Document:

Exhibit 10.1

 

 

FIRST AMENDMENT TO THE AMENDED AND RESTATED PURCHASE
AGREEMENT

 

This
FIRST AMENDMENT TO THE AMENDED AND RESTATED
PURCHASE AGREEMENT (this “Amendment”) is
made and entered into as of February 8, 2008 by and among Answers Corporation, a Delaware corporation
(the “Purchaser”), and Brian Kariger, as the Sellers
Representative.

 

WHEREAS, Lexico
Publishing Group, LLC, a California limited liability company, Brian Kariger,
as trustee of the Brian Patrick Kariger Charitable Remainder Unitrust Trust dated
April 9, 2007, Brian Kariger, as trustee of the Brian Patrick Kariger
Revocable Trust dated February 9, 2007, and Daniel Fierro (collectively,
the “Sellers”), the Sellers
Representative, and the Purchaser (the Sellers, the
Sellers Representative, and the Purchaser collectively, the “Parties”) entered into an Amended and
Restated Purchase Agreement, dated as of January 15, 2008 (the “Agreement”);

 

WHEREAS, the Parties wish to amend
certain provisions in the Agreement, as set forth herein; and

 

WHEREAS, pursuant to Section 10.5
of the Agreement, the Agreement may be amended with the written consent of
Purchaser and the Sellers Representative, which amendment shall be binding upon
the Parties and their respective successors and assignees.

 

NOW, THEREFORE, in
consideration of the premises and of the mutual promises, covenants,
representations and warranties made herein, the Parties intending to be legally
bound, hereby agree as follows:

 

1.             DEFINITIONS.  Unless
otherwise defined herein, capitalized terms used in this Amendment shall have
the meanings ascribed to them under the Agreement.

 

2.                                      AMENDMENTS

 

2.1.          In the Recitals to the Agreement,
Recital “F” (second of two recitals titled “F”) shall be amended such that it
shall be titled “G” and shall read as follows:

 

“F.                 Concurrently
with the Closing of this Agreement, with respect to the Deferred Amount, and,
in the event that the Purchaser elects to effect the Holdback, with respect to
any portion of the Holdback: (i) the parties hereto shall enter into the
that certain Pledge and Security Agreement, in the form attached hereto as Exhibit E
(as amended, the “Pledge and Security Agreement”), and (ii) the parties
hereto and Interlachen Convertible Investments Limited, in its capacity as
collateral agent of the Senior Debt, shall enter into the Subordination
Agreement, in the form attached hereto as Exhibit F (as amended, the “Subordination
Agreement”); and”

 

2.2.          Section 1.2.1 of the Agreement
shall be amended such that Section shall read as follows:

 

“1.2.1      As
full consideration for the sale, conveyance, assignment and transfer of the
Interests to Purchaser, free and clear of all Encumbrances, and all of the
obligations, covenants and conditions contained in this Agreement, (i) at
Closing, Purchaser shall deposit in a bank account in the name of the Escrow
Agent an aggregate amount equal to $70,000,000 (subject to adjustments in
accordance with the provisions of Section 1.2.2) (the “Purchase Price”),
to be immediately thereafter transferred by the Escrow Agent to the Sellers,
pro-rata in accordance with the percentage Membership Interest held by each
Seller as set forth in Schedule A; (ii) the amount of Forfeited Employee
Bonus Amount (if any) shall be transferred and paid to the Sellers, pro-rata in
accordance with the percentage Membership Interest held by each Seller as set
forth in Schedule A, in the manner set forth in Section 1.4.2 (such
amount, if any, the “Second Installment”); (iii) the Escrow Fund remaining
(if any) after deducting any Indemnifiable Damages pursuant to Section 9
shall be transferred and paid to the Sellers, pro-rata in accordance with the
percentage Membership Interest held by each Seller as set forth in Schedule A ,
in the manner set forth in Section 9

 

 

 

 

(such amount, if any, the “Third Installment”) and (iv) the
Deferred Amount shall be transferred and paid to the Sellers, pro-rata in
accordance with the percentage Membership Interest held by each Seller as set
forth in Schedule A, in the manner set forth in Section 1.3.4 (such amount,
the “Fourth Installment”, and together with the Purchase Price, and Second
Installment and the Third Installment, the “Aggregate Purchase Price”).”

