Exhibit 10.1

OVERSTOCK.COM, INC.

2,734,152 Shares of Common Stock, $0.0001 par value per share

PLACEMENT AGENCY AGREEMENT

December 15, 2006

W.R. Hambrecht + Co., LCC

539 Bryant Street

San Francisco, CA 94107

Dear Sir or Madam:

Overstock.com, Inc., a Delaware corporation (the “Company”), proposes to issue
and sell 2,734,152 shares (the “Shares”) of common stock, par value $0.0001 per
share (the “Common Stock”), to certain investors (collectively, the
“Investors”).  The Company desires to engage you as its Placement Agent (the
“Placement Agent”) in connection with such issuance and sale.  The Shares are
more fully described in the Registration Statement (as hereinafter defined).

The Company hereby confirms as follows its agreements with the Placement Agent.

1.             AGREEMENT TO ACT AS PLACEMENT AGENT.  ON THE BASIS OF THE
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY HEREIN CONTAINED AND
SUBJECT TO ALL THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE PLACEMENT AGENT
AGREES TO ACT AS THE COMPANY’S EXCLUSIVE PLACEMENT AGENT IN CONNECTION WITH THE
ISSUANCE AND SALE, ON A BEST EFFORTS BASIS, BY THE COMPANY OF THE SHARES TO THE
INVESTORS.  THE COMPANY SHALL PAY TO THE PLACEMENT AGENT 1% OF THE PROCEEDS
RECEIVED BY THE COMPANY FROM THE SALE OF THE SHARES AS SET FORTH ON THE COVER
PAGE OF THE PROSPECTUS (AS HEREINAFTER DEFINED).

2.             CLOSING.  THE CLOSING (THE “CLOSING”) SHALL TAKE PLACE AT THE
OFFICE OF THE COMPANY AT 6350 SOUTH 3000 EAST, SALT LAKE CITY, UTAH 84121.  ALL
ACTIONS TAKEN AT THE CLOSING SHALL BE DEEMED TO HAVE OCCURRED SIMULTANEOUSLY.

3.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  THE COMPANY
REPRESENTS AND WARRANTS AND COVENANTS TO THE PLACEMENT AGENT THAT:

(A)           THE COMPANY HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) A REGISTRATION STATEMENT ON FORM S-3 (REGISTRATION NO.
333-122904), WHICH HAS BECOME EFFECTIVE, RELATING TO THE COMMON STOCK AND
CERTAIN OTHER SECURITIES OF THE COMPANY, UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), AND THE

--------------------------------------------------------------------------------

 

RULES AND REGULATIONS (COLLECTIVELY REFERRED TO AS THE “RULES AND REGULATIONS”)
OF THE COMMISSION PROMULGATED THEREUNDER.  AS USED IN THIS AGREEMENT:

(I)  “APPLICABLE TIME” MEANS 9:00 A.M. (NEW YORK CITY TIME) ON THE DATE OF THIS 
AGREEMENT;

(II)   “EFFECTIVE DATE” MEANS ANY DATE AS OF WHICH THE REGISTRATION STATEMENT
BECAME, OR IS DEEMED TO HAVE BECOME, EFFECTIVE UNDER THE ACT IN ACCORDANCE WITH
THE RULES AND REGULATIONS;

(III) “ISSUER FREE WRITING PROSPECTUS”  MEANS EACH “FREE WRITING PROSPECTUS” (AS
DEFINED IN RULE 405 OF THE RULES AND REGULATIONS) PREPARED BY OR ON BEHALF OF
THE COMPANY OR USED OR REFERRED TO BY THE COMPANY IN CONNECTION WITH THE
OFFERING OF THE SHARES;

(IV) “PRELIMINARY PROSPECTUS”  MEANS ANY PRELIMINARY PROSPECTUS RELATING TO THE
SHARES INCLUDED IN THE REGISTRATION STATEMENT OR FILED WITH THE COMMISSION
PURSUANT TO RULE 424(B) OF THE RULES AND REGULATIONS;

(V)  “PRICING DISCLOSURE MATERIALS” MEANS, AS OF THE APPLICABLE TIME, THE MOST
RECENT PRELIMINARY PROSPECTUS, TOGETHER WITH EACH ISSUER FREE WRITING PROSPECTUS
FILED OR USED BY THE COMPANY ON OR BEFORE THE APPLICABLE TIME;

(VI) “PROSPECTUS” MEANS THE FINAL PROSPECTUS SUPPLEMENT RELATING TO THE SHARES
AS FILED WITH THE COMMISSION PURSUANT TO RULE 424(B) OF THE RULES AND
REGULATIONS; AND

(VII) “REGISTRATION STATEMENT” MEANS, COLLECTIVELY, THE VARIOUS PARTS OF SUCH
REGISTRATION STATEMENT, EACH AS AMENDED AS OF THE EFFECTIVE DATE FOR SUCH PART,
INCLUDING ANY PRELIMINARY PROSPECTUS OR THE PROSPECTUS AND ALL EXHIBITS TO SUCH
REGISTRATION STATEMENT, AND INCLUDING ALL DOCUMENTS INCORPORATED THEREIN BY
REFERENCE.

(B)           THE REGISTRATION STATEMENT HAS HERETOFORE BECOME EFFECTIVE UNDER
THE ACT OR, WITH RESPECT TO ANY REGISTRATION STATEMENT TO BE FILED TO REGISTER
THE OFFER AND SALE OF SHARES PURSUANT TO RULE 462(B) UNDER THE ACT, WILL BE
FILED WITH THE COMMISSION AND BECOME EFFECTIVE UNDER THE ACT NO LATER THAN 10:00
P.M., NEW YORK CITY TIME, ON THE DATE OF DETERMINATION OF THE PUBLIC OFFERING
PRICE FOR THE SHARES; NO STOP ORDER OF THE COMMISSION PREVENTING OR SUSPENDING
THE USE OF ANY PROSPECTUS, OR THE EFFECTIVENESS OF THE REGISTRATION STATEMENT,
HAS BEEN ISSUED, AND NO PROCEEDINGS FOR SUCH PURPOSE HAVE BEEN INSTITUTED OR, TO
THE COMPANY’S KNOWLEDGE, ARE CONTEMPLATED BY THE COMMISSION.

(C)             THE REGISTRATION STATEMENT, AT THE TIME IT BECAME EFFECTIVE, AS
OF THE DATE HEREOF, AND AT THE CLOSING DATE CONFORMED AND WILL CONFORM IN ALL
MATERIAL RESPECTS TO THE REQUIREMENTS OF THE ACT AND THE RULES AND REGULATIONS.
THE PROSPECTUS WILL CONFORM, WHEN FILED WITH THE COMMISSION PURSUANT TO RULE
424(B) AND ON THE CLOSING DATE TO THE REQUIREMENTS OF THE ACT AND THE RULES AND
REGULATIONS.

(D)           THE REGISTRATION STATEMENT DID NOT, AS OF THE EFFECTIVE DATE,
CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT
MISLEADING.

2

--------------------------------------------------------------------------------

 

(E)           THE PROSPECTUS WILL NOT, AS OF ITS DATE AND ON THE CLOSING DATE,
CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN
THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING; 
PROVIDED, HOWEVER, THAT THE COMPANY MAKES NO REPRESENTATION OR WARRANTY WITH
RESPECT TO ANY STATEMENT CONTAINED IN THE PROSPECTUS IN RELIANCE UPON AND IN
CONFORMITY WITH INFORMATION CONCERNING THE PLACEMENT AGENT AND FURNISHED IN
WRITING BY THE PLACEMENT AGENT TO THE COMPANY EXPRESSLY FOR USE IN THE
PROSPECTUS, AS SET FORTH IN SECTION 8(B).

(F)            THE PRICING DISCLOSURE MATERIALS DID NOT, AS OF THE APPLICABLE
TIME, CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL
FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN,
IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING, EXCEPT
THAT THE PRICE OF THE SHARES, NUMBER OF SHARES TO BE SOLD, AND DISCLOSURES
DIRECTLY RELATING THERETO WILL BE INCLUDED ON THE COVER PAGE OF THE PROSPECTUS;
PROVIDED, HOWEVER, THAT THE COMPANY MAKES NO REPRESENTATION OR WARRANTY WITH
RESPECT TO ANY STATEMENT CONTAINED IN THE PRICING DISCLOSURE MATERIALS IN
RELIANCE UPON AND IN CONFORMITY WITH INFORMATION CONCERNING THE PLACEMENT AGENT
AND FURNISHED IN WRITING BY A PLACEMENT AGENT TO THE COMPANY EXPRESSLY FOR USE
IN THE PRICING DISCLOSURE MATERIALS, AS SET FORTH IN SECTION 8(B).

(G)           EACH ISSUER FREE WRITING PROSPECTUS (INCLUDING, WITHOUT
LIMITATION, ANY ROAD SHOW THAT IS A FREE WRITING PROSPECTUS UNDER RULE 433),
WHEN CONSIDERED TOGETHER WITH THE PRICING DISCLOSURE MATERIALS AS OF THE
APPLICABLE TIME, DID NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT
TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING, EXCEPT THAT THE PRICE OF THE SHARES, NUMBER OF SHARES TO BE
SOLD, AND DISCLOSURES DIRECTLY RELATING THERETO WILL BE INCLUDED ON THE COVER
PAGE OF THE PROSPECTUS.

(H)           EACH ISSUER FREE WRITING PROSPECTUS CONFORMED OR WILL CONFORM IN
ALL MATERIAL RESPECTS TO THE REQUIREMENTS OF THE ACT AND THE RULES AND
REGULATIONS ON THE DATE OF FIRST USE, AND THE COMPANY HAS COMPLIED WITH ANY
FILING REQUIREMENTS APPLICABLE TO SUCH ISSUER FREE WRITING PROSPECTUS PURSUANT
TO THE RULES AND REGULATIONS.  THE COMPANY HAS NOT MADE ANY OFFER RELATING TO
THE SHARES THAT WOULD CONSTITUTE AN ISSUER FREE WRITING PROSPECTUS WITHOUT THE
PRIOR WRITTEN CONSENT OF THE PLACEMENT AGENT. THE COMPANY HAS RETAINED IN
ACCORDANCE WITH THE RULES AND REGULATIONS ALL ISSUER FREE WRITING PROSPECTUSES
THAT WERE NOT REQUIRED TO BE FILED PURSUANT TO THE RULES AND REGULATIONS.

(I)            THE COMPANY IS, AND AT THE CLOSING DATE WILL BE, DULY ORGANIZED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE.
THE COMPANY HAS, AND AT THE CLOSING DATE WILL HAVE, FULL POWER AND AUTHORITY TO
CONDUCT ALL THE ACTIVITIES CONDUCTED BY IT, TO OWN OR LEASE ALL THE ASSETS OWNED
OR LEASED BY IT AND TO CONDUCT ITS BUSINESS AS DESCRIBED IN THE REGISTRATION
STATEMENT AND THE PROSPECTUS.  THE COMPANY IS, AND AT THE CLOSING DATE WILL BE,
DULY LICENSED OR QUALIFIED TO DO BUSINESS AND IN GOOD STANDING AS A FOREIGN
ORGANIZATION IN ALL JURISDICTIONS IN WHICH THE NATURE OF THE ACTIVITIES
CONDUCTED BY IT OR THE CHARACTER OF THE ASSETS OWNED OR LEASED BY IT MAKES SUCH
LICENSING OR QUALIFICATION NECESSARY, EXCEPT WHERE THE FAILURE TO BE SO
QUALIFIED OR IN GOOD STANDING OR HAVE SUCH POWER OR AUTHORITY WOULD NOT,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT OR WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON OR AFFECTING THE
BUSINESS, PROSPECTS,

3

--------------------------------------------------------------------------------

 

PROPERTIES, MANAGEMENT, CONSOLIDATED FINANCIAL POSITION, STOCKHOLDERS’ EQUITY OR
RESULTS OF OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES (AS DEFINED BELOW)
TAKEN AS A WHOLE (A “MATERIAL ADVERSE EFFECT”).  COMPLETE AND CORRECT COPIES OF
THE ARTICLES OR CERTIFICATE OF INCORPORATION AND OF THE BYLAWS OF THE COMPANY
AND ALL AMENDMENTS THERETO HAVE BEEN DELIVERED TO THE PLACEMENT AGENT, AND NO
CHANGES THEREIN WILL BE MADE SUBSEQUENT TO THE DATE HEREOF AND PRIOR TO THE
CLOSING DATE.

