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Exhibit 4.1  


 
 

PURCHASE AGREEMENT    
    


        THIS PURCHASE AGREEMENT (this "Agreement") is made as of the 13th day of February, 2004, by and between Pioneer
Drilling Company (the "Company"), a corporation organized under the laws of the State of Texas, with its principal offices at 9310 Broadway, Building I,
San Antonio, Texas, 78217, and the purchaser whose name and address are set forth on the signature page hereof (the "Purchaser"). 


        IN
CONSIDERATION of the mutual covenants contained in this Agreement, the Company and the Purchaser agree as follows: 



        SECTION
1.    Authorization of Sale of the Shares.    Subject to the terms and conditions of this Agreement, the
Company has authorized the issuance and sale of 4,400,000 shares (the "Shares") of common stock, par value $0.10 per share (the
"Common Stock"), of the Company in a private placement to Purchasers (as defined in Section 2). 


        SECTION
2.    Agreement to Sell and Purchase the Shares.    At the Closing (as defined in Section 3), the
Company will issue and sell to the Purchaser, and the Purchaser will buy from the Company, upon the terms and conditions hereinafter set forth, the number of Shares (at the purchase price) set forth
in Appendix I attached hereto. 


        The
Company proposes to enter into the same form of purchase agreement with certain other investors (the "Other Purchasers") and expects
to complete sales of the Shares to them. The Purchaser and the Other Purchasers are hereinafter sometimes collectively referred to as the "Purchasers",
and this Agreement and the agreements executed by the Other Purchasers are hereinafter sometimes collectively referred to as the "Agreements". The term
"Placement Agents" shall mean Jefferies & Company, Inc. and Raymond James & Associates, Inc. 


        SECTION
3.    Delivery of the Shares at the Closing.    The completion of the purchase and sale of the Shares (the
"Closing") shall occur at the offices of Baker Botts L.L.P., 910 Louisiana, Houston, Texas 77002 as soon as practicable and as agreed to by the parties
hereto, within three business days following the execution of the Agreements, or on such later date or at such different location as the parties shall agree upon in writing, but not prior to the date
that the conditions for Closing set forth below have been satisfied or waived by the appropriate party (the "Closing Date"). 


        As
soon as practicable after the Closing, the Company shall cause to be delivered to the Purchaser one or more stock certificates registered in the name of the Purchaser, or, if so
indicated on the Stock Certificate Questionnaire attached hereto as Appendix I, in such nominee name(s) as designated by the Purchaser,
representing the number of Shares set forth on Appendix I attached hereto and bearing an appropriate legend referring to the fact that the Shares
were sold in reliance upon the exemption from registration under the Securities Act of 1933, as amended (the "Securities Act"), provided by
Section 4(2) thereof and Rule 506 promulgated thereunder. The name(s) in which the stock certificate(s) are to be registered are set forth in the Stock Certificate Questionnaire attached
hereto as Appendix I. The Company's obligation to complete the purchase and sale of the Shares at the Closing and deliver such stock
certificate(s) to the Purchaser shall be subject to the following conditions, any one or more of which may be waived by the Company: (i) receipt by the Company of same-day funds in
the full amount of the purchase price for the Shares being purchased hereunder; (ii) completion of the purchases and sales under the Agreements with the Other Purchasers; and (iii) the
accuracy in all material respects of the representations and warranties made by the Purchasers (as if such representations and warranties were made on the Closing Date) and the fulfillment of those
undertakings of the Purchasers to be fulfilled prior to the Closing. The Purchaser's obligation to accept delivery of such stock certificate(s) and to pay for the Shares evidenced thereby shall be
subject to the following conditions, any one or more of which may be waived by the Purchaser: (i) each of the representations and warranties of the Company made herein shall be accurate in all
material respects as of the Closing Date; (ii) the delivery to the Placement Agents by counsel to the Company of a legal 





 



opinion
described in Section 4.18 of this Agreement; (iii) the delivery to the Purchaser of the officer certificate and secretary certificate described in Section 4.19 of this
Agreement; (iv) the delivery to the Placement Agents of certificates of good standing from the respective states of incorporation or formation of the Company and Pioneer Drilling
Services, Ltd., a Texas limited partnership, dated as of a recent date prior to the Closing; (v) completion of purchases and sales under Agreements with Other Purchasers in an aggregate
amount of at least $15,000,000 in gross proceeds to the Company in a single closing; and (vi) the fulfillment in all material respects of those undertakings of the Company to be fulfilled prior
to Closing. The Purchaser's obligations hereunder are expressly not conditioned on the purchase by any or all of the Other Purchasers of the Shares that they agree or have agreed to purchase from the
Company. 


        SECTION
4.    Representations, Warranties and Covenants of the Company.    The Company hereby represents and warrants
to, and covenants with, the Purchaser as follows: 



        4.1    Organization and Qualification.    The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Texas and the Company is qualified to do business as a foreign corporation in each jurisdiction in which such qualification is required, except where failure to
so qualify would not reasonably be expected to have a Material Adverse Effect (as defined herein). The subsidiaries of the Company are Pioneer Drilling Services, Ltd., a Texas limited
partnership, PDC Management Company, a Texas corporation, and PDC Investment Corporation, a Delaware corporation (each a "Subsidiary" and collectively,
the "Subsidiaries"). Each Subsidiary is a direct or indirect wholly-owned subsidiary of the Company. Each Subsidiary is duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or formation and is qualified to do business as a foreign entity in each jurisdiction in which such qualification is required,
except where failure to so qualify would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, the term "Material Adverse
Effect" shall mean a material adverse effect upon the business, condition (financial or otherwise), properties or results of operations of the Company and its Subsidiaries,
taken as a whole. 


