Document:

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

BPZ
Resources, Inc.

580 Westlake Park Blvd.

Suite 525

Houston, Texas 77079

 

Gentlemen:

 

The undersigned (the “Investor”)
hereby confirms its agreement with BPZ Resources, Inc., a Texas corporation (the “Company”),
as follows:

 

1.                                       This Subscription Agreement, including
the Terms and Conditions for Purchase of Shares attached hereto as Annex I
(collectively, this “Agreement”)
is made as of the date set forth below between the Company and the Investor.

 

2.                                       The Company and the Investor agree that
the Investor will purchase from the Company and the Company will issue and sell
to the Investor 1,630,776 shares (the “Shares”) of its
common stock, no par value per share (the “Common Stock”)
for a purchase price of $4.66 per share. 
The Shares shall be purchased pursuant to the Terms and Conditions for
Purchase of Shares attached hereto as Annex I and incorporated herein by
this reference as if fully set forth herein. 
The Investor acknowledges that the Offering is not being underwritten or
placed by any placement agent and that there is no minimum offering amount.

 

3.                                       All certificates representing the Shares
shall bear the following legend (in addition to any legend required by the blue
sky or securities laws of any state or jurisdiction to the extent such laws are
applicable to the shares represented by the certificate so legended):

 

“THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS, PROVIDED THAT THE
SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION AND COUNSEL
ARE REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY OF SUCH
EXEMPTION.”

 

The legend set forth above shall be removed and the
Company shall issue a certificate without such legend or any other restrictive
legend to the holder of the Shares upon which it is stamped or issue to such
holder by electronic delivery at the applicable balance account at the
Depository Trust Company (“DTC”) within
three business days following delivery by the Investor to the Company or the
Company’s transfer agent of a certificate representing Shares, if (i) such
Shares are registered for resale under the Securities Act of 1933, as amended
(the “Securities Act”), (ii) in
connection with a sale, assignment or other transfer, such holder provides the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Shares may be made without
registration under the applicable requirements of the Securities Act, or (iii) such
holder provides the Company with reasonable assurance that the Shares can be
sold, assigned or transferred 

 

 

pursuant to Rule 144 promulgated under the
Securities Act (“SEC Rule 144”) or Rule 144A
promulgated under the Securities Act.

 

4.                                       Investor acknowledges that it has been
given full access by the Company to all information,  and has had the opportunity to ask questions,
concerning the business and financial condition, properties, operations and prospects
of the Company that Investor has deemed relevant for purposes of making the
investment contemplated by this Agreement. 
By reason of Investor’s knowledge and experience in financial and
business matters in general, the business of the Company and investments of the
type contemplated by this Agreement in particular, Investor is capable of
evaluating the merits and risks of making the investment in the Shares and is
able to bear the economic risk of the investment (including a complete loss of
its investment in the Shares).  Subject to the truth and accuracy of the
representations and warranties made by the Company hereunder, Investor has
conducted such investigation as it deems relevant in connection with its
consummation of the transactions contemplated by this Agreement.

 

5.                                       No offer by the Investor to buy Shares will be
accepted and no part of the Purchase Price will be delivered to the Company
until the Company has accepted such offer by countersigning a copy of this
Agreement, and any such offer may be withdrawn or revoked, without obligation
or commitment of any kind, at any time prior to the Company sending (orally, in
writing or by electronic mail) notice of its acceptance of such offer.  An indication of interest will involve no
obligation or commitment of any kind until this Agreement is accepted and
countersigned by or on behalf of the Company.

 

[Remainder of
Page Left Blank Intentionally. 
Signature Page Follows.]

 

2

 

Number of Shares: 1,630,776

 

Purchase Price Per Share: $ 4.66

 

Aggregate Purchase Price: $7,599,416.16

 

Please confirm that the
foregoing correctly sets forth the agreement between us by signing in the space
provided below for that purpose.

 

 

	
   

  	
   

  	
  Dated
  as of: September 15, 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVESTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  International
  Finance Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Delanson D. Crist

  
	
   

  	
   

  	
  Print
  Name:

  	
  Delanson
  D. Crist

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed
  and Accepted

  	
   

  	
   

  
	
  this
  15th day of September, 2009:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BPZ RESOURCES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Ed Caminos

  	
   

  	
   

  
	
  Name:

  	
  Ed
  Caminos

  	
   

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  	
   

  

 

3

 

ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF SHARES

 

1.                                      Authorization and Sale of the Shares. 
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of the Shares.

 

2.                                      Agreement
to Sell and Purchase the Shares; No Placement Agents.

 

2.1.                            At the Closing
(as defined in Section 3.1),
the Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the number of Shares
set forth on the last page of the Agreement to which these Terms and
Conditions for Purchase of Shares are attached as Annex I
(the “Signature Page”)
for the aggregate purchase price therefor set forth on the Signature Page.

 

2.2.                            Investor
acknowledges that no placement agent or broker was retained and the Company has
not agreed to pay any party a fee or commission in respect of the sale of
Shares to the Investor.

 

3.                                      Closings
and Delivery of the Shares and Funds.

 

3.1.                            Closing.  The completion of the
purchase and sale of the Shares (the “Closing”)
shall occur at a place and time (the “Closing
Date”) to be specified by the Company (such Closing Date to be the
third business day following the date of the approval of listing the Shares on
the NYSE Amex, and of which the Investor will be notified in advance by the
Company, or such other date as the parties shall agree).  At the Closing, (a) the Company shall
cause the Transfer Agent to deliver to the Investor the number of Shares set
forth on the Signature Page registered in the name of the Investor or, if
so indicated on the Investor Questionnaire attached hereto as Exhibit A, in the name of a
nominee designated by the Investor and (b) the aggregate purchase price
for the Shares being purchased by the Investor will be delivered by or on
behalf of the Investor to the Company.

 

3.2.                            Conditions
to the Obligations of the Parties.

 

(a)                                  Conditions to the Company’s Obligations.  The Company’s obligation to
issue and sell the Shares to the Investor shall be subject to: (i) the
delivery by the Investor, in accordance with the provisions of this Agreement,
of the purchase price for the Shares being purchased hereunder as set forth on
the Signature Page and (ii) the accuracy of the representations and
warranties made by the Investor in this Agreement and the fulfillment of those
undertakings of the Investor in this Agreement to be fulfilled prior to the
Closing Date.

 

(b)                                 Conditions to the Investor’s Obligations.  The Investor’s obligation to
purchase the Shares will be subject to (i) the delivery by the Company of
the Shares in accordance with the provisions of this Agreement, (ii) the
accuracy of the representations and warranties made by the Company and the
fulfillment of those undertakings of the Company to be fulfilled prior to the
Closing Date, (iii) the delivery of an opinion of counsel to the Investor
covering the matters set forth in Schedule II hereto and in form reasonably
satisfactory to Investor, and (iv) the delivery of a certificate from the
Company signed by an authorized officer of the Company to the Investor in the
form set forth in Schedule III hereto.

 

A-1

 

3.3.                            Delivery
of Funds.  The Investor
shall remit by wire transfer by the Closing Date the amount of funds equal to
the aggregate purchase price for the Shares being purchased by the Investor to
the following account:

 

	
   

  	
  For
  Domestic Wires:

  	
   

  	
  For
  International Wires:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account Name:.

  	
   

  	
  Bank Name:

  	
   

  
	
   

  	
  Account Number:

  	
   

  	
  SWIFT Code:

  	
   

  
	
   

  	
   

  	
   

  	
  Routing Number:

  	
   

  
	
   

  	
   

  	
   

  	
  DDA Account:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Beneficiary Bank:

  	
  SWIFT Code:

  
	
   

  	
   

  	
   

  	
  Routing
  Number:

  	
   

  
	
   

  	
   

  	
   

  	
  Beneficiary Information:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Account Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Account Number:

  	
   

  

 

4.                                      Representations,
Warranties and Covenants of the Investor.

 

The
Investor acknowledges, represents and warrants to, and agrees with, the Company
as of the date hereof that:

 

4.1.                            Investor is
duly organized and validly existing.

 

4.2.                            Investor has
the authority to execute and deliver this Agreement and to perform its
obligations hereunder.