(J)            THE COMPANY’S ONLY SUBSIDIARIES (EACH A “SUBSIDIARY” AND
COLLECTIVELY THE “SUBSIDIARIES”) ARE LISTED ON SCHEDULE 1 TO THIS AGREEMENT. 
EACH SUBSIDIARY THAT IS A CORPORATION HAS BEEN DULY ORGANIZED AND IS VALIDLY
EXISTING AS A CORPORATION IN GOOD STANDING UNDER THE LAWS OF ITS JURISDICTION OF
FORMATION.  EACH SUBSIDIARY IS DULY QUALIFIED AND IN GOOD STANDING AS A FOREIGN
CORPORATION OR OTHER ENTITY IN EACH JURISDICTION IN WHICH THE CHARACTER OR
LOCATION OF ITS PROPERTIES (OWNED, LEASED OR LICENSED) OR THE NATURE OR CONDUCT
OF ITS BUSINESS MAKES SUCH QUALIFICATION NECESSARY, EXCEPT FOR THOSE FAILURES TO
BE SO QUALIFIED OR IN GOOD STANDING WHICH WILL NOT HAVE A MATERIAL ADVERSE
EFFECT.  ALL OF THE SHARES OF ISSUED CAPITAL STOCK OF EACH SUBSIDIARY OF THE
COMPANY THAT IS A CORPORATION HAVE BEEN DULY AUTHORIZED AND VALIDLY ISSUED, ARE
FULLY PAID AND NON-ASSESSABLE AND ARE OWNED DIRECTLY OR INDIRECTLY BY THE
COMPANY, FREE AND CLEAR OF ANY LIEN, ENCUMBRANCE, CLAIM, SECURITY INTEREST,
RESTRICTION ON TRANSFER, SHAREHOLDERS’ AGREEMENT, VOTING TRUST OR OTHER DEFECT
OF TITLE WHATSOEVER.  ALL INTERESTS OF EACH SUBSIDIARY THAT IS NOT A CORPORATION
HAVE BEEN DULY AUTHORIZED AND VALIDLY ISSUED AND ARE OWNED, DIRECTLY OR
INDIRECTLY, BY THE COMPANY.

(K)           THE ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF THE COMPANY
HAVE BEEN VALIDLY ISSUED, ARE FULLY PAID AND NONASSESSABLE AND, OTHER THAN AS
SET FORTH IN THE REGISTRATION STATEMENT, ARE NOT SUBJECT TO ANY PREEMPTIVE
RIGHTS, RIGHTS OF FIRST REFUSAL OR SIMILAR RIGHTS.  THE COMPANY HAS AN
AUTHORIZED, ISSUED AND OUTSTANDING CAPITALIZATION AS SET FORTH IN THE PROSPECTUS
AS OF THE DATES REFERRED TO THEREIN. THE DESCRIPTIONS OF THE SECURITIES OF THE
COMPANY IN THE REGISTRATION STATEMENT AND THE PROSPECTUS ARE, AND AT THE CLOSING
DATE WILL BE, COMPLETE AND ACCURATE IN ALL RESPECTS.  EXCEPT AS SET FORTH IN THE
REGISTRATION STATEMENT AND THE PROSPECTUS, AND EXCEPT FOR OPTIONS GRANTED IN THE
ORDINARY COURSE OF BUSINESS UNDER THE COMPANY’S INCENTIVE PLANS, THE COMPANY
DOES NOT HAVE OUTSTANDING ANY OPTIONS TO PURCHASE, OR ANY RIGHTS OR WARRANTS TO
SUBSCRIBE FOR, OR ANY SECURITIES OR OBLIGATIONS CONVERTIBLE INTO, OR
EXCHANGEABLE FOR, OR ANY CONTRACTS OR COMMITMENTS TO ISSUE OR SELL, ANY SHARES
OF CAPITAL STOCK OR OTHER SECURITIES.

(L)            THE COMPANY HAS FULL LEGAL RIGHT, POWER AND AUTHORITY TO ENTER
INTO THIS AGREEMENT AND PERFORM THE TRANSACTIONS CONTEMPLATED HEREBY.  THIS
AGREEMENT HAS BEEN AUTHORIZED AND VALIDLY EXECUTED AND DELIVERED BY THE COMPANY
AND CONSTITUTES A LEGAL, VALID AND BINDING AGREEMENT OF THE COMPANY ENFORCEABLE
AGAINST THE COMPANY IN ACCORDANCE WITH ITS TERMS, SUBJECT TO THE EFFECT OF
APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
GENERALLY AND EQUITABLE PRINCIPLES OF GENERAL APPLICABILITY.

(M)          THE ISSUANCE AND SALE OF THE SHARES HAVE BEEN DULY AUTHORIZED BY
THE COMPANY, AND THE SHARES, WHEN ISSUED AND PAID FOR IN ACCORDANCE WITH THIS
AGREEMENT, WILL BE DULY AND VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND
WILL NOT BE SUBJECT TO PREEMPTIVE OR SIMILAR RIGHTS.  THE HOLDERS OF THE SHARES
WILL NOT BE SUBJECT TO PERSONAL LIABILITY BY REASON OF BEING SUCH HOLDERS.  THE
SHARES, WHEN ISSUED, WILL CONFORM IN ALL MATERIAL RESPECTS TO THE DESCRIPTION
THEREOF SET FORTH IN OR INCORPORATED INTO THE PROSPECTUS.

4

--------------------------------------------------------------------------------

 

(N)           THE CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES
INCLUDED IN THE REGISTRATION STATEMENT AND THE PROSPECTUS PRESENT FAIRLY, IN ALL
MATERIAL RESPECTS, THE FINANCIAL CONDITION OF THE COMPANY AND ITS CONSOLIDATED
SUBSIDIARIES AS OF THE DATES THEREOF AND THE RESULTS OF OPERATIONS AND CASH
FLOWS AT THE DATES AND FOR THE PERIODS COVERED THEREBY IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”).  NO OTHER FINANCIAL
STATEMENTS OR SCHEDULES OF THE COMPANY, ANY SUBSIDIARY OR ANY OTHER ENTITY ARE
REQUIRED BY THE ACT OR THE RULES AND REGULATIONS TO BE INCLUDED IN THE
REGISTRATION STATEMENT OR THE PROSPECTUS.

(O)           PRICEWATERHOUSECOOPERS LLC (THE “ACCOUNTANTS”), WHO HAVE REPORTED
ON SUCH CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES, ARE REGISTERED
INDEPENDENT PUBLIC ACCOUNTANTS WITH RESPECT TO THE COMPANY AS REQUIRED BY THE
ACT AND THE RULES AND REGULATIONS AND BY THE RULES OF THE PUBLIC ACCOUNTING
OVERSIGHT BOARD.  THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND THE
RELATED NOTES AND SCHEDULES INCLUDED IN THE REGISTRATION STATEMENT AND THE
PROSPECTUS HAVE BEEN PREPARED IN CONFORMITY WITH THE REQUIREMENTS OF THE ACT AND
THE RULES AND REGULATIONS AND PRESENT FAIRLY THE INFORMATION SHOWN THEREIN.

(P)           THE COMPANY IS NOT AN INELIGIBLE ISSUER AS DEFINED UNDER THE ACT
AND THE COMPANY HAS PAID THE REGISTRATION FEE FOR THIS OFFERING AS REQUIRED
UNDER THE ACT OR WILL PAY SUCH FEES WITHIN THE TIME PERIOD REQUIRED BY SUCH
RULE.

(Q)           THE COMPANY IS, AND AT THE CLOSING DATE WILL BE, IN COMPLIANCE
WITH ALL PROVISIONS OF THE SARBANES-OXLEY ACT OF 2002, AS AMENDED, WHICH ARE
APPLICABLE TO IT.  THE COMPANY AND EACH SUBSIDIARY 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
AUTHORIZATION; (II) TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT PREPARATION
OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AND TO MAINTAIN ACCOUNTABILITY FOR ASSETS; (III) ACCESS TO ASSETS IS
PERMITTED ONLY IN ACCORDANCE WITH MANAGEMENT’S GENERAL OR SPECIFIC
AUTHORIZATION; AND (IV) THE RECORDED ACCOUNTABILITY FOR ASSETS IS COMPARED WITH
EXISTING ASSETS AT REASONABLE INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH
RESPECT TO ANY DIFFERENCES.

(R)            SINCE THE DATE OF THE MOST RECENT CONSOLIDATED FINANCIAL
STATEMENTS OF THE COMPANY INCLUDED OR INCORPORATED BY REFERENCE IN THE
PROSPECTUS AND PRIOR TO CLOSING, (I) THERE HAS NOT BEEN AND WILL NOT HAVE BEEN
ANY CHANGE IN THE CAPITAL STOCK OF THE COMPANY (EXCEPT FOR CHANGES IN THE NUMBER
OF OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY DUE TO THE ISSUANCE OF
SHARES UPON THE EXERCISE OF STOCK OPTIONS OR UPON THE GRANT OF RESTRICTED STOCK
TO THE COMPANY’S DIRECTORS, THE ISSUANCE OF SHARES PURSUANT TO THE COMPANY’S
EMPLOYEE STOCK PURCHASE PLAN OR THE COMPANY’S DEFERRED COMPENSATION PLAN FOR
DIRECTORS) OR LONG-TERM DEBT OF THE COMPANY OR ANY SUBSIDIARY OR ANY DIVIDEND OR
DISTRIBUTION OF ANY KIND DECLARED, SET ASIDE FOR PAYMENT, PAID OR MADE BY THE
COMPANY ON ANY CLASS OF CAPITAL STOCK, OR ANY MATERIAL ADVERSE CHANGE, OR ANY
DEVELOPMENT THAT WOULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
CHANGE, IN OR AFFECTING THE BUSINESS, PROSPECTS, PROPERTIES, MANAGEMENT,
CONSOLIDATED FINANCIAL POSITION, STOCKHOLDERS’ EQUITY, OR RESULTS OF OPERATIONS
OF THE COMPANY AND ITS SUBSIDIARIES TAKEN AS A WHOLE (A “MATERIAL ADVERSE
CHANGE”) AND (II) NEITHER THE COMPANY NOR ANY SUBSIDIARY  HAS SUSTAINED OR WILL
SUSTAIN ANY MATERIAL LOSS OR INTERFERENCE WITH ITS BUSINESS FROM FIRE,
EXPLOSION, FLOOD OR OTHER CALAMITY, WHETHER OR NOT COVERED BY

 

5

--------------------------------------------------------------------------------

 

INSURANCE, OR FROM ANY LABOR DISTURBANCE OR DISPUTE OR ANY ACTION, ORDER OR
DECREE OF ANY COURT OR ARBITRATOR OR GOVERNMENTAL OR REGULATORY AUTHORITY,
EXCEPT IN EACH CASE AS OTHERWISE DISCLOSED IN THE REGISTRATION STATEMENT AND THE
PROSPECTUS.

(S)           SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THE PROSPECTUS,
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS ENTERED OR WILL ENTER INTO ANY
TRANSACTION OR AGREEMENT, NOT IN THE ORDINARY COURSE OF BUSINESS, THAT IS
MATERIAL TO THE COMPANY AND ITS SUBSIDIARIES TAKEN AS A WHOLE OR INCURRED OR
WILL INCUR ANY LIABILITY OR OBLIGATION, DIRECT OR CONTINGENT, NOT IN THE
ORDINARY COURSE OF BUSINESS, THAT IS MATERIAL TO THE COMPANY AND ITS
SUBSIDIARIES TAKEN AS A WHOLE.