        4.2    Authorized Capital Stock.    Except as disclosed in or contemplated by the Confidential Private Placement
Memorandum, dated February 5, 2004, prepared by the Company, including Exhibits A through I thereto, supplements and amendments thereto (the "Private Placement
Memorandum"), the Company had outstanding the capital stock set forth under the heading "Capitalization" in the Private Placement Memorandum as of the date set forth therein;
all the issued and outstanding shares of the Company's Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of any preemptive rights or other rights to subscribe for or purchase securities, and conform in all material respects to the description thereof
contained in the Private Placement Memorandum. Except as disclosed in the Private Placement Memorandum, as of December 31, 2003, the Company did not have outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The description of the Company's stock, stock bonus and other stock plans or arrangements and the options or other rights granted and
exercised thereunder set forth in the Private Placement Memorandum 



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accurately
and fairly presents all material information with respect to such plans, arrangements, options and rights. With respect to each Subsidiary, (i) all the issued and outstanding shares
of capital stock or other equity interest of the Subsidiary have been duly authorized and validly issued, are fully paid and, in the case of each Subsidiary that is a corporation, nonassessable, have
been issued in compliance with applicable federal and state securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase
securities, and (ii) there are no outstanding options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of capital stock or other equity interests of the Subsidiary or any such options, rights, convertible securities or obligations. 


        4.3    Issuance, Sale and Delivery of the Shares.    The Shares have been duly authorized and, when issued, delivered
and paid for in the manner set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free and clear of all pledges, liens, restrictions and encumbrances
(other than restrictions on transfer under state and/or federal securities laws), and will conform in all material respects to the description thereof set forth in the Private Placement Memorandum. No
preemptive rights or other rights to subscribe for or purchase exist with respect to the issuance and sale of the Shares by the Company pursuant to this Agreement, except for such preemptive rights as
have been waived in writing. True and accurate copies of such waivers have been provided to the Placement Agents and their counsel on or prior to the date of this Agreement. No stockholder of the
Company has any right (which has not been waived or has not expired by reason of lapse of time following notification of the Company's intent to file the registration statement to be filed by it
pursuant to Section 7.1 (the "Registration Statement")) to require the Company to register the sale of any shares owned by such stockholder under
the Securities Act in the Registration Statement. No further approval or authority of the stockholders or the Board of Directors of the Company will be required for the issuance and sale of the Shares
to be sold by the Company as contemplated herein. 


        4.4    Due Execution, Delivery and Performance of this Agreement.    The Company has full legal right, corporate power
and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company. The execution, delivery and
performance of this Agreement by the Company and the consummation of the transactions herein contemplated will not violate any provision of the articles of incorporation, bylaws or equivalent
organizational documents, as applicable, of the Company or any of its Subsidiaries and will not result in the creation of any lien, charge, security interest or encumbrance upon any assets of the
Company or any of its Subsidiaries pursuant to the terms or provisions thereof, and will not conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under (i) any agreement, lease, franchise, license, permit or other instrument to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any of their respective properties may be bound or affected and in each case which would have a Material Adverse Effect; or (ii) to the Company's
knowledge, any statute or any judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other governmental body applicable to the Company or any of its
Subsidiaries or any of their respective properties where such conflict, breach, violation or default is reasonably expected to result in a Material Adverse Effect. No consent, approval, authorization
or other order of any court, regulatory body, administrative agency or other governmental body is required for the execution and delivery of this Agreement or the consummation of the transactions
contemplated by this 



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Agreement,
except for compliance with the blue sky laws and federal securities laws applicable to the offering of the Shares. Upon the execution and delivery of this Agreement, and assuming the valid
execution thereof by the Purchaser, this Agreement will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as the indemnification agreements of the Company in
Section 7.3 hereof may be limited by federal or state securities laws or the public policy underlying such laws. 



        4.5    Accountants.    The firm of KPMG LLP, which has expressed its opinion with respect to the audited consolidated
financial statements of the Company to be included or incorporated by reference in the Registration Statement and the prospectus which forms a part thereof, as amended or supplemented by any
prospectus supplement or other amendment (the "Prospectus"), is an independent accountant as required by the Securities Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations"). 



        4.6    No Defaults.    Neither the Company nor any of its Subsidiaries is in violation or default of any provision of
its articles of incorporation, bylaws or equivalent organizational documents, or in breach of or default with respect to any provision of any agreement, judgment, decree, order, lease, franchise,
license, permit or other instrument to which it is a party or by which it or any of its properties are bound which would reasonably be expected to have a Material Adverse Effect and there does not
exist any state of facts which, with notice or lapse of time or both, would constitute an event of default on the part of the Company or any of its Subsidiaries as defined in such documents and which
would reasonably be expected to have a Material Adverse Effect. 



        4.7    Contracts.    Except as otherwise disclosed in the Private Placement Memorandum, the Company and its
Subsidiaries have no material contracts. Any contracts described in the Private Placement Memorandum that are material to the Company and its Subsidiaries, taken as a whole, are in full force and
effect on the date hereof; and neither the Company nor any of its Subsidiaries is, nor, to the Company's knowledge, is any other party in breach of or default under any of such contracts which would
reasonably be expected to have a Material Adverse Effect. 


        4.8    No Actions.    Except as otherwise disclosed in the Private Placement Memorandum, (i) there are no legal
or governmental actions, suits or proceedings pending and (ii) to the Company's knowledge, there are no inquiries or investigations, nor are there any legal or governmental actions, suits, or
proceedings threatened to which the Company or any of its Subsidiaries is or may be a party or of which property owned or leased by the Company or any of its Subsidiaries is or may be the subject, or
related to environmental or discrimination matters, which actions, suits or proceedings, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect; and no labor
disturbance by the employees of the Company exists or, to the Company's knowledge, is imminent which would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is party to or subject to the provisions of any injunction, judgment, decree or order of any court, regulatory body, administrative agency or other governmental body which would
reasonably be expected to have a Material Adverse Effect. 



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        4.9    Properties.    The Company and the Subsidiaries have good and indefeasible title with respect to all real
property and have good and marketable title to all properties and assets (other than real property) reflected as owned in the financial statements included in the Private Placement Memorandum, subject
in each case to liens in favor of lenders or as otherwise set forth in the Private Placement Memorandum. Each of the Company and its Subsidiaries holds its leased properties under valid and binding
leases, with such exceptions as are not materially significant in relation to the business of the Company and its Subsidiaries, taken as a whole. 


