exv10w2






Form of Agreement




EXHIBIT 10.2




PURCHASE AGREEMENT




     THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 1st day of June 2009, by and
between ION Geophysical Corporation (the “Company”), a corporation organized under the laws
of the State of Delaware, with its principal offices at 2105 CityWest Blvd., Suite 400, Houston,
Texas 77042-2839, and the purchaser whose name and address is 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:



     1. Authorization of Sale of the Shares. Subject to the terms and conditions of the
Agreements (as defined below), the Company has authorized the issuance and sale of up to 18,500,000
shares (the “Shares”) of common stock, par value $0.01 per share (the “Common
Stock”) and the preferred stock purchase rights appurtenant thereto (the “Rights”), of
the Company.



     2. Agreement to Sell and Purchase the Shares. At the Closing (as defined in
Section 3), the Company will, subject to the terms of this Agreement, 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) shown on the signature page hereof.



     The Company is simultaneously entering into this 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 purchase agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the “Agreements.” The
term “Placement Agent” shall mean Barclays Capital Inc., as placement agent.



     3. Delivery of the Shares at the Closing; Termination.



          3.1 Closing. The completion of the purchase and sale of the Shares (the
“Closing”) shall occur at the offices of Andrews Kurth LLP, 600 Travis, Suite 4200,
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 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”).



          3.2 Closing Deliveries. At the Closing, the Purchaser shall deliver, in immediately
available funds, the full amount of the purchase price for the Shares being purchased hereunder by
wire transfer to an account designated by the Company and the Company shall deliver to the
Purchaser one or more stock certificates registered in the name of



 









 







the Purchaser, or in such nominee name(s) as designated by the Purchaser in writing,
representing the number of Shares set forth in Section 2 above 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 thereunder. The name(s) in which the stock certificates are
to be registered are set forth in the Stock Certificate Questionnaire attached hereto as part of
Appendix I.



          3.3 Conditions to the Company’s Obligations. The Company’s obligation to complete the
purchase and sale of the Shares and deliver such stock certificate(s) to the Purchaser at the
Closing shall be subject to the following conditions, any one or more of which may be waived by the
Company:




     (a) receipt by the Company of same-day funds in the full amount of the purchase
price for the Shares being purchased hereunder;




     (b) completion of the purchases and sales under the Agreements with the Other
Purchasers;




     (c) the accuracy of the representations and warranties made by the Purchasers
and the fulfillment of those undertakings of the Purchasers to be fulfilled prior to
the Closing; and




     (d) receipt by the Company from the Purchaser of the fully completed
questionnaires attached hereto as Appendix I.



          3.4 Conditions to the Purchaser’s Obligations. 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:




     (a) the closing of purchases of Common Stock by the Other Purchasers equal to
at least the Minimum Purchase Amount; for purposes of this Agreement, the
“Minimum Purchase Amount” means such number of shares of Common Stock to be
purchased by the Other Purchasers under the Agreements that, when combined with the
number of Shares to be purchased by the Purchaser pursuant to this Agreement and
multiplied by the price at which those shares and the Shares are to be purchased, is
equal to $35,000,000;




     (b) each of the representations and warranties of the Company made herein shall
be accurate as of the Closing Date;




     (c) the delivery to the Purchaser by counsel to the Company of legal opinions
substantially similar in substance to the forms of opinion attached as Exhibit
B hereto;




     (d) receipt by the Placement Agent, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to the Placement Agent, from Ernst & Young LLP (i)
confirming that they are independent public accountants within the



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meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Rules and Regulations and (ii) containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to
underwriters in registered public offering with respect to the financial statements
and certain financial information contained in the Private Placement Memorandum;




     (e) receipt by the Purchaser of a certificate executed by the chief executive
officer and the chief financial or accounting officer of the Company, dated as of
the Closing Date, to the effect that the representations and warranties of the
Company set forth herein are true and correct as of the date of this Agreement and
as of such 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;




     (f) receipt by the Purchaser of a certificate of the Secretary of the Company,
dated as of the Closing Date:




     (i) certifying the resolutions adopted by
the Board of Directors of the Company approving
the transactions contemplated by this Agreement
and the issuance of the Shares;




     (ii) certifying the current versions of the
Restated Certificate of Incorporation and the
Amended and Restated Bylaws of the Company; and




     (iii) certifying as to the signatures and
authority of the persons signing this Agreement
and related documents on behalf of the Company;




     (g) receipt by the Purchaser of a certificate of good standing for the Company
for its jurisdiction of incorporation and a certificate of qualification as a
foreign corporation for the Company for any jurisdictions in which it is qualified
to transact business as a foreign corporation;




     (h) receipt by the Purchaser of a certificate from the Company’s transfer agent
certifying the number of shares of Common Stock outstanding as of the Closing Date;




     (i) there shall have been no suspensions in the trading of the Common Stock as
of the Closing Date;




     (j) the Common Stock shall continue to be listed on The New York Stock Exchange
as of the Closing Date and the Shares shall be approved for



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listing on The New York Stock Exchange as of the Closing Date, subject to
official notice of issuance; and




     (k) the fulfillment in all material respects of those undertakings of the
Company to be fulfilled prior to the Closing.



          3.5 Termination. This Agreement shall automatically terminate if the Closing has not
occurred prior to June 15, 2009. Without limiting the generality of the foregoing, in event of
such termination, neither party shall have any obligation to sell or purchase the Shares.



     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 Delaware, and the Company is
qualified to transact business as a foreign corporation in each jurisdiction in which qualification
is required, except where the failure to so qualify would neither have nor reasonably be expected
to have a Material Adverse Effect (as defined in Section 4.6). Each subsidiary (as
defined under Rule 405 promulgated under the Securities Act) of the Company (each, a
“Subsidiary” and collectively, the “Subsidiaries”) are listed on Exhibit A
to this Agreement. 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 organization and is qualified to transact business as a foreign corporation in each
jurisdiction in which qualification is required, except where failure to so qualify would neither
have nor reasonably be expected to have a Material Adverse Effect.



          4.2 Reporting Company; Form S-3. The Company is not an “ineligible issuer” (as
defined in Rule 405 promulgated under the Securities Act) and is eligible to register the resale of
the Shares by the Purchaser on a registration statement on Form S-3 under the Securities Act. The
Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and has filed all reports required thereby during the past 12
calendar months. Provided that none of the Purchasers is deemed to be an underwriter with respect
to any shares and except as provided on Schedule 4.2 hereto, to the Company’s knowledge,
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 could be expected to prohibit 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.



          4.3 Authorized Capital Stock. The Company had duly authorized and validly issued
outstanding capitalization as set forth in the “Capitalization” section of the Private Placement
Memorandum (as defined below) as of the date set forth therein; the issued and outstanding shares
of Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and
nonassessable, (c) have been issued in compliance with all federal and state securities laws and,
(d) except for those granted therein by the holders thereof (other than the Company), are free and
clear of all security interests, liens, pledges, mortgages or other encumbrances, whether arising
voluntarily, involuntarily or by operation of law (“Liens”), (e)



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were not issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and (f) conform in all material respects to the description
thereof contained in the confidential private placement memorandum dated May 26, 2009 (together
with any exhibits, amendments and supplements thereto and all information incorporated by reference
therein, the “Private Placement Memorandum”). Except as set forth in the Private Placement
Memorandum and except for the stock options or other equity incentives that have been issued since
May 26, 2009, the Company does 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. With respect to each of the Subsidiaries,
(i) all of the issued and outstanding shares of such Subsidiary’s capital stock (or equity
interests in the case of non-corporate entities) 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 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 such Subsidiary’s
capital stock or any such options, rights, convertible securities or obligations.



