LOAN AGREEMENT

THIS AGREEMENT is made this [Date] by and between [Software Patent Borrower], a [Type of Organization] with offices at [Address] (the “Software Patent Borrower”), and [Mechanical Patent Bank], a [Type of Organization] with offices at [Address] (the “Mechanical Patent Bank”).

W I T N E S S E T H:

WHEREAS, Software Patent Borrower develops and markets computer software products, including without limitation a “search engine” software for searching and indexing information accessible through the Internet;

WHEREAS, Mechanical Patent Bank develops, manufactures, distributes and markets computer software products and services; and

WHEREAS, Software Patent Borrower and Mechanical Patent Bank desire to enter into a business relationship pursuant to which, among other things (1) Software Patent Borrower would (a) develop software for Mechanical Patent Bank to implement desired features for a Mechanical Patent Bank search engine, (b) provide search results for Mechanical Patent Bank using Software Patent Borrower’s search engine customized with, among other elements, the features developed for Mechanical Patent Bank, (c) provide software hosting and maintenance services for Mechanical Patent Bank’s benefit, and (d) purchase additional hardware and software necessary or desirable to service Mechanical Patent Bank’s needs, and (2) Mechanical Patent Bank would make certain payments to Software Patent Borrower, and provide loans to Software Patent Borrower to facilitate Software Patent Borrower’s purchase of additional hardware and software necessary or desirable to service Mechanical Patent Bank’s needs.

NOW, THEREFORE, in consideration of the promises and agreements set forth herein, the parties, each intending to be legally bound hereby, do promise and agree as follows:

1. LOAN TO SOFTWARE PATENT BORROWER
Pursuant to the terms and conditions of that certain Software Hosting Agreement between Software Patent Borrower and Mechanical Patent Bank of even date herewith (the “Hosting Agreement”) (a copy of which is attached hereto as Exhibit A and the terms of which are expressly incorporated herein by reference), Software Patent Borrower may be required, after consultation with and approval by Mechanical Patent Bank, to purchase additional Hosting Servers, as that term is defined in the Hosting Agreement. Subject to the terms and conditions of this Agreement, Mechanical Patent Bank shall from time to time make advances (“Advances”) to Software Patent Borrower during the period from the date hereof until the termination of this Agreement. In no event shall Mechanical Patent Bank have any obligation to make Advances to Software Patent Borrower following the occurrence of any Event of Default as defined in this Agreement.

A. Advances. Advances shall be made only in amounts separately agreed between Mechanical Patent Bank and Software Patent Borrower to be sufficient to purchase the additional Hosting Servers required by Mechanical Patent Bank. Each such Advance shall be evidenced by a promissory note (the “Promissory Note”) substantially the form of the sample note attached hereto as Exhibit B. The terms of all such Promissory Notes are by this reference incorporated in this Agreement. The proceeds of each Advance shall only be used by Software Patent Borrower to purchase the additional Hosting Servers for which that Advance is made.

B. Persons Authorized. Mechanical Patent Bank is hereby authorized by Software Patent Borrower to make Advances only upon the written requests (including requests made by telex, telegraph or facsimile), of any one of the following persons (the “Responsible Officers” and each a “Responsible Officer”); each of whom is and shall be authorized to request Advances and direct the disposition of any Advance until written notice by Software Patent Borrower of the revocation of such authority is received by Mechanical Patent Bank. Any Advance shall be conclusively presumed to have been made to or for the benefit of Software Patent Borrower when made in accordance with such a request. Requests for Advances shall be on the Borrowing Notice form attached hereto as Exhibit C. Any such Borrowing Notice shall be directed to the following Mechanical Patent Bank representative (or such other person as Mechanical Patent Bank may direct from time to time) for approval prior to disbursement.

C. Assumption of Risk. It is important to Software Patent Borrower that Software Patent Borrower have the privilege of making requests for Advances by e-mail, telex, telegraph or facsimile. Therefore, to induce Mechanical Patent Bank to lend funds in response to such requests, and in consideration for Mechanical Patent Bank’s agreement to receive and consider such requests, SOFTWARE PATENT BORROWER ASSUMES ALL RISK OF THE VALIDITY, AUTHENTICITY AND AUTHORIZATION OF SUCH REQUESTS, WHETHER OR NOT THE INDIVIDUAL MAKING SUCH REQUEST HAS AUTHORITY IN FACT TO REQUEST ADVANCES ON BEHALF OF SOFTWARE PATENT BORROWER. UNLESS AN UNAUTHORIZED OR INVALID ADVANCE IS MADE AS A RESULT OF GROSS NEGLIGENCE ON THE PART OF Mechanical Patent Bank, Mechanical Patent Bank SHALL NOT BE RESPONSIBLE, UNDER PRINCIPLES OF CONTRACT, TORT OR OTHERWISE, FOR ANY LOSS SUSTAINED BY SOFTWARE PATENT BORROWER RESULTING FROM ANY UNAUTHORIZED OR INVALID ADVANCE, INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF ANY ADVANCE. Software Patent Borrower agrees to repay any sums, with interest as provided herein, that Mechanical Patent Bank so advances. Software Patent Borrower agrees to give Mechanical Patent Bank prompt written confirmation of all e-mail, telex, telegraph or facsimile requests for Advances; but Software Patent Borrower’s failure to do so, or the failure of such confirmation to reach Mechanical Patent Bank, shall not affect Software Patent Borrower’s assumption of the risk with respect to such Advance or reduce in any way the obligation of Software Patent Borrower to repay with interest all amounts theretofore or thereafter advanced by Mechanical Patent Bank pursuant thereto.

D. Request for Advance. Each request for an Advance shall set forth the amount of such Advance and the date such Advance is to be made, such request to be received by Mechanical Patent Bank by [time of day], at [location] at least [number] ([#]) full business days before such Advance is to be made. Any proposed Advance shall be made and effected only on a business day and may be disbursed only after a separate Promissory Note for such Advance is properly executed by Software Patent Borrower, and delivered to and accepted by Mechanical Patent Bank. If the date of the proposed Advance is not a business day, such Advance shall be effected on the next succeeding business day. Each request for an Advance shall be irrevocable and binding on Software Patent Borrower.

E. Disbursement of Advances. Advances made and effected by Mechanical Patent Bank shall be disbursed by wire transfer in immediately available funds to the depository account set forth in Exhibit E hereto, or such other account as Software Patent Borrower may designate from time to time by written notice to Mechanical Patent Bank signed by a Responsible Officer.

