BY STONEGATE AND
ITS DIRECTORS, OFFICERS AND EMPLOYEES IN CONNECTION WITH THE PERFORMANCE OF
STONEGATE'S SERVICES UNDER THIS AGREEMENT.
FOR THESE PURPOSES, "OUT-OF-POCKET
EXPENSES" SHALL INCLUDE, BUT NOT BE LIMITED TO LONG DISTANCE TELEPHONE,
FACSIMILE, COURIER, MAIL, SUPPLIES, TRAVEL AND SIMILAR EXPENSES.
(D)
UPON CLOSING OF THE PLACEMENT AND EXECUTION
AND DELIVERY OF EVIDENCE OF ITS STATUS AS AN ACCREDITED INVESTOR IN FORM AND
SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY AND ITS COUNSEL, THE COMPANY
AGREES TO ISSUE TO STONEGATE A SECURITIES PURCHASE WARRANT (THE
"REPRESENTATIVE'S WARRANT") ENTITLING THE HOLDER(S) THEREOF TO PURCHASE AN
AMOUNT OF SECURITIES EQUAL TO SIX PERCENT (6%) OF THE TOTAL NUMBER OF SECURITIES
SOLD IN THE PLACEMENT TO QUALIFIED PURCHASERS.
THE REPRESENTATIVE'S WARRANT
SHALL BE EXERCISABLE FOR A PERIOD OF FIVE (5) YEARS AT AN EXERCISE PRICE PER
SHARE EQUAL TO 100% OF THE CLOSING PRICE PER SHARE ON THE DATE IMMEDIATELY
PRECEDING THE EXECUTION OF DEFINITIVE DOCUMENTS OF THE PRIVATE PLACEMENT.
THE
WARRANTS SHALL NOT BE EXERCISABLE UNTIL 6 MONTHS FROM THE DATE OF CLOSING OF THE
PLACEMENT.
THE REPRESENTATIVE'S WARRANT SHALL OTHERWISE BE SUBSTANTIALLY IN THE
FORM OF EXHIBIT A ATTACHED HERETO.
(E)
THE OBLIGATIONS OF THE PARTIES UNDER THIS
SECTION 6 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT FOR ANY REASON.
7.
INDEMNIFICATION.
(A)
THE COMPANY AGREES TO INDEMNIFY AND HOLD
STONEGATE HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES OR
LIABILITIES (OR ACTIONS, INCLUDING SECURITYHOLDER ACTIONS, IN RESPECT THEREOF)
RELATED TO OR ARISING OUT OF STONEGATE'S ENGAGEMENT HEREUNDER OR ITS ROLE IN
CONNECTION HEREWITH, AND WILL REIMBURSE STONEGATE FOR ALL REASONABLE EXPENSES
(INCLUDING REASONABLE COSTS, EXPENSES, AWARDS AND COUNSEL FEES AND/OR JUDGMENTS)
AS THEY ARE INCURRED BY STONEGATE IN CONNECTION WITH INVESTIGATING, PREPARING
FOR OR DEFENDING ANY SUCH ACTION OR CLAIM, WHETHER OR NOT IN CONNECTION
4
WITH PENDING OR THREATENED LITIGATION IN WHICH STONEGATE IS A PARTY.
THE
COMPANY WILL NOT, HOWEVER, BE RESPONSIBLE FOR ANY CLAIMS, LIABILITIES, LOSSES,
DAMAGES OR EXPENSES WHICH ARE FINALLY JUDICIALLY DETERMINED TO HAVE RESULTED
PRIMARILY FROM THE BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR
RECKLESS DISREGARD OF ITS OBLIGATIONS OR DUTIES OF OR BY STONEGATE OR ANY OF ITS
OFFICERS, DIRECTORS OR EMPLOYEES (COLLECTIVELY, "EXCLUDED CLAIMS").
THE COMPANY
ALSO AGREES THAT STONEGATE SHALL NOT HAVE ANY LIABILITY TO THE COMPANY FOR OR IN
CONNECTION WITH SUCH ENGAGEMENT, EXCEPT FOR ANY SUCH LIABILITY FOR LOSSES,
CLAIMS, DAMAGES, LIABILITIES OR EXPENSES INCURRED BY THE COMPANY THAT RESULT
PRIMARILY FROM AN EXCLUDED CLAIM.
IN THE EVENT THAT THE FOREGOING INDEMNITY IS
UNAVAILABLE (EXCEPT BY REASON OF AN EXCLUDED CLAIM), THEN THE COMPANY SHALL
CONTRIBUTE TO AMOUNTS PAID OR PAYABLE BY STONEGATE IN RESPECT OF ITS LOSSES,
CLAIMS, DAMAGES AND LIABILITIES IN SUCH PROPORTION AS APPROPRIATELY REFLECTS THE
RELATIVE BENEFITS RECEIVED BY, AND FAULT OF, THE COMPANY AND STONEGATE IN
CONNECTION WITH THE MATTERS AS TO WHICH SUCH LOSSES, CLAIMS, DAMAGES OR
LIABILITIES RELATE, AND OTHER EQUITABLE CONSIDERATIONS.
THE FOREGOING SHALL BE
IN ADDITION TO ANY RIGHTS THAT STONEGATE MAY HAVE AT COMMON LAW