 

2.3.          A new Section — Section 1.3A
— will be introduced and incorporated into the Agreement in between Sections
1.3.3 and 1.4 of the Agreement. Section 1.3A shall read as follows:

 

“1.3.4.
Deferred Amount. The Sellers
hereby agree that the Deferred Amount shall not be paid to the Sellers at the
Closing, but instead shall be deferred and paid only upon the lapse of thirty
(30) months following the Closing Date, together with interest thereon at the
rate of 7% per annum on the Deferred Amount computed on the basis of actual
number of days elapsed over a 360-day year, upon thirty (30) months subsequent
to the Closing Date. In the event that (i) the Purchaser elects to effect
the Holdback, the shall enter into the Pledge and Security Agreement and (if
the Purchaser purchases any Senior Notes) the Subordination Agreement, with
respect to the Deferred Amount and Holdback, and (ii) the Purchaser elects
not to effect the Holdback, the parties shall enter into the Pledge and
Security Agreement and the Subordination Agreement with respect to the Deferred
Amount.”  In no event will the Deferred
Amount be subject to claims, including claims for indemnification (if the
Purchaser purchases any Senior Notes).

 

2.4.          Section 6.12 of the Agreement
shall be amended such that Section shall read as follows:

 

“6.12
Rank of Escrow Amount and Deferred Amount.  With respect to any
portion of the Escrow Funds subject to Holdback and the Deferred Amount, and
for as long as any such Escrow Amount and Deferred Amount remain payable to the
Sellers hereunder (the “Outstanding Amount”):

 

6.12.1. If Purchaser issues
Senior Notes (as defined below), then:

 

6.12.1.1.
Such Outstanding Amount shall be subordinated in right of payment to any
amounts due and outstanding (at or prior to the time of payment of any
Outstanding Amount) under the Purchaser’s Senior Convertible Notes (as amended,
the “Senior Notes”) issued pursuant to the Securities Purchase Agreement dated
on or about the date hereof (as amended, collectively, the “Senior Debt”),
provided that, Senior Debt shall not include any amount of principal under the
Senior Notes in excess of the Maximum Priority Senior Note Amount, as defined
and set forth in the Subordination Agreement.

 

6.12.1.2.
Without derogating from the provisions of Section 6.12.1.1, any
indebtedness incurred by the Purchaser after the date hereof that is
subordinated by its terms in right of payment to the Senior Debt, shall also be
subordinated in right of payment to such Outstanding Amount.

 

6.12.1.3.
Purchaser shall grant to the Sellers, for the ratable interest of the Sellers,
a second priority perfected security interest in any property or other assets
in which a first priority security interest has been (or will be) granted to
secure the Senior Debt, but subject to such first priority interest, as set
forth in the Security and Pledge Agreement and the Subordination Agreement. 
Sellers shall receive such security agreements, assignments and other
documents, and the Purchaser shall make such filings and take such other
actions, as granted to holders of Senior Debt, to create and perfect such
second priority security interest, subject to the subordination, in all
respects, of the Outstanding Amount to the rights of such holders of Senior
Debt and clarifying the junior status of any liens securing such Outstanding
Amount as set forth in the Security and Pledge Agreement and the Subordination
Agreement.

 

 

 

 

 

6.12.2.
If Purchaser does not issue Senior Notes, then:

 

6.12.2.1.
Such Outstanding Amount (a) shall rank pari passu with unsecured
indebtedness to trade creditors incurred in the ordinary course of business,
consistent with past practice and not outstanding for more than 120 days after
the date such payable was created, and (b) shall be senior to all other
indebtedness of the Purchaser other than Permitted Senior Indebtedness (as
defined below).

 

“Permitted Senior
Indebtedness” shall mean means the principal of (and premium, if any), interest
on, and all fees and other amounts (including, without limitation, any
reasonable out-of-pocket costs, enforcement expenses (including reasonable
out-of-pocket legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations relating thereto) payable by
Purchaser under or in connection with any inventory and receivables credit
facility based on a customary borrowing base entered into by Purchaser with one
or more financial institutions (and on terms and conditions) to fund the
working capital needs of Purchaser; provided , however , that the aggregate
outstanding amount of such indebtedness permitted hereunder (taking into
account the maximum amounts which may be advanced under the loan documents
evidencing such Permitted Senior Indebtedness) does not at any time exceed (i) five
million dollars ($5,000,000) prior to December 31, 2009 and (ii) ten
million dollars ($10,000,000) thereafter.

