Contract is (with or without the lapse of
time or the giving of notice, or both) in breach or default in any respect
thereunder. The Company has not, except as disclosed in Section 3.09 of the
Company Disclosure Letter, received any notice of the intention of any party to
terminate any Company Contract. Complete and correct copies of all Company
Contracts, together with all modifications and amendments thereto, have been
delivered to Parent.

                  SECTION 3.10. Permits. (a) Section 3.10 of the Company
Disclosure Letter sets forth all certificates, licenses, permits, authorizations
and approvals ("Permits") issued or granted to the Company by Governmental
Entities. Except as set forth in Section 3.10 of the Company Disclosure Letter,
(i) all such Permits are validly held by the Company, and the Company has
complied in all material respects with all terms and conditions thereof, (ii)
neither the Company nor any affiliate of the Company has received notice of any
suit, action or proceeding ("Proceeding") relating to the revocation or
modification of any such Permits the loss of which, individually or in the
aggregate, has had and could reasonably be expected to have a Company Material
Adverse Effect, and (iii) none of such Permits will be subject to suspension,
modification, revocation or nonrenewal as a result of the execution and delivery
of this Agreement or the consummation of the transactions.

<PAGE>
                                                                              18

                  (b) The Company possesses all Permits necessary to own or hold
under lease and operate its assets and to conduct its business as currently
conducted except where the failure to possess such permits has not had and could
not reasonably be expected to have a Company Material Adverse Effect.

                  SECTION 3.11. Compliance with Applicable Laws. Except as set
forth in Section 3.11 of the Company Disclosure Letter, the Company is in
compliance with all Applicable Laws, including those relating to occupational
health and safety or the environment except where the failure to be in
compliance has not had and could not reasonably be expected to have a Company
Material Adverse Effect. Except as set forth in Section 3.11 of the Company
Disclosure Letter, none of the Company and its affiliates has received within
the past two years any written or oral communication from any person that
alleges that the Company is not in compliance in any material respect with any
Applicable Law. This Section 3.11 does not relate to matters with respect to
Taxes, which are the subject of Section 3.12.

                  SECTION 3.12. Taxes. (a) The Company has timely filed, or has
caused to be timely filed on its behalf, all Tax Returns required to be filed by
it, and all such Tax Returns are true, complete and accurate, except to the
extent any failure to file or any inaccuracies in any filed Tax Returns would
not, individually or in the aggregate, have a Company Material Adverse Effect.
All Taxes shown to be due on such Tax Returns, or otherwise owed, have been
timely paid, except to the extent that any failure to pay, individually or in
the aggregate, has not had and could not reasonably be expected to have a
Company Material Adverse Effect.

                  (b) The Balance Sheet reflects an adequate reserve for all
Taxes payable by the Company and for all Taxable periods and portions thereof
through the date of the Balance Sheet. No deficiency with respect to any Taxes
has been proposed, asserted or assessed against the Company, and no requests for
waivers of the time to assess any such Taxes are pending, except to the extent
any such deficiency or request for waiver, individually or in the aggregate, has
not had and could not reasonably be expected to have a Company Material Adverse
Effect.

                  (c) All assessments for Taxes due with respect to any
completed and settled examinations or any concluded litigation have been fully
paid.

                  (d) There are no material Liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of the Company. The Company
has no liability for the payment of Taxes of any other entity as a result of
being a member of an affiliated, combined, consolidated or unitary group. The
Company is not bound by any tax sharing (or similar) agreement with another
person with respect to Taxes.

<PAGE>
                                                                              19

                  (e) For purposes of this Agreement:

                  "Taxes" includes all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, Federal or other Governmental
Entity, or in connection with any agreement with respect to Taxes, including all
interest, penalties and additions imposed with respect to such amounts.

                  "Tax Return" means all Federal, state, local, provincial and
foreign Tax returns, declarations, statements, reports, schedules, forms and
information returns and any amended Tax return relating to Taxes.

                  SECTION 3.13. Litigation. Except as disclosed in Section 3.13
of the Company Disclosure Letter, there is no Proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company (and the
Company is not aware of any basis for any such Proceeding) that (a) as of the
date hereof, relates to or involves more than $50,000 or (b) has had or could
reasonably be expected to have a Company Material Adverse Effect, nor is the
Company a party or subject to or in default under any Judgment. There is no
pending or, to the knowledge of the Company, threatened investigation of or
affecting the Company or its business or assets as of the date hereof or that
could reasonably be expected to have a Company Material Adverse Effect.

