PLACEMENT AGENT SHALL HAVE NO AUTHORITY TO (AND AGREES NOT TO
PURPORT TO) BIND THE COMPANY IN RESPECT OF THE SALE OF ANY SHARES.
THE SALE OF
THE SHARES SHALL BE MADE PURSUANT TO THE SUBSCRIPTION TERMS IN THE FORM INCLUDED
AS EXHIBIT A HERETO (THE "SUBSCRIPTION TERMS").
THE COMPANY SHALL HAVE THE SOLE
RIGHT TO ACCEPT OFFERS TO PURCHASE THE SHARES AND MAY REJECT ANY SUCH OFFER IN
WHOLE OR IN PART, AND, EXCEPT AS SET FORTH IN SECTION 4 HEREOF, IN NO EVENT
SHALL FEES BE PAYABLE ON ANY PROPOSED PURCHASE WHICH IS REJECTED FOR ANY REASON
OR WHICH OTHERWISE DOES NOT CLOSE FOR ANY REASON.
NOTWITHSTANDING THE
FOREGOING, IT IS UNDERSTOOD AND AGREED THAT THE PLACEMENT AGENT OR ANY OF ITS
AFFILIATES MAY, SOLELY AT THEIR DISCRETION AND WITHOUT ANY OBLIGATION TO DO SO,
PURCHASE SHARES AS PRINCIPALS; PROVIDED, HOWEVER, THAT ANY SUCH PURCHASES BY THE
PLACEMENT AGENT (OR ITS AFFILIATES) SHALL BE FULLY DISCLOSED TO THE COMPANY AND
APPROVED BY THE COMPANY IN ACCORDANCE WITH THE PREVIOUS SENTENCE.
(C)
CONCURRENTLY WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE COMPANY, THE PLACEMENT AGENT AND LOWENSTEIN SANDLER PC, AS ESCROW AGENT (THE
"ESCROW AGENT"), SHALL ENTER INTO AN ESCROW AGREEMENT (THE "ESCROW AGREEMENT"),
PURSUANT TO WHICH AN ESCROW ACCOUNT (THE "ESCROW ACCOUNT") WILL BE ESTABLISHED
FOR THE BENEFIT OF THE COMPANY AND THE INVESTORS WHO DESIRE TO SETTLE THEIR
PURCHASE THROUGH THE FACILITIES OF THE DEPOSITORY TRUST COMPANY'S DWAC SYSTEM.
PRIOR TO THE CLOSING DATE (AS HEREINAFTER DEFINED), EACH SUCH INVESTOR SHALL
DEPOSIT INTO THE ESCROW ACCOUNT AN AMOUNT EQUAL TO THE PRODUCT OF (X) THE NUMBER
OF SHARES SUCH INVESTOR HAS AGREED TO PURCHASE AND (Y) THE PURCHASE PRICE PER
SHARE AS SET FORTH ON THE COVER PAGE OF THE PROSPECTUS
(THE "PURCHASE
AMOUNT").
THE AGGREGATE OF ALL SUCH PURCHASE AMOUNTS IS HEREIN REFERRED TO AS
THE "ESCROW FUNDS." ON THE CLOSING DATE, THE ESCROW AGENT WILL DISBURSE THE
ESCROW FUNDS FROM THE ESCROW ACCOUNT TO THE COMPANY AND THE PLACEMENT AGENT AS
PROVIDED IN THE ESCROW AGREEMENT, AND THE COMPANY SHALL CAUSE ITS TRANSFER AGENT
TO DELIVER THE SHARES PURCHASED BY SUCH INVESTORS, WHICH DELIVERY MAY BE MADE
THROUGH THE FACILITIES OF THE DEPOSITORY TRUST COMPANY'S DWAC SYSTEM.
(D)
PAYMENT OF THE PURCHASE PRICE FOR, AND DELIVERY OF, THE SHARES
SHALL BE MADE AT A CLOSING (THE "CLOSING") AT THE OFFICES OF HELLER EHRMAN LLP,
COUNSEL FOR THE COMPANY, LOCATED AT 4350 LA JOLLA VILLAGE DRIVE, 7TH FLOOR, SAN
DIEGO, CALIFORNIA, AT 10:00 A.M., PACIFIC DAYLIGHT TIME, ON THE THIRD OR FOURTH
BUSINESS DAY (AS PERMITTED UNDER RULE 15C6-1 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (COLLECTIVELY WITH THE RULES AND REGULATIONS PROMULGATED
THEREUNDER, THE "EXCHANGE ACT")) AFTER THE DETERMINATION OF THE PUBLIC OFFERING
PRICE OF THE SHARES (SUCH DATE OF PAYMENT AND DELIVERY BEING HEREIN CALLED THE
"CLOSING DATE").
ALL SUCH ACTIONS TAKEN AT THE CLOSING SHALL BE DEEMED TO HAVE
OCCURRED SIMULTANEOUSLY.
NO SHARES WHICH THE COMPANY HAS AGREED TO SELL