          4.4 Rights Agreement. The Rights Agreement, dated as of December 30, 2008, between
the Company and Computershare Trust Company, N.A., as Rights Agent, (the “Rights
Agreement”), has been duly authorized, executed and delivered by the Company. The Rights have
been duly authorized by the Company and, when issued upon issuance of the Shares, will be validly
issued. The Series A Junior Participating Preferred Stock, par value $0.01 per share (the
“Rights Preferred”), has been duly authorized by the Company and validly reserved for
issuance. Upon the exercise of the Rights in accordance with the terms of the Rights Agreement,
the Rights Preferred, Common Stock or other securities issued pursuant to the Rights Agreement will
be validly issued, fully paid and non-assessable.



          4.5 Issuance, Sale and Delivery of the Shares. The issuance and sale of the Shares
have been duly authorized by the Company and the Shares, when issued, delivered and paid for in the
manner set forth in this Agreement, will be validly issued, fully paid and nonassessable, 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 any shares of Common
Stock of the Company exist with respect to the issuance and sale of the Shares by the Company
pursuant to this Agreement that have not been waived or complied with. 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 intention to file the Registration Statement (as
hereinafter defined)) to require the Company to register the sale of any capital stock owned by
such stockholder under the Registration Statement. No further approval or authority of the
Company’s 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.



          4.6 Due Execution, Delivery and Performance of the Agreements. 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,



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executed and delivered by the Company. This Agreement constitutes a legal, valid and binding
agreement 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
other similar laws and judicial decisions of general application relating to or affecting the
enforcement of creditors’ rights generally and the application of general equitable principles
relating to the availability of remedies, and except as rights to indemnity or contribution,
including but not limited to, indemnification provisions set forth in Section 7.3 of this
Agreement, may be limited by federal or state securities law or the public policy underlying such
laws. The execution and performance of this Agreement by the Company and the consummation of the
transactions herein contemplated will not violate any provision of the Restated Certificate of
Incorporation or Restated Bylaws of the Company or the organizational documents of any Subsidiary
and will not result in the creation of any Liens upon any assets of the Company or any Subsidiary
pursuant to the terms or provisions of, or 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 any agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument to which any of the Company or any Subsidiary is a party or by which any of the
Company or any Subsidiary or their respective properties may be bound or affected and in each case
that would have or reasonably be expected to have a Material Adverse Effect, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental agency or body applicable to the Company or any
Subsidiary or any of their respective properties. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other governmental agency or body is
required for the execution and delivery of this Agreement by the Company or the consummation by the
Company of the transactions contemplated by this Agreement, except for compliance with the Blue Sky
laws and federal securities laws applicable to the offering of the Shares and such as may be
required by the bylaws and rules of the Financial Industry Regulatory Authority, Inc. or The New
York Stock Exchange, Inc. For the purposes of this Agreement, the term “Material Adverse
Effect” shall mean any material adverse effect on the business, properties, assets, operations,
results of operations, condition (financial or otherwise) or prospects of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated hereby or by the agreements
and instruments to be entered into in connection herewith or therewith, or on the authority or
ability of the Company to perform its obligations hereunder.



          4.7 Accountants. Ernst & Young LLP, who has reported on the consolidated financial
statements and schedules contained in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008 (which are incorporated by reference into the Private Placement Memorandum), are
registered independent public accountants as required by the Securities Act and the rules and
regulations promulgated thereunder (the “1933 Act Rules and Regulations”) and by the rules
of the Public Accounting Oversight Board.



          4.8 No Defaults or Consents. Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the Shares) will give rise
to a right to terminate or accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default (or an event that with
notice or lapse of time or both would constitute a default) under, except such



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defaults that individually or in the aggregate would neither cause nor reasonably be expected
to cause a Material Adverse Effect, or require any consent or waiver under, or result in the
execution or imposition of any Liens upon any properties or assets of the Company or its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by which either the
Company or its Subsidiaries or any of its or their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the
Company or any of its Subsidiaries or violate any provision of the charter or by-laws of the
Company or any of its Subsidiaries, except for such consents or waivers that have already been
obtained and are in full force and effect.



          4.9 Contracts. The material contracts to which the Company is a party that have been
filed as exhibits to the SEC Documents (as defined in Section 4.2020), have been duly and
validly authorized, executed and delivered by the Company and constitute the legal, valid and
binding agreements of the Company, enforceable by and against it in accordance with their
respective terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws and judicial decisions of general
application relating to enforcement of creditors’ rights generally, and the application of general
equitable principles relating to or affecting the availability of remedies, and except as rights to
indemnity or contribution may be limited by federal or state securities laws or the public policy
underlying such laws.



          4.10 No Actions. There are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened against the Company or any Subsidiary before or
by any court, regulatory body or administrative agency or any other governmental agency or body,
domestic or foreign, which actions, suits or proceedings, individually or in the aggregate, would
have or 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, that would have or
reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary
is a party to or subject to the provisions of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental agency or body that would have
or reasonably be expected to have a Material Adverse Effect.



          4.11 Properties. The Company and each Subsidiary has good and valid title to all items
of tangible personal property described as owned by it in the consolidated financial statements
included in the Private Placement Memorandum that are material to the businesses of the Company and
its Subsidiaries taken as a whole, in each case free and clear of all Liens except for those
disclosed in the SEC Documents, or those, individually or in the aggregate, that (i) do not
materially interfere with the use made and proposed to be made of such property by the Company and
its Subsidiaries or (ii) would neither have nor reasonably be expected to have a Material Adverse
Effect. Any real property described in the Private Placement Memorandum as being leased by the
Company or any Subsidiary that is material to the business of the Company and its Subsidiaries,
taken as a whole, is held by them under valid, existing and enforceable leases, except those that,
individually or in the aggregate, (A) do not materially interfere with the use made or proposed to
be made of such property by the Company and its Subsidiaries or (B) would neither have nor
reasonably be expected to have a Material Adverse Effect.



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          4.12 No Material Adverse Change. Except as disclosed in the Private Placement
Memorandum or the SEC Documents, since December 31, 2008 (i) the Company and its Subsidiaries have
not incurred any material liabilities or obligations, indirect or contingent, or entered into any
material agreement or other transaction that is not in the ordinary course of business or that
could reasonably be expected to result in a material reduction in the future earnings of the
Company; (ii) the Company and its Subsidiaries have not sustained any material loss or material
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 none of the Company or
any Subsidiary is in material default in the payment of principal or interest on any outstanding
long-term debt obligations; (iv) there has not been any change in the capital stock of the Company
or its Subsidiaries other than the sale of the Shares hereunder and shares or options issued
pursuant to employee equity incentive plans or purchase plans approved by the Company’s Board of
Directors, or indebtedness material to the Company or its Subsidiaries (other than in the ordinary
course of business and any required scheduled payments); and (v) there has not occurred any event
that has caused or would reasonably be expected to cause a Material Adverse Effect.



          4.13 Amendment to Credit Facility. The Company has consummated the Amendment to
Credit Facility as described in the Private Placement Memorandum.