2. TERM AND TERMINATION
A. Term. This Agreement and the provisions hereof, except as otherwise provided, shall be in full force and effect commencing on the date of execution by both parties and shall extend for an Initial Term as recited in Schedule 1 attached hereto (the “Term”). This Agreement shall be automatically renewed for additional “Extended Terms” as provided for in Schedule 4 unless either party notifies the other in writing of its intention not to renew the Agreement, such notification to be provided at least [number] ([#]) days prior to the expiration of the then in-effect Term.

B. Termination. This Agreement may be terminated by either party upon [number] ([#]) days written notice to the other party in the event of a breach of a material provision of this Agreement by the other party, provided that, during the [number] ([#]) days period, the breaching party fails to cure such breach.

3. INTEREST
The outstanding principal balance of the Loan shall bear interest at the lowest appropriate applicable federal rate, as determined by Mechanical Patent Bank, when each Promissory Note (or the New Note described in Section 4) is issued. All computations of interest shall be based on a 360-day year for the actual number of days passed.

4. PAYMENT OF PRINCIPAL AND INTEREST
A. Monthly Payments. Payment of principal and interest for each Advance shall be made in immediately available funds, by [time], at such location designated by Mechanical Patent Bank or the holder of the applicable Promissory Note, on the date each payment is due as provided in the Promissory Note. The payments of principal and interest shall be separately calculated for each Advance and shall be payable in immediately available funds on the first business day of each month until paid in full. Each installment payment shall be in an amount sufficient to cause the principal balance of each Advance to be repaid within three years. Notwithstanding the foregoing, any amounts accrued but not paid at the time of termination of this Agreement shall be payable or otherwise satisfied in accordance with the following subsections.

B. Roll-over or Acceleration. Upon expiration or termination of this Agreement:

1. If this Agreement is terminated due to the mutual agreement of the parties, due to termination of the Hosting Agreement by Mechanical Patent Bank pursuant to Section [number] of the Hosting Agreement, or due to termination of the Hosting Agreement by Software Patent Borrower pursuant to Section [number] of the Hosting Agreement, then immediately prior to the effective date of such termination Mechanical Patent Bank shall cancel all outstanding Promissory Notes and Software Patent Borrower shall simultaneously execute a new promissory note (“New Note”) for all outstanding principal, interest and other amounts under such Promissory Notes owed or owing to Mechanical Patent Bank by Software Patent Borrower on that date, in substantially the form attached at Exhibit C satisfying and replacing all outstanding Advances and other amounts due under this Agreement. A New Note issued pursuant to this subsection shall carry the same interest rate and be subject to the same terms and conditions as all Advances under this Agreement, except that the term of the New Note shall be [number] ([#]) years, and each installment payment shall be in an amount sufficient to cause the principal balance of the New Note to be repaid within [number] ([#]) years. Installment payments for the New Note shall be made in immediately available funds, by [time], at such location designated by Mechanical Patent Bank or the holder of the New Note, on the date each payment is due as provided in the New Note. Prior to execution of the New Note, Software Patent Borrower shall satisfy all conditions precedent and make all representations and warranties required for Advances under this Agreement.

2. If termination of this Agreement is due to any other reason (other than due to a material breach of this Agreement or the Hosting Agreement by Mechanical Patent Bank), such termination shall be considered an Event of Default and subject to any and all remedies available to Mechanical Patent Bank for an Event of Default as provided in Section 11 of this Agreement.

C. Prepayment. Software Patent Borrower may prepay each Advance in whole or in part, at any time without penalty. Any repayments of the amounts due under this Loan Agreement shall be made in immediately available funds and shall be applied first against any amounts owed to Mechanical Patent Bank under the Security Agreement, then to the payment of past due interest on any outstanding Advance, and any remaining amount shall reduce the outstanding principal amount of each Advance.

5. OVERDUE PAYMENTS
If any amount due under this Agreement is not paid when and as due, such amount shall bear interest from the date such payment was due until and including the date such payment is received by Mechanical Patent Bank at a rate per annum equal to [number] percent ([#] %) per annum (the “Default Rate”), provided that in no event shall the rate of interest exceed that permitted by applicable law.

6. SECURITY FOR THE LOAN
This Loan is secured by a purchase money security interest in the Hosting Servers purchased by each Advance, pursuant to the terms of a security agreement of even date (“Security Agreement”). Mechanical Patent Bank shall have a first priority security interest in all of the collateral described in the Security Agreement (the “Collateral”).

7. REPRESENTATIONS AND WARRANTIES
Software Patent Borrower hereby represents and warrants to Mechanical Patent Bank as follows:

A. Corporate Existence. Software Patent Borrower is a corporation, duly organized and validly existing, in good standing under the laws of its state of incorporation, and is duly authorized and qualified under all applicable laws, regulations, ordinances and orders of public authorities to carry on such business in any state or county where such qualification is necessary and to own and hold property.

B. Corporate Power. Software Patent Borrower has full right, power and authority to enter into and perform this Agreement, each Promissory Note, the New Note, and the Security (collectively, the “Documents”), and to grant all of the rights granted and agreed to be granted pursuant to this Agreement and the Documents.

C. Authorization. Software Patent Borrower has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the other Documents, including but not limited to, all necessary corporate action required by its articles of incorporation and bylaws.

D. No Conflict, Violation or Consent Required. The execution, delivery and performance of, and the compliance with the provisions of each of the Documents do not and will not violate any provision of an applicable law or any provision of Software Patent Borrower’s articles of incorporation and bylaws, and will not conflict with, require consent under any provision of, result in any breach of any of the terms, conditions or provisions of, result in the creation or imposition of any lien, charge or encumbrance upon any of the properties or assets of Software Patent Borrower pursuant to the terms of, or constitute a default under or conflict with, any other indenture, contract, mortgage, deed of trust or other agreement or instrument to which Software Patent Borrower is a party or by which Software Patent Borrower is bound. Software Patent Borrower shall not enter into other contractual obligations which will restrict or impair its obligations under this Agreement or any other Document.

E. Binding Effect. This Agreement constitutes, and the Promissory Note and each of the other Documents, when executed and delivered by Software Patent Borrower, will constitute, valid obligations of Software Patent Borrower and are binding and enforceable against Software Patent Borrower in accordance with their respective terms, except as hereafter may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws affecting the enforcement of creditor’s rights and the availability of specific performance.

F. Familiarity With Terms. Software Patent Borrower is fully familiar with all of the terms, covenants and conditions of the Documents.