        4.10    No Material Change.    Since December 31, 2003, and except as described in the Private Placement
Memorandum (i) the Company and its Subsidiaries have not incurred any material liabilities or obligations, indirect, or contingent, or entered into any material oral or written agreement or
other transaction which is not in the ordinary course of business or which would reasonably be expected to result in a material reduction in the future earnings of the Company and its Subsidiaries;
(ii) the Company and its Subsidiaries have not sustained any material loss or interference with their businesses or properties from fire, flood, windstorm, accident or other calamity not
covered by insurance; (iii) the Company and its Subsidiaries have not paid or declared any dividends or other distributions with respect to their capital stock and neither the Company nor any
of its Subsidiaries is in default in the payment of principal or interest on any outstanding debt obligations; (iv) there has not been any change in the capital stock of the Company or any of
its Subsidiaries other than the sale of the Shares hereunder, shares or options issued pursuant to equity incentive plans or purchase plans approved by the Company's Board of Directors and repurchases
of shares or options pursuant to repurchase plans already approved by the Company's Board of Directors, or indebtedness not incurred in the ordinary course of business that is material to the Company
and its Subsidiaries, taken as a whole; and (v) there has not been any other event which has caused a Material Adverse Effect. 


        4.11    Compliance.    Except as disclosed in the Private Placement Memorandum, neither the Company nor any of its
Subsidiaries has been advised, nor has reason to believe, that it is not conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is
conducting its business, including, without limitation, all applicable local, state and federal environmental laws and regulations, except where failure to be so in compliance would not reasonably be
expected to have a Material Adverse Effect. 


        4.12    Taxes.    Each of the Company and its Subsidiaries has filed all necessary federal, state and foreign income
and franchise tax returns and has paid or accrued all taxes shown as due thereon, and neither the Company nor any of its Subsidiaries has knowledge of a tax deficiency which has been or might be
asserted or threatened against it which would reasonably be expected to have a Material Adverse Effect. 



        4.13    Investment Company.    The Company is not an "investment company" or an "affiliated person" of, or "promoter"
or "principal underwriter" for an investment company, within the meaning of the Investment Company Act of 1940, as amended. 


        4.14    Registration under the Securities Act.    Neither the Company nor any person acting on its behalf has in the
past or will hereafter take any action independent of the Placement Agents to sell, offer for sale or solicit offers to buy any securities of the Company which would subject the offer, issuance or
sale of the Shares, as contemplated by this Agreement, to the registration requirements of Section 5 of the Securities Act. 


        4.15    Insurance.    The Company and its Subsidiaries maintain insurance of the types and in the amounts that the
Company reasonably believes are adequate for their businesses, including, but not limited to, insurance covering all real and personal property leased by the Company and its Subsidiaries against
damage and destruction, all of which insurance is in full force and effect. 



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        4.16    Additional Information.    The information contained in the following documents, which the Placement Agents
have furnished to the Purchaser and form part of the Private Placement Memorandum does not include 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 in which they were made, not misleading, as of their respective final dates: 



        (a)   the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2003; 


        (b)   the
Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2003; 


        (c)   the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003; 


        (d)   the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003; 


        (e)   the
Company's Current Report on Form 8-K filed on July 31, 2003; 


        (f)    the
Company's Current Report on Form 8-K filed on April 9, 2003; and 


        (g)   the
Company's definitive Proxy Statement for its Annual Meeting of Stockholders held on August 22, 2003. 




        4.17    Price of Common Stock.    The Company has not taken, and will not take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which would reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of the Common Stock to
facilitate the sale or resale of the Shares. 


        4.18    Corporate Legal Opinion.    As a condition to the Purchasers' obligation to purchase the Shares, legal counsel
to the Company will deliver one or more legal opinions to the Placement Agents in a form to be agreed upon among the Company, legal counsel to the Company, the Placement Agents and legal counsel to
the Placement Agents. 


        4.19    Certificate.    At the Closing, the Company will deliver to Purchaser (i) a certificate executed by the
chief executive officer and the chief financial or accounting officer of the Company, dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agents, to the effect
that the representations and warranties of the Company set forth in this Section 4 are true and correct as of the date of this Agreement and as of the Closing Date and that the Company has
complied with all the agreements and satisfied all the conditions herein on its part to be performed or satisfied on or prior to such Closing Date; and (ii) a secretary's certificate, in form
and substance reasonably satisfactory to the Placement Agents, certifying as to the articles of incorporation and bylaws of the Company, each as in effect at the Closing, and the Board of Directors'
resolutions approving the transactions contemplated by this Agreement. 


        4.20    Reporting Company; Form S-3.    The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company is eligible to register the resale of the Shares by the Purchasers on a
registration statement on Form S-3 under the Securities Act. There exist no facts or circumstances (including without limitation any required approvals or waivers or any
circumstances that may delay or prevent the obtaining of accountant's consents) that reasonably would be expected to prohibit or delay the preparation and filing of a registration statement on
Form S-3 that will be available for the resale of the Shares by the Purchaser. 


        4.21    Use of Proceeds.    The Company intends to use the proceeds from the sale of Shares as described under "Use of
Proceeds" in the Private Placement Memorandum. 



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        4.22    Non-Public Information.    Except for the disclosure of the offer and possible sale of the Shares
described in the Private Placement Memorandum, the Company has not disclosed to the Purchaser, whether in the Private Placement Memorandum or otherwise, information that would constitute material
non-public information as of the Closing Date. 


        4.23    Use of Purchaser Name.    Except in the Registration Statement and in any Prospectus, and as may be required
in this Agreement or by applicable law or regulation, the Company shall not use the Purchaser's name or the name of any of its affiliates in any advertisement, announcement, press release or other
similar public communication unless it has received the prior written consent of the Purchaser for the specific use contemplated or as otherwise required by this Agreement or by applicable law or
regulation. 


        4.24    Related Party Transactions.    No transaction has occurred between or among the Company, any of the
Subsidiaries and their affiliates, officers or directors or any affiliate or affiliates of any such officer or director that is required to have been described under applicable securities laws in its
Exchange Act filings and is not so described in such filings. 