          4.14 Intellectual Property. Except as disclosed in the Private Placement Memorandum
or the SEC Documents, (i) the Company and each Subsidiary owns or has obtained valid and
enforceable licenses or options for the inventions, patent applications, patents, trademarks (both
registered and unregistered), trade names, copyrights and trade secrets necessary for the conduct
of its respective business as currently conducted (collectively, the “Intellectual
Property”); and (ii) (a) there are no third parties who have any ownership rights or other
claims to any Intellectual Property that is owned by, or has been licensed to, the Company or any
Subsidiary for the products and services of the Company and its Subsidiaries described in the
Private Placement Memorandum or the SEC Documents that would preclude the Company or any Subsidiary
from conducting its business as currently conducted and have or reasonably be expected to have a
Material Adverse Effect, except for the ownership rights of the owners of the Intellectual Property
licensed or optioned by the Company or any Subsidiary; (b) there are currently no sales of any
products or the provision of services that would constitute an infringement by third parties of any
Intellectual Property owned, licensed or optioned by the Company or any Subsidiary, which
infringement would have or reasonably be expected to have a Material Adverse Effect; (c) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the rights of the Company or any Subsidiary in or to any Intellectual Property owned,
licensed or optioned by the Company or any Subsidiary, other than claims that would neither have
nor reasonably be expected to have a Material Adverse Effect; (d) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
validity or scope of any Intellectual Property owned, licensed or optioned by the Company or any
Subsidiary, other than actions, suits, proceedings and claims that would neither have nor
reasonably be expected to have a Material Adverse Effect; and (e) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or any
Subsidiaries infringes or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary right of



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others, other than actions, suits, proceedings and claims that would neither have nor
reasonably be expected to have a Material Adverse Effect.



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



          4.16 Taxes. The Company and each Subsidiary has filed all required tax returns, and
all such tax returns are true, correct and complete in all material respects. The Company and each
Subsidiary has fully paid all taxes shown as due thereon. None of the Company or any Subsidiary has
knowledge of any deficiency or assessment with respect to liabilities for any material taxes that
has been or might be asserted or threatened against it, which has not been fully paid or finally
settled, unless being contested in good faith through appropriate proceedings and for which
adequate reserves are reflected in the Company’s consolidated financial statements. All tax
liabilities accrued through the date hereof have been adequately reserved for in the Company’s
consolidated financial statements.



          4.17 Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other
than income taxes) that are required to be paid in connection with the transactions contemplated by
this Agreement will be, or will have been, fully paid by the Company and all laws imposing such
taxes will be or will have been fully complied with.



          4.18 Investment Company. The Company is not an “investment company” or “promoter” or
“principal underwriter” for an investment company, within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission (the
“Commission”) promulgated thereunder.



          4.19 Offering Materials. None of the Company, its directors and officers has
distributed or will distribute prior to the Closing Date any offering material, including, without
limitation, any “free writing prospectus” (as defined in Rule 405 promulgated under the Securities
Act), in connection with the offering and sale of the Shares other than the Private Placement
Memorandum or any amendment or supplement hereto. The Company has not in the past nor will it
hereafter take any action independent of the Placement Agent to sell, offer for sale or solicit
offers to buy any securities of the Company that could result in the initial sale of the Shares not
being exempt from the registration requirements of Section 5 of the Securities Act.



          4.20 Insurance. The Company maintains insurance underwritten by insurers of
recognized financial responsibility, of the types and in the amounts that the Company reasonably
believes is adequate for its business, including, but not limited to, insurance covering all real
and personal property owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, with such deductibles as are customary
for companies in the same or similar business, all of which insurance is in full force and effect.



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          4.21 Additional Information. The information contained in the following documents
(the “SEC Documents”), which the Placement Agent has furnished to the Purchaser (or will
furnish prior to the Closing) or which are otherwise available through the Commission’s EDGAR
system, as of the dates thereof, did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading:




     (a) the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2008;




     (b) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2009;




     (c) the Company’s Definitive Proxy Statement for the Annual Meeting of
Stockholders held on May 27, 2009;




     (d) the Company’s Schedule TO filed on April 9 and April 24, 2009;




     (e) the Company’s Current Reports on Form 8-K filed on January 5, January 5,
January 29, March 4 and April 1, 2009;




     (f) the description of the Company’s common stock contained in its Registration
Statement on Form 8-A filed on October 17, 1994, as amended by the Company’s Current
Reports on Form 8-K filed with the Commission on March 8, 2002, December 20, 2007
and February 28, 2008, respectively;




     (g) all other documents, if any, filed by the Company (excluding the Current
Reports on Form 8-K or the portions thereof furnished under Item 2.02 or Item 7.01
of Form 8-K) with the Commission since December 31, 2008 pursuant to the reporting
requirements of the Exchange Act.



     The SEC Documents incorporated by reference in the Private Placement Memorandum or attached as
exhibits thereto, at the time they became effective or were filed with the Commission, as the case
may be, complied in all material respects with the requirements of the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder (the “1934 Act Rules and
Regulations” and, together with the 1933 Act Rules and Regulations, the “Rules and
Regulations”). In the past 12 calendar months, the Company has filed all documents required to
be filed by it prior to the date hereof with the Commission pursuant to the reporting requirements
of the Exchange Act and the 1934 Act Rules and Regulations.



          4.22 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 that has constituted or that might
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.



          4.23 Use of Proceeds. The Company shall use the proceeds from the sale of the Shares
as described under “Use of Proceeds” in the Private Placement Memorandum.



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          4.24 Non-Public Information. Except as disclosed in the Private Placement Memorandum,
the Company has not disclosed to the Purchaser information that would constitute material
non-public information as of the Closing Date other than the existence of the transactions
contemplated hereby.



          4.25 Use of Purchaser Name. Except as otherwise required by applicable law or
regulation, the Company shall not use the Purchaser’s name or the name of any of its Affiliates (as
defined below) 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, which consent shall not be unreasonably withheld or delayed. For purposes of
this Agreement, “Affiliate” means, with respect to any natural person, firm, partnership,
association, corporation, limited liability company, company, trust, entity, public body or
government (a “Person”), any Person that, directly or indirectly, controls, is controlled
by, or is under common control with, such Person. The term “control” (including the terms
“controlled by” and “under common control with”) as used in this definition means the possession,
directly or indirectly, of the power to direct or cause the direction of management and policies of
a Person, whether through the ownership of voting securities, by contract or otherwise. With
respect to any natural person, the term “Affiliate” means (i) the spouse or children (including
those by adoption) and siblings of such Person; and any trust whose primary beneficiary is such
Person, such Person’s spouse, such Person’s siblings and/or one or more of such Person’s lineal
descendants, (ii) the legal representative or guardian of such Person or of any such immediate
family member in the event such Person or any such immediate family member becomes mentally
incompetent and (iii) any Person controlled by or under common control with any one or more of such
Person and the Persons described in clauses (i) or (ii) preceding.



          4.26 Related-Party Transactions. No transaction has occurred between or among the
Company, on the one hand, and its Affiliates, officers or directors on the other hand, that is
required to have been described under applicable securities laws and the rules and regulations
promulgated thereunder in its Exchange Act filings and is not so described in such filings.



          4.27 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 have or would reasonably be expected to have a Material Adverse Effect. There are
no such transactions, arrangements or other relationships with the Company that may create any
material contingencies or liabilities that are not otherwise disclosed by the Company in its
Exchange Act filings.



          4.28 Governmental Permits, Etc. The Company and each Subsidiary has all franchises,
licenses, certificates and other authorizations from federal, state or local governments or
governmental agencies, departments or bodies that are currently necessary 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 neither
have nor reasonably be expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or



11









 







modification of any such permit that, if the subject of an unfavorable decision, ruling or
finding, would have or would reasonably be expected to have a Material Adverse Effect.