G. Legal Proceedings. Except as disclosed on Schedule 2 attached hereto, there is no action, suit or proceeding pending or, to the knowledge of Software Patent Borrower, threatened, at law or in equity or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that might result in a material adverse change in Software Patent Borrower’s ownership or title to any of the Collateral or in its financial condition or operations. As used in this subsection, the phrase “to the knowledge of Software Patent Borrower” shall mean the current actual knowledge of the executive officers and directors of Software Patent Borrower.

H. No Governmental Approvals. No registration with or approval of any governmental agency or commission is necessary for the due execution and delivery of any of the Documents or for the validity or enforceability thereof with respect to any obligation of Software Patent Borrower hereunder or thereunder, except acts to be performed by Mechanical Patent Bank in order to perfect Mechanical Patent Bank’s security interest in the Collateral.

I. Liens and Encumbrances. Software Patent Borrower shall keep the Collateral purchased with each Advance free and clear of all liens, claims, encumbrances and rights of others and at the request of Mechanical Patent Bank from time to time, shall obtain an agreement, in a form satisfactory to Mechanical Patent Bank in its sole discretion, from any of its general creditors or lien holders to subordinate their interests in the Collateral to Mechanical Patent Bank’s interest pursuant to this Agreement and the Security Agreement.

J. Compliance With Laws. Software Patent Borrower has complied with all laws, regulations, ordinances and orders which affect in any material respect its right to carry on its operations, perform its obligations under the Documents or meet its obligations in the ordinary course of business.

K. Outstanding Debt. There exists no default under the provisions of any agreement or instrument evidencing any outstanding indebtedness of Software Patent Borrower and/or its subsidiaries to any party or any material agreement to which Software Patent Borrower and/or its subsidiaries is currently a party.

L. Disclosure. This Agreement does not contain any untrue statement of a material fact and does state all material facts necessary in order to make the statements contained herein not misleading in light of the circumstances under which they were made. There is, to the knowledge of Software Patent Borrower, no fact that would materially adversely affect its business, prospects, condition, affairs or operations or any of its properties or assets.

M. No Consents. The execution, delivery and filing of the Security Agreement and any financing statements, and the creation of the lien, mortgage, encumbrance, preference or security interest contemplated thereby, will not require the consent or approval of any person or entity not a party to this Agreement.

N. Perfection of Liens and Security Interest. As of the date hereof, Mechanical Patent Bank will have a valid and perfected first priority lien on and security interest in all of the Collateral (whether now owned or hereafter acquired), which lien and security interest will be enforceable against the applicable grantor thereof and all third parties and will secure the obligations stated therein. All filings, recordations and other actions necessary under any laws to perfect and protect such liens and security interests as first-priority liens and security interests in the Collateral have been, or will on the Closing Date be, duly taken.

8. AFFIRMATIVE COVENANTS
Until all amounts owed under the Documents have been paid in full or otherwise satisfied under the terms of this Agreement, Software Patent Borrower, at its own expense, covenants and agrees at all times to comply with the terms of this Section.

A. Financial Information.

1. Software Patent Borrower shall furnish or cause to be furnished to Mechanical Patent Bank, as soon as practicable and in any event within [number] ([#]) days after the close of each fiscal quarter, the following unaudited financial statements of Software Patent Borrower for each such quarter, all in reasonable detail and certified by a Responsible Officer of Software Patent Borrower to be true and correct: balance sheet, statement of income, and statement of cash flows.

2. Software Patent Borrower shall furnish or cause to be furnished to Mechanical Patent Bank, as soon as the same are available, and in any event within [number] ([#]) days after the end of each of each fiscal year Software Patent Borrower’s consolidated balance sheet, statement of income and a statement of cash flows, all as of the end of such fiscal year (together, in each case, where applicable, with the comparable figures for the prior fiscal year), all in reasonable detail. Annual consolidated financial statements shall be prepared and audited (without any qualification or exception deemed material by Mechanical Patent Bank) in accordance with generally accepted accounting principles applied on a basis consistently maintained throughout the period involved (except as disclosed in the notes to the financial statements) by independent certified public accountants of recognized national standing or otherwise reasonably acceptable to Mechanical Patent Bank.

3. Concurrently with the information described in (1) and (2) above, a certificate of a Responsible Officer of Software Patent Borrower stating that the consolidated financial statements delivered to Mechanical Patent Bank are properly stated and that there exists no Event of Default, or event which with notice or lapse of time, or both, would constitute an Event of Default, or, if any such event exists, specifying the nature and period of existence thereof and what action Software Patent Borrower proposes to take with respect thereto.

4. Software Patent Borrower shall also furnish or cause to be furnished, from time to time, such additional financial and other information as Mechanical Patent Bank may reasonably request in order to monitor the financial condition of Software Patent Borrower.

B. Notice of Default. Immediately upon obtaining knowledge of the occurrence of any event that constitutes an Event of Default, or that with notice or lapse of time, or both, would constitute an Event of Default, Software Patent Borrower shall give written notice thereof to Mechanical Patent Bank, together with a detailed statement of the steps being taken by Software Patent Borrowers to cure such event.

C. Maintenance of Existence. Software Patent Borrower shall cause to be done all things necessary to maintain and preserve the corporate existence, rights and franchises of Software Patent Borrower and shall comply with all related laws applicable to Software Patent Borrower and/or its subsidiaries.

D. Payment of Taxes. Software Patent Borrower shall pay, indemnify and hold Mechanical Patent Bank harmless from (i) all taxes, assessments and charges lawfully levied or imposed by the United States, any state or local government, any taxing authority or any political or governmental subdivision of any foreign country on or with respect to the Collateral or any part thereof, and (ii) any other claims which, if unpaid, might become by law a lien upon Software Patent Borrower’s property; except, and only to the extent that any such taxes, assessments, charges or claims are being contested in good faith (and for the payment of which adequate reserves have been provided) by appropriate proceedings conducted diligently and in good faith so long as such proceedings do not involve a material danger of the sale, forfeiture or loss of all or a material portion of the Collateral.

E. Maintenance of Property and Leases. Software Patent Borrower shall keep its properties in good repair and condition, reasonable wear and tear excepted, and from time to time make all necessary and proper repairs, renewals, replacements, additions and improvements thereto. Software Patent Borrower shall at all times comply with the provisions of all leases to which it is a party so as to prevent any loss or forfeiture thereof or thereunder.