                  SECTION 3.14. Benefit Plans. (a) Except as set forth in
Section 3.14 of the Company Disclosure Letter, the Company does not maintain or
contribute to any "employee benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA), bonus, stock
option, stock purchase, equity compensation, incentive compensation, deferred
compensation plans or arrangements or other employee fringe benefit plans.

                  (b) Except as set forth in Section 3.14 of the Company
Disclosure Letter, no employee or former employee of the Company will become
entitled to any bonus, retirement, severance, job security or similar benefit or
any enhanced benefit solely as a result of the transactions contemplated hereby.

                  SECTION 3.15. Employee and Labor Matters. (a) (i) None of the
Company's employees are represented by a union and (ii) to the knowledge of the
Company, no union organizational campaign is in progress as of the date hereof
with respect to the employees of the Company and no question concerning
representation of such employees exists.

<PAGE>
                                                                              20

                  (b) Section 3.15(b) of the Company Disclosure Letter sets
forth the name and address of each employee, officer and consultant of the
Company as of the date of this Agreement and sets forth in the current annual
salary (including bonus) for each such person with an annual salary (including
bonus) of $50,000 or greater, including a description of applicable bonus or
benefit plans.

                  SECTION 3.16. Insurance. The Company maintains policies of
fire and casualty, liability and other forms of insurance in such amounts, with
such deductibles and against such risks and losses as are, in the Company's
judgment, reasonable. The insurance policies maintained by the Company are
listed in Section 3.16 of the Company Disclosure Letter. All such policies are
in full force and effect, all premiums due and payable thereon have been paid
(other than retroactive or retrospective premium adjustments that are not yet,
but may be, required to be paid with respect to any period ending prior to the
Effective Date under comprehensive general liability and workmen's compensation
insurance policies), and no notice of cancelation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancelation. The Company
has conducted its business in a manner so as to conform in all material respects
to all applicable provisions of such insurance policies.

                  SECTION 3.17. Transactions with Affiliates. Except as set
forth in Section 3.17 of the Company Disclosure Letter, after the Closing none
of the Company's affiliates will have any interest in any property (real or
personal, tangible or intangible) or Contract of or pertaining to the Company.
Except as set forth in Section 3.17 of the Company Disclosure Letter, no
affiliate of the Company provides any material services to the Company.

                  SECTION 3.18. Brokers; Schedule of Fees and Expenses. Except
as set forth on Schedule 3.18 of the Company Disclosure Letter, no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the Merger and the other Transactions based upon arrangements
made by or on behalf of the Company. The estimated fees and expenses incurred
and to be incurred by the Company in connection with the Merger and the other
Transactions (including the fees of the Company's legal counsel) are set forth
in Schedule 3.18 of the Company Disclosure Letter.

                  SECTION 3.19. Effect of Transaction. Except as set forth in
Section 3.19 of the Company Disclosure Letter, no creditor, employee, client,
customer or other person having a material business relationship with the
Company has informed the Company that such person intends to materially change
such relationship because of the Transactions.

<PAGE>
                                                                              21

                  SECTION 3.20. Disclosure. No representation or warranty of the
Company contained in this Agreement, and no statement contained in any document,
certificate or the Company Disclosure Letter furnished or to be furnished by or
on behalf of the Company to Parent or any of its representatives pursuant to
this Agreement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact necessary, in light of
the circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading or necessary in order to fully and
fairly provide the information required to be provided in any such document,
certificate or Schedule. The financial projections relating to the Company
delivered to Parent were prepared on the basis of assumptions the Company
reasonably believed in good faith at the time of preparation to be reasonable
and the Company has no knowledge of any fact or information that would lead it
to believe that such assumptions are incorrect or misleading in any material
respect.

                  SECTION 3.21. Sufficiency of Assets. Assuming compliance with
this Agreement by Parent and Sub and after giving effect to the amounts to be
funded pursuant to Section 2.01(c)(5), the Company shall have, immediately
following Closing, assets that are sufficient for the conduct of the Company's
business in substantially the same manner as currently conducted.