          4.29 Financial Statements. The consolidated financial statements of the Company and
the related notes and schedules thereto included in its Exchange Act filings present fairly, in all
material respects, the financial condition of the Company and its consolidated Subsidiaries as of
the dates thereof and the results of operations, stockholders’ equity and cash flows of the Company
and its consolidated Subsidiaries at the dates and for the periods covered thereby. Such financial
statements and the related notes and schedules thereto have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and all adjustments necessary for a fair presentation of
results for such periods have been made; provided, however, that the unaudited financial statements
are subject to normal year-end audit adjustments (which are not expected to be material) and do not
contain all footnotes required under generally accepted accounting principles.



          4.30 Listing Compliance. The Company is in compliance with the requirements of The
New York Stock Exchange for continued listing of the Common Stock thereon. The Company has taken
no action designed to, or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or the listing of the Common Stock on The New York Stock Exchange, nor
has the Company received any notification that the Commission or The New York Stock Exchange is
currently contemplating terminating such registration or listing. The transactions contemplated by
this Agreement will not contravene the rules and regulations of The New York Stock Exchange. The
Company will comply with all requirements of The New York Stock Exchange with respect to the
issuance of the Shares and shall cause the Shares to be listed on The New York Stock Exchange and
listed on any other exchange on which the Common Stock is listed on or before (subject to official
notice of issuance) the Closing Date.



          4.31 Internal Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management’s general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company maintains disclosure
controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that are
designed to ensure that material information relating to the Company is made known to the Company’s
principal executive officer and the Company’s principal financial officer or persons performing
similar functions. Except as set forth in the Private Placement Memorandum or the SEC Documents,
there is and has been no failure on the part of the Company, or to its knowledge after due inquiry,
any of the Company’s directors or officers, in their capacities as such, to comply with any
applicable provisions of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated
therewith (the “Sarbanes Oxley Act”). Each of the principal executive officer and the
principal financial officer of the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company as



12









 







applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley
Act with respect to all reports, schedules, forms, statements and other documents required to be
filed by it with the Commission. For purposes of the preceding sentence, “principal executive
officer” and “principal financial officer” shall have the meanings given to such terms in the
Sarbanes-Oxley Act. The Company has taken all reasonable actions necessary to ensure that it is in
compliance with all provisions of the Sarbanes-Oxley Act that are in effect and with which the
Company is required to comply.



          4.32 Foreign Corrupt Practices. Neither the Company nor any Subsidiary has, nor, to
the knowledge of the Company, has any director, officer, agent or employee, in the course of its
actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii)
made any direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government
official or employee.



          4.33 Employee Relations. Neither the Company nor any Subsidiary is a party to any
collective bargaining agreement or employs any member of a union (other than with regards to
statutory unions required under foreign laws and regulations). The Company and each Subsidiary
believe that their relations with their employees are good. No executive officer of the Company
(as defined in Rule 501(f) promulgated under the Securities Act) has notified the Company that such
officer intends to leave the Company or otherwise terminate such officer’s employment with the
Company. No executive officer of the Company is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement or any other agreement or any restrictive covenant, and the
continued employment of each such executive officer does not subject the Company or any Subsidiary
to any liability with respect to any of the foregoing matters.



          4.34 ERISA. Each material employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its Affiliates for employees or
former employees of the Company and its Subsidiaries, or to which the Company or any of its
Subsidiaries has any liability thereunder (a “Company Benefit Plan”), has been maintained in
material compliance with its terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”); no action, dispute, claim, suit or proceeding is pending or, to the
knowledge of the Company, threatened with respect to any Company Benefit Plan (other than claims
for benefits in the ordinary course) that could result in a material liability to the Company; no
prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred that could result in a material liability to the Company with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative exemption; and for each
such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA,
no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each



13









 







such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present
value of all benefits accrued under such plan determined using reasonable actuarial assumptions.



          4.35 Environmental Matters. There has been no storage, disposal, generation,
manufacture, transportation, handling or treatment of toxic wastes, hazardous wastes or hazardous
substances by the Company or to its knowledge, any Subsidiary (or, to the knowledge of the Company,
any of their predecessors in interest) at, upon or from any of the property now or previously owned
or leased by the Company or any Subsidiary in material violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or that would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit; there has been no
material spill, discharge, leak, emission, injection, escape, dumping or release of any kind into
such property or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company or
any Subsidiary or with respect to which the Company or any Subsidiary have knowledge; the terms
“hazardous wastes”, “toxic wastes”, “hazardous substances”, and “medical wastes” shall have the
meanings specified in any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.



          4.36 Integration; Other Issuances of Shares. The Company has not issued any shares of
Common Stock or shares of any series of preferred stock or other securities or instruments
convertible into, exchangeable for or otherwise entitling the holder thereof to acquire shares of
Common Stock that would be integrated with the sale of the Shares to the Purchaser for purposes of
the Securities Act or of any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated quotation system on which
any of the securities of the Company are listed or designated. Assuming the accuracy of the
representations and warranties of the Purchasers to the Company as set forth herein, the offer and
sale of the Shares and related Rights by the Company to the Purchasers pursuant to the Agreements
will be exempt from the registration requirements of the Securities Act.



          4.37 Disclosure. All disclosure provided to the Purchaser, including, without
limitation, the Private Placement Memorandum, regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company, were, as of the date
made, true and correct and did not contain any untrue statement of material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.



          4.38 No New Issuances and Registrations. The Company agrees that until such time as
the Commission declares the Registration Statement effective, it will not, and it will cause its
directors, officers and Affiliates not to, directly or indirectly, grant, issue, sell, pledge or
otherwise dispose of any shares of Common Stock, or securities convertible into or exchangeable for
Common Stock, or file a registration statement with respect to the registration of any such newly
issued shares of Common Stock or other securities. Notwithstanding the above, the restrictions
set forth in this Section 4.38 shall not apply to issuances by the Company of (i)
securities required to be issued pursuant to contractual obligations of the Company in effect as of
the date hereof; (ii) securities issued on a pro rata basis to all holders of a class of
outstanding



14









 







equity securities of the Company; (iii) securities issued in connection with a strategic
partnership, licensing, joint venture, collaboration, lending or other similar arrangements, or in
connection with the acquisition or license by the Company of any business, products or
technologies, so long as the aggregate amount of such issuances pursuant to this clause (iii) does
not exceed 10% of the Company’s outstanding capital stock measured as of the closing of the sale of
the Shares, including the Shares; and (iv) equity securities issued pursuant to employee
compensation, incentive, benefit or purchase plans in effect as of the date hereof or subsequently
adopted by the Company’s Board of Directors. Notwithstanding the foregoing, the Company shall not,
and shall cause its directors, officers and Affiliates not to, sell, offer for sale or solicit
offers to buy any shares of Common Stock or shares of any series of preferred stock or other
securities or instruments convertible into, exchangeable for or otherwise entitling the holder
thereof to acquire shares of Common Stock that would be integrated with the sale of the Shares to
the Purchaser for purposes of the Securities Act.



          4.39 No Undisclosed Events, Liabilities, Developments or Circumstances. Except for
the transactions contemplated hereby, which will be disclosed in the Press Release (as defined in
Section 7.1(i) below), no event, liability, development or circumstance has occurred or
exists, or is contemplated to occur, with respect to the Company or its Subsidiaries or their
respective business, properties, prospects, operations or financial condition, that would be
required to be disclosed by the Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its
Common Stock and which has not been publicly announced.



