Document:

EXHIBIT 10.1

December 12, 2006

VIA
FACSIMILE

Catalytica
Energy Systems, Inc.

301 West Warner Road, Suite 132

Tempe, Arizona 85284

Attention:  Richard Weinroth, Secretary and Corporate
Counsel

Dear
Mr. Weinroth:

Reference is hereby made to the Amended and Restated Preferred Stock
Rights Agreement, dated as of November 22, 2004 (the “Rights Agreement”),
between Catalytica Energy Systems, Inc. (the “Company”), and Mellon Investor
Services LLC, as Rights Agent. 
Capitalized terms set forth herein have the respective meanings ascribed
thereto in the Rights Agreement unless otherwise defined herein.

As of November 30, 2006 (the “Inadvertent Trigger Date”), AWM
Investment Company, Inc. (“AWM”) became the Beneficial Owner of more than 20%
of the Company’s Common Shares then outstanding.  AWM is the investment adviser to each of the funds
listed on Exhibit A attached hereto (each, a “Fund” and, collectively,
the “Funds”).  The number of Common
Shares owned by each Fund is also listed on Exhibit A attached hereto.

AWM understands that, as a result of being the Beneficial Owner of more
than 20% of the Company’s Common Shares outstanding, AWM, together with its
Affiliates and Associates (including, but not limited to, the Funds)
(collectively, the “AWM Parties”) may be deemed to be an Acquiring Person under
the terms of the Rights Agreement.  In
order to induce the Company’s Board of Directors to determine pursuant to
Section 1(a) of the Rights Agreement that the AWM Parties are not an Acquiring
Person, AWM, on its own behalf and on behalf of the other AWM Parties, hereby
represents, warrants and agrees as follows:

1.             The AWM Parties
were unaware that they beneficially owned a percentage of the Common Shares
that may otherwise cause them to be an “Acquiring Person” under the Rights
Agreement.  The AWM Parties have no
intention of changing or influencing control of the Company.

2.             Within one year
from the Inadvertent Trigger Date, AWM shall cause the Funds to divest a
sufficient number of Common Shares so that the AWM Parties no longer are the
Beneficial Owners of 20% or more of the Company’s Common Shares then
outstanding.

3.             AWM will not, and
will cause the other AWM Parties not to, become the Beneficial Owner of any
additional Common Shares unless, after giving effect to any such

acquisition,
the AWM Parties would be the Beneficial Owners of less than 20% of the Company’s
Common Shares then outstanding.

4.             This letter has
been duly authorized executed and delivered by AWM, on its own behalf and on
behalf of the other AWM Parties, and constitutes the legal, valid and binding
obligation of the AWM Parties, enforceable against them in accordance with its
terms.  The Company’s Board of Directors
may rely on this letter in determining that the AWM Parties are not an
Acquiring Person under the Rights Agreement.

 

	
  

  	
  AWM INVESTMENT CO., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID M.
  GREENHOUSE

  
	
   

  	
  Name:

  	
  David M. Greenhouse

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AGREED AND ACKNOWLEDGED:

  
	
   

  	
   

  	
   

  
	
   

  	
  CATALYTICA ENERGY SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT W. ZACK

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Robert W. Zack

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  

 

Exhibit
A

	
  Name of Fund

  	
   

  	
  Shares Owned

  
	
   

  	
   

  	
   

  	
   

  
	
  Special
  Situations Fund III QP, L.P.

  	
   

  	
  2,846,964

  	
   

  
	
  Special
  Situations Fund III, L.P.

  	
   

  	
  253,101

  	
   

  
	
  Special
  Situations Cayman Fund, L.P.

  	
   

  	
  899,692Exhibit 10.1

OVERSTOCK.COM,
INC.

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

PLACEMENT AGENCY AGREEMENT

December 15, 2006

W.R. Hambrecht + Co., LCC

539 Bryant Street

San
Francisco, CA 94107

Dear
Sir or Madam:

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

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

1.             Agreement to Act as Placement Agent.  On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions of this Agreement, the Placement Agent agrees to act
as the Company’s exclusive placement Agent in connection with the issuance and
sale, on a best efforts basis, by the Company of the Shares to the
Investors.  The Company shall pay to the
Placement Agent 1% of the proceeds received by the Company from the sale of the
Shares as set forth on the cover page of the Prospectus (as hereinafter
defined).

2.             Closing.  The closing (the “Closing”) shall take place
at the office of the Company at 6350 South 3000 East, Salt Lake City, Utah
84121.  All actions taken at the Closing
shall be deemed to have occurred simultaneously.

