Document:

BA
            CREDIT CARD TRUST

            as
            Issuer

            
            SUPPLEMENTAL INDENTURE

            with
            respect to Additional Class A(2007-15) Notes

            
            dated as of January 17, 2008

            
            to

            
            CLASS A(2007-15) TERMS DOCUMENT

            
            dated as of November 27, 2007

            
            to

            
            AMENDED AND RESTATED BASERIES INDENTURE SUPPLEMENT

            
            dated as of June 10, 2006

            
            to

            
            SECOND AMENDED AND RESTATED INDENTURE

            
            dated as of October 20, 2006

             

            THE
            BANK OF NEW YORK

            as
            Indenture Trustee

             

            
             

            
                	
                            
                             

                        

            

             

            
            

            

            

             

            
                	
                            
                            ARTICLE I

                        
	
                            
                             

                        
	
                            
                            Definitions and Other Provisions of General
                            Application

                        
	
                            
                             

                        
	
                            
                            Section 1.01.

                        	
                            
                            Definitions

                        	
                            
                            1

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 1.02.

                        	
                            
                            Governing Law; Submission to Jurisdiction; Agent for
                            Service of Process

                        	
                            
                            2

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 1.03.

                        	
                            
                            Counterparts

                        	
                            
                            2

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 1.04.

                        	
                            
                            Ratification of Indenture, Indenture Supplement and the
                            Terms Document

                        	
                            
                            3

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 1.05.

                        	
                            
                            Full Force and Effect of Terms Document

                        	
                            
                            3

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            ARTICLE II

                        
	
                            
                             

                        
	
                            
                            The Additional Class A(2007-15) Notes

                        
	
                            
                             

                        
	
                            
                            Section 2.01.

                        	
                            
                            Terms and Issuance

                        	
                            
                            4

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 2.02.

                        	
                            
                            Modification of Defined Terms

                        	
                            
                            4

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 2.03.

                        	
                            
                            Form of Delivery of Additional Class A(2007-15) Notes;
                            Depository; Denominations

                        	
                            
                            4

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            Section 2.04.

                        	
                            
                            Delivery and Payment for the Additional Class A(2007-15)
                            Notes

                        	
                            
                            4

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            ARTICLE III

                        
	
                            
                             

                        
	
                            
                            Representations and Warranties

                        
	
                            
                             

                        
	
                            
                            Section 3.01.

                        	
                            
                            Issuer’s Representations and Warranties

                        	
                            
                            5

                        

            

            
             

            
            

            

            

            
            THIS SUPPLEMENTAL INDENTURE WITH RESPECT TO ADDITIONAL CLASS A(2007-15)
            NOTES (this “Supplemental
            Indenture”), by and between BA CREDIT CARD TRUST, a
            statutory trust created under the laws of the State of Delaware (the
            “Issuer”), having its
            principal office at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
            19890, and THE BANK OF NEW YORK, a New York banking corporation, as Indenture Trustee
            (the “Indenture
            Trustee”), is made and entered into as of January 17,
            2008 and hereby modifies and supplements the Class A(2007-15) Terms Document (the
            “Terms Document”)
            entered into by the Issuer and the Indenture Trustee as of November 27,
            2007.

            
             

            
            WHEREAS, the Issuer has created, pursuant to the Terms Document, a
            tranche of Class A Notes known as the Class A(2007-15) Notes;

            
             

            
            WHEREAS, pursuant to Section 310(a) of the Indenture, the Issuer shall
            issue the Additional Class A(2007-15) Notes that shall be identical in all material
            respects to all other Outstanding Class A(2007-15) Notes and will be equally and
            ratably entitled to the benefits of the Indenture, the Indenture Supplement and the
            Terms Document as all other Outstanding Class A(2007-15) Notes without preference,
            priority or distinction.

            
             

            
            NOW, THEREFORE, in connection with the issuance of the Additional Class
            A(2007-15) Notes, the Issuer and the Indenture Trustee enter into this Supplemental
            Indenture.

            
             

            
            ARTICLE I

             

            
            Definitions and Other Provisions of General Application

            
            Section 1.01.     
            Definitions. For all purposes of this
            Supplemental Indenture, except as otherwise expressly provided or unless the context
            otherwise requires:

            
            (a)          
            the terms defined in this Article have the meanings assigned to them in
            this Article, and include the plural as well as the singular;

            
            (b)          
            all other terms used herein which are defined in the Amended and
            Restated BAseries Indenture Supplement, dated as of June 10, 2006 (the
            “Indenture Supplement”),
            between the Issuer and the Indenture Trustee, the Second Amended and Restated
            Indenture, dated as of October 20, 2006 (the
            “Indenture”), between
            the Issuer and the Indenture Trustee, as acknowledged and accepted by FIA, as Servicer,
            or the Terms Document, either directly or by reference therein and are not modified by
            Section 2.02 hereof, have the meanings assigned to them therein;

            
            (c)          
            all accounting terms not otherwise defined herein have the meanings
            assigned to them in accordance with generally accepted accounting principles and,
            except as otherwise herein expressly provided, the term “generally accepted
            accounting principles” with respect to any computation required or permitted
            hereunder means such accounting principles as are generally accepted in the United
            States of America at the date of such computation;

             

            
            

            

            

            
            (d)          
            all references in this Supplemental Indenture to designated
            “Articles,” “Sections” and other subdivisions are to the
            designated Articles, Sections and other subdivisions of this Supplemental Indenture as
            originally executed;

            
            (e)          
            the words “herein,” “hereof” and
            “hereunder” and other words of similar import refer to this Supplemental
            Indenture as a whole and not to any particular Article, Section or other
            subdivision;

            
            (f)           
            in the event that any term or provision contained herein shall conflict
            with or be inconsistent with any term or provision contained in the Indenture
            Supplement, the Indenture or the Terms Document, the terms and provisions of this
            Supplemental Indenture shall be controlling;

            
            (g)           
            each capitalized term defined herein shall relate only to the Class
            A(2007-15) Notes and no other tranche of Notes issued by the Issuer; and

            
            (h)          
            “including” and words of similar import will be deemed to be
            followed by “without limitation.”

            
            “Additional Class A(2007-15)
            Notes” means the $200,000,000 principal amount Class
            A(2007-15) Notes described in this Supplemental Indenture, substantially in the form
            set forth in Exhibit A-1 to the
            Indenture Supplement, designated as a Class A(2007-15) Note and duly executed and
            authenticated in accordance with the Indenture.

            
            “Additional Issuance
            Date” means January 17, 2008.

            
            Section 1.02.     
            Governing Law; Submission to Jurisdiction; Agent for Service of
            Process. This Supplemental Indenture shall be governed by and
            construed in accordance with the laws of the State of Delaware, without regard to
            principles of conflict of laws. The parties hereto declare that it is their intention
            that this Supplemental Indenture shall be regarded as made under the laws of the State
            of Delaware and that the laws of said State shall be applied in interpreting its
            provisions in all cases where legal interpretation shall be required. Each of the
            parties hereto agrees (a) that this Supplemental Indenture involves at least
            $100,000.00, and (b) that this Supplemental Indenture has been entered into by the
            parties hereto in express reliance upon 6 DEL. C.
            § 2708. Each of the parties hereto hereby irrevocably and
            unconditionally agrees (a) to be subject to the jurisdiction of the courts of the State
            of Delaware and of the federal courts sitting in the State of Delaware, and (b)(1) to
            the extent such party is not otherwise subject to service of process in the State of
            Delaware, to appoint and maintain an agent in the State of Delaware as such
            party’s agent for acceptance of legal process, and (2) that, to the fullest
            extent permitted by applicable law, service of process may also be made on such party
            by prepaid certified mail with a proof of mailing receipt validated by the United
            States Postal Service constituting evidence of valid service, and that service made
            pursuant to (b)(1) or (2) above shall, to the fullest extent permitted by applicable
            law, have the same legal force and effect as if served upon such party personally
            within the State of Delaware.

            
            Section 1.03.     
            Counterparts. This Supplemental Indenture
            may be executed in any number of counterparts, each of which so executed will be deemed
            to be an original, but all such counterparts will together constitute but one and the
            same instrument.

             

            
            2

             

            
            

            

            

            
            Section 1.04.     
            Ratification of Indenture, Indenture Supplement and the Terms
            Document. As supplemented by this Supplemental Indenture,
            each of the Indenture, the Indenture Supplement and the Terms Document is in all
            respects ratified and confirmed and the Indenture as so supplemented by the Indenture
            Supplement as so supplemented and the Terms Document and this Supplemental Indenture
            shall be read, taken and construed as one and the same instrument.

            
            Section 1.05.     
            Full Force and Effect of Terms Document.
            All terms and conditions of the Terms Document not changed hereby shall remain in full
            force and effect.

            [END
            OF ARTICLE I]

             

            
            3

             

            
            

            

            

            
            ARTICLE II

             

            The
            Additional Class A(2007-15) Notes

            
            Section 2.01.     
            Terms and Issuance. The Additional Class
            A(2007-15) Notes shall be identical in all material respects to all other Outstanding
            Class A(2007-15) Notes and will be equally and ratably entitled to the benefits of the
            Indenture, the Indenture Supplement and the Terms Document as all other Outstanding
            Class A(2007-15) Notes without preference, priority or distinction. The Additional
            Class A(2007-15) Notes shall be issued pursuant to the Indenture, the Indenture
            Supplement, the Terms Document and this Supplemental Indenture on the Additional
            Issuance Date.

            
            Section 2.02.     
            Modification of Defined Terms. Upon
            issuance of the Additional Class A(2007-15) Notes, all references in the Terms Document
            with respect to the Class A(2007-15) Notes shall include the Additional Class
            A(2007-15) Notes and each of the following terms, as used in the Terms Document, shall
            have the respective meanings set forth below:

            
            “Controlled Accumulation
            Amount” means $120,833,333.34;
            provided,
            however, if the Accumulation Period Length
            is determined to be less than twelve (12) months pursuant to
            Section 3.10(b)(ii) of the Indenture
            Supplement, the Controlled Accumulation Amount shall be the amount specified in the
            definition of “Controlled Accumulation Amount” in the Indenture
            Supplement.

            
            “Initial Dollar Principal
            Amount” means $1,450,000,000.

            
            “Stated Principal
            Amount” means $1,450,000,000.

            
            Section 2.03.     
            Form of Delivery of Additional Class A(2007-15) Notes; Depository;
            Denominations.

            
            (a)          
            The Additional Class A(2007-15) Notes shall be delivered in the form of
            a global Registered Note as provided in Sections
            202 and 301(i)
            of the Indenture, respectively.

            
            (b)          
            The Depository for the Additional Class A(2007-15) Notes shall be The
            Depository Trust Company, and the Additional Class A(2007-15) Notes shall initially be
            registered in the name of Cede & Co., its nominee.

            
            (c)          
            The Additional Class A(2007-15) Notes will be issued in minimum
            denominations of $5,000 and multiples of $1,000 in excess of that amount.

            
            Section 2.04.     
            Delivery and Payment for the Additional Class A(2007-15)
            Notes. The Issuer shall execute and deliver the Additional
            Class A(2007-15) Notes to the Indenture Trustee for authentication, and the Indenture
            Trustee shall deliver the Additional Class A(2007-15) Notes when authenticated, each in
            accordance with Section 303 of the
            Indenture.