     5. Representations, Warranties and Covenants of the Purchaser. The Purchaser
represents and warrants to, and covenants with, the Company that:



          5.1 Experience. (i) The Purchaser is knowledgeable, sophisticated and experienced in
financial and business matters, in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in the purchase of the
Shares, including, without limitation, investments in securities issued by the Company and
comparable entities, and the Purchaser has undertaken an independent analysis of the merits and the
risks of an investment in the Shares and has reviewed carefully the Private Placement Memorandum,
based on the Purchaser’s own financial circumstances; (ii) the Purchaser has had the opportunity to
request, receive, review and consider all information it deems relevant in making an informed
decision to purchase the Shares and to ask questions of, and receive answers from, the Company
concerning such information; (iii) the Purchaser is acquiring the number of Shares set forth in
Section 2 above in the ordinary course of its business and for its own account and with no
present intention of distributing any of such Shares or any arrangement or understanding with any
other Persons regarding the distribution of such Shares (this representation and warranty not
limiting the Purchaser’s right to resell the Shares pursuant to the Registration Statement or in
compliance with the Securities Act and the Rules and Regulations, or, other than with respect to
any claims arising out of a breach of this representation and warranty, the Purchaser’s right to
indemnification under Section 7.3); (iv) the Purchaser will not, directly or indirectly,
offer, sell, pledge (other than pledges in connection with bona fide margin accounts), transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of (other than pledges in connection with bona fide margin accounts)) any of the Shares, nor will
the Purchaser engage in any short sale that




15












 




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 as currently
interpreted on the date hereof; (v) the Purchaser will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with resales of the Shares
pursuant to the Registration Statement or with the applicable requirements of any exemption from
the Securities Act; (vi) 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, unless the
Purchaser notifies the Company otherwise, 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; (vii) the Purchaser has, in connection with
its decision to purchase the number of Shares set forth in Section 2 above, relied solely
upon the SEC Documents, the Private Placement Memorandum and the representations and warranties of
the Company contained herein, and the Purchaser has not relied on the Placement Agent in
negotiating the terms of its investment in the Shares and, in making a decision to purchase the
Shares, the Purchaser has not received or relied on any communication, investment advice or
recommendation from the Placement Agent; (viii) the Purchaser has had an opportunity to discuss
this investment with representatives of the Company and ask questions of them but has not relied on
any communication (other than the Private Placement Memorandum) or recommendation from any
representative of the Company and (ix) the Purchaser is an “accredited investor” (an
“Accredited Investor”) within the meaning of Rule 501 under the Securities Act.




          5.2 Reliance on Exemptions. 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.




          5.3 Confidentiality. For the benefit of the Company, the Purchaser previously agreed
with the Placement Agent to keep confidential all information concerning this private placement.
The Purchaser is prohibited from reproducing or distributing this Agreement, the Private Placement
Memorandum or any other offering materials or other information provided by the Company in
connection with the Purchaser’s consideration of its investment in the Company, 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 the Press Release (as defined below), which shall
include any material, non-public information provided to



16









 






the Purchaser prior to the date hereof. 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 5.9 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 provide the Company with prompt notice of any such
request or order in time sufficient to enable the Company to seek an appropriate protective order.




          5.4 Investment Decision. The Purchaser understands that nothing in the Agreement or
any other materials presented to the Purchaser in connection with the purchase and sale of the
Shares constitutes legal, tax or investment advice. The Purchaser has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.




          5.5 Risk of Loss. 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, and the Purchaser has full cognizance of and understands all of the risk factors
related to the Purchaser’s purchase of the Shares, including, but not limited to, those set forth
and incorporated by reference 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.




          5.6 Legend; Legend Removal. The Purchaser understands that, until such time as the
Registration Statement has been declared effective, or the Shares are sold pursuant to Rule 144
under the Securities Act without any restriction as to the number of securities as of a particular
date that can then be immediately sold, 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 STATE SECURITIES LAWS AND THE SECURITIES LAWS OF 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
OR THE COMPANY HAS



17









 







RECEIVED FROM THE HOLDER REASONABLE ASSURANCE THAT THE SHARES CAN BE
SOLD, ASSIGNED OR TRANSFERRED PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”



     The legend set forth above shall be removed and the Company shall issue a certificate without
such legend to the holder of the Shares upon which it is stamped or issue such Shares to such
holder by electronic delivery at the applicable balance account at The Depository Trust Company
(“DTC”), if, unless otherwise required by state securities laws, (i) the Registration
Statement covering registered resales of such Shares has been declared effective under the
Securities Act and such Registration Statement remains effective under such Act, or (ii) in
connection with any sale, assignment or other transfer of Shares that is not to be effected
pursuant to such Registration Statement, such holder first provides the Company with an opinion of
counsel reasonably satisfactory to the Company, in a generally acceptable form, to the effect that
such sale, assignment or transfer of the Shares may be made without registration under the
applicable requirements of the Securities Act and that such legend is no longer required, or (iii)
such holder first provides the Company with reasonable assurance that the Shares can be sold,
assigned or transferred pursuant to Rule 144. The Company shall be responsible for the fees of its
transfer agent and all DTC fees associated with such issuance. If the Company shall fail for any
reason or for no reason to issue to the holder of the Shares within five (5) Trading Days (as
defined below) after the occurrence of any of (i) through (iii) above and following the delivery by
such holder to the Company in accordance with Section 10 hereof or to the Company’s
transfer agent (with a copy delivered to the Company in accordance with Section 10 hereof)
of a certificate representing Shares issued with a restrictive legend, a certificate without such
legend to such holder or to issue such Shares to such holder by electronic delivery at the
applicable balance account at DTC, and if on or after such Trading Day such holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by such holder of such Shares that the holder anticipated receiving without legend from the Company
(a “Buy-In”), then the Company shall, within five (5) Trading Days after such holder’s
request and in such holder’s discretion, either (i) pay cash to such holder in an amount equal to
such holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock actually purchased by such holder (the “Buy-In Price”), at which point the
Company’s obligation to deliver such unlegended Shares shall terminate and such holder shall
transfer to the Company title to such Shares and hereby agrees to execute and deliver to the
Company such documentation as the Company may reasonably request to reflect such transfer, or (ii)
promptly honor its obligation to deliver to the holder such unlegended Shares as provided above and
pay cash to the holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the closing bid price of the Common
Stock on the date such legend-free Shares were required to have been delivered. For purposes of the
Agreement, “Trading Day” means a day on which the Common Stock is traded on The New York
Stock Exchange or, if the Common Stock is not then traded on The New York Stock Exchange, the
principal market or exchange on which the Common Stock is then listed or quoted for trading.



18









 





     The Company acknowledges and agrees that, so long as Shares owned by the Purchaser remain
“restricted securities” within the meaning of Rule 144 and have not been sold pursuant to the
Registration Statement, the Purchaser may from time to time pledge some or all of such Shares
pursuant to a bona fide margin agreement with a registered broker-dealer that is a qualified
institutional buyer as defined in Rule 144A under the Securities Act (a “QIB”) or an
Accredited Investor or grant a security interest in some or all of such Shares to a financial
institution that is a QIB or an Accredited Investor (each such pledgee or transferee, a
“Qualifying Institution”), provided in each case such Qualifying Institution agrees to be
bound by the provisions of this Agreement (including without limitation complying with the
restrictions on transfer set forth herein and agreeing 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).
The Purchaser shall not be required to give notice to the Company of such pledge or granting of a
security interest, but, in accordance with Section 7.2 hereof, shall promptly furnish to
the Company upon request a copy of such instrument or instrument of transfer evidencing the
assignee’s or transferee’s agreement to be bound by the provisions of this Agreement (including
Section 11 hereof). If required under the terms of the Purchaser’s arrangement with such
Qualifying Institution, the Purchaser may transfer any such pledged or secured Shares to such
Qualifying Institution, provided such transfer is made in compliance with the Securities Act and
the 1933 Act Rules and Regulations and any applicable state securities laws. Such transfer would
not be subject to approval by the Company, and no legal opinion of legal counsel of the Qualifying
Institution would be required in connection therewith. At the Purchaser’s expense, the Company
will execute and deliver such reasonable documentation as such Qualifying Institution may
reasonably request in connection with a transfer of such Shares, including, if appropriate, the
preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder to include such Qualifying Institution as a selling stockholder
therein.