                                   ARTICLE IV

                Representations and Warranties of Parent and Sub

                  Parent and Sub, jointly and severally, represent and warrant
to the Company as follows:

                  SECTION 4.01. Organization, Standing and Power. Each of Parent
and Sub is duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is organized and has full corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to conduct its business as presently
conducted, other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, have not had and
could not reasonably be expected to have a material adverse effect on (i) the
business, prospects, assets, condition (financial or otherwise) or results of
operations of Parent and its subsidiaries taken as a whole, (ii) the ability of
Parent or Sub to perform its obligations under this Agreement or (iii) the
ability of Parent or Sub to consummate the Merger and the other Transactions (a
"Parent Material Adverse Effect"). Parent is duly qualified to do business in
each jurisdiction where the nature of its business or its ownership or leasing
of its properties make such qualification necessary or the failure to so qualify
has had or could reasonably be expected to have a Parent Material Adverse
Effect. Parent has delivered to the Company true and complete copies of the
certificate of incorporation and by-laws of Parent and the articles of
incorporation and by-laws of Sub, in each case as amended through the date of
this Agreement.

<PAGE>
                                                                              22

                  SECTION 4.02. Capital Structure. The authorized capital stock
of the Parent consists of 20,000,000 shares of Parent Common Stock, 20,000,000
shares of Preferred Stock, 6,400,000 shares of which were designated as 15%
Senior Preferred Stock (the "Senior Preferred Stock") and [ ] shares of which
were designated as Junior Participating Cumulative Convertible Preferred Stock
("Junior Preferred Stock"). As of the date of this Agreement. 6,851,820 shares
of Parent Common Stock are issued and outstanding, 3,000,000 shares of Senior
Preferred Stock are issued and outstanding, [ ] shares of Junior Preferred Stock
are issued and outstanding, and zero shares of Parent Common Stock are held by
the Company in its treasury. Except as set forth above, no shares of capital
stock or other voting securities of the Parent are issued, reserved for issuance
or outstanding. All outstanding shares of Parent Common Stock and Senior
Preferred Stock are duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the Delaware General Corporation Law, the
certificate of incorporation or by-laws of Parent or any Contract to which
Parent is a party or otherwise bound. There are not any bonds, debentures, notes
or other indebtedness of Parent having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which holders of Parent Common Stock may vote ("Voting Company Debt"). Except as
set forth above, as of the date of this Agreement, there are not any options,
warrants, rights, convertible or exchangeable securities, "phantom" stock
rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which Parent is a party
or by which it is bound (i) obligating Parent to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other equity interests in, or any security convertible or exercisable for or
exchangeable into any capital stock of or other equity interest in, Parent or
any Voting Company Debt, (ii) obligating Parent to issue, grant, extend or enter
into any such option, warrant, call, right, security, commitment, Contract,
arrangement or undertaking or (iii) that give any person the right to receive
any economic benefit or right similar to or derived from the economic benefits
and rights occurring to holders of Parent Common Stock or Senior Preferred
Stock. As of the date of this Agreement, there are not any outstanding
contractual obligations of Parent to repurchase, redeem or otherwise acquire any
shares of capital stock of Parent.

<PAGE>
                                                                              23

                  SECTION 4.03. Authority; Execution and Delivery; and
Enforceability. (a) Each of Parent and Sub has all requisite power and authority
to execute and deliver this Agreement and to consummate the Transactions. The
execution and delivery by each of Parent and Sub of this Agreement and the
consummation by Parent and Sub of the Transactions have been duly authorized by
all necessary corporate action on the part of Parent and Sub. Each of Parent and
Sub has duly executed and delivered this Agreement, and this Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

                  (b) The Board of Directors of Parent and Sub (the "Company
Board") have duly and unanimously adopted resolutions approving this Agreement,
the Merger and the other Transactions (including, in the case of Parent, the
Share Issuances).

                  SECTION 4.04. No Conflicts; Consents. (a) Except as set forth
in Section 4.03 of the letter dated as of the date of this Agreement, from
Parent to the Company (the "Parent Disclosure Letter"), the execution and
delivery by each of Parent and Sub of this Agreement, do not, and the
consummation of the Merger and the other Transactions and compliance with the
terms hereof and thereof will not, conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancelation or acceleration of any obligation or
to loss of a material benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any person under, or result in the creation
of any Lien upon any of the properties or assets of Parent under, any provision
of (i) Parent Charter or Parent By-laws, (ii) any Contract to which Parent is a
party or by which any of its properties or assets is bound or (iii) subject to
the filings and other matters referred to in Section 4.03(b), any Judgment or
Law applicable to Parent or its properties or assets, other than in the case of
clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, have not had and could not reasonably be expected to have a Parent
Material Adverse Effect.