F. Insurance. Software Patent Borrower shall maintain with responsible companies reasonably acceptable to Mechanical Patent Bank liability insurance and insurance with respect to the Collateral in amounts and covering risks as is customary among companies engaged in businesses similar to that of Software Patent Borrower. Each liability insurance policy maintained pursuant to this paragraph shall name Mechanical Patent Bank as additional insured. Each such policy other than liability policies shall name Mechanical Patent Bank as named insured and loss payee as its interest may appear. The parties agree that such interest of Mechanical Patent Bank shall be equal to the total of all amounts owed under the Documents to Mechanical Patent Bank. Software Patent Borrower shall maintain insurance against any other risks as is customary among companies engaged in businesses similar to that of Software Patent Borrower. All required insurance shall (a) be in form and amount reasonably satisfactory to Mechanical Patent Bank and (b) contain a Mechanical Patent Bank’s Loss Payable Endorsement. Each insurer shall agree by endorsement upon the policies issued by it, or by independent instrument furnished to Mechanical Patent Bank, that it will give Mechanical Patent Bank [number] ([#]) days written notice before the policy is materially altered or canceled. The proceeds of any public liability policy shall be payable first to Mechanical Patent Bank to the extent of its liability, if any, and the balance shall be payable to Software Patent Borrower. Software Patent Borrower hereby irrevocably appoints Mechanical Patent Bank as Software Patent Borrower’s attorney-in-fact to make claim for, receive payment of, and execute and endorse all documents, checks or drafts for loss or damage under any insurance policy.

G. Notice of Litigation. Software Patent Borrower shall promptly notify Mechanical Patent Bank in writing of the initiation of any litigation against Software Patent Borrower that in Software Patent Borrower’s good faith judgment might materially and adversely affect the operations, financial condition, property or business of Software Patent Borrower. If any suit is filed against any of the Collateral or if any of the Collateral is otherwise attached, levied upon or taken in custody by virtue of any legal proceeding in any court, Software Patent Borrower shall promptly notify Mechanical Patent Bank thereof by telephone, confirmed by letter, and within [number] ([#]) days (unless otherwise consented to in writing by Mechanical Patent Bank) cause the Collateral to be released and promptly notify Mechanical Patent Bank thereof in the manner aforesaid.

H. Accounts and Reports. Software Patent Borrower shall keep true and accurate records and books of account in which full, true and correct entries shall be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting principles.

I. Compliance With Laws. Software Patent Borrower shall duly observe and conform to all valid requirements of governmental authorities relating to the conduct of its business or to its property or assets.

J. Inspection. Software Patent Borrower shall permit Mechanical Patent Bank or its designated representative, at all reasonable hours upon reasonable advance notice, to visit and inspect Software Patent Borrower’s properties, offices, facilities and the Collateral, and to examine Software Patent Borrower’s books of account, solely to monitor the status of the Collateral and financial condition of Software Patent Borrower. Mechanical Patent Bank agrees that any such visitation or inspection may be escorted and monitored by Software Patent Borrower.

K. Filing and Execution of Documents. Software Patent Borrower shall from time to time do and perform such other and further acts and execute and deliver any and all such further instruments as may be required by law or reasonably requested by Mechanical Patent Bank to establish, maintain and protect Mechanical Patent Bank’s security interest in any of the Collateral as provided in this Agreement.

L. Anti-forfeiture. Software Patent Borrower shall not have committed or commit any act or omission affording the federal government or any state or local government the right of forfeiture as against the property of Software Patent Borrower or any part thereof or any moneys paid in performance of its obligations under this Agreement, any Promissory Note or under any of the other Documents. Software Patent Borrower covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right of forfeiture. In furtherance thereof, Software Patent Borrower hereby indemnifies Mechanical Patent Bank and agrees to defend and hold Mechanical Patent Bank harmless from and against any loss, damage or injury by reason of the breach of the covenants and agreements or the warranties and representations set forth in the preceding sentence. Without limiting the generality of the foregoing, the filing of formal charges or the commencement of proceedings against Software Patent Borrower, Mechanical Patent Bank, or all or any of the property of any Software Patent Borrower under any federal or state law for which forfeiture of such property or any part thereof or of any moneys paid in performance of any Software Patent Borrower’s obligations under the Documents shall, at the election of Mechanical Patent Bank, constitute an Event of Default hereunder without notice or opportunity to cure.

M. Meeting. The Responsible Officers of Software Patent Borrower (and such other officers and employees of Software Patent Borrower as Mechanical Patent Bank may reasonably request) shall meet at least [frequency] per [specify period, year, 6 months, etc.] with Mechanical Patent Bank’s designated representatives to review Software Patent Borrower’s consolidated financial statements and such other information regarding the operation of Software Patent Borrower’s business as may be reasonably requested by Mechanical Patent Bank to monitor the financial condition of Software Patent Borrower and status of the Collateral.

9. NEGATIVE COVENANTS
Until all amounts owed under this Agreement, the Promissory Note and the other Documents have been paid in full or otherwise satisfied under the terms of this Agreement, Software Patent Borrower, without the prior written consent of Mechanical Patent Bank, covenants and agrees that it shall not sell all or any portion of the Collateral, nor relocate the Collateral. Software Patent Borrower shall not encumber the Collateral, assume any debt secured by the Collateral or subject the Collateral to any unpaid charge or claim of any third party. Mechanical Patent Bank may give its prior written consent to any sale or encumbrance of any of the Collateral upon the express terms and conditions set forth in such consent of Mechanical Patent Bank.

10. CONDITIONS PRECEDENT TO LOAN ADVANCES
Notwithstanding anything contained herein to the contrary, the obligation of Mechanical Patent Bank to make any Advance to Software Patent Borrower, is expressly conditioned upon the following:

A. Representations and Warranties. All representations and warranties of Software Patent Borrower contained in this Agreement, in the Documents and in any certificate or other instrument delivered pursuant to the provisions hereof, or in connection with the transactions contemplated hereby, shall be and remain true and correct in all material respects throughout the term of this Agreement, including without limitation on the date of each request for an Advance with the same force and effect as though such representations and warranties had been made on the date of the Advance.

B. Covenants. Software Patent Borrower shall have performed and complied with all material terms, covenants and conditions of this Agreement and the Documents to be performed or complied with by it on or before execution of this Agreement or on or before the date of each Advance, as the case may be.

C. No Event of Default. There shall exist no Event of Default, or event which with notice or lapse of time, or both, would constitute an Event of Default, under this Agreement or the other Documents.