 

6.12.2.2. Purchaser shall grant to the Sellers, for
the ratable interest of the Sellers, a first priority perfected security
interest in any property or other assets in which a first priority security
interest may have been granted to secure the Senior Debt, substantially as set
forth in the Security and Pledge Agreement (but without regards to the
subordination provisions therein, which shall be removed).  Sellers shall
receive such security agreements, assignments and other documents, and the
Purchaser shall make such filings and take such other actions, as may have been
granted to holders of Senior Debt, to create and perfect such first priority
security interest substantially as set forth in the Security and Pledge
Agreement (but without regards to the subordination provisions therein, which
shall be removed).

 

2.5.          Exhibit A attached to the
Agreement (“Certain Definitions”) shall be amended so as to add a new
definition under Section 1.11A of the Exhibit, as follows:

 

1.11A.
“Deferred Amount” means
$10,000,000.

 

3.             OTHER
AGREEMENTS. The Parties agree that the form
of Pledge and Security Agreement attached to this Amendment as Appendix A
shall replace the form of Pledge and Security Agreement attached to the
Agreement as Exhibit E; and that the form of Subordination Agreement
attached to this Amendment as Appendix B shall replace the form of
Subordination Agreement attached to the Agreement as Exhibit F.

 

4.             SURVIVAL
OF PROVISIONS.  Except as specifically amended above, the
Agreement is hereby ratified, confirmed, and acknowledged and shall remain in
full force and effect.

 

5.             COUNTERPARTS.  This Amendment may be executed in
any number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute a single agreement.  The exchange of a fully executed Amendment
(in counterparts or otherwise) by facsimile or by electronic delivery in .pdf
format shall be sufficient to bind the Parties to the terms and conditions of
this Amendment, as an original.

 

- Signature pages follow -

 

 

 

 

 

IN WITNESS
WHEREOF, the Purchaser and the Sellers Representative, intending to be legally bound, have executed this FIRST AMENDMENT TO THE PURCHASE AGREEMENT as of the date first written
above.

 

	
   

  	
  ANSWERS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Bruce Smith

  
	
   

  	
  By:

  	
  Bruce Smith

  
	
   

  	
  Title:

  	
  Chief Strategic Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRIAN KARIGER, AS SELLERS REPRESENTATIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Brian KarigerExhibit 10.2

 

Answers Corporation

237 West 35th Street, Suite 1101

New York, NY 10001

 

February 8,
2008

 

Interlachen
Convertible Investments Limited  

c/o Interlachen Capital Group LP

800 Nicollet Mall, Suite 2500 

Minneapolis, MN 55402-2034

 

Attention:
Gregg Colburn/Lance Breiland

 

Re:          Second
Amendment to Securities Purchase Agreement

 

Ladies and
Gentlemen:

 

Reference is made to that
certain Securities Purchase Agreement by and among Answers Corporation (the “Company”) and Interlachen Convertible Investments Limited
(the “Investor”), dated as of January 15,
2008, as amended by that certain letter agreement between the Company and the
Investor dated as of January 23, 2008 (the “Securities Purchase Agreement”).

 

1.             The Company and the Investor hereby agree that Section 4(k) of
the Securities Purchase Agreement is hereby amended and replaced in its
entirety to read as follows:

 

“              (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, or but for the Securities Limitations (as defined below) would 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 whether
or not the Common Stock is listed on the 

 

 

 

 

Principal
Market or any applicable Eligible Market (as defined in the Registration Rights
Agreement), in each case without giving effect to (x) the limitations on
exercise contained in the Notes, and (y) the application of any Conversion
Floor Price (as defined in the Notes) (the “Securities
Limitations”).  For so long as
any Notes are outstanding, unless or until the Required Stockholder Approval
(as defined in the Notes) has been obtained, the Company shall not take any
action if the effect of such action would be to cause the Conversion Price to
be reduced below the Conversion Floor Price, in each case without giving effect
to any Securities Limitations.”

 

2.             The Company and the Investor hereby agree that Section 7(ix) of
the Securities Purchase Agreement is hereby amended and replaced in its
entirety to read as follows:

 

“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 and the Conversion Price (as
defined in the Notes) of the Notes is greater than the Conversion Floor Price
(as defined in the Notes).”

 

Reference is made to the
form of Follow-On Notes attached as Exhibit A to the Securities Purchase
Agreement.