 

4.3.                            Investor is
acquiring the Shares for its own account for investment and not with a view to,
or for resale in connection with, any “distribution” thereof for purposes of
the Securities Act.  Investor is an “accredited
investor” as such term is defined in Regulation D under the Securities
Act.  Investor acknowledges that the
Shares shall be “restricted securities” within the meaning of Rule 144 (“Rule 144”) under the Securities At, will contain a
transfer restriction legend and may be resold pursuant to an effective
registration statement filed with the SEC under the Securities Act, or pursuant
to Rule 144 or another valid exemption from the registration requirements
of the Act as established by an opinion of counsel reasonably acceptable to the
Company.

 

4.4.                            Investor
acknowledges that it has been given full access by the Company to all
information concerning the business and financial condition, properties,
operations and prospects of the Company that Investor has deemed relevant for
purposes of making the investment contemplated by this Agreement.  By reason of Investor’s knowledge and
experience in financial and business matters in general, the business of the
Company and investments of the type contemplated by this Agreement in
particular, Investor is capable of evaluating the merits and risks of making
the investment in the Shares and is able to bear the economic risk of the
investment (including a complete loss of its investment in the Shares).  Subject to the truth and accuracy of the
representations and warranties made by the Company hereunder (which Investor
has relied upon in entering into this 

 

A-2

 

Agreement), Investor has
conducted such investigation as it deems relevant in connection with its
consummation of the transactions contemplated by this Agreement.

 

5.                                      Representations
and Warranties of the Company.  The Company represents and warrants to the
Investor as of the date hereof and as of the Closing Date and agrees with the
Investor as follows:

 

5.1.                            Filing
of Registration Statement.

 

(a)                                  The Company
shall prepare and file or cause to be prepared and filed with the Securities
and Exchange Commission (“SEC” or the “Commission”), as soon as practicable but in any event no
later than forty-five (45) days after the Closing Date, a Registration
Statement on Form S-3 (or such other form as the Company is then eligible
to use) for an offering to be made on a delayed or continuous basis pursuant to
Rule 415 of the Securities Act registering the resale from time to time by
the Investor of the Shares pursuant to plans of distribution acceptable to
Investor (the “Registration Statement”).  The Investor agrees to promptly provide to
the Company, in writing, such information as the Company may reasonably request
for inclusion in the Registration Statement.  The Company shall use its
reasonable best efforts to cause the Registration Statement to be declared
effective under the Securities Act no later than the earlier of (i) ninety
(90) days after the Closing Date or in the event of SEC review, one hundred and
twenty (120) days after the Closing Date and (ii) the third business day
following the date on which the Company is notified (orally or in writing, whichever
is earlier) by the SEC that the Registration Statement will not be reviewed or
is no longer subject to further review and comments (the “Effectiveness
Deadline”), unless upon the advice of counsel it is advisable not to
accelerate the effectiveness of such Registration Statement, for such reasons
including but not limited to, the Company issues an earnings release or
material news or a material event relating to the Company occurs in which case
such third business day shall be the third business day following the fifteen
(15) calendar day period after such event occurs, and to keep such Registration
Statement continuously effective under the Securities Act until the earlier of (i) the
date on which all Shares covered by the Registration Statement may be sold
pursuant to SEC Rule 144 without the requirement for the Company to be in
compliance with the current public information required under SEC Rule 144
and without volume or manner of sale restriction by persons who are not
affiliates of the Company, or (ii) such date as all Shares registered on
such Registration Statement have been resold either pursuant to such
Registration Statement or under SEC Rule 144 (the earlier to occur of (i) or
(ii) is the “Registration Termination
Date”).

 

(b)                                 If a Registration
Statement ceases to be effective for any reason at any time prior to the
applicable Registration Termination Date, the Company shall use its reasonable
best efforts to reinstate the effectiveness thereof.

 

(c)                                  The Company
shall supplement and amend the Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Registration Statement, if required by the Securities Act or,
to the extent to which the Company does not reasonably object, as requested by
the Investor.

 

(d)                                 All
Registration Expenses incurred in connection with the registrations pursuant to
this Section 5.1 shall be borne by the Company. “Registration
Expenses” shall mean all expenses incurred by the Company in
complying with this Section 5.1 including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such 

 

A-3

 

registration (but excluding
the compensation of regular employees of the Company which shall be paid in any
event by the Company and Selling Expenses, as defined hereinafter).  
All Selling Expenses incurred in connection with any registrations hereunder
shall be borne by the Investor. “Selling  Expenses” shall mean all brokerage and selling commissions
applicable to a sale of the Shares pursuant to the Registration Statement.

 

(e)                                  The Company may
suspend sales of Shares pursuant to the Registration Statement for a period of
not more than fifteen (15) days during any six (6) month period in the
event it determines in good faith that such Registration Statement contains an
untrue statement of material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not misleading; provided
that (i) the Company shall immediately notify the Investor of such
suspension and (ii) the Company shall promptly amend such Registration
Statement in order to correct any untrue statement and/or ensure that such
Registration Statement is not misleading; provided further that subject to the
time limitations set forth above, the Company may delay such amendment if the
Company determines that such delay is in the best interest of the Company in
order to avoid premature public announcements of potential acquisitions or
other extraordinary transactions.  At the time the Registration Statement
is declared effective, the Investor shall be named as a selling securityholder
in the Registration Statement and the related prospectus in such a manner as to
permit such Investor to deliver such prospectus to purchasers of Shares in
accordance with applicable law.

 

(f)                                    The Company
shall promptly furnish to the Investor, upon request and without charge, (i) any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement (but shall redact any
material non-public information therefrom), and (ii) after the same is
prepared and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits.  The Company shall respond as promptly as
reasonably practicable to any comments received from the SEC with respect to
any Registration Statement or any amendment thereto.

 

(g)                                 The Company
shall furnish to the Investor such numbers of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as it may reasonably request in order to
facilitate the disposition of the Shares owned by them.

 

(h)                                 The Company
shall use its reasonable best efforts to register and qualify the securities
covered by a Registration Statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Investor, provided
that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.

 

(i)                                     The Company
shall notify immediately the Investor holding Shares covered by a Registration
Statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; provided,
however, that, subject to Section 5.1(f) the Company shall
promptly amend such Registration Statement in order to correct any untrue
statement and/or ensure that such Registration Statement is not
misleading.  The Company shall immediately notify each Investor holding
Shares covered by such Registration Statement (i) when 

 

A-4

 

such registration statement
or any post-effective amendment thereto has become effective; (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or prospectus or for
additional information that pertains to the Investor as selling stockholder or
its respective plans of distribution; (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of a Registration Statement
covering any or all of the Shares or the initiation of any proceedings for that
purpose, including pursuant to Section 8A of the Securities Act; (iv) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Shares for
sale in any jurisdiction, or the initiation or threatening of any proceeding
for such purpose; and (v) of the occurrence of any other event that
results in the Investor being unable to sell Shares pursuant to the
Registration Statement or related prospectus. 
The Company shall use commercially reasonable efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of a Registration Statement, or (ii) any suspension of
the qualification (or exemption from qualification) of any of the Shares for
sale in any jurisdiction, as soon as practicable.  The Company shall, by 9:30 a.m. New York
City time on the second business day after the effective date of a Registration
Statement, file a final prospectus with the SEC under Rule 424(b).

 

(j)                                     The Company
shall not less than three (3) business days prior to the filing of the
Registration Statement covering the Shares and not less than one (1) business
day prior to the filing of any related prospectus, or any amendment or
supplement thereto containing information about the Investor or the plan of
distribution of the Shares, furnish to the Investor copies of such Registration
Statement, prospectus or amendment or supplement thereto, as proposed to be
filed, which documents will be subject to the review of such Investor (it being
acknowledged and agreed that if an Investor does not object to or comment on the
aforementioned documents within such three (3) business day or one (1) business
day period, as the case may be, then the Investor shall be deemed to have
consented to and approved the use of such documents).  The Company shall not file any such
Registration Statement covering the Shares or amendment or supplement thereto
in a form to which Investor reasonably objects in good faith, provide that, the
Company is notified of such objection in writing within the three (3) business
day or one (1) business day period described above, as applicable.