          5.7 Stop Transfer. The certificates representing the Shares will be subject to a stop
transfer order with the Company’s transfer agent prior to the time that the resale Registration
Statement on Form S-3 is effective, which order restricts the transfer of such shares, except in
circumstances in which the Company is permitted to suspend the effectiveness of the Registration
Statement as permitted herein and with notice provided to the Purchaser of such stop transfer order
in accordance with Section 10.




          5.8 Residency. The Purchaser’s principal executive offices are in the jurisdiction
set forth immediately below the Purchaser’s name on the signature pages hereto.




          5.9 Public Sale or Distribution. 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 (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule). The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus (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



19









 






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. Without the Company’s prior
written consent, which consent shall not unreasonably be withheld or delayed, the Purchaser shall
not use any written materials to offer the Shares for resale other than the Prospectus, including
any “free writing prospectus” as defined in Rule 405 under the Securities Act. The Purchaser
covenants that it will not sell any Shares pursuant to said Prospectus during the period commencing
at the time when the Company gives the Purchaser written notice of Suspension of the use of said
Prospectus and ending at the time when the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to said Prospectus. In each such notice, the
Company shall not disclose the content of any material, non-public information to the Purchaser.
The Purchaser shall maintain in confidence the receipt of any notice of Suspension.
Notwithstanding the foregoing, the Company agrees that no Suspension shall be for a period in
excess of fifteen (15) consecutive days, and during any three hundred sixty-five (365) day period,
the aggregate of all of the Suspensions shall not exceed an aggregate of thirty (30) days, and the
first day of any Suspension shall be at least five (5) trading days after the last day of any prior
Suspension (each, an “Allowable Suspension Period”).




          5.10 Organization; Validity; Enforcements. 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 agency or body applicable to the Purchaser, (iii) no consent, approval,
authorization or other order of any court, regulatory body, administrative agency or other
governmental agency or 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 such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws or judicial decisions of general application relating to or affecting the
enforcement of creditors’ rights generally and the application of equitable principles relating to
the availability of remedies, and except as rights to indemnity or contribution, including, but not
limited to, 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.




          5.11 Short Sales. Since the time the Purchaser was first contacted about the offering
of the Shares and the transactions contemplated hereby, the Purchaser has not taken, and prior to
the public announcement of the transaction the Purchaser shall not take, any action that



20









 






has caused or will cause the Purchaser to have, directly or indirectly, sold or agreed to sell
any shares of Common Stock, effected any short sale, whether or not against the box, established
any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to
the Common Stock, granted any other right (including, without limitation, any put or call option)
with respect to the Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock.




     6. Survival of Agreements; Non-Survival of Company Representations and Warranties.
Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent,
all representations, warranties, covenants and agreements 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.



     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 five business
days following the Closing Date (the “Filing Deadline”), prepare and file
with the Commission the Registration Statement on Form S-3 relating to the resale of
the Shares and related Rights by the Purchaser and the Other Purchasers from time to
time on The New York 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 reasonable best efforts, subject to receipt of necessary
information from the Purchasers, to cause the Commission to declare the Registration
Statement effective by the earlier of (i) 3 days after the Commission has advised
the Company that the Registration Statement has not been selected for review by the
Commission, (ii) 3 days after the Commission has advised the Company the Commission
has no more comments with respect to the Registration Statement or (iii) 75 days
after the Closing Date (each of (i) and (ii), the “Effective Deadline”);




     (c) by 9:30 a.m., New York City time, on the second business day following the
date the Registration Statement is declared effective by the Commission, the Company
shall file with the Commission in accordance with Rule 424 under the Securities Act
the final prospectus to be used in connection with sales pursuant to such
Registration Statement;




     (d) promptly prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective until the
earlier of (i) the date as of which the Investors may sell all of the Shares covered
by such Registration Statement without restriction pursuant to Rule 144 and without
the requirement to be in compliance with Rule 144(c)(1) (or



21









 






any successor thereto) promulgated under the Securities Act or (ii) the date on
which the Investors shall have sold all of the Shares covered by the Registration
Statement. For the purpose of this Agreement, “Investor” means a Purchaser
or any transferee or assignee thereof to whom a Purchaser assigns its rights as a
holder of Shares under this Agreement and who agrees to become bound by the
provisions of this Agreement and any transferee or assignee thereof to whom a
transferee or assignee assigns its rights as a holder of Shares under this Agreement
and who agrees to become bound by the provisions of this Agreement;




     (e) furnish to the Purchaser with respect to the Shares and related Rights
registered under the Registration Statement (and to each underwriter, if any, of
such Shares and related Rights) 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 and related Rights by the
Purchaser;




     (f) 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;




     (g) bear all expenses in connection with the procedures in paragraphs (a)
through (e) of this Section 7.1 and the registration of the Shares and
related Rights 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, in connection with the offering of the Shares and
related Rights pursuant to the Registration Statement;




     (h) file a Form D with the Commission with respect to the Shares and related
Rights as required under Regulation D promulgated under the Securities Act and to
provide a copy thereof to the Purchaser promptly after filing;




     (i) issue a press release describing the transactions contemplated by this
Agreement (the “Press Release”) on or before 9:00 a.m., New York City time,
on the first business day following the date hereof; and




     (j) the Company shall not, and shall cause each of its Subsidiaries and each of
their respective officers, directors, employees and agents not to, provide any
Purchaser with any material, non-public information regarding the Company or any of
its Subsidiaries from and after the filing of the Press Release without the express
written consent of such Purchaser;




     (k) in order to enable the Purchasers to sell the Shares under Rule 144 under
the Securities Act, for a period of one year from Closing, use its reasonable best
efforts to comply with the requirements of Rule 144, including without



22









 







limitation, use its reasonable best efforts to comply with the requirements of
Rule 144(c) with respect to public information about the Company and to timely file
all reports required to be filed by the Company under the Exchange Act; and




     (l) permit the Purchaser and its legal counsel to review and comment upon (i)
an initial draft of a Registration Statement at least two (2) business days prior to
its filing with the Commission and (ii) any numbered pre-effective amendment to such
Registration Statement (for purposes of clarification, excluding any Annual Report
on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing incorporated by reference into such Registration Statement) at least
one (1) business day prior to its filing with the Commission. The Company shall
furnish to the Purchaser or its legal counsel, without charge, copies of any
correspondence from the Commission to the Company or its representatives relating to
the Registration Statement.



     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.
Neither the Company nor any Subsidiary or Affiliate thereof shall identify the Purchaser as an
underwriter in any public disclosure or filing with the Commission or any stock exchange or market
without the prior written consent of Purchaser. The forms of the questionnaires related to the
Registration Statement to be completed by the Purchaser are attached hereto as Appendix I.



     For purposes of this Section 7.1 and for purposes of Sections 7.3(d),
7.6 and 18 hereof, the definition of “Shares” shall include any capital stock of
the Company issued or issuable with respect to the Shares as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise.