D. Subordination of Prior Interests/Release of Liens. If Mechanical Patent Bank so requests, for any prior security interest, lien or encumbrance in the Collateral or in the general assets of the Software Patent Borrower’s business, Software Patent Borrower shall obtain a subordination agreement from its creditor or lien holder in favor Mechanical Patent Bank or shall obtain the release and discharge of such security interest, lien or encumbrance, including any financing statement or recorded lien filed to perfect such interest, lien or encumbrance.

E. Delivery of Documentation. Software Patent Borrower, at its sole cost and expense, shall have delivered to Mechanical Patent Bank the following documents, duly executed by the appropriate party, in form and substance satisfactory to Mechanical Patent Bank:

1. the applicable Promissory Note executed by Software Patent Borrower prior to disbursement of each respective Advance;

2. the Security Agreement executed by Software Patent Borrower on the date of this Agreement;

3. the Hosting Agreement executed by Software Patent Borrower, on the date of this Agreement;

4. a certificate of Software Patent Borrower’s corporate secretary, to be dated as of the date of this Agreement, certifying as true and accurate and in full force and effect as of that date, copies of current resolutions of Software Patent Borrower’s Board of Directors authorizing (i) Software Patent Borrower to enter into and perform this Agreement and to execute, deliver and honor and perform the other Documents, and (ii) the persons who have executed or will execute this Agreement, the Promissory Note and the other Documents to do so;

5. a certificate, as of the most recent date practical, of the secretary of state of Software Patent Borrower’s state of incorporation as to the good standing of Software Patent Borrower;

6. certificates issued in favor of Mechanical Patent Bank evidencing the insurance policies required by Mechanical Patent Bank in accordance with Section 8(F) hereof;

7. UCC financing statements executed by Software Patent Borrower, in form and substance satisfactory to Mechanical Patent Bank, evidencing Mechanical Patent Bank’s security interest in the Collateral designated thereon to be filed in each jurisdiction in which Software Patent Borrower is or may be doing business;

8. Officer’s certificates executed by a Responsible Officer of Software Patent Borrower, dated the purchase date for each purchase of each item of Collateral, certifying that on that date (i) Software Patent Borrower has good title to all Collateral described in the Security Agreement, (ii) no Event of Default, or event which with notice or lapse of time, or both, would constitute an Event of Default, has occurred, and is continuing, and (iii) the representations and warranties contained in the Documents are true and accurate on and as of that date;

9. such other agreements, certificates or other documents as shall be deemed necessary or desirable, in the good faith opinion of Mechanical Patent Bank or its counsel, in order to fully and completely perfect, preserve or protect Mechanical Patent Bank’s interests hereunder and Mechanical Patent Bank’s security interest in the Collateral; and

10. a valid and authorized Borrowing Notice containing a request for an Advance approved by Mechanical Patent Bank’s designated representative.

11. EVENTS OF DEFAULT
The occurrence of one or more of the following events (herein called “Events of Default”) shall constitute a default under this Agreement.

A. Software Patent Borrower’s failure to pay any portion of any installment of principal or interest due under any Promissory Note or any other amount under any of the other Documents when and as the same shall become due and payable as therein or herein expressed, if such failure continues for a period of [number] ([#]) days after Mechanical Patent Bank has notified Software Patent Borrower (regardless of whether Software Patent Borrower actually receives such notice) that such payment has not been received;

B. Software Patent Borrower’s failure to comply with and duly and punctually observe or perform, any of the covenants of Software Patent Borrower contained in Sections 8 and 9 of this Loan Agreement;

C. Software Patent Borrower’s failure to maintain insurance as required in accordance with Section 8(F) hereof; which failure shall continue for a period of [number] ([#]) days after the earlier of the giving of notice of such failure by Mechanical Patent Bank to Software Patent Borrower, or the date Mechanical Patent Bank is notified of such failure by Software Patent Borrower or should have been so notified pursuant to Section 8 hereof;

D. Software Patent Borrower applies for, consents to or acquiesces in the appointment of a trustee, receiver, liquidator, assignee, sequestrator or other similar official for Software Patent Borrower or for any of Software Patent Borrower’s property, or makes a general assignment for the benefit of creditors, or files a petition or an answer seeking reorganization in a proceeding under any bankruptcy law (as now or hereafter in effect) or a readjustment of its indebtedness or an answer admitting the material allegations of a petition filed against it in any such proceeding, or seeks relief under the provisions of any bankruptcy or similar law; or, in the absence of any of the foregoing, a trustee, receiver, liquidator, assignee, sequestrator or other similar official is appointed for Software Patent Borrower or for a substantial part of any of the property of Software Patent Borrower and is not discharged within [number] ([#]) days; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or other insolvency law or common law or in equity is instituted against Software Patent Borrower and is not dismissed within [number] ([#]) days; or, in the absence of any of the foregoing, if, under the provisions of any law providing for reorganization or winding up which may apply to Software Patent Borrower, any court of competent jurisdiction shall assume jurisdiction, custody or control of Software Patent Borrower or of any substantial part of any of Software Patent Borrower’s property and such jurisdiction, custody or control shall remain in force unrelinquished, unstayed or unterminated for a period of [number] ([#]) days;

E. Any material representation or warranty made by Software Patent Borrower and contained in any of the Documents, or otherwise made by Software Patent Borrower to Mechanical Patent Bank, proves or becomes untrue in any material respect, provided that any cure period (if any) available to remedy the inaccuracy has passed;

F. Software Patent Borrower is in material default in the payment or performance of any material obligation under any promissory note, indenture, contract, mortgage, deed of trust or other instrument to which Software Patent Borrower is a party or by which Software Patent Borrower is bound and the applicable cure period shall have expired;

G. Any provision of any Document, including, without limitation, the Security Agreement, shall for any reason (except for acts to be performed by Mechanical Patent Bank) cease to be valid and binding on any signatory thereto, or such signatory shall so allege, or any Security Agreement shall for any reason (except for acts to be performed by Mechanical Patent Bank) cease to create a valid and perfected first priority lien, mortgage, encumbrance or security interest except to the extent permitted by the terms thereof, in any of the property purported to be covered thereby, or the signatory to such Security Agreement shall so allege;

H. The termination of the Hosting Agreement by Mechanical Patent Bank due to the material breach thereunder by Software Patent Borrower;

I. Software Patent Borrower’s failure to duly and punctually observe or perform, in any material respect, any other of the covenants, conditions or agreements to be performed or observed by Software Patent Borrower contained in this Agreement or any of the Documents and, except as may otherwise be specifically provided in the Documents, such failure continues for a period of [number] ([#]) days after the earlier of the giving of notice of such failure by Mechanical Patent Bank to Software Patent Borrower, or the date Mechanical Patent Bank is notified of such failure by Software Patent Borrower or should have been so notified pursuant to Section 8 hereof; or

J. Software Patent Borrower’s material breach under the Hosting Agreement and/or any of the following agreements between the parties (which remains uncured after the applicable core period, if any, thereunder): the Software Development Agreement of even date herewith; and the Information Services Agreement of even date herewith (and the Escrow Agreement referred to therein).