(T)            THE COMPANY AND EACH SUBSIDIARY HAS GOOD AND VALID TITLE IN FEE
SIMPLE TO ALL ITEMS OF REAL PROPERTY AND GOOD AND VALID TITLE TO ALL PERSONAL
PROPERTY DESCRIBED IN THE REGISTRATION STATEMENT OR THE PROSPECTUS AS BEING
OWNED BY THEM THAT ARE MATERIAL TO THE BUSINESSES OF THE COMPANY AND ITS
SUBSIDIARIES TAKEN AS A WHOLE, IN EACH CASE FREE AND CLEAR OF ALL LIENS,
ENCUMBRANCES AND CLAIMS EXCEPT THOSE THAT (I) DO NOT MATERIALLY INTERFERE WITH
THE USE MADE AND PROPOSED TO BE MADE OF SUCH PROPERTY BY THE COMPANY AND ITS
SUBSIDIARIES OR (II) WOULD NOT REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT.  ANY REAL PROPERTY DESCRIBED IN
THE REGISTRATION STATEMENT OR THE PROSPECTUS AS BEING LEASED BY THE COMPANY OR
ANY SUBSIDIARY THAT IS MATERIAL TO THE BUSINESS OF THE COMPANY AND ITS
SUBSIDIARIES TAKEN AS A WHOLE IS HELD BY THEM UNDER VALID, EXISTING AND
ENFORCEABLE LEASES, EXCEPT THOSE THAT (A) DO NOT MATERIALLY INTERFERE WITH THE
USE MADE OR PROPOSED TO BE MADE OF SUCH PROPERTY BY THE COMPANY AND ITS
SUBSIDIARIES OR (B) WOULD NOT BE REASONABLY EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT.

(U)           THE COMPANY IS NOT, NOR UPON COMPLETION OF THE TRANSACTIONS
CONTEMPLATED HEREIN WILL IT BE, 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 (THE “INVESTMENT COMPANY ACT”).

(V)           EXCEPT AS DISCLOSED IN THE PROSPECTUS, THERE ARE NO LEGAL,
GOVERNMENTAL OR REGULATORY ACTIONS, SUITS OR PROCEEDINGS PENDING, NOR, TO THE
COMPANY’S KNOWLEDGE, ANY LEGAL, GOVERNMENTAL OR REGULATORY INVESTIGATIONS, TO
WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY OR TO WHICH ANY PROPERTY OF THE
COMPANY OR ANY SUBSIDIARY IS THE SUBJECT THAT, INDIVIDUALLY OR IN THE AGGREGATE,
WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR MATERIALLY AND
ADVERSELY AFFECT THE ABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THE
AGREEMENT; TO THE COMPANY’S KNOWLEDGE, NO SUCH ACTIONS, SUITS OR PROCEEDINGS ARE
THREATENED OR CONTEMPLATED BY ANY GOVERNMENTAL OR REGULATORY AUTHORITY OR
THREATENED BY OTHERS; AND THERE ARE NO CURRENT OR PENDING LEGAL, GOVERNMENTAL OR
REGULATORY INVESTIGATIONS, ACTIONS, SUITS OR PROCEEDINGS THAT ARE REQUIRED UNDER
THE ACT TO BE DESCRIBED IN THE PROSPECTUS THAT ARE NOT SO DESCRIBED.

(W)          THE COMPANY AND EACH SUBSIDIARY HAS, AND AT THE CLOSING DATE WILL
HAVE, (I) ALL GOVERNMENTAL LICENSES, PERMITS, CONSENTS, ORDERS, APPROVALS AND
OTHER AUTHORIZATIONS NECESSARY TO CARRY ON ITS RESPECTIVE BUSINESS AS PRESENTLY
CONDUCTED EXCEPT WHERE THE FAILURE TO HAVE SUCH GOVERNMENTAL LICENSES, PERMITS,
CONSENTS, ORDERS, APPROVALS AND OTHER AUTHORIZATIONS WOULD NOT HAVE A MATERIAL
ADVERSE EFFECT, (II) COMPLIED WITH ALL LAWS, REGULATIONS AND ORDERS APPLICABLE
TO EITHER IT OR ITS BUSINESS, EXCEPT WHERE THE FAILURE TO SO

6

--------------------------------------------------------------------------------

 

COMPLY WOULD NOT HAVE A MATERIAL ADVERSE EFFECT, AND (III) PERFORMED ALL ITS
OBLIGATIONS REQUIRED TO BE PERFORMED, AND IS NOT, AND AT THE CLOSING DATE WILL
NOT BE, IN DEFAULT, UNDER ANY INDENTURE, MORTGAGE, DEED OF TRUST, VOTING TRUST
AGREEMENT, LOAN AGREEMENT, BOND, DEBENTURE, NOTE AGREEMENT, LEASE, CONTRACT OR
OTHER AGREEMENT OR INSTRUMENT (COLLECTIVELY, A “CONTRACT OR OTHER AGREEMENT”) TO
WHICH IT IS A PARTY OR BY WHICH ITS PROPERTY IS BOUND OR AFFECTED, EXCEPT WHERE
SUCH DEFAULT WOULD NOT HAVE A MATERIAL ADVERSE EFFECT, AND, TO THE COMPANY’S
BEST KNOWLEDGE, NO OTHER PARTY UNDER ANY MATERIAL CONTRACT OR OTHER AGREEMENT TO
WHICH IT IS A PARTY IS IN DEFAULT IN ANY RESPECT THEREUNDER.  THE COMPANY AND
ITS SUBSIDIARIES ARE NOT IN VIOLATION OF ANY PROVISION OF THEIR RESPECTIVE
ORGANIZATIONAL OR GOVERNING DOCUMENTS.

(X)            THE COMPANY HAS ALL CORPORATE POWER AND AUTHORITY TO ENTER INTO
THIS AGREEMENT, AND TO CARRY OUT THE PROVISIONS AND CONDITIONS HEREOF, AND ALL
CONSENTS, AUTHORIZATIONS, APPROVALS AND ORDERS REQUIRED IN CONNECTION HEREWITH
HAVE BEEN OBTAINED, EXCEPT SUCH AS MAY BE REQUIRED UNDER STATE SECURITIES OR
BLUE SKY LAWS OR THE BY-LAWS AND RULES OF THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. (THE “NASD”) OR THE NASDAQ GLOBAL MARKET IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED BY THE PLACEMENT AGENCY AGREEMENT.

(Y)           NEITHER THE EXECUTION OF THIS AGREEMENT, NOR THE ISSUANCE,
OFFERING OR SALE OF THE SHARES, NOR THE CONSUMMATION OF ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, NOR THE COMPLIANCE BY THE COMPANY WITH THE TERMS AND
PROVISIONS HEREOF WILL CONFLICT WITH, OR WILL RESULT IN A BREACH OF, ANY OF THE
TERMS AND PROVISIONS OF, OR HAS CONSTITUTED OR WILL CONSTITUTE A DEFAULT UNDER,
OR HAS RESULTED IN OR WILL RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN,
CHARGE OR ENCUMBRANCE UPON ANY PROPERTY OR ASSETS OF THE COMPANY OR ANY
SUBSIDIARY PURSUANT TO THE TERMS OF ANY CONTRACT OR OTHER AGREEMENT TO WHICH THE
COMPANY OR ITS SUBSIDIARIES MAY BE BOUND OR TO WHICH ANY OF THE PROPERTY OR
ASSETS OF THE COMPANY OR ITS SUBSIDIARIES IS SUBJECT, EXCEPT SUCH CONFLICTS,
BREACHES OR DEFAULTS AS MAY HAVE BEEN WAIVED; NOR WILL SUCH ACTION RESULT IN ANY
VIOLATION OF THE PROVISIONS OF THE ORGANIZATIONAL OR GOVERNING DOCUMENTS OF THE
COMPANY OR ANY SUBSIDIARY, OR ANY STATUTE OR ANY ORDER, RULE OR REGULATION
APPLICABLE TO THE COMPANY OR ANY SUBSIDIARY OR OF ANY COURT OR OF ANY FEDERAL,
STATE OR OTHER REGULATORY AUTHORITY OR OTHER GOVERNMENT BODY HAVING JURISDICTION
OVER THE COMPANY OR ANY SUBSIDIARY.

(Z)            THERE IS NO DOCUMENT OR CONTRACT OF A CHARACTER REQUIRED TO BE
DESCRIBED IN THE REGISTRATION STATEMENT OR THE PROSPECTUS OR TO BE FILED AS AN
EXHIBIT TO THE REGISTRATION STATEMENT WHICH IS NOT DESCRIBED OR FILED AS
REQUIRED.  ALL SUCH CONTRACTS TO WHICH THE COMPANY IS A PARTY HAVE BEEN
AUTHORIZED, EXECUTED AND DELIVERED BY THE COMPANY, CONSTITUTE VALID AND BINDING
AGREEMENTS OF THE COMPANY, AND ARE ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE
WITH THE TERMS THEREOF, SUBJECT TO THE EFFECT OF APPLICABLE BANKRUPTCY,
INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS GENERALLY AND EQUITABLE
PRINCIPLES OF GENERAL APPLICABILITY, EXCEPT WHERE THE FAILURE OF ANY SUCH
CONTRACTS TO BE BINDING ON THE COMPANY OR ENFORCEABLE AGAINST IT WOULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

(AA)         NO STATEMENT, REPRESENTATION OR WARRANTY MADE BY THE COMPANY IN
THIS AGREEMENT OR MADE IN ANY CERTIFICATE OR DOCUMENT REQUIRED BY THIS AGREEMENT
TO BE DELIVERED TO THE PLACEMENT AGENT OR THE INVESTORS WAS OR WILL BE, WHEN
MADE, INACCURATE, UNTRUE OR INCORRECT IN ANY MATERIAL RESPECT.

7

--------------------------------------------------------------------------------

 

(BB)         THE COMPANY AND ITS DIRECTORS, OFFICERS OR CONTROLLING PERSONS HAVE
NOT TAKEN, DIRECTLY OR INDIRECTLY, ANY ACTION INTENDED, OR WHICH MIGHT
REASONABLY BE EXPECTED, TO CAUSE OR RESULT, UNDER THE ACT OR OTHERWISE, IN, OR
WHICH HAS CONSTITUTED, STABILIZATION OR MANIPULATION OF THE PRICE OF ANY
SECURITY OF THE COMPANY TO FACILITATE THE SALE OR RESALE OF THE COMMON STOCK.

(CC)         NO HOLDER OF SECURITIES OF THE COMPANY HAS RIGHTS TO THE
REGISTRATION OF ANY SECURITIES OF THE COMPANY AS A RESULT OF THE FILING OF THE
REGISTRATION STATEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
EXCEPT FOR SUCH RIGHTS AS HAVE BEEN WAIVED OR SATISFIED.

(DD)         THE COMMON STOCK OF THE COMPANY IS QUOTED ON THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS AUTOMATED QUOTATIONS GLOBAL MARKET (THE
“NASDAQ GLOBAL MARKET”). THE COMPANY IS, AND HAS NO REASON TO BELIEVE THAT IT
WILL NOT IN THE FORESEEABLE FUTURE CONTINUE TO BE, IN COMPLIANCE WITH ALL SUCH
LISTING AND MAINTENANCE REQUIREMENTS OF THE NASDAQ GLOBAL MARKET.

(EE)         THE COMPANY IS NOT INVOLVED IN ANY MATERIAL LABOR DISPUTE NOR IS
ANY SUCH DISPUTE KNOWN BY THE COMPANY TO BE THREATENED.

(FF)           THE BUSINESS AND OPERATIONS OF THE COMPANY AND EACH OF ITS
SUBSIDIARIES HAVE BEEN AND ARE BEING CONDUCTED IN COMPLIANCE WITH ALL APPLICABLE
LAWS, ORDINANCES, RULES, REGULATIONS, LICENSES, PERMITS, APPROVALS, PLANS,
AUTHORIZATIONS OR REQUIREMENTS RELATING TO OCCUPATIONAL SAFETY AND HEALTH, OR
POLLUTION, OR PROTECTION OF HEALTH OR THE ENVIRONMENT (INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO EMISSIONS, DISCHARGES, RELEASES OR THREATENED
RELEASES OF POLLUTANTS, CONTAMINANTS OR HAZARDOUS OR TOXIC SUBSTANCES, MATERIALS
OR WASTES INTO AMBIENT AIR, SURFACE WATER, GROUNDWATER OR LAND, OR RELATING TO
THE MANUFACTURE, PROCESSING, DISTRIBUTION, USE, TREATMENT, STORAGE, DISPOSAL,
TRANSPORT OR HANDLING OF CHEMICAL SUBSTANCES, POLLUTANTS, CONTAMINANTS OR
HAZARDOUS OR TOXIC SUBSTANCES, MATERIALS OR WASTES, WHETHER SOLID, GASEOUS OR
LIQUID IN NATURE) OF ANY GOVERNMENTAL DEPARTMENT, COMMISSION, BOARD, BUREAU,
AGENCY OR INSTRUMENTALITY OF THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, OR ANY FOREIGN JURISDICTION, AND ALL APPLICABLE JUDICIAL OR
ADMINISTRATIVE AGENCY OR REGULATORY DECREES, AWARDS, JUDGMENTS AND ORDERS
RELATING THERETO, EXCEPT WHERE THE FAILURE TO BE IN SUCH COMPLIANCE WILL NOT,
INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT; AND NEITHER
THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS RECEIVED ANY NOTICE FROM ANY
GOVERNMENTAL INSTRUMENTALITY OR ANY THIRD PARTY ALLEGING ANY MATERIAL VIOLATION
THEREOF OR LIABILITY THEREUNDER (INCLUDING, WITHOUT LIMITATION, LIABILITY FOR
COSTS OF INVESTIGATING OR REMEDIATING SITES CONTAINING HAZARDOUS SUBSTANCES
AND/OR DAMAGES TO NATURAL RESOURCES).

(GG)         INTELLECTUAL PROPERTY.  THE COMPANY AND EACH SUBSIDIARY OWNS, IS
LICENSED OR OTHERWISE POSSESSES ALL RIGHTS TO USE, ALL PATENTS, PATENT RIGHTS,
INVENTIONS, KNOW-HOW (INCLUDING TRADE SECRETS AND OTHER UNPATENTED OR
UNPATENTABLE OR CONFIDENTIAL INFORMATION, SYSTEMS, OR PROCEDURES), TRADEMARKS,
SERVICE MARKS, TRADE NAMES, COPYRIGHTS AND OTHER INTELLECTUAL PROPERTY RIGHTS
(COLLECTIVELY, THE “INTELLECTUAL PROPERTY”) NECESSARY FOR THE CONDUCT OF ITS
BUSINESS AS DESCRIBED IN THE REGISTRATION STATEMENT.  EXCEPT AS DISCLOSED IN THE
PROSPECTUS OR AS WOULD NOT BE REASONABLY EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT, NO CLAIMS HAVE BEEN ASSERTED
AGAINST THE COMPANY OR ANY OF ITS SUBSIDIARIES BY

8

--------------------------------------------------------------------------------

 

ANY PERSON WITH RESPECT TO THE USE OF ANY SUCH INTELLECTUAL PROPERTY OR
CHALLENGING OR QUESTIONING THE VALIDITY OR EFFECTIVENESS OF ANY SUCH
INTELLECTUAL PROPERTY. 

(HH)         THE COMPANY AND EACH SUBSIDIARY HAS FILED ALL NECESSARY FEDERAL,
STATE AND FOREIGN INCOME AND FRANCHISE TAX RETURNS AND HAVE PAID OR ACCRUED ALL
TAXES SHOWN AS DUE THEREON, AND THE COMPANY HAS NO KNOWLEDGE OF ANY TAX
DEFICIENCY WHICH HAS BEEN OR MIGHT BE ASSERTED OR THREATENED AGAINST IT OR ANY
SUBSIDIARY WHICH COULD HAVE A MATERIAL ADVERSE EFFECT.

(II)           ON THE CLOSING DATE, ALL STOCK TRANSFER OR OTHER TAXES (OTHER
THAN INCOME TAXES) WHICH ARE REQUIRED TO BE PAID IN CONNECTION WITH THE SALE AND
TRANSFER OF THE SHARES TO BE SOLD 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 FULLY COMPLIED WITH.

(JJ)           THE COMPANY MAINTAINS INSURANCE OF THE TYPES AND IN THE AMOUNTS
THAT THE COMPANY REASONABLY BELIEVES IS ADEQUATE FOR ITS BUSINESS.

(KK)         NEITHER THE COMPANY NOR ANY SUBSIDIARY, NOR, TO THE KNOWLEDGE OF
THE COMPANY, ANY DIRECTOR, OFFICER, AGENT OR EMPLOYEE HAS DIRECTLY OR
INDIRECTLY, (I) MADE ANY UNLAWFUL CONTRIBUTION TO ANY CANDIDATE FOR PUBLIC
OFFICE, OR FAILED TO DISCLOSE FULLY ANY CONTRIBUTION IN VIOLATION OF LAW, (II)
MADE ANY PAYMENT TO ANY FEDERAL OR STATE GOVERNMENTAL OFFICER OR OFFICIAL, OR
OTHER PERSON CHARGED WITH SIMILAR PUBLIC OR QUASI-PUBLIC DUTIES, OTHER THAN
PAYMENTS REQUIRED OR PERMITTED BY THE LAWS OF THE UNITED STATES OR ANY
JURISDICTION THEREOF, (III) VIOLATED OR IS IN VIOLATION OF ANY PROVISIONS OF THE
U.S. FOREIGN CORRUPT PRACTICES ACT OF 1977 OR (IV) MADE ANY BRIBE, REBATE,
PAYOFF, INFLUENCE PAYMENT, KICKBACK OR OTHER UNLAWFUL PAYMENT.

(LL)           THE COMPANY HAS NOT DISTRIBUTED AND, PRIOR TO THE LATER TO OCCUR
OF THE CLOSING DATE AND COMPLETION OF THE DISTRIBUTION OF THE SHARES, WILL NOT
DISTRIBUTE ANY OFFERING MATERIAL IN CONNECTION WITH THE OFFERING AND SALE OF THE
SHARES OTHER THAN THE PROSPECTUS AND ANY ISSUER FREE WRITING PROSPECTUS TO WHICH
THE PLACEMENT AGENT HAS CONSENTED.

(MM)       EACH MATERIAL EMPLOYEE BENEFIT PLAN, WITHIN THE MEANING OF SECTION
3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), THAT IS MAINTAINED, ADMINISTERED OR CONTRIBUTED TO BY THE COMPANY OR
ANY OF ITS AFFILIATES FOR EMPLOYEES OR FORMER EMPLOYEES OF THE COMPANY AND ITS
SUBSIDIARIES HAS BEEN MAINTAINED IN MATERIAL COMPLIANCE WITH ITS TERMS AND THE
REQUIREMENTS OF ANY APPLICABLE STATUTES, ORDERS, RULES AND REGULATIONS,
INCLUDING BUT NOT LIMITED TO ERISA AND THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE “CODE”); NO PROHIBITED TRANSACTION, WITHIN THE MEANING OF SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE, HAS OCCURRED WHICH WOULD RESULT IN A
MATERIAL LIABILITY TO THE COMPANY WITH RESPECT TO ANY SUCH PLAN EXCLUDING
TRANSACTIONS EFFECTED PURSUANT TO A STATUTORY OR ADMINISTRATIVE EXEMPTION; AND
FOR EACH SUCH PLAN THAT IS SUBJECT TO THE FUNDING RULES OF SECTION 412 OF THE
CODE OR SECTION 302 OF ERISA, NO “ACCUMULATED FUNDING DEFICIENCY” AS DEFINED IN
SECTION 412 OF THE CODE HAS BEEN INCURRED, WHETHER OR NOT WAIVED, AND THE FAIR
MARKET VALUE OF THE ASSETS OF EACH SUCH PLAN (EXCLUDING FOR THESE PURPOSES
ACCRUED BUT UNPAID CONTRIBUTIONS) EXCEEDS THE PRESENT VALUE OF ALL BENEFITS
ACCRUED UNDER SUCH PLAN DETERMINED USING REASONABLE ACTUARIAL ASSUMPTIONS.

9

--------------------------------------------------------------------------------

 

(NN)         NO RELATIONSHIP, DIRECT OR INDIRECT, EXISTS BETWEEN OR AMONG THE
COMPANY OR ANY SUBSIDIARY, ON THE ONE HAND, AND THE DIRECTORS, OFFICERS,
STOCKHOLDERS, CUSTOMERS OR SUPPLIERS OF THE COMPANY OR ANY SUBSIDIARY, ON THE
OTHER, WHICH IS REQUIRED BY THE ACT TO BE DISCLOSED IN THE REGISTRATION
STATEMENT AND THE PROSPECTUS AND IS NOT SO DISCLOSED.

(OO)         THE COMPANY HAS NOT SOLD OR ISSUED ANY SECURITIES THAT WOULD BE
INTEGRATED WITH THE OFFERING OF THE SHARES CONTEMPLATED BY THIS AGREEMENT
PURSUANT TO THE ACT, THE RULES AND REGULATIONS OR THE INTERPRETATIONS THEREOF BY
THE COMMISSION.

4.             AGREEMENTS OF THE COMPANY.  THE COMPANY COVENANTS AND AGREES WITH
THE PLACEMENT AGENT AS FOLLOWS:

(A)           THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE, AND IF RULE 430A
IS USED OR THE FILING OF THE PROSPECTUS IS OTHERWISE REQUIRED UNDER RULE 424(B),
THE COMPANY WILL FILE THE PROSPECTUS (PROPERLY COMPLETED IF RULE 430A HAS BEEN
USED), SUBJECT TO THE PRIOR APPROVAL OF THE PLACEMENT AGENT, PURSUANT TO RULE
424(B) WITHIN THE PRESCRIBED TIME PERIOD AND WILL PROVIDE A COPY OF SUCH FILING
TO THE PLACEMENT AGENT PROMPTLY FOLLOWING SUCH FILING.

(B)           THE COMPANY WILL NOT, DURING SUCH PERIOD AS THE PROSPECTUS WOULD
BE REQUIRED BY LAW TO BE DELIVERED IN CONNECTION WITH SALES OF THE SHARES BY AN
UNDERWRITER OR DEALER IN CONNECTION WITH THE OFFERING CONTEMPLATED BY THIS
AGREEMENT, FILE ANY AMENDMENT OR SUPPLEMENT TO THE REGISTRATION STATEMENT OR THE
PROSPECTUS UNLESS A COPY THEREOF SHALL FIRST HAVE BEEN SUBMITTED TO THE
PLACEMENT AGENT WITHIN A REASONABLE PERIOD OF TIME PRIOR TO THE FILING THEREOF
AND THE PLACEMENT AGENT SHALL NOT HAVE REASONABLY OBJECTED THERETO IN GOOD
FAITH.

(C)           THE COMPANY WILL NOTIFY THE PLACEMENT AGENT PROMPTLY, AND WILL, IF
REQUESTED, CONFIRM SUCH NOTIFICATION IN WRITING, (1) WHEN ANY POST-EFFECTIVE
AMENDMENT TO THE REGISTRATION STATEMENT BECOMES EFFECTIVE; (2) OF ANY REQUEST BY
THE COMMISSION FOR ANY AMENDMENTS TO THE REGISTRATION STATEMENT OR ANY AMENDMENT
OR SUPPLEMENTS TO THE PROSPECTUS OR ANY ISSUER FREE WRITING PROSPECTUS OR FOR
ADDITIONAL INFORMATION; (3) OF THE ISSUANCE BY THE COMMISSION OF ANY STOP ORDER
PREVENTING OR SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION STATEMENT, THE
PROSPECTUS OR ANY ISSUER FREE WRITING PROSPECTUS, OR THE INITIATION OF ANY
PROCEEDINGS FOR THAT PURPOSE OR THE THREAT THEREOF; (4) OF BECOMING AWARE OF THE
OCCURRENCE OF ANY EVENT THAT IN THE JUDGMENT OF THE COMPANY MAKES ANY STATEMENT
MADE IN THE REGISTRATION STATEMENT OR THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR THAT REQUIRES THE MAKING OF ANY CHANGES IN THE REGISTRATION STATEMENT
OR THE PROSPECTUS IN ORDER TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE
CIRCUMSTANCES IN WHICH THEY ARE MADE, NOT MISLEADING; AND (5) OF RECEIPT BY THE
COMPANY OF ANY NOTIFICATION WITH RESPECT TO ANY SUSPENSION OF THE QUALIFICATION
OF THE SHARES FOR OFFER AND SALE IN ANY JURISDICTION.  IF AT ANY TIME THE
COMMISSION SHALL ISSUE ANY ORDER SUSPENDING THE EFFECTIVENESS OF THE
REGISTRATION STATEMENT IN CONNECTION WITH THE OFFERING CONTEMPLATED HEREBY, THE
COMPANY WILL MAKE EVERY REASONABLE EFFORT TO OBTAIN THE WITHDRAWAL OF ANY SUCH
ORDER AT THE EARLIEST POSSIBLE MOMENT.  IF THE COMPANY HAS OMITTED ANY
INFORMATION FROM THE REGISTRATION STATEMENT, PURSUANT TO RULE 430A, IT WILL USE
ITS BEST EFFORTS TO COMPLY WITH THE PROVISIONS OF AND MAKE ALL REQUISITE FILINGS
WITH THE COMMISSION PURSUANT TO SAID RULE 430A AND TO NOTIFY THE PLACEMENT AGENT
PROMPTLY OF ALL SUCH FILINGS.

 

10

--------------------------------------------------------------------------------

 

(D)           IF, AT ANY TIME WHEN A PROSPECTUS RELATING TO THE SHARES IS
REQUIRED TO BE DELIVERED UNDER THE ACT, THE COMPANY BECOMES AWARE OF THE
OCCURRENCE OF ANY EVENT AS A RESULT OF WHICH THE PROSPECTUS, AS THEN AMENDED OR
SUPPLEMENTED, WOULD, IN THE REASONABLE JUDGMENT OF COUNSEL TO THE COMPANY OR
COUNSEL TO THE PLACEMENT AGENT, INCLUDE ANY UNTRUE STATEMENT OF A MATERIAL FACT
OR OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING, OR THE REGISTRATION STATEMENT, AS THEN AMENDED OR SUPPLEMENTED,
WOULD, IN THE REASONABLE JUDGMENT OF COUNSEL TO THE COMPANY OR COUNSEL TO THE
PLACEMENT AGENT, INCLUDE ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING,
OR IF FOR ANY OTHER REASON IT IS NECESSARY, IN THE REASONABLE JUDGMENT OF
COUNSEL TO THE COMPANY OR COUNSEL TO THE PLACEMENT AGENT, AT ANY TIME TO AMEND
OR SUPPLEMENT THE PROSPECTUS OR THE REGISTRATION STATEMENT TO COMPLY WITH THE
ACT OR THE RULES AND REGULATIONS, THE COMPANY WILL PROMPTLY NOTIFY THE PLACEMENT
AGENT AND WILL PROMPTLY PREPARE AND FILE WITH THE COMMISSION, AT THE COMPANY’S
EXPENSE, AN AMENDMENT TO THE REGISTRATION STATEMENT OR AN AMENDMENT OR
SUPPLEMENT TO THE PROSPECTUS THAT CORRECTS SUCH STATEMENT OR OMISSION OR EFFECTS
SUCH COMPLIANCE AND WILL DELIVER TO THE PLACEMENT AGENT, WITHOUT CHARGE, SUCH
NUMBER OF COPIES THEREOF AS THE PLACEMENT AGENT MAY REASONABLY REQUEST.  THE
COMPANY CONSENTS TO THE USE OF THE PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT
THERETO BY THE PLACEMENT AGENT, AND THE PLACEMENT AGENT AGREES TO PROVIDE TO
EACH INVESTOR, PRIOR TO THE CLOSING, A COPY OF THE PROSPECTUS AND ANY AMENDMENTS
OR SUPPLEMENTS THERETO.

(E)           THE COMPANY WILL FURNISH TO THE PLACEMENT AGENT AND ITS COUNSEL,
WITHOUT CHARGE (I) ONE CONFORMED COPY OF THE REGISTRATION STATEMENT AS
ORIGINALLY FILED WITH THE COMMISSION AND EACH AMENDMENT THERETO, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES, AND ALL EXHIBITS THERETO, (II) SO LONG AS A
PROSPECTUS RELATING TO THE SHARES IS REQUIRED TO BE DELIVERED UNDER THE ACT, AS
MANY COPIES OF EACH ISSUER FREE WRITING PROSPECTUS, PRELIMINARY PROSPECTUS OR
THE PROSPECTUS OR ANY AMENDMENT OR SUPPLEMENT THERETO AS THE PLACEMENT AGENT MAY
REASONABLY REQUEST.

(F)            THE COMPANY WILL COMPLY WITH ALL THE UNDERTAKINGS CONTAINED IN
THE REGISTRATION STATEMENT.

(G)           THE COMPANY WILL NOT MAKE ANY OFFER RELATING TO THE SHARES THAT
WOULD CONSTITUTE AN ISSUER FREE WRITING PROSPECTUS WITHOUT THE PRIOR WRITTEN
CONSENT OF THE PLACEMENT AGENT.

(H)           THE COMPANY WILL RETAIN IN ACCORDANCE WITH THE RULES AND
REGULATIONS ALL ISSUER FREE WRITING PROSPECTUSES NOT REQUIRED TO BE FILED
PURSUANT TO THE RULES AND REGULATIONS.

(I)            PRIOR TO THE SALE OF THE SHARES TO THE INVESTORS, THE COMPANY
WILL COOPERATE WITH THE PLACEMENT AGENT AND ITS COUNSEL IN CONNECTION WITH THE
REGISTRATION OR QUALIFICATION OF THE SHARES FOR OFFER AND SALE UNDER THE STATE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS AS THE PLACEMENT AGENT MAY
REASONABLY REQUEST; PROVIDED, THAT IN NO EVENT SHALL THE COMPANY BE OBLIGATED TO
QUALIFY TO DO BUSINESS IN ANY JURISDICTION WHERE IT IS NOT NOW SO QUALIFIED OR
TO TAKE ANY ACTION WHICH WOULD SUBJECT IT TO GENERAL SERVICE OF PROCESS IN ANY
JURISDICTION WHERE IT IS NOT NOW SO SUBJECT.

11

--------------------------------------------------------------------------------

 

(J)            THE COMPANY WILL APPLY THE NET PROCEEDS FROM THE OFFERING AND
SALE OF THE SHARES IN THE MANNER SET FORTH IN THE PROSPECTUS UNDER THE CAPTION
“USE OF PROCEEDS.”

(K)           THE COMPANY WILL USE ITS BEST EFFORTS TO ENSURE THAT THE SHARES
ARE LISTED OR QUOTED ON THE NASDAQ GLOBAL MARKET AT THE TIME OF THE CLOSING.

(L)            THE COMPANY WILL NOT AT ANY TIME, DIRECTLY OR INDIRECTLY, TAKE
ANY ACTION INTENDED, OR WHICH MIGHT REASONABLY BE EXPECTED, TO CAUSE OR RESULT
IN, OR WHICH WILL CONSTITUTE, STABILIZATION OF THE PRICE OF THE SHARES TO
FACILITATE THE SALE OR RESALE OF ANY OF THE SHARES.

5.             AGREEMENTS OF THE PLACEMENT AGENT.  THE PLACEMENT AGENT AGREES
THAT IT SHALL NOT INCLUDE ANY “ISSUER INFORMATION” (AS DEFINED IN RULE 433 UNDER
THE ACT) IN ANY “FREE WRITING PROSPECTUS” (AS DEFINED IN RULE 405) USED OR
REFERRED TO BY SUCH PLACEMENT AGENT WITHOUT THE PRIOR CONSENT OF THE COMPANY
(ANY SUCH ISSUER INFORMATION WITH RESPECT TO WHOSE USE THE COMPANY HAS GIVEN ITS
CONSENT, “PERMITTED ISSUER INFORMATION”); PROVIDED THAT (I)  NO SUCH CONSENT
SHALL BE REQUIRED WITH RESPECT TO ANY SUCH ISSUER INFORMATION CONTAINED IN ANY
DOCUMENT FILED BY THE COMPANY WITH THE COMMISSION PRIOR TO THE USE OF SUCH FREE
WRITING PROSPECTUS AND (II) “ISSUER INFORMATION,” AS USED IN THIS SECTION 5
SHALL NOT BE DEEMED TO INCLUDE INFORMATION PREPARED BY SUCH PLACEMENT AGENT ON
THE BASIS OF OR DERIVED FROM ISSUER INFORMATION.

6.             EXPENSES. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT ARE CONSUMMATED OR THIS AGREEMENT IS TERMINATED, THE COMPANY WILL PAY
ALL COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF THE OBLIGATIONS OF THE
COMPANY UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO COSTS AND EXPENSES OF
OR RELATING TO (1) THE PREPARATION, PRINTING AND FILING OF THE REGISTRATION
STATEMENT (INCLUDING EACH PRE- AND POST-EFFECTIVE AMENDMENT THERETO) AND
EXHIBITS THERETO, ANY ISSUER FREE WRITING PROSPECTUS, EACH PRELIMINARY
PROSPECTUS, THE PROSPECTUS AND ANY AMENDMENTS OR SUPPLEMENTS THERETO, INCLUDING
ALL FEES, DISBURSEMENTS AND OTHER CHARGES OF COUNSEL AND ACCOUNTANTS TO THE
COMPANY, (2) THE PREPARATION AND DELIVERY OF CERTIFICATES REPRESENTING THE
SHARES, (3) FURNISHING (INCLUDING COSTS OF SHIPPING AND MAILING) SUCH COPIES OF
THE REGISTRATION STATEMENT (INCLUDING ALL PRE- AND POST-EFFECTIVE AMENDMENTS
THERETO), THE PROSPECTUS AND ANY PRELIMINARY PROSPECTUS OR ISSUER FREE WRITING
PROSPECTUS, AND ALL AMENDMENTS AND SUPPLEMENTS THERETO, AS MAY BE REQUESTED FOR
USE IN CONNECTION WITH THE DIRECT PLACEMENT OF THE SHARES, (4) THE LISTING OF
THE COMMON STOCK ON THE NASDAQ GLOBAL MARKET, (5) ANY FILINGS REQUIRED TO BE
MADE BY THE PLACEMENT AGENT WITH THE NASD, AND THE FEES, DISBURSEMENTS AND OTHER
CHARGES OF COUNSEL FOR THE PLACEMENT AGENT IN CONNECTION THEREWITH, (6) THE
REGISTRATION OR QUALIFICATION OF THE SHARES FOR OFFER AND SALE UNDER THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS DESIGNATED PURSUANT TO SECTION
4(I), INCLUDING THE REASONABLE FEES, DISBURSEMENTS AND OTHER CHARGES OF COUNSEL
TO THE PLACEMENT AGENT IN CONNECTION THEREWITH AND THE PREPARATION AND PRINTING
OF PRELIMINARY, SUPPLEMENTAL AND FINAL BLUE SKY MEMORANDA, AND FEES,
DISBURSEMENTS AND OTHER CHARGES OF COUNSEL TO THE COMPANY.  THE COMPANY SHALL
REIMBURSE THE PLACEMENT AGENT, ON A FULLY ACCOUNTABLE BASIS, FOR ALL REASONABLE
TRAVEL, LEGAL AND OTHER OUT-OF-POCKET EXPENSES.

12

--------------------------------------------------------------------------------

 

7.             CONDITIONS OF THE OBLIGATIONS OF THE PLACEMENT AGENT.  THE
OBLIGATIONS OF THE PLACEMENT AGENT HEREUNDER ARE SUBJECT TO THE FOLLOWING
CONDITIONS:

(A)           (I) NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF THE REGISTRATION
STATEMENT SHALL HAVE BEEN ISSUED, AND NO PROCEEDINGS FOR THAT PURPOSE SHALL BE
PENDING OR THREATENED BY ANY SECURITIES OR OTHER GOVERNMENTAL AUTHORITY
(INCLUDING, WITHOUT LIMITATION, THE COMMISSION), (II) NO ORDER SUSPENDING THE
EFFECTIVENESS OF THE REGISTRATION STATEMENT OR THE QUALIFICATION OR REGISTRATION
OF THE SHARES UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY JURISDICTION SHALL BE
IN EFFECT AND NO PROCEEDING FOR SUCH PURPOSE SHALL BE PENDING BEFORE, OR
THREATENED OR CONTEMPLATED BY, ANY SECURITIES OR OTHER GOVERNMENTAL AUTHORITY
(INCLUDING, WITHOUT LIMITATION, THE COMMISSION), (III) ANY REQUEST FOR
ADDITIONAL INFORMATION ON THE PART OF THE STAFF OF ANY SECURITIES OR OTHER
GOVERNMENTAL AUTHORITY (INCLUDING, WITHOUT LIMITATION, THE COMMISSION) SHALL
HAVE BEEN COMPLIED WITH TO THE SATISFACTION OF THE STAFF OF THE COMMISSION OR
SUCH AUTHORITIES AND (IV) AFTER THE DATE HEREOF NO AMENDMENT OR SUPPLEMENT TO
THE REGISTRATION STATEMENT, ANY ISSUER FREE WRITING PROSPECTUS OR THE PROSPECTUS
SHALL HAVE BEEN FILED UNLESS A COPY THEREOF WAS FIRST SUBMITTED TO THE PLACEMENT
AGENT AND THE PLACEMENT AGENT DID NOT OBJECT THERETO IN GOOD FAITH, AND THE
PLACEMENT AGENT SHALL HAVE RECEIVED CERTIFICATES OF THE COMPANY, DATED THE
CLOSING DATE AND SIGNED BY THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OR THE
CHAIRMAN OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE CHIEF FINANCIAL
OFFICER OF THE COMPANY, TO THE EFFECT OF CLAUSES (I), (II) AND (III).

(B)           SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN IN THE
REGISTRATION STATEMENT AND THE PROSPECTUS, (I) THERE SHALL NOT HAVE BEEN A
MATERIAL ADVERSE CHANGE, WHETHER OR NOT ARISING FROM TRANSACTIONS IN THE
ORDINARY COURSE OF BUSINESS, IN EACH CASE OTHER THAN AS SET FORTH IN OR
CONTEMPLATED BY THE REGISTRATION STATEMENT AND THE PROSPECTUS AND (II) THE
COMPANY SHALL NOT HAVE SUSTAINED ANY MATERIAL LOSS OR INTERFERENCE WITH ITS
BUSINESS OR PROPERTIES FROM FIRE, EXPLOSION, FLOOD OR OTHER CASUALTY, WHETHER OR
NOT COVERED BY INSURANCE, OR FROM ANY LABOR DISPUTE OR ANY COURT OR LEGISLATIVE
OR OTHER GOVERNMENTAL ACTION, ORDER OR DECREE, WHICH IS NOT SET FORTH IN THE
REGISTRATION STATEMENT AND THE PROSPECTUS, IF IN THE JUDGMENT OF THE PLACEMENT
AGENT ANY SUCH DEVELOPMENT MAKES IT IMPRACTICABLE OR INADVISABLE TO CONSUMMATE
THE SALE AND DELIVERY OF THE SHARES TO INVESTORS AS CONTEMPLATED HEREBY.

(C)           SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN IN THE
REGISTRATION STATEMENT AND THE PROSPECTUS, THERE SHALL HAVE BEEN NO LITIGATION
OR OTHER PROCEEDING INSTITUTED AGAINST THE COMPANY OR ANY OF ITS OFFICERS OR
DIRECTORS IN THEIR CAPACITIES AS SUCH, BEFORE OR BY ANY FEDERAL, STATE OR LOCAL
COURT, COMMISSION, REGULATORY BODY, ADMINISTRATIVE AGENCY OR OTHER GOVERNMENTAL
BODY, DOMESTIC OR FOREIGN, WHICH LITIGATION OR PROCEEDING, IN THE REASONABLE
JUDGMENT OF THE PLACEMENT AGENT, COULD HAVE A MATERIAL ADVERSE EFFECT.

(D)           EACH OF THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY
CONTAINED HEREIN SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AT THE
CLOSING DATE, AS IF MADE ON SUCH DATE, AND ALL COVENANTS AND AGREEMENTS HEREIN
CONTAINED TO BE PERFORMED ON THE PART OF THE COMPANY AND ALL CONDITIONS HEREIN
CONTAINED TO BE FULFILLED OR COMPLIED WITH BY THE COMPANY AT OR PRIOR TO THE
CLOSING DATE SHALL HAVE BEEN DULY PERFORMED, FULFILLED OR COMPLIED WITH IN ALL
MATERIAL RESPECTS.

13

--------------------------------------------------------------------------------

 

(E)           THE PLACEMENT AGENT SHALL HAVE RECEIVED AN OPINION, DATED THE
CLOSING DATE (OR SUCH OTHER DATE AS MAY BE SET FORTH IN A REPRESENTATION OR
WARRANTY), OF BRACEWELL & GIULIANI LLP, AS COUNSEL TO THE COMPANY, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE PLACEMENT AGENT.

(F)            THE SHARES SHALL BE QUALIFIED FOR SALE IN SUCH STATES AS THE
PLACEMENT AGENT MAY REASONABLY REQUEST, AND EACH SUCH QUALIFICATION SHALL BE IN
EFFECT AND NOT SUBJECT TO ANY STOP ORDER OR OTHER PROCEEDING ON THE CLOSING
DATE, AS PROVIDED IN SECTIONS 3(B) AND 3(Y) ABOVE.

(G)           THE COMPANY SHALL HAVE FURNISHED OR CAUSED TO BE FURNISHED TO THE
PLACEMENT AGENT SUCH CERTIFICATES, IN ADDITION TO THOSE SPECIFICALLY MENTIONED
HEREIN, AS THE PLACEMENT AGENT MAY HAVE REASONABLY REQUESTED AS TO THE ACCURACY
AND COMPLETENESS AT THE CLOSING DATE OF ANY STATEMENT IN THE REGISTRATION
STATEMENT OR THE PROSPECTUS, AS TO THE ACCURACY AT THE CLOSING DATE OF THE
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AS TO THE PERFORMANCE BY THE
COMPANY OF ITS OBLIGATIONS HEREUNDER, OR AS TO THE FULFILLMENT OF THE CONDITIONS
CONCURRENT AND PRECEDENT TO THE OBLIGATIONS HEREUNDER OF THE PLACEMENT AGENT.

8.             INDEMNIFICATION.

(A)           THE COMPANY SHALL INDEMNIFY AND HOLD HARMLESS THE PLACEMENT AGENT,
ITS DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS AND EACH PERSON, IF ANY, WHO
CONTROLS THE PLACEMENT AGENT WITHIN THE MEANING OF SECTION 15 OF THE ACT OR
SECTION 20 OF THE EXCHANGE ACT, FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS,
LIABILITIES, EXPENSES AND DAMAGES, JOINT OR SEVERAL, (INCLUDING ANY AND ALL
INVESTIGATIVE, LEGAL AND OTHER EXPENSES REASONABLY INCURRED IN CONNECTION WITH,
AND ANY AMOUNT PAID IN SETTLEMENT OF, ANY ACTION, SUIT OR PROCEEDING OR ANY
CLAIM ASSERTED), TO WHICH IT, OR ANY OF THEM, MAY BECOME SUBJECT UNDER THE ACT
OR OTHER FEDERAL OR STATE STATUTORY LAW OR REGULATION, AT COMMON LAW OR
OTHERWISE, INSOFAR AS SUCH LOSSES, CLAIMS, LIABILITIES, EXPENSES OR DAMAGES
ARISE OUT OF OR ARE BASED ON (I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE
STATEMENT MADE BY THE COMPANY IN SECTION 3 OF THIS AGREEMENT, (II) ANY UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY MATERIAL FACT CONTAINED IN (A) ANY
PRELIMINARY PROSPECTUS, THE REGISTRATION STATEMENT OR THE PROSPECTUS OR ANY
AMENDMENT OR SUPPLEMENT THERETO, (B) ANY ISSUER FREE WRITING PROSPECTUS OR ANY
AMENDMENT OR SUPPLEMENT THERETO OR (C) ANY PERMITTED ISSUER INFORMATION USED OR
REFERRED TO IN ANY “FREE WRITING PROSPECTUS” (AS DEFINED IN RULE 405) USED OR
REFERRED TO BY THE PLACEMENT AGENT AND (B) ANY APPLICATION OR OTHER DOCUMENT, OR
ANY AMENDMENT OR SUPPLEMENT THERETO, EXECUTED BY THE COMPANY BASED UPON WRITTEN
INFORMATION FURNISHED BY OR ON BEHALF OF THE COMPANY FILED IN ANY JURISDICTION
IN ORDER TO QUALIFY THE SHARES UNDER THE SECURITIES OR BLUE SKY LAWS THEREOF OR
FILED WITH THE COMMISSION OR ANY SECURITIES ASSOCIATION OR SECURITIES EXCHANGE
(EACH, AN “APPLICATION”), OR (III) THE OMISSION OR ALLEGED OMISSION TO STATE IN
ANY PRELIMINARY PROSPECTUS, THE REGISTRATION STATEMENT, THE PROSPECTUS OR ANY
ISSUER FREE WRITING PROSPECTUS, OR ANY AMENDMENT OR SUPPLEMENT THERETO, OR IN
ANY PERMITTED ISSUER INFORMATION OR ANY APPLICATION A MATERIAL FACT REQUIRED TO
BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE
CIRCUMSTANCES IN WHICH THEY WERE MADE, NOT MISLEADING; PROVIDED, HOWEVER, THAT
THE COMPANY WILL NOT BE LIABLE TO THE EXTENT THAT SUCH LOSS, CLAIM, LIABILITY,
EXPENSE OR DAMAGE ARISES FROM THE SALE OF THE SHARES IN THE PUBLIC OFFERING TO
ANY PERSON AND IS BASED SOLELY ON AN UNTRUE STATEMENT OR OMISSION OR ALLEGED
UNTRUE STATEMENT OR OMISSION MADE IN RELIANCE ON AND IN CONFORMITY WITH
INFORMATION RELATING TO THE PLACEMENT AGENT FURNISHED IN WRITING TO THE

14

--------------------------------------------------------------------------------

 

COMPANY BY THE PLACEMENT AGENT EXPRESSLY FOR INCLUSION IN THE REGISTRATION
STATEMENT, ANY PRELIMINARY PROSPECTUS, THE PROSPECTUS, ANY ISSUER FREE WRITING
PROSPECTUS OR IN ANY AMENDMENT OR SUPPLEMENT THERETO OR IN ANY PERMITTED ISSUER
INFORMATION OR ANY APPLICATION (AS SET FORTH IN PARAGRAPH (B) ABOVE); AND
PROVIDED FURTHER, THAT SUCH INDEMNITY WITH RESPECT TO ANY PRELIMINARY PROSPECTUS
SHALL NOT INURE TO THE BENEFIT OF THE PLACEMENT AGENT (OR ANY PERSON CONTROLLING
THE PLACEMENT AGENT) FROM WHOM THE PERSON ASSERTING ANY SUCH LOSS, CLAIM,
DAMAGE, LIABILITY OR ACTION PURCHASED SHARES WHICH ARE THE SUBJECT THEREOF TO
THE EXTENT THAT ANY SUCH LOSS, CLAIM, DAMAGE OR LIABILITY (I) RESULTS FROM THE
FACT THAT THE PLACEMENT AGENT FAILED TO SEND OR GIVE A COPY OF THE PROSPECTUS
(AS AMENDED OR SUPPLEMENTED) TO SUCH PERSON AT OR PRIOR TO THE CONFIRMATION OF
THE SALE OF SUCH SHARES TO SUCH PERSON IN ANY CASE WHERE SUCH DELIVERY IS
REQUIRED BY THE ACT AND (II) ARISES OUT OF OR IS BASED UPON AN UNTRUE STATEMENT
OR OMISSION OF A MATERIAL FACT CONTAINED IN SUCH PRELIMINARY PROSPECTUS THAT WAS
CORRECTED IN THE PROSPECTUS (OR ANY AMENDMENT OR SUPPLEMENT THERETO), UNLESS
SUCH FAILURE TO DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED) WAS THE
RESULT OF NONCOMPLIANCE BY THE COMPANY WITH SECTION 4(D).  THIS INDEMNITY
AGREEMENT WILL BE IN ADDITION TO ANY LIABILITY WHICH THE COMPANY MAY OTHERWISE
HAVE.

