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 BY STONEGATE AND ITS DIRECTORS,
OFFICERS AND