BE HELD, WITHOUT INTEREST, BY THE
COMPANY'S LEGAL COUNSEL IN TRUST FOR THE BENEFIT OF EACH SUCH INVESTOR UNTIL THE
CLOSING DATE AND SUCH TIME AS THE COMPANY OR THE COMPANY'S LEGAL COUNSEL
RECEIVES WRITTEN CONFIRMATION FROM EACH INVESTOR (WHICH MAY BE TRANSMITTED BY
FACSIMILE OR EMAIL) THAT ALL CLOSING CONDITIONS HAVE BEEN SATISFIED, AT WHICH
TIME SUCH FUNDS SHALL BE IMMEDIATELY FORWARDED BY WIRE TRANSFER TO THE COMPANY.
THE COMPANY SHALL DELIVER TO EACH INVESTOR CERTIFICATES REPRESENTING THE
SECURITIES SO PURCHASED BY SUCH INVESTOR WITHIN TWO (2) BUSINESS DAYS FOLLOWING
THE CLOSING DATE AGAINST DELIVERY OF THE PURCHASE PRICE AS DESCRIBED ABOVE.
1.3
CLOSING DATE.
SUBJECT TO THE SATISFACTION
OR WAIVER OF THE CONDITIONS SET FORTH IN ARTICLES VI AND VII HEREOF, THE CLOSING
WILL TAKE PLACE AT 8 A.M. PACIFIC STANDARD TIME ON AUGUST 15, 2005 OR AT SUCH
OTHER DATE OR TIME AGREED UPON BY THE PARTIES TO THIS AGREEMENT (THE "CLOSING
DATE").
THE CLOSING WILL BE HELD AT THE OFFICES OF STRADLING YOCCA CARLSON &
RAUTH OR AT SUCH OTHER PLACE AS THE PARTIES AGREE.
IN NO EVENT (I) WILL THE
CLOSING OCCUR UNLESS AND UNTIL THE COMPANY HAS RECEIVED DEPOSITS FOR THE
PURCHASE OF SECURITIES IN ACCORDANCE WITH SECTION 1.2 OF AT LEAST TEN MILLION
DOLLARS ($10,000,000) OR (II) WILL THE COMPANY SELL SECURITIES PURSUANT TO THIS
AGREEMENT FOR AN AGGREGATE PURCHASE PRICE IN EXCESS OF TWENTY-FIVE MILLION
DOLLARS ($25,000,000).
ARTICLE II
INVESTOR'S REPRESENTATIONS AND WARRANTIES
Each Investor represents and warrants to the Company, severally and solely with
respect to itself and its purchase hereunder and not with respect to any other
Investor, that:
2.1
INVESTMENT PURPOSE.
THE INVESTOR IS
PURCHASING THE SECURITIES FOR ITS OWN ACCOUNT AND NOT WITH A PRESENT VIEW TOWARD
THE PUBLIC SALE OR DISTRIBUTION THEREOF, EXCEPT PURSUANT TO SALES REGISTERED OR
EXEMPTED FROM REGISTRATION UNDER THE SECURITIES ACT; PROVIDED, HOWEVER, THAT BY
MAKING THE REPRESENTATION HEREIN, THE INVESTOR DOES NOT AGREE TO HOLD ANY OF THE
SECURITIES FOR ANY MINIMUM OR OTHER SPECIFIC TERM AND RESERVES THE RIGHT TO
DISPOSE OF THE SECURITIES AT ANY TIME IN ACCORDANCE WITH OR PURSUANT TO A
REGISTRATION STATEMENT OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT.
2.2
QUALIFIED INSTITUTIONAL BUYER.
THE INVESTOR
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A(A)(1) PROMULGATED
UNDER THE SECURITIES ACT, OR A "LARGE INSTITUTIONAL ACCREDITED INVESTOR" AS SUCH
TERM IS USED IN THE SEC STAFF'S NO-ACTION LETTER DATED FEBRUARY 28, 1992 TO
SQUADRON, ELLENOFF, PLEASANT & LEHRER; PROVIDED, THAT NO MORE THAN TWO (2) LARGE
INSTITUTIONAL ACCREDITED INVESTORS MAY BE INVESTORS UNDER THIS AGREEMENT.
THE
INVESTOR HAS DELIVERED AN INVESTOR QUESTIONNAIRE IN THE FORM OF EXHIBIT C TO THE
COMPANY AND TO PUNK, ZIEGEL & COMPANY.
2.3
RELIANCE ON EXEMPTIONS.
THE INVESTOR
UNDERSTANDS THAT THE SECURITIES ARE BEING OFFERED AND SOLD TO IT IN RELIANCE
UPON SPECIFIC EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF UNITED STATES
FEDERAL AND STATE SECURITIES LAWS AND THAT THE COMPANY IS RELYING UPON THE TRUTH
AND ACCURACY OF, AND THE INVESTOR'S