3.             Representations and Warranties of the
Company.  The Company
represents and warrants and covenants to the Placement Agent that:

(a)           The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (Registration No. 333-122904), which has
become effective, relating to the Common Stock and certain other securities of
the Company, under the Securities Act of 1933, as amended (the “Act”), and the

 

 

rules and regulations (collectively referred
to as the “Rules and Regulations”) of the Commission promulgated
thereunder.  As used in this Agreement:

(i)  “Applicable
Time” means 9:00 a.m. (New York City time) on the date of this  Agreement;

(ii)   “Effective
Date” means any date as of which the Registration Statement became, or is
deemed to have become, effective under the Act in accordance with the Rules and
Regulations;

(iii) “Issuer Free Writing Prospectus”  means each “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of
the Company or used or referred to by the Company in connection with the
offering of the Shares;

(iv) “Preliminary Prospectus”  means any preliminary prospectus relating to
the Shares included in the Registration Statement or filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations;

(v)  “Pricing
Disclosure Materials” means, as of the Applicable Time, the most recent
Preliminary Prospectus, together with each Issuer Free Writing Prospectus filed
or used by the Company on or before the Applicable Time;

(vi) “Prospectus” means the final prospectus
supplement relating to the Shares as filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations; and

(vii) “Registration Statement” means,
collectively, the various parts of such registration statement, each as amended
as of the Effective Date for such part, including any Preliminary Prospectus or
the Prospectus and all exhibits to such registration statement, and including
all documents incorporated therein by reference.

(b)           The Registration Statement has heretofore
become effective under the Act or, with respect to any registration statement
to be filed to register the offer and sale of Shares pursuant to Rule 462(b)
under the Act, will be filed with the Commission and become effective under the
Act no later than 10:00 p.m., New York
City time, on the date of determination of the public offering price for the
Shares; no stop order of the Commission preventing or suspending the use of any
Prospectus, or the effectiveness of the Registration
Statement, has been issued, and no proceedings for such purpose have been
instituted or, to the Company’s knowledge, are contemplated by the Commission.

(c)             The Registration Statement, at the time it
became effective, as of the date hereof, and at the Closing Date conformed and
will conform in all material respects to the requirements of the Act and the
Rules and Regulations. The Prospectus will conform, when filed with the
Commission pursuant to Rule 424(b) and on the Closing Date to the requirements
of the Act and the Rules and Regulations.

(d)           The Registration Statement did not, as of the
Effective Date, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading.

 2
 

 

 

(e)           The Prospectus will not, as of its date and
on the Closing Date, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;  provided,
however, that the Company makes no representation or warranty with
respect to any statement contained in the Prospectus
in reliance upon and in conformity with information concerning the
Placement Agent and furnished in writing by the Placement Agent to the Company
expressly for use in the Prospectus,
as set forth in Section 8(b).

(f)            The
Pricing Disclosure Materials did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that the
price of the Shares, number of Shares to be sold, and disclosures directly
relating thereto will be included on the cover page of the Prospectus; provided,
however, that the Company makes no representation or warranty with respect
to any statement contained in the Pricing Disclosure Materials in reliance upon and in conformity
with information concerning the Placement Agent and furnished in writing by a
Placement Agent to the Company expressly for use in the Pricing Disclosure Materials,
as set forth in Section 8(b).

(g)           Each
Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433), when considered together
with the Pricing Disclosure Materials as of the Applicable Time, did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except that
the price of the Shares, number of Shares to be sold, and disclosures directly
relating thereto will be included on the cover page of the Prospectus.

(h)           Each
Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Act and the Rules and Regulations on the
date of first use, and the Company has complied with any filing requirements
applicable to such Issuer Free Writing Prospectus pursuant to the Rules and
Regulations.  The Company has not made
any offer relating to the Shares that would constitute an Issuer Free Writing
Prospectus without the prior written consent of the Placement Agent. The
Company has retained in accordance with the Rules and Regulations all Issuer
Free Writing Prospectuses that were not required to be filed pursuant to the
Rules and Regulations.

(i)            The
Company is, and at the Closing Date will be, duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has,
and at the Closing Date will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by
it and to conduct its business as described in the Registration Statement and
the Prospectus.  The Company is, and at
the Closing Date will be, duly licensed or qualified to do business and in good
standing as a foreign organization in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary, except where the failure
to be so qualified or in good standing or have such power or authority would
not, individually or in the aggregate, have a material adverse effect or would
not reasonably be expected to have a material adverse effect on or affecting
the business, prospects,

 3
 

 

 

properties, management, consolidated
financial position, stockholders’ equity or results of operations of the
Company and its Subsidiaries (as defined below) taken as a whole (a “Material
Adverse Effect”).  Complete and correct
copies of the articles or certificate of incorporation and of the bylaws of the
Company and all amendments thereto have been delivered to the Placement Agent,
and no changes therein will be made subsequent to the date hereof and prior to
the Closing Date.

(j)            The
Company’s only subsidiaries (each a “Subsidiary” and collectively the “Subsidiaries”)
are listed on Schedule 1 to this Agreement. 
Each Subsidiary that is a corporation has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of formation.  Each
Subsidiary is duly qualified and in good standing as a foreign corporation or
other entity in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so
qualified or in good standing which will not have a Material Adverse
Effect.  All of the shares of issued
capital stock of each Subsidiary of the Company that is a corporation have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of any lien,
encumbrance, claim, security interest, restriction on transfer, shareholders’
agreement, voting trust or other defect of title whatsoever.  All interests of each Subsidiary that is not
a corporation have been duly authorized and validly issued and are owned,
directly or indirectly, by the Company.

(k)           The
issued and outstanding shares of capital stock of the Company have been validly
issued, are fully paid and nonassessable and, other than as set forth in the
Registration Statement, are not subject to any preemptive rights, rights of
first refusal or similar rights.  The
Company has an authorized, issued and outstanding capitalization as set forth
in the Prospectus as of the dates referred to therein. The descriptions of the
securities of the Company in the Registration Statement and the Prospectus are,
and at the Closing Date will be, complete and accurate in all respects.  Except as set forth in the Registration
Statement and the Prospectus, and except for options granted in the ordinary
course of business under the Company’s incentive plans, the Company does not
have outstanding any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
exchangeable for, or any contracts or commitments to issue or sell, any shares
of capital stock or other securities.

(l)            The
Company has full legal right, power and authority to enter into this Agreement
and perform the transactions contemplated hereby.  This Agreement has been authorized and
validly executed and delivered by the Company and constitutes a legal, valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to the effect of applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and equitable
principles of general applicability.

(m)          The
issuance and sale of the Shares have been duly authorized by the Company, and
the Shares, when issued and paid for in accordance with this Agreement, will be
duly and validly issued, fully paid and nonassessable and will not be subject
to preemptive or similar rights.  The
holders of the Shares will not be subject to personal liability by reason of
being such holders.  The Shares, when
issued, will conform in all material respects to the description thereof set
forth in or incorporated into the Prospectus.

 4
 

 

 

(n)           The
consolidated financial statements and the related notes included in the
Registration Statement and the Prospectus present fairly, in all material
respects, the financial condition of the Company and its consolidated
Subsidiaries as of the dates thereof and the results of operations and cash
flows at the dates and for the periods covered thereby in conformity with
generally accepted accounting principles (“GAAP”).  No other financial statements or schedules of
the Company, any Subsidiary or any other entity are required by the Act or the
Rules and Regulations to be included in the Registration Statement or the
Prospectus.

(o)           PricewaterhouseCoopers
LLC (the “Accountants”), who have reported on such consolidated financial
statements and schedules, are registered independent public accountants with
respect to the Company as required by the Act and the Rules and Regulations and
by the rules of the Public Accounting Oversight Board.  The consolidated financial statements of the
Company and the related notes and schedules included in the Registration
Statement and the Prospectus have been prepared in conformity with the
requirements of the Act and the Rules and Regulations and present fairly the
information shown therein.

(p)           The
Company is not an ineligible issuer as defined under the Act and the Company
has paid the registration fee for this offering as required under the Act or
will pay such fees within the time period required by such rule.

(q)           The
Company is, and at the Closing Date will be, in compliance with all provisions
of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to it.  The Company and each Subsidiary maintain a
system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(r)            Since
the date of the most recent consolidated financial statements of the Company
included or incorporated by reference in the Prospectus and prior to Closing,
(i) there has not been and will not have been any change in the capital stock
of the Company (except for changes in the number of outstanding shares of
Common Stock of the Company due to the issuance of shares upon the exercise of
stock options or upon the grant of restricted stock to the Company’s directors,
the issuance of shares pursuant to the Company’s employee stock purchase plan
or the Company’s deferred compensation plan for directors) or long-term debt of
the Company or any Subsidiary or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development that would
reasonably be expected to result in a material adverse change, in or affecting
the business, prospects, properties, management, consolidated financial
position, stockholders’ equity, or results of operations of the Company and its
Subsidiaries taken as a whole (a “Material Adverse Change”) and (ii) neither
the Company nor any Subsidiary  has
sustained or will sustain any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by

 

 5

 

 

insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or regulatory
authority, except in each case as otherwise disclosed in the Registration
Statement and the Prospectus.

(s)           Since
the date as of which information is given in the Prospectus, neither the
Company nor any Subsidiary has entered or will enter into any transaction or
agreement, not in the ordinary course of business, that is material to the
Company and its Subsidiaries taken as a whole or incurred or will incur any
liability or obligation, direct or contingent, not in the ordinary course of
business, that is material to the Company and its Subsidiaries taken as a
whole.

(t)            The
Company and each Subsidiary has good and valid title in fee simple to all items
of real property and good and valid title to all personal property described in
the Registration Statement or the Prospectus as being owned by them that are
material to the businesses of the Company and its Subsidiaries taken as a
whole, in each case free and clear of all liens, encumbrances and claims except
those that (i) do not materially interfere with the use made and proposed to be
made of such property by the Company and its Subsidiaries or (ii) would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.  Any real property
described in the Registration Statement or the Prospectus as being leased by
the Company or any Subsidiary that is material to the business of the Company and
its Subsidiaries taken as a whole is held by them under valid, existing and
enforceable leases, except those that (A) do not materially interfere with the
use made or proposed to be made of such property by the Company and its
Subsidiaries or (B) would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.

(u)           The
Company is not, nor upon completion of the transactions contemplated herein
will it be, an “investment company” or an “affiliated person” of, or “promoter”
or “principal underwriter” for, an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”).

(v)           Except
as disclosed in the Prospectus, there are no legal, governmental or regulatory
actions, suits or proceedings pending, nor, to the Company’s knowledge, any
legal, governmental or regulatory investigations, to which the Company or any
Subsidiary is a party or to which any property of the Company or any Subsidiary
is the subject that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect or materially and adversely affect
the ability of the Company to perform its obligations under the Agreement; to
the Company’s knowledge, no such actions, suits or proceedings are threatened
or contemplated by any governmental or regulatory authority or threatened by
others; and there are no current or pending legal, governmental or regulatory
investigations, actions, suits or proceedings that are required under the Act
to be described in the Prospectus that are not so described.

(w)          The
Company and each Subsidiary has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its respective business as presently
conducted except where the failure to have such governmental licenses, permits,
consents, orders, approvals and other authorizations would not have a Material
Adverse Effect, (ii) complied with all laws, regulations and orders applicable
to either it or its business, except where the failure to so

 6
 

 

 

comply would not have a Material Adverse Effect, and (iii) performed
all its obligations required to be performed, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument (collectively, a “contract or other
agreement”) to which it is a party or by which its property is bound or
affected, except where such default would not have a Material Adverse Effect,
and, to the Company’s best knowledge, no other party under any material
contract or other agreement to which it is a party is in default in any respect
thereunder.  The Company and its
Subsidiaries are not in violation of any provision of their respective
organizational or governing documents.

(x)            The
Company has all corporate power and authority to enter into this Agreement, and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection herewith have been
obtained, except such as may be required under state securities or Blue Sky
Laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the “NASD”) or the Nasdaq Global Market in connection with the
transactions contemplated by the Placement Agency Agreement.

(y)           Neither
the execution of this Agreement, nor the issuance, offering or sale of the
Shares, nor the consummation of any of the transactions contemplated herein,
nor the compliance by the Company with the terms and provisions hereof will
conflict with, or will result in a breach of, any of the terms and provisions
of, or has constituted or will constitute a default under, or has resulted in
or will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiary pursuant to the
terms of any contract or other agreement to which the Company or its
Subsidiaries may be bound or to which any of the property or assets of the
Company or its Subsidiaries is subject, except such conflicts, breaches or
defaults as may have been waived; nor will such action result in any violation
of the provisions of the organizational or governing documents of the Company
or any Subsidiary, or any statute or any order, rule or regulation applicable
to the Company or any Subsidiary or of any court or of any federal, state or
other regulatory authority or other government body having jurisdiction over
the Company or any Subsidiary.

(z)            There
is no document or contract of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required.  All such contracts to which the Company is a
party have been authorized, executed and delivered by the Company, constitute
valid and binding agreements of the Company, and are enforceable against the
Company in accordance with the terms thereof, subject to the effect of
applicable bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and equitable principles of general applicability, except where the
failure of any such contracts to be binding on the Company or enforceable
against it would not reasonably be expected to have a Material Adverse Effect.

(aa)         No
statement, representation or warranty made by the Company in this Agreement or
made in any certificate or document required by this Agreement to be delivered
to the Placement Agent or the Investors was or will be, when made, inaccurate,
untrue or incorrect in any material respect.

 7
 

 

 

(bb)         The
Company and its directors, officers or controlling persons have not taken,
directly or indirectly, any action intended, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Stock.

(cc)         No holder of
securities of the Company has rights to the registration of any securities of
the Company as a result of the filing of the Registration Statement or the
transactions contemplated by this Agreement, except for such rights as have
been waived or satisfied.

(dd)         The Common Stock of
the Company is quoted on the National Association of Securities Dealers
Automated Quotations Global Market (the “Nasdaq Global Market”). The Company
is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements of the Nasdaq Global Market.

(ee)         The
Company is not involved in any material labor dispute nor is any such dispute
known by the Company to be threatened.

(ff)           The
business and operations of the Company and each of its Subsidiaries have been
and are being conducted in compliance with all applicable laws, ordinances,
rules, regulations, licenses, permits, approvals, plans, authorizations or
requirements relating to occupational safety and health, or pollution, or
protection of health or the environment (including, without limitation, those
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic substances, materials or wastes
into ambient air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of chemical substances, pollutants, contaminants or hazardous
or toxic substances, materials or wastes, whether solid, gaseous or liquid in
nature) of any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto, except where the failure to be in such compliance will not,
individually or in the aggregate, have a Material Adverse Effect; and neither
the Company nor any of its Subsidiaries has received any notice from any
governmental instrumentality or any third party alleging any material violation
thereof or liability thereunder (including, without limitation, liability for
costs of investigating or remediating sites containing hazardous substances
and/or damages to natural resources).

(gg)         Intellectual
Property.  The Company and each
Subsidiary owns, is licensed or otherwise possesses all rights to use, all
patents, patent rights, inventions, know-how (including trade secrets and other
unpatented or unpatentable or confidential information, systems, or
procedures), trademarks, service marks, trade names, copyrights and other
intellectual property rights (collectively, the “Intellectual Property”)
necessary for the conduct of its business as described in the Registration
Statement.  Except as disclosed in the
Prospectus or as would not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect, no claims have been asserted
against the Company or any of its Subsidiaries by

 8
 

 

 

any person with respect to the use of any such Intellectual Property or
challenging or questioning the validity or effectiveness of any such
Intellectual Property.  

(hh)         The
Company and each Subsidiary has filed all necessary federal, state and foreign
income and franchise tax returns and have paid or accrued all taxes shown as
due thereon, and the Company has no knowledge of any tax deficiency which has
been or might be asserted or threatened against it or any Subsidiary which
could have a Material Adverse Effect.

(ii)           On
the Closing Date, all stock transfer or other taxes (other than income taxes)
which are required to be paid in connection with the sale and transfer of the
Shares to be sold hereunder will be, or will have been, fully paid or provided
for by the Company and all laws imposing such taxes will be or will have been
fully complied with.

(jj)           The
Company maintains insurance of the types and in the amounts that the Company
reasonably believes is adequate for its business.

(kk)         Neither
the Company nor any Subsidiary, nor, to the knowledge of the Company, any
director, officer, agent or employee has directly or indirectly, (i) made any
unlawful contribution to any candidate for public office, or failed to disclose
fully any contribution in violation of law, (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof, (iii)
violated or is in violation of any provisions of the U.S. Foreign Corrupt
Practices Act of 1977 or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.

(ll)           The
Company has not distributed and, prior to the later to occur of the Closing
Date and completion of the distribution of the Shares, will not distribute any
offering material in connection with the offering and sale of the Shares other
than the Prospectus and any Issuer Free Writing Prospectus to which the
Placement Agent has consented.

(mm)       Each
material employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its
Subsidiaries has been maintained in material compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”); no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred which would result in a
material liability to the Company with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; and
for each such plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.

 9
 

 

 

(nn)         No
relationship, direct or indirect, exists between or among the Company or any
Subsidiary, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any Subsidiary, on the other, which is
required by the Act to be disclosed in the Registration Statement and the
Prospectus and is not so disclosed.

(oo)         The
Company has not sold or issued any securities that would be integrated with the
offering of the Shares contemplated by this Agreement pursuant to the Act, the
Rules and Regulations or the interpretations thereof by the Commission.

4.             Agreements of
the Company.  The Company covenants
and agrees with the Placement Agent as follows:

(a)           The
Registration Statement has become effective, and if Rule 430A is used or the
filing of the Prospectus is otherwise required under Rule 424(b), the Company
will file the Prospectus (properly completed if Rule 430A has been used),
subject to the prior approval of the Placement Agent, pursuant to Rule 424(b)
within the prescribed time period and will provide a copy of such filing to the
Placement Agent promptly following such filing.

(b)           The
Company will not, during such period as the Prospectus would be required by law
to be delivered in connection with sales of the Shares by an underwriter or
dealer in connection with the offering contemplated by this Agreement, file any
amendment or supplement to the Registration Statement or the Prospectus unless
a copy thereof shall first have been submitted to the Placement Agent within a
reasonable period of time prior to the filing thereof and the Placement Agent
shall not have reasonably objected thereto in good faith.

(c)           The
Company will notify the Placement Agent promptly, and will, if requested,
confirm such notification in writing, (1) when any post-effective amendment to
the Registration Statement becomes effective; (2) of any request by the
Commission for any amendments to the Registration Statement or any amendment or
supplements to the Prospectus or any Issuer Free Writing Prospectus or for
additional information; (3) of the issuance by the Commission of any stop order
preventing or suspending the effectiveness of the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus, or the initiation of any
proceedings for that purpose or the threat thereof; (4) of becoming aware of
the occurrence of any event that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue in any
material respect or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading; and (5) of receipt by
the Company of any notification with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction.  If at any time the Commission shall issue any
order suspending the effectiveness of the Registration Statement in connection
with the offering contemplated hereby, the Company will make every reasonable
effort to obtain the withdrawal of any such order at the earliest possible
moment.  If the Company has omitted any
information from the Registration Statement, pursuant to Rule 430A, it will use
its best efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to said Rule 430A and to notify the Placement
Agent promptly of all such filings.

 

 10

 

 

(d)           If,
at any time when a Prospectus relating to the Shares is required to be
delivered under the Act, the Company becomes aware of the occurrence of any
event as a result of which the Prospectus, as then amended or supplemented,
would, in the reasonable judgment of counsel to the Company or counsel to the
Placement Agent, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or the
Registration Statement, as then amended or supplemented, would, in the
reasonable judgment of counsel to the Company or counsel to the Placement
Agent, include any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading, or if for any
other reason it is necessary, in the reasonable judgment of counsel to the
Company or counsel to the Placement Agent, at any time to amend or supplement
the Prospectus or the Registration Statement to comply with the Act or the
Rules and Regulations, the Company will promptly notify the Placement Agent and
will promptly prepare and file with the Commission, at the Company’s expense,
an amendment to the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance
and will deliver to the Placement Agent, without charge, such number of copies
thereof as the Placement Agent may reasonably request.  The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Placement Agent, and
the Placement Agent agrees to provide to each Investor, prior to the Closing, a
copy of the Prospectus and any amendments or supplements thereto.

(e)           The
Company will furnish to the Placement Agent and its counsel, without charge (i)
one conformed copy of the Registration Statement as originally filed with the
Commission and each amendment thereto, including financial statements and
schedules, and all exhibits thereto, (ii) so long as a prospectus relating to
the Shares is required to be delivered under the Act, as many copies of each
Issuer Free Writing Prospectus, Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Placement Agent may reasonably request.

(f)            The
Company will comply with all the undertakings contained in the Registration
Statement.

(g)           The
Company will not make any offer relating to the Shares that would constitute an
Issuer Free Writing Prospectus without the prior written consent of the
Placement Agent.

(h)           The
Company will retain in accordance with the Rules and Regulations all Issuer
Free Writing Prospectuses not required to be filed pursuant to the Rules and
Regulations.

(i)            Prior
to the sale of the Shares to the Investors, the Company will cooperate with the
Placement Agent and its counsel in connection with the registration or
qualification of the Shares for offer and sale under the state securities or
Blue Sky laws of such jurisdictions as the Placement Agent may reasonably
request; provided, that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to take
any action which would subject it to general service of process in any
jurisdiction where it is not now so subject.

 11
 

 

 

(j)            The
Company will apply the net proceeds from the offering and sale of the Shares in
the manner set forth in the Prospectus under the caption “Use of Proceeds.”

(k)           The
Company will use its best efforts to ensure that the Shares are listed or
quoted on the Nasdaq Global Market at the time of the Closing.

(l)            The
Company will not at any time, directly or indirectly, take any action intended,
or which might reasonably be expected, to cause or result in, or which will
constitute, stabilization of the price of the Shares to facilitate the sale or
resale of any of the Shares.

5.             Agreements of the Placement Agent.  The Placement Agent agrees that it shall not
include any “issuer information” (as defined in Rule 433 under the Act) in any “free
writing prospectus” (as defined in Rule 405) used or referred to by such
Placement Agent without the prior consent of the Company (any such issuer
information with respect to whose use the Company has given its consent, “Permitted
Issuer Information”); provided that (i) 
no such consent shall be required with respect to any such issuer
information contained in any document filed by the Company with the Commission
prior to the use of such free writing prospectus and (ii) “issuer information,”
as used in this Section 5 shall not be deemed to include information prepared
by such Placement Agent on the basis of or derived from issuer information.

6.             Expenses. Whether or not the
transactions contemplated by this Agreement are consummated or this Agreement
is terminated, the Company will pay all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement (including each pre- and
post-effective amendment thereto) and exhibits thereto, any Issuer Free Writing
Prospectus, each Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto, including all fees, disbursements and other charges of
counsel and accountants to the Company, (2) the preparation and delivery
of certificates representing the Shares, (3) furnishing (including costs
of shipping and mailing) such copies of the Registration Statement (including
all pre- and post-effective amendments thereto), the Prospectus and any
Preliminary Prospectus or Issuer Free Writing Prospectus, and all amendments
and supplements thereto, as may be requested for use in connection with the
direct placement of the Shares, (4) the listing of the Common Stock on the
Nasdaq Global Market, (5) any filings required to be made by the Placement
Agent with the NASD, and the fees, disbursements and other charges of counsel
for the Placement Agent in connection therewith, (6) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(i), including the
reasonable fees, disbursements and other charges of counsel to the Placement
Agent in connection therewith and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, and fees, disbursements and other
charges of counsel to the Company.  The
Company shall reimburse the Placement Agent, on a fully accountable basis, for
all reasonable travel, legal and other out-of-pocket expenses.

 12
 

 

 

7.             Conditions of
the Obligations of the Placement Agent.  The obligations of the Placement Agent
hereunder are subject to the following conditions:

(a)           (i) No
stop order suspending the effectiveness of the Registration Statement shall
have been issued, and no proceedings for that purpose shall be pending or
threatened by any securities or other governmental authority (including,
without limitation, the Commission), (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be pending
before, or threatened or contemplated by, any securities or other governmental
authority (including, without limitation, the Commission), (iii) any
request for additional information on the part of the staff of any securities
or other governmental authority (including, without limitation, the Commission)
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities and (iv) after the date hereof no amendment
or supplement to the Registration Statement, any Issuer Free Writing Prospectus
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Placement Agent and the Placement Agent did not object thereto
in good faith, and the Placement Agent shall have received certificates of the
Company, dated the Closing Date and signed by the President and Chief Executive
Officer or the Chairman of the Board of Directors of the Company, and the Chief
Financial Officer of the Company, to the effect of clauses (i), (ii) and (iii).

(b)           Since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, (i) there shall not have been a Material
Adverse Change, whether or not arising from transactions in the ordinary course
of business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) the Company shall not
have sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in the judgment of the Placement
Agent any such development makes it impracticable or inadvisable to consummate
the sale and delivery of the Shares to Investors as contemplated hereby.

(c)           Since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall have been no litigation or other
proceeding instituted against the Company or any of its officers or directors
in their capacities as such, before or by any Federal, state or local court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, which litigation or proceeding, in the reasonable judgment
of the Placement Agent, could have a Material Adverse Effect.

(d)           Each
of the representations and warranties of the Company contained herein shall be
true and correct in all material respects at the Closing Date, as if made on
such date, and all covenants and agreements herein contained to be performed on
the part of the Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date shall have been
duly performed, fulfilled or complied with in all material respects.

 13
 

 

 

(e)           The
Placement Agent shall have received an opinion, dated the Closing Date (or such
other date as may be set forth in a representation or warranty), of Bracewell
& Giuliani LLP, as counsel to the Company, in form and substance reasonably
satisfactory to the Placement Agent.

(f)            The
Shares shall be qualified for sale in such states as the Placement Agent may
reasonably request, and each such qualification shall be in effect and not
subject to any stop order or other proceeding on the Closing Date, as provided
in Sections 3(b) and 3(y) above.

(g)           The
Company shall have furnished or caused to be furnished to the Placement Agent
such certificates, in addition to those specifically mentioned herein, as the
Placement Agent may have reasonably requested as to the accuracy and
completeness at the Closing Date of any statement in the Registration Statement
or the Prospectus, as to the accuracy at the Closing Date of the
representations and warranties of the Company as to the performance by the
Company of its obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Placement Agent.

8.             Indemnification.

(a)           The
Company shall indemnify and hold harmless the Placement Agent, its directors,
officers, employees and agents and each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, liabilities,
expenses and damages, joint or several, (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted),
to which it, or any of them, may become subject under the Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, liabilities, expenses or damages arise out of or are based
on (i) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement, (ii) any untrue statement or
alleged untrue statement of any material fact contained in (A) any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereto, (B) any Issuer Free Writing Prospectus or any amendment or
supplement thereto or (C) any Permitted Issuer Information used or referred to
in any “free writing prospectus” (as defined in Rule 405) used or referred to
by the Placement Agent and (B) any application or other document, or any
amendment or supplement thereto, executed by the Company based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or Blue Sky laws thereof or
filed with the Commission or any securities association or securities exchange
(each, an “Application”), or (iii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement, the Prospectus
or any Issuer Free Writing Prospectus, or any amendment or supplement thereto,
or in any Permitted Issuer Information or any Application a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable to the extent that such
loss, claim, liability, expense or damage arises from the sale of the Shares in
the public offering to any person and is based solely on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to the Placement Agent furnished in
writing to the

 14
 

 

 

Company by the Placement Agent expressly for inclusion in the
Registration Statement, any Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus or in any amendment or supplement thereto or in any
Permitted Issuer Information or any Application (as set forth in paragraph (b)
above); and provided further, that such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of the Placement Agent
(or any person controlling the Placement Agent) from whom the person asserting
any such loss, claim, damage, liability or action purchased Shares which are
the subject thereof to the extent that any such loss, claim, damage or
liability (i) results from the fact that the Placement Agent failed to send or
give a copy of the Prospectus (as amended or supplemented) to such person at or
prior to the confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act and (ii) arises out of or is based
upon an untrue statement or omission of a material fact contained in such
Preliminary Prospectus that was corrected in the Prospectus (or any amendment
or supplement thereto), unless such failure to deliver the Prospectus (as
amended or supplemented) was the result of noncompliance by the Company with
Section 4(d).  This indemnity agreement
will be in addition to any liability which the Company may otherwise have.

(b)           The
Placement Agent will indemnify and hold harmless the Company, each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each director of the Company and each officer
of the Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to the Placement Agent, but only insofar
as losses, claims, liabilities, expenses or damages arise out of or are based
on any untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to the
Placement Agent furnished in writing to the Company by the Placement Agent
expressly for use in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any Issuer Free Writing Prospectus.  This indemnity agreement will be in addition
to any liability that the Placement Agent might otherwise have.  The Company acknowledges that, for all
purposes under this Agreement, the statements set forth in paragraphs one
through three under the heading “Plan of Distribution” in the Prospectus
constitute the only information relating to the Placement Agent furnished in
writing to the Company by the Placement Agent expressly for inclusion in the
Registration Statement, any Preliminary Prospectus or the Prospectus.

(c)           Any
party that proposes to assert the right to be indemnified under this
Section 8 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 8 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by
the indemnifying party.  If any such
action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party, and after notice
from the indemnifying party

 

 15

 

to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense.  The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that a conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party that would prevent the counsel
selected by the indemnifying party from representing the indemnified party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (3) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or
parties.  It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted
to practice in such jurisdiction at any one time for all such indemnified party
or parties.  All such fees, disbursements
and other charges will be reimbursed by the indemnifying party promptly as they
are incurred.  The Company will not,
without the prior written consent of the Placement Agent (which consent will
not be unreasonably withheld), settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification has been sought hereunder (whether or not the
Placement Agent or any person who controls the Placement Agent within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party
to such claim, action, suit or proceeding), unless such settlement, compromise
or consent includes an unconditional release of the Placement Agent and each
such controlling person from all liability arising out of such claim, action,
suit or proceeding.  An indemnifying
party will not be liable for any settlement of any action or claim effected
without its written consent (which consent will not be unreasonably withheld).

(d)           In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in the foregoing paragraphs of this Section 8
is applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or the Placement Agent, the Company and the
Placement Agent will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Placement
Agent such as persons who control the Company within the meaning of the Act or the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the
Company and the Placement Agent may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agent on the other. 
The relative benefits received by the Company on the one hand and the
Placement Agent on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting Company expenses)
received by the Company as set forth in the table on the cover

 16
 

 

 

page of the Prospectus bear to the fee received by the Placement Agent
hereunder.  If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Placement Agent on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. 
Such relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Placement Agent, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  The Company and
the Placement Agent agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to herein.  The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action
in respect thereof, referred to above in this Section 8(d) shall be deemed to
include, for purpose of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. 
Notwithstanding the provisions of this Section 8(d), the Placement Agent
shall not be required to contribute any amount in excess of the fee received by
it, and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 8(d), any person
who controls a party to this Agreement within the meaning of the Act or the
Exchange Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof.  Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 8(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 8(d). 
No party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).

9.             Termination.

(a)           The
obligations of the Placement Agent under this Agreement may be terminated at
any time prior to the Closing Date, by notice to the Company from the Placement
Agent, without liability on the part of the Placement Agent to the Company if,
prior to delivery and payment for the Shares, in the sole judgment of the
Placement Agent (i) trading in the Common Stock of the Company shall have
been suspended by the Commission or by the Nasdaq Global Market
(ii) trading in securities generally on the Nasdaq Global Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on any of such
exchanges, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by any of such exchanges or by order of the Commission or any court
or other governmental authority, (iii) a general banking moratorium shall
have been declared by Federal or New York State authorities, or (iv) any
material adverse change in the financial or securities

 17
 

 

 

markets in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred, the effect of any of which is
such as to make it, in the sole judgment of the Placement Agent, impracticable
or inadvisable to market the Shares on the terms and in the manner contemplated
by the Prospectus.

(b)           If
this Agreement shall be terminated pursuant to any of the provisions hereof or
if the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Placement Agent set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof,
the Company will, subject to demand by the Placement Agent, reimburse the
Placement Agent for all out-of-pocket expenses incurred in connection herewith.

10.           Notices.  Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the
office of the Company, 6350 South 3000 East, Salt Lake City, Utah, 84121,
Attention:  Jonathan Johnson, with copies
to Bracewell & Giuliani LLP, 111 Congress Avenue, Suite 2300, Austin, Texas
78701, Attention:  Thomas W. Adkins, or
(b) if to the Placement Agent, at the office of W.R. Hambrecht + Co., LLC,
539 Bryant Street, San Francisco, CA 94107, Attention:  Harrison Clay, with copies to Morrison &
Foerster LLP, 1290 Avenue
of the Americas

New York, New York 10104-0050, Attention:  Anna Pinedo. 
Any such notice shall be effective only upon receipt.  Any notice under Section 8 may be made by
facsimile or telephone, but if so made shall be subsequently confirmed in
writing.

11.           Survival.  The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and the
Placement Agent set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Placement Agent or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Shares.  The respective agreements,
covenants, indemnities and other statements set forth in Sections 6 and 8
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.

12.           Successors.  This Agreement shall inure to the benefit of
and shall be binding upon the Placement Agent, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnification and contribution contained in
Sections 8(a) and (d) of this Agreement shall also be for the benefit of
the directors, officers, employees and agents of the Placement Agent and any
person or persons who control the Placement Agent within the meaning of Section
15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnification and contribution contained in Sections 8(b) and (d) of this
Agreement shall also be for the benefit of the directors of the

 18
 

 

 

Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. 
No Investor shall be deemed a successor because of such purchase.

13.           Applicable Law.  The validity and interpretations of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.

14.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

15.           Entire Agreement.  This Agreement constitutes the entire
understanding between the parties hereto as to the matters covered hereby and
supersedes all prior understandings, written or oral, relating to such subject
matter.

 

 19

 

 

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

	
  

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  OVERSTOCK.COM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason C. Lindsey

  
	
   

  	
   

  	
  Name: Jason C. Lindsey

  
	
   

  	
   

  	
  Title: President and Chief Operating Officer

  

 

 

Confirmed as of the date
first

above mentioned:

	
  W.R. HAMBRECHT + CO., LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ E. John Schneider, IV

  	
   

  
	
   

  	
  Name: E. John Schneider, IV

  	
   

  
	
   

  	
  Title: Managing Director

  	
   

  

 

 

SCHEDULE 1

SUBSIDIARIES

 

	
  Name

  	
   

  	
  Jurisdiction of
  Formation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  Mexico

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OTravel.com, Inc.

  	
   

  	
  Utah

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]