Exhibit 10.1


Exhibit 10.1

 

 EXECUTION COPY 

 PURCHASE AGREEMENT
   

       THIS
  PURCHASE AGREEMENT is made and entered into as of February 16, 2004, by and
  between Silicon Graphics, Inc., a Delaware corporation (the “Company”)
  and the purchasers whose names and addresses are set forth on the signature
  page hereof (the “Purchasers”).
   

      1. 
  Authorization and Sale of the Shares.
  Subject to the terms and conditions of this Agreement, the Company has authorized
  the issuance and sale of up to 18,181,818 shares (the “Shares”)
  of its common stock, par value $0.001 per share (the “Common
  Stock”).  

      2.
   Agreements to Sell and Purchase.
  On the basis of the representations and warranties contained in this Agreement,
  and subject to its terms and conditions, the Company hereby agrees to sell to
  the Purchasers, and each Purchaser severally and not jointly agrees to purchase
  from the Company, the number of Shares set forth on the signature page under
  each Purchaser’s name hereto at a purchase price of $2.75 per share (the
  “Purchase Price”).
  The agreements to sell and purchase the Shares hereunder constitute separate
  agreements between the Company and each Purchaser.  

       3. 
  Payment and Delivery.
  Payment for the Shares shall be made to the Company
  in Federal funds immediately available in New York City against delivery of
  such Shares (such payment and delivery hereinafter referred to as the “Closing”)
  at 10:00 a.m., New York City time, on February 19, 2004, or at such other time
  on the same or such other date as shall be agreed by the Company and the Purchaser.
  The time and date of such payment are hereinafter referred to as the “Closing
  Date.” Payment for the Shares shall
  be made by wire transfer to an account designated in writing by the Company.
   

      Certificates
  for the Shares shall be registered in the name of each Purchaser or if so indicated
  on the signature page hereto, in the name of a nominee designated by such Purchaser.
  The certificates evidencing the Shares shall be delivered to the Purchasers
  on the Closing Date, with any transfer taxes payable in connection with the
  transfer of the Shares to the Purchasers duly paid by the Company, against payment
  of the aggregate Purchase Price therefor.  

      4.
  Conditions to the Company’s Obligations.
  The Company’s obligations to issue and sell the Shares to the Purchasers
  are subject to the following conditions:  


        (a)
    Receipt by the Company of Federal funds immediately
    available in the full amount of the aggregate Purchase Price.  



  






        (b)
    Accuracy of the representations and warranties
    made by the Purchasers and the fulfillment in all material respects of those
    undertakings of the Purchasers to be fulfilled prior to the Closing. 
  



      5.
  Conditions to Each Purchaser’s Obligations.
  The several obligations of each Purchaser to purchase and pay for the Shares
  on the Closing Date are subject to the following conditions:  


        (a)
    The Purchaser shall have received on the
    Closing Date a certificate, dated the Closing Date and signed by an executive
    officer of the Company, to the effect that the representations and warranties
    of the Company contained in this Agreement are true and correct as of the
    Closing Date and that the Company has complied with all of the agreements
    and satisfied all of the conditions on its part to be performed or satisfied
    hereunder on or before the Closing Date.  

   The officer signing and delivering
    such certificate may rely upon the best of his or her knowledge as to proceedings
    threatened.  

        (b)
    All representations and warranties of the
    Company contained herein shall remain true and correct as of the Closing Date
    and the Company shall have performed and complied with all of the agreements
    and satisfied all of the conditions on its part to be performed or satisfied
    hereunder on or before the Closing Date. 

        (c)
    Except as described in the Exchange Act Documents
    (as defined in Section 6(a) below), there shall have been no material adverse
    change in the condition, financial or otherwise, or in the earnings, business
    or operations of the Company taken as a whole, since the date hereof. 
  

        (d)
    The Purchaser shall have received on the
    Closing Date an opinion of Davis Polk & Wardwell, counsel for the Company,
    dated the Closing Date, in the form set forth as Exhibit A. Such opinion shall
    be rendered to the Purchaser at the request of the Company and shall so state
    therein.  

        (e)
    From the date hereof to the Closing Date,
    trading in the Common Stock shall not have been suspended by the Commission
    or by the New York Stock Exchange, other than as part of a general suspension
    of trading by the Commission or such exchange.  

        (f)
    All corporate and other proceedings in connection
    with the transactions contemplated at the Closing hereby, and all documents
    and instruments incident to such transactions, shall be reasonably satisfactory
    in substance to the Purchaser and its counsel.  



  2
   






        (g)
    A minimum of $40 million in gross proceeds
    shall have been obtained pursuant to the offering contemplated by this Agreement.
     



       6. 
  Representations, Warranties and Covenants
  of the Company. The  Company
  represents and warrants to, and covenants with, the Purchaser that, as of the
  date hereof and as of the Closing Date (or as of such other date as may be expressly
  set forth below):  


        (a)
    The Company has timely filed with the Securities
    and Exchange Commission (the “Commission”) all documents
    required to be filed pursuant to the Securities Exchange Act of 1934, as amended
    (the “Exchange Act”) during
    the 12 months preceding the date of this Agreement. The following documents
    (collectively, the “Exchange Act Documents”) complied when
    filed in all material respects with the Exchange Act and the applicable rules
    and regulations of the Commission thereunder, and did not, when so filed,
    contain any untrue statement of a material fact or omit to state a material
    fact necessary to make the statements therein, in the light of the circumstances
    under which they were made, not misleading:  

  
          (i)
      Annual Report on Form 10-K for the Year
      ended June 27, 2003;  

          (ii)
      Quarterly Reports on Form 10-Q for the
      Quarters ended September 26, 2003 and December 26, 2003;  

          (iii)
      Definitive Proxy Statement filed with the
      Commission on November 4, 2003; and  

          (iv)
      All other documents filed by the Company
      with the Commission since June 27, 2003.  

  

   The financial statements of the Company
    included in the Exchange Act Documents comply in all material respects with
    applicable accounting requirements and the rules and regulations of the Commission
    with respect thereto as in effect at the time of filing. Such financial statements
    have been prepared in accordance with United States generally accepted accounting
    principles applied on a consistent basis during the periods involved (“GAAP”), except as may be
    otherwise specified in such financial statements or the notes thereto and
    except that unaudited financial statements may not contain all footnotes required
    by GAAP, and fairly present in all material respects the financial position
    of the Company and its consolidated subsidiaries as of and for the dates thereof
    and the results of operations and cash flows for the periods then ended, subject,
    in the case of unaudited statements, to normal, immaterial, year-end audit
    adjustments.  



  3
   






        (b)
    The information contained in the Exchange
    Act Documents, taken as a whole and as amended to the date hereof, does not
    as of the date hereof contain any untrue statement of a material fact or omit
    to state a material fact necessary to make the statements therein, in the
    light of the circumstances under which they were made, not misleading. 
  

        (c)
    The Company has been duly incorporated, is
    validly existing as a corporation in good standing under the laws of the jurisdiction
    of its incorporation, has the corporate power and authority to own or lease
    its properties and to conduct its business as currently conducted and as described
    in the Exchange Act Documents (as defined below) and is duly qualified to
    transact business and is in good standing in each jurisdiction in which the
    conduct of its business or its ownership or leasing of property requires such
    qualification, except to the extent that the failure to be so qualified or
    be in good standing would not reasonably be expected to have a material adverse
    effect on the Company and its Subsidiaries, taken as a whole.  

        (d)
    Each “significant subsidiary” (as
    defined in Rule 1.02(w) of Regulation S-X under the Securities Act of 1933,
    as amended (the “Securities Act”))
    of the Company that is incorporated in the United States (the “Subsidiaries”)
    has been duly incorporated, is validly existing as a corporation in good standing
    under the laws of the jurisdiction of its incorporation, has the corporate
    power and authority to own its property and to conduct its business as currently
    conducted and described in the Exchange Act Documents and is duly qualified
    to transact business and is in good standing in each jurisdiction in which
    the conduct of its business or its ownership or leasing of property requires
    such qualification, except to the extent that the failure to be so qualified
    or be in good standing would not reasonably be expected to have a material
    adverse effect on the Company and its Subsidiaries, taken as a whole; all
    of the issued shares of capital stock of each Subsidiary of the Company have
    been duly and validly authorized and issued, are fully paid and non-assessable
    and are owned directly by the Company, free and clear of all liens, encumbrances,
    equities or claims and free of preemptive or similar rights.  

        (e)
    This Agreement has been duly authorized,
    executed and delivered by, and is a valid and binding agreement of, the Company,
    enforceable in accordance with its terms, subject to applicable bankruptcy,
    insolvency or similar laws affecting creditors’ rights generally and
    general principles of equity and except as rights to indemnification and contribution
    in Section 11 hereof may be limited under applicable law.  



 4 






        (f)
    The Company is not required to obtain any
    consent, waiver, authorization or order of, give any notice to, or make any
    filing or registration with, any court or other federal, state, local or other
    governmental authority any regulatory or self-regulatory agency or any other
    individual, corporation, partnership, limited liability company, association,
    trust or other entity or organization (each, a “Person”)
    in connection with the execution, delivery and performance by the Company
    of this Agreement, other than (a) the filing with the Commission of the Registration
    Statement and a Form D, (b) applicable Blue Sky filings and (c) the filing
    of a listing notification with the New York Stock Exchange.  

        (g)
    The authorized capital stock of the Company
    consists of 750,000,000 shares of Common Stock, par value $0.001, of which
    211,034,000 shares were outstanding as of December 26, 2003. The authorized
    capital stock of the Company conforms as to legal matters to the description
    thereof contained in the Exchange Act Documents. Except as disclosed in the
    Exchange Act Documents or under existing employee benefits plans of the Company
    described in the Exchange Act Documents, there are no outstanding warrants,
    options, convertible securities or other rights, agreements or arrangements
    of any character under which the Company is or may be obligated to issue any
    equity securities of any kind (whether or not presently convertible into or
    exercisable or exchangeable for shares of capital stock of the Company). All
    outstanding shares of capital stock are duly authorized, validly issued, fully
    paid and nonassessable and have been issued in compliance with all applicable
    securities laws.  