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


        4.26    Governmental Permits, Etc.    Each of the Company and its Subsidiaries has all franchises, licenses,
certificates and other authorizations from such federal, state or local government or governmental agency, department or body that are currently required for the operation of the business of the
Company and its Subsidiaries as currently conducted, except where the failure to possess currently such franchises, licenses, certificates and other authorizations would not reasonably be expected to
have a Material Adverse Effect. The Company and its Subsidiaries have not received any notice of proceedings relating to the revocation or modification of any such permit which, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect. 


        4.27    Financial Statements.    The consolidated financial statements of the Company and the related notes contained
in the Private Placement Memorandum (i) comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto at the time
of filing; and (ii) present fairly, in accordance with generally accepted accounting principles, the consolidated financial position of the Company and its Subsidiaries as of the dates
indicated, and the results of their operations, cash flows and the changes in shareholders' equity for the periods therein specified, subject, in the case of unaudited financial statements for interim
periods, to normal year-end audit adjustments. Except as otherwise indicated therein or in the footnotes thereto, such consolidated financial statements (including the related notes) have
been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods therein specified, except that unaudited financial statements may not
contain all footnotes required by generally accepted accounting principles. 


        4.28    Listing.    The Company shall comply with all requirements of the American Stock Exchange with respect to the
issuance of Shares. The Company intends to maintain the listing of the Common Stock on the American Stock Exchange or on another national securities exchange or quotation system, and, as soon as
reasonably practicable following the Closing (but not later than the first date that the Registration Statement is declared effective by the Commission), to list the Shares on the American Stock
Exchange. The Company agrees, if the Company applies to have the Common Stock traded on any other market or exchange, it will include in such application the Shares, and will take such other
commercially reasonable action as is necessary or desirable in the opinion of the Purchasers to cause the Shares to be listed on such other market or exchange as promptly as possible. 



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        SECTION
5.    Representations, Warranties and Covenants of the Purchaser.    



        (a)   The
Purchaser represents and warrants to, and covenants with, the Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in securities representing an investment decision similar to that involved in the purchase of the Shares, including investments in
securities issued by the Company and comparable entities, and has had the opportunity to request, receive, review and consider all information it deems relevant in making an informed decision to
purchase the Shares; (ii) the Purchaser is acquiring the number of Shares set forth on Appendix I attached 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 or entering into any arrangement or understanding with any other persons
regarding the distribution of such Shares; provided, however, that by making the representations in this subsection (ii), the Purchaser does not agree to hold any of the Shares for any minimum or
other specific term and the representations in this subsection (ii) shall in no way limit the Purchaser's right to sell pursuant to the Registration Statement or in compliance with the
Securities Act and the Rules and Regulations; provided, further, that the representations made by the Purchaser in this subsection (ii) shall not limit the Purchaser's right to indemnification
under Section 7.3, other than with respect to any claim arising out of a breach of the representation in this subsection (ii); (iii) the Purchaser will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares, nor will the Purchaser engage in any short
sale that results in a disposition of any of the Shares by the Purchaser, except in compliance with the Securities Act and the Rules and Regulations and any applicable state securities laws;
(iv) the Purchaser has completed or caused to be completed the Registration Statement Questionnaire attached hereto as part of Appendix I,
for use in preparation of the Registration Statement, and the answers thereto are true and correct as of the date hereof and will be true and correct as of the effective date of the Registration
Statement and the Purchaser will notify the Company immediately of any material change in any such information provided in the Registration Statement Questionnaire 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; (v) the Purchaser has, in connection with its decision to purchase
the number of Shares set forth on Appendix I attached hereto, relied solely upon the Private Placement Memorandum and the documents included
therein or incorporated by reference and the representations and warranties of the Company contained herein; (vi) the Purchaser has had an opportunity to discuss this investment with
representatives of the Company and ask questions of them; (vii) the Purchaser is an "accredited investor" within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act; and (viii) the Purchaser agrees to notify the Company immediately of any change in any of the foregoing information until such time as the Purchaser has sold all of its Shares
or the Company is no longer required to keep the Registration Statement effective. 


        (b)   The
Purchaser understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act,
the Rules and Regulations and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Shares. 



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        (c)   For
the benefit of the Company, the Purchaser previously agreed orally with the Placement Agents to keep confidential all information concerning this private placement.
The Purchaser understands that the information contained in the Private Placement Memorandum is strictly confidential and proprietary to the Company and has been prepared from the Company's publicly
available documents and other information and is being submitted to the Purchaser solely for such Purchaser's confidential use. The Purchaser agrees to use the information contained in the Private
Placement Memorandum for the sole purpose of evaluating a possible investment in the Shares and the Purchaser hereby acknowledges that it is prohibited from reproducing or distributing the Private
Placement Memorandum or this Agreement, in whole or in part, or divulging or discussing any of their contents, except to its financial, investment or legal advisors in connection with its proposed
investment in the Shares. Further, the Purchaser understands that the existence and nature of all conversations and presentations, if any, regarding the Company and this offering must be kept strictly
confidential. The Purchaser understands that the federal securities laws impose restrictions on trading based on information regarding this offering. In addition, the Purchaser hereby acknowledges
that unauthorized disclosure of information regarding this offering may result in a violation of Regulation FD. This obligation will terminate upon the filing by the Company of a press release or
press releases describing this offering. In addition to the above, the Purchaser shall maintain in confidence the receipt and content of any notice of a Suspension (as defined in Section 5(h)
below). The foregoing agreements shall not apply to any information that is or becomes publicly available through no fault of the Purchaser, or that the Purchaser is legally required to disclose;
provided, however, that if the Purchaser is requested or ordered to disclose any such information pursuant to any court or other government order or any other applicable legal procedure, it shall
cooperate with the Company and, provide the Company with prompt notice of any such request or order, unless the Purchaser is legally prohibited from providing such notice, in time sufficient to enable
the Company to seek an appropriate protective order. 


        (d)   The
Purchaser understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of the Purchaser's investment. The
Purchaser has full cognizance of and understands all the risk factors set forth under the caption "Risk Factors" in the Private Placement Memorandum. The Purchaser understands that the market price of
the Common Stock has been volatile and that no representation is being made as to the future value of the Common Stock. The Purchaser has the knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the Shares and has the ability to bear the economic risks of an investment in the Shares. 


        (e)   The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or
endorsement of the Shares. 