            [END
            OF ARTICLE II]

             

            
            4

             

            
            

            

            

            
            ARTICLE III

             

            
            Representations and Warranties

            
            Section 3.01.     
            Issuer’s Representations and
            Warranties. The Issuer makes the following representations
            and warranties as to the Collateral Certificate on which the Indenture Trustee is
            deemed to have relied in acquiring the Collateral Certificate. Such representations and
            warranties speak as of the execution and delivery of this Supplemental Indenture, but
            shall survive until the termination of this Supplemental Indenture. Such
            representations and warranties shall not be waived by any of the parties to this
            Supplemental Indenture unless the Issuer has obtained written confirmation from each
            Note Rating Agency that there will be no Ratings Effect with respect to such
            waiver.

            
            (a)          
            The Indenture creates a valid and continuing security interest (as
            defined in the Delaware UCC) in the Collateral Certificate in favor of the Indenture
            Trustee, which security interest is prior to all other liens, and is enforceable as
            such as against creditors of and purchasers from the Issuer.

            
            (b)          
            The Collateral Certificate constitutes either an “account,”
            a “general intangible,” an “instrument,” or a
            “certificated security,” each within the meaning of the Delaware
            UCC.

            
            (c)          
            At the time of the transfer and assignment of the Collateral Certificate
            to the Indenture Trustee pursuant to the Indenture, the Issuer owned and had good and
            marketable title to the Collateral Certificate free and clear of any lien, claim or
            encumbrance of any Person.

            
            (d)          
            The Issuer has caused, within ten days of the execution of the
            Indenture, the filing of all appropriate financing statements in the proper filing
            office in the appropriate jurisdictions under applicable law in order to perfect the
            security interest in the Collateral Certificate granted to the Indenture Trustee
            pursuant to the Indenture.

            
            (e)          
            Other than the security interest granted to the Indenture Trustee
            pursuant to the Indenture, the Issuer has not pledged, assigned, sold, granted a
            security interest in, or otherwise conveyed the Collateral Certificate. The Issuer has
            not authorized the filing of and is not aware of any financing statements against the
            Issuer that include a description of collateral covering the Collateral Certificate
            other than any financing statement relating to the security interest granted to the
            Indenture Trustee pursuant to the Indenture or any financing statement that has been
            terminated. The Issuer is not aware of any judgment or tax lien filings against the
            Issuer.

            
            (f)           
            All original executed copies of the Collateral Certificate have been
            delivered to the Indenture Trustee.

            
            (g)          
            At the time of the transfer and assignment of the Collateral Certificate
            to the Indenture Trustee pursuant to the Indenture, the Collateral Certificate had no
            marks or notations indicating that it has been pledged, assigned or otherwise conveyed
            to any Person other than the Indenture Trustee.

            [END
            OF ARTICLE III]

             

            
            5

             

            
            

            

            

            
            IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
            Indenture to be duly executed, all as of the day and year first above
            written.

            
             

            
             

            
                	
                            
                            BA CREDIT CARD TRUST,

                        
	
                            
                            by BA CREDIT CARD FUNDING, LLC,

                        
	
                            
                            as Beneficiary and not in its individual
                            capacity

                        
	
                            
                             

                        
	
                            
                             

                        
	
                            
                             

                        
	
                            
                            By:   
                                /s/ Keith W.
                            Landis                                     

                        
	
                            
                            Name: Keith W. Landis

                        
	
                            
                            Title: Vice President

                        
	
                            
                             

                        
	
                            
                             

                        
	
                            
                             

                        
	
                            
                            THE BANK OF NEW YORK, as Indenture Trustee

                        
	
                            
                            and not in its individual capacity

                        
	
                            
                             

                        
	
                            
                             

                        
	
                            
                             

                        
	
                            
                            By:    
                                /s/ Catherine
                            Cerilles                                   

                        
	
                            
                            Name: Catherine Cerilles

                        
	
                            
                            Title:   Vice President

                        

            

            
             

            
             

            
             

            
             

            
             

            
             

            
             

            
             

            
             

            
             

            
             

            
            [Signature Page to the Class A(2007-15) Supplemental
            Indenture]Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE AGREEMENT
(the “Agreement”), dated as of January 15,
2008, by and among Answers Corporation, a Delaware corporation, with
headquarters located at 237 West 35th Street, Suite 1101, New York, NY
10001  (the “Company”), and the investors listed on the
Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).

 

WHEREAS:

 

A.         The
Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the Securities Act of 1933, as amended (the “1933
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.

 

B.          The
Company has authorized a new series of senior secured convertible notes of the
Company, issuable by the Company following the Follow-On Offering (a “Follow-On Issuance”) or upon a Notes Termination Event (as
defined below), which notes shall be convertible into shares (as converted, the
“Conversion Shares”) of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), in accordance with the
terms of the Notes (as defined below).

 

C.          (i) In
connection with a Follow-On Issuance, if any, each Buyer wishes to purchase,
and the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate principal amount of the notes, in substantially the
form attached hereto as Exhibit A (the “Follow-On
Notes”), set forth opposite such
Buyer’s name in column 

 

(3) on the Schedule of Buyers attached hereto (which aggregate
amount for all Buyers shall be $8,500,000) and (ii) in connection with a
Notes Termination Event, the Company may wish to issue in accordance with Section 8
hereof, that principal amount of notes (the “Termination
Notes” and together with the Follow-On Notes, the “Notes”), in substantially the form attached hereto as Exhibit A,
set forth opposite such Buyer’s name in Column (4) on the Schedule of
Buyers.

 

D.         Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the Company
has agreed, subject to the issuance of the Follow-On Notes or the Termination
Notes on the Closing Date, to provide certain registration rights with respect
to the Registrable Securities (as defined in the Registration Rights Agreement)
under the 1933 Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.

 

E.          The
Notes and the Conversion Shares, collectively, are referred to herein as the “Securities”.

 

 

F.          The
Notes will be senior obligations and will rank senior in right of payment to
all existing and future indebtedness of the Company, other than Permitted
Senior Indebtedness (as defined in the Notes) and will be secured by a first
priority perfected security interest, in all of the assets of the Company and
the stock, equity interests and assets of each of the Company’s subsidiaries,
as evidenced by a pledge and security agreement, in the form attached hereto as
Exhibit C (as amended or modified from time to time in accordance
with its terms, the “Pledge and Security
Agreement”, and, together with any ancillary documents related
thereto, collectively the “Security Documents”).

 

NOW,
THEREFORE, the Company and each Buyer hereby agree as
follows:

 

1.          PURCHASE AND SALE OF NOTES.

 

(a)        Purchase of Notes.  Subject to the satisfaction (or waiver) of
the conditions set forth in Sections 6 and 7 below, if applicable, and in
connection with the Notes Termination Event under Section 8 below, the
Company shall issue and sell to each Buyer, and each Buyer, with respect to the
Follow-On Notes only, severally, but not jointly, agrees to purchase from the
Company on the Closing Date (as defined below), a principal amount of Notes as
is set forth opposite such Buyer’s name in column (3) or in column (4) on
the Schedule of Buyers, as applicable (the “Closing”).

 

(b)        Closing.  The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m.,
New York City time, two Business Days (or such later date as is mutually agreed
to by the Company and each Buyer) after notification of satisfaction (or
waiver) of the conditions to the Closing set forth in Sections 6 and 7 below at
the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York,
New York 10022.  As used herein, “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.

 

(c)        Purchase Price.  The aggregate purchase price for the
Follow-On Notes to be purchased by each such Buyer at the Closing (the “Purchase Price”) shall be the amount set
forth opposite each Buyer’s name in column (5) of the Schedule of
Buyers.  Each Buyer shall pay $1,000 for
each $1,000 of principal amount of Follow-On Notes to be purchased by such Buyer
at the Closing.

 

(d)        Form of Payment.  On the Closing Date, (i) each Buyer
shall pay its Purchase Price to the Company for the Follow-On Notes to be
issued and sold to such Buyer at the Closing, if any, by wire transfer of
immediately available funds in accordance with the Company’s written wire
instructions and (ii) the Company shall deliver to each Buyer the Notes
(allocated in the principal amounts as such Buyer shall request) which such
Buyer is then purchasing or receiving hereunder, duly executed on behalf of the
Company and registered in the name of such Buyer or its designee.

 

2.             BUYER’S
REPRESENTATIONS AND WARRANTIES.  Each
Buyer, severally and not jointly, represents and warrants with respect to only
itself that:

 

(a)        No Public Sale or
Distribution.  Such Buyer is (i) acquiring
the Notes and (ii) upon conversion of the Notes will acquire the
Conversion Shares issuable upon conversion of 

 

 

the Notes, for its own account
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the 1933 Act; provided, however, that by making the
representations herein, such Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act and pursuant to the applicable
terms of the Transaction Documents (as defined in Section 3(b)).  Such Buyer is acquiring the Securities
hereunder in the ordinary course of its business.  Such Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.

 

(b)        Accredited Investor Status.  Such Buyer is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D.

 

(c)        Reliance on
Exemptions.  Such Buyer understands
that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying in part upon the truth
and accuracy of, and such Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Buyer set
forth herein in order to determine the availability of such exemptions and the
eligibility of such Buyer to acquire the Securities.

 

(d)        Information.  Such Buyer and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by such Buyer.  Such Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the Company.  Neither such inquiries nor any other due
diligence investigations conducted by such Buyer or its advisors, if any, or
its representatives shall modify, amend or affect such Buyer’s right to rely on
the Company’s representations and warranties contained herein.  Such Buyer understands that its investment in
the Securities involves a high degree of risk. 
Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to
its acquisition of the Securities.

 

(e)        No Governmental
Review.  Such Buyer understands that
no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of
the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the
offering of the Securities.

 

(f)         Transfer or Resale.  Such Buyer understands that except as
provided in the Registration Rights Agreement: (i) the Securities have not
been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company
an opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or
transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can
be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the 1933 Act, as amended, (or a successor rule thereto)
(collectively,

 

 

“Rule 144”); (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the Person (as defined in Section 3(s))
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other Person is under any obligation to
register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.  The Securities may be pledged in connection
with a bona fide margin account or other loan or financing arrangement secured
by the Securities and such pledge of Securities shall not be deemed to be a
transfer, sale or assignment of the Securities hereunder, and no Buyer
effecting a pledge of Securities shall be required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document (as defined in Section 3(b)),
including, without limitation, this Section 2(f).

 

(g)        Legends.  Such Buyer understands that the certificates
or other instruments representing the Notes and, until such time as the resale
of the Conversion Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares, except as set forth below, shall bear any
legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):

 

[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]  [HAVE
BEEN][THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.  [ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY
REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 18(a) HEREOF.  THE HOLDER OF THIS NOTE AGREES TO THE TERMS
AND PROVISIONS SET FORTH IN SECTION 4(q) OF THE SECURITIES PURCHASE
AGREEMENT REGARDING THE COLLATERAL AGENT (AS DEFINED IN THE SECURITIES PURCHASE
AGREEMENT).  THE PRINCIPAL

 

 

AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES
ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON
THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.]

 

The legend set
forth above shall be removed and the Company shall issue a certificate without
such legend to the holder of the Securities upon which it is stamped by
electronic delivery at the applicable balance account at DTC (as defined
below), unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in
connection with a sale, assignment or other transfer, such holder provides the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the 1933 Act, or (iii) such
holder provides the Company with reasonable assurance that the Securities can
be sold, assigned or transferred pursuant to Rule 144 or Rule 144A.