 

5.2.                            Termination of Registration Rights. All rights
and obligations provided for in Section 5.1 shall terminate on the date on
which the Company has no obligation to maintain the effectiveness of the
Registration Statement; provided that the rights of Investor under Section 5.1
shall terminate on the Registration Termination Date.

 

5.3.                            Due
Incorporation.

 

(1)                                  The Company has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Texas, with the corporate power and authority to
own its properties and to conduct its business as it is currently being
conducted. The Company is duly qualified to transact business and is in good
standing as a foreign corporation or other legal entity in each other
jurisdiction in which its ownership or leasing of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified or in good standing or have such power or authority (i) would
not have, individually or in the aggregate, a material adverse effect upon the
general affairs, business, operations, prospects, properties, financial
condition, or results of operations of the Company and its subsidiaries, taken
as a whole, or (ii) impair in any material respect the power or ability of
the Company to perform its obligations under this Agreement or to consummate
any

 

A-5

 

transactions contemplated by this Agreement, including the issuance and
sale of the Shares (any such effect as described in clauses (i) or (ii), a
“Material Adverse Effect”);

 

(2)                                  Each of the
subsidiaries of the Company has been duly incorporated or formed, as the case
may be, and is validly existing and in good standing under the laws of its
respective jurisdiction of organization, each with full power and authority
(corporate and otherwise) to own its properties and conduct its business as it
is currently being conducted, and each has been duly qualified as a foreign
corporation or limited partnership for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
except where the failure to be so qualified or in good standing would not
result in any Material Adverse Effect to the Company or such subsidiary.

 

5.4.                            Subsidiaries. Except as
otherwise described in the Company’s Form 10-K for the year ended December 31,
2008, Form 10-Q for the period ended March 31, 2009, and Form 10-Q
for the period ended June 30, 2009 (the “SEC Filings”),
the Company has no subsidiaries and does not own any beneficial interest,
directly or indirectly, in any corporation, partnership, joint venture or other
business entity.

 

5.5.                            Due
Authorization and Enforceability. The Company
has the full right, power and authority to enter into this Agreement, and to
perform and discharge its obligations hereunder; and this Agreement has been
duly authorized, executed and delivered by the Company, and constitutes a
valid, legal and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity hereunder
may be limited by federal or state securities laws and except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting the rights of creditors generally and subject to general
principles of equity.

 

5.6.                            The
Shares. The issuance of the Shares has been duly and
validly authorized by the Company and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will have been duly and validly
issued and will be fully paid and nonassessable, will not be subject to any
statutory or contractual preemptive rights or other rights to subscribe for or
purchase or acquire any shares of Common Stock of the Company which have not
been waived or complied with, and will conform in all material respects to the
description thereof contained in the Company’s Form 8-K filed with the
Commission on October 16, 2007 and such description conforms in all
material respects to the rights set forth in the instruments defining the same.

 

5.7.                            Capitalization. The
authorized capital stock of the Company consists of 250,000,000 shares of
Common Stock, 113,399,234 shares of Common Stock issued and outstanding as of
the date hereof, and 25,000,000 shares of preferred stock, no par value, none
of which are issued or outstanding as of the date hereof. The certificates
evidencing the Shares of Common Stock are in due and proper legal form and have
been duly authorized for issuance by the Company.  The issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued, are fully
paid and nonassessable, and have been issued in compliance with all federal and
state securities laws. None of the outstanding shares of Common Stock was
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase or acquire any securities of the
Company or any of its subsidiaries. There are no authorized or outstanding
shares of capital stock, options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, 

 

A-6

 

or equity or debt securities
convertible into or exchangeable for, any capital stock of the Company or any
of its subsidiaries other than those described in the SEC Filings. The
description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as described
in the SEC Filings, accurately and fairly present the information required to
be shown with respect to such plans, arrangements, options and rights.  The issued and outstanding shares of capital
stock of each of the Company’s subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and are owned directly
by the Company or by another wholly-owned subsidiary of the Company free and
clear of any lien, encumbrance, security interest, claim or charge, other than
those described in the SEC Filings.  All
the outstanding shares of capital stock of each “significant subsidiary” within
the meaning of Rule 1-02(w) of Regulation S-X (such a significant
subsidiary of the Company, a “Significant Subsidiary”)
of the Company have been duly authorized and validly issued, are fully paid and
nonassessable and except to the extent set forth in the SEC Filings, are owned
by the Company directly or indirectly through one or more wholly-owned
subsidiaries, free and clear of any lien, encumbrance, security interest, claim
or charge, restriction upon voting or transfer or any other claim of any third
party.

 

5.8.                            No
Conflict. The execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions
contemplated hereby, including the issuance and sale of the Shares by the
Company, will not conflict with or result in a breach or violation of, or
constitute a default under (nor constitute any event which with or without
notice, lapse of time or both would result in any breach or violation of or
constitute a default under), give rise to any right of termination or other
right or the cancellation or acceleration of any right or obligation or loss of
a benefit under, or give rise to the creation or imposition of any lien,
encumbrance, security interest, claim or charge upon any property or assets of
the Company or its subsidiaries pursuant to (i) any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which either the Company or
its subsidiaries or any of their properties may be bound or to which any of
their property or assets is subject, (ii) result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries,
or (iii) result in any violation of any law, statute, rule, regulation,
judgment, order or decree of any court or governmental agency or body, domestic
or foreign, having jurisdiction over the Company or any of its properties or
assets.

 

5.9.                            No
Consents Required. No approval,
authorization, consent or order of or filing, qualification or registration
with, any court or governmental agency or body, foreign or domestic, which has
not been made, obtained or taken and is not in full force and effect, is
required in connection with the Company’s execution, delivery and performance
of this Agreement, the consummation by the Company of the transactions
contemplated hereby or the issuance and sale of the Shares other than (i) as
may be required under the Securities Act, (ii) any necessary qualification
of the Shares under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Company, (iii) as
may be required under the rules and regulations of the Financial Industry
Regulatory Authority (“FINRA”)
or (iv) the New York Stock Exchange Amex Equities (“NYSE Amex”).

 

5.10.                     Preemptive
Rights. There are no preemptive rights or other rights (other than rights
which have been waived in writing in connection with the transactions
contemplated by this Agreement or otherwise satisfied or the Investor’s
contractual purchase rights) to subscribe for or to purchase any shares of
Common Stock or shares of any other capital stock or other equity interests of
the Company or any of its subsidiaries, or any agreement or arrangement between
the Company and

 

A-7

 

any of the Company’s
stockholders or between any of the Company’s subsidiaries and any of such
subsidiary’s stockholders, or to the Company’s knowledge, between or among any
of the Company’s stockholders or any of its subsidiaries’ stockholders, which
grant special rights with respect to any shares of the Company’s or any of its
subsidiaries’ capital stock or which in any way affect any stockholder’s
ability or right to alienate freely or vote such shares.

 

5.11.                     Registration
Rights. There are no contracts, agreements or understandings between the
Company or any of its subsidiaries and any person (other than the Investor)
granting such person the right (other than rights which have been waived in
writing in connection with the transactions contemplated by this Agreement or
otherwise satisfied) to require the Company or any of its subsidiaries to
register any securities with the Commission.

 

5.12.                     Independent
Accountants. Johnson, Miller & Co., CPA’s PC, whose
report on the consolidated financial statements of the Company is included in
the Company’s Form 10-K for the year ended December 31, 2008, is (i) an
independent public accounting firm within the meaning of the Securities Act, (ii) a
registered public accounting firm (as defined in Section 2(a)(12) of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”)), and (iii) to the Company’s knowledge, not in violation
of the auditor independence requirements of the Sarbanes-Oxley Act.  Except as disclosed in the SEC Filings and as
pre-approved in accordance with the requirements set forth in Section 10A
of the Securities Exchange Act of 1934 (the “Exchange Act”),
Johnson, Miller & Co., CPA’s PC has not been engaged by the Company to
perform any “prohibited activities” (as defined in Section 10A of the
Exchange Act).