                  (b) No Consent of, or registration, declaration or filing
with, or permit from, any Governmental Entity is required to be obtained or made
by or with respect to Parent or Sub in connection with the execution, delivery
and performance of this Agreement or the consummation of the Transactions, other
than (i) compliance with and filings under the HSR Act, if applicable, (ii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Florida, (iii) such filings as may be required in connection with the taxes
described in Section 6.09 and (iv) such other items as are set forth in Section
4.03 of the Parent Disclosure Letter.

                  SECTION 4.05. Activities of Sub. Since the date of its
incorporation, Sub has not carried on any business or conducted any operations
other than the execution of this Agreement, the performance of its obligations
hereunder and thereunder and matters ancillary thereto.
<PAGE>
                                                                              24

                  SECTION 4.06. Financial Statements; Undisclosed Liabilities;
Absence of Changes. Reference is made to the following financial statements: (a)
audited consolidated balance sheet of Parent for the fiscal year ended December
31, 2000 (the "Parent Balance Sheet"), and the related statements of operations
and cash flows of Parent for the 12-months ended on such date, filed with the
Securities and Exchange Commission (the "SEC") on April 5, 2001, as part of
Parent's Amended Annual Report on Form 10-K/A for such period. Such financial
statements (including any related schedules and notes) have been prepared in
accordance with GAAP consistently applied throughout the period or periods in
question (except as specifically disclosed therein) and show all liabilities,
direct and contingent, of Parent required to be shown in accordance with GAAP
consistently applied throughout the period or periods in question (except as
specifically disclosed therein) and fairly present the consolidated financial
position and the consolidated results of operations of Parent for the periods
indicated therein.

                  (b) Parent does not have any liabilities or obligations of any
nature (whether accrued, absolute, contingent, unasserted or otherwise) that
have had or could reasonably be expected to have a Material Adverse Effect,
except (i) as disclosed, reflected or reserved against in the Parent Balance
Sheet, (ii) for items set forth in Section 4.06(b) of Parent Disclosure Letter
and (iii) for liabilities and obligations incurred in the ordinary course of
business of Parent, consistent with past practice, since the date of the Parent
Balance Sheet.

                  (c) Except as set forth in Section 4.06 of the Parent
Disclosure Letter, since the date of the Parent Balance Sheet, there has not
been any material adverse change in the business, prospects, assets, condition
(financial or otherwise) or results of operations of Parent.

                  SECTION 4.07. Brokers, Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the Merger and the other Transactions based upon arrangements
made by or on behalf of Parent or Sub.

                  SECTION 4.08. Disclosure. No representation or warranty of the
Parent contained in this Agreement, and no statement contained in any document,
certificate or the Parent Disclosure Letter furnished or to be furnished by or
on behalf of the Parent to Company or any of its representatives pursuant to
this Agreement, contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact necessary, in light of
the circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading or necessary in order to fully and
fairly provide the information required to be provided in any such document,
certificate or Schedule.
<PAGE>
                                                                              25

                                    ARTICLE V

                   Covenants Relating to Conduct of Business

                  SECTION 5.01. Conduct of Business. (a) Conduct of Business by
the Company. Except for matters set forth in Section 5.01 of the Company
Disclosure Letter or otherwise expressly permitted by this Agreement, from the
date of this Agreement to the Effective Time the Company shall conduct its
business in the usual, regular and ordinary course in substantially the same
manner as previously conducted and use all reasonable efforts to maintain its
assets in good operating order and condition, preserve intact its current
business organization, keep available the services of its current officers and
employees and keep its relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with them to the end
that its goodwill and ongoing business shall not be materially impaired at the
Effective Time. In addition, and without limiting the generality of the
foregoing, except for matters set forth in Section 5.01 of the Company
Disclosure Letter or otherwise expressly permitted by this Agreement, from the
date of this Agreement to the Effective Time, the Company shall not do any of
the following without the prior written consent of Parent:

                  (i) (A) declare, set aside or pay any dividends on, or make
         any other distributions in respect of, any of its capital stock, (B)
         split, combine or reclassify any of its capital stock or issue or
         authorize the issuance of any other securities in respect of, in lieu
         of or in substitution for shares of its capital stock, or (C) purchase,
         redeem or otherwise acquire any shares of capital stock of the Company
         or any other securities thereof or any rights, warrants or options to
         acquire any such shares or other securities;

                  (ii) issue, deliver, sell or grant (A) any shares of its
         capital stock, (B) any Voting Company Debt or other voting securities,
         (C) any securities convertible into or exchangeable for, or any
         options, warrants or rights to acquire, any such shares, Voting Company
         Debt, voting securities or convertible or exchangeable securities or
         (D) any "phantom" stock, "phantom" stock rights, stock appreciation
         rights or stock-based performance units;

                  (iii) amend its articles of incorporation or by-laws;

                  (iv) adopt or amend any employee benefit plan or enter into
         any collective bargaining agreement or other Contract with any labor
         organization, union or association, except in each case as required by
         Applicable Law;

<PAGE>
                                                                              26

                  (v) grant to any officer or employee any increase in
         compensation or benefits, except as may be required under existing
         agreements or enter into any employment, severance or similar agreement
         with any officer or employee;

                  (vi) incur or assume any liabilities, obligations or
         indebtedness for borrowed money or guarantee any such liabilities,
         obligations or indebtedness except, in each case, liabilities,
         obligations and indebtedness to Parent or its Affiliates;

                  (vii) permit, allow or suffer any asset to become subjected to
         any Lien of any nature whatsoever that would have been required to be
         set forth in Section 3.07 or 3.08 of the Company Disclosure Letter if
         existing on the date of this Agreement;

                  (viii) cancel any material indebtedness (individually or in
         the aggregate) or waive any claims or rights of substantial value;

                  (ix) pay, loan or advance any amount to, or sell, transfer or
         lease any of its assets to, or enter into any agreement or arrangement
         with, any of the Company's affiliates;

                  (x) acquire by merging or consolidating with, or by purchasing
         a substantial portion of the assets of, or by any other manner, any
         business or business organization or otherwise acquire any assets
         except assets that are acquired in the ordinary course of the Company's
         business consistent with past practice and that are not material,
         individually or in the aggregate, to the Company;

                  (xi) make or incur any capital expenditures that, in the
         aggregate, are in excess of $25,000;

                  (xii) sell, lease, license or otherwise dispose of any of its
         assets, except inventory sold in the ordinary course of business and
         consistent with past practice;

                  (xiii) enter into any lease of real property;

                  (xiv) modify, amend, terminate or permit the lapse of the
         Lease or other material agreement relating to, real property or modify,
         amend or terminate any Company Contract;
<PAGE>
                                                                              27

                  (xv) enter into any Contract except Contracts that are entered
         into in the ordinary course of business consistent with past practice
         and that are not material, individually or in the aggregate, to the
         Company;

                  (xvi) make or change any material Tax election or settle or
         compromise any material Tax liability; or

                  (xvii) authorize any of, or commit or agree to take, whether
         in writing or otherwise, to do any of, the foregoing actions.

                  SECTION 5.02. Advise of Changes. The Company shall promptly
advise Parent in writing of the occurrence of any matter or event that is
material to the business, assets, condition (financial or otherwise), prospects,
working capital, liabilities or results of operations of the Company.

                                   ARTICLE VI

                              Additional Agreements

                  SECTION 6.01. Shareholder Approval. The Company shall, as soon
as practicable following the date of this Agreement, duly seek Company
Shareholder Approval pursuant to the requirements of Section 1103 of the FBCA.
The Company shall, through its Board of Directors, recommend to its shareholders
that they give the Company Shareholder Approval.

                  SECTION 6.02. Access to Information. The Company shall afford
to Parent, its lenders and their accountants, counsel and other representatives
reasonable access, upon reasonable notice during normal business hours during
the period prior to the Closing, to all the personnel, properties and records of
the Company, and during such period shall furnish promptly to Parent any
information concerning the Company as Parent may reasonably request.

                  SECTION 6.03. Commercially Reasonable Efforts. (a) On the
terms and subject to the conditions of this Agreement, each party shall use its
commercially reasonable efforts to cause the Closing to occur, including taking
all commercially reasonable actions necessary to comply promptly with all legal
requirements that may be imposed on it or any of its affiliates with respect to
the Closing. Without limiting the foregoing or the provisions set forth in
Section 6.03(b), each party shall use its commercially reasonable efforts to
cause the Closing to occur on or prior to March 31, 2001.

<PAGE>
                                                                              28

                  (b) If required by law, each of the Company and Parent shall
as promptly as practicable, but in no event later than five business days
following the execution and delivery of this Agreement or as soon thereafter as
the Company and Parent become aware such filings are required, file with the
United States Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") any notification and report form required for
the transactions contemplated hereby and any supplemental information requested
in connection therewith pursuant to the HSR Act. Any such notification and
report form and supplemental information shall be in substantial compliance with
the requirements of the HSR Act. Each of Parent and the Company shall furnish to
the other such necessary information and reasonable assistance as the other may
request in connection with its preparation of any filing or submission that is
necessary under the HSR Act. The Company and Parent shall keep each other
appraised of the status of any communications with, and any inquiries or
requests for additional information from, the FTC and the DOJ and, subject to
Section 8.01(e), shall comply promptly with any such inquiry or request. Subject
to Section 8.01(e), each of the Company and Parent shall use its commercially
reasonable efforts to obtain any clearance required under the HSR Act for the
consummation of the transactions contemplated by this Agreement. For purposes of
this Section 6.03, the "commercially reasonable efforts" of Parent shall not
require Parent to agree to any prohibition, limitation or other requirement of
the type set forth in Section 7.02(c).

                  SECTION 6.04. Company Stock Options. The Company will cause
(i) the 1999 Stock Option Plan, (ii) all agreements under the 1999 Stock Option
Plan, and (iii) all other bonus, stock option, stock purchase, equity
compensation, incentive compensation and similar plans and agreements to be
terminated on or prior to the Closing Date and for there to be no options or
other rights, convertible into Company Capital Stock outstanding on or following
the Closing Date.

                  SECTION 6.05. Fees and Expenses. All fees and expenses
incurred in connection with the Merger and the other Transactions shall be paid
by the party incurring such fees or expenses, whether or not the Merger is
consummated. Notwithstanding anything to the contrary contained herein, all
stock transfer, real estate transfer, documentary, stamp, recording and other
similar Taxes (including interest, penalties and additions to any such Taxes)
("Transfer Taxes") incurred in connection with the Merger and the other
Transactions shall be paid by the Shareholders. The Company shall cooperate with
Sub and Parent in preparing, executing and filing any Tax Returns with respect
to such Transfer Taxes, including supplying in a timely manner a complete list
of all real property interests held by the Company and any information with
respect to such property that is reasonably necessary to complete such Tax
Returns.

<PAGE>
                                                                              29

                  SECTION 6.06. Public Announcements. Parent and Sub, on the one
hand, and the Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Merger and the
other Transactions and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable Law or court process.

                                   ARTICLE VII

                              Conditions Precedent

                  SECTION 7.01. Conditions to Each Party's Obligation To Effect
The Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Effective Date of the
following conditions:

                  (a) Governmental Approvals. The waiting period under the HSR
Act, if applicable to the consummation of the Transaction, shall have expired or
been terminated. All other authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity necessary for the consummation of the Acquisition shall have
been obtained or filed or shall have occurred without, in the case of Parent's
obligation to effect the Merger, any materially adverse condition.

                  (b) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.

                  (c) Group One Note Exchange. The Group One Note Exchange shall
have been consummated, concurrently with the Closing, on the terms and
conditions of the Group One Exchange Agreement.

                  (d) Company Shareholder Approval. The Company shall have
obtained the Company Shareholder Approval.

                  SECTION 7.02. Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are further subject to the
following conditions:

<PAGE>
                                                                              30

                  (a) Representations and Warranties. The representations and
warranties of the Company in this Agreement that are qualified as to materiality
shall be true and correct and those not so qualified shall be true and correct
in all material respects, as of the date of this Agreement and as of the Closing
Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date). Parent shall have received a
certificate signed on behalf of the Company by the chief executive officer and
the chief operating officer of the Company to such effect.

                  (b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and Parent
shall have received a certificate signed on behalf of the Company by the chief
executive officer and the chief operating officer of the Company to such effect.

                  (c) No Litigation. There shall not be pending or threatened
any Proceeding by any Governmental Entity or any other person (i) challenging
the acquisition by Parent or Sub of any Company Capital Stock, seeking to
restrain or prohibit the consummation of the Merger or any other Transaction or
seeking to obtain from the Company, Parent or Sub any damages that are material
in relation to the Company, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of Parent's subsidiaries of any material
portion of the business or assets of the Company, Parent or any of Parent's
subsidiaries, or to compel the Company, Parent or any of Parent's subsidiaries
to dispose of or hold separate any material portion of the business or assets of
the Company, Parent or any of Parent's subsidiaries, as a result of the Merger
or any other Transaction, (iii) seeking to impose limitations on the ability of
Parent to acquire or hold, or exercise full rights of ownership of, any shares
of Company Capital Stock, including the right to vote the Company Capital Stock
on all matters properly presented to the shareholders of the Company, (iv)
seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect the business or operations of the Company or
(v) which otherwise is reasonably likely to have a Company Material Adverse
Effect.