12. REMEDIES
Upon the occurrence of an Event of Default and while any Event of Default is continuing, Mechanical Patent Bank may at its option elect to pursue any or all of the following remedies, which are cumulative and in addition to any other right or remedy provided by applicable law:

A. Without further demand, protest or notice of any kind to Software Patent Borrower, declare any or all sums and obligations due under the Documents to be due and immediately payable, and upon such declaration the same shall become and be immediately due and payable;

B. Terminate Mechanical Patent Bank’s commitment to make Advances hereunder;

C. If Software Patent Borrower fails to perform any act that it is required to perform under this Agreement or the Security Agreement, Mechanical Patent Bank may, but shall not be obligated to, perform, or cause to performed, such act, provided that any reasonable expense thereby incurred by Mechanical Patent Bank and any money thereby paid by Mechanical Patent Bank, shall be a demand obligation owing by Software Patent Borrower and Mechanical Patent Bank shall promptly notify Software Patent Borrower of the amount of such obligation, which obligation shall bear interest at the Default Rate from the date Mechanical Patent Bank makes such payment until repaid by Software Patent Borrower; and Mechanical Patent Bank shall be subrogated to all rights of the person receiving such payment;

D. Enforce Mechanical Patent Bank’s rights under the Security Agreement;

E. Terminate the Hosting Agreement;

F. Institute one or more legal proceedings at law or in equity for the:

1. specific performance of any covenant, condition, agreement or undertaking contained in the Documents, or in aid of the execution of any powers granted therein and/or to recover a judgment for damages for the breach hereof, including, without limitation, any amount due under the Documents, either by their terms or by virtue of such declaration, and collect the same out of any property of Software Patent Borrower;

2. foreclosure of its security interest in the Collateral and the sale of all or any part of the Collateral under the judgment or decree of any court of competent jurisdiction;

3. enforcement of such other appropriate legal or equitable remedy as may in the opinion of Mechanical Patent Bank be necessary to protect and enforce Mechanical Patent Bank’s rights under the Documents;

G. Assert such other rights and remedies of a secured party and of a mortgagee under the laws of the United States or the State of [State] (regardless of whether such law or one similar thereto has been enacted in the jurisdiction where the rights or remedies are asserted), including, without limitation, all rights of a secured party under the Uniform Commercial Code, whether or not this Agreement and the transactions contemplated hereby are determined to be governed by the UCC.

13. COSTS AND EXPENSES OF COLLECTION AND ENFORCEMENT
Software Patent Borrower shall pay to Mechanical Patent Bank on demand all reasonable attorneys fees and other costs and expenses reasonably incurred by Mechanical Patent Bank in protecting the Collateral or in exercising Mechanical Patent Bank’s rights, powers or remedies under this Agreement or the Documents, together with interest on such sums at the Default Rate from the date when the costs and expenses are incurred until fully paid. If because of Software Patent Borrower’s default the Mechanical Patent Bank consults an attorney regarding the enforcement of any of its rights under any Document, or if suit is brought to enforce any Document, Software Patent Borrower promises to pay all costs thereof, including attorneys’ fees. Such costs and attorneys’ fees shall include, without limitation, costs and attorneys’ fees incurred in any appeal, forfeiture proceeding or in any proceedings under any present or future federal bankruptcy or state receivership law.

14. ALLOCATION OF PROCEEDS
The (a) proceeds of any sale, (b) proceeds of any insurance received by Mechanical Patent Bank under any insurance policy obtained by any Software Patent Borrower hereunder, and (c) any and all other moneys received by Mechanical Patent Bank with respect to the Documents, the application of which has not elsewhere herein been specifically provided for, shall, except as otherwise specified in any applicable Document, be applied as follows:

1. first, to the payment of all expenses and charges, including expenses of any sale or retaking, reasonable attorneys’ fees, court costs and other expenses or advances reasonably made or incurred by Mechanical Patent Bank, or on Mechanical Patent Bank’s behalf, under the Documents upon an Event of Default, and to the payment of, and provision for adequate indemnity for, any taxes, assessments or liens prior to the lien of Mechanical Patent Bank;

2. second, to the payment of all accrued and unpaid interest under the Promissory Notes or New Notes;

3. third, to the payment of the unpaid principal balance under the Promissory Notes or New Note;

4. fourth, to the payment of all other amounts due to Mechanical Patent Bank under the Documents; and

5. last, any residue shall be paid to Software Patent Borrower, or as otherwise required by law, or, directed by a court having jurisdiction.

If the proceeds and other sums described in this Section are insufficient to pay in full all amounts due to Mechanical Patent Bank under the Documents, Software Patent Borrower shall immediately pay such deficiency to Mechanical Patent Bank.

15. MODIFICATIONS, CONSENTS AND WAIVERS
No failure or delay on the part of Mechanical Patent Bank in exercising any power or right hereunder or under the Promissory Notes or New Notes or under any other Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power. No amendment, modification or waiver of any provision to this Agreement, the Notes or any other Document, nor consent to any departure therefrom, shall in any event be effective unless the same shall be in writing and consented to by Mechanical Patent Bank, and then such amendment, modification, waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Software Patent Borrower in any case shall entitle Software Patent Borrower to any other or further notice or demand in similar or other circumstances.

16. COSTS AND EXPENSES OF PERFECTING SECURITY INTERESTS AND OTHER RIGHTS
Software Patent Borrower shall pay in a timely manner all costs and expenses incurred by Mechanical Patent Bank, including the reasonable fees and expenses of legal counsel, in connection with the approval, preparation, negotiation, filing, or recording of any financing statements, pledge agreements, waivers, subordination agreements, and assignments (as well as any amendments or extensions thereto) reasonably required to protect or perfect Mechanical Patent Bank’s interest in the Collateral or any other rights granted by the Documents.

17. SURVIVAL OF COVENANTS
All covenants, agreements, representations and warranties made by Software Patent Borrower hereunder shall survive the execution and delivery of this Agreement and the disbursement of any Advances made pursuant to this Agreement. All statements contained in certificates or other instruments delivered by Software Patent Borrower pursuant to this Agreement shall constitute representations and warranties made by Software Patent Borrower hereunder, as the case may be.