(B)           THE PLACEMENT AGENT WILL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
EACH PERSON, IF ANY, WHO CONTROLS THE COMPANY WITHIN THE MEANING OF SECTION 15
OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT, EACH DIRECTOR OF THE COMPANY AND
EACH OFFICER OF THE COMPANY WHO SIGNS THE REGISTRATION STATEMENT TO THE SAME
EXTENT AS THE FOREGOING INDEMNITY FROM THE COMPANY TO THE PLACEMENT AGENT, BUT
ONLY INSOFAR AS LOSSES, CLAIMS, LIABILITIES, EXPENSES OR DAMAGES ARISE OUT OF OR
ARE BASED ON ANY UNTRUE STATEMENT OR OMISSION OR ALLEGED UNTRUE STATEMENT OR
OMISSION MADE IN RELIANCE ON AND IN CONFORMITY WITH INFORMATION RELATING TO THE
PLACEMENT AGENT FURNISHED IN WRITING TO THE COMPANY BY THE PLACEMENT AGENT
EXPRESSLY FOR USE IN THE REGISTRATION STATEMENT, ANY PRELIMINARY PROSPECTUS, THE
PROSPECTUS OR ANY ISSUER FREE WRITING PROSPECTUS.  THIS INDEMNITY AGREEMENT WILL
BE IN ADDITION TO ANY LIABILITY THAT THE PLACEMENT AGENT MIGHT OTHERWISE HAVE. 
THE COMPANY ACKNOWLEDGES THAT, FOR ALL PURPOSES UNDER THIS AGREEMENT, THE
STATEMENTS SET FORTH IN PARAGRAPHS ONE THROUGH THREE UNDER THE HEADING “PLAN OF
DISTRIBUTION” IN THE PROSPECTUS CONSTITUTE THE ONLY INFORMATION RELATING TO THE
PLACEMENT AGENT FURNISHED IN WRITING TO THE COMPANY BY THE PLACEMENT AGENT
EXPRESSLY FOR INCLUSION IN THE REGISTRATION STATEMENT, ANY PRELIMINARY
PROSPECTUS OR THE PROSPECTUS.

(C)           ANY PARTY THAT PROPOSES TO ASSERT THE RIGHT TO BE INDEMNIFIED
UNDER THIS SECTION 8 WILL, PROMPTLY AFTER RECEIPT OF NOTICE OF COMMENCEMENT OF
ANY ACTION AGAINST SUCH PARTY IN RESPECT OF WHICH A CLAIM IS TO BE MADE AGAINST
AN INDEMNIFYING PARTY OR PARTIES UNDER THIS SECTION 8, NOTIFY EACH SUCH
INDEMNIFYING PARTY OF THE COMMENCEMENT OF SUCH ACTION, ENCLOSING A COPY OF ALL
PAPERS SERVED, BUT THE OMISSION SO TO NOTIFY SUCH INDEMNIFYING PARTY WILL NOT
RELIEVE IT FROM ANY LIABILITY THAT IT MAY HAVE TO ANY INDEMNIFIED PARTY UNDER
THE FOREGOING PROVISIONS OF THIS SECTION 8 UNLESS, AND ONLY TO THE EXTENT THAT,
SUCH OMISSION RESULTS IN THE FORFEITURE OF SUBSTANTIVE RIGHTS OR DEFENSES BY THE
INDEMNIFYING PARTY.  IF ANY SUCH ACTION IS BROUGHT AGAINST ANY INDEMNIFIED PARTY
AND IT NOTIFIES THE INDEMNIFYING PARTY OF ITS COMMENCEMENT, THE INDEMNIFYING
PARTY WILL BE ENTITLED TO PARTICIPATE IN AND, TO THE EXTENT THAT IT ELECTS BY
DELIVERING WRITTEN NOTICE TO THE INDEMNIFIED PARTY PROMPTLY AFTER RECEIVING
NOTICE OF THE COMMENCEMENT OF THE ACTION FROM THE INDEMNIFIED PARTY, JOINTLY
WITH ANY OTHER INDEMNIFYING PARTY SIMILARLY NOTIFIED, TO ASSUME THE DEFENSE OF
THE ACTION, WITH COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY, AND
AFTER NOTICE FROM THE INDEMNIFYING PARTY

 

15

--------------------------------------------------------------------------------

TO THE INDEMNIFIED PARTY OF ITS ELECTION TO ASSUME THE DEFENSE, THE INDEMNIFYING
PARTY WILL NOT BE LIABLE TO THE INDEMNIFIED PARTY FOR ANY LEGAL OR OTHER
EXPENSES EXCEPT AS PROVIDED BELOW AND EXCEPT FOR THE REASONABLE COSTS OF
INVESTIGATION SUBSEQUENTLY INCURRED BY THE INDEMNIFIED PARTY IN CONNECTION WITH
THE DEFENSE.  THE INDEMNIFIED PARTY WILL HAVE THE RIGHT TO EMPLOY ITS OWN
COUNSEL IN ANY SUCH ACTION, BUT THE FEES, EXPENSES AND OTHER CHARGES OF SUCH
COUNSEL WILL BE AT THE EXPENSE OF SUCH INDEMNIFIED PARTY UNLESS (1) THE
EMPLOYMENT OF COUNSEL BY THE INDEMNIFIED PARTY HAS BEEN AUTHORIZED IN WRITING BY
THE INDEMNIFYING PARTY, (2) THE INDEMNIFIED PARTY HAS REASONABLY CONCLUDED
(BASED ON ADVICE OF COUNSEL) THAT A CONFLICT EXISTS (BASED ON ADVICE OF COUNSEL
TO THE INDEMNIFIED PARTY) BETWEEN THE INDEMNIFIED PARTY AND THE INDEMNIFYING
PARTY THAT WOULD PREVENT THE COUNSEL SELECTED BY THE INDEMNIFYING PARTY FROM
REPRESENTING THE INDEMNIFIED PARTY (IN WHICH CASE THE INDEMNIFYING PARTY WILL
NOT HAVE THE RIGHT TO DIRECT THE DEFENSE OF SUCH ACTION ON BEHALF OF THE
INDEMNIFIED PARTY) OR (3) THE INDEMNIFYING PARTY HAS NOT IN FACT EMPLOYED
COUNSEL TO ASSUME THE DEFENSE OF SUCH ACTION WITHIN A REASONABLE TIME AFTER
RECEIVING NOTICE OF THE COMMENCEMENT OF THE ACTION, IN EACH OF WHICH CASES THE
REASONABLE FEES, DISBURSEMENTS AND OTHER CHARGES OF COUNSEL WILL BE AT THE
EXPENSE OF THE INDEMNIFYING PARTY OR PARTIES.  IT IS UNDERSTOOD THAT THE
INDEMNIFYING PARTY OR PARTIES SHALL NOT, IN CONNECTION WITH ANY PROCEEDING OR
RELATED PROCEEDINGS IN THE SAME JURISDICTION, BE LIABLE FOR THE REASONABLE FEES,
DISBURSEMENTS AND OTHER CHARGES OF MORE THAN ONE SEPARATE FIRM ADMITTED TO
PRACTICE IN SUCH JURISDICTION AT ANY ONE TIME FOR ALL SUCH INDEMNIFIED PARTY OR
PARTIES.  ALL SUCH FEES, DISBURSEMENTS AND OTHER CHARGES WILL BE REIMBURSED BY
THE INDEMNIFYING PARTY PROMPTLY AS THEY ARE INCURRED.  THE COMPANY WILL NOT,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE PLACEMENT AGENT (WHICH CONSENT WILL NOT
BE UNREASONABLY WITHHELD), SETTLE OR COMPROMISE OR CONSENT TO THE ENTRY OF ANY
JUDGMENT IN ANY PENDING OR THREATENED CLAIM, ACTION, SUIT OR PROCEEDING IN
RESPECT OF WHICH INDEMNIFICATION HAS BEEN SOUGHT HEREUNDER (WHETHER OR NOT THE
PLACEMENT AGENT OR ANY PERSON WHO CONTROLS THE PLACEMENT AGENT WITHIN THE
MEANING OF SECTION 15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT IS A PARTY TO
SUCH CLAIM, ACTION, SUIT OR PROCEEDING), UNLESS SUCH SETTLEMENT, COMPROMISE OR
CONSENT INCLUDES AN UNCONDITIONAL RELEASE OF THE PLACEMENT AGENT AND EACH SUCH
CONTROLLING PERSON FROM ALL LIABILITY ARISING OUT OF SUCH CLAIM, ACTION, SUIT OR
PROCEEDING.  AN INDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY SETTLEMENT OF ANY
ACTION OR CLAIM EFFECTED WITHOUT ITS WRITTEN CONSENT (WHICH CONSENT WILL NOT BE
UNREASONABLY WITHHELD).

(D)           IN ORDER TO PROVIDE FOR JUST AND EQUITABLE CONTRIBUTION IN
CIRCUMSTANCES IN WHICH THE INDEMNIFICATION PROVIDED FOR IN THE FOREGOING
PARAGRAPHS OF THIS SECTION 8 IS APPLICABLE IN ACCORDANCE WITH ITS TERMS BUT FOR
ANY REASON IS HELD TO BE UNAVAILABLE FROM THE COMPANY OR THE PLACEMENT AGENT,
THE COMPANY AND THE PLACEMENT AGENT WILL CONTRIBUTE TO THE TOTAL LOSSES, CLAIMS,
LIABILITIES, EXPENSES AND DAMAGES (INCLUDING ANY INVESTIGATIVE, LEGAL AND OTHER
EXPENSES REASONABLY INCURRED IN CONNECTION WITH, AND ANY AMOUNT PAID IN
SETTLEMENT OF, ANY ACTION, SUIT OR PROCEEDING OR ANY CLAIM ASSERTED, BUT AFTER
DEDUCTING ANY CONTRIBUTION RECEIVED BY THE COMPANY FROM PERSONS OTHER THAN THE
PLACEMENT AGENT SUCH AS PERSONS WHO CONTROL THE COMPANY WITHIN THE MEANING OF
THE ACT OR THE EXCHANGE ACT, OFFICERS OF THE COMPANY WHO SIGNED THE REGISTRATION
STATEMENT AND DIRECTORS OF THE COMPANY, WHO ALSO MAY BE LIABLE FOR CONTRIBUTION)
TO WHICH THE COMPANY AND THE PLACEMENT AGENT MAY BE SUBJECT IN SUCH PROPORTION
AS SHALL BE APPROPRIATE TO REFLECT THE RELATIVE BENEFITS RECEIVED BY THE COMPANY
ON THE ONE HAND AND THE PLACEMENT AGENT ON THE OTHER.  THE RELATIVE BENEFITS
RECEIVED BY THE COMPANY ON THE ONE HAND AND THE PLACEMENT AGENT ON THE OTHER
SHALL BE DEEMED TO BE IN THE SAME PROPORTION AS THE TOTAL NET PROCEEDS FROM THE
OFFERING (BEFORE DEDUCTING COMPANY EXPENSES) RECEIVED BY THE COMPANY AS SET
FORTH IN THE TABLE ON THE COVER

16

--------------------------------------------------------------------------------

 

PAGE OF THE PROSPECTUS BEAR TO THE FEE RECEIVED BY THE PLACEMENT AGENT
HEREUNDER.  IF, BUT ONLY IF, THE ALLOCATION PROVIDED BY THE FOREGOING SENTENCE
IS NOT PERMITTED BY APPLICABLE LAW, THE ALLOCATION OF CONTRIBUTION SHALL BE MADE
IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT NOT ONLY THE RELATIVE BENEFITS
REFERRED TO IN THE FOREGOING SENTENCE BUT ALSO THE RELATIVE FAULT OF THE
COMPANY, ON THE ONE HAND, AND THE PLACEMENT AGENT ON THE OTHER, WITH RESPECT TO
THE STATEMENTS OR OMISSIONS WHICH RESULTED IN SUCH LOSS, CLAIM, LIABILITY,
EXPENSE OR DAMAGE, OR ACTION IN RESPECT THEREOF, AS WELL AS ANY OTHER RELEVANT
EQUITABLE CONSIDERATIONS WITH RESPECT TO SUCH OFFERING.  SUCH RELATIVE FAULT
SHALL BE DETERMINED BY REFERENCE TO WHETHER THE UNTRUE OR ALLEGED UNTRUE
STATEMENT OF A MATERIAL FACT OR OMISSION OR ALLEGED OMISSION TO STATE A MATERIAL
FACT RELATES TO INFORMATION SUPPLIED BY THE COMPANY OR THE PLACEMENT AGENT, THE
INTENT OF THE PARTIES AND THEIR RELATIVE KNOWLEDGE, ACCESS TO INFORMATION AND
OPPORTUNITY TO CORRECT OR PREVENT SUCH STATEMENT OR OMISSION.  THE COMPANY AND
THE PLACEMENT AGENT AGREE THAT IT WOULD NOT BE JUST AND EQUITABLE IF
CONTRIBUTIONS PURSUANT TO THIS SECTION 8(D) WERE TO BE DETERMINED BY PRO RATA
ALLOCATION OR BY ANY OTHER METHOD OF ALLOCATION WHICH DOES NOT TAKE INTO ACCOUNT
THE EQUITABLE CONSIDERATIONS REFERRED TO HEREIN.  THE AMOUNT PAID OR PAYABLE BY
AN INDEMNIFIED PARTY AS A RESULT OF THE LOSS, CLAIM, LIABILITY, EXPENSE OR
DAMAGE, OR ACTION IN RESPECT THEREOF, REFERRED TO ABOVE IN THIS SECTION 8(D)
SHALL BE DEEMED TO INCLUDE, FOR PURPOSE OF THIS SECTION 8(D), ANY LEGAL OR OTHER
EXPENSES REASONABLY INCURRED BY SUCH INDEMNIFIED PARTY IN CONNECTION WITH
INVESTIGATING OR DEFENDING ANY SUCH ACTION OR CLAIM.  NOTWITHSTANDING THE
PROVISIONS OF THIS SECTION 8(D), THE PLACEMENT AGENT SHALL NOT BE REQUIRED TO
CONTRIBUTE ANY AMOUNT IN EXCESS OF THE FEE RECEIVED BY IT, AND NO PERSON FOUND
GUILTY OF FRAUDULENT MISREPRESENTATION (WITHIN THE MEANING OF SECTION 11(F) OF
THE ACT) WILL BE ENTITLED TO CONTRIBUTION FROM ANY PERSON WHO WAS NOT GUILTY OF
SUCH FRAUDULENT MISREPRESENTATION.  FOR PURPOSES OF THIS SECTION 8(D), ANY
PERSON WHO CONTROLS A PARTY TO THIS AGREEMENT WITHIN THE MEANING OF THE ACT OR
THE EXCHANGE ACT WILL HAVE THE SAME RIGHTS TO CONTRIBUTION AS THAT PARTY, AND
EACH OFFICER OF THE COMPANY WHO SIGNED THE REGISTRATION STATEMENT WILL HAVE THE
SAME RIGHTS TO CONTRIBUTION AS THE COMPANY, SUBJECT IN EACH CASE TO THE
PROVISIONS HEREOF.  ANY PARTY ENTITLED TO CONTRIBUTION, PROMPTLY AFTER RECEIPT
OF NOTICE OF COMMENCEMENT OF ANY ACTION AGAINST SUCH PARTY IN RESPECT OF WHICH A
CLAIM FOR CONTRIBUTION MAY BE MADE UNDER THIS SECTION 8(D), WILL NOTIFY ANY SUCH
PARTY OR PARTIES FROM WHOM CONTRIBUTION MAY BE SOUGHT, BUT THE OMISSION SO TO
NOTIFY WILL NOT RELIEVE THE PARTY OR PARTIES FROM WHOM CONTRIBUTION MAY BE
SOUGHT FROM ANY OTHER OBLIGATION IT OR THEY MAY HAVE UNDER THIS SECTION 8(D). 
NO PARTY WILL BE LIABLE FOR CONTRIBUTION WITH RESPECT TO ANY ACTION OR CLAIM
SETTLED WITHOUT ITS WRITTEN CONSENT (WHICH CONSENT WILL NOT BE UNREASONABLY
WITHHELD).

9.             TERMINATION.

(A)           THE OBLIGATIONS OF THE PLACEMENT AGENT UNDER THIS AGREEMENT MAY BE
TERMINATED AT ANY TIME PRIOR TO THE CLOSING DATE, BY NOTICE TO THE COMPANY FROM
THE PLACEMENT AGENT, WITHOUT LIABILITY ON THE PART OF THE PLACEMENT AGENT TO THE
COMPANY IF, PRIOR TO DELIVERY AND PAYMENT FOR THE SHARES, IN THE SOLE JUDGMENT
OF THE PLACEMENT AGENT (I) TRADING IN THE COMMON STOCK OF THE COMPANY SHALL HAVE
BEEN SUSPENDED BY THE COMMISSION OR BY THE NASDAQ GLOBAL MARKET (II) TRADING IN
SECURITIES GENERALLY ON THE NASDAQ GLOBAL MARKET SHALL HAVE BEEN SUSPENDED OR
LIMITED OR MINIMUM OR MAXIMUM PRICES SHALL HAVE BEEN GENERALLY ESTABLISHED ON
ANY OF SUCH EXCHANGES, OR ADDITIONAL MATERIAL GOVERNMENTAL RESTRICTIONS, NOT IN
FORCE ON THE DATE OF THIS AGREEMENT, SHALL HAVE BEEN IMPOSED UPON TRADING IN
SECURITIES GENERALLY BY ANY OF SUCH EXCHANGES OR BY ORDER OF THE COMMISSION OR
ANY COURT OR OTHER GOVERNMENTAL AUTHORITY, (III) A GENERAL BANKING MORATORIUM
SHALL HAVE BEEN DECLARED BY FEDERAL OR NEW YORK STATE AUTHORITIES, OR (IV) ANY
MATERIAL ADVERSE CHANGE IN THE FINANCIAL OR SECURITIES

17

--------------------------------------------------------------------------------

 

MARKETS IN THE UNITED STATES OR ANY OUTBREAK OR MATERIAL ESCALATION OF
HOSTILITIES OR DECLARATION BY THE UNITED STATES OF A NATIONAL EMERGENCY OR WAR
OR OTHER CALAMITY OR CRISIS SHALL HAVE OCCURRED, THE EFFECT OF ANY OF WHICH IS
SUCH AS TO MAKE IT, IN THE SOLE JUDGMENT OF THE PLACEMENT AGENT, IMPRACTICABLE
OR INADVISABLE TO MARKET THE SHARES ON THE TERMS AND IN THE MANNER CONTEMPLATED
BY THE PROSPECTUS.

(B)           IF THIS AGREEMENT SHALL BE TERMINATED PURSUANT TO ANY OF THE
PROVISIONS HEREOF OR IF THE SALE OF THE SHARES PROVIDED FOR HEREIN IS NOT
CONSUMMATED BECAUSE ANY CONDITION TO THE OBLIGATIONS OF THE PLACEMENT AGENT SET
FORTH HEREIN IS NOT SATISFIED OR BECAUSE OF ANY REFUSAL, INABILITY OR FAILURE ON
THE PART OF THE COMPANY TO PERFORM ANY AGREEMENT HEREIN OR COMPLY WITH ANY
PROVISION HEREOF, THE COMPANY WILL, SUBJECT TO DEMAND BY THE PLACEMENT AGENT,
REIMBURSE THE PLACEMENT AGENT FOR ALL OUT-OF-POCKET EXPENSES INCURRED IN
CONNECTION HEREWITH.

10.           NOTICES.  NOTICE GIVEN PURSUANT TO ANY OF THE PROVISIONS OF THIS
AGREEMENT SHALL BE IN WRITING AND, UNLESS OTHERWISE SPECIFIED, SHALL BE MAILED
OR DELIVERED (A) IF TO THE COMPANY, AT THE OFFICE OF THE COMPANY, 6350 SOUTH
3000 EAST, SALT LAKE CITY, UTAH, 84121, ATTENTION:  JONATHAN JOHNSON, WITH
COPIES TO BRACEWELL & GIULIANI LLP, 111 CONGRESS AVENUE, SUITE 2300, AUSTIN,
TEXAS 78701, ATTENTION:  THOMAS W. ADKINS, OR (B) IF TO THE PLACEMENT AGENT, AT
THE OFFICE OF W.R. HAMBRECHT + CO., LLC, 539 BRYANT STREET, SAN FRANCISCO, CA
94107, ATTENTION:  HARRISON CLAY, WITH COPIES TO MORRISON & FOERSTER LLP, 1290
AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104-0050, ATTENTION:  ANNA PINEDO.  ANY SUCH NOTICE SHALL
BE EFFECTIVE ONLY UPON RECEIPT.  ANY NOTICE UNDER SECTION 8 MAY BE MADE BY
FACSIMILE OR TELEPHONE, BUT IF SO MADE SHALL BE SUBSEQUENTLY CONFIRMED IN
WRITING.

11.           SURVIVAL.  THE RESPECTIVE REPRESENTATIONS, WARRANTIES, AGREEMENTS,
COVENANTS, INDEMNITIES AND OTHER STATEMENTS OF THE COMPANY AND THE PLACEMENT
AGENT SET FORTH IN THIS AGREEMENT OR MADE BY OR ON BEHALF OF THEM, RESPECTIVELY,
PURSUANT TO THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT, REGARDLESS OF
(I) ANY INVESTIGATION MADE BY OR ON BEHALF OF THE COMPANY, ANY OF ITS OFFICERS
OR DIRECTORS, THE PLACEMENT AGENT OR ANY CONTROLLING PERSON REFERRED TO IN
SECTION 8 HEREOF AND (II) DELIVERY OF AND PAYMENT FOR THE SHARES.  THE
RESPECTIVE AGREEMENTS, COVENANTS, INDEMNITIES AND OTHER STATEMENTS SET FORTH IN
SECTIONS 6 AND 8 HEREOF SHALL REMAIN IN FULL FORCE AND EFFECT, REGARDLESS OF ANY
TERMINATION OR CANCELLATION OF THIS AGREEMENT.

12.           SUCCESSORS.  THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND
SHALL BE BINDING UPON THE PLACEMENT AGENT, THE COMPANY AND THEIR RESPECTIVE
SUCCESSORS AND LEGAL REPRESENTATIVES, AND NOTHING EXPRESSED OR MENTIONED IN THIS
AGREEMENT IS INTENDED OR SHALL BE CONSTRUED TO GIVE ANY OTHER PERSON ANY LEGAL
OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER OR IN RESPECT OF THIS AGREEMENT, OR
ANY PROVISIONS HEREIN CONTAINED, THIS AGREEMENT AND ALL CONDITIONS AND
PROVISIONS HEREOF BEING INTENDED TO BE AND BEING FOR THE SOLE AND EXCLUSIVE
BENEFIT OF SUCH PERSONS AND FOR THE BENEFIT OF NO OTHER PERSON EXCEPT THAT
(I) THE INDEMNIFICATION AND CONTRIBUTION CONTAINED IN SECTIONS 8(A) AND (D) OF
THIS AGREEMENT SHALL ALSO BE FOR THE BENEFIT OF THE DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF THE PLACEMENT AGENT AND ANY PERSON OR PERSONS WHO
CONTROL THE PLACEMENT AGENT WITHIN THE MEANING OF SECTION 15 OF THE ACT OR
SECTION 20 OF THE EXCHANGE ACT AND (II) THE INDEMNIFICATION AND CONTRIBUTION
CONTAINED IN SECTIONS 8(B) AND (D) OF THIS AGREEMENT SHALL ALSO BE FOR THE
BENEFIT OF THE DIRECTORS OF THE

18

--------------------------------------------------------------------------------

 

COMPANY, THE OFFICERS OF THE COMPANY WHO HAVE SIGNED THE REGISTRATION STATEMENT
AND ANY PERSON OR PERSONS WHO CONTROL THE COMPANY WITHIN THE MEANING OF SECTION
15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT.  NO INVESTOR SHALL BE DEEMED A
SUCCESSOR BECAUSE OF SUCH PURCHASE.

13.           APPLICABLE LAW.  THE VALIDITY AND INTERPRETATIONS OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.

14.           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

15.           ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE
UNDERSTANDING BETWEEN THE PARTIES HERETO AS TO THE MATTERS COVERED HEREBY AND
SUPERSEDES ALL PRIOR UNDERSTANDINGS, WRITTEN OR ORAL, RELATING TO SUCH SUBJECT
MATTER.

 

19

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the agreement between the
Company and the Placement Agent.

Very truly yours,

 

 

 

 

OVERSTOCK.COM, INC.

 

 

 

 

 

 

 

By:

/s/ Jason C. Lindsey

 

 

Name: Jason C. Lindsey

 

 

Title: President and Chief Operating Officer

 

 

Confirmed as of the date first

above mentioned:

W.R. HAMBRECHT + CO., LLC

 

 

 

 

 

By:

/s/ E. John Schneider, IV

 

 

Name: E. John Schneider, IV

 

 

Title: Managing Director

 

 

--------------------------------------------------------------------------------

SCHEDULE 1

SUBSIDIARIES

 

Name

 

Jurisdiction of Formation

 

 

 

 

 

 

 

Overstock Mexico, S. de R.L. de C.V.

 

Mexico

 

 

 

 

 

 

 

OTravel.com, Inc.

 

Utah

 

 

 

 

--------------------------------------------------------------------------------