        (h)
    The issue and sale of the Shares will not
    obligate the Company to issue shares of Common Stock or other securities to
    any Person (other than the Purchasers) and will not result in a right of any
    holder of Company securities to adjust the exercise, conversion, exchange
    or reset price under such securities.  

        (i)
    The shares of common stock outstanding prior
    to the issuance of the Shares have been duly authorized and are validly issued,
    fully paid and non-assessable.  

        (j)
    The Shares have been duly authorized and,
    when issued and delivered in accordance with the terms of this Agreement,
    will be validly issued, fully paid and non-assessable, and the issuance of
    such Shares will not be subject to any preemptive or similar rights. 
  

        (k)
    The execution and delivery by the Company
    of, and the performance by the Company of its obligations under, this Agreement
    will not contravene any provision of applicable law or the certificate of
     



 5  






   incorporation or by-laws of the Company
    or any agreement or other instrument binding upon the Company or any of its
    Subsidiaries that is material to the Company and its Subsidiaries, taken as
    a whole, or any judgment, order or decree of any governmental body, agency
    or court having jurisdiction over the Company or any Subsidiary, and no consent,
    approval, authorization or order of, or qualification with, any governmental
    body or agency is required for the performance by the Company of its obligations
    under this Agreement, except such as may be required by the securities or
    Blue Sky laws of the various states or foreign jurisdictions in connection
    with the offer and sale of the Shares and by Federal and state securities
    laws with respect to the Company’s obligations under Sections 8 and 10
    of this Agreement.  

        (l)
    Other than intraquarter working capital fluctuations
    of the type described in the Exchange Act Documents, there has not occurred
    any material adverse change in the condition, financial or otherwise, or in
    the earnings, business or operations of the Company and its Subsidiaries,
    taken as a whole, since December 26, 2003.  

        (m)
    There are no legal or governmental proceedings
    pending or threatened to which the Company or any of its Subsidiaries is a
    party or to which any of the properties of the Company or any of its Subsidiaries
    is subject other than proceedings accurately described in all material respects
    in the Exchange Act Documents and proceedings that would not reasonably be
    expected to have a material adverse effect on the Company and its Subsidiaries,
    taken as a whole, or that would have any material effect on the power or ability
    of the Company to perform its obligations under this Agreement to consummate
    the transactions contemplated by this Agreement.  

        (n)
    Except as described in the Exchange Act Documents
    or as would not reasonably be expected by the Company to result in a material
    adverse effect, neither the Company nor any Subsidiary (i) is in default under
    or in violation of (and no event has occurred that, with notice or lapse of
    time or both, would result in a default by the Company or any Subsidiary under)
    any indenture, loan, or credit agreement of any kind or any other instrument
    to which it is a party or by which any of its properties is bound, (ii) is
    in violation of any order of any court, arbitrator or governmental body or
    (iii) is or has been in violation of any statute, rule or regulation of any
    governmental authority, including without limitation all foreign, federal,
    state and local laws applicable to its business, except in the case of clauses
    (i), (ii) and (iii) as would not have or reasonably be expected to result
    in a material adverse effect on the Company and its Subsidiaries, taken as
    a whole.  



 6  






        (o)
    Except as described in the Exchange Act Documents,
    the Company and its Subsidiaries (i) are in compliance with any and all applicable
    foreign, federal, state and local laws and regulations relating to the protection
    of human health and safety, the environment or hazardous or toxic substances
    or wastes, pollutants or contaminants (“Environmental Laws”),
    (ii) have received all permits, licenses or other approvals required of them
    under applicable Environmental Laws to conduct their respective businesses
    and (iii) are in compliance with all terms and conditions of any such permit,
    license or approval, except where such noncompliance with Environmental Laws,
    failure to receive required permits, licenses or other approvals or failure
    to comply with the terms and conditions of such permits, licenses or approvals
    would not, alone or in the aggregate, reasonably be expected to have a material
    adverse effect on the Company and its Subsidiaries, taken as a whole. 
  

        (p)
    Except as described in the Exchange Act Documents,
    there are no costs or liabilities associated with Environmental Laws (including,
    without limitation, any capital or operating expenditures required for clean-up,
    closure of properties or compliance with Environmental Laws or any permit,
    license or approval, any related constraints on operating activities and any
    potential liabilities to third parties) which would, alone or in the aggregate,
    reasonably be expected to have a material adverse effect on the Company and
    its Subsidiaries, taken as a whole.  

        (q)
    Except as described in the Exchange Act Documents,
    the Company and its Subsidiaries own or possess, or can acquire on reasonable
    terms, all material patents, patent rights, licenses, inventions, copyrights,
    know-how (including trade secrets and other unpatented and/or unpatentable
    proprietary or confidential information, systems or procedures), trademarks,
    service marks and trade names currently employed by them in connection with
    the business now operated by them, and neither the Company nor any of its
    Subsidiaries has received any notice of infringement of or conflict with asserted
    rights of others with respect to any of the foregoing which, alone or in the
    aggregate, would reasonably be expected to have a material adverse effect
    on the Company and its Subsidiaries, taken as a whole.  

        (r)
    The Company and its Subsidiaries have good
    and marketable title in fee simple to all real property owned by them that
    is material to the business of the Company and its Subsidiaries and good and
    marketable title in all personal property owned by them that is material to
    the business of the Company and its Subsidiaries, in each case free and clear
    of all liens, except for liens as do not materially affect the value of such
    property and do not materially interfere with the use made and proposed to
    be made of such property by the Company and its Subsidiaries  



 7  






   and liens for the payment of federal,
    state or other taxes, the payment of which is neither delinquent nor subject
    to penalties. Any real property and facilities held under lease by the Company
    and its Subsidiaries are held by them under valid, subsisting and enforceable
    leases of which the Company and its Subsidiaries are in compliance in all
    material respects.  

        (s)
    No material labor dispute exists or, to the
    knowledge of the Company, is imminent with respect to any of the employees
    of the Company or its Subsidiaries which could reasonably be expected to result
    in a material adverse effect on the Company and its Subsidiaries, taken as
    a whole.  

        (t)
    The Company is in material compliance with
    all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it
    as of the Closing Date. The Company and its Subsidiaries maintain a system
    of internal accounting controls sufficient to provide reasonable assurance
    that (i) transactions are executed in accordance with management’s general
    or specific authorizations, (ii) transactions are recorded as necessary to
    permit preparation of financial statements in conformity with GAAP and to
    maintain asset accountability, (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 the existing assets
    at reasonable intervals and appropriate action is taken with respect to any
    differences. The Company has established disclosure controls and procedures
    (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company
    and designed such disclosure controls and procedures to ensure that material
    information relating to the Company, including its Subsidiaries, is made known
    to the certifying officers by others within those entities. The Company’s
    certifying officers have evaluated the effectiveness of the Company’s
    controls and procedures as of the date prior to the filing date , as stated
    in such report, of the most recently filed periodic report under the Exchange
    Act (such date, the “Evaluation Date”).
    The Company presented in its most recently filed periodic report under the
    Exchange Act the conclusions of the certifying officers about the effectiveness
    of the disclosure controls and procedures based on their evaluations as of
    the Evaluation Date. Since the Evaluation Date, there have been no significant
    changes in the Company’s internal controls (as such term is defined in
    Item 307(b) of Regulation S-K under the Exchange Act) or, the Company’s
    knowledge, in other factors that could significantly affect the Company’s
    internal controls.  

        (u)
    Except as set forth in the Exchange Act documents,
    there are no relationships or transactions involving the Company that would
    be required to be disclosed by the Company pursuant to Item 402 of Regulation
    S-K under the Securities Act.  



 8  






        (v)
    Since December 26, 2003, except as specifically
    disclosed in the Exchange Act Documents, (i) the Company has not materially
    altered its method of accounting (other than as required by GAAP) or the identity
    of its auditors, (ii) the Company has not declared or made any dividend or
    distribution of cash or other property to its stockholders or purchased, redeemed
    or made any agreements to purchase or redeem any shares of its capital stock
    and (iii) the Company has not issued any equity securities to any executive
    officer, director or Affiliate, except pursuant to existing Company stock
    option or stock purchase plans. Except as specified in the Exchange Act Documents,
    the Company does not have pending before the Commission any request for confidential
    treatment of information.  

        (w)
    The Company has not, in the twelve months
    preceding the date hereof, received notice from any market on which the Common
    Stock is or has been listed or quoted to the effect that the Company is not
    in compliance with the listing or maintenance requirements of such market.
     

        (x)
    The Company is not, and after giving effect
    to the offering and sale of the Shares and the application of the proceeds
    thereof will not be, required to register as, an “investment company”
    as such term is defined in the Investment Company Act of 1940, as amended.
     

        (y)
    Neither the Company nor any Affiliate (as
    defined in Rule 501(b) of Regulation D under the Securities Act) of the Company
    has, directly, or through any agent, (i) sold, offered for sale, solicited
    offers to buy or otherwise negotiated in respect of, any security (as defined
    in the Securities Act) which is or will be integrated with the sale of the
    Shares in a manner that would require the registration under the Securities
    Act of the issuance and sale of the Shares by the Company pursuant to this
    Agreement; or (ii) offered, solicited offers to buy or sold the Shares by
    any form of general solicitation or general advertising (as those terms are
    used in Regulation D under the Securities Act) or in any manner involving
    a public offering within the meaning of Section 4(2) of the Securities Act;
    and neither the Company nor any Affiliate of the Company will engage in any
    of the actions described in clauses (i) and (ii) of this paragraph. 
  

        (z)
    Subject to the accuracy of the Purchaser’s
    representations herein, it is not necessary in connection with the offer,
    sale and delivery of the Shares to the Purchasers in the manner contemplated
    by this Agreement to register the Shares under the Securities Act. 
  

        (aa)
    The Company shall comply with all requirements
    of the New York Stock Exchange with respect to the issuance of the Shares
    and the listing thereof on the New York Stock Exchange.  



 9  






        (bb)
    The Company has not taken and will not, in
    violation of applicable law, take, any action designed to or that might reasonably
    be expected to cause or result in stabilization or manipulation of the price
    of the Common Stock to facilitate the sale or resale of the Shares. 
  

        (cc)
    The Company is eligible to file a registration
    statement on Form S-3.  

        (dd)
    The Company shall, prior to the open of trading
    succeeding the execution of this Agreement issue a press release in order
    to publicly disclose the sale of Shares pursuant to this Agreement, which
    press release shall contain all the material terms of the transactions contemplated
    hereunder and otherwise disclose all material information possessed by the
    Purchaser; provided that no disclosure will be made identifying the Purchaser.
    In addition, as promptly as practicable after the Closing, the Company shall
    file a Form 8-K disclosing the transactions contemplated hereunder and including
    as exhibits all agreements executed in connection with such transactions.
    Except for the material terms and conditions of this Agreement which shall
    all be disclosed as provided in the first sentence, the Company confirms that
    neither it, nor to its knowledge any other Person acting on its behalf, has
    provided any of the Purchasers or their agents or counsel with any information
    that the Company believes constitutes material, non-public information. The
    Company understands and confirms that the Purchasers will rely on the foregoing
    representations and covenants in effecting transactions in securities of the
    Company.  

        (ee)
    No stockholder of the Company has any right
    (which has not been waived) to require the Company to register the sale of
    any shares owned by such stockholder under the Securities Act in the Registration
    Statement (as defined in Section 8(a)) to be filed by the Company on behalf
    of the Purchaser pursuant to Section 8(a).  



      7. 
  Representations, Warranties and Covenants
  of the Purchasers. Each
  Purchaser severally represents and warrants to, and covenants with, the Company
  that:  


        (a)
    The Purchaser is an “accredited investor”
    as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
    Act or a “qualified institutional buyer” as defined in Rule 144A
    under the Securities Act, and has requested, received, reviewed and considered
    all information it deems relevant in making an informed decision to purchase
    the Shares. The Purchaser is experienced in evaluating companies such as the
    Company. At no time was the Purchaser presented with or solicited by any publicly
    issued or circulated newspaper, mail, radio, television, or to  



 10  






   the Purchaser’s knowledge, any
    other form of general advertising or solicitation in connection with the offer,
    sale and purchase of the Shares.  

        (b)
    The Purchaser is acquiring the number of
    Shares set forth on the signature page hereto in the ordinary course of its
    business and for its own account for investment only and with no present intention
    of distributing any of such Shares without prejudice, however, to such Purchaser’s
    right, subject to the provisions of this Agreement, to sell or otherwise dispose
    of all or any part of such Shares pursuant to an effective registration statement
    under the Securities Act or under an exemption from such registration, in
    compliance with applicable federal and state securities laws and subject to
    this Agreement. Nothing contained herein shall be deemed a representation
    or warranty by such Purchaser to hold Shares for any period of time. Such
    Purchaser does not have any arrangement or understanding with any other Persons
    regarding the distribution of such Shares, other than as contemplated in Section
    8 of this Agreement; without prejudice, however, to such Purchaser’s
    right, subject to the provisions of this Agreement, to sell or otherwise dispose
    of all or any part of such Securities pursuant to an effective registration
    statement under the Securities Act or under an exemption from such registration
    and in compliance with applicable federal and state securities laws. 
  

        (c)
    The Purchaser will not, directly or indirectly,
    offer, sell, pledge, transfer or otherwise dispose of (or solicit offers to
    buy, purchase or otherwise acquire or take a pledge of) any of the Shares,
    except in compliance with this Agreement and the Securities Act and the applicable
    rules and regulations of the Commission thereunder, including without limitation
    if applicable, the prospectus delivery requirements in connection with any
    sales made under the Registration Statement referred to in Section 8 hereof.
  

        (d)
    The Purchaser will have, on or prior to the
    Closing Date, furnished to the Company a fully completed Selling Stockholder
    Questionnaire attached as Appendix I hereto for use in preparation of the
    Registration Statement and all of the information contained therein will be
    true and correct as of the Closing Date.  

        (e)
    The Purchaser will notify the Company immediately
    of any change in any such information required to be disclosed until such
    time as the Purchaser has sold all of its Shares or until the Company is no
    longer required to keep the Registration Statement effective.  

        (f)
    In connection with its decision to purchase
    the number of Shares set forth on the signature page hereto, the Purchaser
    (i) has relied only upon the Exchange Act Documents and the representations
    and  



 11  






   warranties of the Company contained
    herein and the information described in Section 7(a), and (ii) has not relied
    on any information or advice furnished by or on behalf of Bear Stearns &
    Co., Inc.  

        (g)
    The Purchaser acknowledges that the certificates
    evidencing the Shares will be imprinted with a legend in substantially the
    following form (and a stop-transfer order may be placed against transfer of
    the certificates for the Shares):  

  
     “THE SECURITIES REPRESENTED
      BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
      IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER SAID ACT UNTIL THE PASSAGE OF TWO YEARS FROM [CLOSING DATE], UNLESS
      THE  SECURITIES ARE OTHERWISE SOLD, TRANSFERRED
      OR ASSIGNED IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS, AND THE COMPANY
      RECEIVES AN OPINION OF COUNSEL AS TO THE EXEMPTION FROM REGISTRATION OF
      SUCH SALE, TRANSFER OR  ASSIGNMENT. THESE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
      SECURED BY SUCH SECURITIES, PROVIDED SUCH PLEDGE IS MADE IN COMPLIANCE WITH
      APPLICABLE LAW.”  

  

   The Purchaser acknowledges that there
    may occasionally be times when the Company determines that it must suspend
    the use of the Prospectus (as defined in Section 11(a)) forming part of the
    Registration Statement, as set forth in Section 10. Certificates evidencing
    the Shares shall not contain any legend (i) after such Shares have been sold
    pursuant to an effective registration statement, (ii) following any sale of
    such Shares pursuant to and in compliance with Rule 144 or (iii) while such
    Shares are eligible for sale under Rule 144(k) and, within five business days
    after receipt of a Purchaser’s stock certificate for cancellation, together
    with evidence reasonably satisfactory to the Company or its counsel that any
    of the foregoing conditions have been satisfied, the Company shall deliver
    or cause to be delivered instructions to the Company’s transfer agent
    to deliver to such Purchaser or its transferee either (i) shares via electronic
    DTC delivery or (ii) a certificate representing such Shares that is free from
    all restrictive and other legends. The Company may not make any notation on
    its records or give instructions to any transfer agent of the Company that
    enlarge the restrictions on transfer set forth in this Section except as it
    may reasonably determine are necessary or appropriate to  



 12  






   comply or to ensure compliance with
    those applicable laws that are enacted or modified after the Closing. 
  

        (h)
    The Purchaser will notify the Company promptly
    of the sale of any of its Shares, other than (i) sales pursuant to a Registration
    Statement contemplated in Section 8 of this Agreement and (ii) sales following
    termination of the transfer restrictions described in Section 12, and the
    Purchaser will furnish any information reasonably requested by the Company,
    including an opinion of counsel reasonably satisfactory to the Company, to
    evidence the exemption from the registration requirements of the Securities
    Act, the applicable rules and regulations of the Commission thereunder, and
    state securities laws, in reliance upon which such sales have been made. 
  

        (i)
    This Agreement has been duly authorized,
    executed and delivered by, and is a valid and binding agreement of, the Purchaser,
    enforceable in accordance with its terms, subject to applicable bankruptcy,
    insolvency or similar laws affecting creditors’ rights generally and
    general principles of equity and except as rights to indemnification and contribution
    in Section 11 hereof may be limited under applicable law.  

        (j)
    The Purchaser will not use any of the Shares
    acquired pursuant to this Agreement to cover any short position in the Common
    Stock if doing so would be in violation of applicable securities laws. 
  

        (k)
    The Purchaser will hold in confidence all
    information concerning this Agreement and the placement of Shares hereunder
    until the earlier of such time as the Company has made a public announcement
    concerning this Agreement and the placement of Shares hereunder, or this Agreement
    is terminated. 

        (l)
    The Purchaser represents, warrants and covenants
    neither the Purchaser nor any Affiliate of such Purchaser which: (i) had knowledge
    of the transactions contemplated hereby; (ii) has or shares discretion relating
    to such Purchaser’s investments or trading or information concerning
    such Purchaser’s investments, including in respect of the Shares; or
    (iii) is subject to such Purchaser’s review or input concerning such
    Affiliate’s investments or trading, has or will, directly or indirectly,
    during the period beginning on the date on which the Company or a financial
    advisor to the Company, first contacted such Purchaser regarding the transactions
    contemplated by this Agreement and ending earlier of the date the transaction
    is publicly announced, the Closing date, or the date the transaction is described
    in a Current Report on Form 8-K filed by the Company, engage in: (1) any “short
    sales” (as such term is defined in Rule 3b-3 promulgated under the Exchange
    Act) of the  



 13  






   Common Stock, including, without
    limitation, the maintaining of any short position with respect to, establishing
    or maintaining a “put equivalent position” (within the meaning of
    Rule 16a-1(h) under the Exchange Act) with respect to, entering into any swap,
    derivative transaction or other arrangement (whether any such transaction
    is to be settled by delivery of Common Stock, other securities, cash or other
    consideration) that transfers to another, in whole or in part, any economic
    consequences or ownership, or otherwise dispose of, any Common Stock by the
    Purchaser; or (2) any hedging transaction which establishes a net short position
    with respect to the Common Stock (clauses (1) and (2) together, a “Short
    Sale”); except for (A) Short Sales
    by a Purchaser or Affiliate of such Purchaser which was, prior to the date
    on which such Purchaser was first contacted by the Company or a financial
    advisor to the Company regarding the transactions contemplated by this Agreement,
    a market maker for the Common Stock, provided that such Short Sales are in
    the ordinary course of business of such Purchaser or Affiliate of such Purchaser
    and are in compliance with the Securities Act, the rules and regulations under
    the Securities Act and such other securities laws as may be applicable, (B)
    Short Sales by the Purchaser or an Affiliate of such Purchaser which by virtue
    of the procedures of such Purchaser or Affiliate of such Purchaser are made
    without knowledge of the transactions contemplated by this Agreement or (C)
    Short Sales by the Purchaser or an Affiliate of such Purchaser to the extent
    that such Purchaser or Affiliate of such Purchaser is acting in the capacity
    of a broker-dealer executing unsolicited third-party transactions. 
  