 

(h)        Validity;
Enforcement.  This Agreement and the
Registration Rights Agreement and the Security Documents to which such Buyer is
a party have been duly and validly authorized, executed and delivered on behalf
of such Buyer and shall constitute the legal, valid and binding obligations of
such Buyer enforceable against such Buyer in accordance with their respective
terms, except as such enforceability may be limited by general principles of
equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

 

(i)         No Conflicts.  The execution, delivery and performance by
such Buyer of this Agreement and the Registration Rights Agreement and the
Security Documents to which such Buyer is a party and the consummation by such
Buyer of the transactions contemplated hereby and thereby will not (i) result
in a violation of the organizational documents of such Buyer or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Buyer is a party, or (iii) result in
a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Buyer, except in the case
of clauses (ii) and (iii) above, for such conflicts, defaults, rights
or violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of such Buyer to
perform its obligations hereunder.

 

(j)         Residency.  Such Buyer is a resident of that jurisdiction
specified below its address on the Schedule of Buyers.

 

3.             REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company
hereby represents and warrants to each of the Buyers as of the date hereof and
as of the Closing Date as set forth below. 
Except as otherwise indicated, for purposes of this Agreement, Lexico
Publishing Group LLC and its subsidiaries (taken together, “Lexico”) shall be deemed to be a subsidiary of the Company,
as if the acquisition of Lexico (the “Lexico Acquisition”)
had been consummated as of the date hereof.

 

 

(a)        Organization and
Qualification.  Each of the Company
and its “Subsidiaries” (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns any of the capital stock or holds an equity or similar
interest) are entities duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are formed, and have the
requisite power and authorization to own their properties and to carry on their
business as now being conducted.  Each of
the Company and its Subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect” means any material
adverse effect on the business, properties, assets, operations, results of
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated hereby and
the other Transaction Documents or by the agreements and instruments to be
entered into in connection herewith or therewith, or on the authority or
ability of the Company to perform its obligations under the Transaction
Documents (as defined below).  The
Company has no Subsidiaries except as set forth on Schedule 3(a).

 

(b)        Authorization;
Enforcement; Validity.  The Company
has the requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Notes, the Registration Rights Agreement,
the Security Documents, the Irrevocable Transfer Agent Instructions (as defined
in Section 5(b)) and each of the other agreements entered into by the
parties hereto in connection with the transactions contemplated by this
Agreement (collectively, the “Transaction
Documents”) and under any applicable laws, including without
limitation, the rules and regulations of the Principal Market (as defined
below) and to issue the Securities in accordance with the terms hereof and
thereof, except as disclosed in Schedule 3(b).  The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby, including, without limitation,
the issuance of the Notes, the reservation for issuance and the issuance of the
Conversion Shares  issuable upon
conversion of the Notes and the granting of a security interest in the
Collateral (as defined in the Security Documents) have been duly authorized by
the Company’s Board of Directors and (other than (i) the filing of
appropriate UCC financing statements with the appropriate states and other
authorities pursuant to the Pledge and Security Agreement, and (ii) the
filing with the SEC of one or more Registration Statements in accordance with
the requirements of the Registration Rights Agreement) no further filing,
consent, or authorization is required by the Company, its Board of Directors or
its stockholders, except as disclosed in Schedule 3(b).  This Agreement and the other Transaction
Documents of even date herewith have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.

 

(c)        Issuance of
Securities.  The issuance of the Notes
is duly authorized and is free from all taxes, liens and charges with respect
to the issue thereof.  As of the Closing
and except as disclosed in Schedule 3(b), the Company shall have reserved
all of its duly authorized

 

 

and unissued capital stock for
the issuance of the shares of Common Stock issuable upon conversion of the
Notes (without taking into account any limitations on the conversion of the
Notes set forth in the Notes) and from and after the Stockholder Approval (as
defined below), the Company shall have reserved from its duly authorized
capital stock not less than 130% of the maximum number of shares of Common
Stock issuable upon conversion of the Notes (without taking into account any
limitations on the conversion of the Notes set forth in the Notes).  Except as disclosed in Schedule 3(b),
upon conversion or payment in accordance with the Notes, the Conversion Shares
will be validly issued, fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.  The offer and
issuance by the Company of the Securities is exempt from registration under the
1933 Act.

 

(d)        No Conflicts.  Except as disclosed in Schedule 3(b),
the execution, delivery and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Notes,
the granting of a security interest in the Collateral and reservation for
issuance and issuance of the Conversion Shares) will not (i) result in a
violation of any certificate of incorporation, certificate of formation, any
certificate of designations or other constituent documents of the Company or
any of its Subsidiaries, any capital stock of the Company or any of its
Subsidiaries or the bylaws of the Company or any of its Subsidiaries or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) in any respect under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
contract, agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations of The
NASDAQ Global Market (the “Principal Market”))
applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected.

 

(e)        Consents.  Neither the Company nor any of its
Subsidiaries is required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other Person, including without
limitation, the Principal Market, in order for it to execute, deliver or perform
any of its obligations under or contemplated by the Transaction Documents, in
each case in accordance with the terms hereof or thereof, except for applicable
state securities laws and filings.  All
consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the Closing Date, and the Company and its Subsidiaries
are unaware of any facts or circumstances which might prevent the Company from
obtaining or effecting any of the registration, application or filings pursuant
to the preceding sentence.  The Company
is not and, after giving effect to the transactions contemplated hereby, will
not be in violation of the listing requirements of the Principal Market and has
no knowledge of any facts which would reasonably lead to delisting or
suspension of the Common Stock in the foreseeable future.

 

(f)         Acknowledgment
Regarding Buyer’s Purchase of Securities. 
The Company acknowledges and agrees that each Buyer is acting solely in
the capacity of arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated

 

 

hereby and thereby and that no
Buyer is or, after giving effect to the transactions contemplated hereby, will
be (i) an officer or director of the Company, (ii) an “affiliate” of
the Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to
the knowledge of the Company, a “beneficial owner” of more than 10% of the
shares of Common Stock (as defined for purposes of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)).  The
Company further acknowledges that no Buyer is acting as a financial advisor or
fiduciary of the Company or any of its Subsidiaries (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its
representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such Buyer’s
purchase of the Securities.  The Company
further represents to each Buyer that the Company’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by
the Company and its representatives.

 

(g)        No General
Solicitation; Placement Agent’s Fees. 
Neither the Company, nor any of its Subsidiaries or affiliates, nor any
Person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities.  The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or brokers’
commissions (other than for persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated
hereby.  The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim.  The Company
acknowledges that it has engaged Thomas Weisel Partners LLC and Canaccord Adams
as placement agents (the “Placement Agents”) in connection with the
sale of the Securities.  Other than the
Placement Agents, the Company has not engaged any placement agent or other
agent in connection with the sale of the Securities.

 

(h)        No Integrated
Offering.  None of the Company, its
Subsidiaries, any of their affiliates, and any Person acting on their behalf
has, directly or indirectly, made, or will prior to Closing make, any offers or
sales of any security or solicited, or will prior to Closing solicit, any
offers to buy any security, under circumstances that would require registration
of any of the Securities under the 1933 Act or cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
the 1933 Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the Company are
listed or designated.  None of the
Company, its Subsidiaries, their affiliates and any Person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the 1933 Act or cause
the offering of the Securities to be integrated with other offerings,
including, for the avoidance of doubt, the Follow-on Offering.

 

(i)         Dilutive Effect.  The Company understands and acknowledges that
the number of Conversion Shares issuable upon conversion of the Notes will
increase in certain circumstances.  The
Company further acknowledges that its obligation to issue Conversion Shares
upon conversion of the Notes in accordance with this Agreement and the Notes is

 

 

absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other stockholders of the Company.

 

(j)         Application of
Takeover Protections; Rights Agreement. 
The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the jurisdiction of its formation which is or could become
applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the
Securities and any Buyer’s ownership of the Securities.  The Company has not adopted a stockholder
rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company.

 

(k)        SEC Documents;
Financial Statements.  Except as
disclosed in Schedule 3 (k), during the two (2) years prior to the
date hereof, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to the
date hereof and all exhibits included therein and financial statements, notes
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”).  The Company has delivered to the Buyers or
their respective representatives true, correct and complete copies of the SEC
Documents not available on the EDGAR system. 
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as
may be otherwise indicated in such financial statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).  No other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 2(d) of this Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary in order
to make the statements therein, in the light of the circumstance under which
they are or were made, not misleading.

 

(l)         Absence of Certain
Changes.  Except as disclosed in Schedule
3, since December 31, 2006, there has been no material adverse change
and no material adverse development in the business, properties, operations,
condition (financial or otherwise), or results of operations of the Company or
its Subsidiaries.  Except as disclosed in
Schedule 3, since December 31, 2006, the Company has not (i) declared
or paid any dividends, (ii) sold any assets,

 

 

individually or in the
aggregate, in excess of $250,000 outside of the ordinary course of business or (iii) had
capital expenditures, individually or in the aggregate, in excess of
$500,000.  Neither the Company nor any of
its Subsidiaries has taken any steps to seek protection pursuant to any
bankruptcy law nor does the Company have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings or any
actual knowledge of any fact which would reasonably lead a creditor to do
so.  The Company is not as of the date
hereof, and after giving effect to the transactions contemplated hereby to
occur at the Closing, will not be Insolvent (as defined below).  For purposes of this Section 3(l), “Insolvent” means, with respect to any
Person (as defined in Section 3(s), (i) the present fair saleable
value of such Person’s assets is less than the amount required to pay such
Person’s total Indebtedness (as defined in Section 3(s)), (ii) such
Person is unable to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, (iii) the
Company intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts mature or (iv) such Person has
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted.

 

(m)       No Undisclosed
Events, Liabilities, Developments or Circumstances.  No event, liability, development or
circumstance has occurred or exists, or is contemplated to occur with respect
to the Company, its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by
the Company under applicable securities laws on a registration statement on Form S-1
filed with the SEC relating to an issuance and sale by the Company of its
Common Stock where the filing of such Form S-1 is required and which has
not been publicly announced.

 

(n)        Conduct of Business;
Regulatory Permits.  Neither the
Company nor its Subsidiaries is in violation of any term of or in default under
any certificate of designations of any outstanding series of preferred stock of
the Company, its Certificate of Incorporation or Bylaws or their organizational
charter or certificate of incorporation or bylaws, respectively.  Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation of any of the foregoing, except for possible
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.  Without limiting the
generality of the foregoing, the Company is not in violation of any of the
rules, regulations or requirements of the Principal Market and has no knowledge
of any facts or circumstances which would reasonably lead to delisting or
suspension of the Common Stock by the Principal Market in the foreseeable
future.  During the two years prior to
the date hereof, the Common Stock has been designated for quotation on the
Principal Market.  During the two years
prior to the date hereof, (i) trading in the Common Stock has not been
suspended by the SEC or the Principal Market and (ii) the Company has
received no communication, written or oral, from the SEC or the Principal
Market regarding the suspension or delisting of the Common Stock from the
Principal Market.  The Company and its
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has

 

 

received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

 

(o)        Foreign Corrupt
Practices.  Neither the Company, nor
any of its Subsidiaries, nor to its knowledge any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the
Company or any of its Subsidiaries (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.

 

(p)        Sarbanes-Oxley Act.  The Company is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations
promulgated by the SEC thereunder that are effective as of the date hereof.

 

(q)        Transactions With
Affiliates.  Except as set forth on Schedule
3, none of the officers, directors or employees of the Company is presently
a party to any transaction with the Company or any of its Subsidiaries (other
than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the knowledge of the Company or any of its
Subsidiaries, any corporation, partnership, trust or other entity in which any
such officer, director, or employee has a substantial interest or is an
officer, director, trustee or partner.

 

(r)         Equity
Capitalization.  As of the date
hereof (without giving effect to the Lexico Acquisition), the authorized
capital stock of the Company consists of (i) 30,000,000 shares of Common
Stock, of which as of the date hereof, 7,859,890
are issued and outstanding, 2,291,779 shares are reserved for issuance pursuant
to the Company’s stock option and purchase plans and 1,157,763 shares are
reserved for issuance pursuant to securities (other than the aforementioned
options, and the Notes) exercisable or exchangeable for, or convertible into,
shares of Common Stock and (ii) 1,000,000 shares of preferred stock, par
value $0.01 per share, of which as of the date hereof, none are issued and
outstanding.  As of the Closing Date,
after giving effect to the Lexico Acquisition and assuming such public offering
price in the Follow-On Offering as is set forth on Exhibit D, the
authorized capital stock of the Company shall consist of (i) 30,000,000
shares of Common Stock, of which, 20,393,308 shall be issued and outstanding,
2,291,779 shares shall be reserved for issuance pursuant to the Company’s stock
option and purchase plans and 1,157,763 shares shall be reserved for issuance
pursuant to securities (other than the aforementioned options, and the Notes)
exercisable or exchangeable for, or convertible into, shares of Common Stock
and (ii) 1,000,000 shares of preferred stock, par value $0.01 per share,
of which, none shall be issued and outstanding. 
All of such outstanding shares have been, or upon issuance will be, validly
issued and are fully paid and nonassessable. 
Except as disclosed in Schedule 3: (i) none of the Company’s
capital stock is subject to preemptive rights

 

 

or any other similar rights or
any liens or encumbrances suffered or permitted by the Company; (ii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings
or arrangements by which the Company or any of its Subsidiaries is or may
become bound to issue additional capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries; (iii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound; (iv) there are no financing statements securing obligations
in any material amounts, either singly or in the aggregate, filed in connection
with the Company or any of its Subsidiaries; (v) there are no agreements
or arrangements under which the Company or any of its Subsidiaries is obligated
to register the sale of any of their securities under the 1933 Act (except
pursuant to the Registration Rights Agreement); (vi) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (vii) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities; (viii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement; and (ix) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Documents but
not so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company’s or its Subsidiaries’ respective businesses and
which, individually or in the aggregate, do not or would not have a Material
Adverse Effect.  The Company has
furnished to the Buyers true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”),
and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock
and the material rights of the holders thereof in respect thereto.

 

(s)        Indebtedness and
Other Contracts.  Except as disclosed
in Schedule 3(1), neither the Company nor any of its Subsidiaries (i) (without
giving effect to the Lexico Acquisition) has any outstanding Indebtedness (as
defined below), (ii) is a party to any contract, agreement or instrument,
the violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument would result in a Material Adverse Effect, (iii) is
in violation of any term of or in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iv) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the
judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect.  Schedule 3(1) provides
a detailed description of the material terms of any such outstanding
Indebtedness.  Except as disclosed in Schedule
3(s)(2), as of the Closing Date, after giving effect to the Lexico
Acquisition and based on such assumptions as are set forth on Exhibit D,
neither the Company nor any of its Subsidiaries shall have any outstanding
Indebtedness not set forth on Schedule 3(s)(1).

 

 

A true and correct copy of the
Lexico Agreement (as defined below) is attached hereto as Schedule 3(3).  For purposes of this Agreement:  (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services, including (without limitation) “capital
leases” in accordance with generally accepted accounting principles (other than
trade payables entered into in the ordinary course of business), (C) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses, (E) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either
case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a
capital lease, (G) all indebtedness referred to in clauses (A) through
(F) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become
liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means, as to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any indebtedness, lease, dividend or other obligation of
another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the
obligee of such liability that such liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such liability will be protected (in whole or in part) against loss with
respect thereto; and (z) “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

(t)         Absence of Litigation.  There is no action, suit, proceeding, inquiry
or investigation before or by the Principal Market, any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries, the Common Stock or any of the Company’s Subsidiaries or any
of the Company’s or its Subsidiaries’ officers or directors in their capacities
as such, except as set forth in Schedule 3(t).

 

(u)        Insurance.  The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged.  Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers 

 

 

as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.

 

(v)        Employee Relations.    Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union.  The Company and its
Subsidiaries believe that their relations with their employees are good.  No executive officer of the Company or any of
its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has
notified the Company or any such Subsidiary that such officer intends to leave
the Company or any such Subsidiary or otherwise terminate such officer’s
employment with the Company or any such Subsidiary.  No executive officer of the Company or any of
its Subsidiaries, to the knowledge of the Company, is, or is now expected to
be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or any
of its Subsidiaries to any liability with respect to any of the foregoing
matters.

 

(i)              The Company and its Subsidiaries
are in compliance with all federal, state, local and foreign laws and
regulations respecting labor, employment and employment practices and benefits,
terms and conditions of employment and wages and hours, except where failure to
be in compliance would not, either individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect.

 

(w)       Title.  The Company and its Subsidiaries have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and any of its Subsidiaries.   Any real property and facilities held under
lease by the Company and any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

 

(x)         Intellectual
Property and Internet Practices.

 

(i)                 For purposes of this Section 3(x),
the following definitions shall apply.

 

(1)           “Intellectual Property”
means any and all statutory or common law worldwide industrial and intellectual
property rights and all rights associated therewith, including all patents and
applications therefor and all reissues, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof, all inventions
(whether patentable or not), invention disclosures, improvements, trade
secrets, proprietary information, know how, technology, technical data,
proprietary processes and formulae, algorithms, specifications, customer lists
and supplier lists, all industrial designs and any registrations and applications
therefor, all trademarks, trade names, trade dress, logos, and service names
and marks (in each case whether or not registered) and registrations and
applications therefor and the right to file applications for

 

 

the
registration thereof, Internet domain names, Internet and World Wide Web URLs
or addresses, all copyrights (whether or not registered), registrations and
applications therefor and the right to file applications for registration
thereof, and all other rights corresponding thereto, all computer software,
including all source code, object code, firmware, development tools, files,
records, documentation, screen displays, layouts, and data, test methodologies,
emulation and simulation tools and reports, all databases and data collections
and all rights therein, all publicity and privacy rights, and all moral and
economic rights of authors and inventors, however denominated, and any similar
or equivalent rights to any of the foregoing, arising under the laws of the
United States of America, any state thereof, or any other country or province,
and all tangible embodiments of the foregoing (in whatever form).

 

(2)           “Company IP Rights”
means any and all Intellectual Property used in the conduct of the business of
the Company as currently conducted or as currently proposed to be conducted by
the Company, including, without limitation, Intellectual Property currently
under development by or for the Company (whether or not in collaboration with
another Person).

 

(3)           “Company-Owned IP Rights”
means Company IP Rights that are owned or are purportedly owned by or
exclusively licensed to the Company, including, but not limited to, Company
Registered Intellectual Property.

 

(4)           “Company Registered
Intellectual Property” means all United States, international and
foreign: (A) patents and patent applications (including provisional
applications all reissues, divisions, renewals, extensions, continuations and
continuations-in-part thereof); (B) registered trademarks and service
marks, applications to register trademarks and service marks, intent-to-use
applications, and other registrations and applications related to trademarks or
service marks; (C) registered Internet domain names and Internet and World
Wide Web URLs or addresses; (D) registered copyrights and applications for
copyright registration; and (E) any other Intellectual Property that is
the subject of an application, certificate, filing, registration or other
document issued, filed with, or recorded by any governmental authority owned
by, registered or filed in the name of, the Company.

 

(ii)             The Company (x) owns and has
independently developed or acquired, or (y) has the valid right or license
to all Company IP Rights and has not transferred ownership of any Intellectual
Property that is or was a Company IP Right or Company-Owned IP Rights to any
third party. The Company IP Rights are sufficient for the conduct of the
business of the Company as currently conducted and as currently proposed to be
conducted by the Company.

 

(iii)            The Company owns and has good and
exclusive title to each item of Company-Owned IP Rights and each item of
Company Registered Intellectual Property, free and clear of any encumbrances.
The right, license and interest of the Company in and to all Intellectual
Property owned by a third party licensed by the Company from a third party are
free and clear of all encumbrances (excluding restrictions contained in the
applicable license agreements with such third parties) and none of the Company
or any Company-Owned IP Rights 

 

 

is subject to any proceedings
or agreement restricting in any manner the use or enforceability of any
Company-Owned IP Rights.

 

(iv)            Neither the execution and delivery
or effectiveness of this Agreement nor the performance of the Company’s
obligations under this Agreement will cause the (A) forfeiture or
termination of, or give rise to a right of forfeiture or termination of any
Company-Owned IP Right, or impair the right of the Company or the Buyers to
use, possess, sell or license any Company-Owned IP Right or portion thereof or (B) breach
of any contract governing any Company IP Rights (the “Company IP
Rights Agreements”) and the consummation of the transactions
contemplated by this Agreement will not result in the modification,
cancellation, termination, suspension of, or acceleration of any payments with
respect to the Company IP Rights Agreements, or give any Person other than the
Company that is party to any Company IP Rights Agreement the right to do any of
the foregoing. After the Closing, all Company-Owned IP Rights will be fully
transferable, alienable or licensable by the Buyers without restriction and
without payment of any kind to any third party. Except as set forth in Schedule
3(x)(iv), none of the Company-Owned IP Rights have expired or terminated,
or are expected to expire or termination, within three years from the date of
this Agreement.

 

(v)             Schedule 3(x)(v) lists
all Company Registered Intellectual Property including the jurisdictions in
which each such item of Intellectual Property has been issued or registered
(including, without limitation, the “whois” lookup with respect to domain
names) or in which any application for such issuance and registration has been
filed, or in which any other filing or recordation has been made, together with
the current owner of record thereof.  All
Company-Owned IP Rights are subsisting, all registration, maintenance and
renewal fees currently due as of the date hereof in connection with such
Company Registered Intellectual Property have been paid and all documents, recordations
and certificates in connection with such Company Registered Intellectual
Property currently required to be filed have been filed with the relevant
jurisdiction or authority.

 

(vi)            None of the Company IP Rights
Agreements grants any third party exclusive rights to or under any Company IP
Rights or grants any third party the right to sublicense any Company IP Rights
and to the knowledge of the Company, there is no unauthorized use, infringement
or misappropriation of any Company-Owned IP Rights, by any third party and the
Company is unaware of any facts or circumstances which might give rise to any
of the foregoing infringements or claims. Except as set forth on Schedule
3(x)(vi), the Company has not, within the last 3 years, brought any action,
suit or proceeding for infringement or misappropriation of any Intellectual
Property or breach of any Company IP Rights Agreement.

 

(vii)           The Company has not been sued in any
suit, action or proceeding (or received any written notice or, to the knowledge
of the Company, threat) which involves a claim of infringement or
misappropriation of any Intellectual Property right of any third party, except
for routine notices of content infringement under the Digital Millennium
Copyright Act, or which contests the validity, ownership or right of the
Company to exercise any Intellectual Property right and the Company is unaware
of any facts or circumstances which might give rise to any of the foregoing
actions or proceedings.

 

 

(viii)          The Company has secured from all third
parties, unencumbered and unrestricted exclusive ownership of all such third
party’s Intellectual Property in any Company-Owned IP Rights that the Company
does not already own by operation of law and such third party has not retained
any rights or licenses with respect thereto, including without limitation,
receipt of all proprietary information and invention disclosure and assignment
agreements from any such third party.

 

(ix)             The Company has taken all
commercially reasonable steps to protect and preserve the confidentiality of
all confidential or nonpublic information included in the Company IP Rights (“Confidential Information”). All use, disclosure or
appropriation of Confidential Information owned by the Company to a third party
has been pursuant to the terms of a written contract between the Company and
such third party. All use, disclosure or appropriation of Confidential
Information by the Company not owned by the Company has been pursuant to the
terms of a written agreement between the Company and the owner of such
Confidential Information, or is otherwise lawful.

 

(x)              Schedule 3(x)(x) lists
all software or other material that is distributed as “free software”, “open
source software” or under a similar licensing or distribution terms (including
but not limited to the GNU General Public License GPL), GNU Lesser General
Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic
License, the Netscape Public License, the Sun Community Source License (SCSL)
the Sun Industry Standards License (SISL) and the Apache License) (“Open Source Materials”) used by the Company in any way. The
Company is in compliance with the terms and conditions of all licenses for the
Open Source Materials.

 

(xi)             For all software used by the
Company in providing services, or in developing or making available any of the
Company’s products, the Company has implemented any and all security patches or
upgrades that are generally available for that software.

 

(xii)            The Company has implemented and
maintains a comprehensive security plan which (i) identifies internal and
external risks to the security of the Confidential Information, including
personally identifiable information; (ii) implements, monitors and
improves adequate and effective administrative, electronic and physical
safeguards to control those risks; and (iii) maintains notification
procedures in compliance with applicable laws or regulations in the case of any
breach of security compromising unencrypted data containing personally
identifiable information. The Company has not experienced any breach of
security or otherwise unauthorized access by third parties to the Confidential
Information, including personally identifiable information in the Company’s
possession, custody or control, or to any Company Product.

 

(xiii)           The Company has complied with all
applicable laws and regulations and their respective internal and public
privacy policies relating to the use, collection, storage, disclosure and
transfer of any personally identifiable information collected by the Company or
by third parties having authorized access to the records of the Company. The
execution, delivery and performance of this Agreement, will comply with all
applicable laws and regulations relating to privacy and with the Company’s
privacy policies. The Company has not

 

 

received a complaint regarding
the Company’s collection, use or disclosure of personally identifiable
information.

 

(y)        Environmental Laws.  The Company and its Subsidiaries (i) are
in compliance with any and all Environmental Laws (as hereinafter defined), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. 
The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”)  into
the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or
demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.

 

(z)         Subsidiary Rights.  Except as set forth in Schedule 3 the
Company or one of its Subsidiaries has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.

 

(aa)      Investment Company
Status.  The Company is not, and upon
consummation of the sale of the Securities will not be, an “investment company,”
a company controlled by an “investment company” or an “affiliated person” of,
or “promoter” or “principal underwriter” for, an “investment company” as such
terms are defined in the Investment Company Act of  1940, as amended.

 

(bb)      Tax Status.  The Company and each of its Subsidiaries (i) has
made or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set
aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim.

 

(cc)      Internal Accounting
and Disclosure Controls.  The Company
and each of its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in

 

 

accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference.  The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-14
under the 1934 Act) that are effective in ensuring that information required to
be disclosed by the Company in the reports that it files or submits under the
1934 Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed in to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure.  During
the twelve months prior to the date hereof neither the Company nor any of its
Subsidiaries have received any notice or correspondence from any accountant
relating to any material weakness in any part of the system of internal
accounting controls of the Company or any of its Subsidiaries

 

(dd)      Off Balance Sheet
Arrangements.  There is no
transaction, arrangement, or other relationship between the Company and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed or
that otherwise would be reasonably likely to have a Material Adverse Effect.

 

(ee)      Ranking of Notes.  Except as set forth on Schedule 3 no
Indebtedness of the Company is senior to or ranks pari passu with the Notes in right of payment, whether with
respect of payment of redemptions, interest, damages or upon liquidation or
dissolution or otherwise.

 

(ff)        Form S-3
Eligibility.  The Company is eligible
to register the Conversion Shares for resale by the Buyers using Form S-3
promulgated under the 1933 Act.

 

(gg)      Transfer Taxes.  On the Closing Date, all stock transfer or
other taxes (other than income or similar taxes) which are required to be paid
in connection with the sale and transfer of the Securities to be sold to each
Buyer hereunder will be, or will have been, fully paid or provided for by the Company,
and all laws imposing such taxes will be or will have been complied with.

 

(hh)      Manipulation of Price.  The Company has not, and to its knowledge no
one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of
any of the Securities, (ii) other than the Placement Agents, sold, bid
for, purchased, or paid any compensation for soliciting purchases of, any of
the Securities, or (iii) other than the Placement Agents, paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.

 

(ii)        Acknowledgement
Regarding Buyers’ Trading Activity.  It is understood and acknowledged by the
Company that (i) none of the Buyers have been asked to agree, nor has any
Buyer agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the

 

 

Securities for any specified
term; (ii) any Buyer, and counter parties in “derivative” transactions to
which any such Buyer is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iii) each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counter-party in any
“derivative” transaction.  The Company
further understands and acknowledges that one or more Buyers may engage in
hedging and/or trading activities at various times during the period that the
Securities are outstanding, including, without limitation, during the periods
that the value of the Conversion Shares are being determined and (b) such
hedging and/or trading activities, if any, can reduce the value of the existing
stockholders’ equity interest in the Company both at and after the time the
hedging and/or trading activities are being conducted.  The Company acknowledges that such
aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement, the Notes or any of the documents executed in connection
herewith.

 

(jj)        U.S. Real Property
Holding Corporation.  The Company is
not, has never been, nor while any Securities are outstanding, will ever become,
a U.S. real property holding corporation within the meaning of Section 897
of the Internal Revenue Code of 1986, as amended, and the Company shall so
certify upon Buyer’s request.

 

(kk)      Bank Holding Company
Act.  Neither the Company nor any of
its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”) and to regulation by the Board
of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the
Company nor any of its Subsidiaries or affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of any class of
voting securities or twenty-five (25%) or more of the total equity of a bank or
any equity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its
Subsidiaries or affiliates exercises a controlling influence over the
management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.

 

(ll)        Disclosure.  The Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes or could reasonably be
expected to constitute material, nonpublic information.  The Company understands and confirms that
each of the Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company. 
All disclosure provided to the Buyers regarding the Company, or any of
its Subsidiaries, their business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.  Each press
release issued by the Company or any of its Subsidiaries during the twelve (12)
months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  No event or circumstance has
occurred or information exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but which has not
been so publicly announced or disclosed.

 

 

4.                                       COVENANTS.

 

(a)                                  Best
Efforts.  Each party shall use its
best efforts timely to satisfy each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.

 

(b)                                 Form D
and Blue Sky.  The Company agrees to
file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof to each Buyer promptly after such filing.  The Company shall, on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for or to qualify the Securities for sale to
the Buyers at the Closing pursuant to this Agreement under applicable
securities or “Blue Sky” laws of the states of the United States (or to obtain
an exemption from such qualification), and shall provide evidence of any such
action so taken to the Buyers on or prior to the Closing Date.  The Company shall make all filings and
reports relating to the offer and sale of the Securities required under
applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date.

 

(c)                                  Reporting
Status.  Until the date on which the
Investors (as defined in the Registration Rights Agreement) shall have sold all
the Conversion Shares and none of the Notes is outstanding (the “Reporting Period”), the Company shall
timely file all reports required to be filed with the SEC pursuant to the 1934
Act, and the Company shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination.

 

(d)                                 Use
of Proceeds.  The Company will use
the proceeds from the sale of the Follow-On Notes and the Follow-on Offering
(as defined below) to finance the Lexico Acquisition and any remainder
thereafter for general corporate and for working capital purposes and not for (i) the
repayment of any outstanding Indebtedness of the Company or any of its
Subsidiaries, (ii) the redemption or repurchase of any of its or its
Subsidiaries’ equity securities or (iii) the settlement of any claims,
actions or proceedings against the Company or any of its Subsidiaries.

 

(e)                                  Financial
Information.  The Company agrees to
send the following to each Investor (as defined in the Registration Rights
Agreement) during the Reporting Period (i) unless the following are filed
with the SEC through EDGAR and are available to the public through the EDGAR
system, within one (1) Business Day after the filing thereof with the SEC,
a copy of its Annual Reports and Quarterly Reports on Form 10-K, 10-KSB,
10-Q or 10-QSB, any interim reports or any consolidated balance sheets, income
statements, stockholders’ equity statements and/or cash flow statements for any
period other than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the
1933 Act, (ii) on the same day as the release thereof, facsimile or
e-mailed copies of all press releases issued by the Company or any of its
Subsidiaries unless such press release is available on a national internet or
print media outlet on the date of release, and (iii) copies of any notices
and other information made available or given to the stockholders of the
Company generally, contemporaneously with the making available or giving
thereof to the stockholders.

 

(f)                                    Listing.  The Company shall promptly secure the listing
of all of the Registrable Securities (as defined in the Registration Rights
Agreement) upon each national

 

 

securities exchange and
automated quotation system, if any, upon which the Common Stock is then listed
(subject to official notice of issuance) and shall maintain such listing of all
Registrable Securities from time to time issuable under the terms of the
Transaction Documents.  The Company shall
maintain the Common Stocks’ authorization for quotation on the Principal
Market.  Neither the Company nor any of
its Subsidiaries shall take any action which would be reasonably expected to
result in the delisting or suspension of the Common Stock on the Principal
Market.  The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 4(f).

 

(g)                                 Fees.  The Company shall reimburse Interlachen
Convertible Investments Limited (a Buyer) (“Interlachen”)
or its designee(s) (in addition to any other expense amounts paid to any
Buyer prior to the date of this Agreement) for its costs and expenses incurred
in connection with the transactions contemplated by the Transaction Documents
(including, without limitation, legal fees and disbursements in connection
therewith, negotiation, preparation and execution of the Transaction Documents
and due diligence in connection therewith) up to a maximum amount of $75,000
(the “Expense Cap”), which amount, in the
event of Issuance of Follow-On Notes, may be withheld by such Buyer from its
Purchase Price at the Closing. 
Notwithstanding anything else in this Agreement, the Expense Cap shall
not apply to any expenses incurred in connection with the negotiation,
preparation, execution and delivery of security, intercreditor and
subordination documents relating to any Lexico Indebtedness (as defined in the
Notes) and any liens granted to the Buyers in connection with such Lexico
Indebtedness which amounts the Company shall be responsible for shall not
exceed $50,000. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or broker’s commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the
transactions contemplated hereby, including, without limitation, any fees or
commissions payable to the Placement Agents. 
The Company shall pay, and hold each Buyer harmless against, any
liability, loss or expense (including, without limitation, reasonable attorney’s
fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment.  Except as otherwise
set forth in the Transaction Documents, each party to this Agreement shall bear
its own expenses in connection with the sale of the Securities to the Buyers.