        (f)    Until
the conditions set forth in Section 7.4 of this Agreement are satisfied, the Purchaser understands that the Shares will bear a restrictive legend in
substantially the following form: 




"The
Shares evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction. The
Shares may not be offered, sold, pledged or otherwise transferred except (1) pursuant to an exemption from registration under the Securities Act or (2) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with all applicable securities laws of the states and other jurisdictions, and in the case of a transaction exempt from
registration, unless the Company has received an opinion of counsel reasonably satisfactory to it that such transaction does not require registration under the Securities Act and such other applicable
laws." 





9





 




        (g)   The
Purchaser's principal executive offices are in the jurisdiction set forth immediately below the Purchaser's name on the signature pages hereto. 


        (h)   The
Purchaser hereby covenants with the Company not to make any sale of the Shares under the Registration Statement without complying with the provisions of this
Agreement and without effectively causing the prospectus delivery requirement under the Securities Act to be satisfied, and the Purchaser acknowledges and agrees that such Shares are not transferable
on the books of the Company unless the certificate submitted to the transfer agent evidencing the Shares is accompanied by a separate Purchaser's Certificate of Subsequent Sale: (i) in the form
of Appendix II hereto, (ii) executed by an officer of, or other authorized person designated by, the Purchaser, and (iii) to the
effect that (A) the Shares have been sold in accordance with the Registration Statement, the Securities Act and any applicable state securities or blue sky laws and (B) the requirement
of delivering a current prospectus has been satisfied. The Purchaser will notify the Company promptly after the sale of all of its Shares. The Purchaser acknowledges that there may occasionally be
times when the Company must suspend the
use of the Prospectus forming a part of the Registration Statement (a "Suspension") until such time as an amendment to the Registration Statement has
been filed by the Company and declared effective by the Commission, or until such time as the Company has filed an appropriate report with the Commission pursuant to the Exchange Act. The Purchaser
hereby covenants that it will not sell any Shares pursuant to said Prospectus during the period commencing at the time at which the Company gives the Purchaser written notice of the Suspension of the
use of said Prospectus and ending at the time the Company gives the Purchaser written notice that the Purchaser may thereafter effect sales pursuant to said Prospectus. Notwithstanding the foregoing,
the Company agrees that no Suspension shall be for a period of longer than 90 consecutive days, and all Suspensions in any 365-day period shall not total more than 120 days. 


        (i)    The
Purchaser further represents and warrants to, and covenants with, the Company that (i) the Purchaser has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, (ii) the
making and performance of this Agreement by the Purchaser and the consummation of the transactions herein contemplated will not violate any provision of the organizational documents of the Purchaser
or conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a default under any material agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which the Purchaser is a party, or any statute or any authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to the Purchaser, (iii) no consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required on the part of the Purchaser for the execution and delivery of this Agreement or the consummation of the transactions contemplated by this
Agreement, (iv) upon the execution and delivery of this Agreement, this Agreement shall constitute a legal, valid and binding obligation of the Purchaser, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except to the extent
enforcement of the indemnification provisions, set forth in Section 7.3 of this Agreement, may be limited by federal or state securities laws or the public policy underlying such laws, and
(v) there is not in effect any order enjoining or restraining the Purchaser from entering into or engaging in any of the transactions contemplated by this Agreement. 



10





 





        SECTION
6.    Survival of Representations, Warranties and Agreements.    Notwithstanding any investigation made by any
party to this Agreement or by the Placement Agents, all covenants, agreements, representations and warranties made by the Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the delivery to the Purchaser of the Shares being purchased and the payment therefor for a period of three years, whereupon
such covenants, agreements, representations and warranties will terminate and expire. 


        SECTION
7.    Registration of the Shares; Compliance with the Securities Act.    



        7.1    Registration Procedures and Expenses.    The Company shall: 



        (a)   as
soon as reasonably practicable, but in no event later than ten (10) business days following the Closing Date, prepare and file with the Commission the
Registration Statement on Form S-3 relating to the sale of the Shares by the Purchaser and the Other Purchasers from time to time on the American Stock Exchange or the facilities of
any national securities exchange on which the Common Stock is then traded or in privately-negotiated transactions; 


        (b)   use
its commercially reasonable efforts, subject to receipt of necessary information from the Purchasers, to cause the Registration Statement to be declared effective
under the Securities Act within 60 days after the Closing Date if the Registration Statement is not reviewed by the Commission and within 90 days after the Closing Date if the
Registration Statement is reviewed by the Commission (each such date, the "Required Effective Date"); 


        (c)   use
commercially reasonable efforts to prepare and file with the Commission such amendments, including post-effective amendments, and supplements to the
Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement effective as to the Shares until the earliest of (i) two years
after the effective date of the Registration Statement, or (ii) such time as the Shares become eligible for resale by non-affiliates pursuant to Rule 144(k) under the
Securities Act; 


        (d)   furnish
to the Purchaser with respect to the Shares registered under the Registration Statement (and to each underwriter, if any, of such Shares) such number of copies
of prospectuses and such other documents as the Purchaser may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Shares by the Purchaser; 


        (e)   file
documents required of the Company for normal Blue Sky clearance in states specified in writing by the Purchaser; provided, however, that the Company shall not be
required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; 



        (f)    bear
all expenses in connection with the procedures of this Section 7.1 and the registration of the Shares pursuant to the Registration Statement, other than fees
and expenses, if any, of counsel or other advisers to the Purchaser or the Other Purchasers or underwriting discounts, brokerage fees and commissions incurred by the Purchaser or the Other Purchasers,
if any; 


        (g)   file a
Form D with respect to the Shares as required under Regulation D and to provide a copy thereof to the Purchaser promptly after filing; 


        (h)   issue
a press release describing the transactions contemplated by this Agreement on the Closing Date; and 



        (i)    make
available, while the Registration Statement is effective and available for resale, one or more officers of the Company for questions regarding the ability of the
Purchasers to use the Registration Statement or Prospectus; provided however, that such information may not include material, non-public information. 




11





 







        The
Company understands that the Purchaser disclaims being an underwriter, but the Purchaser being deemed an underwriter shall not relieve the Company of any obligations it has
hereunder. A draft of the proposed form of the Registration Statement is included with the Private Placement Memorandum and a questionnaire related thereto to be completed by the Purchaser is attached
hereto as Appendix I. 



        7.2    Transfer of Shares After Registration.    The 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 or any applicable state securities laws, except as contemplated in the Registration
Statement 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. 


        7.3    Indemnification.    


        (a)   For
purposes of this Section 7.3, (i) the term "Purchaser/Affiliate" shall mean the officers, directors,
agents and employees of the Purchaser, each person who controls the Purchaser (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling person; (ii) the term "Company/Affiliate" shall mean the officers, directors, agents and
employees of the Company, each person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of each such controlling person; and (iii) the term "Registration Statement" shall include any preliminary prospectus, final
prospectus, exhibit, supplement or amendment included in or relating to, and any document incorporated by reference in, the Registration Statement referred to in Section 7.1. 



        (b)   The
Company agrees to indemnify and hold harmless each Purchaser and each Purchaser/Affiliate against any losses, claims, damages, liabilities or expenses, joint or
several, to which such Purchaser or Purchaser/Affiliate may become subject, under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is effected with the prior written consent of the Company), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement,
including the Prospectus, financial statements and schedules, and all other documents filed as a part thereof, as amended at the time of effectiveness of the Registration Statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and Regulations, or the
Prospectus, in the form first filed with the Commission pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them, in light of the circumstances under which they were made, not misleading, or arise out of or are based in whole or in part on any
inaccuracy in the representations or warranties of the Company contained in this Agreement, or any failure of the Company to perform its obligations hereunder or under law, and will promptly reimburse
each such Purchaser and each such Purchaser/Affiliate for any legal and other expenses as such expenses are reasonably incurred by such Purchaser or such Purchaser/Affiliate in connection with
investigating, defending or preparing to defend, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Company will not be liable 



12





 

in
any such case to the extent, but only to the extent, that any such loss, claim, damage, liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement, the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Purchaser expressly for use therein, or (ii) the failure of any Purchaser to comply with the covenants and agreements contained in Sections 5 or
7.2, or (iii) the inaccuracy of any representation or warranty made by any Purchaser in or pursuant to any of the Agreements or (iv) any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser prior to the pertinent sale or sales by the Purchaser. 



        (c)   Each
Purchaser will severally indemnify and hold harmless the Company and each Company/Affiliate against any losses, claims, damages, liabilities or expenses to which
the Company and each Company/Affiliate may become subject, under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with the written consent of such Purchaser) insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any failure to comply with the covenants and agreements contained in Sections 5 or 7.2 hereof, or (ii) the
inaccuracy of any representation or warranty made by such Purchaser herein, or (iii) any untrue or alleged untrue statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the 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 the Registration Statement, the Prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by or on
behalf of any Purchaser expressly for use therein, and will reimburse the Company and each Company/Affiliate for any legal and other expense reasonably incurred by the Company and each
Company/Affiliate in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Purchaser's obligation to indemnify
shall be limited to the net amount of the proceeds received by the Purchaser from the sale of the Common Stock pursuant to the Registration Statement. 


        (d)   Promptly
after receipt by an indemnified party under this Section 7.3 of notice of the threat or commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this Section 7.3, promptly notify the indemnifying party in writing thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise under the indemnity agreement contained in this Section 7.3 to
the extent it is not prejudiced as a result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded, based on an opinion of counsel reasonably satisfactory to the indemnifying party, that there may be a conflict of interest between the
positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon 



13





 




receipt
of notice from the indemnifying party to such indemnified party of its election to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, reasonably satisfactory to such indemnifying party, representing all of the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of any action unless the indemnifying party shall have approved in writing the terms of such settlement; provided that such
consent shall not be unreasonably withheld. 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 indemnification could have been sought hereunder by such indemnified party from all liability on claims that are the subject
matter of such proceeding, unless the terms of such settlement include a complete release of such indemnified party with respect to the underlying claim or claims. 


        (e)   If
the indemnification provided for in this Section 7.3 is required by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party under paragraphs (b), (c) or (d) of this Section 7.3 in respect to any losses, claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any losses, claims, damages, liabilities or expenses referred to herein
(i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Purchaser from the private placement of Common Stock hereunder 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 Company and the Purchaser in connection with the statements or omissions or inaccuracies in the representations and warranties in this Agreement and/or the
Registration Statement which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The respective relative benefits received by the
Company on the one hand and each Purchaser on the other shall be deemed to be in the same proportion as the amount paid by such Purchaser to the Company pursuant to this Agreement for the Shares
purchased by such Purchaser that were sold pursuant to the Registration Statement bears to the difference (the "Difference") between the amount such
Purchaser paid for the Shares that were sold pursuant to the Registration Statement and the amount received by such Purchaser from such sale. The relative fault of the Company, on the one hand, and
each Purchaser on the other shall be determined by reference to, among other things, whether the untrue or alleged statement of a material fact or the omission or alleged omission to state a material
fact or the inaccurate or the alleged inaccurate representation and/or warranty relates to information supplied by the Company or by such Purchaser and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in paragraph (d) of this Section 7.3, any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions set forth in paragraph (d) of this Section 7.3 with respect to the notice of the threat or commencement of
any threat or action shall apply if a claim for contribution is to be made under this paragraph (e); provided, however, that no additional notice shall be required with respect to 



14





 




any
threat or action for which notice has been given under paragraph (d) for purposes of indemnification. The Company and each Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 7.3 were determined solely by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section 7.3, no Purchaser shall be required to contribute any amount in excess of the amount by which the Difference
exceeds the amount of any damages that such Purchaser 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 contributions from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant to this Section 7.3 are several and not joint. 


        7.4    Termination of Conditions and Obligations.    The restrictions imposed by Section 5 or this
Section 7 upon the transferability of the Shares shall cease and terminate as to any particular number of the Shares upon the passage of two years from the effective date of the Registration
Statement covering such Shares or at such time as an opinion of counsel satisfactory in form and substance to the Company shall have been rendered to the effect that such conditions are not necessary
in order to comply with the Securities Act. 