          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 pursuant to any applicable state securities laws,
except pursuant to the Registration Statement referred to in Section 7.1, in accordance
with Rule 144 under the Securities Act 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. For the purpose of this Section 7.3:





(i) the term “Purchaser Indemnified Persons” shall mean
each Investor, director, officer, member, partner, employee,
agent and representative of the Investor and each Person, if
any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act; and




(ii) the term “Registration Statement” shall include
any preliminary prospectus, final prospectus, free writing
prospectus, exhibit, supplement or amendment included in or



23









 







relating to, and any document incorporated by reference in, the
Registration Statement referred to in Section 7.1.




     (a) The Company agrees to indemnify and hold harmless the Purchaser Indemnified
Persons, against any losses, claims, damages, liabilities or expenses, joint or
several, to which the Purchaser Indemnified Persons 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 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 (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including, without limitation, 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,
without limitation, any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rules 430B,
430C or 434, of the 1933 Act Rules and Regulations, or the Prospectus, in the form
first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Rules and
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 that 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 the Registration Statement or any amendment or supplement
thereto not misleading or in the Prospectus or any amendment or supplement thereto
not misleading in light of the circumstances under which they were made;
provided, however, that the Company will not be liable for amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall not
be unreasonably withheld or delayed, and the Company will not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense arises
out of or is based upon (A) 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 the Purchaser expressly for
use therein, (B) the failure of the Purchaser to comply with the covenants and
agreements contained herein or (C) the inaccuracy of any representation or warranty
made by the Purchaser herein, (ii) any misrepresentation or breach of any
representation or warranty made by the Company in the Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (iii) any breach
of any covenant, agreement or obligation of the Company contained in the Agreement
or any other certificate, instrument or document contemplated hereby or thereby or
(iv) any cause of action, suit or claim brought or made against such Purchaser
Indemnified Person by a third party (including for these purposes a derivative
action brought on behalf of the Company) and arising out of or resulting (A) from
the execution, delivery, performance or enforcement of the Agreement or any other
certificate,



24









 







instrument or document contemplated hereby or thereby, (B) from any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance of the Shares or (C) solely from the status of such
Purchaser or holder of the Shares as an investor in the Company, and the Company
will promptly reimburse the Purchaser Indemnified Persons for reasonable legal and
other expenses as such expenses are reasonably incurred by the Purchaser Indemnified
Persons in connection with investigating, defending or preparing to defend,
settling, compromising or paying any such loss, claim, damage, liability, expense or
action.




     (b) The Purchaser and Other Purchasers will severally, but not jointly,
indemnify and hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (a “Control Person”), against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed the Registration Statement or Control Person 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, but only if such settlement is effected with the written consent of the
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 any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto, or
that 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 in the Registration Statement or any amendment or supplement thereto not
misleading or in the Prospectus or any amendment or supplement thereto not
misleading in the light of the circumstances under which they were made, 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 the Purchaser expressly for use therein; and will reimburse the Company, each of
its directors, each of its officers who signed the Registration Statement and each
such Control Person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed the Registration
Statement or Control Person, as the case may be, in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Purchaser’s aggregate
liability under this Section 7 shall not exceed the amount of net proceeds
received by the Purchaser on the sale of the Shares pursuant to the Registration
Statement.




     (c) 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



25









 








indemnifying party under this Section 7.3, promptly notify the indemnifying party in
writing thereof, but the omission to notify the indemnifying party will not relieve
it from any liability that 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 that 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 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 or delayed. 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.




     (d) 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 (a), (b) or (c)



26









 







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 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
that resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Purchaser on the other shall be deemed to be in the
same proportion as the amount paid by the Purchaser to the Company pursuant to this
Agreement for the Shares purchased by the Purchaser that were sold pursuant to the
Registration Statement bears to the difference (the “Difference”) between
the amount the Purchaser paid for the Shares that were sold pursuant to the
Registration Statement and the amount received by the Purchaser from such sale. The
relative fault of the Company on the one hand and the 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 the 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 (c) 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 (c) 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 (d); provided,
however, that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (c) for purposes of
indemnification. The Company and the Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7.3 were determined
solely by pro rata allocation (if the Purchaser were treated as one entity for such
purpose) 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, the Purchaser shall not be required to
contribute any amount in excess of the amount by which the Difference exceeds the
amount of any damages that the Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7.3, the Purchaser shall not
be required to contribute any amount in excess of the



27









 







amount of net proceeds received by such Purchaser from the sale of its Shares
pursuant to the Registration Statement, less any other payments made by such
Purchaser pursuant to this Section 7.3. 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. 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 5.9 or Section 7.2 upon the transferability of the Shares shall cease and
terminate as to any particular number of the Shares upon the earlier of (i) the passage of one year
from the effective date of the Registration Statement covering such Shares and (ii) 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 Information Available. The Company, upon the reasonable request of the Purchaser,
shall make available for inspection by each Purchaser, any underwriter participating in any
disposition pursuant to the Registration Statement and any attorney, accountant or other agent
retained by the Purchaser or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s officers, employees and
independent accountants to supply all information reasonably requested by the Purchaser or any such
underwriter, attorney, accountant or agent in connection with the Registration Statement, and all
such information provided by the Company pursuant to this Section 7.5 shall be subject to
the confidentiality obligations imposed by Section 5.3.




          7.6 Delay in Filing or Effectiveness of Registration Statement; Public Information.





     (a) If (i) a Registration Statement covering all of the Shares required to be
covered thereby and required to be filed by the Company pursuant to this Agreement
is (A) not filed with the SEC on or before the respective Filing Deadline (a
“Filing Failure”) or (B) not declared effective by the SEC on or before the
Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any day after
the Effective Date sales of all of the Shares required to be included on such
Registration Statement cannot be made (other than during an Allowable Suspension
Period (as defined in Section 5.9)) pursuant to such Registration Statement or
otherwise (including, without limitation, because of a failure to keep such
Registration Statement effective, to disclose such information as is necessary for
sales to be made pursuant to such Registration Statement or to register a sufficient
number of shares of Common Stock or to maintain the listing of the shares of Common
Stock) (a “Maintenance Failure”) then, as partial relief for the damages to
any Investor by reason of any such delay in or reduction of its ability to sell the
underlying shares of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each Investor
relating to such Registration Statement an amount in cash equal to (A) one percent
(1.0%) of the aggregate Purchase Price of such Investor’s Shares included in such
Registration Statement on each of the following dates: (i)



28









 







the day of a Filing Failure and on every thirtieth day (pro rated for periods
totaling less than thirty (30) days) thereafter until the date such Filing Failure
is cured; (ii) the day of an Effectiveness Failure and on every thirtieth day (pro
rated for periods totaling less than thirty (30) days) thereafter until the date
such Effectiveness Failure is cured; and (iii) the initial day of a Maintenance
Failure and on every thirtieth day (pro rated for periods totaling less than thirty
(30) days) thereafter until the date such Maintenance Failure is cured. The
payments to which an Investor shall be entitled to pursuant to this Section
7.6 are referred to herein “Registration Delay Payments.” Registration
Delay Payments shall be paid on the earlier of (I) the last day of the calendar
month during which such Registration Delay Payments are incurred and (II) the third
Business Day after the event or failure giving rise to the Registration Delay
Payments is cured. In the event the Company fails to make Registration Delay
Payments in a timely manner, such Registration Delay Payments shall bear interest at
the rate of one percent (1.5%) per month (prorated for partial months) until paid in
full. The parties agree that the maximum aggregate Registration Delay Payments
payable to an Investor under this Agreement shall be 10% of the aggregate purchase
price paid by such Investor pursuant to this Agreement. In addition, and
notwithstanding anything to the contrary contained herein, if the Company has
received a comment by the SEC requiring an Investor to be named as an underwriter in
the Registration Statement (which notwithstanding the reasonable best efforts of the
Company is not withdrawn by the SEC) and such Investor elects in writing not to be
named as a selling stockholder in the Registration Statement, the Investor shall not
be entitled to any Registration Delay Payments with respect to such Registration
Statement.