 

(h)                                 Pledge
of Securities.  The Company
acknowledges and agrees that the Securities may be pledged by an Investor (as
defined in the Registration Rights Agreement) in connection with a bona fide
margin agreement or other loan or financing arrangement that is secured by the
Securities.  The pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required
to provide the Company with any notice thereof or otherwise make any delivery
to the Company pursuant to this Agreement or any other Transaction Document,
including, without limitation, Section 2(f) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of Section 2(f) hereof
in order to effect a sale, transfer or assignment of Securities to such
pledgee.  The Company hereby agrees to
execute and deliver such documentation as a pledgee of the Securities may
reasonably request in connection with a pledge of the Securities to such
pledgee by an Investor or such other documentation as may be reasonably
requested by any Buyer effecting a pledge of securities in connection with a
bona fide margin account or other loan or financing agreement as contemplated
under Section 2(f) or any financial agent of such Buyer.

 

 

(i)                                           Disclosure
of Transactions and Other Material Information.  On or before 8:30 a.m., New York City
time, on the first Business Day following the Closing Date or a Termination
Event, the Company shall issue a press release and file a Current Report on Form 8-K
describing the terms of the transactions contemplated by the Transaction
Documents, including without limitation the terms of the Closing or a
Termination Event, as applicable, in the form required by the 1934 Act and
attaching the material Transaction Documents (including, without limitation,
this Agreement, any documents previously unfiled as to the Lexico Agreement (as
defined below), the form of the Notes and the form of the Registration Rights
Agreement and the form of Security Documents as exhibits to such filing)
(including all attachments, the “8-K Filing”).  From and after the filing of the 8-K Filing
with the SEC, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents, that is not disclosed in the 8-K
Filing.  The Company shall not, and shall
cause each of its Subsidiaries and its and each of their respective officers,
directors, employees and agents, not to, provide any Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and
after the filing of the 8-K Filing with the SEC without the express written
consent of such Buyer.  If a Buyer has,
or believes it has, received any such material, nonpublic information regarding
the Company or any of its Subsidiaries, it shall provide the Company with
written notice thereof.  The Company
shall, within two (2) Trading Days (as defined in the Notes) of receipt of
such notice, make public disclosure of such material, nonpublic
information.  In the event of a breach of
the foregoing covenant by the Company, any of its Subsidiaries, or any of its
or their respective officers, directors, employees and agents, in addition to
any other remedy provided herein or in the Transaction Documents, a Buyer shall
have the right to make a public disclosure, in the form of a press release,
public advertisement or otherwise, of such material, nonpublic information
without the prior approval by the Company, its Subsidiaries, or any of its or
their respective officers, directors, employees or agents.  No Buyer shall have any liability to the Company,
its Subsidiaries, or any of its or their respective officers, directors,
employees, stockholders or agents for any such disclosure.  Subject to the foregoing, neither the
Company, its Subsidiaries nor any Buyer shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure
with respect to such transactions (i) in substantial conformity with the
8-K Filing and contemporaneously therewith and (ii) as is required by
applicable law and regulations (provided that in the case of clause (i) each
Buyer shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release).  Without the prior written consent of any
applicable Buyer, neither the Company nor any of its Subsidiaries or affiliates
shall disclose the name of such Buyer in any filing, announcement, release or
otherwise.

 

(i)                                     Restriction
on Redemption and Cash Dividends.  So
long as any Notes are outstanding, the Company shall not, directly or
indirectly, redeem, or declare or pay any cash dividend or distribution on, the
Common Stock without the prior express written consent of the holders of Notes
representing not less than a majority of the aggregate principal amount of the
then outstanding Notes.

 

(j)                                     Stockholder
Approval.  The Company shall provide
each stockholder entitled to vote at a special or annual meeting of
stockholders of the Company (the “Stockholder Meeting”),
which initially shall be promptly called and held as soon as practicable, but
no later 

 

 

than May 30, 2008 (the “Stockholder Approval Deadline”), a proxy statement,
substantially in the form which has been previously reviewed by the Buyers,
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting
for approval of resolutions (the “Resolutions”)
providing for the increase in the authorized Common Stock from 30,000,000
shares to a number of shares that is not less than 100,000,000 shares (such
affirmative approval being referred to herein as the “Stockholder
Approval” and the date such approval is obtained, the “Stockholder Approval Date”), and the Company shall cause the
Board of Directors of the Company to recommend to its stockholders that they
approve the Resolutions and use its best efforts to solicit the stockholders’
approval of the Resolutions; provided, however, that the Stockholder Approval
Deadline shall mean June 30, 2008 if the SEC has provided written comments
to the proxy statement.  The Company
shall be obligated to seek to obtain the Stockholder Approval by the
Stockholder Approval Deadline.  If,
despite the Company’s reasonable best efforts the Stockholder Approval is not
obtained on or prior to the Stockholder Approval Deadline, the Company shall
cause an additional Stockholder Meeting to be held each six month period
thereafter until such Stockholder Approval is obtained.

 

(k)                                  Additional
Notes; Variable Securities; Dilutive Issuances.  So long as any Buyer beneficially owns any
Securities, the Company will not issue any Notes other than to the Buyers as
contemplated hereby and the Company shall not issue any other securities that
would cause a breach or default under the Notes.  For so long as any Notes remain outstanding,
the Company shall not, in any manner, issue or sell any rights, warrants or
options to subscribe for or purchase Common Stock or directly or indirectly
convertible into or exchangeable or exercisable for Common Stock at a price
which varies or may vary with the market price of the Common Stock, including
by way of one or more reset(s) to any fixed price unless the conversion,
exchange or exercise price of any such security cannot be less than the then
applicable Conversion Price (as defined in the Notes) with respect to the
Common Stock into which any Note is convertible.  For so long as any Notes remain outstanding,
the Company shall not, in any manner, enter into or affect any Dilutive
Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is
to cause the Company to be required to issue upon conversion of any Note any
shares of Common Stock in excess of that number of shares of Common Stock which
the Company may issue upon conversion of the Notes without breaching the
Company’s obligations under the rules or regulations of the Principal
Market or any applicable Eligible Market (as defined in the Registration Rights
Agreement).

 

(l)                                     Corporate
Existence.  So long as any Buyer
beneficially owns any Securities, the Company shall not be party to any
Fundamental Transaction (as defined in the Notes) unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes.

 

(m)                               Reservation
of Shares.  So long as any Buyer owns
any Securities, the Company shall take all action necessary to reserve (I) at
all times from the Closing Date until the Stockholder Approval Date, all of its
duly authorized and unissued capital stock, to the extent available after taking
into account reservation of shares of common stock (i) underlying the
outstanding options set forth on Schedule (m)(i) and (ii) subject
to the Company stock plans set forth on Schedule (m)(ii), for the
issuance of the shares of Common Stock issuable upon conversion of the Notes
(without taking into account any limitations on the conversion of the Notes set
forth in the Notes) (the “Confirmed Authorized
Capital”) and (II) from and after the

 

 

Stockholder Approval Date, to
have reserved from its duly authorized capital stock not less than 130% of the
maximum number of shares of Common Stock issuable upon conversion of the Notes
(without taking into account any limitations on the conversion of the Notes set
forth in the Notes) issued at the Closing.

 

(n)                                 Conduct
of Business.  The business of the
Company and its Subsidiaries shall not be conducted in violation of any law,
ordinance or regulation of any governmental entity, except where such
violations would not result, either individually or in the aggregate, in a
Material Adverse Effect.

 

(o)                                 Additional
Issuances of Securities.

 

(i)                               For
purposes of this Section 4(o), the following definitions shall apply.

 

(1)                                  “Convertible Securities” means any stock or securities (other
than Options) convertible into or exercisable or exchangeable for shares of
Common Stock.

 

(2)                                  “Options” means any rights, warrants or
options to subscribe for or purchase shares of Common Stock or Convertible
Securities.

 

(3)                                  “Common Stock Equivalents” means, collectively, Options and
Convertible Securities.

 

(ii)                                        From
the Closing Date until the date thirty (30) Trading Days after the date when
all Registrable Securities (as defined in the Registration Rights Agreement)
have been registered (the “Trigger Date”),
the Company will not, directly or indirectly, file any registration statement
with the SEC other than the Registration Statement (as defined in the
Registration Rights Agreement).  From the
date hereof until the Trigger Date, the Company will not, (i) directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
(or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries’ equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common Stock Equivalents or (ii) be
party to any solicitations, negotiations or discussions with regard to the
foregoing.

 

(iii)                                     The
restrictions contained in subsection (ii) of this Section 4(o) shall
not apply in connection with the issuance of any Excluded Securities (as
defined in the Notes).

 

(p)                                 Stock
Approval Date Listing.  Not more than
45 days after the Stockholder Approval Date, not less than the maximum number
of shares of Common Stock issuable upon conversion of the Notes (without taking
into account any limitations on the conversion of the Notes set forth in the
Notes) shall be designated for quotation or listed on the Principal Market.

 

 

(q)                                 Collateral
Agent.

 

(i)                                     Each
Buyer hereby (a) appoints Interlachen as the collateral agent hereunder
and under the other Security Documents (in such capacity, the “Collateral Agent”), and (b) authorizes the Collateral
Agent (and its officers, directors, employees and agents) to take such action
on such Buyer’s behalf in accordance with the terms hereof and thereof.  The Collateral Agent shall not have, by
reason hereof or any of the other Security Documents, a fiduciary relationship
in respect of any Buyer.  Neither the
Collateral Agent nor any of its officers, directors, employees and agents shall
have any liability to any Buyer for any action taken or omitted to be taken in
connection hereof or any other Security Document except to the extent caused by
its own gross negligence or willful misconduct, and each Buyer agrees to
defend, protect, indemnify and hold harmless the Collateral Agent and all of
its officers, directors, employees and agents (collectively, the “Collateral Agent Indemnitees”) from and against any losses,
damages, liabilities, obligations, penalties, actions, judgments, suits, fees,
costs and expenses (including, without limitation, reasonable attorneys’ fees,
costs and expenses) incurred by such Collateral Agent Indemnitee, whether
direct, indirect or consequential, arising from or in connection with the
performance by such Collateral Agent Indemnitee of the duties and obligations
of Collateral Agent pursuant hereto or any of the Security Documents.  The Collateral Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the holders of at least a majority in
principal amount of the Follow-On or Termination Notes, as applicable, then
outstanding, and such instructions shall be binding upon all holders of such
Notes; provided, however, that the Collateral Agent shall not be required to
take any action which, in the reasonable opinion of the Collaeral Agent,
exposes the Collateral Agent to liability or which is contrary to this
Agreement or any other Transaction Document or applicable law.

 

(ii)                                  The
Collateral Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining
to this Agreement or any of the other Transaction Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

 

(iii)                               The
Collateral Agent may resign from the performance of all its functions and
duties hereunder and under the Notes and the Security Documents at any time by
giving at least ten (10) Business Days prior written notice to the Company
and each holder of the Notes.  Such
resignation shall take effect upon the acceptance by a successor Collateral
Agent of appointment as provided below. 
Upon any such notice of resignation, the holders of a majority of the
outstanding principal under the Follow-On or Termination Notes, as applicable,
shall appoint a successor Collateral Agent. 
Upon the acceptance of the appointment as Collateral Agent, such
successor Collateral Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
under this Agreement, the Notes and the other Security Documents.  After any Collateral Agent’s resignation
hereunder , the provisions of this Section 4(q) shall inure to its
benefit.  If a successor Collateral Agent
shall not have been so appointed within said ten (10) Business Day period,
the retiring Collateral Agent shall then 

 

 

appoint a successor Collateral
Agent who shall serve until such time, if any, as the holders of a majority of
the outstanding principal under the Follow-On or Termination Notes, as
applicable, appoint a successor Collateral Agent as provided above.