 

3.             The Company and the Investor hereby agree that Section 7(a) of
the form of Follow-On Notes attached as Exhibit A to the Securities
Purchase Agreement is hereby amended by adding a new clause (vi) that
shall read as follows:

 

“              (vi)          Floor Price. 
Until such time as the Company receives any stockholder approval that
may be required under any applicable stockholder approval provisions in order
to allow the Conversion Price to be less than the Conversion Floor Price (as
defined below), 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 (the “Required
Stockholder Approval”), no adjustment pursuant to Sections 7(a) or
7(b) shall cause the Conversion Price to be less than $[        ](1), as
adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction (the “Conversion
Floor Price”).

 

(1)  Insert amount obtained by the following formula:

 

	
  Original Principal Amount 
 20%* TSO 

   

  TSO = total
  number of shares of Common Stock outstanding on the Closing Date (which shall
  include all shares of Common Stock issued in the Follow-On Offering).

  

 

 

 

 

4.             The Company and the Investor hereby agree that clause (vi) of
the definition of “Permitted Indebtedness” in Section 30(y) of the
form of Follow-On Notes attached as Exhibit A to the Securities Purchase
Agreement is hereby amended and replaced in its entirety with the following new
clause (vi) that shall read as follows:

 

“(vi) the
Deferred Amount and the Holdback (each, as defined in the Lexico Agreement),
which bear interest (payable at maturity) no greater than seven percent (7.0%)
per annum incurred by the Company which Indebtedness does not provide at any
time for the payment, prepayment, repayment, repurchase or defeasance, directly
or indirectly, of any principal or premium, if any, thereon made in favor of
the sellers pursuant to the Lexico Agreement (as defined in the Securities
Purchase Agreement) not to exceed (A) $10,000,000 plus interest in the
aggregate that does not become payable at any time earlier than two (2) years
from the Closing Date or later and (B) principal not to exceed $10,000,000
plus interest in the aggregate that does not become payable at any time earlier
than until thirty (30) months following the Closing Date or later, and that is
made expressly subordinate in right of payment to the Indebtedness evidenced by
this Note, as reflected in the Subordination Agreement (as defined in the
Securities Purchase Agreement) (such Indebtedness, the “Lexico
Indebtedness”),”

 

5.             The Company and the Investor agree that Section 8(a)(ii) of
the form of Follow-On Notes attached as Exhibit A to the Securities
Purchase Agreement shall apply, and the Investor shall be entitled to exercise
the Lexico Redemption Right, each time any amount of any outstanding Lexico
Indebtedness becomes due.  For the avoidance
of doubt, a “Lexico Maturity Date” as defined in the form of Follow-On Notes
shall include each day that any amount of the Deferred Amount or Holdback
(each, as defined in the Lexico Agreement, as amended) becomes due or payable.

 

6.             The Company and the Investor hereby agree that each of
the form of Subordination Agreement attached as Exhibit H to the
Securities Purchase Agreement, and the form of Lexico Pledge and Security
Agreement attached as Exhibit I to the Securities Purchase Agreement shall
be amended as provided in the attached forms hereto.

 

7.             Upon execution of this Letter Agreement, except as
modified by the provisions hereof, the Securities Purchase Agreement, including
all exhibits thereto, will remain in full force and effect in accordance with
its terms.

 

8.             This Letter 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.

 

9.             This Letter Agreement may not be amended or otherwise
modified in any respect without the written consent of each of the Company and
the Investor. This Letter Agreement 

 

 

 

 

 

shall
be construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of laws.

 

If this Letter Agreement
accurately reflects the understanding and agreement of the Investor, please
sign below and return an executed copy of this Letter Agreement to the
undersigned.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANSWERS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce D. Smith

  
	
   

  	
   

  	
  Name: 

  	
  Bruce D. Smith

  
	
   

  	
   

  	
  Title:

  	
  Chief Strategic Officer

  

 

 

 

	
  Acknowledged
  and Agreed

  
	
  as of this
  8th day of February, 2008

  
	
   

  
	
   

  
	
  INTERLACHEN
  CONVERTIBLE 

  INVESTMENTS LIMITED

  
	
   

  
	
  By:

  	
  Interlachen
  Capital Group LP, an

  
	
   

  	
  authorized
  signatory

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  Gregg
  T. Colburn

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Gregg T. Colburn

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

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