Document:

Securities Purchase Agreement

 Exhibit 10.24 
  
 Execution Copy 
  

SECURITIES PURCHASE AGREEMENT 
  
 This Securities Purchase Agreement (this “Agreement”) is dated as of December 13, 2005, by and among NeoMagic Corporation, a
Delaware corporation (the “Company”), and the purchasers identified on the signature pages hereto (each, a “Purchaser” and collectively, the “Purchasers”). 
  
 RECITALS 
  
 A. The Company and each Purchaser are executing and delivering this agreement in reliance upon the exemption from securities
registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities
and Exchange Commission under the Securities Act. 
  
 B. Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) that aggregate number of shares of the Common Stock, par value $0.001 per share, of the
Company (the “Common Stock”), equal to the quotient obtained by dividing (1) such Purchaser’s Subscription Amount by (2) $6.00 (the “Per Share Purchase Price”) (which aggregate amount
for all Purchasers together shall be 1,500,000 shares of Common Stock and shall be collectively referred to herein as the “Shares”) and (ii) warrants, in substantially the form attached hereto as Exhibit A (the
“Warrants”) to acquire up to that number of additional shares of Common Stock equal to 50% of the number of Shares purchased by such Purchaser (as exercised, collectively, the “Warrant Shares”)

  
 C. The Shares, the Warrants and the Warrant Shares issued
pursuant to this Agreement are collectively referred to herein as the “Securities”. 
  
 D. The Company has engaged A.G. Edwards & Sons, Inc. as its placement agent (the “Placement Agent”) for the offering of
the Securities on a “best efforts” basis. 
  
 E.
Contemporaneous with the sale of the Shares and the Warrants, the parties hereto will enter into a Registration Rights Agreement, in the form attached hereto as Exhibit B (the “Registration Rights Agreement”),
pursuant to which, among other things, the Company will agree to provide certain registration rights under the Securities Act and applicable state securities laws. 

 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good
and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1: 
  
 “Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition)
or investigation pending or threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state,
county, local or foreign), stock market, stock exchange or trading facility. 
  
 “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such
Person. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 
  
 “Business Day” means a day, other than a Saturday or
Sunday, on which banks in New York City are open for the general transaction of business. 
  
 “Buy-In” has the meaning set forth in Section 4.1(c). 
  
 “Buy-In Price” has the meaning set forth in Section 4.1(c). 
  
 “Cash Placement Agent Fees” has the meaning set forth in Section 3.1(w). 
  
 “Closing” means the closing of the purchase and sale
of the Shares and the Warrants pursuant to this Agreement. 
  
 “Closing Date” means the Business Day on which all of the conditions set forth in Sections 2.1 and 2.2 hereof are satisfied, or such other date as the parties may agree. 
  
 “Commission” means the United States Securities and
Exchange Commission. 
  
 “Common Stock”
has the meaning set forth in the Recitals, and also includes any securities into which the Common Stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company or any Subsidiary which would entitle the holder thereof to acquire
at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock. 
  
 “Company Counsel” means Wilson Sonsini Goodrich & Rosati, Professional Corporation 
  

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 “Company Deliverables” has the meaning set forth in Section 2.2(a).

  
 “Company’s Knowledge” means with
respect to any statement made to the knowledge of a party, that the statement is based upon the actual knowledge of the officers of such party having responsibility for the matter or matters that are the subject of the statement, after due inquiry
and investigation. 
  
 “Control”
(including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise. 
  
 “Disclosure Materials” has the meaning set forth in Section 3.1(h). 
  
 “Effective Date” means the date on which the initial Registration Statement required by Section 2(a) of the Registration
Rights Agreement is first declared effective by the Commission. 
  
 “Effectiveness Deadline” means the date on which the initial Registration Statement is required to be declared effective by the Commission under the terms of the Registration Rights Agreement. 
  
 “Environmental Laws” has the meaning set forth in
Section 3.1(l). 
  
 “Evaluation Date”
has the meaning set forth in Section 3.1(v). 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder. 
  
 “GAAP” means U.S. generally accepted accounting principles, as applied by the Company. 

 
 “Indemnified Person” has the meaning set forth in
Section 4.7(b). 
  
 “Intellectual Property
Rights” has the meaning set forth in Section 3.1(r). 
  
 “Lien” means any lien, charge, encumbrance, security interest, right of first refusal, preemptive right or other restrictions of any kind. 
  
 “Losses” has the meaning set forth in Section 4.7(a). 
  
 “Material Adverse Effect” means any of (i) a
material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, prospects, business or condition (financial or 

  

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otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) an adverse impairment to the Company’s ability to perform on a timely
basis its obligations under any Transaction Document. 
  
 “Material Contract” means any contract of the Company that was filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K. 
  
 “Net Escrow Amount” means the Escrow Amount (as
defined in Section 2.3) less the Cash Placement Agent Fee (as defined in Section 3.1(u). 
  
 “New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan. 
  
 “Outside Date” means January 14, 2006

  
 “Person” means an individual,
corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed
herein. 
  
 “Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened in writing. 
  
 “Purchaser Deliverables” has the meaning set forth in Section 2.2(b). 
  
 “Purchaser Party” has the meaning set forth in
Section 4.7. 
  
 “Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Registrable Securities (as defined in the Registration Rights Agreement).

  
 “Rule 144” means Rule 144 promulgated
by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “SEC Reports” has the meaning set forth in
Section 3.1(h). 
  
 “Secretary’s
Certificate” has the meaning set forth in Section 2.2(a)(vi). 
  
 “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act. 
  
 “Subscription Amount” means with respect to each
Purchaser, the Subscription Amount indicated on such Purchaser’s signature page to this Agreement. 
  

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 “Subsidiary” means any “significant subsidiary” as defined in Rule
1-02(w) of the Regulation S-X promulgated by the Commission under the Exchange Act. 
  
 “Trading Affiliate” has the meaning set forth in Section 3.2(g). 
  
 “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its primary Trading Market (other
than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding
to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 “Trading Market” means whichever of the New York
Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question. 
  
 “Transaction Documents” means this Agreement, the
schedules and exhibits attached hereto, the Warrants, the Registration Rights Agreement, and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Transfer Agent” means Computershare Investor
Services or any successor transfer agent for the Company. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company, the Shares and Warrants representing such Purchaser’s Subscription Amount. The Closing shall take place at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304-1050 on the Closing Date or at such other location or time as the parties may agree. 
  

2.2 Closing Deliveries. (a) At the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser the following (the
“Company Deliverables”): 
  
 (i) This
Agreement, duly executed by the Company; 
  
 (ii) One or more
stock certificates, free and clear of all restrictive and other legends (except as expressly provided in Section 4.1(b) hereof), evidencing a number of Shares equal to the quotient obtained by dividing (a) such Purchaser’s
Subscription Amount by (b) the Per Share Purchase Price; 
  

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 (iii) a Warrant, executed by the Company and registered in the name of such Purchaser, pursuant to which
such Purchaser shall have the right to acquire such number of Warrant Shares equal to 50% of the number of Shares issuable to such Purchaser pursuant to Section 2.2(a)(i); 
  
 (iv) a legal opinion of Company Counsel, in the form set forth in Exhibit C hereto, executed by such counsel and addressed
to the Purchasers and the Placement Agent; 
  
 (v) the
Registration Rights Agreement, duly executed by the Company; 
  
 (vi) a certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Securities, certifying the current versions of the Restated Articles of Incorporation and by-laws of the Company and certifying as to the
signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company; and 
  
 (b) At the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser
Deliverables”): 
  
 (i) This Agreement, duly
executed by such Purchaser; 
  
 (ii) It’s Subscription
Amount, in United States dollars and in immediately available funds, pursuant to the escrow arrangements set forth in Section 2.3 below; 
  
 (iii) the Registration Rights Agreement, duly executed by such Purchaser; 
  
 (iv) a fully completed and duly executed Selling Stockholder Questionnaire in the form attached as Annex B to the
Registration Rights Agreement; and 
  
 (v) a fully completed and
duly executed Accredited Investor Questionnaire and Stock Certificate Questionnaire in the forms attached hereto as Exhibits D-1 and D-2, respectively. 
  
 2.3 Escrow of Purchase Price. 
  
 (a) Simultaneously with the execution and delivery of a counterpart to this Agreement by a Purchaser, such Purchaser shall promptly cause a wire transfer
of immediately available funds (U.S. dollars) in an amount representing such Purchaser’s Subscription Amount, as set forth on such Purchaser’s signature page, to be paid to the non-interest bearing escrow account of Lowenstein Sandler PC,
the Placement Agent’s counsel (“Placement Agent Counsel”), set forth on Schedule I affixed hereto (the aggregate amounts being held in escrow are referred to herein as the “Escrow Amount”).
Placement Agent Counsel shall hold the 
  

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Escrow Amount in escrow until (i) Placement Agent Counsel receives written instructions from the Company and the Placement Agent authorizing the release
of the Escrow Amount in accordance with Section 2.2, or (ii) Placement Agent Counsel’s receipt of written instructions from the Company and/or the Placement Agent that the Agreement has been terminated in accordance with
Section 6.18 (in which case Placement Agent Counsel shall return to each terminating Purchaser the portion of the Escrow Amount each such terminating Purchaser delivered to the Placement Agent Counsel. The Company hereby authorizes the
Placement Agent Counsel to release from the Escrow Amount, at the Closing, without further action or deed (other than receipt of the written instructions from the Company and the Placement Agent authorizing the release of the Escrow Amount), the
(i) Cash Placement Agent Fee (as defined in Section 3.1(u)) to the Placement Agent, and (ii) the Net Escrow Amount to the Company. 
  
 (b) The Company and the Purchasers acknowledge and agree for the benefit of Placement Agent Counsel (which shall be deemed to be a third party beneficiary
of this Section 2.3) as follows: 
  
 (i) Placement
Agent Counsel (i) is not responsible for the performance by the Company or the Purchasers of this Agreement or any of the Transaction Documents or for determining or compelling compliance therewith, (ii) is only responsible for
(A) holding the Escrow Amount in escrow pending receipt of written instructions from the holders of a majority of the Shares and/or the Company directing the release of the Escrow Amount in accordance with Section 2.3 and
(B) disbursing the Escrow Amount in accordance with the written instructions from the Company and/or the holders of a majority of the Shares in accordance with Section 2.3, each of the responsibilities of Placement Agent Counsel in
clause (A) and (B) is ministerial in nature, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part of Placement Agent Counsel (collectively, the “Placement Agent Counsel
Duties”), (iii) shall not be obligated to take any legal or other action hereunder which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with indemnification
acceptable to it, in its sole discretion, (iv) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction (including, without limitation, wire transfer instructions, whether incorporated herein
or provided in a separate written instruction), instrument, statement, certificate, request or other document furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper Person, and shall have no
responsibility for making inquiry as to, or for determining, the genuineness, accuracy or validity thereof, or of the authority of the Person signing or presenting the same and (v) may consult counsel satisfactory to it, and the written opinion
or advice of such counsel in any instance shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or advice of such counsel.
Documents and written materials referred to in this Section 2.3(b) include, without limitation, e-mail and other electronic transmissions capable of being printed, whether or not they are in fact printed; and any such e-mail or other
electronic transmission may be deemed and treated by Placement Agent Counsel as having been signed or presented by a Person if it bears, as sender, the Person’s e-mail address. 
  
 (ii) Placement Agent Counsel shall not be liable to anyone for any action taken or omitted to be taken by it hereunder,
except in the case of Placement Agent 

  

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Counsel’s gross negligence, bad faith or willful misconduct in breach of the Placement Agent Counsel Duties. IN NO EVENT SHALL PLACEMENT AGENT COUNSEL
BE LIABLE FOR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGE OR LOSS (INCLUDING BUT NOT LIMITED TO LOST PROFITS) WHATSOEVER, EVEN IF PLACEMENT AGENT COUNSEL HAS BEEN INFORMED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM
OF ACTION. 
  
 (iii) The Company and the Purchasers hereby
indemnify and hold harmless Placement Agent Counsel from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees and expenses, which Placement Agent Counsel may suffer or incur by
reason of any action, claim or proceeding brought against Placement Agent Counsel arising out of or relating to the performance of the Placement Agent Counsel Duties, unless such action, claim or proceeding is the result of the willful misconduct,
bad faith or gross negligence of Placement Agent Counsel. 
  
 (iv) Placement Agent Counsel has acted as legal counsel to the Placement Agent in connection with this Agreement and the other Transaction Documents, is merely acting as a stakeholder under this Agreement and is, therefore, hereby
authorized to continue acting as legal counsel to Placement Agent including, without limitation, with regard to any dispute arising out of this Agreement, the other Transaction Documents, the Escrow Amount or any other matter. Each of the Company
and the Purchasers hereby expressly consents to permit Placement Agent Counsel to represent the Placement Agent in connection with all matters relating to this Agreement, including, without limitation, with regard to any dispute arising out of this
Agreement, the other Transaction Documents, the Escrow Amount or any other matter, and hereby waives any conflict of interest or appearance of conflict or impropriety with respect to such representation. Each of the Company and the Purchasers has
consulted with its own counsel specifically about this Section 2.3 to the extent they deemed necessary, and has entered into this Agreement after being satisfied with such advice. 
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchasers and to the Placement Agent that, except as set forth in the Schedules delivered herewith:

  
 (a) Subsidiaries. The Company has no direct or
indirect Subsidiaries other than those listed in the Company’s Form 10-K Report for the year ended January 31, 2005. Except as disclosed therein, the Company owns, directly or indirectly, all of the capital stock or comparable equity
interests of each Subsidiary free and clear of any and all Liens and all the issued and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights. 
  
 (b) Organization and Qualification.
The Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite 
  

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power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary or appropriate, except where the failure to be so qualified or
in good standing, as the case may be, could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents to which it is a party by the Company and
the consummation by it of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Shares and the Warrants and the subsequent issuance of the Warrant Shares upon exercise of the Warrants have been
duly authorized by all necessary corporate action on the part of the Company and no further corporate action is required by the Company, its Board of Directors or its stockholders. Each Transaction Document to which it is a party has been (or upon
delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable
principles of general application. There are no stockholders agreements, voting agreements, or other similar arrangements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s Knowledge, between
or among any of the Company’s stockholders. 
  
 (d) No
Conflicts. The execution, delivery and performance of the Transaction Documents to which it is a party by the Company and the consummation by the Company of the transactions contemplated hereby or thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound, or affected, except to the extent
that such conflict, default, termination, amendment, acceleration or cancellation right could not reasonably be expected to have a Material Adverse Effect, or (iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of
the representations and warranties made by the Purchasers herein, of any self-regulatory organization to which the Company or its securities are subject, including all 
  

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applicable Trading Markets), or by which any property or asset of the Company or a Subsidiary is bound or affected, except to the extent that such violation
could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
  
 (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than
(i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or application(s) to each applicable Trading Market for the issuance and sale of the Common Stock
and the Warrants and the listing of the Common Stock for trading or quotation, as the case may be, thereon in the time and manner required thereby, (v) the filings required in accordance with Section 4.5 and (vi) those that have been
made or obtained prior to the date of this Agreement. 
  
 (f)
Issuance of the Securities. The Shares and the Warrant Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws and shall not be subject to preemptive or similar rights of stockholders. Assuming the accuracy of the
representations and warranties of the Purchasers, the Shares and the Warrant Shares will be issued in compliance with all applicable federal and state securities laws. The issue and sale of the Securities will not, immediately or with the passage of
time, obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price
under such securities. 
  
 (g) Capitalization. The number
of shares and type of all authorized, issued and outstanding capital stock, options and other securities of the Company (whether or not presently convertible into or exercisable or exchangeable for shares of capital stock of the Company) is
specified in the SEC Reports. Except as specified in the SEC Reports, no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents. Except as specified in the SEC Reports, there are no outstanding options, warrants or scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of the Company’s capital stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of capital stock of the Company, or options, securities or rights convertible or exchangeable into shares of capital stock. Except for customary
adjustments as a result of stock dividends, stock splits, combination of shares, reorganizations, recapitalizations, reclassifications or other similar events, there are no anti-dilution or price adjustment provisions contained in any 

  

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 security issued by the Company (or in any agreement providing rights to security holders) and the issuance and sale of
the Securities will not, immediately or with the passage of time, obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not, result in a right of any holder of securities to
adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with all
applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of the Company. 
  
 (h) SEC Reports. The Company has filed all reports required to be
filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such reports) (the foregoing materials
being collectively referred to herein as the “SEC Reports” and together with this Agreement and the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, or to the extent corrected by a subsequent restatement, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 (i) Financial Statements. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement). Such financial statements have been
prepared in accordance with GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, year-end audit adjustments. 
  
 (j) Tax Matters. Each of the Company and its Subsidiaries (i) has accurately and timely prepared and filed all foreign, federal and state income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being
contested in good faith, with respect to which adequate reserves have been set aside on the books of the Company and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction. 
  

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 (k) Material Changes. Since the date of the latest audited financial statements included within
the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the manner in which it keeps its accounting
books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (other
than in connection with repurchases of unvested stock issued to employees of the Company) and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except Common Stock issued in the ordinary course as
dividends on outstanding preferred stock and pursuant to existing Company stock option or stock purchase plans or executive and director corporate arrangements disclosed in the SEC Reports and (vi) there has not been any material change or
amendment to, or any waiver of any material right under, any contract under which the Company, any subsidiary thereof, or any of their assets is bound or subject. The Company does not have pending before the Commission any request for confidential
treatment of information. 
  
 (l) Environmental Matters. To
the Company’s knowledge, neither the Company nor any Subsidiary (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any
real property contaminated with any substance that is in violation of any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, and (iv) is subject to any claim relating to any
Environmental Laws; which violation, contamination, liability or claim has had or could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate; and there is no pending or, to the Company’s Knowledge,
threatened investigation that might lead to such a claim. 
  
 (m)
Litigation. There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports,
could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof (in his or her
capacity thereof), is or has been during the ten-year period prior to the closing Date the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has
not been and to the Company’s Knowledge, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company (in his or her capacity as such). The
Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any subsidiary under the Exchange Act or the Securities Act. 
  

 12 

 (n) Employment Matters. The Company and its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, either individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement. The Company and its Subsidiaries believe that their relations with
their employees are satisfactory. No executive officer of the Company or any of its Subsidiaries (as defined in Rule 501(f) of the Securities Act) has notified the Company or any such Subsidiary that such officer intends to leave the Company or any
such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. 
  
 (o) Compliance. Neither the Company nor any Subsidiary, except in each case as could not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or
assets, or (iii) is or has been in violation of, or in receipt of notice that it is in violation of, any statute, rule or regulation of any governmental authority applicable to the Company. 
  
 (p) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such
permits, individually or in the aggregate, has not and could not reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such permits. 
  
 (q) Title to Assets.
The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to
their respective businesses, in each case free and clear of all Liens, except for Liens that do not, individually or in the aggregate, have or result in a Material Adverse Effect. Any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in material compliance. 
  

 13 

 (r) Patents and Trademarks. The Company and its subsidiaries own, possess, license or have other
rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted. Except as set forth in the SEC Reports and except where such
violations or infringements would not reasonably be expected to result in a Material Adverse Effect, (a) there are no rights of third parties to any such Intellectual Property; (b) to the Company’s knowledge, there is no infringement
by third parties of any such Intellectual Property; (c) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s and its subsidiaries’ rights in or to
any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (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 such Intellectual Property; and (e) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company and its subsidiaries infringe or
otherwise violate any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable basis for any such claim. 
  
 (s) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses and location in which the Company and the Subsidiaries are engaged. Neither the Company nor any
Subsidiary has any knowledge that it will be unable to renew its existing insurance coverage for the Company and the Subsidiaries as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost. 
  
 (t)
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports made on or prior to the date hereof, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the
Company is presently a party to any transaction with the Company or any Subsidiary or to a presently contemplated transaction (other than for services as employees, officers and directors) that would be required to be disclosed pursuant to
Item 404 of Regulation S-K promulgated under the Securities Act. Sarbanes Oxley Act. The Company is in compliance with applicable requirements of the Sarbanes Oxley Act of 2002 and applicable rules and regulations promulgated by the Commission
thereunder, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect. 
  
 (u) Internal Accounting Controls. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
  

 14 

 (v) Internal Controls. The Company has established disclosure controls and procedures (as defined
in 1934 Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company is made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s most recently filed period report under the 1934 Act, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures as of the end of the most recent periodic reporting period under the 1934 Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the
1934 Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, except with respect to the remediation of the
material weakness in internal control over financial reporting and the ineffectiveness of disclosure controls and procedures as described in the SEC Filings, there have been no significant changes in the Company’s internal control over
financial reporting (as such term is defined in Item 308(c) of Regulation S-K) or, to the Company’s Knowledge, in other factors that could significantly affect the Company’s internal control over financial reporting. The Company
maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting principles and the applicable requirements of the 1934 Act. 
  
 (w) Certain Fees. Except for the fees and commissions payable to the
Placement Agent, no brokerage or finder’s fees or commissions are or will be payable by the company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. The Purchasers shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by a Purchaser pursuant to written agreements executed by such
Purchaser which fees or commissions shall be the sole responsibility of such Purchaser) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this
Agreement. 
  
 (x) Private Placement. Assuming the accuracy
of the Purchasers’ representations and warranties set forth in Section 3.2(b)-(e), no registration under the Securities Act is required for the offer and sale of the Shares and Warrant Shares by the Company to the Purchasers under the
Transaction Documents. The Company is eligible to register the Shares and the Warrant Shares for resale by the Purchasers using Form S-3 promulgated under the Securities Act. Except as specified in Schedule 3.1(x), the Company has not granted
or agreed to grant to any Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied or waived.

  
 (y) No Directed Selling Efforts or General
Solicitation. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has conducted any “general solicitation” or “general advertising” (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities. 
  

 15 

 (z) No Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting
on its or their behalf has, directly or indirectly, at any time within the past six months made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would (i) eliminate the
availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to
the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market.

  
 (aa) Listing and Maintenance Requirements. The
Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. Except as specified in the SEC Reports, the Company has not, in the two years preceding the date hereof, received notice (written or oral) from any Trading Market to
the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is in compliance in all material respects with the listing and maintenance requirements for continued listing of the Common Stock on
the Trading Market on which the Common Stock is currently listed or quoted. The issuance and sale of the Securities under the Transaction Documents does not contravene the rules and regulations of the Trading Market on which the Common Stock is
currently listed or quoted, and no approval of the shareholders of the Company thereunder is required for the Company to issue and deliver to the Purchasers the maximum number of Securities contemplated by Transaction Documents. 
  
 (bb) Investment Company. Neither the Company nor any of its
Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. 
  
 (cc) Questionable Payments.
Neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, directors, officers, employees, agents or other Persons acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for,
or on behalf of, the Company: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity; (b) made any direct or indirect unlawful payments to
any foreign or domestic governmental officials or employees from corporate funds; (c) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended or (d) made any other unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. 
  
 (dd) Application of Takeover Protections. There is no control share acquisition, business combination, poison pill (including any distribution
under a rights 
  

 16 

 agreement) or other similar anti-takeover provision under the Company’s charter documents or the laws of its state
of incorporation that is or could reasonably be expected to become applicable to any of the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  
 (ee) Disclosure. The Company confirms that neither it nor any Person acting on its behalf has provided any Purchaser or its respective agents or
counsel with any information that constitutes or might constitute material, non-public information except insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such
information. The Company understands and confirms that the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business
and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 
  
 3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants to the Company as follows: 
  
 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited
liability company or other applicable like action, on the part of such Purchaser. Each of this Agreement and the Registration Rights Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with terms
hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. 
  
 (b) Investment Intent. Such Purchaser understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities and, upon exercise of the Warrants will acquire the Warrant Shares issuable upon exercise thereof, as principal for its own account
for investment purposes only and not with a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Purchaser’s right, subject to the provisions of this Agreement and the Registration
Rights Agreement, at all times to sell or otherwise dispose of all or any part of such Securities or Warrant Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and 

 

 17 

 in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing
contained herein shall be deemed a representation or warranty by such Purchaser to hold the Securities for any period of time. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not have
any agreement, plan or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date on which it
exercises the Warrants it will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act. 
  
 (d) Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) Access to Information. Such Purchaser acknowledges that it
reviewed the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of
the Securities and the merits and risks of investing in the Securities; (ii) access to information (other than material non-public information) about the Company and the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend
or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents. 
  
 (f) Residency. Such Purchaser has, if an entity, its principal place
of business or, if an individual, its primary residence in the jurisdiction set forth immediately below such Purchaser’s name on the signature pages hereto. 
  
 (g) Short Sales. Between the time the Purchaser learned of the transactions contemplated hereby and the public
announcement of the transactions contemplated hereby, the Purchaser has not and will not, directly or indirectly offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take pledges of)
any of the Securities. Except in compliance with the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws, the Purchaser will not engage in any Short Sale that results in the disposition of the
Securities (including the Warrant Shares) acquired hereunder by the Purchaser. 
  

 18 

 (h) Brokers and Finders. No Person will have, as a result of the transactions contemplated by this
Agreement, any valid right, interest or claim against or upon the Company, or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

  
 (i) Limited Ownership. The purchase by such Purchaser
of the Securities issuable to it at the Closing will not result in such Purchaser (individually or together with other Person with whom such Purchaser has identified, or will have identified, itself as part of a “group” in a public filing
made with the Commission involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 19.99% of the outstanding shares of Common Stock or the voting power of the Company on a post transaction basis that assumes
that the Closing shall have occurred. Such Purchaser does not presently intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together with such other Persons have) acquired, or
obtained the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 19.99% of the outstanding shares of Common Stock or the voting power of
the Company on a post transaction basis that assumes that the Closing shall have occurred. 
  
 (j) Independent Investment Decision. Such Purchaser has independently evaluated the merits of its decision to purchase Securities pursuant to the Transaction Documents, and such Purchaser confirms that it has
not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision. Such Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Purchaser
in connection with the purchase of the Securities constitutes legal, tax or investment advice. Such 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 Securities. Such Purchaser understands that the Placement Agent has acted solely as the agent of the Company in this placement of the Securities and such Purchaser has not relied on the business or legal advice of the Placement
Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to such Purchaser in connection with the transactions contemplated by
the Transaction Documents. 
  
 The Company acknowledges and agrees that no
Purchaser has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
  
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 (a) Compliance with Laws. Notwithstanding any other provision of this Article IV, each Purchaser covenants that the securities may only be
disposed of pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer of the Securities other than pursuant to 
  

 19 

 an effective registration statement, pursuant to Rule 144(k) or in connection with a pledge as contemplated in
Section 4.1(b), except as otherwise provided herein, the transferor will provide to the Company an opinion of counsel selected by the transferor, which counsel and the form and substance of which opinion shall be reasonably satisfactory to the
Company and its legal counsel, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. 
  
 (b) Legends. Certificates evidencing the Securities will contain the following legend, until such time as they are not required under
Section 4.1(c): 
  
 [NEITHER THESE SECURITIES NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. 
  
 The Company acknowledges and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in some
or all of the legended Securities, in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan. Such a pledge would not be subject to approval or consent of the Company and no
legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the
Purchaser transferee of the pledge. No notice shall be required of such pledge but Purchaser’s transferee shall promptly notify the Company of the pledge. Each Purchaser acknowledges that the Company shall not be responsible for any pledges
relating to, or the grant of any security interest in, any of the Securities or for any agreement, understanding or arrangement between any Purchaser and its pledgee or secured party. Provided that the Company is in compliance with the terms of this
Section 4.1(b), the Company’s indemnification obligations pursuant to this Agreement shall not extend to any Proceeding or Losses arising out of or related to this Section 4.1(b). 
  
 (c) Removal of Legends. Certificates evidencing Securities shall not
be required to contain such legend or any other legend (i) while a registration statement (including the Registration Statement) covering the resale of such Securities is effective under the Securities Act, (ii) following any sale of such
Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities are eligible for sale under Rule 144(k) (to the extent that the applicable Purchaser provides a certification or legal
opinion to the Company to that effect), or (iv) if such legend is not required under applicable requirements of the 
  

 20 

 
Securities Act (including controlling judicial interpretations and pronouncements issued by the Commission). The Company shall cause its counsel to issue a
standing legal opinion to the Company’s transfer agent promptly after the Effective Date, if required by the Company’s transfer agent to effect the removal of the legends hereunder. Any fees (with respect to the transfer agent, counsel to
the Company or otherwise) associated with the issuance of such opinion or the removal of such legend shall be borne by the Company. If any portion of the Warrant is exercised at a time when there is an effective registration statement to cover the
resale of the Warrant Shares, or if such Warrant Shares may be sold under Rule 144(k), then such Warrant Shares shall be issued free of all legends. Following the Effective Date or at such earlier time as a legend is no longer required for certain
Securities, the Company will no later than three Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent (with notice to the Company) of (i) a legended certificate representing such Shares or Warrant Shares
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer or (ii) an Exercise Notice in the manner stated in the Warrants to affect the exercise of such Warrant in
accordance with its terms and an opinion of counsel to the extent required by Section 4.1(a), deliver or cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section. If within three (3) Trading Days after the Company’s receipt of a legended
certificate representing such Securities (the “Delivery Date”), the Company shall fail to issue and deliver to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends, and
if on or after such Delivery Date the Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Purchaser of shares of Common Stock that the Purchaser anticipated receiving
from the Company without any restrictive legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Purchaser’s request and in the Purchaser’s sole discretion, either (i) pay cash
to the Purchaser in an amount equal to the Purchaser’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to deliver to the Purchaser a certificate or certificates representing such number of shares of Common Stock that
would have been issued if the Company timely complied with its obligations hereunder and pay cash to the Purchaser 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 that
the Company was required to deliver to the Purchaser on the Delivery Date, times (b) the closing bid price of the Common Stock on the Delivery Date. 
  
 4.2 Reservation of Common Stock. The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the
Transaction Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. In the event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy its
obligations in full under the Transaction Documents, the Company shall promptly take such actions as may be required to increase the number of authorized shares. 
  

 21 

 4.3 Furnishing of Information. As long as any Purchaser owns the Securities, the Company covenants
to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Shares and Warrant
Shares under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell the Shares and Warrant Shares
without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.4 No Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchasers, or that will be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market. 
  
 4.5 Subsequent Registrations. Other than pursuant to the Registration
Statement, prior to the Effective Date, the Company shall not file any registration statement (other than on Form S-8) with the Commission with respect to any securities of the Company. 
  
 4.6 Securities Laws Disclosure; Publicity. By 9:00 a.m. (New York City time) on the Trading Day immediately following
the execution of this Agreement and by 9:00 a.m. (New York City time) on the Trading Day following the Closing Date, the Company shall issue press releases disclosing the transactions contemplated hereby and the Closing. On the trading day following
the execution of this Agreement, the Company will file a Current Report on Form 8-K with the Commission describing the material terms of the Transaction Documents (and including as exhibits to such Current Report on Form 8-K the Transaction
Documents), and on the Trading Day following the Closing Date, the Company will file an additional Current Report on Form 8-K to disclose the Closing. Thereafter, the Company shall timely file any filings and notices required by the Commission and
the Trading Market on which the Common Stock is listed. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any press release or filing with the Commission (other
than the Registration Statement) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall
promptly provide the Purchasers with prior notice of such disclosure. 
  
 4.7 Indemnification. 
  
 (a) Indemnification
of Purchasers. In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold the Purchasers and their directors, officers, shareholders, partners, employees and agents (each, a
“Purchaser  
  

 22 

 
Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Purchaser Party may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document. In addition to the indemnity contained herein, the Company will reimburse each Purchaser Party for its
reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred. If and to the extent that such indemnification is
unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of such losses permissible under applicable law. 
  

(b) Conduct of Indemnification Proceedings. Promptly after receipt by any Person (the “Indemnified Person”) of notice of
any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity may be sought pursuant to Section 4.7(a), such Indemnified Person
shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses;
provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is actually and materially prejudiced by such
failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the
Indemnified Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditions, but if settled without
such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against any Losses by reason of such settlement or judgment. Without the prior written consent of the
Indemnified Person, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding. 
  
 4.8 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide or has provided
any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information (other than the contemplated Transaction Documents and the transactions contemplated thereby), unless prior thereto
such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in
securities of the Company. 
  

 23 

 4.9 Listing of Securities. Promptly following the date hereof, the Company shall take all
necessary action to cause the Shares and the Warrant Shares to be approved for inclusion in the Nasdaq National Market. Further, if the Company applies to have its Common Stock or other securities listed on any other Trading Market, it shall include
in such application the Shares and the Warrant Shares and will take such other action as is necessary to cause the Shares and the Warrant Shares to be listed on such other Trading Market as promptly as practicable. The Company will use commercially
reasonable efforts to continue the listing and trading of its Common Stock on a Trading Market and, in accordance therewith, will use commercially reasonable efforts to comply in all respects with the Company’s reporting, filing and other
obligations applicable to issuers whose securities are listed on such Trading Market. 
  
 4.10 Use of Proceeds. The Company intends to use the net proceeds from the sale of the Securities hereunder for working capital and general corporate purposes and not to redeem any Common Stock or Common Stock
Equivalents or to settle any outstanding Action. 
  
 ARTICLE V.

  
 CONDITIONS PRECEDENT TO CLOSING 
  
 5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase
Securities. The obligation of each Purchaser to acquire Securities at the Closing is subject to the fulfillment to such Purchase’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be
waived by such Purchaser (as to itself only): 
  
 (a)
Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date, as though made on and as of such date.

  
 (b) Performance. The Company and each other Purchaser
shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing. 
  
 (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction
Documents. 
  
 (d) Consents. The Company shall have
obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and sale of the Securities, and all of which shall be and remain so long as necessary in full
force and effect. 
  
 (e) Adverse Changes. Since the date
of execution of this Agreement, no event or series of events shall have occurred that reasonably could have or result in a Material Adverse Effect; 
  

 24 

 (f) No Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not have
been suspended by the Commission or any Trading Market (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material information regarding the Company) at any time since the date of execution of
this Agreement, and the Common Stock shall have been at all times since such date listed for trading on a Trading Market; 
  
 (g) Company Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(a); and 
  
 (h) Compliance Certificate. The Company shall have delivered to each
Purchaser a certificate, dated as of the Closing Date and signed by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 5.1(a), (b), (c),
(d) and (f). 
  
 (i) Termination. This Agreement shall
not have been terminated as to such Purchaser in accordance with Section 6.17 herein. 
  
 5.2 Conditions Precedent to the Obligations of the Company to sell Securities. The Company’s obligation to sell and issue the Securities at the Closing is subject to the fulfillment to the satisfaction of
the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company: 
  
 (a) Representations and Warranties. The representations and warranties made by the Purchasers in Section 6 hereof shall be true and
correct in all material respects as of the date when made, and as of the Closing Date as though made on and as of such date. 
  
 (b) Performance. The Purchasers shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Purchasers at or prior to the Closing; 
  
 (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; 
  
 (d) Purchasers’ Deliverables. Each Purchaser shall have delivered its Purchaser Deliverables in accordance with
Section 2.2(b); and 
  
 (e) Termination. This
Agreement shall not have been terminated as to such Purchaser in accordance with Section 6.17 herein. 
  

 25 

 ARTICLE VI. 
 MISCELLANEOUS 
  
 6.1 Fees and
Expenses. At Closing, the Company shall reimburse the Placement Agent for the reasonable fees and expenses of Placement Agent Counsel in connection with the transactions contemplated by this Agreement, which fees shall include, without
limitation, the fees and expenses associated with the negotiation, preparation and execution and delivery of this Agreement and the other Transaction Documents and any amendments, modifications or waivers thereto. Except as set forth above, the
Company and the Purchasers shall each pay the fees and expenses of their respective advisers, counsel, accountants and other experts, if any and all other expenses incurred by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the sale and issuance of the Securities. Each party acknowledges that Lowenstein Sandler PC
has rendered legal advice to the Placement Agent, and not to such party in connection with the transactions contemplated hereby, and that such party has relied for such matters on the advice of its own respective counsel. 
  
 6.2 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and without further consideration, the Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents. 
  
 6.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful transmission) at
the facsimile number specified in this Section prior to 5:00 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 5:00 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows: 
  

					
	 	 	 If to the Company:        
	  	NeoMagic Corporation
	 	 	 	  	3250 Jay Street
	 	 	 	  	Santa Clara, California 95054
	 	 	 	  	Telephone No.: (408) 988-7020
	 	 	 	  	Facsimile No.: (408) 654-6167
	 	 	 	  	 Attention: Scott Sullinger

  

 26 

					
			
	 	 	 With a copy to:        
	  	Wilson Sonsini Goodrich & Rosati
	 	 	 	  	650 Page Mill Road
	 	 	 	  	Palo Alto, California 94304-1050
	 	 	 	  	Telephone No.(650) 493-9300
	 	 	 	  	Facsimile No.: (650) 493-6811
	 	 	 	  	Attention: Michael J. Danaher
			
	 	 	 If to a Purchaser:
	  	To the address set forth under such Purchaser’s name on the signature page hereof;

  
 or such other address
as may be designated in writing hereafter, in the same manner, by such Person. 
  
 6.4 Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and each of the
Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such
right. No consideration shall be offered or paid to any Purchaser to amend or consent to a waiver or modification of any provision of any Transaction Document unless the same consideration is also offered to all Purchasers who then hold Shares.

  
 6.5 Construction. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provisions of this Agreement or any of the Transaction Documents. 
  
 6.6 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their successors and permitted assigns. This Agreement, or any rights or
obligations hereunder, may not be assigned by the Company without the prior written consent of the Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to any Person to whom such Purchaser assigns or transfers any Securities
in compliance with this agreement and applicable law, provided such transferee shall agree in writing to be bound, with respect to the transferred Securities, by the terms and conditions of this Agreement that apply to the “Purchasers”.

  
 6.7 No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except each Purchaser Party is an intended third party
beneficiary of Section 4.7 and may enforce the provisions of such Section directly against the parties with obligations thereunder . 
  

 27 

 6.8 Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to
the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such
Proceeding. 
  
 6.9 Survival. Subject to applicable statute
of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Securities. 
  
 6.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

  
 6.11 Severability. If any provision of this Agreement
is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
  
 6.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, 
  

 28 

 whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights 
  
 6.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and the execution by the holder thereof of a customary
lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company for any losses in connection therewith. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a replacement. 
  
 6.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any
action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate. 
  
 6.15 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any
Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred. 
  
 6.16
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document 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 any Transaction Document. The decision of each Purchaser to purchase Securities pursuant to the Transaction Documents has been made by such Purchaser independently of any
other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company
or any Subsidiary 
  

 29 

 which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no
Purchaser and any of its agents or employees shall have any liability to any other Purchaser (or any other Person) relating to or arising from any such information, materials, statement or opinions. Nothing contained herein or in any Transaction
Document, 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 Transaction Documents. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party
in any proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Purchasers and not because it was required or
requested to do so by any Purchaser. The Company’s obligations to each Purchaser under this Agreement are identical to its obligations to each other Purchaser other than such differences resulting solely from the number of Securities purchased
by such Purchaser, but regardless of whether such obligations are memorialized herein or in another agreement between the Company and a Purchaser. 
  
 6.17 Termination. This Agreement may be terminated and the sale and purchase of the Shares and the Warrants abandoned at any time prior to the
Closing by either the Company or any Purchaser (with respect to itself only) upon written notice to the other, if the Closing has not been consummated on or prior to 5:00 p.m. (New York City time) on the Outside Date; provided, however, that
the right to terminate this Agreement under this Section 6.17 shall not be available to any Person whose failure to comply with its obligations under this Agreement has been the cause of or resulted in the failure of the Closing to occur
on or before such time. Nothing in this Section 6.17 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the
right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents. In the event of a termination pursuant to this Section, the Company shall promptly notify all
non-terminating Purchasers. Upon a termination in accordance with this Section, the Company and the terminating Purchaser(s) shall not have any further obligation or liability (including arising from such termination) to the other and no Purchaser
will have any liability to any other Purchaser under the Transaction Documents as a result therefrom. 
  

 30 

 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

			
	NEOMAGIC CORPORATION
		
	 By:
	 	

	 	 	 Name:

	 	 	 Title:

  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR PURCHASERS FOLLOW]           

			
	 	  	NAME OF PURCHASER
		
	 	  	 By:

	 	  	 Name:

	 	  	 Title:

		
	 	  	Subscription Amount
$                                
	 	  	Tax ID No.
                                        
    
		
	 	  	ADDRESS FOR NOTICE
		
	 	  	 c/o:

		
	 	  	 Street:

		
	 	  	 City/State/Zip:

		
	 	  	 Attention:

		
	 	  	 Telephone No.:

		
	 	  	 Facsimile No.:

		
	Deliver Instructions	  	 
	(if different than above)	  	 
		
	 c/o

	  	 
		
	 Street:

	  	 
		
	 City/State/Zip:

	  	 
		
	 Attention:

	  	 
		
	 Tel No.:

	  	 

 Exhibit A 
  

FORM OF WARRANT 

 Exhibit B 
  

FORM OF REGISTRATION RIGHTS AGREEMENT 

 Exhibit C 
  

OPINION OF COMPANY COUNSEL 
  
 1. The Company is a corporation duly incorporated and validly existing under, and by virtue of, the laws of the State of Delaware and is in good standing
under such laws. The Company has requisite corporate power to own and operate its properties and assets, and to carry on its business as presently conducted. The Company is qualified to do business as a foreign corporation in the state of
California. 
  
 2. The Company has all requisite legal and
corporate power to execute and deliver the Agreement, to sell and issue the Common Stock and the Warrants under the Agreement, to issue the Warrant Shares issuable upon exercise of the Warrants and to carry out and perform its obligations under the
terms of the Agreement. 
  
 3. The shares of Common Stock have
been duly authorized and when issued, delivered and paid for in accordance with the terms of the Agreement, will be validly issued, fully paid and nonassessable. The Warrants have been duly authorized and when issued, delivered and paid for in
accordance with the terms of the Agreement, will be validly issued. The Warrant Shares have been duly and validly reserved, and, when issued in accordance with the terms of the Agreement, the Warrant and the Company’s Certificate of
Incorporation, will be validly issued, fully paid and nonassessable. 
  
 4. All corporate action on the part of the Company necessary for the authorization, execution and delivery of the Agreement by the Company, the authorization, sale, issuance and delivery of the Common Stock, the Warrants and the Warrant
Shares and the performance by the Company of its obligations under the Agreement has been taken. The Agreement has been duly and validly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. 
  
 5. The
execution and delivery by the Company of the Agreement, the performance by the Company of its obligations under the Agreement, and the issuance of the Common Stock and the Warrants do not violate any provision of the Certificate of Incorporation or
Bylaws, or any provision of the Delaware General Corporations Law, any applicable federal or California state law, or rule or regulation known to us to be customarily applicable to transactions of this nature. The execution and delivery by the
Company of the Agreement, the performance by the Company of its obligations under the Agreement, and the issuance of the Common Stock, the Warrants and the Warrant Shares do not violate, or constitute a default under, any contract or agreement filed
as an exhibit to the Company’s Form 10-K for the fiscal year ended January 31, 2005 or the Company’s Form 10-Q for the fiscal quarters ended April 30, 2005 or July 31, 2005 with the Securities and Exchange Commission
pursuant to Item 601(b)(10) of Regulation S-K to which the Company is a party or by which the Company is bound. 
  
 6. No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required
in connection with the valid 

 
execution and delivery of the Agreement, the offer, sale or issuance of the Common Stock or the Warrants or the consummation by the Company of any other
transaction contemplated by the Agreement except the filing of a Form D pursuant to Regulation D under the Securities Act of 1933, as amended. 
  
 7. Subject to the accuracy of the Investors’ representations in Section 3.2 of the Agreement, the offer, sale and issuance of the Common Stock
and the Warrants in conformity with the terms of the Agreement constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended. 
  
 ************************************************************************************************************ 
  
 Except as identified in the Agreement, to our knowledge, there are no actions, suits, proceedings or investigations pending against the Company or its properties before
any court or governmental agency nor, to our knowledge, has the Company received any written threat thereof. 

 Exhibit D 
  

INSTRUCTION SHEET FOR PURCHASER 
  
 (to be read in conjunction with the entire 
 Securities Purchase Agreement) 
  

	A.	Complete the following items in the Securities Purchase Agreement: 

  
 1. Complete and execute the Purchaser Signature Page. The Agreement must be executed by an individual authorized to bind the Purchaser. 
  
 2. Exhibit D-1—Stock Certificate Questionnaire: 
  
 Provide the information requested by the Stock Certificate Questionnaire;

  
 3. Exhibit D-2—Purchaser Certificate: 
  
 Provide the information requested by the Certificate for Corporate,
Partnership, Trust, Foundation and Joint Purchasers, as applicable. 
  
 4. Return, via facsimile, the signed Share Purchase Agreement including the properly completed Exhibits D-1 and D-2, to: 
  
 Wilson Sonsini Goodrich & Rosati 
 650 Page Mill Road 
 Palo Alto, California 94304-1050 
 Attn: Stephen M. Schmidt 
 Facsimile No.:
(650) 493-6811 
  
 5. After completing instruction number
five (5) above, deliver the original signed Share Purchase Agreement including the properly completed Exhibits D-1 and D-2 to: 
  

	B.	Instructions regarding the transfer of funds for the purchase of Shares will be e-mailed to the Purchaser by the Company or the Placement Agent under separate cover.

  

	C.	Upon the resale of any Shares by the Purchaser after the Registration Statement covering any Shares is effective, as described in the Purchase Agreement, the Purchaser must deliver
a current prospectus, and annual and quarterly reports of the Company to the buyer. 

 Exhibit D-1 
  
 NeoMagic Corporation 
  
 STOCK CERTIFICATE QUESTIONNAIRE 
  
 Please provide us with the following information: 
  

					
	 1.
	  	The exact name that the Shares are to be registered in (this is the name that will appear on the stock certificate(s)). You may use a nominee name if appropriate:	  	 
			
	 2.
	  	The relationship between the Purchaser of the Shares and the Registered Holder listed in response to item 1 above:	  	 
			
	 3.
	  	The mailing address, telephone and telecopy number of the Registered Holder listed in response to item 1 above:	  	 
			
	 	  	 	  	 
			
	 	  	 	  	 
			
	 	  	 	  	 
			
	 	  	 	  	 
			
	 4.
	  	The Tax Identification Number of the Registered Holder listed in response to item 1 above:	  	 

 Exhibit D-2 
  
 NeoMagic Corporation 
  
 CERTIFICATE FOR CORPORATE, PARTNERSHIP, 
 TRUST, FOUNDATION AND JOINT PURCHASERS 
  
 If the investor is a corporation, partnership, trust, pension plan, foundation, joint purchaser (other than a married couple) or other entity, an authorized officer, partner, or trustee must complete, date and sign this Certificate.

  
 CERTIFICATE 
  
 The undersigned certifies that the representations and responses below are
true and accurate: 
  
 (a) The investor has been duly formed and
is validly existing and has full power and authority to invest in the Company. The person signing on behalf of the undersigned has the authority to execute and deliver the Share Purchase Agreement on behalf of the Purchaser and to take other actions
with respect thereto. 
  
 (b) Indicate the form of entity of the
undersigned: 
  
                  Limited Partnership 
  
                  General Partnership 

 
                  Corporation 
  
                  Revocable Trust (identify each grantor and
indicate under what circumstances the trust is revocable 
 by the grantor):                                  
                                        
                                        
                                        
                                       
                             
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                  . 
 (Continue on a separate piece of paper, if
necessary.) 
  
                  Other type of Trust (indicate type of trust and, for trusts other than pension trusts, name the grantors 
 and beneficiaries):                                  
                                        
                                        
                                        
                                        
                       
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                      
                                        
                                        
                                        
                                        
                                        
                   . 
 (Continue on a separate piece of
paper, if necessary.) 
  
                  Other form of organization (indicate
form of organization (                                  
                                        
           
                                       
                                        
                                        
                                        
                                        
                                        
                  . 
  

 39 

 (c) Indicate the approximate date the undersigned entity was formed:
                        . 
  
 (d) In order for the Company to offer and sell the Shares in conformance with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable to you as an investor in the Company. 
  

	 	            	1. A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities
Act whether acting in its individual or fiduciary capacity; 

  

	 	            	2. A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; 

  

	 	            	3. An insurance company as defined in Section 2(13) of the Securities Act; 

  

	 	            	4. An investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;

  

	 	            	5. A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

  

	 	            	6. A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; 

  

	 	            	7. An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors; 

  

	 	            	8. A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; 

  

	 	            	9. An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the
specific purpose of acquiring the Shares, with total assets in excess of $5,000,000; 

	 	            	10. A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as
described in Rule 506(b)(2)(ii) of the Exchange Act; 

  

	 	            	11. An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity
owners of the undersigned, and the investor category which each such equity owner satisfies: 

  

	
	
	 
	
	 
	
	 
	
	 .

	 (Continue on a separate piece of paper, if necessary.)

  
 Please set forth
in the space provided below the (i) states, if any, in the U.S. in which you maintained your principal office during the past two years and the dates during which you maintained your office in each state, (ii) state(s), if any, in which
you are incorporated or otherwise organized and (iii) state(s), if any, in which you pay income taxes. 
  

	
	
	 
	
	 
	
	 

  

	
	 Dated:                     ,
2005

	
	

	 Name of investor

	
	

	 Signature and title of authorized officer, partner or trusteeForm of Underwriting Agreement

 Exhibit 10.1 
  
 GLOBALSANTAFE CORPORATION 
  
 Ordinary Shares 
  
 UNDERWRITING AGREEMENT 
  
 1. Introductory. GlobalSantaFe Corporation, a Cayman Islands company (“Company”), proposes to issue and sell from time to time ordinary shares, par value $0.01, of the Company (the “Ordinary
Shares”) registered under the registration statement referred to in Section 2(a) (the “Registered Securities”). Particular offerings of the Registered Securities will be sold pursuant to a Terms Agreement referred to in
Section 4, for resale in accordance with terms of offering determined at the time of sale. 
  
 The Registered Securities involved in any such offering are hereinafter referred to as the “Securities.” The firm or firms which agree to
purchase the Securities are hereinafter referred to as the “Underwriters” of such Securities, and the representative or representatives of the Underwriters, if any, specified in a Terms Agreement referred to in Section 4 are
hereinafter referred to as the “Representatives”; provided, however, that if the Terms Agreement does not specify any representative of the Underwriters, the term “Representatives,” as used in this Agreement, shall
mean the Underwriters. 
  
 2. Representations and Warranties of
the Company. The Company represents and warrants to, and agrees with, each Underwriter that: 
  
 (a) A registration statement on Form S-3 (File No. 333-127168), as may be subsequently amended and supplemented (the “Initial
Registration Statement”), in respect of the Securities has been filed with the Securities and Exchange Commission (the “Commission”); the Initial Registration Statement and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives and, excluding exhibits to the Initial Registration Statement, but including all documents incorporated by reference in the prospectus included therein, to the Representatives for each
of the other Underwriters have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the “Act”), which became effective upon filing, no other document with respect to the Initial Registration Statement or document incorporated by reference therein has heretofore been filed, or
transmitted for filing, with the Commission (other than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the Commission under the Act, each in the form heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or any part thereof or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (the base prospectus filed as part of the Initial Registration Statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement relating to the Securities, is
hereinafter called the “Basic Prospectus”; any preliminary prospectus (including any preliminary prospectus supplement) relating to the Securities filed with the Commission 

 pursuant to Rule 424(b) under the Act, is hereinafter called a “Preliminary Prospectus”; the
various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and the including any prospectus supplement relating to the Securities that is filed with the Commission and
deemed by virtue of Rule 430B under the Act to be part of the Initial Registration Statement, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively called the “Registration Statement”; the Basic Prospectus, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 2(c)
hereof), is hereinafter called the “Pricing Prospectus”; the form of the final prospectus relating to the Securities filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof is hereinafter
called the “Prospectus”; any reference herein to the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to
the applicable form under the Act, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Shares filed with the Commission pursuant to Rule 424(b) under the Act and any documents filed under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and incorporated therein, in each case after the date of the Basic Prospectus, the Pricing Prospectus, such Preliminary Prospectus or the Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Securities is hereinafter called an “Issuer Free Writing Prospectus”); and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Securities in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing). 
  
 (b) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and 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 the light of the circumstances under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein; 
  
 (c) For the purposes of this Agreement, the term
“Applicable Time” shall have the meaning assigned to such term in the Terms Agreement. The Pricing Prospectus, as 
  

 2 

 of the Applicable Time, did not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule II(a) to the Terms Agreement does not
conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus, and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable
Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein; 
  
 (d) The documents incorporated by reference in the Pricing Prospectus and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will 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 not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Securities through the Representatives expressly for use therein; and no such documents were filed with the Commission since the
Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II(b) to the Terms Agreement. 
  
 (e) The Registration Statement and the Pricing Prospectus
conform, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to each part of the Registration Statement, as of the Applicable Time as to the Pricing Prospectus, and as of the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except that the price of the Securities is not included in
the Pricing Prospectus and will be included on the cover page of the Prospectus; provided, however, that this representation and warranty shall not apply to any statements or omissions from any such documents made in reliance upon and
in conformity with written information furnished to the Company by an Underwriter of Securities through the Representatives expressly for use therein. 
  

 3 

 (f) The Company has been duly incorporated and is an existing company in good standing
under the laws of the Cayman Islands, with corporate power and authority to own its properties and conduct its business as described in the Pricing Prospectus, and the Company is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business, except as would not have a material adverse effect on the condition, financial or otherwise,
earnings, business or prospects of the Company and its Subsidiaries (as defined below), taken as a whole (a “Material Adverse Effect”). 
  
 (g) Each of the Company’s significant subsidiaries (as defined in Section 1-02(w) of Regulation S-X promulgated under the Act)
(“Subsidiaries”) has been duly formed and is a validly existing corporation, company, partnership, or limited liability company, as the case may be, in good standing under the laws of the jurisdiction in which it is chartered or organized
with corporate, partnership or limited liability company power, as the case may be, and authority to own its properties and conduct its business as described in the Pricing Prospectus, and each of the Subsidiaries is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification wherein it owns or leases material properties or conducts material business, except as would not have a Material Adverse Effect.

  
 (h) The Securities have been duly and validly
authorized and when issued, delivered and paid for pursuant to the Terms Agreement on the Closing Date (as defined below), such Securities will have been duly and validly issued, fully paid and nonassessble and will conform to the description
thereof contained in the Pricing Prospectus; and the shareholders of the Company will have no preemptive rights with respect to the Securities. 
  
 (i) None of the Company or its Subsidiaries is required to be registered or qualified as an “investment company” within the
meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and after giving effect to the offer and sale of the Securities and the application of the proceeds thereof as described in the Pricing Prospectus,
none of the Company or its Subsidiaries will be required to be registered or qualified as an “investment company” as defined in the Investment Company Act. 
  
 (j) Neither the Company nor any of its Subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the Pricing Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, except
as 
  

 4 

 set forth or contemplated in the Pricing Prospectus there has not been (i) any change in the share
capital, long-term debt, consolidated net current assets, consolidated revenues, operating income or net income of the Company or any of its Subsidiaries or (ii) any material adverse change, or any development involving a prospective material
adverse change, in or affecting the management, business, financial position, shareholders’ equity or results of operations of the Company and its Subsidiaries. 
  
 (k) Except as set forth in the Pricing Prospectus, the Company and its Subsidiaries possess and are in
compliance with all approvals, certificates, authorizations, licenses and permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now being operated by them, except where the
failure to possess such approvals, certificates, authorizations, licenses and permits or be in compliance therewith is not reasonably likely to have a Material Adverse Effect, and none of the Company or its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such approval, certificate, authorization, license or permit that individually or in the aggregate, is likely to have a Material Adverse Effect. 
  
 (l) Except as set forth in the Pricing Prospectus, there is
no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company and its Subsidiaries, threatened against the Company or any of its Subsidiaries that is likely
to result in any Material Adverse Effect or materially and adversely affect the offering of the Securities in the manner contemplated by the Prospectus. 
  
 (m) The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Terms Agreement, and the
consummation of the transactions contemplated therein (i) will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, (ii) will not result in any violation of (A) the provisions of the Amended
and Restated Memorandum of Association or Amended and Restated Articles of Association of the Company or (B) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of
its properties, except in the case of any such conflict, breach, violation or default referred to in sub-clause (i) or (ii)(B) above as would not, individually or in the aggregate, have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement
or the Terms Agreement, except such as have been or will have been, prior to the Closing Date, obtained under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by the Underwriters, except in the case of any failure to obtain a consent, approval, authorization, order, registration or qualification would not, individually or in the
aggregate, have a Material Adverse Effect or affect the issuance and sale of the Securities as contemplated by the Terms Agreement. 
  

 5 

 (n) The statements set forth in the Pricing Prospectus and the Prospectus under the
caption “Description of Ordinary Shares”, insofar as they purport to constitute a summary of the terms of the share capital, under the captions “U.S. Federal Income Tax Considerations” and “Cayman Islands Tax
Considerations” and under the caption “Plan of Distribution” and “Underwriting”, insofar as they purport to describe the provisions of the laws and documents referred to therein, fairly summarize the matters referred to
therein in all material respects, subject to the qualifications and assumptions stated therein. 
  
 (o) The Terms Agreement has been duly authorized, executed and delivered by the Company. 
  
 (p) The Share Purchase Agreement (as defined below) has been
duly authorized, executed and delivered by the Company and is a valid and legally binding agreement of the Company, enforceable against it in accordance with its terms, except as the enforceability thereof may be subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or other laws affecting creditors’ rights generally from time to time in effect and general principles of equity (regardless of whether considered in a
proceeding in equity or at law), and except as rights to indemnity and contribution thereunder may be limited by any applicable laws or principles of public policy. 
  
 (q) The Company’s authorized share capital is as set forth in the balance sheet as of June 30,
2005 incorporated by reference in the Pricing Prospectus and the Prospectus from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. 
  
 (r) The Company has been since the time of the initial filing of the Registration Statement and continues to
be eligible to use Form S-3 for the offering of the Securities. At the earliest time after the filing of the Initial Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) under the Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the Act. 
  
 (s) PricewaterhouseCoopers, who have certified certain financial statements of the Company and its subsidiaries and have audited the
Company’s internal control over financial reporting and management’s assessment thereof, are an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder. 
  
 (t) Each of Netherland, Sewell and Associates, Inc. and
DeGolyer and MacNaughton (together, the “Engineers”), whose reserve evaluations are referenced or appear, as the case may be, in the Pricing Prospectus and the Prospectus were, as of December 31, 2002, December 31, 2003 and
December 31, 2004, and are, as of the date hereof, independent engineers with respect to the Company. 
  

 6 

 (u) Except as otherwise stated or incorporated by reference in the Registration Statement
or the Pricing Prospectus, the Company and its subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to pollution or the protection of human
health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except in the case of clauses (i), (ii) and (iii) for any such failure to comply, or failure to receive required permits, licenses or approvals, or liability as would not,
individually or in the aggregate, have a Material Adverse Effect. 
  
 (v) The Company and its subsidiaries maintain systems of internal accounting controls (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange Act and has
been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting. Except as set forth in Item 9 of the
Company’s quarterly reports on Form 10-Q for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005, since the date of the latest audited financial statements included or incorporated by reference in the
Pricing Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

  
 (w) The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, and such disclosure controls and procedures are effective to perform the functions for
which they were established; the Company’s auditors and the Audit Committee of the Board of Directors have been advised of: (i) any significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the Company’s ability 
  

 7 

 to record, process, summarize, and report financial information; and (ii) any fraud, whether or not
material, that involves management or other employees who have a role in the Company’s internal control over financial reporting; since the date of the most recent evaluation of such disclosure controls and procedures, there has not been any
change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; the principal executive officer and
principal financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and any related rules and regulations promulgated by the Commission, and the statements contained
in any such certification are complete and correct; and the Company is otherwise in material compliance with all applicable provisions of the Sarbanes-Oxley Act that are effective. 
  
 3. Additional Agreements of the Company and the Underwriters. 
  
 (a) Without the prior consent of the Representatives, the
Company has not made and will not make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; each Underwriter represents and agrees that, without the prior consent of
the Company and the Representatives, it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus. Any such free writing prospectus, the use of which has been consented to by the Company and
the Representatives, is listed on Schedule II(a) to the Terms Agreement. 
  
 (b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission or retention where required and legending. Each Issuer Free Writing Prospectus, when considered together with the Pricing Prospectus, 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 the light of the circumstances under which they were made, not misleading, except that the price of the Securities is not included therein
and will be included on the cover page of the Prospectus. 
  
 (c) The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the
information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus
or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein. 
  

 8 

 4. Purchase and Offering of Securities. The obligation of the Underwriters to purchase the
Securities will be evidenced by an exchange of written communications (“Terms Agreement”) at the time the Company determines to sell the Securities. The Terms Agreement will incorporate by reference the provisions of this Agreement and all
references herein to the Terms Agreement shall be deemed to include the terms of this Agreement, in each case, except as otherwise provided therein, and will specify the firm or firms which will be Underwriters, the names of any Representatives, the
number of shares to be purchased by each Underwriter and the purchase price to be paid by the Underwriters. The Terms Agreement will also specify the time and date of delivery and payment, which time and date may be postponed by agreement between
the Representatives and the Company or as provided in Section 8 hereof (such time and date referred to as the “Closing Date”), the place of delivery and payment and any details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Securities. The obligations of the Underwriters to purchase the Securities will be several and not joint. It is understood that the Underwriters propose to offer the Securities for sale as set
forth in the Pricing Prospectus. 
  
 5. Certain Agreements of
the Company. The Company agrees with the several Underwriters that it will furnish to the counsel for the Underwriters designated in the Terms Agreement one signed copy of the registration statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all amendments thereto and that, in connection with each offering of Securities: 
  
 (a) The Company will file the Prospectus in a form approved by the Underwriters with the Commission pursuant to and in accordance with
Rule 424(b) not later than the second business day following the execution and delivery of the Terms Agreement, or, if applicable, such earlier time as may be required by the Act. 
  
 (b) The Company will advise the Representatives promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and will afford the Representatives a reasonable opportunity to comment on any such proposed amendment or supplement; the Company will also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of any part thereof and will use its best efforts to prevent the issuance of any such stop order and to obtain
as soon as possible its lifting, if issued; the Company will promptly file all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; and the Company will timely file all reports required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is required in connection with the offering of sale of the Securities. 
  
 (c) If the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if at such time any events shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a 
  

 9 

 material fact or omit to state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or if for any other reason it shall be necessary during such period to amend
or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus to comply with the Act or the Exchange Act, to notify the Representatives and to file such document and prepare and furnish
without charge to each Underwriter and to any dealer in securities as many written and electronic copies as may from time to time reasonably be requested of an amended Prospectus or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Securities at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act. The terms “supplement” and “amendment” as used in this Agreement shall include, without limitation, all documents filed by the Company with the Commission subsequent to the date of
the Prospectus which are deemed to be incorporated by reference in the Prospectus. Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6. 
  
 (d)
As soon as practicable, but not later than 16 months, after the date of each Terms Agreement, the Company will make generally available to its securityholders an earnings statement covering a period of at least 12 months beginning after the later of
(i) the effective date of the registration statement relating to the Registered Securities, (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company’s most recent Annual Report on Form 10-K filed with the Commission prior to the date of such Terms Agreement, which will satisfy the provisions of Section 11(a) of the Act. 

 
 (e) The Company will furnish to the Representatives
copies of the Registration Statement, including all exhibits, any related Preliminary Prospectus, the Prospectus and all amendments and supplements to such documents, in each case prior to 10:00 A.M., New York City time on the New York business day
next succeeding the date of the Terms Agreement and from time to time and in such quantities as are reasonably requested. 
  
 (f) The Company will arrange for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Company will not be required in connection therewith to register or qualify as a foreign corporation where
it is not now so registered or qualified or to execute a general consent to service of process in any jurisdiction or subject itself to taxation in any jurisdiction where it is not then so subject. 
  

 10 

 (g) The Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the
Registration Statement, the Basic Prospectus, the Pricing Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Terms Agreement, any Blue Sky Memorandum, closing documents (including compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(f) hereof,
including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey(s); (iv) the cost of preparing certificates for the Securities; (v) the cost and charges
of any transfer agent or registrar or dividend disbursing agent; and (vi) all other costs and expenses incident to the performance of its obligations hereunder and under any Terms Agreement which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this Section, and Section 8 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they may make. 
  
 (h) For the period, if any, specified in the Terms Agreement, the Company will not offer, sell, contract to sell, pledge, or otherwise
dispose of, directly or indirectly, any Ordinary Shares or any securities convertible into or exercisable or exchangeable for Ordinary Shares without the prior written consent of the Representatives, or publicly disclose the intention to make any
such offer, sale, pledge or disposition, except (i) grants of employee or director stock options, stock appreciation rights or restricted stock grants pursuant to the terms of a plan in effect on the date of the Terms Agreement (including any
such plan as amended after such date so long as the total shares available for use under the plan is not increased by such amendment), issuances of Ordinary Shares pursuant to the exercise of such options or the exercise of any convertible security,
warrants or other stock options outstanding at the date of the Terms Agreement or issuable under the Company’s employee benefit plans in effect on the date of the Terms Agreement, or the filing by the Company with the Commission of a
registration statement on Form S-8, (ii) the filing by the Company with the Commission of a universal shelf registration statement on Form S-3, provided that no Ordinary Shares or any securities convertible into or exercisable or exchangeable
for Ordinary Shares shall be issued, sold or otherwise disposed of under such universal shelf registration statement during such period specified in the Terms Agreement without the prior written consent of the Representatives and (iii) the
issuance of up to 1,000,000 Ordinary Shares in connection with acquisition transactions; provided that it shall be a condition to any such issuance pursuant to subsection (iii) that the person or entity acquiring such Ordinary Shares agrees to
be bound by the terms of this lock-up letter provision to the same extent as if the person or entity acquiring such Ordinary Shares were a party hereto. 
  

 11 

 (i) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington D.C. time, on the date of the Terms Agreement, and the Company shall at the time of filing either pay the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act. 
  
 (j) Pursuant to a Share Purchase Agreement, dated the date of the Terms Agreement, between the Company, SFIC Holdings (Cayman), Inc.
(“SFIC Holdings”) and Kuwait Petroleum Corporation (“KPC”, and together with SFIC Holdings, the “KPC Parties”) (the “Share Purchase Agreement”), the Company will use the net proceeds received by it from the
sale of the Securities pursuant to the Terms Agreement to purchase from SFIC Holdings a number of Ordinary Shares equal to the number of Ordinary Shares being sold by the Company to the Underwriters under the Terms Agreement (the “SFIC Holdings
Shares”). 
  
 (k) The Company will use its
best efforts to list, subject to notice of issuance, the Securities on the New York Stock Exchange. 
  
 6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Securities will be
subject to the accuracy of the representations and warranties on the part of the Company herein as of the date and time that the Terms Agreement is executed and delivered by the parties thereto and as of the Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent: 
  
 (a) The Representatives shall have received an opinion,
dated the Closing Date, of Maples and Calder, special Cayman Islands counsel to the Company, to the effect that: 
  
 (i) the Company has been duly incorporated and is validly existing as an exempted company in good standing under the laws of the Cayman
Islands with full corporate power and authority under its Memorandum and Articles of Association to own its properties and conduct its business as described in the Prospectus; 
  
 (ii) the Company has full power and authority under its Memorandum and Articles of Association to enter
into, execute and perform its obligations under the Share Purchase Agreement and the Terms Agreement, including the purchase of the SFIC Holdings Shares pursuant to the Share Purchase Agreement and the issue and offer of the Securities pursuant to
the Terms Agreement; 
  
 (iii) the Company’s
authorized share capital is as set forth in the balance sheet as of September 30, 2005 incorporated by reference into the Prospectus from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005;

  

 12 

 (iv) the execution and delivery of the Terms Agreement and the Share Purchase Agreement
have been duly authorized by and on behalf of the Company and, assuming for the purposes of delivery that the Company has physically delivered the Terms Agreement and the Share Purchase Agreement to the other parties thereto, the Terms Agreement and
the Share Purchase Agreement have each been duly executed and delivered on behalf of the Company; 
  
 (v) the issuance and sale of the Securities have been duly and validly authorized by the Company, and the Securities, when issued,
delivered and sold in accordance with the provisions of the Terms Agreement, will be duly and validly issued, fully paid and nonassessable and will conform as to legal matters in all material respects to the description thereof contained in the
Prospectus; and to such counsel’s knowledge, the shareholders of the Company have no preemptive rights with respect to the Securities; 
  
 (vi) the execution and delivery of the Share Purchase Agreement and the Terms Agreement, the purchase of the SFIC Holdings Shares, the
issue and offer of the Securities by the Company and the performance of its obligations under the Share Purchase Agreement and the Terms Agreement do not conflict with or result in a breach of or constitute a default under any of the terms or
provisions of the Memorandum and Articles of Association of the Company or any order, law, rule or regulation of any court or government agency or body of the Cayman Islands having jurisdiction over the Company or any of its subsidiaries that are
incorporated under the laws of the Cayman Islands or any of their respective properties; 
  
 (vii) to the knowledge of such counsel, no authorizations, consents, approvals, licenses, validations, orders or exemptions are required
by law from any governmental authorities or agencies, courts or other official bodies in the Cayman Islands in connection with the (A) execution, creation or delivery of the Share Purchase Agreement or the Terms Agreement; (B) subject to
the payment of the appropriate stamp duty, enforcement of the Share Purchase Agreement and the Terms Agreement; (C) purchase of the SFIC Holdings Shares, (D) offering, issuance or delivery of the Securities; and (E) performance by the
Company of its obligations under the Share Purchase Agreement and the Terms Agreement; 
  
 (viii) the statements set forth in the Prospectus under the caption “Description of Ordinary Shares” insofar as they purport to
constitute a summary of the terms of the Company’s share capital fairly summarize the matters referred to therein in all material respects, subject to the qualifications and assumptions stated therein; 
  
 (ix) the statements set forth in the Prospectus under the
caption “Cayman Islands Tax Considerations,” insofar as such statements purport to describe the provisions of the laws of the Cayman Islands and documents referred to therein fairly summarize the matters referred to therein in all material
respects, subject to the qualifications and assumptions stated therein; and 
  

 13 

 (x) under the laws of the Cayman Islands, the submission of the Company to the
jurisdiction of any New York State or federal court sitting in the City of New York and the appointment of The Corporation Trust as its authorized agent for purposes described in Section 12 of this Agreement are valid and binding; service of
process effected in the manner set forth in Section 12 of this Agreement will be effective under the laws of the Cayman Islands to confer personal jurisdiction over the Company, assuming this to be the case under the laws of New York; the
courts of the Cayman Island will observe and give effect to the choice of New York law as the governing law of this Agreement; and the Company can sue and be sued in its own name under the laws of the Cayman Islands; and 
  
 (xi) although there is no statutory enforcement in the
Cayman Islands of judgments obtained in New York, the courts of the Cayman Islands will recognize a foreign judgment as the basis for a claim at common law in the Cayman Islands provided such judgment (A) is given by a competent foreign court;
(B) is final; (C) is not in respect of taxes, a fine or a penalty; (D) was not obtained in a manner and is not of a kind the enforcement of which is contrary to the public policy of the Cayman Islands; and (E) imposes on the
judgment debtor a liability to pay a liquidated sum for which the judgment has been given. 
  
 (b) The Representatives shall have received an opinion, dated the Closing Date, of Baker Botts L.L.P., counsel for the Company, to
the effect that: 
  
 (i) the Terms Agreement,
assuming its due authorization, and further assuming its due execution and delivery by the Company insofar as such matters are governed by Cayman Islands law, has been duly executed and delivered by the Company; 
  
 (ii) the Share Purchase Agreement, assuming its due
authorization, and further assuming its due execution and delivery by the Company insofar as such matters are governed by Cayman Islands law, has been duly executed and delivered by the Company; 
  
 (iii) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental agency or body is required under U.S. federal law or the laws of the States of New York or Texas for the consummation by the Company of the transactions contemplated by the Share Purchase
Agreement or the Terms Agreement, except such as may be required under the blue sky or securities laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters (as to which such counsel need express
no opinion) and such other approvals (specified in such opinion) as have been obtained; 
  
 (iv) neither the purchase of the SFIC Holdings Shares, the issue and sale of the Securities by the Company, the execution and delivery by
the Company of the Share Purchase Agreement or the Terms Agreement, nor the 
  

 14 

 consummation of any other of the transactions contemplated by the Share Purchase Agreement or the Terms
Agreement, nor the fulfillment of the terms thereof will conflict with, result in a breach or violation of, or constitute a default under (A) any applicable U.S. federal law or the laws of the States of New York or Texas or (B) the terms
of any indenture, mortgage, deed of trust or other agreement or instrument providing for the borrowing of money that is filed as an exhibit to the Company’s annual report on Form 10-K for the year ended December 31, 2004, quarterly report
on Form 10-Q for the quarter ended March 31, 2005, quarterly report on Form 10-Q for the quarter ended June 30, 2005 or quarterly report on Form 10-Q for the quarter ended September 30, 2005, to which the Company or any of its
subsidiaries is a party or bound, except in the case of clauses (A) and (B) above, such conflict, breach, violation or default that is not, individually or in the aggregate reasonably likely to have a Material Adverse Effect; 

 
 (v) the Registration Statement has become effective under
the Act; any required filing of the Prospectus with the Commission pursuant to Rule 424(b) has been made in the manner and within the time period required thereby; and, to the knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the Act, and the registration statement relating to the Registered Securities, as of its most recent effective
date, and the Prospectus, as of its issue date, and any amendment or supplement thereto, as of its effective or issue date (in each case, other than the financial statements and schedules, the notes thereto and the auditor’s reports thereon,
the other financial data, numerical data related to such financial statements and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case included or incorporated by reference therein, or omitted
therefrom, as to which such counsel need not comment), appear on their face to comply as to form in all material respects with the requirements of the Act and the rules and regulations promulgated thereunder; 
  
 (vi) the statements set forth in the Prospectus under the
caption “Plan of Distribution” and “Underwriting”, insofar as they purport to describe the provisions of the laws and documents referred to therein fairly summarize the matters referred to therein in all material respects,
subject to the qualifications and assumptions stated therein; 
  
 (vii) the statements in the Prospectus under the caption “U.S. Federal Income Tax Considerations”, insofar as they refer to statements of law or legal conclusions, fairly summarize the matters referred to
therein in all material respects, subject to the qualifications and assumptions stated therein. 
  
 (viii) none of the Company or its Subsidiaries is required to be registered or regulated as an “investment company” within the
meaning of the Investment Company Act, and immediately after giving effect to the offer and sale of the Securities and the application of the proceeds thereof as described in the 
  

 15 

 Prospectus, none of the Company or its Subsidiaries will be required to be registered or regulated as an
“investment company” as defined in the Investment Company Act. 
  
 Such counsel shall also state that such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants of the Company,
representatives of the Underwriters and counsel to the Underwriters and representatives of the KPC Parties and counsel to the KPC Parties at which the contents of the Registration Statement, the Pricing Prospectus and the Prospectus were discussed
and, although such counsel did not independently verify such information and is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Pricing
Prospectus and the Prospectus (except to the extent specified in clauses (vi) and (vii) above), on the basis of the foregoing (relying as to factual matters upon statements of officers and other representatives of the Company), no facts
came to such counsel’s attention that led such counsel to believe that any part of the Registration Statement or any further amendment thereto made by the Company prior to the Closing Date (in each case, other than the financial statements and
schedules, the notes thereto and the auditor’s reports thereon, the other financial data, numerical data related to such financial statements and accounting data, and reports of independent reserve engineers and reserve engineering data, in
each case included or incorporated by reference therein, or omitted therefrom, and the exhibits thereto as to which such counsel need express no belief), when such part or amendment became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Pricing Prospectus, together with any Issuer Free Writing Prospectus, as of the Applicable Time (other
than the financial statements and schedules, the notes thereto and the auditor’s reports thereon, the other financial and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case, included or
incorporated by reference therein, or omitted therefrom, and the exhibits thereto, as to which such counsel need express no belief), when considered together with and as supplemented by the information regarding the sales price of the Securities set
forth on the cover page of the Prospectus, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading or that, as of its date and as of the Closing Date, the Prospectus or any further amendment or supplement thereto made by the Company prior to the Closing Date (other than the financial statements and schedules, the notes thereto and the
auditor’s reports thereon, the other financial and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case, included or incorporated by reference therein, or omitted therefrom, and the exhibits
thereto, as to which such counsel need express no belief) contained or contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading. 
  
 Such opinion may
be limited to the laws of the States of Texas and New York and the federal laws of the United States. Such counsel may rely as to matters of Cayman Islands law upon the opinion of Maples and Calder furnished to the Underwriters 
  

 16 

 pursuant to the Terms Agreement. As to matters involving the application of laws other than the laws of
the State of Texas, the contract law of the State of New York or the federal laws of the United States, to the extent they deem proper and specified in such opinion, such counsel may rely upon the opinion of other counsel of good standing and
reasonably acceptable to the Underwriters provided such opinions are also addressed to the Underwriters and are in form and substance satisfactory to them. Such counsel may also rely as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. 
  
 (c) The Representatives shall have received an opinion, dated the Closing Date, of the General Counsel, Associate General Counsel or Assistant General Counsel of the Company, to the effect that: 
  
 (i) each of the Subsidiaries of the Company listed on
Schedule II to the Terms Agreement (individually a “Specified Subsidiary” and collectively the “Specified Subsidiaries”) has been duly formed and is validly existing as a corporation, company or limited liability company, as
applicable, in good standing under the laws of the jurisdiction in which it is chartered or organized, with corporate or limited liability company power and authority, as applicable, to own its properties and conduct its business as described in the
Pricing Prospectus, and the Company and each of the Specified Subsidiaries is duly qualified to do business as a foreign corporation or limited liability company, as applicable, and is in good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material properties or conducts material business, except as would not have a Material Adverse Effect; provided that, with respect to any such subsidiary for which a certificate of existence or
good standing or similar certification is not available on a timely basis from the certifying authority in the applicable jurisdiction, such counsel may state that his opinion is based solely on such counsel’s general familiarity with such
subsidiary and not on the certificate of any public official; 
  
 (ii) all the outstanding shares of capital stock, limited liability company interests or quotas, as applicable, of each Specified Subsidiary have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Pricing Prospectus, all outstanding shares of capital stock, limited liability company interests or quotas, as applicable, of the Specified Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any perfected security interest and, to the knowledge of such counsel, any other security interests, claims, liens or encumbrances; 
  
 (iii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation of the transactions contemplated by the Share Purchase Agreement or the Terms Agreement, except such as may be required under the blue sky or securities laws of any jurisdiction
in connection with the purchase and distribution of the Securities by the Underwriters, as to which such counsel need express no opinion, and such other approvals (specified in such opinion) as have been obtained; 
  

 17 

 (iv) neither the purchase of the SFIC Holdings Shares, the issue and sale of the
Securities by the Company nor the fulfillment of the terms of the Share Purchase Agreement and the Terms Agreement will conflict with, result in a breach or violation of, or constitute a default under (A) any applicable U.S. federal or Texas
law, (B) the terms of any indenture, mortgage, deed of trust or other agreement or instrument known to such counsel, and to which the Company or any of its subsidiaries is a party or bound, or (C) any judgment, order or decree known to
such counsel, to be applicable to the Company or its Specified Subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or its Specified Subsidiaries, except in the case
of clauses (A), (B) and (C) above, such conflict, breach, violation or default that is not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect; 
  
 (v) except as set forth in the Pricing Prospectus, the
Company and its Specified Subsidiaries possess and are in compliance with all approvals, certificates, authorizations, licenses and permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their
business as described in the Pricing Prospectus, except where the failure to possess such approvals, certificates, authorizations, licenses and permits or be in compliance therewith would not be reasonably likely to have a Material Adverse Effect
and to the knowledge of such counsel, none of the Company or its Specified Subsidiaries, has received any notice of proceedings relating to the revocation or modification of any such approval, certificate, authorization, license or permit which,
individually or in the aggregate, if it became the subject of an unfavorable decision, ruling or finding, would be reasonably likely to have a Material Adverse Effect; 
  
 (vi) to the knowledge of such counsel, there is no pending or threatened action, suit or proceeding before
any court or government agency, authority or body or any arbitrator to which the Company or its Specified Subsidiaries is a party required to be described in the Registration Statement, the Pricing Prospectus or Prospectus which are not described as
required or of any contracts or documents of a character required to be described in the Registration Statement, the Pricing Prospectus or Prospectus or to be filed as exhibits to the Registration Statement which are not described and filed as
required; and 
  
 (vii) the documents
incorporated by reference in the Prospectus or any further amendment or supplement thereto, made by the Company prior to the Closing Date (in each case, other than the financial statements and schedules, the notes thereto and the auditor’s
reports thereon, the other financial data, numerical data related to such financial statements and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case included or incorporated by reference
therein, or omitted therefrom, and the exhibits 
  

 18 

 thereto, as to which such counsel need not comment), when they become effective or were filed with the
Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as the case may be, and the rules and regulations promulgated thereunder; 
  
 Such counsel shall also state that such counsel has
participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants of the Company, representatives of the Underwriters and counsel to the Underwriters and representatives of the
KPC Parties and counsel to the KPC Parties at which the contents of the Registration Statement, the Pricing Prospectus and the Prospectus were discussed and, although such counsel did not independently verify such information and is not passing upon
and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement, the Pricing Prospectus and the Prospectus (except to the extent specified above), on the basis of the
foregoing (relying as to factual matters upon statements of officers and other representatives of the Company) no facts came to such counsel’s attention that led such counsel to believe that any part of the Registration Statement or any further
amendment thereto made by the Company prior to the Closing Date (other than the financial statements and schedules, the notes thereto and the auditor’s reports thereon, the other financial, numerical data related to such financial statements
and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case, included or incorporated by reference therein, or omitted therefrom, and the exhibits thereto, as to which such counsel need express no
belief), when such part or amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that
the Pricing Prospectus, together with any Issuer Free Writing Prospectus, as of the Applicable Time (other than the financial statements and schedules, the notes thereto and the auditor’s reports thereon, the other financial, numerical data
related to such financial statements and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case, included or incorporated by reference therein, or omitted therefrom, and the exhibits thereto, as to
which such counsel need express no belief), when considered together with and as supplemented by the information regarding the sales price of the Securities set forth on the cover page of the Prospectus, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or that, as of its date and as of the Closing Date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to the Closing Date (in each case, other than the financial statements and schedules, the notes thereto and the auditor’s reports thereon, the other financial data, numerical
data related to such financial statements and accounting data, and reports of independent reserve engineers and reserve engineering data, in each case, included or incorporated by reference therein, or omitted therefrom, as to which such counsel
need express no belief) contained or contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

  

 19 

 The opinions expressed in such opinion may be limited to the laws of the State of Texas,
the corporate laws of the State of Delaware and the federal laws of the United States. Such counsel may rely as to matters of Cayman Islands law upon the opinion of Maples and Calder furnished to the Underwriters pursuant to the Terms Agreement. As
to matters involving the application of laws other than the laws of the State of Texas, the corporate laws of the State of Delaware or the federal laws of the United States, to the extent they deem proper and specified in such opinion, such counsel
may rely upon the opinion of other counsel of good standing and reasonably acceptable to the Underwriters provided such opinions are also addressed to the Underwriters and are in form and substance satisfactory to them. Such counsel may also rely as
to matters of fact, to the extent he deems proper, on certificates of responsible officers of the Company and public officials. 
  
 (d) The Representatives shall have received from the counsel for the Underwriters designated in the Terms Agreement such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Registration Statement, the Pricing Prospectus and the Prospectus and other related matters as the Underwriters may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. 
  
 (e) The Company shall have furnished to the Underwriters a certificate of the Company, signed by the Chairman of the Board, the Chief
Executive Officer or the President or any Vice President of the Company and the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the
Prospectus, any amendment or supplement to the Prospectus and the Terms Agreement and that: 
  
 (i) the representations and warranties of the Company in this Agreement and the Terms Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing
Date; 
  
 (ii) the Prospectus as amended or
supplemented in relation to the Securities has been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a)
hereof; the Rule 462(b) Registration Statement became effective by 10:00 P.M., Washington, D.C. time, on the date of the Terms Agreement; 
  
 (iii) (A) neither the Company nor any of its subsidiaries have sustained since the date of the most recent financial statements
included or incorporated by reference in the Pricing Prospectus as amended prior to the date of the Terms Agreement relating to the Securities any material loss or interference with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or governmental action, order or 
  

 20 

 decree, otherwise than as set forth or contemplated in the Pricing Prospectus as amended prior to the
date of the Terms Agreement relating to the Securities and (B) otherwise than as set forth or contemplated in the Pricing Prospectus as amended prior to the date of the Terms Agreement relating to the Securities, since the respective dates as
of which information is given in the Pricing Prospectus as amended prior to the date of the Terms Agreement relating to the Securities there has not been any material adverse change in the share capital, long-term debt, consolidated net current
assets, consolidated revenues, operating income or net income of the Company or any of its Subsidiaries or any of its subsidiaries or any material adverse change or any development involving a prospective change, in or affecting the management,
business, financial position, shareholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business; and 
  
 (iv) that no stop order suspending the effectiveness of the
Registration Statement or any part therof has been issued and no proceedings for that purpose have been instituted or, to their knowledge, are contemplated by the Commission and all request for additional information on the part of the Commission
have been complied with. 
  
 (f) On the date of
the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at
the Closing Date, the Representatives shall have received letters, dated the respective dates of delivery thereof, of PricewaterhouseCoopers LLP, confirming that they are a registered independent public accounting firm with respect to the Company
and its subsidiaries within the meaning of the Act and the applicable rules and regulations promulgated thereunder and stating in effect that: 
  
 (i) in their opinion, the financial statements and schedules audited by them and included or incorporated by reference in the Pricing
Prospectus contained in the Registration Statement relating to the Registered Securities, as amended at the date of such letter, comply as to form in all material respects with the applicable sections of the Act or the Exchange Act, as applicable
and the applicable rules and regulations promulgated thereunder; 
  
 (ii) if any interim consolidated financial statements are available from the Company for any period commencing immediately after the date of the Company’s most recent consolidated balance sheet included or
incorporated by reference in such Pricing Prospectus, they read the unaudited consolidated financial data of the Company relating to such period and relating to the corresponding period in the preceding year and inquired of certain officials of the
Company who have responsibility for financial and accounting matters whether those unaudited financial data are stated on a basis substantially consistent with that of the audited financial statements included or incorporated by reference in such
Pricing Prospectus, and that as a result of the foregoing procedures, nothing came to their attention that caused them to believe that: 
  

 21 

 (A) there was, at the end of such period, any change in the Ordinary Shares, increase in
the long-term debt, including capital lease obligation, or any decrease in consolidated net current assets (working capital) or shareholders’ equity of the Company and subsidiaries consolidated as compared with amounts shown in the
Company’s most recent consolidated balance sheet included or incorporated by reference in such Pricing Prospectus, or 
  
 (B) for such period, there were any decreases, as compared to the corresponding period in the preceding year, in total consolidated
revenues, operating income or net income, 
  
 except, in the case
of both (A) and (B), for changes or decreases that such Pricing Prospectus or documents incorporated by reference therein discloses have occurred or may occur and except as may be set forth in such letter; 
  
 (iii) with respect to the period subsequent to the later of
the end of the period specified in 5(f)(ii) above or the end of the most recent period specified in 5(f)(i) they have inquired of certain officials of the Company who have responsibility for financial and accounting matters whether (i) at a
date not more than five business days prior to the date of the letter, there was any change in Ordinary Shares or increase in long-term debt, including capital lease obligation, of the Company as compared with amounts shown on the Company’s
most recent unaudited condensed consolidated balance sheet incorporated by reference in such prospectus or (ii) for the period subsequent to the date of such balance sheet until a date not more than five business days prior to the date of the
letter, there were any decreases, as compared with the corresponding period in the preceding year in total consolidated revenues; and on the basis of the foregoing inquiries and a reading of minutes of the meetings of the board of directors and
audit committee of the Company, nothing came to their attention that caused them to believe that there was any such change, increase or decrease, except in all instances that the Pricing Prospectus or documents incorporated by reference therein
discloses have occurred or may occur and except as may be set forth in such letter; 
  
 (iv) they have performed certain other specified procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) included or incorporated by reference in such Pricing
Prospectus agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation; 
  
 (v) the unaudited selected financial information with respect to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Pricing Prospectus and included or incorporated by reference in Item 6 of the Company’s Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts 
  

 22 

 (after restatement where applicable) in the audited consolidated financial statements for such five
fiscal years which were included or incorporated by reference in the Company’s Annual Reports on Form 10-K for such fiscal years. 
  
 All financial statements and schedules included in material incorporated by reference into such Pricing Prospectus shall be deemed included in such
prospectus for purposes of this subsection. 
  
 (g) The Prospectus as amended or supplemented in relation to the Securities shall have been filed with the Commission in accordance with the rules and regulations under the Act and Section 5(a) of this Agreement. All material required
to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433 under the Act. If the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M. Washington, D.C. time, on the date of the Terms Agreement. No stop order suspending the effectiveness of the Registration Statement or of any part thereof shall have
been issued and no proceedings for that purpose shall have been initiated or threatened by the Commission; no stop order suspending the effectiveness or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been
instituted or, to the knowledge of the Company or any Underwriter, shall be contemplated by the Commission. 
  
 (h) (A) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Pricing Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus as amended prior to the date of the Terms Agreement relating to the Securities, and (B) since the respective dates as of which
information is given in the Pricing Prospectus as amended prior to the date of the Terms Agreement relating to the Securities there shall not have been any change in the share capital, long-term debt, consolidated net current assets, consolidated
revenues, operating income or net income of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the management, business, financial position, shareholders’ equity or results
of operations of the Company and its subsidiaries (taken as a whole), otherwise than as set forth or contemplated in the Pricing Prospectus as amended prior to the date of the Terms Agreement relating to the Securities, the effect of which, in any
such case described in clause (A) or (B), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Pricing Prospectus as amended relating to the Securities. 
  
 (i) On or after the Applicable Time, there shall not have occurred (i) any downgrading in the rating of any debt securities of the
Company by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Act), or any notice given of any intended or potential decrease in any such rating or of 
  

 23 

 a possible change in any such rating that does not indicate the direction of the possible change;
(ii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension or limitation of trading of any securities of the Company by
the Commission or the New York Stock Exchange; (iii) any general moratorium on commercial banking activities declared by federal or New York authorities or a material disruption in commercial banking or securities settlement or clearance
services in the United States; or (iv) any outbreak or escalation of hostilities in which the United States is involved, any declaration of war by the United States or a national emergency or war or other calamity or crisis or any change in the
financial, political or economic conditions in the United States or elsewhere, such that in the case of clause (iv), the effect of any such event such as to make it, in the judgment of a majority in interest of the Underwriters, including any
Representatives, impracticable or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Prospectus. 
  
 (j) Prior to the Closing Date, the Company shall have furnished to the Underwriters such further information, certificates and documents
as the Underwriters may reasonably request. 
  
 (k) The Securities shall have been approved for listing on the New York Stock Exchange. 
  
 The Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as they reasonably request.

  
 7. Indemnification and Contribution. 
  
 (a) The Company agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment
or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or alleged omission in any of such documents, in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriters
through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any liability that the Company may otherwise have. 
  

 24 

 (b) Each Underwriter agrees to severally indemnify and hold harmless the Company, its directors, its
officers and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating
to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representatives, specifically for inclusion in the Registration Statement, the Basic Prospectus, any Preliminary Prospectus, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus. This indemnity agreement will be in addition to any liability that any Underwriter may otherwise have. 
  
 (c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but
the failure so to notify the indemnifying party (i) will not relieve it from liability under Subsection 7(a) or 7(b) hereof unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in
Subsection 7(a) or 7(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. An indemnifying party will not, without
the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding and does not include any statements as to or an addition of fault, culpability or failure to act, by or on behalf of any indemnified party. An indemnifying party will not, without its prior consent, be
liable for any settlement or compromise or consent to the entry of any judgment. 
  
 (d) In the event that the indemnity provided in Subsection 7(a) or 7(b) hereof is unavailable to or insufficient for any reason to hold harmless an indemnified party (other than as set forth therein), the Company
and the Underwriters agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively “Losses”) to which
the Company 
  

 25 

 and the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the
Company and by the Underwriters from the offering of the Securities. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative fault of the Company and of the Underwriters in connection with the statements or omissions that resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering of the Securities (before deducting expenses), and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the
Company or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. The amount paid or payable by an indemnified party as a result of the Losses referred
to above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Subsection 7(d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls any Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this Subsection 7(d). 
  
 8. Default of Underwriters. 
  

(a) If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase under the Terms
Agreement relating to such Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six hours after such default by
any Underwriter the Representatives do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the
Representatives to purchase such Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Securities, the Representatives or the Company shall have the right to postpone the Closing Date for 
  

 26 

 such Securities for a period of not more than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion
of the Representatives may thereby be made necessary. 
  
 (b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased does not exceed one-eleventh of the total number of Securities to be purchased at the Closing Date, the Representatives may make arrangements satisfactory to the Company for the purchase of such Securities by
other persons, including any of the Underwriters, but if no such arrangements are made by the Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments under the Terms Agreement, to
purchase the Securities that such defaulting Underwriters agreed but failed to purchase. 
  
 (c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the aggregate number of such Securities which remains unpurchased exceeds one-eleventh of the total number of Securities to be purchased at the Closing Date, as referred to in
subsection (b) above, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase the Securities of a defaulting Underwriter or Underwriters, such Terms Agreement will
terminate without liability on the part of any nondefaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 5(g) hereof and the indemnity and contribution agreements as
provided in Section 7. In the event satisfactory arrangements for the purchase of such Securities are made within 36 hours of such default, the Closing Date shall be postponed for such period, not exceeding seven days, as the Underwriters shall
determine in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. 
  
 As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter of its liability, if any, to the Company or any non-defaulting Underwriter for damages occasioned by its default hereunder. 
  
 The foregoing obligations and agreements set forth in this Section will not apply if the Terms Agreement specifies that such obligations and agreements
will not apply. 
  
 9. Survival of Certain Representations and
Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Company or any of their respective representatives, officers or directors or any controlling person and will survive
delivery of and payment for the Securities. 
  

 27 

 If the Terms Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Securities by
the Underwriters under the Terms Agreement is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company and the Underwriters
pursuant to Section 7 shall remain in effect. If the purchase of the Securities by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (ii), (iii) or (iv) of Section 6(i), the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with
the offering of the Securities. 
  
 10. Notices. All
communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to them at their addresses furnished to the Company in writing for the purpose of communications
hereunder or, if sent to the Company, will be mailed, delivered, telegraphed or sent by facsimile and confirmed to it at 15375 Memorial Drive, Houston, Texas 77079-4101, facsimile number (281) 925-6652, attention of General Counsel. 

 
 11. Successors. This Agreement will inure to the benefit of and be
binding upon the Company and such Underwriters as are identified in Terms Agreements and their respective successors and the officers and directors and controlling persons referred to in Section 7, and no other person will have any right or
obligation hereunder. 
  
 12. Governing Law. The Company
irrevocably (i) agrees that any legal suit, action or proceeding against the Company brought by the Underwriters or any person who controls the Underwriters arising out of or based upon this Agreement, the Terms Agreement or the transactions
contemplated hereby or thereby may be instituted in any New York court, (ii) waives, to the fullest extent it may effectively do so, any objection which it may not or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company has appointed CT Corporation System, New York, New York, as its authorized agent (the “Authorized Agent”) upon whom process
may be served in any such action arising out of or based on this Agreement, the Terms Agreement or the transactions contemplated hereby or thereby which may be instituted in any New York court by the Underwriters or any person who controls the
Underwriters, expressly consents to the jurisdiction of any such court in respect of any such action, and waives any other requirements of or objections to personal jurisdiction with respect thereto. Such appointment shall be irrevocable and for a
term of not less than ten years from the date of the Terms Agreement. The Company represents and warrants that the Authorized Agent has agreed to act as such agent for service of process and agrees to take any and all action, including the filing of
any and all documents and instruments that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized agent and written notice of such service to the Company shall be deemed, in every
respect, effective service of process upon the Company. 
  
 13.
Business Day. For purposes of the Terms Agreement, “business day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in the City of New York, New York are authorized or obligated
by law, executive order or regulation to close. 
  

 28 

 14. Headings. The headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement. 
  
 15. Counterparts. Any Terms Agreement may be executed in two or more counterparts, each of which will be deemed to be an original, but all such counterparts will together constitute one and the same instrument. 
  
 16. Absence of Fiduciary Relationship. The Company acknowledges and
agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection
therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the
obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has
rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto. 
  
 17. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company
and the Underwriters, or any of them, with respect to the subject matter hereof. 
  

 29

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