 

5.                                       REGISTER; TRANSFER AGENT INSTRUCTIONS.

 

(a)                                  Register.  The Company shall maintain at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Notes in
which the Company shall record the name and address of the Person in whose name
the Notes have been issued (including the name and address of each transferee),
the principal amount of Notes held by such Person and the number of Conversion
Shares issuable upon conversion of the Notes. 
The Company shall keep the register open and available at all times
during business hours for inspection of any Buyer or its legal representatives.

 

(b)                                 Transfer
Agent Instructions.  The Company
shall issue irrevocable instructions to its transfer agent, and any subsequent
transfer agent, to issue certificates or credit shares to the applicable
balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer or its respective
nominee(s), for the Conversion Shares issued at the Closing or upon conversion
of the Notes in such amounts as specified in such amounts as specified from
time to time by each Buyer to the Company upon conversion of the Notes in the
form of Exhibit E (the “Irrevocable
Transfer Agent Instructions”). 
The Company warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5(b), and stop
transfer instructions to give effect to Section 2(g) hereof, will be
given by the Company to its transfer agent, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the other Transaction
Documents.  If a Buyer effects a sale,
assignment or transfer of the Securities in accordance with Section 2(f),
the Company shall permit the transfer and shall promptly instruct its transfer
agent to issue one or more certificates or credit shares to the applicable
balance accounts at DTC in such name and in such denominations as specified by
such Buyer to effect such sale, transfer or assignment.  In the event that such sale, assignment or
transfer involves Conversion Shares sold, assigned or transferred pursuant to
an effective registration statement or pursuant to Rule 144, the transfer
agent shall issue such Securities to the Buyer, assignee or transferee, as the
case may be, without any restrictive legend. 
The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to a Buyer.  Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Section 5(b) will
be inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5(b), that a Buyer shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond
or other security being required.

 

6.                                       CLOSING CONDITIONS OF THE COMPANY.

 

The obligation
of the Company hereunder to issue and sell the Notes to each Buyer at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the Company’s
sole benefit and may 

 

 

be waived by the Company at any time in its sole discretion by
providing each Buyer with prior written notice thereof:

 

(i)                                           Such
Buyer shall have executed each of the Transaction Documents to which it is a
party and delivered the same to the Company.

 

(ii)                                        Such
Buyer and each other Buyer shall have delivered to the Company the Purchase
Price (less, in the case of Interlachen, the amounts withheld pursuant to Section 4(g))
for the Notes being purchased by such Buyer at the Closing by wire transfer of
immediately available funds pursuant to the wire instructions provided by the
Company.

 

(iii)                                     The
representations and warranties of such Buyer shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by such Buyer at or
prior to the Closing Date.

 

7.                                       CLOSING CONDITIONS OF THE BUYERS.

 

The
obligations of each Buyer under this Agreement are subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for each Buyer’s sole benefit and may be waived by
such Buyer at any time in its sole discretion by providing the Company with
prior written notice thereof:

 

(i)                                           The
Company shall have duly executed and delivered to such Buyer (A) each of
the Transaction Documents and (B) the Notes (in such principal amounts as
such Buyer shall request in an aggregate amount up to $8,500,000) being issued
to such Buyer at the Closing pursuant to this Agreement and each of the
Transaction Documents and the Notes shall continue to be in full force and
effect.

 

(ii)                                        Such
Buyer shall have received the opinion of Sichenzia Ross Friedman Ference LLP,
the Company’s outside counsel, satisfactory to such Buyer in its discretion,
dated as of the Closing Date.

 

(iii)                                     The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer
Agent Instructions, in the form of Exhibit E attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent.

 

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

 

(v)                                       The
Company shall have delivered to such Buyer a certificate evidencing the Company’s
qualification as a foreign corporation and good standing issued by the
Secretary of State (or comparable office) of each jurisdiction in which the
Company conducts 

 

 

business and where the failure
to be so qualified or be in good standing, individually or in the aggregate,
would have a Material Adverse Effect, as of a date within 10 days of the
Closing Date.

 

(vi)                                    The
Company shall have delivered to such Buyer a certified copy of the Certificate
of Incorporation as certified by the Secretary of State of the State (or
comparable office of) Delaware within ten (10) days of the Closing Date.

 

(vii)                                 The
Company shall have delivered to such Buyer a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3(b) as adopted by the Company’s
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the
Certificate of Incorporation and
(iii) the Bylaws, each as in effect at the Closing, in the form attached
hereto as Exhibit F.

 

(viii)                              The
representations and warranties of the Company shall be true and correct as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all respects
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or
prior to the Closing Date.  Such Buyer
shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably
requested by such Buyer in the form attached hereto as Exhibit G.

 

(ix)                                      With respect to the Follow-On Issuance only,
the Company shall have raised funds in an underwritten offering of common stock
(the “Follow-On Offering”) (combined with the
funds raised in connection with the issuance of the Follow-On Notes hereunder)
sufficient to finance the closing of the acquisition of Lexico (the “Lexico Closing”) on terms and conditions acceptable to such
Buyer.

 

(x)                                         With respect to the Follow-On Issuance only,
the Lexico Closing shall have been consummated before or concurrently with the
Closing on the terms and conditions contained in that certain amended and
restated purchase agreement, entered into on or about the date hereof, by and
among the persons listed on Schedule A attached thereto, Lexico, the Company,
and Brian Kariger, as the sellers’ representative, as amended (the “Lexico Agreement”), and the Lexico Agreement shall not have
been amended or waived in any manner that is materially adverse to the Company
or the Buyer in the reasonable judgment of the Buyer.

 

(xi)                                      The Company shall have delivered updated Schedule
3(r) and Schedule 3(s) as of the Closing.

 

(xii)                                   The Company shall have delivered to such
Buyer a letter from the Company’s transfer agent certifying the number
of shares of Common Stock outstanding as of a date within five days of the
Closing Date.

 

(xiii)                                The
duly authorized and unissued capital stock of the Company that shall be
reserved from the Closing Date for the issuance of Common Stock issuable upon
conversion of the Notes (without taking into account any limitations on the
conversion of the Notes set forth in the Notes) to the extent available after
taking into account reservation of shares 

 

 

of common stock (i) underlying
the outstanding options set forth on Schedule 4(m)(i) and (ii) subject
to the Company stock plans set forth on Schedule 4(m)(ii), shall as of
the Closing Date (a) be designated for quotation or listed on the
Principal Market and (b) shall not have been suspended by the SEC or the
Principal Market from trading on the Principal Market nor shall suspension by
the SEC or the Principal Market have been threatened, as of the Closing Date,
either (A) in writing by the SEC or the Principal Market or (B) by
falling below the minimum listing maintenance requirements of the Principal
Market.

 

(xiv)                               The
Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the sale of the Securities.

 

(xv)                                  The Company shall
have delivered to such Buyer such other documents relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably
request.

 

(xvi)                               The Company shall have
delivered to such Buyer, upon its request, such documents satisfactory for use
in connection with a bona fide margin account or other loan or financing
arrangement.

 

(xvii)                            The Company shall have
provided updated versions of each Company Schedule to this Agreement, which
updated Company Schedules shall include all of the information required to be
set forth therein with respect to the Company after giving effect to the Lexico
Closing, shall be accurate as of the Closing and shall be satisfactory to the
Buyers.

 

(xviii)                         The Buyers shall have been
granted a first priority perfected security interest in any property or other
assets in which a security interest has been (or will be) granted to secure any
Lexico Indebtedness, and the Buyers shall have received such security
agreements, assignments and other documents, and the Company shall have made
such filings and taken such other actions, satisfactory to such Buyer to create
and perfect such security interest and such subordination agreement in the form
attached hereto as Exhibit H (the “Subordination
Agreement”).

 

(xix)                           In
accordance with the terms of the Security Documents, the Company shall have
delivered to the Collateral Agent (i) certificates representing the
Subsidiaries’ shares of capital stock to the extent such subsidiary is a
corporation or otherwise has certificated capital stock, along with duly
executed blank stock powers and (ii) appropriate financing statements on Form UCC-1
to be duly filed in such office or offices as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the security interests
purported to be created by each Security Document.

 

(xx)                              Within
two (2) Business Days prior to the Closing, the Company shall have
delivered or caused to be delivered to each Buyer (i) true copies of UCC
search results, listing all effective financing statements which name as debtor
the Company or any of its Subsidiaries filed in the prior five years to perfect
an interest in any assets thereof, together with copies of such financing
statements, none of which, except as otherwise agreed in writing by the Buyers,
shall cover any of the Collateral (as defined in the Security Documents) and
the results of searches for any tax lien and judgment lien filed against such
Person or its property, which 

 

 

results,
except as otherwise agreed to in writing by the Buyers shall not show any such
Liens (as defined in the Security Documents); and (ii) a perfection
certificate, duly completed and executed by the Company and each of its Subsidiaries,
in form and substance satisfactory to the Buyers.

 

(xxi)                                 The Company shall have
executed and delivered to the Collateral Agent mortgage or other required
documentation reasonably satisfactory to the Collateral Agent.

 

(xxii)                              Each of the seller
parties to the Lexico Acquisition shall have executed the Subordination
Agreement.

 

(xxiii)                           The Company and each of the
seller parties to the Lexico Acquisition shall have executed the pledge and
security agreement in the form attached hereto as Exhibit I (the “Lexico Pledge and Security Agreement”).

 

(xxiv)                          The Company shall have
delivered to such Buyer such other usual and customary documents, instruments
and certificates as such Buyer may reasonably request.

 

8.                                       TERMINATION.

 

(a)                                  In
the event that (i) the transactions contemplated by the Lexico Agreement
have been terminated, (ii) the Company has terminated this Agreement
pursuant to Section 8(b), (iii) the Closing has not occurred on or
before March 1, 2008 (other than as a result of Buyer’s material breach of
this Agreement) (any of the foregoing in (i)-(iii), a “Notes
Termination Event”), or (iv) the transactions contemplated by
the Lexico Agreement have been consummated but the Closing of the issuance of
the Follow-On Notes to the Buyers has not occurred in connection with therewith
(a “Cash Termination Event,” with any Notes
Termination Event or any Cash Termination Event being a “Termination
Event”), each Buyer shall be entitled to a Termination Fee from the
Company.  With respect to each Buyer, the
“Termination Fee” means (i) in the
event of a Notes Termination Event, the Termination Notes, which shall be
substantially in the form of the Follow-On Notes and which shall be in an
initial principal amount equal to 5% of the principal amount of the Follow-On
Notes that were to be issued to such Buyer, as is set forth opposite such Buyer’s
name in Column (4) on the Schedule of Buyers (the “Notes
Termination Fee”), and which shall be issued to such Buyer without
any obligation on the part of such Buyer to pay for such Termination Notes, and
(ii) in the event of a Cash Termination Event, a cash amount equal to 4.3%
of the principal amount of the Follow-On Notes that were to be issued to such
Buyer as is set forth opposite such Buyer’s name in Column (3) on the
Schedule of Buyers (the “Cash Termination Fee”
and the Notes Termination Fee, each, a “Termination Fee”).  Any Cash Termination Fee shall be paid no
later than two (2) Business Days after the Termination Event giving rise
to such Cash Termination Fee.  The
Termination Notes issued in connection with any Notes Termination Fee shall be
issued at a Closing occurring no later than two (2) Business Days after
the completion of any measurement period for purposes of determining the
conversion price of such Termination Notes, which conversion price shall be
determined as set forth in the Notes.

 

 

(b)                                 Each
Buyer shall have the right to terminate this Agreement after the occurrence of
a Termination Event, and the Company shall have the right to terminate this Agreement
at any time (whether before or after a Termination Event); provided, however,
that in the event of any termination of this Agreement (whether by any Buyer or
the Company) for any reason, the Company shall remain obligated to pay to the
Buyers the applicable Termination Fee pursuant to Section 8(a) and to
reimburse the Buyers for the expenses described in Section 4(g).

 

9.                                       MISCELLANEOUS.

 

(a)                                  Governing Law;
Jurisdiction; Jury Trial.  All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the
State of New York.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. 
Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law.  EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

(b)                                 Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original,
not a facsimile signature.

 

(c)                                  Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

(d)                                 Severability.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.

 

 

(e)                                  Entire
Agreement; Amendments.  This
Agreement and the other Transaction Documents supersede all other prior oral or
written agreements between the Buyers, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein,
and this Agreement, the other Transaction Documents and the instruments
referenced herein and therein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any Buyer
makes any representation, warranty, covenant or undertaking with respect to
such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder and under the Notes, and
any amendment to this Agreement made in conformity with the provisions of this Section 9(e) shall
be binding on all Buyers and holders of Securities, as applicable.  No provision hereof may be waived other than
by an instrument in writing signed by the party against whom enforcement is
sought.  No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
applicable Securities then outstanding. 
No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties
to the Transaction Documents or holders of Notes, as the case may be.  The Company has not, directly or indirectly,
made any agreements with any Buyers relating to the terms or conditions of the
transactions contemplated by the Transaction Documents except as set forth in
the Transaction Documents.  Without
limiting the foregoing, the Company confirms that, except as set forth in this
Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company or otherwise.

 

(f)                                    Notices.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after
deposit with an overnight courier service, in each case properly addressed to
the party to receive the same.  The
addresses and facsimile numbers for such communications shall be:

 

	
   

  	
  If to the Company:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Answers Corporation

  
	
   

  	
  237 West 35th Street, Suite 1101

  
	
   

  	
  New York, NY 10001

  
	
   

  	
  Telephone:

  	
  (646) (502-4777)

  
	
   

  	
  Facsimile:

  	
  (646) (304-1826)

  
	
   

  	
  Attention:

  	
  Caleb A Chill, General Counsel

  
					

 

 

	
   

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sichenzia Ross Friedman Ference LLP

  
	
   

  	
  61 Broadway, 32nd Floor

  
	
   

  	
  New York, NY 10006

  
	
   

  	
  Telephone:

  	
  (212) (930-9700)

  
	
   

  	
  Facsimile:

  	
  (212) (930-9725)

  
	
   

  	
  Attention:

  	
  Jeffrey J. Fessler, Esq.

  
					

 

	
   

  	
  If to the Transfer Agent:

  
	
   

  	
   

  	
   

  
	
   

  	
  American Stock Transfer & Trust
  company

  
	
   

  	
  6201 15th Avenue

  
	
   

  	
  Brooklyn, NY 11219

  
	
   

  	
  Telephone:

  	
  (718) 921-8261

  
	
   

  	
  Facsimile:

  	
  (718) 921-8337

  
	
   

  	
  Attention:

  	
  Donna Ansbro

  
					

 

If to a Buyer,
to its address and facsimile number set forth on the Schedule of Buyers, with
copies to such Buyer’s representatives as set forth on the Schedule of Buyers,

 

	
   

  	
  with a copy (for informational purposes
  only) to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Schulte Roth & Zabel LLP

  
	
   

  	
  919 Third Avenue

  
	
   

  	
  New York, New York  10022

  
	
   

  	
  Telephone:

  	
  (212) 756-2000

  
	
   

  	
  Facsimile:

  	
  (212) 593-5955

  
	
   

  	
  Attention:

  	
  Eleazer N. Klein, Esq.

  
					

 

or to such
other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change.  Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine containing the
time, date, recipient facsimile number and an image of the first page of
such transmission or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from
an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

(g)                                 Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Notes.  The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of
each of the holders of Registrable Securities issued and issuable hereunder,
including by way of a Fundamental Transaction (unless the Company is in
compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes).  A Buyer may
assign some or all of its rights hereunder to any accredited 

 

 

investor with the consent of
the Company, such consent not to be unreasonably withheld or delayed.

 

(h)                                 No
Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

 

(i)                                     Survival.  Unless this Agreement is terminated under Section 8,
the representations and warranties of the Company and the Buyers contained in
Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5
and 9 shall survive the Closing.  Each
Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.

 

(j)                                     Further
Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments
and documents, as any other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.

 

(k)                                  Indemnification.  In consideration of each Buyer’s execution
and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Buyer and each other holder of the Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and
disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company as of the Closing Date in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim
brought or made against such Indemnitee by a third party (including for these
purposes a derivative action brought on behalf of the Company) and arising out
of or resulting from (i) the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (ii) any transaction financed
or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Securities, (iii) any disclosure made by
such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer
or holder of the Securities as an investor in the Company pursuant to the
transactions contemplated by the Transaction Documents.  To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law.  Except as otherwise set forth herein, the 

 

 

mechanics and procedures with
respect to the rights and obligations under this Section 9(k) shall
be the same as those set forth in Section 6 of the Registration Rights
Agreement.

 

(l)                                     No
Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will
be applied against any party.

 

(m)                               Remedies.  Each Buyer and each holder of the Securities
shall have all rights and remedies set forth in the Transaction Documents and
all rights and remedies which such holders have been granted at any time under
any other agreement or contract and all of the rights which such holders have
under any law.  Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. 
Furthermore, the Company recognizes that in the event that it fails to
perform, observe, or discharge any or all of its obligations under the
Transaction Documents, any remedy at law may prove to be inadequate relief to
the Buyers.  The Company therefore agrees
that the Buyers shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.

 

(n)                                 Rescission
and Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any
Buyer exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within
the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to
its future actions and rights.

 

(o)                                 Payment
Set Aside.  To the extent that the
Company makes a payment or payments to the Buyers hereunder or pursuant to any
of the other Transaction Documents or the Buyers enforce or exercise their
rights hereunder or thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, foreign, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

 

(p)                                 Independent
Nature of Buyers’ Obligations and Rights. 
The obligations of each Buyer under any Transaction Document are several
and not joint with the obligations of any other Buyer, and no Buyer shall be
responsible in any way for the performance of the obligations of any other
Buyer under any Transaction Document. 
Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to
constitute the Buyers as, and the Company acknowledges that the Buyers do not
so constitute, a partnership, an association, a joint venture or any other kind
of entity, or create a 

 

 

presumption that the Buyers are
in any way acting in concert or as a group, and the Company will not assert any
such claim with respect to such obligations or the transactions contemplated by
the Transaction Documents and the Company acknowledges that the Buyers are not
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents.  The Company acknowledges and each Buyer
confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and
advisors.  Each Buyer shall be entitled
to independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement or out of any other Transaction
Documents, and it shall not be necessary for any other Buyer to be joined as an
additional party in any proceeding for such purpose.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first
written above.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  ANSWERS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert S. Rosenschein

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert S. Rosenschein

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
					

 

 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to
this Securities Purchase Agreement to be duly executed as of the date first
written above.

 

 

	
   

  	
  BUYERS:

  
	
   

  	
   

  
	
   

  	
  INTERLACHEN CONVERTIBLE

  
	
   

  	
  INVESTMENTS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gregg T. Colburn

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gregg T. Colburn

  
	
   

  	
   

  	
  Title

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
					

 

 

SCHEDULE OF BUYERS

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (4)

  	
   

  	
   

  	
   

  	
   

  
	
  (1)

  Buyer

  	
   

  	
  (2)

  Address and

  Facsimile Number

  	
   

  	
  (3)

  Aggregate

  Principal

  Amount of

  Follow-On Notes

  	
   

  	
  Aggregate

  Principal

  Amount of

  Termination

  Notes

  	
   

  	
  (5)

  Purchase Price of

  Follow-On Notes

  	
   

  	
  (4)

  Legal Representative’s

  Address and Facsimile

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interlachen Convertible

  Investments Limited

  	
   

  	
  c/o Interlachen Capital Group LP

  800
  Nicollet Mall, Suite 2500

  Minneapolis, MN 55402-2034

  Attention: Gregg T. Colburn

  and Legal Department

  Facsimile: (612) 659-4457

  Telephone: (612) 659-4407

  Residency: Cayman

  Islands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Schulte
  Roth & Zabel LLP

  919 Third Avenue

  New York, New York 10022

  Attention: Eleazer Klein, Esq.

  Facsimile: (212) 593-5955

  Telephone: (212) 756-2376

  

 

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of Follow-On Notes

  
	
  Exhibit B

  	
   

  	
  Form of Registration Rights Agreement

  
	
  Exhibit C

  	
   

  	
  Pledge and Security Agreement for Buyers

  
	
  Exhibit D

  	
   

  	
  Pro Forma Assumptions

  
	
  Exhibit E

  	
   

  	
  Form of Irrevocable Transfer Agent Instructions

  
	
  Exhibit F

  	
   

  	
  Form of Secretary’s Certificate

  
	
  Exhibit G

  	
   

  	
  Form of Officer’s Certificate

  
	
  Exhibit H

  	
   

  	
  Subordination Agreement

  
	
  Exhibit I

  	
   

  	
  Lexico Pledge and Security Agreement

  

 

SCHEDULES

 

	
  Schedule 3(a)

  	
   

  	
  Subsidiaries

  
	
  Schedule 3(b)

  	
   

  	
  Authorization; Enforcement; Validity

  
	
  Schedule 3(k)

  	
   

  	
  SEC Documents

  
	
  Schedule 3(l)

  	
   

  	
  Absence of Certain Changes

  
	
  Schedule 3(q)

  	
   

  	
  Transactions with Affiliates

  
	
  Schedule 3(r)

  	
   

  	
  Equity Capitalization

  
	
  Schedule 3(s)(1)

  	
   

  	
  Indebtedness and Other Contracts

  
	
  Schedule 3(s)(2)

  	
   

  	
  Closing Indebtedness

  
	
  Schedule 3(s)(3)

  	
   

  	
  Lexico Agreement

  
	
  Schedule 3(t)

  	
   

  	
  Absence of Litigation

  
	
  Schedule 3(x)(iv)

  	
   

  	
  Terminated Company-Owned IP Rights

  
	
  Schedule 3(x)(v)

  	
   

  	
  Company Registered Intellectual Property

  
	
  Schedule 3(x)(vi)

  	
   

  	
  Company Intellectual Property Action

  
	
  Schedule 3(x)(x)

  	
   

  	
  Open Source Materials

  
	
  Schedule 3(z)

  	
   

  	
  Subsidiary Rights

  
	
  Schedule 3(ee)

  	
   

  	
  Ranking of Notes

  
	
  Schedule 4(m)(i)

  	
   

  	
  Options

  
	
  Schedule 4(m)(ii)

  	
   

  	
  Stock Plans

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