(b) At any time during the period commencing on the six (6) month anniversary
of the Closing Date and ending at such time that all of the Shares can be sold
without the requirement to be in compliance with Rule 144(c)(1) and otherwise
without restriction or limitation pursuant to Rule 144(c), including, if applicable,
Rule 144(i), if a registration statement is not available for the resale of all of
the Shares and the Company shall fail for any reason to satisfy the current public
information requirement under Rule 144 (a “Public Information Failure”)
then, as partial relief for the damages to any Investor by reason of any such delay
in or reduction of its ability to sell the Shares of such Investor (which remedy
shall not be exclusive of any other remedies available at law or in equity), the
Company shall pay to each Investor an amount in cash equal to one percent (1.0%) of
the aggregate Purchase Price of such Investor’s Shares on every thirtieth day (pro
rated for periods totaling less than thirty days) after a Public Information Failure
until the earlier of (i) the date such Public Information Failure is cured and (ii)
such time that such public information is no longer required pursuant to Rule 144.
The payments to which a holder shall be entitled pursuant to this Section
7.6(b) are referred to herein as “Public Information Failure Payments.”
Public Information Failure Payments shall be paid on the earlier of (I) the last day
of the calendar month during which such Public Information Failure Payments are
incurred and (II) the third Business Day after the event or failure giving rise to
the



29









 







Public Information Failure Payments is cured. In the event the Company fails
to make Public Information Failure Payments in a timely manner, such Public
Information Failure Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full.



          7.7 Questionnaires. The Purchaser agrees to furnish to the Company completed
questionnaires in the form attached hereto as Appendix I at the Closing for use in
preparation of the Registration Statement contemplated in Section 7.1. The Company shall
not be required to include the Shares of the Purchaser in the Registration Statement and shall not
be required to pay a cash payment to such Purchaser pursuant to Section 7.6 so long as the
Purchaser fails to furnish fully completed questionnaires at the Closing or does not respond to
subsequent written requests for information by the Company within two business days of such
requests; provided that the Company shall be required to provide only two (2) such subsequent
written request for information.




     8. Broker’s Fee. The Purchaser acknowledges that the Company intends to pay to the
Placement Agent a fee in respect of the sale of the Shares to the Purchaser. The Purchaser and the
Company agree that the Purchaser shall not be responsible for such fee and that the Company will
indemnify and hold harmless the Purchaser Indemnified Persons against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchaser Indemnified Person may become
subject with respect to such fee. Each of the parties hereto 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.



     9. Independent Nature of Purchasers’ Obligations and Rights. The obligations of the
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 the Agreements. The decision of each Purchaser to purchase the Shares
pursuant to the Agreements has been made by such Purchaser independently of any other Purchaser.
Nothing contained in the Agreements, and no action taken by any Purchaser pursuant thereto, shall
be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any
other kind of entity, or create a 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 the Agreements.
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 Shares 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.



     10. Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed by first-class registered or certified airmail, e-mail, confirmed
facsimile or nationally recognized overnight express courier postage prepaid, and shall be deemed
given when so mailed and shall be delivered as addressed as follows:


if to the Company, to:




30









 







ION Geophysical Corporation

2105 CityWest Blvd., Suite 400

Houston, Texas 77042-2839

Attention: David L. Roland, Senior Vice President,

                  General Counsel & Corporate
Secretary

Facsimile: (281) 879- 3600

E-mail: david.roland@iongeo.com



with a copy to:



Mayer Brown LLP

700 Louisiana, Suite 3400

Houston, Texas 77002-2730

Attention: Marc H. Folladori

Facsimile: (713) 238-4696

E-mail: mfolladori@mayerbrown.com





or to such other person at such other place as the Company shall designate to the Purchaser
in writing; and




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


with a copy to:



Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:    (212) 756-2000

Facsimile:     (212) 593-5955

Attention:    Eleazer N. Klein, Esq.





or at such other address or addresses as may have been furnished to the Company in writing.



     11. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Purchaser. Any amendment or waiver effected in
accordance with this Section 11 shall be binding upon each holder of any securities
purchased under this Agreement at the time outstanding, each future holder of all such securities,
and the Company.



     12. 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.



     13. 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.



31









 





     14. Governing Law; Venue. This Agreement is to be construed in accordance with and
governed by the federal law of the United States of America and the internal laws of the State of
Delaware without giving effect to any choice of law rule that would cause the application of the
laws of any jurisdiction other than the internal laws of the State of Delaware to the rights and
duties of the parties.



     15. Counterparts. This Agreement may be executed in 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 to the other parties. Facsimile signatures shall be deemed original signatures.



     16. 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. Each party
expressly represents and warrants that it is not relying on any oral or written representations,
warranties, covenants or agreements outside of this Agreement.



     17. Fees and Expenses. Except as set forth herein, each of the Company and the
Purchaser shall pay its respective fees and expenses related to the transactions contemplated by
this Agreement.



     18. Parties. This Agreement is made solely for the benefit of and is binding upon the
Purchaser and the Company and to the extent provided in Section 7.3, any Person controlling
the Company or the Purchaser, the officers and directors of the Company, and their respective
executors, administrators, successors and assigns and subject to the provisions of Section
7.3, no other Person shall acquire or have any right under or by virtue of this Agreement. The
term “successor and assigns” shall not include any subsequent purchaser, as such purchaser, of the
Shares sold to the Purchaser pursuant to this Agreement; provided, however, it shall include
purchasers of Shares if (i) the Investor agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with a duly executed Stock Certificate Questionnaire from such transferee or
assignee and written notice of (a) the name and address of such transferee or assignee, and (b) the
securities with respect to which such rights are being transferred or assigned; (iii) immediately
following such transfer or assignment, the further disposition of such securities by the transferee
or assignee is restricted under the Securities Act and applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the
obligations of Investor under this Agreement; (v) such transfer shall have been made in accordance
with the applicable requirements of this Agreement; and (vi) such transfer shall have been
conducted in accordance with all applicable federal and state securities laws.



     19. 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



32









 







transactions described herein and contemplated hereby and to carry into effect the intents and
purposes of this Agreement.



[Remainder of Page Left Intentionally Blank]




33









 








Form
of Agreement


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



	 	 	 	 	 
	 	ION GEOPHYSICAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	David L. Roland 	 
	 	 	Title:  	Senior Vice President, General Counsel and
Corporate Secretary 	 
	 



	 	 	 	 	 
	 
	 	Print or Type:
	 	 

	 	 	 	 	 

	 	 	 	 	Name of Purchaser

(Individual or Institution)

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	Jurisdiction of Purchaser’s Executive Offices

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	Name of Individual representing Purchaser (if an Institution)

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	Title of Individual representing Purchaser (if an Institution)

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	Number of Shares to Be Purchased

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	$

	 	 	 	 	 

	 	 	 	 	Price Per Share in Dollars

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	 

	 	 	 	 	Aggregate Price

	 	 	Signature by:
	 	 

	 	 	 	 	 

	 	 	 	 	Individual Purchaser or Individual 

representing Purchaser:

	 	 	 	 	 

	 	 	 	 	 






	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 
	 	 	 	 
	 
	 	Address:

	 	 	 	 
	 	 	 

	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	Telephone:
	 	 	 	 
	 	 	 

	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	Facsimile:
	 	 	 	 
	 	 	 

	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	E-mail: