(C) BELOW,
STONEGATE WILL KEEP THE COMPANY INFORMATION PROVIDED HEREUNDER CONFIDENTIAL AND
WILL NOT DISCLOSE SUCH COMPANY INFORMATION OR ANY PORTION THEREOF, EXCEPT (I) TO
A THIRD PARTY CONTACTED BY STONEGATE ON BEHALF OF, AND WITH THE PRIOR APPROVAL
OF, THE COMPANY PURSUANT HERETO WHO HAS AGREED TO BE BOUND BY A CONFIDENTIALITY
AGREEMENT SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, OR (II) TO ANY
OTHER PERSON FOR WHICH THE COMPANY'S CONSENT TO DISCLOSE SUCH COMPANY
INFORMATION HAS BEEN OBTAINED.
FURTHER, STONEGATE ACKNOWLEDGES THAT CERTAIN
CONFIDENTIAL INFORMATION MAY CONSTITUTE MATERIAL NON-PUBLIC INFORMATION (AS
DEFINED IN REGULATION FD) AND AGREES TO, AND TO CAUSE ITS OFFICER, DIRECTORS,
EMPLOYEES AND AFFILIATES TO, REFRAIN FROM TRADING IN THE COMPANY'S COMMON STOCK
UNTIL SUCH INFORMATION IS MADE PUBLICLY AVAILABLE BY THE COMPANY.
(C)
STONEGATE'S CONFIDENTIALITY OBLIGATIONS
UNDER THIS AGREEMENT SHALL NOT APPLY TO ANY PORTION OF THE COMPANY INFORMATION
WHICH (I) AT THE TIME OF DISCLOSURE TO STONEGATE OR THEREAFTER IS GENERALLY
AVAILABLE TO AND KNOWN BY THE PUBLIC (OTHER THAN AS A RESULT OF A DISCLOSURE
DIRECTLY OR INDIRECTLY BY STONEGATE IN VIOLATION OF THIS AGREEMENT); (II) WAS
AVAILABLE TO STONEGATE ON A NON-CONFIDENTIAL BASIS FROM A SOURCE OTHER THAN THE
COMPANY, PROVIDED THAT SUCH SOURCE IS NOT AND WAS NOT BOUND BY A CONFIDENTIALITY
AGREEMENT WITH THE COMPANY; (III) HAS BEEN INDEPENDENTLY ACQUIRED OR DEVELOPED
BY STONEGATE WITHOUT VIOLATING ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT; OR
(IV) THE DISCLOSURE OF WHICH IS LEGALLY COMPELLED (WHETHER BY DEPOSITION,
INTERROGATORY, REQUEST FOR DOCUMENTS, SUBPOENA, CIVIL OR ADMINISTRATIVE
INVESTIGATIVE DEMAND OR OTHER SIMILAR PROCESS).
IN THE EVENT THAT STONEGATE
BECOMES LEGALLY COMPELLED TO DISCLOSE ANY OF THE COMPANY INFORMATION, STONEGATE
SHALL PROVIDE THE COMPANY WITH PROMPT PRIOR WRITTEN NOTICE OF SUCH REQUIREMENT
SO THAT THE COMPANY MAY SEEK A PROTECTIVE ORDER OR OTHER APPROPRIATE REMEDY
AND/OR WAIVE COMPLIANCE WITH THE TERMS OF THIS AGREEMENT.
(D)
THE OBLIGATIONS OF THE PARTIES UNDER THIS
SECTION 5 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT FOR 12 MONTHS.
3
6.
FEES AND EXPENSES.
(A)
AS COMPENSATION FOR SERVICES RENDERED BY
STONEGATE IN CONNECTION WITH THE PLACEMENTS, THE COMPANY AGREES TO PAY STONEGATE
A FEE (THE "AGENCY FEE") OF: (I) SIX PERCENT (6%) OF THE GROSS PROCEEDS FROM THE
SALE OF SECURITIES IN THE PLACEMENTS (ON A CUMULATIVE BASIS) TO PURCHASERS OTHER
THAN OFFICERS, DIRECTORS, EMPLOYEES OR AFFILIATES OF THE COMPANY OR THEIR
RESPECTIVE AFFILIATES OR ANY INDIVIDUALS WHO PARTICIPATE IN THE PLACEMENT AS A
RESULT OF AN INTRODUCTION FROM ANY SUCH PERSON (SUCH PURCHASERS, BEING
"QUALIFIED PURCHASERS").
THE AGENCY FEE SHALL BE PAID IMMEDIATELY UPON THE
CLOSING OF EACH SALE OF SECURITIES BY THE COMPANY.
(B)
UPON EXECUTION OF THIS AGREEMENT BY THE
PARTIES, THE COMPANY SHALL DELIVER TO STONEGATE $5,000 AS A NON-ACCOUNTABLE AND
NON-REFUNDABLE EXPENSE ALLOWANCE TO COMPENSATE STONEGATE FOR ITS INITIAL
DILIGENCE EFFORTS, WHICH SUCH AMOUNT SHALL BE CREDITED AGAINST ANY AMOUNTS
PAYABLE TO STONEGATE PURSUANT TO SECTION 6(A).
(C)
THE COMPANY SHALL ALSO PROMPTLY REIMBURSE
STONEGATE FOR ALL REASONABLE OUT-OF-POCKET EXPENSES INCURRED