                  (d) Absence of Company Material Adverse Effect. Except as set
forth in Section 7.02(d) of the Company Disclosure Letter, since the date of the
Balance Sheet there shall not have been any event, change, effect or development
that, individually or in the aggregate, has had or could reasonably be expected
to have a Company Material Adverse Effect.

                  (e) Employment Agreement. Each of the employees listed in
Section 7.02(e) of the Company Disclosure Schedule shall be employees of the
Company and shall have entered into employment agreements satisfactory to
Parent, which shall be in full force, at the time of Closing.

<PAGE>
                                                                              31

                  (f) Stockholders Agreement. Parent shall receive a copy of a
Stockholders Agreement (the "Stockholders Agreement") on the terms set forth in
Exhibit C hereto and otherwise reasonably satisfactory in form and substance to
Parent signed by each Group One Lender.

                  (g) Consents. Parent and Sub shall have received written
consents from all third parties necessary or appropriate to effect the
Transactions, other than such consents the absence of which, individually or in
the aggregate, could not reasonably be expected to have a Parent Material
Adverse Effect or Company Material Adverse Effect.

                  (h) Financial Projections. Parent shall be satisfied with the
content and reasonableness of the financial projections of the Company provided
by the Company with respect to the liabilities and estimated operating and other
expenses of the Company set forth therein for the period from January 1, 2001 to
December 31, 2002.

                  (i) Certificates. Parent shall have received Certificates or
appropriate affidavits in lieu thereof representing all issued and outstanding
shares of Company Capital Stock.

                  (j) Stock Options. Parent shall have received evidence
reasonably satisfactory to it of compliance by the Company with the covenants
contained in Section 6.04.

                  (k) Credit Agreement. Parent shall have received all waivers,
consents and amendments under the Credit Agreement dated as of November 17,
1999, among Weekly Reader Corporation and JLC Learning Corporation, as
borrowers, Parent, as guarantor, the various lenders party thereto, DLJ Capital
Funding Inc., Bank of America, N.A. and General Electric Capital Corporation, as
Parent, in its sole discretion, believes necessary or desirable in connection
with the consummation of the Merger and the other transactions contemplated
hereby and the prevention of a default following the Merger (including, without
limitation, under the financial covenants applicable to Parent's consolidated
financial results).

                  SECTION 7.03. Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is further subject to the
following conditions:

<PAGE>
                                                                              32

                  (a) Representations and Warranties. The representations and
warranties of Parent and Sub in this Agreement that are qualified as to
materiality shall be true and correct and those not so qualified shall be true
and correct in all material respects, as of the date of this Agreement and on
the Effective Date as though made on the Effective Date, except to the extent
such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date). The Company shall have
received a certificate signed on behalf of Parent by the chief executive officer
and the chief financial officer of Parent to such effect.

                  (b) Performance of Obligations of Parent and Sub. Parent and
Sub shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Effective Date, and
the Company shall have received a certificate signed on behalf of Parent by the
chief executive officer and the chief financial officer of Parent to such
effect.

                  (c) No Litigation. There shall not be pending or threatened
any Proceeding by any Governmental Entity or any other person (i) challenging
the acquisition by the Company Shareholders of any Parent Common Stock, (ii)
seeking to restrain or prohibit the consummation of the Share Issuance, (iii)
seeking to impose limitations on the ability of any Company Shareholders to
acquire or hold, or exercise full rights of ownership of, any shares of Parent
Common Stock, including the right to vote the Parent Common Stock on all matters
properly presented to the shareholders of Parent or (iv) which otherwise is
reasonably likely to have a Parent Material Adverse Effect.

                  (d) Absence of Parent Material Adverse Effect. Since the date
of the Parent Balance Sheet there shall not have been any event, change, effect
or development that, individually or in the aggregate, has had or could
reasonably be expected to have a Parent Material Adverse Effect.

                                  ARTICLE VIII

                        Termination, Amendment and Waiver

                  SECTION 8.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time:

                  (a) by mutual written consent of Parent, Sub and the Company;

                  (b) by the Company if any of the conditions set forth in
         Sections 7.01 or 7.03 shall have become incapable of fulfillment, and
         shall not have been waived by the Company;

<PAGE>
                                                                              33

                  (c) by Parent if any of the conditions set forth in Sections
         7.01 or 7.02 shall have become incapable of fulfillment, and shall not
         have been waived by Parent;

                  (d) by Parent or the Company if the Closing does not occur on
         or prior to May 15, 2001; or

                  (e) by Parent if, in its reasonable opinion, compliance with
         any request for additional information made by the FTC or the DOJ
         pursuant to the HSR Act would be burdensome or unduly expensive;

provided, however, that the party seeking termination pursuant to clause (b),
(c), or (d) or (e) is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement; provided
further that Parent may not seek termination pursuant to clause (d) prior to May
31, 2001, if the sole reason for the Closing not occurring is the failure of the
condition set forth in Section 7.02(k) to be satisfied.

                  SECTION 8.02. Effect of Termination. If this Agreement is
terminated and the transactions contemplated hereby are abandoned as described
in Section 8.01, this Agreement shall become null and void and of no further
force and effect, without any liability or obligation on the part of any party,
other than Section 3.18, Section 4.07, Section 6.05, this Section 8.02 and
Article IX, which provisions shall survive termination and except to the extent
that such termination results from the breach by a party of any representation,
warranty or covenant set forth in this Agreement. Nothing in this Section 8.02
shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement.

                  SECTION 8.03. Amendments and Waivers. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing Parent and Sub, on the one hand, or
the Company, on the other hand, may waive compliance by the other party with any
term or provision of this Agreement that such other party was or is obligated to
comply with or perform.

                                   ARTICLE IX

                               General Provisions

                  SECTION 9.01. Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):

<PAGE>
                                                                              34

     (i)   if to Purchaser or Parent,

               WRC Media Inc.
               512 7th Avenue, 21st Floor
               New York, NY
               Telecopy: (212) 768-1887

               Attention: Robert Lynch
                          Richard Nota

     with copies to:

               Ripplewood Holdings L.L.C.
               One Rockefeller Center, 32nd Floor
               New York, NY 10020
               Telecopy: (212) 582-4110

               Attention: Charles Laurey

     and

               Cravath, Swaine & Moore
               Worldwide Plaza
               825 Eighth Avenue
               New York, NY 10019
               Telecopy: (212) 474-3700

               Attention: Thomas E. Dunn, Esq.; and

     (ii)  if to the Company,

               ChildU, Inc.
               2400 N. Commerce Parkway
               Weston, FL 33326
               Telecopy: (954) 233-1002

               Attention: Scott Udine

<PAGE>
                                                                              35

                  SECTION 9.02. Definitions. For purposes of this Agreement:

                  An "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person.

                  A "person" means any individual, firm, corporation,
partnership, company, limited liability company, trust, joint venture,
association, Governmental Entity or other entity.

                  A "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.

                  SECTION 9.03. Interpretation; Disclosure Letters. When a
reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". Any matter
disclosed in any schedule of either the Company Disclosure Letter or the Parent
Disclosure Letter shall be deemed disclosed only for the purposes of the
specific Sections of this Agreement to which such schedule relates.

                  SECTION 9.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule or
Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.

                  SECTION 9.05. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.

<PAGE>
                                                                              36

                  SECTION 9.06. Entire Agreement; No Third-Party Beneficiaries.
This Agreement, taken together with the Group One Exchange Agreement, the
Stockholders Agreement, the Company Disclosure Letter and the Parent Disclosure
Letter, (a) constitute the entire agreement, and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
Transactions and (b) except for the provisions of Article II, are not intended
to confer upon any person other than the parties any rights or remedies.

                  SECTION 9.07. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof, except to the extent the laws of Florida are
mandatorily applicable to the Merger.

                  SECTION 9.08. Assignment. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, except that Sub may assign, in
its sole discretion, any of or all its rights, interests and obligations under
this Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.

                  SECTION 9.09. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any New York state
court or any Federal court located in the State of New York, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any New York state court or any Federal court located
in the State of New York in the event any dispute arises out of this Agreement
or any Transaction, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement or any
Transaction in any court other than any New York state court or any Federal
court sitting in the State of New York and (d) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
Transaction.

<PAGE>
                                                                              37

                  IN WITNESS WHEREOF, Parent, Sub and the Company have duly
executed this Agreement, all as of the date first written above.

                                             CHILDU, INC.,

                                             By:    /s/ Scott R. Udine
                                                 ------------------------
                                                 Name:  Scott R. Udine
                                                 Title: President

                                             WRC MEDIA INC.,

                                             By:    /s/ Richard Nota
                                                 ------------------------
                                                 Name:  Richard Nota
                                                 Title: Vice President

                                             CU ACQUISITION, INC.,

                                             By:    /s/ Charles L. Laurey
                                                 ------------------------
                                                 Name:  Charles L. Laurey
                                                 Title: President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]