      8. 
  Shelf Registration.
  The Company shall:  


        (a)
    use all reasonable efforts to prepare and
    file or cause to be prepared and filed with the Commission, as soon as practicable
    but in any event by the date (the “Filing
    Deadline Date”) ten business days
    after the Closing Date, a registration statement (the “Registration Statement”)
    registering the resale from time to time by Purchasers of all of the Shares
    (including, for purposes of this Section 8 only, any shares of Common Stock
    issued on or about the Closing Date by the Company to any Purchaser or its
    Affiliates as an incentive to convert the Company’s 6.50% Senior Secured
    Convertible Notes due 2009 held by such persons, but not the Common Stock
    underlying such notes). The Registration Statement shall be on Form S-3 or
    a successor form permitting registration of such Shares for resale by the
    Purchasers from time to time in accordance with the plan of distribution contained
    therein. The Company shall use all reasonable efforts, subject to receipt
    of necessary information from the Purchaser, to cause the Registration Statement
    to be declared effective under the Securities Act as promptly as is practicable
    but in any event by the date (the “Effectiveness Deadline Date”)
    that is or sixty days after the date the Registration Statement is filed.
     



 14  






        (b)
    prepare and file with the Commission such
    amendments to the Registration Statement as may be necessary to keep such
    Registration Statement continuously effective for a period not to exceed the
    earlier of (i) the second anniversary of the Closing Date, or (ii) such time
    as all Shares purchased by such Purchaser pursuant to this Agreement have
    been sold pursuant to a registration statement or pursuant to Rule 144 under
    the Securities Act (such period, the “Effectiveness
    Period”); cause the related prospectus
    to be supplemented by any required Prospectus supplement, and as so supplemented
    to be filed pursuant to Rule 424 (or any similar provisions then in force)
    under the Securities Act; and use all reasonable efforts to comply with this
    Agreement and the provisions of the Securities Act applicable to it with respect
    to the disposition of all securities covered by such Registration Statement
    during the Effectiveness Period in accordance with this Agreement and the
    intended methods of disposition by the sellers thereof set forth in such Registration
    Statement as so amended or such Prospectus as so supplemented.  

        (c)
    as promptly as practicable give notice to
    the Purchaser (i) when any Prospectus, Prospectus supplement, or the Registration
    Statement or a post-effective amendment to the Registration Statement has
    been filed with the Commission and, with respect to a Registration Statement
    or any post-effective amendment, when the same has been declared effective.
     

        (d)
    use all reasonable efforts to obtain the
    withdrawal of any order suspending the effectiveness of the Registration Statement
    or the lifting of any suspension of the qualification (or exemption from qualification)
    of any of the Shares for sale in any jurisdiction in which they have been
    qualified for sale, in either case at the earliest possible moment, and provide
    prompt notice to the Purchaser of the withdrawal of any such order. 
  

        (e)
    during the Effectiveness Period, deliver
    to the Purchaser in connection with any sale by the Purchaser of Shares pursuant
    to the Registration Statement, without charge, as many copies of the Prospectus
    or Prospectuses relating to such Shares (including each preliminary prospectus)
    and any amendment or supplement thereto as such the Purchaser may reasonably
    request.  

        (f)
    file documents required of the Company for
    customary Blue Sky clearance in states specified in writing by the Purchaser;
    provided that the Company will not be required to (i) qualify as a foreign
    corporation or as a dealer in securities in any jurisdiction where it would
    not otherwise be required to qualify but for this Agreement or (ii) take any
     



 15  






   action that would subject it to general
    service of process in suits or to taxation in any such jurisdiction where
    it is not then so subject.  

        (g)
    bear all fees and expenses incurred in connection
    with the performance by the Company of its obligations under paragraphs (a)
    through (f) of this Section whether or not the Registration Statement is declared
    effective, other than fees and expenses, if any, of counsel or other advisors
    to the Purchaser or underwriting discounts, brokerage fees and commissions
    incurred by the Purchaser.  



      9. 
  Delay in Filing or Effectiveness of Registration
  Statement. If the  Registration
  Statement is not filed by the Company with the Commission on or prior to the
  Filing Deadline Date, then for each day following the Filing Deadline Date,
  until but excluding the date the Registration Statement is filed, or if the
  Registration Statement is not declared effective by the Commission by the Effectiveness
  Deadline Date, or if, after the date the registration statement is declared
  effective, sales pursuant to the registration statement are suspended for more
  than the periods set forth in Section 10(c) below, then for each day following
  the Filing Deadline Date or Effectiveness Deadline Date (as the case may be),
  until but excluding the date the Registration Statement is filed or the Commission
  declares the Registration Statement effective (as the case may be), and for
  each day in excess of the days permitted for suspensions under Section 10(c),
  the Company shall, for each such day, pay each Purchaser that has completed
  and delivered to the Company, at least five business days prior to the date
  the Registration Statement is declared effective, a Selling Stockholder Questionnaire,
  as liquidated damages and not as a penalty, an amount equal to a rate per year
  of 12% of the Purchase Price for the first 28-day period and a rate per year
  of 18% of the Purchase Price thereafter; and for any such day, such payment
  shall be made no later than the first business day of the calendar month next
  succeeding the month in which such day occurs and shall be prorated for partial
  periods.  

      The parties
  agree that the sole damages payable for a violation of the terms of this Agreement
  with respect to which liquidated damages are expressly provided shall be such
  liquidated damages. Nothing shall preclude the Purchaser from pursuing or obtaining
  specific performance or other equitable relief with respect to this Agreement.
   

      The parties
  hereto agree that the liquidated damages provided for in this Section 9 constitute
  a reasonable estimate of the damages that may be incurred by the Purchaser by
  reason of the failure of the Registration Statement to be filed or declared
  effective in accordance with the provisions hereof, except in the case of the
  Company’s willful breach.  

      10.
  Transfer of Shares After Registration; Suspension.
   

 16  






        (a)
    Each Purchaser agrees that it will not effect
    any disposition of the Shares or its right to purchase the Shares that would
    constitute a sale within the meaning of the Securities Act except as contemplated
    in the Registration Statement referred to in Section 8(a) and as described
    below or as otherwise permitted by law, and that it will promptly notify the
    Company of any changes in the information set forth in the Registration Statement
    regarding the Purchaser or its plan of distribution.  

        (b)
    The Company shall, as promptly as practicable,
    give notice to the Purchaser (i) of any request, following the effectiveness
    of the Registration Statement under the Securities Act, by the Commission
    or any other federal or state governmental authority for amendments or supplements
    to any Registration Statement or related prospectus or for additional information,
    (ii) of the issuance by the Commission or any other federal or state governmental
    authority of any stop order suspending the effectiveness of the Registration
    Statement or the initiation or threatening of any proceedings for that purpose,
    (iii) of the receipt by the Company of any notification with respect to the
    suspension of the qualification or exemption from qualification of any of
    the Shares for sale in any jurisdiction or the initiation or threatening of
    any proceeding for such purpose, (iv) of the occurrence of a Material Event
    (as defined in Section 10(c)) and (v) of the determination by the Company
    that a post-effective amendment to a Registration Statement will be filed
    with the Commission, which notice may, at the discretion of the Company (or
    as required pursuant to paragraph 10(c)), state that it constitutes a Deferral
    Notice, in which event the provisions of Section 10(c) shall apply. 
  

        (c)
    The Company shall, upon (A) the issuance
    by the Commission of a stop order suspending the effectiveness of the 
    Registration Statement or the initiation of proceedings
    with respect to the Registration Statement under Section 8(d) or 8(e) of the
    Securities Act, (B) the occurrence of any event or the existence of any fact
    (a “Material Event”)
    as a result of which the Registration Statement shall contain any untrue statement
    of a material fact or omit to state any material fact required to be stated
    therein or necessary to make the statements therein not misleading, or the
    related prospectus shall contain any untrue statement of a material fact or
    omit to state any 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, or (C) the occurrence or existence of any
    pending corporate development that, in the reasonable discretion of the Company,
    makes it appropriate to suspend the availability of the Registration Statement
    and the related Prospectus, (i) in the case of clause (B) above, subject to
    the next sentence, as promptly as practicable prepare and file, if necessary
    pursuant to applicable law, a post-effective amendment to such Registration
    Statement or a supplement  



 17  






   to the related Prospectus or any
    document incorporated therein by reference or file any other required document
    that would be incorporated by reference into such Registration Statement and
    Prospectus so that such Registration Statement does not contain any untrue
    statement of a material fact or omit to state any material fact required to
    be stated therein or necessary to make the statements therein not misleading,
    and such prospectus does not contain any untrue statement of a material fact
    or omit to state any 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, as thereafter delivered to the purchasers
    of the Shares being sold thereunder, and, in the case of a post-effective
    amendment to the Registration Statement, subject to the next sentence, use
    all reasonable efforts to cause it to be declared effective as promptly as
    is practicable, and (ii) give notice (which notice, in the case of clauses
    (B) and (C) above, need not specify the reasons for such deferral) to the
    Purchasers that the availability of the Registration Statement is suspended
    (a “Deferral Notice”)
    and, upon receipt of any Deferral Notice, the Purchaser agrees not to sell
    any Shares pursuant to the Registration Statement until such Purchaser’s
    receipt of copies of the supplemented or amended prospectus provided for in
    clause (i) above, or until it is advised in writing by the Company that the
    Prospectus may be used, and has received copies of any additional or supplemental
    filings that are incorporated or deemed incorporated by reference in such
    Prospectus. The Company will use all reasonable efforts to ensure that the
    use of the Prospectus may be resumed (x) in the case of clause (A) and (B)
    above, as promptly as is practicable, and (y) in the case of clause (C) above,
    as soon as, in the sole judgment of the Company, public disclosure of such
    development would not be prejudicial to or contrary to the interests of the
    Company or, if necessary to avoid unreasonable burden or expense, as soon
    as practicable thereafter. The Company shall be entitled to exercise its right
    under this Section 10(c) to suspend the availability of the Registration Statement
    or any Prospectus no more than four (4) times in any 12 month period and for
    no more than an aggregate of 90 days in any 12 month period (each such suspension
    a “Deferral Period”)
    and provided that no single Deferred Period shall last more than 45 days.
    The Company shall use all reasonable efforts to limit the duration and number
    of any Deferral Periods. Each Purchaser hereby agrees that upon receipt of
    any Deferral Notice from the Company, such Purchaser shall, and shall cause
    each of its officers, directors, employees, affiliates, advisors, agents and
    representatives to, keep confidential all nonpublic information set forth
    in such notice including the existence and terms of such Deferral Notice.
     



      11.
  Indemnity and Contribution.
   

 18  






        (a)
    The Company agrees to indemnify and hold
    harmless such Purchasers and each Person, if any, who controls such Purchasers
    within the meaning of either Section 15 of the Securities Act or Section 20
    of the Exchange Act from and against any and all losses, claims, damages and
    liabilities (including, without limitation, any legal or other expenses reasonably
    incurred in connection with defending or investigating any such action or
    claim) caused by any untrue statement or alleged untrue statement of a material
    fact contained in the Registration Statement or the prospectus included in
    the Registration Statement, as amended or supplemented by any amendment or
    prospectus supplement, including post-effective amendments, and all material
    incorporated by reference in such prospectus (the “Prospectus”) or in any
    amendment or supplement thereto or in any preliminary prospectus, or caused
    by any omission or alleged omission to state therein a material fact required
    to be stated therein or necessary to make the statements therein not misleading,
    except insofar as such losses, claims, damages or liabilities are caused by
    (i) any such untrue statement or omission or alleged untrue statement or omission
    based upon information relating to such Purchaser furnished to the Company
    in writing by such Purchaser expressly for use therein, or (ii) the failure
    of such Purchaser to comply with the covenants and agreements contained in
    Sections 7 and 10 hereof respecting resale of the Shares.  

        (b)
    Each Purchaser agrees to indemnify and hold
    harmless the Company, its directors and its officers and each Person, if any,
    who controls the Company within the meaning of either Section 15 of the Securities
    Act or Section 20 of the Exchange Act, from and against any and all losses,
    claims, damages and liabilities (including, without limitation, any legal
    or other expenses reasonably incurred in connection with defending or investigating
    any such action or claim), insofar as such losses, claims, damages or liabilities
    are caused by (i) the failure of such Purchaser to comply with the covenants
    and agreements contained in Sections 7 and 10 hereof respecting resale of
    the Shares, (ii) any untrue statement or alleged untrue statement of a material
    fact contained in the Registration Statement or the Prospectus or in any amendment
    or supplement thereto or in any preliminary prospectus, or caused by any omission
    or alleged omission to state therein a material fact required to be stated
    therein or necessary to make the statements therein not misleading, in each
    case to the extent, but only to the extent, that such untrue statement or
    alleged untrue statement or omission or alleged omission was made in reliance
    upon and in conformity with information relating to such Purchaser furnished
    in writing by the Purchaser to the Company expressly for use in the Registration
    Statement or Prospectus, and provided that in no case shall any Purchaser
    be required to indemnify any other Person for amounts in excess of the net
    proceeds to such Purchaser from the sale of Shares under the Registration
    Statement.  



 19  






        (c)
    In case any proceeding (including any governmental
    investigation) shall be instituted involving any Person in respect of which
    indemnity may be sought pursuant to Section 11(a) or 11(b), such Person (the
    “indemnified party”)
    shall promptly notify the Person against whom such indemnity may be sought
    (the “indemnifying party”)
    in writing and the indemnifying party, upon request of the indemnified party,
    shall retain counsel reasonably satisfactory to the indemnified party to represent
    the indemnified party and any others the indemnifying party may designate
    in such proceeding and shall pay the fees and disbursements of such counsel
    related to such proceeding. In any such proceeding, any indemnified party
    shall have the right to retain its own counsel, but the fees and expenses
    of such counsel shall be at the expense of such indemnified party unless (i)
    the indemnifying party and the indemnified party shall have mutually agreed
    to the retention of such counsel at the indemnifying party’s expense
    or (ii) the named parties to any such proceeding (including any impleaded
    parties) include both the indemnifying party and the indemnified party and
    representation of both parties by the same counsel would be inappropriate
    due to actual differing interests between them. It is understood that the
    indemnifying party shall not, in respect of the legal expenses of any indemnified
    party in connection with any proceeding or related proceedings in the same
    jurisdiction, be liable for the fees and expenses of more than one separate
    firm (in addition to any local counsel) for all indemnified parties, and that
    all such fees and expenses shall be reimbursed as they are incurred. The indemnifying
    party shall not be liable for any settlement of any proceeding effected without
    its written consent, but if settled with such consent or if there be a final
    judgment for the plaintiff, the indemnifying party agrees to indemnify the
    indemnified party from and against any loss or liability by reason of such
    settlement or judgment. No indemnifying party shall, without the prior written
    consent of the indemnified party, effect any settlement of any pending or
    threatened proceeding in respect of which any indemnified party is or could
    have been a party and indemnity could have been sought hereunder by such indemnified
    party, unless such settlement includes an unconditional release of such indemnified
    party from all liability on claims that are the subject matter of such proceeding.
     

        (d)
    To the extent that the indemnification provided
    for under Section 11(a) or 11(b) is unavailable to an indemnified party or
    is insufficient in respect of any losses, claims, damages or liabilities referred
    to therein, then each indemnifying party under such paragraph, in lieu of
    indemnifying such indemnified party thereunder, shall contribute to the amount
    paid or payable by such indemnified party as a result of such losses, claims,
    damages or liabilities (i) in such proportion as is appropriate to reflect
    the relative benefits received by the indemnifying party or parties on the
    one hand and the indemnified party or parties on the  



 20  






   other hand or (ii) if the allocation
    provided by clause (i) above is not permitted by applicable law, in such proportion
    as is appropriate to reflect not only the relative benefits referred to in
    clause (i) above but also the relative fault of the indemnifying party or
    parties on the one hand and of the indemnified party or parties on the other
    hand in connection with the statements or omissions or other matters that
    resulted in such losses, claims, damages or liabilities, as well as any other
    relevant equitable considerations. The relative fault of the Purchasers on
    the one hand and the Company on the other hand shall be determined by reference
    to, among other things, whether the untrue or alleged untrue statement of
    a material fact or the omission or alleged omission to state a material fact,
    or the inaccurate or the alleged inaccurate representation or warranty relates
    to information supplied by the Purchasers or by the Company and the parties’
    relative intent, knowledge, access to information and opportunity to correct
    or prevent such statement or omission.  

        The
    parties hereto agree that it would not be just and equitable if contribution
    pursuant to this Section 11(d) were determined by pro rata allocation or by
    any other method or allocation that does not take account of the equitable
    considerations referred to in the immediately preceding paragraph. The amount
    paid or payable by an indemnified party as a result of the losses, claims,
    damages and liabilities referred to in the immediately preceding paragraph
    shall be deemed to include, subject to the limitations set forth above, any
    legal or other expenses reasonably incurred by such indemnified party in connection
    with investigating or defending any such action or claim. Notwithstanding
    this Section 11(d), the Purchasers shall not be required to contribute any
    amount in excess of the amount by which the net amount received by the Purchasers
    from the sale of the Shares to which such loss relates exceeds the amount
    of any damages that such indemnifying party has otherwise been required to
    pay by reason of such untrue or alleged untrue statement or omission or alleged
    omission. No Person guilty of fraudulent misrepresentation (within the meaning
    of Section 11(f) of the Securities Act) shall be entitled to contribution
    from any Person who was not guilty of such fraudulent misrepresentation. 
  

        (e)
    The remedies provided for in this Section
    11 are not exclusive and shall not limit any rights or remedies which may
    otherwise be available to any indemnified party at law or equity. 
  

        (f)
    The indemnity and contribution provisions
    contained in this Section 11 and the representations, warranties and other
    statements of the Company and the Purchaser contained in this Agreement shall
    survive the execution of this Agreement and shall remain operative and in
    full force and effect regardless of (i) any investigation made by or on behalf
    of the  



 21  






   Purchaser or any Person controlling
    the Purchaser, or the Company, or the Company’s officers or directors
    or any Person controlling the Company and (ii) the sale of any Shares by the
    Purchaser.  



      12.
  Termination of Conditions and Obligations.
  The conditions precedent imposed by Sections 7, 8 and 10 upon the transferability
  of the Shares shall cease and terminate as to any particular number of the Shares
  (and any legend on the Shares will be removed by the Company) at such time as
  such Shares have been effectively registered under the Securities Act and sold
  or otherwise disposed of in accordance with the intended method of disposition
  set forth in the Registration Statement covering such Shares, upon the passage
  of two years from the Closing Date, or at such time as an opinion of counsel
  satisfactory to the Company shall have been rendered to the effect that such
  conditions are not necessary in order to comply with the Securities Act. 


      13.
  Information Available.
  So long as the Registration Statement is effective covering the resale of Shares
  owned by the Purchasers, the Company will furnish to each Purchaser: 



        (a)
    as soon as practicable after it is available
    (but in the case of the Company’s Annual Report to Shareholders, within
    90 days of each fiscal year of the Company), one copy of:  

  
          (i)
      its Annual Report to Shareholders (which
      Annual Report shall contain financial statements audited in accordance with
      generally accepted accounting principles by a national firm of certified
      public accountants);  

          (ii)
      if not included in substance in the Annual
      Report to Stockholders, its Annual Report on Form 10-K;  

          
      (iii) its
      Quarterly Reports on Form 10-Q; and  

          (iv)
      a full copy of the particular Registration
      Statement covering the Shares (the foregoing, in each case, excluding exhibits
      unless specifically requested); and 

  

        (b)
    upon the reasonable request of the Purchaser,
    an adequate number of copies of the Prospectus to supply to any other party
    requiring such Prospectus.  



      14.
  Placement Agent’s Fee.
  The Purchaser acknowledges that the Company intends to pay to the Placement
  Agent for the Shares, a fee in respect of the sale of the Shares to the Purchaser.
  Each of the parties to this Agreement hereby represents that, on the basis of
  any actions and agreements by it, there are  

 22  





 no other brokers or finders entitled
  to compensation in connection with the sale of the Shares to the Purchaser.
   

      15.
  Rule 144.
   


        (a)
    The Company covenants that, if at any time
    before the end of the Effectiveness Period the Company is not subject to the
    reporting requirements of the Exchange Act, it will cooperate with the Purchaser
    and take such further reasonable action as the Purchaser may reasonably request
    in writing (including, without limitation, making such reasonable representations
    as the Purchaser may reasonably request), all to the extent required from
    time to time to enable the Purchaser to sell Shares without registration under
    the Securities Act within the limitation of the exemptions provided by Rule
    144 and Rule 144A under the Securities Act and customarily taken in connection
    with sales pursuant to such exemptions. Upon the written request of the Purchaser,
    the Company shall deliver to the Purchaser a written statement as to whether
    it has complied with such reporting requirements, unless such a statement
    has been included in the Company’s most recent report filed pursuant
    to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing,
    nothing in this Section 15 shall be deemed to require the Company to register
    any of its securities (other than the Common Stock) under any section of the
    Exchange Act.  

        (b)
    The Company shall timely file the reports
    required to be filed by it under the Exchange Act and shall timely comply
    with all other requirements set forth in the instructions to Form S-3 in order
    to allow the Company to be eligible to file registration statements on Form
    S-3.  



      16.
  Notices.
  All notices and other communications provided for or permitted hereunder shall
  be made in writing by hand delivery, by telecopier, by courier guaranteeing
  overnight delivery or by first-class mail, return receipt requested, and shall
  be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation,
  if made by telecopier, (iii) one (1) business day after being deposited with
  such courier, if made by overnight courier or (iv) on the date indicated on
  the notice of receipt, if made by first-class mail, to the parties as follows:
   


        (a)
    if to the Purchaser, at its address on the
    signature page hereto;  

         (b)
    if to the Company, to:  



 23  






  
     Silicon Graphics, Inc. 

      1500 Crittenden Lane 

      Mountain View, CA 94043 

      Attention: Sandra Escher,

      Senior Vice President and General
                  Counsel 

      Facsimile 650-933-0298  

  

         (c)
    if to the Placement Agent, to:  

  
     Bear Stearns & Co., Inc.
      

      383 Madison Avenue 

      New York, NY 10179 

      Attn: Syndicate Operations  

  



 or to such other address as such
          Person may have furnished to the other Persons identified in this Section
          16 in writing in accordance herewith.  

      17.
  No Piggyback on Registrations.
  Neither the Company nor any of its security holders (other than the Purchasers
  pursuant hereto) may include securities of the Company in the Registration Statement,
  and the Company shall not, after the date hereof, enter into any agreement providing
  any such right to any of its security holders. The Company shall not file any
  other registration statement until after the earlier of the date the registration
  statement is declared effective and the date 90 days after the Closing other
  than any registration statement on Form S-4 or Form S-8.  

      18.
  Subsequent Placements. From
  the date hereof until the earlier of the date the registration statement is
  declared effective and the date 90 days after the Closing, the Company shall
  not effect a financing through the sale of its Common Stock or common stock
  equivalents (a “Subsequent Financing”)
  unless the Company delivers to each of the Purchasers hereunder a written notice
  at least 5 business days prior to the closing of such Subsequent Financing (the
   “Subsequent
  Financing Notice”) of its intention
  to effect such Subsequent Financing, which Subsequent Financing Notice shall
  describe in reasonable detail the proposed terms of such Subsequent Financing,
  the amount of proceeds intended to be raised thereunder, the Persons or entities
  with whom such Subsequent Financing is proposed to be effected, and attached
  to which shall be any term sheet or similar document relating thereto and offer
  to each Purchaser the opportunity to participate in such Subsequent Financing
  on the same terms and conditions as set forth in the Subsequent Financing Notice.
  Each Purchaser shall have until 6:30 p.m. (New York City time) on the fifth
  (5th) business day after its receipt of the Subsequent Financing Notice to notify
  the Company of its willingness to provide, subject to completion of mutually
  acceptable documentation, an amount equal to the proportion of the aggregate
  amount to be raised in such transaction represented by such Purchaser’s
  proportionate share of  

 24  





 the amounts purchased in the transactions
  contemplated hereby, on the same terms and conditions set forth in the Subsequent
  Financing Notice.  

      Notwithstanding
  anything to the contrary herein, this Section 19 shall not apply to the following:
  (i) the granting of options or restricted stock to employees, officers, directors
  and key consultants of the Company pursuant to any stock option plan or agreement
  duly adopted by the Company’s board of directors by vote of a majority
  of the independent members of the board or a committee of independent directors
  established for such purpose, or (ii) the exercise of any security issued by
  the Company in connection with the offer and sale of the Company’s securities
  pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible
  securities, options or warrants issued and outstanding on the date hereof, provided
  such securities have not been amended since the date hereof, or (iv) the issuance
  of securities to customers, vendors or joint venture partners or in connection
  with other strategic alliances approved by the Company’s board of directors
  which involve the grant of licenses or localization, marketing or distribution,
  OEM, bundling, manufacturing or resale rights respect to the Company’s
  products or technology, the primary purpose of which is not to raise equity
  capital, or (v) the issuance of securities in connection with an equipment lease
  financing transaction or a bank financing transaction approved by the Company’s
  board of directors, no significant purpose of which is to raise equity capital;
  or (vi) the exercise of or conversion of any convertible securities, options
  or warrants issued and outstanding pursuant to subclauses (i), (iv) and (v)
  above.  

      19.
  Restriction on Actions Regarding Public
  Debt. From the Closing until the earlier
  of (a) fifteen business days after the Registration Statement has been declared
  effective or (b) 90 days after the Closing, the Company shall not (i) call any
  publicly traded convertible debt securities for redemption, (ii) make or announce
  any discretionary reduction in the conversion price or any discretionary increase
  in the conversion rate, or offer any other consideration as an incentive for
  conversion, of any publicly traded convertible debt securities or (iii) commence
  any consent solicitation with respect to any publicly traded debt securities
  for purposes of making such securities convertible or changing the terms upon
  which such securities are convertible into shares of the Company’s Common
  Stock or other equity securities.  

      20.
  Non-Public Information.
  The Company covenants and agrees that neither it nor any other Person acting
  on its behalf will provide any Purchaser or its agents with any information
  that the Company believes constitutes material non-public information, unless
  prior thereto such Purchaser shall have executed a written agreement regarding
  the confidentiality and use of such information. The Company understands and
  confirms that each Purchaser shall be relying on the foregoing representations
  in effecting transactions in securities of the Company.  

 25  





      21.
  Severability.
  If any term provision, covenant or restriction of this Agreement is held to
  be invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
  covenants and restrictions set forth herein shall remain in full force and effect
  and shall in no way be affected, impaired or invalidated thereby, and the parties
  hereto shall use their best efforts to find and employ an alternative means
  to achieve the same or substantially the same result as that contemplated by
  such term, provision, covenant or restriction, it being intended that all of
  the rights and privileges of the parties shall be enforceable to the fullest
  extent permitted by law.  

      22.
  Modification; Amendment.
  The provisions of this Agreement, including the provisions of this sentence,
  may not be amended, modified or supplemented unless pursuant to an instrument
  in writing signed by the Company and the Purchaser.  

      23.
  Entire Agreement.
  This Agreement is intended by the parties as a final expression of their agreement
  and is intended to be a complete and exclusive statement of the agreement and
  understanding of the parties hereto with respect to the subject matter contained
  herein. Except as provided in this Agreement, there are no restrictions, promises,
  warranties or undertakings, other than those set forth or referred to herein,
  with respect to such matters. This Agreement supersedes all prior agreements
  and undertakings among the parties with respect to such matters. No party hereto
  shall have any rights, duties or obligations other than those specifically set
  forth in this Agreement.  

      24.
  Counterparts.
  This Agreement may be signed in any number of counterparts, each of which shall
  be an original, with the same effect as if the signatures thereto and hereto
  were upon the same instrument.  

      25.
  Applicable Law.
  This Agreement shall be governed by and construed in accordance with the internal
  laws of the State of New York. 

      26.
  Headings.
  The headings of the sections of this Agreement have been inserted for convenience
  of reference only and shall not be deemed a part of this Agreement. 


      27.
  Independent Nature of Purchasers’ Obligations
  and Rights. The obligations of each Purchaser
  under this Agreement are several and not joint with the obligations of any other
  Purchaser, and no Purchaser shall be responsible in any way for the performance
  of the obligations of any other Purchaser under this Agreement. The decision
  of each Purchaser to purchase Securities pursuant to this Agreement has been
  made by such Purchaser independently of any other Purchaser. Nothing contained
  herein, and no action taken by any Purchaser pursuant to this Agreement, shall
  be deemed to constitute the Purchasers as a partnership, an association, a joint
  venture or any other kind of entity, or create a  

 26  





 presumption that the Purchasers are
  in any way acting in concert or as a group with respect to such obligations
  or the transactions contemplated by this Agreement. Each Purchaser acknowledges
  that no other Purchaser has acted as agent for such Purchaser in connection
  with making its investment hereunder and that no Purchaser will be acting as
  agent of such Purchaser in connection with monitoring its investment in the
  Securities or enforcing its rights under this Agreement. Each Purchaser shall
  be entitled to independently protect and enforce its rights, including without
  limitation the rights arising out of this Agreement, and it shall not be necessary
  for any other Purchaser to be joined as an additional party in any proceeding
  for such purpose.  

      28.
  Survival.
  The representations, warranties and covenants contained in this Agreement shall
  survive the Closing for a period of two years.  

      29.
  Termination. This
  Agreement may be terminated by either party in the event the closing has not
  occurred within 3 business days following the date of execution of this Agreement.
   

 27 





      IN WITNESS
  WHEREOF, the parties have executed this Agreement as of the date first written
  above.

	 	[NAME OF PURCHASER]
         

       By: __________________________________

        

              Name: _____________________________

        

              Title: ______________________________

        

              Address:____________________________

        

              Number of Shares: ____________________

        

              Aggregate Purchase Price: $ _____________

        

              Tax ID No.: _________________________

        

              Contact Name: _______________________

        

              Telephone: __________________________
      

            Name
        in which the Shares should be

             registered (if different): __________________
      

            Relationship
        between the Purchaser and 

             the Person or entity in whose name the 

             Shares should be registered (if 

             different): ____________________________



     ____________________________________


    
	Agreed to and Accepted by: 	 
	 	Silicon Graphics, Inc. 
      

       By: __________________________________

              Name: 

              Title: 




  





 EXHIBIT A 

 FORM OF OPINION OF COUNSEL FOR
  THE COMPANY  

      The opinion
  of the counsel for the Company, to be delivered pursuant to Section 5(b) of
  the Purchase Agreement shall be to the effect that:  

      (A)
      The Company has been
  duly incorporated and is validly existing as a corporation in good standing
  under the laws of the jurisdiction of its incorporation.  

      (B)
      The Purchase Agreement
  has been duly authorized, executed and delivered by, and is a valid and binding
  agreement of, the Company, enforceable in accordance with its terms, subject
  to applicable bankruptcy, insolvency or similar laws affecting creditors’
  rights generally and general principles of equity and except as rights to indemnification
  and contribution in Section 11 thereof may be limited under applicable law.
   

      (C)
       The
  Shares have been duly authorized and, when issued and delivered in accordance
  with the terms of the Purchase Agreement, will be validly issued, fully paid
  and non-assessable, and the issuance of such Shares will not be subject to any
  preemptive or similar rights set forth in any document filed as an exhibit to
  the Exchange Act Documents.  

      (D)
      
  Assuming the accuracy of the representations,
  warranties and agreements of the Purchaser in Section 7 of the Purchase Agreement,
  it is not necessary in connection with the offer, sale and delivery of the Shares
  to the Purchasers under the Purchase Agreement to register the Shares under
  the Securities Act, it being understood that no opinion is expressed as to any
  subsequent resale of any Shares.  

      (E) 
      The
  execution, delivery and performance of the Purchase Agreement by the Company
  and the consummation by the Company of the transactions contemplated by such
  agreement does not and will not (i) conflict with or violate any provision of
  its Certificate of Incorporation or Bylaws or (ii) conflict with, or constitute
  a default (or an event which with notice or lapse of time or both would become
  a default) under, or give to others any rights of termination, amendment, acceleration
  or cancellation of, any agreement specified on Schedule I hereto.  





 APPENDIX I 

 SILICON GRAPHICS, INC. 


 SELLING STOCKHOLDER QUESTIONNAIRE
   

  FOR INTENDED SALE OF 

  SHARES OF COMMON STOCK

   PURSUANT TO SHELF REGISTRATION STATEMENT
   

      The following
  questionnaire and agreement (the “Questionnaire”)
  elicits information necessary to prepare a registration statement on Form S-3
  (the “Shelf Registration Statement”)
  for the registration and resale under Rule 415 of the Securities Act of 1933,
  as amended (the “Securities Act”),
  of certain shares of common stock of Silicon Graphics, Inc. (the “Company”) to be filed by the Company with the Securities and Exchange
  Commission (the “Commission”),
  in accordance with the terms of the Purchase Agreement, dated as of February
  [__], 2004 (the “Purchase Agreement”),
  between the Company and the undersigned beneficial owner of shares of common
  stock of the Company purchased pursuant to such agreement (the “Selling
  Stockholder”). All capitalized terms
  not otherwise defined herein shall have the meaning ascribed thereto in the
  Purchase Agreement.  

      In order
  to sell or otherwise dispose of any Shares pursuant to the Shelf Registration
  Statement, you generally will be required to be named as a selling stockholder
  in the related prospectus, deliver a prospectus to purchasers of the Shares
  and be bound by the provisions of the Purchase Agreement (including certain
  indemnification provisions, as described below). If you do not complete
  this Questionnaire and deliver it to the Company as provided below you will
  not be named as a selling stockholder in the prospectus and therefore will not
  be permitted to sell any Shares pursuant to the Shelf Registration Statement.
  Please complete and deliver this Questionnaire to [__________] of [
  ____________________ ] as soon as possible and in any event no later than February
  __, 2004 [Closing Date].  

      Certain
  legal consequences arise from being named as a selling stockholder in the Shelf
  Registration Statement and the related prospectus. Accordingly, holders and
  beneficial owners of the Shares are advised to consult their own securities
  law counsel regarding the consequences of being named or not being named as
  a selling stockholder in the Shelf Registration Statement and the related prospectus.
   

      The Selling
  Stockholder, by signing and returning this Questionnaire, understands that it
  will be bound by the terms and conditions of this Questionnaire and the Purchase
  Agreement.  





      Pursuant
  to the Purchase Agreement, the undersigned has agreed to indemnify and hold
  harmless the Company, any of its directors and officers who sign the Shelf Registration
  Statement, and each person, if any, who controls the Company within the meaning
  of either Section 15 of the Securities Act or Section 20 of the Securities Exchange
  Act of 1934, as amended (the “Exchange
  Act”), from and against certain losses arising in connection
  with statements concerning the undersigned made in the Company’s Shelf
  Registration Statement or the related prospectus in reliance upon the information
  provided in this Questionnaire.  

      The undersigned
  hereby provides the following information to the Company and represents and
  warrants that such information is accurate and complete:  





 QUESTIONNAIRE 

   
   

	 	1. 	(a) Full Legal Name of Selling Stockholder:1
      

      

       ______________________________________________________
      

      	 
	 	 	 	 
	 	 	(b) Full Legal Name of Registered
        Holder (if not the same as (a) above) through which the Shares listed
        in Item 3 below are held:  

       
        ______________________________________________________
	 
	 	 	 	 
	 	 	(c) Full Legal Name of DTC participant
        (if applicable and if not the same as (b) above) through which the Shares
        listed in Item 3 below are held:  

       
        ______________________________________________________
        
	 
	 	 	 	 
	 	 	(d) If Selling Stockholder is
        not, and is not a wholly-owned subsidiary of, a company that is required
        to file periodic and other reports (e.g., Forms 10-K, 10-Q, 8-K) with
        the Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange
        Act of 1934, identify the natural person(s) who exercise voting power
        and investment control over any Shares:  

       
        ______________________________________________________
	 
	 	 	 	 
	 	2.	Address for Notices to Selling Stockholder:
      

      

      ______________________________________________________

      

      ______________________________________________________

      


Telephone: __________________________

      

      Fax: ________________________________

      

      Contact Person: _______________________	 
	 	 	 	 
	 	3.	Beneficial Ownership of the
        Shares:  

       (a) Type and principal amount
        of the Shares beneficially owned:  

       
        ______________________________________________________

        

	 


___________________    

        1 If
  this Questionnaire is being completed by or on behalf of an entity, state the
  name of that entity. 











	 	 	______________________________________________________

      

      (b) CUSIP No(s). of such Shares beneficially owned: 

      ______________________________________________________

      	 
	 	 	 	 
	 	4.	 Beneficial
        Ownership of Other Securities of the Company Owned by the Selling Stockholder.
         

       Except as set forth below in
        this Item 4, the undersigned is not the beneficial or registered owner
        of any securities of the Company other than the Shares listed above in
        Item 3.  

       (a) Type and amount of other
        securities beneficially owned by the Selling Stockholder:  

        ______________________________________________________

        

        ______________________________________________________

        

        (b) CUSIP No(s). of such other securities beneficially owned: 

        ______________________________________________________

        

        ______________________________________________________

        
	 
	 	 	 	 
	 	5.	Relationships with the Company:
         

       Except as set forth below, neither
        the undersigned nor any of its affiliates, officers, directors or principal
        equity holders (5% or more) has held any position or office or has had
        any other material relationship with the Company (or its predecessors
        or affiliates) during the past three years.  

        State any exceptions here: 
      

      
        ______________________________________________________

        

        ______________________________________________________

        

        ______________________________________________________

    
	 
	 	 	 	 
	 	6.	Plan of Distribution: 
      

       Except as set forth below, the
        undersigned (including its donees or pledgees) intends to distribute the
        Shares pursuant to the Shelf Registration Statement only as follows (if
        at all): Such Shares may be sold from time to time directly by the undersigned
        or,  
	 



   





  

	 	 	alternatively, through underwriters,
        broker-dealers or agents. If the Shares are sold through underwriters
        or broker-dealers, the Selling Stockholder will be responsible for underwriting
        discounts or commissions or agent’s commissions. Such Shares may
        be sold in one more or transactions at fixed prices, at prevailing market
        prices at the time of sale, at varying prices determined at the time of
        sale or at negotiated prices. Such sales may be effected in transactions
        (which may involve block transactions) (i) on any national securities
        exchange or quotation service on which the Shares may be listed or quoted
        at the time of sale, (ii) in the over-the-counter market, (iii) in transactions
        otherwise than on such exchanges or services or in the over-the-counter
        market or (iv) through the writing of options. In connection with sales
        of the Shares or otherwise, the undersigned may enter into hedging transactions
        with broker-dealers, which may in turn engage in short sales of the Shares
        in the course of hedging positions they assume. The undersigned may also
        sell Shares short and deliver Shares to close out short positions, or
        loan or pledge Shares to broker-dealers that in turn may sell such securities.
         

        State any exceptions here: 
      

       
        ______________________________________________________

        

        ______________________________________________________

        

        ______________________________________________________ 

     Note: In no event will such method(s)
        of distribution take the form of an underwritten offering of the Shares
        without the prior agreement of the Company. 
        	 
	 	 	 	 
	 	7. 	Broker-Dealer Status: 
      

       (a) Is the Selling Stockholder
        a registered broker-dealer? 

        

        Yes____________________   No____________________

        

        If so, please answer the remaining question in this section.  

      
          1. Please advise whether the
          Shares were received by the  Selling
          Stockholder as compensation for investment banking services or as investment
          shares, and if so please describe the circumstances:  

         
          _______________________________________________ 

      
	 


 
   





  

	 	 	
        

          _______________________________________________

           

          _______________________________________________  

      

       Note that in general we may be
        required to identify any registered broker-dealer as an underwriter in
        the prospectus.  

       (b) Affiliation with Broker-Dealers.
         