 

5.13.                     Financial
Statements. The consolidated financial statements of the
Company, together with the related schedules and notes thereto, set forth in
the SEC Filings comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and
present fairly in all material respects (i) the financial condition of the
Company and its consolidated subsidiaries as of the dates indicated and (ii) the
consolidated results of operations, stockholders’ equity and changes in cash
flows of the Company and its consolidated subsidiaries for the periods therein
specified; and such financial statements and related schedules and notes
thereto have been prepared in conformity with United States generally accepted accounting
principles, consistently applied throughout the periods involved (except as
otherwise stated therein and subject, in the case of unaudited financial
statements, to the absence of footnotes and normal year-end adjustments). The
Company does not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not disclosed in the
SEC Filings; and all disclosures contained in the SEC Filings regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations
of the Commission) comply with Regulation G of the Exchange Act and Item 10(e) of
Regulation S-K under the Securities Act, to the extent applicable, and present
fairly the information shown therein and the Company’s basis for using such
measures.

 

5.14.                     Absence
of Material Changes. Subsequent to June 30, 2009, there has not
been (i) any Material Adverse Effect, (ii) any transaction which is
material to the Company or any of its subsidiaries, (iii) any obligation,
direct or contingent (including any off-balance sheet obligations), incurred by
the Company or any of its subsidiaries, which is material to the Company or any
of its subsidiaries, (iv) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, (v) any change in
the capital stock (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of outstanding
options or warrants or the conversion of convertible indebtedness), or material
change in the short-term debt or long-term debt of the Company or any of its
subsidiaries (other than upon conversion of convertible 

 

A-8

 

indebtedness) or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock (other than grants of stock options under the
Company’s stock option plans existing on the date hereof) of the Company or any
of its subsidiaries.

 

5.15.                     Legal
Proceedings. Except as disclosed in the SEC Filings, there are
no legal or governmental actions, suits, claims or proceedings pending or, to
the Company’s knowledge, threatened or contemplated to which the Company or any
of its subsidiaries is or would be a party or of which any of their respective
properties is or would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency, or before or by any self-regulatory organization or
other non-governmental regulatory authority which are required to be described
in such filings or a document incorporated by reference therein and are not so
described therein, or which, singularly or in the aggregate, if resolved
adversely to the Company or such subsidiary, would reasonably be likely to
result in a Material Adverse Effect or prevent or materially and adversely
affect the ability of the Company to consummate the transactions contemplated
hereby. To the Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by other third parties.

 

5.16.                     No
Violation. Neither the Company nor any of its subsidiaries is
in breach or violation of or in default (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation of, or
constitute a default) (i) under the provisions of its charter or bylaws (or
analogous governing instrument, as applicable) or (ii) in the performance
or observance of any term, covenant, obligation, agreement or condition
contained in any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which the Company or such subsidiary is a
party or by which any of its properties may be bound or affected, or (iii) in
the performance or observance of any statute, law, rule, regulation, ordinance,
judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or such subsidiary or any of its properties, as applicable, except,
with respect to clauses (ii) and (iii) above, to the extent any such
contravention has been waived or would not result in a Material Adverse Effect.

 

5.17.                     Permits. The Company
and each of its subsidiaries have made all filings, applications and
submissions required by, and owns or possesses all approvals, licenses,
certificates, certifications, clearances, consents, exemptions, marks,
notifications, orders, permits and other authorizations issued by, the
appropriate federal, state or foreign regulatory authorities necessary to
conduct its business as it is currently being conducted (collectively, “Permits”), and is in compliance
in all material respects with the terms and conditions of all such Permits. All
such Permits are valid and in full force and effect. Neither the Company nor
any of its subsidiaries has received any notice of any proceedings relating to
revocation or modification of, any such Permit, which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.  Except
as may be required under the Securities Act and state and foreign Blue Sky laws
and the rules and regulations of FINRA, no other Permits are required for
the Company or any of its subsidiaries to enter into, deliver and perform this
Agreement and to issue and sell the Shares to be issued and sold by the Company
hereunder.

 

5.18.                     Not
an Investment Company. The Company
is not or, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Company’s Proxy
Statement filed with the Commission on July 27, 2009, will not be (i) required
to register as an “investment company” as defined in the Investment Company Act
of 1940, as amended (the “Investment
Company Act”), and
the rules and regulations of the Commission thereunder or 

 

A-9

 

(ii) a “business
development company” (as defined in Section 2(a)(48) of the Investment
Company Act).

 

5.19.                     No
Price Stabilization. Neither the Company nor any of its subsidiaries,
or any of their respective officers, directors, affiliates or controlling
persons has taken or will take, directly or indirectly, any action designed to
or that might be reasonably expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

 

5.20.                     Good
Title to Property. The Company
and each of its subsidiaries has good and valid title to all property (whether
real or personal) described in the SEC Filings as being owned by it, in each
case free and clear of all liens, claims, security interests, other
encumbrances or defects (collectively, “Liens”),
except such as are described in the SEC Filings and those that would not,
individually or in the aggregate materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries. All of the property
described in the SEC Filings as being held under lease by the Company or any of
its subsidiaries is held thereby under valid, subsisting and enforceable
leases, without any liens, restrictions, encumbrances or claims, except those
that, individually or in the aggregate, are not material and do not materially
interfere with the use made and proposed to be made of such property by the
Company or such subsidiary.

 

5.21.                     Intellectual
Property Rights. The Company and each of its subsidiaries owns or
possesses the right to use all patents, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights, licenses,
inventions, software, databases, know-how, Internet domain names, trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, and other intellectual property
(collectively, “Intellectual
Property”) necessary to carry on its businesses as currently
conducted, and as proposed to be conducted as described in the SEC Filings, and
the Company is not aware of any claim to the contrary or any challenge by any
other person to the rights of the Company or any of its subsidiaries with
respect to the foregoing except for those that could not have a Material
Adverse Effect. The Intellectual Property licenses described in the SEC Filings
are, to the knowledge of the Company, valid, binding upon, and enforceable by
or against the parties thereto in accordance with their terms. The Company and
each of its subsidiaries has complied in all material respects with, and is not
in breach nor has received any asserted or threatened claim of breach of, any
Intellectual Property license, and the Company has no knowledge of any breach
or anticipated breach by any other person of any Intellectual Property license.  The Company’s and each of its subsidiaries’
business as now conducted and as proposed to be conducted, to the knowledge of
the Company, does not and will not infringe or conflict with any patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses or
other Intellectual Property or franchise right of any person. Neither the
Company nor any of its subsidiaries has received notice of any claim against
the Company or any of its subsidiaries alleging the infringement by the Company
or any of its subsidiaries of any patent, trademark, service mark, trade name,
copyright, trade secret, license in or other intellectual property right or
franchise right of any person. The Company and each of its subsidiaries has
taken all reasonable steps to protect, maintain and safeguard its rights in all
Intellectual Property, including the execution of appropriate nondisclosure and
confidentiality agreements. The consummation of the transactions contemplated
by this Agreement will not result in the loss or impairment of or payment of
any additional amounts with respect to, nor require the consent of any other
person in respect of, the Company’s or any of its subsidiaries’ right to own,
use, or hold for use any of the Intellectual Property as owned, used or held 

 

A-10

 

for use in the conduct of
the businesses as currently conducted. 
The Company and each of its subsidiaries has duly and properly filed or
caused to be filed with the United States Patent and Trademark Office (the “PTO”) and applicable foreign and
international patent authorities all patent applications owned by the Company
and its subsidiaries (the “Company
Patent Applications”). To the knowledge of the Company, the Company
and each of its subsidiaries has complied with the PTO’s duty of candor and
disclosure for the Company Patent Applications and has made no material
misrepresentation in the Company Patent Applications. The Company is not aware
of any information material to a determination of patentability regarding the
Company Patent Applications not called to the attention of the PTO or similar
foreign authority. The Company is not aware of any information not called to
the attention of the PTO or similar foreign authority that would preclude the
grant of a patent for the Company Patent Applications. The Company has no
knowledge of any information that would preclude the Company or any of its
subsidiaries from having clear title to the Company Patent Applications.  To the Company’s knowledge, no employee of
the Company or any of its subsidiaries is the subject of any claim or
proceeding involving a violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition
agreement, non-solicitation agreement, nondisclosure agreement or any
restrictive covenant to or with a former employer where the basis of such
violation relates to such employee’s employment with the Company or any of the
Company’s subsidiaries or actions undertaken by the employee while employed with
the Company or any of the Company’s subsidiaries.

 

5.22.                     No
Labor Disputes. No labor problem or dispute with the employees of
the Company or any of the Company’s subsidiaries exists, or, to the Company’s
knowledge, is threatened or imminent, which would reasonably be expected to
result in a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company or any of the Company’s
subsidiaries plans to terminate employment with the Company or any of the
Company’s subsidiaries. Neither the Company nor any of its subsidiaries has
engaged in any unfair labor practice; except for matters which would not,
individually or in the aggregate, result in a Material Adverse Effect, (i) there
is (A) no unfair labor practice complaint pending or, to the Company’s
knowledge, threatened against the Company or any of its subsidiaries before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending or to the
Company’s knowledge, threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the Company’s knowledge, threatened against the
Company or any of its subsidiaries and (C) no union representation dispute
currently existing concerning the employees of the Company or any of its
subsidiaries and (ii) to the Company’s knowledge, (A) no union
organizing activities are currently taking place concerning the employees of
the Company or any of its subsidiaries and (B) there has been no violation
of any federal, state, local or foreign law relating to discrimination in the
hiring, promotion or pay of employees, any applicable wage or hour laws or any
provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) or the rules and
regulations promulgated thereunder concerning the employees of the Company or
any of its subsidiaries.

 

5.23.                     Taxes. Except as
disclosed in its SEC Filings, the Company and each of its subsidiaries (i) has
timely filed all necessary federal, state, local and foreign income and
franchise tax returns (or timely filed applicable extensions therefor) that
have been required to be filed and (ii) is not in default in the payment
of any taxes which were payable pursuant to such returns or any assessments
with respect thereto, other than any which the Company or any of its
subsidiaries is contesting in good faith and for which adequate reserves have
been provided and reflected in the Company’s financial statements included in
the SEC Filings. Neither the Company nor any of its subsidiaries has any tax 

 

A-11

 

deficiency that has been or,
to the knowledge of the Company, is reasonably likely to be asserted or
threatened against it that would result in a Material Adverse Effect.  Neither the Company nor any of its
subsidiaries has engaged in any transaction which is a corporate tax shelter or
which could be characterized as such by the Internal Revenue Service or any
other taxing authority.

 

5.24.                     ERISA. The Company
and each of its subsidiaries is in compliance in all material respects with all
presently applicable provisions of ERISA; no “reportable event” (as defined in
ERISA) has occurred with respect to any “pension plan” (as defined in ERISA)
for which the Company or any of its subsidiaries would have any liability;
neither the Company nor any of its subsidiaries has incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections
412 or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the “Code”); and each “pension plan” for which the Company or any
of its subsidiaries would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.

 

5.25.                     Compliance
with Environmental Laws. The Company and each of its subsidiaries (i) is
in compliance with any and all applicable foreign, federal, state and local
laws, orders, rules, regulations, directives, decrees and judgments relating to
the use, treatment, storage and disposal of hazardous or toxic substances or
waste and protection of human health and safety or the environment which are
applicable to their businesses and the IFC Performance Standards (“Environmental Laws”); (ii) has
received and is in compliance with all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business; and
(iii) is in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, individually or in the aggregate, result in a Material Adverse
Effect. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would,
individually or in the aggregate, result in a Material Adverse Effect.  As used herein, “IFC
Performance Standards” means the Investor’s Performance Standards on
Social and Environmental Sustainability dated April 30, 2006.

 

5.26.                     Insurance. The Company
and each of its subsidiaries maintains or is covered by insurance provided by
recognized, financially sound and reputable institutions with insurance policies
in such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for companies
engaged in similar businesses in similar industries. All such insurance is
fully in force on the date hereof and will be fully in force as of the Closing
Date. The Company has no reason to believe that it and its subsidiaries will
not be able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.  Neither the Company nor
any of its subsidiaries has been denied any material insurance policy or
coverage for which it has applied. 
Neither the Company nor any of its subsidiaries insures risk of loss
through any captive insurance, risk retention group, reciprocal group or by
means of any fund or pool of assets specifically set aside for contingent
liabilities other than as described in the SEC Filings.

 

A-12

 

5.27.                     Accounting
Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

 

5.28.                     Disclosure
Controls. The Company has established, maintains and
evaluates “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) and
15d-15(e) under the Exchange Act), which (i) are designed to ensure
that material information relating to the Company and its subsidiaries is made
known to the Company’s principal executive officer and its principal financial
officer by others within those entities, particularly during the periods in
which the periodic reports required under the Exchange Act are being prepared, (ii) have
been evaluated for effectiveness as of the end of the last fiscal period ended June 30,
2009; and (iii) such disclosure controls and procedures are effective to
perform the functions for which they were established. There are no significant
deficiencies or material weaknesses in the design or operation of internal
controls which could adversely affect the Company’s ability to record, process,
summarize, or report financial data to management and the Board of Directors of
the Company. The Company is not aware of any fraud, whether or not material,
that involves management or other employees who have a role in the Company’s
internal controls; and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.  A member of the
Audit Committee of the Board of Directors of the Company (the “Audit Committee”) has confirmed to the Chief Executive
Officer, Chief Financial Officer or General Counsel of the Company that, except
as set forth in the SEC Filings, the Audit Committee is not reviewing or
investigating, and neither the Company’s independent auditors nor its internal
auditors have recommended that the Audit Committee review or investigate, (iv) adding
to, deleting, changing the application of or changing the Company’s disclosure
with respect to, any of the Company’s material accounting policies, (v) any
manner which could result in a restatement of the Company’s financial
statements for any annual or interim period during the current or prior three
fiscal years, or (iii) a significant deficiency, material weakness, change
in internal control over financial reporting or fraud involving management or
other employees who have a significant role in the internal control over
financial reporting.

 

5.29.                     Contracts;
Off-Balance Sheet Interests. There is no document,
contract, permit or instrument, or off-balance sheet transaction (including
without limitation, any “variable interests” in “variable interest entities,”
as such terms are defined in Financial Accounting Standards Board
Interpretation No. 46) of a character required by the Securities Act, or
the rules and regulations promulgated thereunder, to be described in the
SEC Filings or to be filed as an exhibit to the SEC Filings or document
incorporated by reference therein, which is not described or filed as
required.  Each description of a
document, contract, permit or instrument in the SEC Filings accurately reflects
in all material respects the terms of the underlying document, contract, permit
or instrument.  The documents, contracts,
permits and instruments described in the immediately preceding sentence to
which the Company is a party have been duly authorized, executed and delivered
by the Company, constitute valid and binding agreements of the Company, are
enforceable against and by the Company in accordance with the terms thereof and
are in full force and effect on the date hereof.  Neither the 

 

A-13

 

Company nor any of its
subsidiaries, if a subsidiary is a party, nor to the Company’s knowledge, any
other party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a
default, in any case which default or event, individually or in the aggregate,
would have a Material Adverse Effect.  No
default exists, and no event has occurred which with notice or lapse of time or
both would constitute a default, in the due performance and observance of any
term, covenant or condition, by the Company or a subsidiary, if a subsidiary is
a party thereto, of any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or its properties or
business or a subsidiary or the subsidiary’s properties or business may be
bound or affected which default or event, individually or in the aggregate,
would have a Material Adverse Effect.

 

5.30.                     No
Undisclosed Relationships. No
relationship, direct or indirect, exists between or among the Company on the
one hand and the directors, officers, stockholders, customers or suppliers of
the Company or any of their affiliates on the other hand, which is required to
be described in the SEC Filings or a document incorporated by reference therein
and which has not been so described.

 

5.31.                     Brokers
Fees. There are no contracts, agreements or understandings between the
Company and any person (other than this Agreement) that would give rise to a
claim against the Company for a brokerage commission, finder’s fee or other
like payment in connection with the offering and sale of the Shares.

 

5.32.                     Forward-Looking
Statements. No forward-looking statements (within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the SEC Filings have been made or reaffirmed without a
reasonable basis therefor or have been disclosed other than in good faith.

 

5.33.                     NYSE
Amex; Exchange Act Registration. The Common
Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act
and is listed on the NYSE Amex, and the Company has taken no action designed
to, or reasonably likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from the
NYSE Amex, nor has the Company received any notification that the Commission or
the NYSE Amex is contemplating terminating such registration or listing. The
Company has complied in all material respects with the applicable requirements
of the NYSE Amex for maintenance of inclusion of the Common Stock thereon. The
Company has filed a notification of the listing of the Shares on the NYSE Amex.

 

5.34.                     Sarbanes-Oxley
Act. The Company, and to its knowledge, each of the Company’s directors or
officers, in their capacities as such, is in compliance in all material
respects with all applicable effective provisions of the Sarbanes-Oxley Act and
any related rules and regulations promulgated by the Commission. Each of
the principal executive officer and the principal financial officer of the
Company (and each former principal executive officer of the Company and each
former principal financial officer of the Company as applicable) has made all
certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with
respect to all reports, schedules, forms, statements and other documents
required to be filed by him or her with the Commission. For purposes of the
preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

 

A-14

 

5.35.                     Foreign
Corrupt Practices; Sanctionable Practices.

 

(a)                                  Neither the
Company nor, to the Company’s knowledge, any other person associated with or
acting on behalf of the Company, including without limitation any director,
officer, agent or employee of the Company or any of its subsidiaries has,
directly or indirectly, while acting on behalf of the Company or any of its
subsidiaries (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity
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 provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.

 

(b)                                 Neither the
Company or any affiliate (as such term is defined in Rule 405 under the
Securities Act), nor any person or entity acting on its or their behalf, has
committed or engaged in, with respect to its business or operations or any
transaction contemplated by this Agreement, any Sanctionable Practice.  As used herein, “Sanctionable
Practice” means any Corrupt Practice, Fraudulent Practice, Coercive
Practice, Collusive Practice, or Obstructive Practice as those terms are
defined and interpreted in accordance with the Anti-Corruption Guidelines
attached to this Agreement as Schedule I.

 

5.36.                     Affiliate
Transactions.  There are no
transactions, arrangements or other relationships between and/or among the
Company, any of its affiliates (as such term is defined in Rule 405 under
the Securities Act) and any unconsolidated entity, including, but not limited
to, any structured finance, special purpose or limited purpose entity that
could reasonably be expected to materially affect the Company’s liquidity or
the availability of or requirements for its capital resources required to be
described in the SEC Filings or a document incorporated by reference therein
which have not been described as required. 
The Company does not, directly or indirectly, including through any
subsidiary, have any outstanding personal loans or other credit extended to or
for any of its directors or executive officers.

 

5.37.                     Statistical
or Market-Related Data. Any statistical, industry-related or
market-related data included or incorporated by reference in the SEC Filings
are based on or derived from sources that the Company reasonably and in good
faith believes to be reliable and accurate, and such data agree with the
sources from which they are derived.

 

5.38.                     Money
Laundering Laws. The operations of the Company and its subsidiaries
are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the USA
PATRIOT Act, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company with respect to the Money Laundering Laws is pending, or to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries.

 

A-15

 

5.39.                     OFAC. Neither the
Company nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”);
and the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any
affiliate, joint venture partner or other person or entity, which, to the
Company’s knowledge, will use such proceeds for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered
by OFAC.

 

5.40.                     Margin
Securities. The Company does not own any “margin securities”
as that term is defined in Regulation U of the Board of Governors of the
Federal Reserve System (the “Federal
Reserve Board”), and none of the proceeds of the sale of the Shares
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which might cause any of the Shares to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.

 

5.41.                     Rated
Securities. At the Time of Sale there were, and as of the
Closing Date there will be, no securities of or guaranteed by the Company that
are rated by a “nationally recognized statistical rating organization,” as that
term is defined in Rule 436(g)(2) promulgated under the Act.

 

5.42.                     Exchange
Act Requirements. The Company has filed in a timely manner all
reports required to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of
the Exchange Act during the preceding 12 months (except to the extent that Section 15(d) requires
reports to be filed pursuant to Sections 13(d) and 13(g) of the
Exchange Act, which shall be governed by the next clause of this sentence); and
the Company has filed in a timely manner all reports required to be filed
pursuant to Sections 13(d) and 13(g) of the Exchange Act since January 1,
2004, except where the failure to timely file could not reasonably be expected
individually or in the aggregate to have a Material Adverse Effect.

 

5.43.                     Trading
Market. Assuming the accuracy of the representations of the Investor in this
Agreement, no approval of the shareholders of the Company under the rules and
regulations of any trading market is required for the Company to issue and
deliver to the Investor the Shares.

 

5.44.                     Reserve
Reports.  The information underlying the
estimates of the reserves of the Company and its subsidiaries, which was
supplied by the Company to Netherland, Sewell & Associates, Inc.,
(“NSAI”), independent petroleum
engineers, for purposes of preparing the reserve reports included in the
Company’s Form 10-K for the year ended December 31, 2008 (the “Reserve Reports”), including, without limitation,
production, volumes, sales prices for production, contractual pricing
provisions under oil or gas sales or marketing contracts under hedging
arrangements, costs of operations and development, and working interest and net
revenue interest information relating to the Company’s ownership interests in
properties, was true and correct in all material respects on the dates of such
Reserve Reports; the estimates of future capital expenditures and other future
exploration and development costs supplied to NSAI were prepared in good faith
and with a reasonable basis; the information provided to NSAI by the Company
for purposes of preparing the Reserve Reports was prepared in accordance with
customary industry practices; NSAI was, as of the dates of the Reserve Reports,
and is, as of the date hereof, independent petroleum engineers with respect to
the Company; other than any decrease in reserves resulting from normal
production of the reserves and intervening spot market product price
fluctuations disclosed in the Company’s Form 10-K for the year ended

 

A-16

 

December 31, 2008, to
the knowledge of the Company, there are not any facts or circumstances that
would adversely effect the reserves in the aggregate, or the aggregate present
value of future net cash flows therefrom, as disclosed in the Company’s Form 10-K
for the year ended December 31, 2008 and reflected in the Reserve Reports
such as to cause a material adverse change; estimates of such reserves and the
present value of the future net cash flows therefrom as disclosed in the
Company’s Form 10-K for the year ended December 31, 2008 and
reflected in the Reserve Reports comply in all material respects to the
applicable requirements of Regulation S-X and Industry Guide 2 under the Act.

 

5.45.                     To the best of the Company’s knowledge, information and belief, none of
the current directors or officers of the Company or any of its subsidiaries is
or has ever been subject to prior regulatory, criminal or bankruptcy
proceedings in the U.S. or elsewhere.

 

5.46.                     The Company has not provided and has not authorized any other person to
act on its behalf to provide any Investor or its respective agents or counsel
with any information about the Company that constitutes or might constitute
material, non-public information which is not otherwise disclosed in the SEC
Filings.

 

6.                                      Covenants. The Company
covenants and agrees with Investor as follows:

 

6.1.                            Reporting
Obligations; Exchange Act Compliance. The Company will file all
reports and any definitive proxy or information statements 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 this Agreement and prior to
the Closing Date.

 

6.2.                            Blue
Sky Laws. The Company
will promptly take or cause to be taken, from time to time, such actions as reasonably
necessary to qualify the Shares for offering and sale under the state
securities, or blue sky, laws of such states or other jurisdictions and to
maintain such qualifications in effect so long as reasonably necessary for the
distribution of the Shares, provided,
that in no event shall the Company be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to file a
general consent to service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction. The Company will advise the
Investor promptly of the suspension of the qualification or registration of (or
any exemption relating to) the Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest possible moment.

 

6.3.                            Earnings
Statement. As soon as practicable, the Company will make
generally available to holders of its securities, an earnings statement of the
Company (which need not be audited) covering a period of at least 12 months
beginning after the date of this Agreement that will satisfy the provisions of Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158).

 

6.4.                            Use
of Proceeds. The Company will apply the net proceeds from the
sale of the Shares in the manner set forth in the Company’s Proxy Statement
filed with the Commission on July 27, 2009 and shall not use such proceeds
in reimbursement of, or for, expenditures in the territories of any country
which is not a member of the World Bank or for goods produced in or services
supplied from any such country.

 

A-17

 

6.5.                            Stabilization. The Company
will not take directly or indirectly any action designed, or that might
reasonably be expected to cause or result in, or that will constitute,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares.

 

6.6.                            Transfer
Agent. The Company shall engage and maintain, at its expense, a transfer
agent and, if necessary under the jurisdiction of incorporation of the Company,
a registrar for the Shares.

 

6.7.                            Listing. The Company
shall use its best efforts to ensure the Shares are listed for quotation on the
NYSE Amex at the Closing Date and to maintain such listing.

 

6.8.                            Investment
Company Act. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner
as would require the Company to register as an investment company under the
Investment Company Act.

 

6.9.                            Sarbanes-Oxley
Act. The Company will comply with all effective applicable provisions of
the Sarbanes Oxley Act.

 

6.10.                     Periodic
Reports. The Company will file with the Commission such periodic and special
reports as required by the Securities Act.

 

7.                                      Survival of Representations, Warranties and Agreements; Third Party
Beneficiary.  Notwithstanding
any investigation made by any party to this Agreement, all representations and
warranties made by the Company and the Investor herein will survive the
execution of this Agreement, the delivery to the Investor of the Shares being
purchased and the payment therefor.  All
covenants and other agreements set forth in this Agreement shall survive the
Closing for the respective periods set forth therein.

 

8.                                      Notices.  All notices,
requests, consents and other communications hereunder will be in writing, will
be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside
the United States, by International Federal Express or facsimile, and (c) will
be deemed given (i) if delivered by first-class registered or certified
mail domestic, three (3) business days after so mailed, (ii) if delivered
by nationally recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two (2) business days after so
mailed and (iv) if delivered by facsimile, upon electric confirmation of
receipt and will be delivered and addressed as follows:

 

(a)                                  if to the
Company, to:

 

BPZ Resources, Inc.

580 Westlake Blvd., Suite 525

Houston, Texas  77079

Attention: 
Vice President – Chief Accounting Officer

Facsimile:  (281) 556-6377

 

A-18

 

with a copy to:

 

Seyfarth Shaw LLP

700 Louisiana, Suite 3700

Houston, Texas 77002

Attention: Mark W. Coffin

Facsimile: (713) 821-0669

 

(b)                                 if to the
Investor, at its address on the Signature Page hereto, or at such other
address or addresses as may have been furnished to the Company in writing.

 

9.                                      Changes.  This Agreement
may not be modified or amended except pursuant to an instrument in writing
signed by the Company and the Investor.

 

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

 

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

 

12.                               Governing Law; Forum.

 

12.1.                     Governing
Law. This Agreement will be governed by, and construed in accordance with,
the internal laws of the State of New York, without giving effect to the
principles of conflicts of law that would require the application of the laws
of any other jurisdiction.

 

12.2.                     Forum.

 

(a)                                  Any dispute,
controversy or claim arising out of, relating to, or in connection with this
Agreement, including any question regarding its existence, validity or
termination, shall be referred to and finally resolved by arbitration.  The arbitration shall be conducted in
accordance with the Rules of Arbitration of the International Chamber of
Commerce (the “ICC”) in effect at the time the
arbitration is initiated, except as they may be modified herein or by mutual
agreement of the parties.  The place of
arbitration shall be New York, New York. 
The arbitration shall be conducted in the English language.

 

(b)                                 The arbitration
shall be conducted by three arbitrators. 
The claimant shall nominate one arbitrator and the respondent shall
nominate another arbitrator.  If either
side fails to nominate an arbitrator within 30 days of receipt of the request
for arbitration,  then that arbitrator
shall be nominated by the ICC.  The first
two arbitrators nominated in accordance with this provision shall nominate a
third arbitrator within 30 days after the nomination of the later-nominated of
those two arbitrators.  When the third
arbitrator has accepted the nomination, the two arbitrators making the
nomination shall promptly notify the parties of the nomination.  If the first two arbitrators nominated fail
to (i) nominate a third arbitrator within the time period prescribed above
or (ii) notify the parties of the acceptance of a third arbitrator within
10 days after the time period prescribed above, then the ICC shall nominate the
third arbitrator and shall promptly notify the parties of the nomination.  The third arbitrator shall act as chair of
the tribunal.

 

A-19

 

(c)                                  The arbitration
tribunal shall have the authority to make such orders for interim relief,
including injunctive relief, as it may deem appropriate, and any interim
measures ordered by the arbitrators shall be specifically enforced by any court
of competent jurisdiction.  Each party
hereto retains the right to seek interim measures from a judicial authority,
and any such request shall not be deemed incompatible with the agreement to
arbitrate or a waiver of the right to arbitrate.  The parties agree that, to the extent
permitted by applicable law, any ruling by the arbitration tribunal on interim
measures shall be deemed to be a final award with respect to the subject matter
of the ruling and shall be fully enforceable as such.

 

(d)                                 Subject to
paragraph (g) below, the arbitration tribunal shall have the authority to
order such production of documents as may reasonably be requested by any party
or by the tribunal itself.

 

(e)                                  The arbitration
award shall be in writing, state the reasons for the award, and be final and
binding on the parties.  The award may
include an award of costs, including reasonable attorneys’ fees and
disbursements.  Judgment upon the award
may be entered by any court having jurisdiction thereof or having jurisdiction
over the relevant party or its assets.

 

(f)                                    Each party
shall use its commercially reasonable efforts to ensure the arbitration is
concluded as quickly and as efficiently as possible.

 

(g)                                 Notwithstanding
anything to the contrary contained in this Section 12.2, the parties
acknowledge and agree that neither any provision of this Section 12.2 nor
the submission by Investor to any courts of competent jurisdiction pursuant
thereto shall constitute a waiver either before any Authority or court of law
of any of the privileges and immunities set forth in Investor’s Articles of
Agreement, including without limitation (i) the immunity of all of the
assets of Investor from all forms of seizure, attachment or execution before
the delivery of final judgment against Investor, (ii) the immunity of all
of the assets of Investor from search, requisition, confiscation, expropriation
or any other forms of seizure by executive or legislative action, (iii) the
inviolability of Investor’s archives and (iv) the freedom of Investor’s
assets from restrictions of any nature.  “Authority” shall mean any national, supranational, regional
or local government or governmental, administrative, fiscal, judicial, or
government-owned body, department, commission, authority, tribunal, agency or
entity, or central bank (or any Person, whether or not government owned and
howsoever constituted or called, that exercises the functions of a central
bank).  “Person”
shall mean any natural person, corporation, company, partnership, firm,
voluntary association, joint venture, trust, unincorporated organization,
Authority or any other entity whether acting in an individual, fiduciary or
other capacity.

 

(h)                                 To the extent
that the Company may, in any proceeding brought arising out of or in connection
with this Agreement, or the breach, termination or invalidity hereof, be
entitled to the benefit of any provision requiring Investor in such suit,
action or proceeding to post security for the costs of such party or parties,
or to post a bond or to take similar action, the Company hereby irrevocably
waives such benefit, in each case to the fullest extent now or in the future
permitted under the applicable laws and regulations.

 

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

 

A-20

 

14.                               Confirmation
of Sale.  The Investor
acknowledges and agrees that such Investor’s receipt of the Company’s signed
counterpart to this Agreement shall constitute written confirmation of the
Company’s sale of Shares to such Investor.

 

15.                               Press Release.  If in the
opinion of Company’s legal counsel, a press
release or communication is required by law or applicable stock exchange rules,
the Company and the Investor agree that the Company shall issue a press
release announcing the Offering and disclosing all material information
regarding the Offering prior to the opening of the financial markets in New
York City on the business day immediately after the date hereof.  The Company shall not identify the Investor
by name in any press release or public filing, or otherwise publicly disclose
the Investor’s name, without such Investor’s prior written consent, unless
required by law or the rules and regulations of a national securities
exchange, provided, however, that promptly after becoming aware of any request
or requirement to so disclose (a “Disclosure Requirement”),
and in any event prior to any such disclosure, the Company will provide such
Investor with notice of such request or requirement so that such Investor may
at its election seek a protective order or other appropriate remedy and the
Company will fully cooperate with such Investor’s efforts to obtain the same;
provided, further, however, if, absent the entry of such a protective order or
other remedy, the Company is compelled by applicable law, rule or
regulation or a court order, subpoena, similar judicial process, regulatory
agency or stock exchange rule to disclose such Investor’s name, the
Company may disclose only that portion of such information that the Company is
so compelled to disclose and will use its reasonable best efforts to obtain
assurance that confidential treatment will be accorded to that portion of such
information that is being disclosed.  As
of the date hereof, the Company is not aware of any Disclosure Requirement.

 

16.                               2006
Subscription Agreement.  The
Company acknowledges that the Subscription Agreement dated December 18,
2006 between the Company and the Investor remains in full force and effect in
accordance with its terms and is not superseded by this Agreement.

 

17.                               Indemnification.

 

17.1.                     Indemnification.  The Company will indemnify and hold harmless
Investor, its officers, directors, employees, partners, affiliates, agents,
representatives and legal counsel (collectively, “Investor Agents”) with
respect to which registration, qualification or compliance has been effected
pursuant to Section 5.1, against all claims, losses, damages and
liabilities (or actions in respect thereof) against or incurred by Investor or
Investor Agents arising out of or based on (A) (i) any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other similar document
or any amendments or supplements thereto (including any related registration
statement and amendments or supplements thereto, notification or the like) incident
to any such registration, qualification or compliance, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and will reimburse Investor
and Investor Agents for any reasonable legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damages, liability or action, as incurred, or (ii) any violation by the
Company of any federal, state or common law rule or regulation applicable
to the Company in connection with any such registration, qualification or
compliance, and will reimburse Investor, and Investor Agents, for any legal and
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; and (B) any
breach of any covenant, agreement, representation or warranty of the Company in
this Agreement; provided, however, that the Company shall not be liable
under this Section 17: (a) in any such case to the extent that any
such claim, loss, damage, liability or expense 

 

A-21

 

arises out of or is based on
any untrue statement or omission based upon written information furnished to
the Company by an instrument duly executed by Investor and stated to be
specifically for use in a Registration Statement, (b) for any amount paid
in settlement of claims without the Company’s written consent (which consent
shall not be unreasonably withheld), or (c) with respect to clause (B) of
this Section 17.1, to the extent that it is finally judicially determined
that such claim, loss, damage, liability or expense resulted primarily from the
willful misconduct, gross negligence or bad faith of Investor; provided,
further, that if and to the extent that such indemnification is held, by
final judicial determination to be unenforceable, in whole or in part, for any
reason, the Company shall make the maximum contribution to the payment and
satisfaction of such indemnified claim, loss, damage, liability or
expense.  In connection with the
obligation of the Company to indemnify for expenses as set forth in clause (B) of
this Section 17.1, if an indemnified party is reimbursed hereunder for any
expenses, such reimbursement of expenses shall be refunded to the extent it is
finally judicially determined that the claim, loss, damage, liability or
expense in question resulted primarily from the willful misconduct, gross
negligence or bad faith of such indemnified party.

 

17.2.                     Notification;
Procedure.

 

(a)                                  Investor shall
give notice to the Company promptly after it has received written notice of any
claim as to which indemnity may be sought, and shall permit the Company to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Company, who shall conduct the defense of such
claim or litigation, shall be approved by Investor (whose approval shall not be
unreasonably withheld).  Investor may
participate in such defense with separate counsel at its expense; provided,
however, that the Company shall bear the expense of such separate counsel if
representation of both parties by the same counsel would be inappropriate due
to actual or potential conflicts of interest between the Company and
Investor.  The failure of Investor to
give notice within a reasonable period of time as provided herein shall relieve
the Company of its obligations under this Section 17, with respect to any
expenses incurred by Investor or Investor’s Agents before the date of such
notice and to the extent that such failure to give notice shall materially
adversely prejudice the Company in the defense of any such claim or any such
litigation.  The Company, in the defense
of any such claim or litigation, shall not, except with the consent of
Investor, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to Investor of a release from all liability in respect to such claim
or litigation.

 

(b)                                 If the
indemnification provided for in this Section 17 is held to be unavailable
to Investor with respect to any loss, liability, claim, damage or expense, then
the Company, in lieu of indemnifying Investor hereunder, shall contribute to
the amount paid or payable by Investor as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of Investor on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by Investor
under this Section 17 exceed the net proceeds from the offering received
by Investor. The relative fault of the Company and of Investor shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by Investor and the parties’
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission.

 

(c)                                  All
indemnification rights hereunder shall survive the execution and delivery of
this Agreement and the subscription contemplated herein for the applicable
statute of

 

A-22

 

limitations, notwithstanding
any inquiry or examination made for or on behalf of, or any knowledge of
Investor or the acceptance by Investor of any certificate or opinion.

 

(d)                                 Investor shall
furnish to the Company such information regarding Investor and the distribution
proposed by Investor as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Section 17.

 

18.                               Expenses.  The Company shall pay to Investor or as
Investor may direct the fees and expenses of Investor and its counsel incurred
in connection with the preparation and/or review, execution and, where
appropriate, registration of this Agreement and any other documents related to
this Agreement.

 

A-23EXHIBIT 10.1

 

RESOLUTIONS

 

Director Compensation

 

RESOLVED,
effective June 1, 2010, that directors who are not officers or employees
of the Corporation or any of its subsidiaries (each a “Non-Employee Director”)
shall be entitled to receive for their services as directors a quarterly cash
retainer in the amount of $17,500 (“Quarterly Retainer”), to be paid on each June 1,
September 1, December 1, and March 1 (each a “Quarterly Payment
Date”) to each Non-Employee Director serving as a director on such date.

 

FURTHER
RESOLVED, effective June 1, 2010, that each Non-Employee Director who
serves as a chair of a committee of the Corporation’s Board of Directors shall be
entitled to receive an additional quarterly chair fee for each such chair, in
the amount of $3,500 (“Quarterly Chair Fee”), to be paid on each Quarterly
Payment Date to each Non-Employee Director serving as a committee chair on such
date.

 

FURTHER
RESOLVED, effective June 1, 2010, that any Non-Employee Director initially elected or appointed to the Board or initially appointed as a committee chair effective on any
date other than a Quarterly Payment Date shall be entitled to receive on the
Quarterly Payment Date following the date he or she joins the Board or becomes
such chair, as the case may be, an additional one-time fee in an amount equal
to the Quarterly Retainer or Quarterly Chair Fee, as the case may be,
multiplied by a fraction, the numerator of which is the number of calendar days
such Non-Employee Director has served on the Board or as such chair prior to such
Quarterly Payment Date and the denominator of which is 91.

 

FURTHER
RESOLVED, that on June 1 of each year, each Non-Employee Director who is
serving as a director on that date shall be entitled to receive a number of
restricted stock units (“RSUs”) equal to $150,000 divided by the Fair Market
Value, as defined in the 2006 Equity Compensation Plan for Non-Employee
Directors (“Plan”), of the Corporation’s common stock as of such June 1,
with any fractional amount rounded up to the next whole RSU.

 

FURTHER
RESOLVED, that any Non-Employee Director initially
elected or appointed to the Board effective on any date other than June 1
shall be entitled to receive on the date he or she joins the Board, a number of
RSUs equal to $150,000 divided by the Fair Market Value, as defined in the
Plan, of the Corporation’s common stock as of the date the Non-Employee
Director joins the Board, multiplied by a fraction, the numerator of which is
the number of full calendar months from such date until
the following May 31 and the denominator of which is 12, with any
fractional amount rounded to the next whole RSU.

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