18. BINDING EFFECT AND ASSIGNMENT
This Agreement, the Promissory Notes and all other Documents shall be binding upon and inure to the benefit of Software Patent Borrower and Mechanical Patent Bank and their respective successors and assigns. Software Patent Borrower may not assign or transfer its rights hereunder, or delegate its obligations hereunder, without the prior written consent of Mechanical Patent Bank, which may be withheld in Mechanical Patent Bank’s sole and absolute discretion. From and after any assignment, transfer or delegation of obligation by Mechanical Patent Bank of its interest hereunder, Mechanical Patent Bank shall be released from all liability to Software Patent Borrower hereunder arising after the date of such assignment, transfer or delegation of obligation; provided, however, that any assignee of Mechanical Patent Bank shall expressly assume all of the obligations of Mechanical Patent Bank hereunder. For purposes of this Agreement, an “transfer” under this Section shall be deemed to include, without limitation, the following: (a) a merger or any other combination of an entity with another party (other than a reincorporation of Software Patent Borrower from the State of [State] to the State of [State]), whether or not the entity is the surviving entity; (b) any transaction or series of transactions whereby a third party acquires direct or indirect power to control the management and policies of an entity, whether through the acquisition of voting securities, by contract, or otherwise; (c) in the case of Software Patent Borrower, the sale or other transfer of Software Patent Borrower’s search engine business or any other substantial portion of Software Patent Borrower’s assets (whether in a single transaction or series of transactions), or (d) the transfer of any rights or obligations in the course of a liquidation or other similar reorganization of an entity (other than a reincorporation of Software Patent Borrower from the State of [State] to the State of [State]).

19. ADDITIONAL DOCUMENTS
Software Patent Borrower shall at Mechanical Patent Bank’s request, from time to time, at Software Patent Borrower’s sole cost and expense, execute, re-execute, deliver and redeliver any and all documents, and do and perform such other and further acts, as may reasonably be required by Mechanical Patent Bank to enable Mechanical Patent Bank to perfect, preserve and protect Mechanical Patent Bank’s security interest in the Collateral and Mechanical Patent Bank’s and Mechanical Patent Bank’s rights and remedies under this Agreement or granted by law and to carry out and effect the intents and purposes of this Agreement.

20. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original if fully executed, but all of which shall constitute one and the same document.

21. CONFIDENTIALITY
Neither party will issue any press release or make any public announcement(s) relating in any way whatsoever to this Agreement or the relationship established by this Agreement without the express prior written consent of the other party. However, the parties acknowledge that this Agreement, or portions thereof, may be required under applicable law to be disclosed, as part of or an exhibit to a party’s required public disclosure documents. If either party is advised by its legal counsel that such disclosure is required, it will notify the other in writing and the parties will jointly seek confidential treatment of this Agreement to the maximum extent reasonably possible, in documents approved by both parties and filed with the applicable governmental or regulatory authorities.

22. FORCE MAJEURE
Neither party will be liable for, or will be considered to be in breach of or default under this Agreement on account of, any delay or failure to perform as required by this Agreement as a result of any causes or conditions that are beyond such Party’s reasonable control and that such Party is unable to overcome through the exercise of commercially reasonable diligence. If any force majeure event occurs, the affected Party will give prompt written notice to the other Party and will use commercially reasonable efforts to minimize the impact of the event.

23. NOTICE AND PAYMENT
A. Any notice required to be given under this Agreement shall be in writing and delivered personally to the other designated party at the above stated address or mailed by certified, registered or Express mail, return receipt requested or by Federal Express.

B. Either party may change the address to which notice or payment is to be sent by written notice to the other under any provision of this paragraph.

24. JURISDICTION/DISPUTES
This Agreement shall be governed in accordance with the laws of the State of [State]. All disputes under this Agreement shall be resolved by litigation in the courts of the State of [State] including the federal courts therein and the Parties all consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.

25. WAIVER
No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same of other provisions of this Agreement.

26. SEVERABILITY
If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement.

27. INTEGRATION
This Agreement constitutes the entire understanding of the Parties, and revokes and supersedes all prior agreements between the Parties and is intended as a final expression of their Agreement. It shall not be modified or amended except in writing signed by the Parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents which may conflict with this Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal the day indicated.

[Software Patent Borrower]    [Mechanical Patent Bank]

By:      By:
Title     Title:
Date:     Date:
EXHIBIT A

WEB HOSTING AGREEMENT

[attachment]

 

EXHIBIT B

PROMISSORY NOTE

US$_____________  [City], [State] ________, 200_

FOR VALUE RECEIVED, the undersigned, Software Patent Borrower Corporation (“Maker”), hereby promises to pay to the order of Mechanical Patent Bank Corporation (“Mechanical Patent Bank”), at such place as Mechanical Patent Bank may designate in writing from time to time, the principal sum of ___________ _________________________ and No/100 United States Dollars (US$________________) together with interest and costs as herein provided.

Interest. The outstanding principal balance of the Loan shall bear interest at the rate of ____ percent (___%) per annum. All computations of interest shall be based on a 360-day year for the actual number of days passed.

Term/Note Maturity Date. The term of this Note shall be [number] ([#]) years. The Note Maturity Date shall be __________ ________, 200_.

Loan Agreement. This Note is given pursuant to the terms and conditions of the Loan Agreement, dated as of ________________, [year] between Maker and Mechanical Patent Bank (the “Loan Agreement”). Capitalized terms not otherwise defined herein shall have the meaning given to them in the Loan Agreement.

Payments of Principal and Interest. Maker shall make monthly principal and interest payments of ___________________ on the first day of each month during the term of this Note. Maker shall pay all remaining principal and accrued interest on or before the Note Maturity Date.

Prepayment. Maker may repay all or any portion of the amount due under this Note without premium or penalty.

Events of Default; Acceleration. Upon occurrence of an Event of Default, at the option of Mechanical Patent Bank the entire outstanding principal, interest and costs hereunder shall be immediately due and payable and shall thereafter bear interest at a rate equal to [number] percent ([number]%) per annum (the “Default Rate”), until payment in full of all amounts due to Mechanical Patent Bank. Notwithstanding the foregoing, the interest paid under this Note shall never be greater than the maximum rate of interest permitted under applicable law.