      
          Is the Selling Stockholder
          an affiliate2
          of a registered broker-dealer?  

          Yes____________________  No____________________
           

          If so, please answer the remaining
          questions in this section.  

          1.   Please describe
          the affiliation between the Selling  
          Stockholder and any registered broker-dealers:  

          _______________________________________________

          

          _______________________________________________

          

          _______________________________________________
           

          2.   If the Shares
          were purchased by the Selling Stockholder other than in the ordinary
          course of business, please describe the circumstances:  

          _______________________________________________

          

          _______________________________________________

          

          _______________________________________________
           

         3.   Please advise whether the Shares
        were received by the  Selling Stockholder
        as compensation for investment banking services or as investment shares,
        and if so please describe the circumstances:  

        

        _______________________________________________

         

        _______________________________________________ 
	 
	 	 	 	 


___________________

     2 An
“affiliate” of a specified person or entity means a person or entity
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person or entity specified.









  

	 	 	
        _______________________________________________
           

          4.   If the Selling
          Stockholder, at the time of its purchase of the Shares, had any agreements
          or understandings, directly or indirectly, with any person to distribute
          the Shares, please describe such agreements or understandings: 
        

         _______________________________________________

        

        _______________________________________________

        

        _______________________________________________

      Note that if the Selling Stockholder
        is an affiliate of a broker-dealer and did not purchase its debentures
        in the ordinary course of business or at the time of the purchase had
        any agreements or understandings, directly or indirectly, to distribute
        the securities, we may be required to identify the Selling Stockholder
        as an underwriter in the prospectus.  

      
         (c)   Beneficial
          Ownership by Natural Persons:  

         If the Selling Stockholder
          is an entity, does any natural person having voting or investment power
          over the Shares held by the Selling Stockholder?3  

          Yes____________________  No____________________

          

          If so, please state the person’s or persons’ name(s): 

          

          _______________________________________________

          

          _______________________________________________

          

          _______________________________________________ 

      
	 
	 	 	 	 
	 	8.	Beneficial Ownership by Natural
        Persons or by a Board or  Committee:
         

       Is the Selling Stockholder a
        reporting entity with the Securities and Exchange Commission? 
      
	 
	 	 	 	 


___________________

     3Please
answer “Yes” if any natural person, directly or indirectly, through
any contract, arrangement, understanding, relationship, or otherwise has or shares:
(a) voting power which includes the power to vote, or to direct the voting of,
such security; and/or, (b) investment power which includes the power to dispose,
or to direct the disposition of, the Shares held by the Selling Stockholder. 




  

	 	 	
      
          Yes____________________  No____________________

          

          If No, please answer the remaining questions in this section. 
        

         1. Please name the natural
          person or person(s) having voting and/or investment control over the
          Selling Stockholder:4
           

         
          _______________________________________________

          

          _______________________________________________

          

          _______________________________________________
           

         2. If
          the voting and/or investment control over the Selling Stockholder is held by board
          or committee, please state the name of the natural person or person(s)
          on such board or committee:  

         _______________________________________________

        

        _______________________________________________

        

        _______________________________________________

      
	 


      The undersigned
  acknowledges that it understands its obligation to comply with the provisions
  of the Exchange Act and the rules thereunder relating to stock manipulation,
  particularly Regulation M thereunder (or any successor rules or regulations),
  in connection with any offering of the Shares pursuant to the Shelf Registration
  Statement. The undersigned agrees that neither it nor any person acting on its
  behalf will engage in any transaction in violation of such provisions. 


      The Selling
  Stockholder hereby acknowledges its obligations under the Purchase Agreement
  to indemnify and hold harmless certain persons as set forth therein. 


      Pursuant
  to the Purchase Agreement, the Company has agreed under certain circumstances
  to indemnify the Selling Stockholder against certain liabilities.  

      In accordance
  with the undersigned’s obligation under the Purchase Agreement to provide
  such information as may be required by law for inclusion in the Shelf Registration
  Statement, the undersigned agrees to promptly notify the  

 ___________________

       4 Please
  include any natural person that, directly or indirectly, through any contract,
  arrangement, understanding, relationship, or otherwise has or shares: (a) voting
  power which includes the power to vote, or to direct the voting of, such security;
  and/or , (b) investment power which includes the power to dispose, or to direct
  the disposition of, the Shares held by the Selling Stockholder.  





 Company of any inaccuracies or changes
  in the information provided herein that may occur subsequent to the date hereof
  at any time while the Shelf Registration Statement remains effective. 


      All notices
  hereunder and pursuant to the Purchase Agreement shall be made in writing by
  hand delivery, first class mail or air courier guaranteeing overnight delivery
  to the address set forth below.  

      By signing
  below, the undersigned consents to the disclosure of the information contained
  herein in its answers to Items 1 through 6 above and the inclusion of such information
  in the Shelf Registration Statement and the related prospectus. The undersigned
  understands that such information will be relied upon by the Company in connection
  with the preparation or amendment of the Shelf Registration Statement and the
  related prospectus.  

      Once
  this Notice and Questionnaire is executed by the Selling Stockholder and received
  by the Company, the terms of this Notice and Questionnaire, and the representations
  and warranties contained herein, shall be binding on, shall inure to the benefit
  of and shall be enforceable by the respective successors, heirs, personal representatives
  and assigns of the Company and the Selling Stockholder with respect to the Shares
  beneficially owned by such Selling Stockholder and listed in Item (3) above.
  This Agreement shall be governed in all respects by the laws of the State of
  New York.  

      IN WITNESS
  WHEREOF, the undersigned, by authority duly given, has caused this Questionnaire
  to be executed and delivered either in person or by its duly authorized agent.
   


	 	Dated: 	 
	 	 	 
	 	 	[NAME OF SELLING STOCKHOLDER]
         

       By: ____________________________
         

              Name:_______________________

              Title:  _______________________




  





 APPENDIX A 

 Definitions of Terms Used
   

      30.     
  You are the “beneficial
  owner” of a security if you directly
  or indirectly, through any contract, arrangement, understanding, relationship,
  or otherwise, have or share: (i) voting power which includes the power to vote,
  or to direct the voting of, such security, or (ii) investment power which includes
  the power to dispose, or to direct the disposition of, such security. You are
  deemed the beneficial owner of a security if you, directly or indirectly, create
  or use a trust, proxy, power of attorney, pooling arrangement or any other contract,
  arrangement, or device with the purpose or effect of divesting yourself of beneficial
  ownership of a security or preventing the vesting of such beneficial ownership.
  Finally, you are deemed to be the beneficial owner of a security if you have
  the right to acquire beneficial ownership of such security at any time within
  sixty days, including but not limited to any right to acquire (a) through the
  exercise of any option, warrant or right, or (b) through the conversion of a
  security, or (c) pursuant to the power to revoke a trust, discretionary account,
  or similar arrangement, or (d) pursuant to the automatic termination of a trust,
  discretionary account or similar arrangement. If you have acquired any security
  or power specified in (a), (b) or (c) above, with the purpose or effect of changing
  or influencing the control of the issuer, or in connection with or as a participant
  in any transaction having such purpose or effect, then immediately upon such
  acquisition you are deemed to be the beneficial owner of the securities which
  may be acquired through the exercise or conversion of such security or power.
   

      All securities
  of the same class that are beneficially owned by you, regardless of the form
  which such beneficial ownership takes, must be aggregated in calculating the
  number of shares beneficially owned by you.  

      The above
  definition is broad and although you may not actually have or share voting or
  investment power with respect to securities owned by persons in your family
  or living in your home, you should include such shares in your beneficial ownership
  disclosure, and then, as appropriate, disclaim beneficial ownership of such
  securities.  

      31.
     The term “underwriter
  or related person” includes, with respect to a proposed offering, any underwriter,
  underwriter’s counsel, financial consultant and advisors, finders, members
  of the selling or distribution group, any member participating in the proposed
  offering and any and all other persons associated with or related to and members
  of the immediate family of any of such persons. NASD Rule 2710(a)(6). 


      32.     
  The NASD defines a “member”
  as being either any broker or dealer admitted to membership in the NASD or any
  individual, partnership, corporation  





 or other legal entity admitted to membership
  in the NASD under the provisions of Articles III and IV of the By-laws. NASD
  Rule 0120(i).  

      33.
     The NASD defines a “person
  associated with a member” as being every sole proprietor, general or limited partner,
  officer, director or branch manager of any member, or any natural person occupying
  a similar status or performing similar functions, or any natural person engaged
  in the investment banking or securities business who is directly or indirectly
  controlling or controlled by such member (for example, any employee), whether
  or not any such person is registered or exempt from registration with the NASD.
  Thus, “person associated with a member”
  includes a sole proprietor, general or limited partner, officer, director or
  branch manager of an organization of any kind (whether a corporation, partnership
  or other business entity) which itself is a “member”
  or a “person associated with a member”.
  In addition, an organization of any kind is a “person
  associated with a member” if its sole
  proprietor or any one of its general or limited partners, officers, directors
  or branch managers is a “member”
  or “person associated with a member”.
  (Article I of the NASD By-Laws.)  

      34.   
  The NASD defines “affiliate”
  to include a company which controls, is controlled by or is under common control
  with a member. A company is presumed to control a member if the company beneficially
  owns 10 percent or more of the outstanding voting securities of a member which
  is a corporation, or beneficially owns a partnership interest in 10 percent
  or more of the distributable profits or losses of a member which is a partnership.
  A company is presumed to be controlled by a member if the member and persons
  associated with the member beneficially own 10 percent or more of the outstanding
  voting securities of a company which is a corporation, or beneficially own a
  partnership interest in 10 percent or more of the distributable profits or losses
  of a company which is a partnership. A company is presumed to be under common
  control with a member if (i) the same natural person or company controls both
  the member and company by beneficially owning 10 percent or more of the outstanding
  voting securities of a member or company which is a corporation, or by beneficially
  owning a partnership interest in 10 percent or more of the distributable profits
  or losses of a member or company which is a partnership or (ii) a person having
  the power to direct or cause the direction of the management or policies of
  the member or the company also has the power to direct or cause the direction
  of the management or policies of the other entity in question. NASD Rule 2720(b)(1).