        7.5    Delay in Effectiveness of Registration Statement.    If (i) the Registration Statement filed hereunder
is not declared effective by the Commission by the Required Effective Date, for each month any of the Shares remain unregistered following the Required Effective Date, the Company shall issue to the
Purchaser additional shares of Common Stock in an amount equal to 1% of the total shares of Common Stock purchased by the Purchaser pursuant to Section 2 above, or (ii) the Purchaser
shall be prohibited from selling Shares under the Registration Statement as a result of a Suspension of more than 45 days or one or more Suspensions in any 365-day period exceeding
a total of 90 days, then for each month in which a Suspension is in effect that exceeds the maximum allowed period for a Suspension or Suspensions, the Company shall issue to the Purchaser
additional shares of Common Stock in an amount equal to 1% of the total shares of Common Stock purchased by the Purchaser pursuant to Section 2 above. Notwithstanding the foregoing:
(i) in no event shall the number of additional shares of Common Stock issued to the Purchaser pursuant to this Section 7.5 exceed 10% of the total shares of Common Stock purchased by the
Purchaser pursuant to Section 2 above; (ii) if as a result of the issuance of any such additional shares the Company would be required to seek shareholder approval pursuant to the rules,
regulations or other requirements of the American Stock Exchange or any other national securities exchange or quotation system on which the Common Stock is then traded or quoted, the Company may, in
lieu of issuing any such additional shares, pay to the Purchaser an amount in cash equal to the Applicable Percentage (as defined below) of the aggregate purchase price paid by the Purchaser pursuant
to Section 2 above; and (iii) in no event shall the Company be obligated to issue additional shares of Common Stock pursuant to this Section 7.5 to more than one Purchaser in
respect of the same Shares for the same period of time. Any issuance or payment pursuant to this Section 7.5 shall be made no later than the first business day of each calendar month next
succeeding each month in which such Suspension is in effect. For purposes of this Section 7.5, the term "Applicable Percentage" shall mean the
difference obtained by subtracting (i) the percentage that corresponds to the maximum amount of shares of Common Stock that the Company may issue in a transaction or a series of related
transactions without shareholder approval pursuant to the rules, regulations or other requirements of the American Stock Exchange or any other national securities exchange or quotation system on which
the Common Stock is traded or quoted as of the applicable date to calculate the Applicable Percentage, from (ii) the percentage that the Shares and all additional shares issued pursuant to this
Section 7.5 represent of the total outstanding shares of Common Stock as of the applicable date to calculate the Applicable Percentage. 



15





 





        SECTION
8.    Broker's Fee.    The Purchaser acknowledges that the Company intends to pay to the Placement Agents a
fee in respect of the sale of the Shares to the Purchaser. The Purchaser and the Company hereby agree that the Purchaser shall not be responsible for such fee and that the Company will indemnify and
hold harmless the Purchaser and each affiliate of the Purchaser against any losses, claims, damages, liabilities or expenses, joint or several, to which such Purchaser or affiliate of the Purchaser
may become subject with respect to such fee. Each of the parties hereto hereby represents that, on the basis of any actions and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchaser. 


        SECTION
9.    Notices.    All notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (i) upon delivery to the party to be notified; (ii) when received by confirmed facsimile; or (iii) one (1) business day after deposit with a nationally
recognized overnight carrier, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the Company and the Purchaser as follows or at such other
addresses as the Company or the Purchaser may designate upon ten (10) days' advance written notice to the other party: 



	(a)	 	if to the Company, to:
	

 	
 	

Pioneer Drilling Company

9310 Broadway, Building 1

San Antonio, Texas 78217

Attn: Wm. Stacy Locke

Fax: 210-828-8228
	

 	
 	

with a copy to:
	

 	
 	

Baker Botts L.L.P.

One Shell Plaza

910 Louisiana Street

Houston, Texas 77002

Attn: Ted W. Paris

Fax: 713-229-7738
	

(b)	
 	

if to the Purchaser, at its address as set forth at the end of this Agreement.





        SECTION 10.    Changes.    This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Purchaser. No provision hereunder may be waived other than in a written instrument executed by the waiving party. 


        SECTION
11.    Headings.    The headings of the various sections of this Agreement have been inserted for convenience
of reference only and shall not be deemed to be part of this Agreement. 



        SECTION
12.    Severability.    In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 


        SECTION
13.    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the
State of New York and the federal law of the United States of America. 



        SECTION
14.    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and
delivered (including by facsimile) to the other parties. 


16





 



        SECTION
15.    Entire Agreement.    This Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters. 


        SECTION
16.    Assignment.    The provisions hereof shall inure to the benefit of, and be binding upon, the parties
hereto and their respective permitted successors, assigns, heirs, executors and administrators. In connection with a transfer of Shares (other than a transfer of Shares pursuant to the Registration
Statement or in a broker transaction) in compliance with applicable federal and state securities laws, the Purchaser may assign any or all of its rights under this Agreement to any person, provided
such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions hereof that apply to the Purchaser. 


        SECTION
17.    Further Assurances.    Each party agrees to cooperate fully with the other parties and to execute such
further instruments, documents and agreements and to give such further written assurance as may be reasonably requested by any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this Agreement. 


[Remainder
of Page Left Intentionally Blank] 


17





 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written. 



	

 	
 	

PIONEER DRILLING COMPANY
	

 	
 	

By:	
 	

 Name:

Title:
	

Print or Type:	
 	

 	
 	

 
	 	 	Name of Purchaser (Individual or Institution):
	

 	
 	


	

 	
 	

Name of Individual representing Purchaser (if an Institution):
	

 	
 	


	

 	
 	

Title of Individual representing Purchaser (if an Institution)
	

 	
 	


	

Signature by:	
 	

 	
 	

 
	 	 	Individual Purchaser or Individual representing Purchaser:
	

 	
 	







	

 	
 	

Address:	
 	


	

 	
 	

Telephone:	
 	


	

 	
 	

Telecopier:	
 	






18





SUMMARY INSTRUCTION SHEET FOR PURCHASER


(to
be read in conjunction with the entire

Purchase Agreement which this follows) 


	A.
	Complete
the following items on BOTH Purchase Agreements (Please sign two originals):



	1.
	Page
24—Signature:



	(i)
	Name
of Purchaser (Individual or Institution)



	(ii)
	Name
of Individual representing Purchaser (if an Institution)



	(iii)
	Title
of Individual representing Purchaser (if an Institution)



	(iv)
	Signature
of Individual Purchaser or Individual representing Purchaser






	2.
	Appendix I—Stock
Certificate Questionnaire/Registration Statement Questionnaire: 







Provide
the information requested by the Stock Certificate Questionnaire and the Registration Statement Questionnaire. 



	3.
	Return
BOTH properly completed and signed Purchase Agreements including the properly completed Appendix I to (initially by
facsimile with hand copy by overnight delivery): 






Jefferies
& Company, Inc.

520 Madison Avenue, 12th Floor

New York, New York 10022

Attention: Michael Bauer

Facsimile: (212) 284-2208 






	B.
	Instructions
regarding the transfer of funds for the purchase of Shares will be sent by facsimile to the Purchaser by the Placement Agents at a later date.



	C.
	Upon
the resale of the Shares by the Purchasers after the Registration Statement covering the Shares is effective, as described in the Purchase Agreement, the Purchaser:




	(i)
	must
deliver a current prospectus of the Company to the buyer (prospectuses must be obtained from the Company at the Purchaser's request); and



	(ii)
	must
send a letter in the form of Appendix II to the Company so that the Shares may be properly transferred. 













Appendix
I

(Page 1 of 4) 


Pioneer
Drilling Company
 REGISTRATION STATEMENT QUESTIONNAIRE


        Pursuant
to Section 3 of the Agreement, please provide us with the following information: 



	

1.	

The exact name that your Shares are to be registered in (this is the name that will appear on your stock certificate(s)). You may use a nominee name if appropriate:	
 	


	

2.	

The relationship between the Purchaser of the Shares and the Registered Holder listed in response to item 1 above:	
 	


	

3.	

The mailing address of the Registered Holder listed in response to item 1 above:	
 	


	

4.	

The Social Security Number or Tax Identification Number of the Registered Holder listed in response to item 1 above:	
 	









Appendix I

(Page 2 of 4) 


Pioneer
Drilling Company
 REGISTRATION STATEMENT QUESTIONNAIRE


        In
connection with the preparation of the Registration Statement, please provide us with the following information: 



        SECTION
1. Pursuant to the "Selling Shareholder" section of the Registration Statement, please state your or your organization's name exactly as it should appear in the Registration
Statement: 





        SECTION
2. The number of shares being purchased and the purchase price being paid by you: 



	Number to be Purchased
	 	Price Per Share in Dollars
	 	Aggregate Price

	 	 	$                    	 	$                    





        SECTION 3. Please provide the number of shares that you, your organization or any affiliates will own immediately after Closing, including those Shares purchased
by you or your organization pursuant to this Purchase Agreement and those shares purchased by you or your organization through other transactions: 



	Your Name (or name of Affiliated Entity)
	 	Number of Shares Owned

	 	 	 





        SECTION 4. Have you or your organization had any position, office or other material relationship within the past three years with the Company or its affiliates? 


o  Yes        o  No



        If
yes, please indicate the nature of any such relationships below: 















Appendix
I

(Page 3 of 4) 


Pioneer
Drilling Company
 REGISTRATION STATEMENT QUESTIONNAIRE


        SECTION
5. (a) Are you (i) an NASD Member (see definition), (ii) a Controlling (see definition) shareholder of an NASD Member, (iii) a Person Associated with
a Member of the NASD (see definition), or (iv) an Underwriter or a Related Person (see definition) with respect to the proposed offering; or (b) do you own any shares or other securities
of any NASD Member not purchased in the open market; or (c) have you made any outstanding subordinated loans to any NASD Member? 


        Answer:
o  Yes        o  No If "yes", please describe below. 















Appendix
I

(Page 4 of 4) 


Pioneer
Drilling Company
 REGISTRATION STATEMENT QUESTIONNAIRE


NASD Member.    The term "NASD member" means either any broker or dealer admitted to membership in the National Association of Securities
Dealers, Inc. ("NASD"). (NASD Manual, By-laws Article I, Definitions) 


Control.    The term "control" (including the terms "controlling", "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
(Rule 405 under the Securities Act of 1933, as amended) 


Person Associated with a member of the NASD.    The term "person associated with a member of the NASD" means (i) a natural person who
is registered or has applied for registration under the Rules of the Association set forth in the NASD manual or (ii) a sole proprietor, partner, officer, director, or branch manager of a
member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly
controlling or controlled by a NASD Member, whether or not such person is registered or exempt from registration with the NASD pursuant to its bylaws or the Rules of the Association set forth in the
NASD manual. (NASD Manual, By-laws Article I, Definitions) 


Underwriter or a Related Person.    The term "underwriter or a related person" means, with respect to a proposed offering, underwriters,
underwriters' counsel, financial consultants and advisors, finders, members of the selling or distribution group, and any and all other persons associated with or related to any of such persons. (NASD
Interpretation) 





APPENDIX
II 


[Transfer
Agent]

[Address] 


Attention:



PURCHASER'S
CERTIFICATE OF SUBSEQUENT SALE 


        The
undersigned, [an officer of, or other person duly authorized by]

___________________________________________________________

                                [fill in official name of individual
or institution]
 hereby certifies that he/she [said institution] is the Purchaser of the shares evidenced by the attached certificate, and as such, sold
such shares on ____________________________

                                         
       [date]
 in accordance with the terms of the Purchase Agreement and in accordance with Registration Statement number 


_____________________________________________________
 [fill in the number of or otherwise identify Registration Statement] 


or otherwise in accordance with the Securities Act of 1933, as amended, and, in the case of a transfer pursuant to the Registration Statement, the requirement
of delivering a current prospectus by the Company has been complied with in connection with such sale. 



	Print or Type:	 	 
	

 	
 	

Name of Purchaser (Individual or Institution):	
 	


	

 	
 	

Name of Individual representing Purchaser (if an Institution):	
 	


	

 	
 	

Title of Individual representing Purchaser (if an Institution):	
 	


	

 	
 	

Signature by: Individual Purchaser or Individual representing Purchaser:	
 	













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