Liability and Waiver. Maker hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever. The non-exercise by Mechanical Patent Bank of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

Costs of Collection. Maker, together with all sureties, endorsers and guarantors of this Note, jointly and severally promise to pay: (a) all costs and expenses incurred by Mechanical Patent Bank, including without limitation attorneys’ fees, in the event that Mechanical Patent Bank consults an attorney regarding a default by Software Patent Borrower, even though suit is not instituted; (b) attorneys’ fees, and all other costs, expenses and fees incurred by Mechanical Patent Bank, including costs on appeal, in the event that suit is instituted on this Note; (c) all costs and expenses provided for in the Loan Agreement or in any other instrument given as security for this Note and/or incurred by or on behalf of Mechanical Patent Bank in connection with collecting or otherwise enforcing any right of Mechanical Patent Bank under this Note, the Loan Agreement or any other instrument given as security for this Note; and (d) all costs and expenses, including, without limitation, attorneys’ fees, incurred by Mechanical Patent Bank in connection with any bankruptcy, forfeiture, insolvency or reorganization proceeding or receivership in which Maker is involved, including, without limitation, those incurred in making any appearances in any such proceeding or in seeking relief from any stay or injunction issued in or arising out of any such proceeding.

NOTICE. NOTICE IS HEREBY GIVEN THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER [STATE] LAW.

Applicable Law. This Note shall be governed by and construed in accordance with the laws of the State of [State].
Maker: Software Patent Borrower Corporation, a [State] corporation
By _____________________________
Its _________________________
EXHIBIT C

NOTICE OF BORROWING

To: Mechanical Patent Bank Corporation
One Mechanical Patent Bank Way

The undersigned, Software Patent Borrower Corporation (“Software Patent Borrower”), hereby refers to the Software Hosting Agreement and Loan Agreement, both dated [Month] __, [Year], and hereby requests to borrow the sum of $____________ pursuant to said Loan Agreement and that such funds be sent by wire transfer to the account specified in the Loan Agreement.

Pursuant to said Software Hosting Agreement, you and Software Patent Borrower agreed, on or about _________________________, that the Mechanical Patent Bank Search Engine would be increased to accommodate up to ______________ hits per day, and that Software Patent Borrower would purchase __________ new Hosting Servers to satisfy such capacity requirement. Software Patent Borrower certifies that all amounts loaned by you in response to this request will be used only to purchase __________ new Hosting Servers for the cluster servicing the Mechanical Patent Bank Search Engine.

Software Patent Borrower further certifies that as of the date hereof: (i) all representations and warranties made by Software Patent Borrower under said Loan Agreement remain true; (ii) Software Patent Borrower is in full compliance with all of its affirmative covenants under said Loan Agreement; and (iii) no event has occurred and is continuing which constitutes an Event of Default under said Loan Agreement.

All capitalized terms used in this Notice will have the meanings ascribed to them under said Loan Agreement or Software Hosting Agreement (whichever is applicable).
Software Patent Borrower Corporation
By: _________________________
Printed Name: _________________________
Printed Title: _________________________
Date: _________________________
EXHIBIT D

PROMISSORY NOTE

US$_______________  [City], [State] _________, 200_

FOR VALUE RECEIVED, the undersigned, Software Patent Borrower Corporation (“Maker”), hereby promises to pay to the order of Mechanical Patent Bank Corporation (“Mechanical Patent Bank”), at such place as Mechanical Patent Bank may designate in writing from time to time, the principal sum of _________________________ and No/100 United States Dollars (US$________________) together with interest and costs as herein provided.
Interest. The outstanding principal balance of the Loan shall bear interest at the rate of ____ percent (___%) per annum. All computations of interest shall be based on a 360-day year for the actual number of days passed.

Term/Note Maturity Date. The term of this Note shall be [number] ([#]) years. The Note Maturity Date shall be __________________, 200_.

Loan Agreement. This Note is given pursuant to the terms and conditions of the Loan Agreement, dated as of ________________, [Year] between Maker and Mechanical Patent Bank (the “Loan Agreement”). Capitalized terms not otherwise defined herein shall have the meaning given to them in the Loan Agreement.

Payments of Principal and Interest. Maker shall make monthly principal and interest payments of ___________________ on the first day of each month during the term of this Note. Maker shall pay all remaining principal and accrued interest on or before the Note Maturity Date.

Prepayment. Maker may repay all or any portion of the amount due under this Note without premium or penalty.

Events of Default; Acceleration. Upon occurrence of an Event of Default, at the option of Mechanical Patent Bank the entire outstanding principal, interest and costs hereunder shall be immediately due and payable and shall thereafter bear interest at a rate equal to [number] percent ([#]%) per annum (the “Default Rate”), until payment in full of all amounts due to Mechanical Patent Bank. Notwithstanding the foregoing, the interest paid under this Note shall never be greater than the maximum rate of interest permitted under applicable law.

Liability and Waiver. Maker hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever. The non-exercise by Mechanical Patent Bank of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

Costs of Collection. Maker, together with all sureties, endorsers and guarantors of this Note, jointly and severally promise to pay: (a) all costs and expenses incurred by Mechanical Patent Bank, including without limitation attorneys’ fees, in the event that Mechanical Patent Bank consults an attorney regarding a default by Software Patent Borrower, even though suit is not instituted; (b) attorneys’ fees, and all other costs, expenses and fees incurred by Mechanical Patent Bank, including costs on appeal, in the event that suit is instituted on this Note; (c) all costs and expenses provided for in the Loan Agreement or in any other instrument given as security for this Note and/or incurred by or on behalf of Mechanical Patent Bank in connection with collecting or otherwise enforcing any right of Mechanical Patent Bank under this Note, the Loan Agreement or any other instrument given as security for this Note; and (d) all costs and expenses, including, without limitation, attorneys’ fees, incurred by Mechanical Patent Bank in connection with any bankruptcy, forfeiture, insolvency or reorganization proceeding or receivership in which Maker is involved, including, without limitation, those incurred in making any appearances in any such proceeding or in seeking relief from any stay or injunction issued in or arising out of any such proceeding.

NOTICE. NOTICE IS HEREBY GIVEN THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER [STATE] LAW.

Applicable Law. This Note shall be governed by and construed in accordance with the laws of the State of [state].

Maker:
Software Patent Borrower Corporation, a [State] corporation
By ___________________________
Its _________________________
EXHIBIT E

SOFTWARE PATENT BORROWER DEPOSITORY ACCOUNT INFORMATION

All Advances should be sent to Software Patent Borrower’s account by wire transfer as follows, unless Software Patent Borrower notifies Mechanical Patent Bank in writing signed by a Responsible Officer that Advances henceforth should be sent to a different account: