Document:

exv10w5

 

Exhibit 10.5

CHEVRON CORPORATION

DEFERRED COMPENSATION PLAN

FOR MANAGEMENT EMPLOYEES

(As Amended and Restated Effective December 7, 2005)

(Formerly the “Salary Deferral Plan for Management Employees”)

     1.     ESTABLISHMENT AND PURPOSE.

     The Chevron Corporation Deferred Compensation Plan for Management Employees (the “Plan”)
(formerly the Salary Deferral Plan for Management Employees) was amended and restated effective
April 1, 2002, to enhance the ability of Chevron Corporation (the “Corporation”) and its
Subsidiaries to attract, motivate and retain executive and other key employees. The Plan was
amended and restated again effective December 7, 2005. This Plan is intended to qualify as an
unfunded ERISA pension plan maintained by an employer for a select group of management or highly
compensated employees, as described in 26 C.F.R. § 2520.104-23(d).

     2.     DEFINITIONS.

     For purposes of the Plan, the following terms shall have the meanings set forth below:

     (a)     “Account” means the bookkeeping account maintained on behalf of a Participant to
which shall be credited any amount described in Section 5.

     (b)     “Beneficiary” means the person designated as such by the Participant pursuant to
Section 8(b).

     (c)     “Board” means the Board of Directors of the Corporation.

     (d)     “Change in Control” means a ‘change in control’ as that term is defined in Article
VI of the bylaws of the Corporation, as such bylaws may be amended from time to time.

     (e)     “Code” means the Internal Revenue Code of 1986, as amended.

     (f)     “Committee” means the Committee appointed by the Board to administer the Plan as
provided in Section 3.

     (g)     “Corporation” means Chevron Corporation, a Delaware corporation, or any successor
corporation.

     (h)     “Eligible Employee” means an executive or other key employee (including an
officer, whether or not a director) of the Corporation or a Subsidiary who holds a position of

 

 

significant responsibility or whose performance or potential contribution, in the judgment of the
Committee, would benefit the future success of the Corporation and who is designated by the
Committee as eligible to participate in the Plan.

     (i)     “Employee” means an individual who is a salaried employee on the payroll of the
Corporation or any Subsidiary.

     (j)     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     (k)     “Long-Term Incentive Plan” means the Chevron Corporation Long-Term Incentive Plan,
as amended from time to time.

     (l)     “Management Incentive Plan” means the Chevron Corporation Management Incentive
Plan, as amended from time to time.

     (m)     “Participant” means an Eligible Employee described in Section 4.

     (n)     “Plan” means the Chevron Corporation Salary Deferral Plan for Management
Employees, as set forth herein and as amended from time to time.

     (o)     “Plan Year” means the calendar year.

     (p)     “Rules” mean the rules promulgated by the Committee pursuant to the authority
granted in Section 3(c).

     (q)     “Subsidiary” means any corporation or entity in which the Corporation directly or
indirectly controls more than 50% of the total voting power of all classes of its stock having
voting powers and which the Board has designated as a Subsidiary for purposes of the Plan.

     3.     ADMINISTRATION.

     (a)     The Committee.

     The Plan shall be administered by the Management Compensation Committee of the Board, or any
successor thereto. The Board may at any time replace the Management Compensation Committee with
another Committee.

     (b)     Actions by the Committee.

     The Committee shall hold meetings at such times and places as it may determine. Acts approved
by a majority of the members of the Committee present at a meeting at which a quorum is present, or
acts reduced to or approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee.

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     (c)     Powers of the Committee.

     The Committee shall have the authority to administer the Plan in its sole discretion. To this
end, the Committee is authorized to construe and interpret the Plan, to promulgate, amend and
rescind Rules relating to the implementation of the Plan and to make all other determinations
necessary or advisable for the administration of the Plan, including the selection of Employees who
shall be eligible to participate in the Plan. Subject to the requirements of applicable law, the
Committee may designate persons other than members of the Committee to carry out its
responsibilities and may prescribe such conditions and limitations as it may deem appropriate. Any
determination, decision or action of the Committee in connection with the construction,
interpretation, administration, or application of the Plan shall be final, conclusive and binding
upon all persons participating in the Plan and any person validly claiming under or through persons
participating in the Plan.

     (d)     Liability of Committee Members.

     No member of the Board or the Committee will be liable for any action or determination made in
good faith by the Board or the Committee with respect to the Plan.

     (e)     Administration of the Plan Following a Change in Control.

     Within 30 days after the occurrence of a Change in Control, the Committee shall appoint an
independent organization which shall thereafter administer the Plan and have all of the powers and
duties formerly held and exercised by the Committee pursuant to Section 3(c) with respect to the
Plan. Upon such appointment, the Committee shall cease to have any responsibility with respect to
the administration of the Plan.

     4.     PARTICIPATION.

     Each Eligible Employee who elects to defer base salary under the Plan in accordance with the
Rules or who makes a deferral election available under the terms of the Management Incentive Plan
or Long-Term Incentive Plan, shall automatically become a Participant in the Plan.

     5.     DEFERRED COMPENSATION.

     The Committee shall promulgate Rules governing (i) elections by Eligible Employees to defer
base salary and (ii) the establishment of Accounts to which shall be credited amounts deferred
pursuant to an election described in (i) or any deferral election made available under the terms of
the Management Incentive Plan or the Long-Term Incentive Plan, the crediting of interest or
earnings to such Accounts, and the time, form and value of distributions from such Accounts.

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     6.     FORFEITURE.

     (a)     Notwithstanding any other provision of this Plan to the contrary, if a Participant engages
in Misconduct the Committee (or its delegate) may determine that any balance in the Participant’s
Account attributable to awards made under the Long-Term Incentive Plan or the Management Incentive
Plan on or after June 29, 2005 and the date of the Participant’s Misconduct shall be forfeited.

     (b)     For this purpose, “Misconduct” means that:

          (1)     the Corporation has been required to prepare an accounting restatement due to material
noncompliance, as a result of misconduct, with any financial reporting requirement under the
securities laws, and the Committee (or its delegate) has determined in its sole discretion that a
Participant (i) had knowledge of the material noncompliance or the circumstances that gave rise to
such noncompliance and failed to take reasonable steps to bring it to the attention of appropriate
individuals within the Corporation or (ii) personally and knowingly engaged in practices which
materially contributed to the circumstances that enabled a material noncompliance to occur; or

          (2)     a Participant discloses to others, or takes or uses for his or her own purpose or the
purpose of others, any trade secrets, confidential information, knowledge, data or know-how or any
other proprietary information or intellectual property belonging to the Corporation and obtained by
the Participant during the term of his or her employment, whether or not they are the Participant’s
work product. Examples of such confidential information or trade secrets include, without
limitation, customer lists, supplier lists, pricing and cost data, computer programs, delivery
routes, advertising plans, wage and salary data, financial information, research and development
plans, processes, equipment, product information and all other types and categories of information
as to which the Participant knows or has reason to know that the Corporation intends or expects
secrecy to be maintained; or

          (3)     a Participant fails to promptly return all documents and other tangible items belonging to
the Corporation in the Participant’s possession or control, including all complete or partial
copies, recordings, abstracts, notes or reproductions of any kind made from or about such documents
or information contained therein, upon termination of employment, whether pursuant to retirement or
otherwise; or

          (4)     a Participant directly or indirectly engages in, becomes employed by, or renders services,
advice or assistance to any business in competition with the Corporation at any time during the
twelve months following termination of employment with the Corporation. As used herein, “business
in competition” means any person, organization or enterprise which is engaged in or is about to
become engaged in any line of business engaged in by the Corporation at the time of the termination
of the Participant’s employment with the Corporation; or

          (5)     a Participant fails to inform any new employer, before accepting employment, of the terms
of this section and of the Participant’s continuing obligation to

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maintain the confidentiality of the trade secrets and other confidential information belonging to
the Corporation and obtained by the Participant during the term of his or her employment with the
Corporation; or

          (6)     a Participant induces or attempts to induce, directly or indirectly, any of the
Corporation’s customers, employees, representatives or consultants to terminate, discontinue or
cease working with or for the Corporation, or to breach any contract with the Corporation, in order
to work with or for, or enter into a contract with, the Participant or any third party; or

          (7)     a Participant engages in conduct which is not in good faith and which disrupts, damages,
impairs or interferes with the business, reputation or employees of the Corporation; or

          (8)     a Participant committed an act of embezzlement, fraud or theft with respect to the
property of the Corporation.

The Committee shall determine in its sole discretion whether the Participant has engaged in any of
the acts set forth in subsections 1 through 8 above, and its determination shall be conclusive and
binding on all interested persons.

Any provision of this Section 6 which is determined by a court of competent jurisdiction to be
invalid or unenforceable should be construed or limited in a manner that is valid and enforceable
and that comes closest to the business objectives intended by such invalid or unenforceable
provision, without invalidating or rendering unenforceable the remaining provisions of this Section
6.

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     7.     AMENDMENT OR TERMINATION OF THE PLAN.

     Except as otherwise provided in this Section 7, the Board may amend, suspend or terminate the
Plan at any time. In the event of such termination, the Accounts of Participants shall be paid at
such times and in such forms as shall be determined pursuant to the Rules, unless the Board
prescribes a different time or times for payment of such Accounts. No amendment, suspension or
termination (other than an amendment to discontinue future salary deferrals) approved by the Board
after six months prior to the public announcement of a proposed transaction which, when effected,
is a Change in Control or before the date which is two years after the date of a Change in Control
(the ‘Benefit Protection Period’) shall be valid or effective if such amendment, suspension or
termination would alter the terms of these resolutions or adversely affect the amount of a
Participant’s Account under the Plan, whether or not the Participant’s employment had terminated at
the time the amendment, suspension or termination was approved; provided, however, any amendment,
suspension or termination may be effected, even if so approved after such a public announcement, if
(a) the amendment, suspension or termination is approved after any plans have been abandoned to
effect the transaction which, if effected, would have constituted a Change in Control and the event
which would have constituted the Change in Control has not occurred, and (b) within a period of six
months after such approval, no other event constituting a Change in Control shall have occurred,
and no public announcement of a proposed event which would constitute a Change in Control shall
have been made, unless thereafter any plans to effect the Change in Control have been abandoned and
the event which would have constituted the Change in Control has not occurred. Any amendment,
suspension or termination of the Plan which is so approved prior to a Change in Control at the
request of a third party who effectuates a Change in Control shall be deemed to be an amendment,
suspension or termination approved during the Benefit Protection Period.

     8.     GENERAL.

     (a)     No Right of Employment.

     Nothing contained in the Plan nor any action of the Committee pursuant to the Plan shall give
any employee any right to remain in the employ of the Corporation or to impair the Corporation’s
right to terminate the employment of any employee at any time, with or without cause, which right
is hereby reserved.

     (b)     Designation of Beneficiaries.

     Participants may designate on the prescribed form one or more Beneficiaries to whom
distribution shall be made of any outstanding Account balance at the time of the Participant’s
death. A Participant may change such designation at any time by filing the prescribed form with
the Committee. If a Beneficiary has not been designated or if no designated Beneficiary survives
the Participant, distribution will be made to the Participant’s surviving spouse as Beneficiary if
then living or, if not, in equal shares to the then living children of the Participant as
Beneficiaries or, if none, to the Participant’s estate as Beneficiary.

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     (c)     Domestic Relations Orders.

     The procedures established by the Corporation for the determination of the qualified status of
domestic relations orders and for making distributions under qualified domestic relations orders,
as provided in Section 206(d) of ERISA, shall apply to the Plan.

     (d)     Costs of the Plan.

     The costs and expenses of administering the Plan shall be borne by the Corporation.

     (e)     Severability.

     The provisions of the Plan shall be deemed severable and the validity or unenforceability of
any provision shall not affect the validity or enforceability of the other provisions hereof.

     (f)     Binding Effect of Plan.

     The Plan shall be binding upon and shall inure to the benefit of the Corporation, its
successors and assigns, and the Corporation shall require any successor or assign to expressly
assume and agree to perform the Plan in the same manner and to the same extent that the Corporation
would be required to perform it if no such succession or assignment had taken place. The term “the
Corporation” as used herein shall include such successors and assigns. The term “successors and
assigns” as used herein shall mean a corporation or other entity acquiring all or substantially all
the assets and business of the Corporation (including the Plan) whether by operation of law or
otherwise.

     (g)     No Waiver of Breach.

     No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of the Plan to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions of conditions at the same or at any prior or
subsequent time.

     (h)     No Assignment.

     The interest and property rights of any Participant under the Plan shall not be subject to
option nor be assignable either by voluntary or involuntary assignment or by operation of law,
including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and
any act in violation of this Section 8(h) shall be void.

     (i)     Applicable Law.

     The Plan shall be administered, construed and governed in accordance with ERISA and, to the
extent not preempted by ERISA, the laws of the State of California.

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     (j)     Participant’s Rights Unsecured.

     This Plan is not intended and shall not be construed to require the Corporation to fund any of
the benefits provided hereunder or to establish a trust for such purpose. The interest under the
Plan of any Participant and such Participant’s right to receive a distribution of his or her
Account shall be an unsecured claim against the general assets of the Corporation. The Account
shall be a bookkeeping entry only and no Participant shall have any interest in or claim against
any specific asset of the Company pursuant to the Plan.

     (k)     Authority to Establish a Grantor Trust.

     The Committee is authorized in its sole discretion to establish a grantor trust for the
purpose of providing security for the payment of benefits under the Plan; provided, however, that
no Participant shall be considered to have a beneficial ownership interest (or any other sort of
interest) in any specific asset of the Corporation or of its subsidiaries or affiliates as a result
of the creation of such trust or the transfer of funds or other property to such trust.

     (l)     Other Benefit Plans.

     To the extent permitted by applicable law, a Participant’s deferral elections made pursuant to
this Plan shall be disregarded for purposes of determining the Participant’s benefits under any
other benefit plan or program established or maintained by the Corporation or its Subsidiaries.

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                                                                    Exhibit 10.1

                                9,171,429 SHARES

                           HALOZYME THERAPEUTICS, INC.

                             SHARES OF COMMON STOCK
                               ($0.001 PAR VALUE)

                            PLACEMENT AGENT AGREEMENT

                                                               December 12, 2005

SG COWEN & CO., LLC
RODMAN & RENSHAW, LLC
ROTH CAPITAL PARTNERS, LLC
c/o SG Cowen & Co., LLC
1221 Avenue of the Americas
New York, New York  10020

Dear Sirs:

         Halozyme Therapeutics, Inc., a Nevada corporation (the "COMPANY"),
proposes to sell to the Purchasers, pursuant to the terms of this Placement
Agent Agreement (this "AGREEMENT") and the Subscription Agreements in the form
of Exhibit A attached hereto (the "SUBSCRIPTION AGREEMENTS") entered into with
the Purchasers identified therein (each a "PURCHASER" and, collectively, the
"PURCHASERS"), an aggregate of 9,171,429 shares of Common Stock, $0.001 par
value (the "COMMON STOCK"), of the Company. The aggregate of 9,171,429 shares so
proposed to be sold is hereinafter referred to as the "STOCK." The Company
hereby confirms its agreement with the placement agents named on Schedule I
attached hereto (the "PLACEMENT Agents"), as set forth below. SG Cowen & Co.,
LLC is acting as the representative of the Placement Agents and in such capacity
is hereinafter referred to as the "REPRESENTATIVE." Certain terms used herein
are defined in Section 14 hereof.

1. AGREEMENT TO ACT AS PLACEMENT AGENTS; PLACEMENT OF SECURITIES. On the basis
of the representations, warranties and agreements of the Company and its
Subsidiary (as defined below) herein contained, and subject to all the terms and
conditions of this Agreement:

         (a) The Company hereby authorizes the Placement Agents to act as its
         exclusive agents to solicit offers for the purchase of all or part of
         the Stock from the Company in connection with the proposed offering of
         the Stock (the "OFFERING"). Until the Closing Date (as defined in
         Section 3 hereof), the Company shall not, without the prior consent of
         the Representative, solicit or accept offers to purchase the Stock
         otherwise than through the Placement Agents.

<PAGE>

         (b) The Placement Agents agree, as agents of the Company, to use their
         commercially reasonable efforts to solicit offers to purchase the Stock
         from the Company on the terms and subject to the conditions set forth
         in the Base Prospectus (as defined below) and the Prospectus Supplement
         (as defined below). The Placement Agents shall make commercially
         reasonable efforts to assist the Company in obtaining performance by
         each Purchaser whose offer to purchase Stock has been solicited by the
         Placement Agents and accepted by the Company, but the Placement Agents
         shall not, except as otherwise provided in this Agreement, be obligated
         to disclose the identity of any potential purchaser or have any
         liability to the Company in the event any such purchase is not
         consummated for any reason. Under no circumstances will the Placement
         Agents be obligated to purchase any Stock for its own account and, in
         soliciting purchases of Stock, the Placement Agents shall act solely as
         the Company's agent and not as principals. Notwithstanding the
         foregoing and except as otherwise provided in Section 1(c), it is
         understood and agreed that the Placement Agents (or their affiliates)
         may, solely at their discretion and without any obligation to do so,
         purchase Stock as principals.

         (c) Subject to the provisions of this Section 1, offers for the
         purchase of Stock may be solicited by the Placement Agents as agents
         for the Company at such times and in such amounts as the Placement
         Agents deem advisable. Each Placement Agent shall communicate to the
         Company, orally or in writing, each reasonable offer to purchase Stock
         received by it as agent of the Company. The Company shall have the sole
         right to accept offers to purchase the Stock and may reject any such
         offer, in whole or in part. Each Placement Agent shall have the right,
         in its discretion reasonably exercised, without notice to the Company,
         to reject any offer to purchase Stock received by it, in whole or in
         part, and any such rejection shall not be deemed a breach of its
         agreement contained herein.

         (d) The purchases of the Stock by the Purchasers shall be evidenced by
         the execution of the Subscription Agreements by each of the parties
         thereto.

         (e) As compensation for services rendered, on the Closing Date the
         Company shall pay to the Placement Agents by wire transfer of
         immediately available funds to an account or accounts designated by the
         Representative, an amount equal to seven percent (7%) of the gross
         proceeds received by the Company from the sale of the Stock on such
         Closing Date.

         (f) No Stock which the Company has agreed to sell pursuant to this
         Agreement shall be deemed to have been purchased and paid for, or sold
         by the Company, until such Stock shall have been delivered to the
         Purchaser thereof against payment by such Purchaser. If the Company
         shall default in its obligations to deliver Stock to a Purchaser whose
         offer it has accepted, the Company shall indemnify and hold the
         Placement Agents harmless against any loss, claim or damage arising
         from or as a result of such default by the Company.

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<PAGE>

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARY. The Company
and its Subsidiary represent and warrant to, and agrees with, the several
Placement Agents and the Purchasers that:

         (a) The Company meets the requirements for use of Form S-3 under the
         Securities Act of 1933, as amended (the "SECURITIES ACT"), and has
         filed with the Securities and Exchange Commission (the "COMMISSION") a
         registration statement on such form (Registration File No. 333-125731),
         which became effective as of June 17, 2005, for the registration under
         the Securities Act of the Stock. Such registration statement meets the
         requirements set forth in Rule 415(a)(1)(x) under the Securities Act
         and complies with said Rule. The Company will file with the Commission
         pursuant to Rule 424(b) under the Securities Act, and the rules and
         regulations (the "RULES AND REGULATIONS") of the Commission promulgated
         thereunder, a supplement to the form of prospectus included in such
         registration statement relating to the placement of the Stock and the
         plan of distribution thereof and has advised the Representative of all
         further information (financial and other) with respect to the Company
         required to be set forth therein. Such registration statement,
         including the exhibits thereto, as amended at the date of this
         Agreement, is hereinafter called the "REGISTRATION STATEMENT"; such
         prospectus in the form in which it appears in the Registration
         Statement is hereinafter called the "BASE PROSPECTUS"; and the
         supplemented form of prospectus, in the form in which it will be filed
         with the Commission pursuant to Rule 424(b) (including the Base
         Prospectus as so supplemented) is hereinafter called the "PROSPECTUS
         SUPPLEMENT." Any reference herein to the Registration Statement, the
         Base Prospectus or the Prospectus Supplement shall be deemed to refer
         to and include the documents incorporated by reference therein,
         including all exhibits thereto (the "INCORPORATED DOCUMENTS") pursuant
         to Item 12 of Form S-3 which were filed under the Securities Exchange
         Act of 1934, as amended (the "EXCHANGE ACT"), on or before the date of
         this Agreement, or the issue date of the Base Prospectus or the
         Prospectus Supplement, as the case may be; and any reference herein to
         the terms "amend," "amendment" or "supplement" with respect to the
         Registration Statement, the Base Prospectus or the Prospectus
         Supplement shall be deemed to refer to and include the filing of any
         document under the Exchange Act after the date of this Agreement, or
         the issue date of the Base Prospectus or the Prospectus Supplement, as
         the case may be, deemed to be incorporated therein by reference. All
         references in this Agreement to financial statements and schedules and
         other information which is "contained," "included," "described," "set
         forth" or "stated" in the Registration Statement, the Base Prospectus
         or the Prospectus Supplement (and all other references of like import)
         shall be deemed to mean and include all such financial statements and
         schedules and other information which is or is deemed to be
         incorporated by reference in the Registration Statement, the Base
         Prospectus or the Prospectus Supplement, as the case may be. No stop
         order suspending the effectiveness of the Registration Statement or the
         use of the Base Prospectus or the Prospectus Supplement has been
         issued, and no proceeding for any such purpose is pending or has been
         initiated or, to the Company's knowledge, is threatened by the
         Commission. For purposes of this Agreement, "FREE WRITING PROSPECTUS"
         has the meaning set forth in Rule 405 under the Securities Act and the
         "TIME OF SALE PROSPECTUS" means the

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<PAGE>

         preliminary prospectus, if any, together with the free writing
         prospectuses, if any, used in connection with the Offering, including
         any documents, incorporated by reference therein.

         (b) The Registration Statement (and any further documents to be filed
         with the Commission) contains all exhibits and schedules as required by
         the Securities Act. Each of the Registration Statement and any
         post-effective amendment thereto, at the time it became effective,
         complied in all material respects with the Securities Act and the
         Exchange Act and the applicable Rules and Regulations and did not and,
         as amended or supplemented, if applicable, will not, contain any untrue
         statement of a material fact or omit to state a material fact required
         to be stated therein or necessary to make the statements therein not
         misleading. The Base Prospectus, the Time of Sale Prospectus, if any,
         and the Prospectus Supplement, each as of its respective date, comply
         in all material respects with the Securities Act and the Exchange Act
         and the applicable Rules and Regulations. Each of the Base Prospectus,
         the Time of Sale Prospectus, if any, and the Prospectus Supplement, as
         amended or supplemented, did not and will not contain as of the date
         thereof any untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading.
         The Incorporated Documents, when they were filed with the Commission,
         conformed in all material respects to the requirements of the Exchange
         Act and the applicable Rules and Regulations, and none of such
         documents, when they were filed with the Commission, contained any
         untrue statement of a material fact or omitted to state a material fact
         necessary to make the statements therein not misleading; and any
         further documents so filed and incorporated by reference in the Base
         Prospectus, the Time of Sale Prospectus, if any, or Prospectus
         Supplement, when such documents are filed with the Commission, will
         conform in all material respects to the requirements of the Exchange
         Act and the applicable Rules and Regulations, as applicable, and will
         not contain any untrue statement of a material fact or omit to state a
         material fact necessary to make the statements therein not misleading.
         Notwithstanding the foregoing, the Company makes no representations or
         warranties as to information, if any, contained in or omitted from the
         Time of Sale Prospectus, if any, or the Prospectus Supplement or any
         amendment thereof or supplement thereto in reliance upon and in
         conformity with information furnished in writing to the Company by or
         on behalf of any Placement Agent specifically for use in the
         Registration Statement, the Time of Sale Prospectus, if any, or the
         Prospectus Supplement, which information the parties hereto agree is
         limited to the Placement Agents' Information as defined in Section 16.
         No post-effective amendment to the Registration Statement reflecting
         any facts or events arising after the date thereof which represent,
         individually or in the aggregate, a fundamental change in the
         information set forth therein is required to be filed with the
         Commission. There are no documents required to be filed with the
         Commission in connection with the transaction contemplated hereby that
         (x) have not been filed as required pursuant to the Securities Act or
         (y) will not be filed within the requisite time period. There are no
         contracts or other documents required to be described in the Base
         Prospectus, the Time of Sale Prospectus, if any, or Prospectus
         Supplement, or to be filed as exhibits or

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<PAGE>

         schedules to the Registration Statement, which have not been described
         or filed as required.

         (c) The Company is eligible to use free writing prospectuses in
         connection with the Offering pursuant to Rules 164 and 433 under the
         Securities Act. Any free writing prospectus that the Company is
         required to file pursuant to Rule 433(d) under the Securities Act has
         been, or will be, filed with the Commission in accordance with the
         requirements of the Securities Act and the applicable rules and
         regulations of the Commission thereunder. Each free writing prospectus
         that the Company has filed, or is required to file, pursuant to Rule
         433(d) under the Securities Act or that was prepared by or behalf of or
         used by the Company complies or will comply in all material respects
         with the requirements of the Securities Act and the applicable rules
         and regulations of the Commission thereunder. The Company will not,
         without the Representative's consent, prepare, use or refer to, any
         free writing prospectus.

         (d) The Company has delivered, or will as promptly as practicable
         deliver, to the Representative complete conformed copies of the
         Registration Statement and of each consent and certificate of experts
         filed as a part thereof, and conformed copies of the Registration
         Statement (without exhibits) and the Base Prospectus, the Time of Sale
         Prospectus, if any, and the Prospectus Supplement, as amended or
         supplemented, in such quantities and at such places as the
         Representative reasonably requests. Neither the Company nor any of its
         directors and officers has distributed and none of them will
         distribute, prior to the completion of the distribution of Stock, any
         offering material in connection with the offering and sale of the Stock
         other than the Base Prospectus, the Time of Sale Prospectus, if any,
         the Prospectus Supplement, the Registration Statement, copies of the
         documents incorporated by reference therein and any other materials
         permitted by the Securities Act.

         (e) Each of the Company and Halozyme, Inc., a wholly-owned subsidiary
         of the Company (the "SUBSIDIARY"), have been duly organized and are
         validly existing as corporations or other legal entities in good
         standing (or the equivalent thereof, if any) under the laws of their
         respective jurisdictions of incorporation, are duly qualified to do
         business and are in good standing (or the equivalent thereof, if any)
         as foreign corporations in each jurisdiction in which their respective
         ownership or lease of property or the conduct of their respective
         businesses requires such qualification, and have all power and
         authority necessary to own or hold their respective properties and to
         conduct the businesses in which they are engaged, except where the
         failure to be so qualified and in good standing or have such power or
         authority would not have, singularly or in the aggregate, a material
         adverse effect on the condition (financial or otherwise), results of
         operations, business, properties or prospects of the Company and its
         Subsidiary taken as a whole (a "MATERIAL ADVERSE EFFECT").

         (f) The Stock to be issued and sold by the Company hereunder and under
         the Subscription Agreements has been duly and validly authorized and,
         when issued and delivered against payment therefor as provided herein,
         will be duly and validly issued, fully paid and nonassessable and free
         of any preemptive or

                                       5
<PAGE>

         similar rights. The Stock conforms to the description thereof contained
         in the Base Prospectus, the Prospectus Supplement and the Time of Sale
         Prospectus, if any.

         (g) The Company has an authorized capitalization as set forth in the
         Base Prospectus, the Prospectus Supplement and the Time of Sale
         Prospectus, if any, all of the issued and outstanding shares of capital
         stock of the Company have been duly and validly authorized and issued,
         are fully paid and non-assessable, have been issued in compliance with
         federal and state securities laws, and conform to the description
         thereof contained in the Base Prospectus, the Prospectus Supplement and
         the Time of Sale Prospectus, if any. None of the outstanding shares of
         Common Stock was issued in violation of any preemptive rights, rights
         of first refusal or other similar rights to subscribe for or purchase
         securities of the Company. There are no authorized or outstanding
         options, warrants, preemptive rights, rights of first refusal or other
         rights to purchase, or equity or debt securities convertible into or
         exchangeable or exercisable for, any capital stock of the Company that
         have been granted by the Company other than: (i) those accurately
         described in the Base Prospectus or ii) those issued pursuant to
         existing stock option plans. The description of the Company's stock
         option, stock bonus and other stock plans or arrangements, and the
         options or other rights granted thereunder, as described in the Base
         Prospectus, completely, accurately and fairly present the information
         required to be shown with respect to such plans, arrangements, options
         and rights.

         (h) All the outstanding shares of capital stock of the Subsidiary have
         been duly authorized and validly issued, are fully paid and
         non-assessable and, except to the extent set forth in the Base
         Prospectus, are owned directly by the Company, free and clear of any
         claim, lien, encumbrance, security interest, defect or restriction upon
         voting or transfer or any other claim of any kind ("LIENS").

         (i) The Company has the full right, power and authority to enter into
         this Agreement and each of the Subscription Agreements and to perform
         and to discharge its obligations hereunder and thereunder; and each of
         this Agreement and each of the Subscription Agreements has been duly
         authorized, executed and delivered by the Company, and constitutes a
         valid and binding obligation of the Company enforceable in accordance
         with its terms, except as limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or similar laws affecting creditors' and
         contracting parties' rights generally and except as enforceability may
         be subject to general principles of equity (regardless of whether such
         enforceability is considered in a proceeding in equity or at law) and
         except as the indemnification agreements of the Company herein may be
         legally unenforceable.

         (j) The execution, delivery and performance of this Agreement and the
         Subscription Agreements by the Company and the consummation of the
         transactions contemplated hereby and thereby will not conflict with or
         result in a breach or violation of any of the terms or provisions of,
         or constitute a default under, any indenture, mortgage, deed of trust,
         loan agreement or other

                                       6
<PAGE>

         agreement or instrument to which the Company or its Subsidiary is a
         party or by which the Company or its Subsidiary is bound or to which
         any of the property or assets of the Company or its Subsidiary is
         subject, except any such conflicts, breaches or violations which would
         not reasonably be expected to have a Material Adverse Effect, nor will
         such actions result in any violation of the provisions of the charter
         or bylaws of the Company or its Subsidiary or any statute, law, rule or
         regulation or any judgment, order or decree of any court or
         governmental agency or body having jurisdiction over the Company or its
         Subsidiary or any of their properties or assets.

         (k) There is no franchise, contract, lease, instrument or other
         document of a character required by the Securities Act or the Rules and
         Regulations to be described in the Base Prospectus or the Prospectus
         Supplement, or to be filed as an exhibit to the Registration Statement,
         which is not described or filed as required; and all statements
         summarizing any such franchises, contracts, leases, instruments or
         other documents or legal matters contained in the Registration
         Statement are accurate and complete in all material respects, except as
         redacted pursuant to confidential treatment requests. Other than as
         described in the Base Prospectus, no such franchise, contract, lease,
         instrument or other document has been suspended or terminated for
         convenience or default by the Company or its Subsidiary or any of the
         other parties thereto, neither the Company or its Subsidiary has sent
         or received any communication regarding intent not to renew any such
         franchise, contract, lease, instrument or other document, and neither
         the Company nor its Subsidiary has received notice or any other
         knowledge of any such pending or threatened suspension, termination or
         non-renewal, except for such pending or threatened suspensions,
         terminations or non-renewals that would not reasonably be expected to,
         singularly or in the aggregate, have a Material Adverse Effect.

         (l) All existing minute books of the Company and its Subsidiary,
         including all existing records of all meetings and actions of the board
         of directors (including, Audit, Compensation, Nominating and Governance
         and other board committees) and stockholders of the Company through the
         date of the latest meeting and action (collectively, the "CORPORATE
         RECORDS") have been made available to the Placement Agents and counsel
         for the Placement Agents. All such Corporate Records are complete and
         accurately reflect, in all material respects, all transactions referred
         to in such Corporate Records. There are no material transactions,
         agreements or other actions of the Company or its Subsidiary that are
         not properly approved and/or recorded in the Corporate Records.

         (m) No consent, approval, authorization, filing with or order of or
         registration with, any court or governmental agency or body is required
         in connection with the transactions contemplated herein or in the
         Subscription Agreements, except such as have been obtained or made (or
         will be timely obtained or made) under the Securities Act or the
         Exchange Act and such as may be required under the securities, or blue
         sky, laws of any jurisdiction in connection with the offer and sale of
         the Stock by the Company in the manner contemplated herein and in the
         Base Prospectus and the Prospectus Supplement.

                                       7
<PAGE>

         (n) Except as described in the Base Prospectus, (i) no person has the
         right, contractual or otherwise, to cause the Company to issue or sell
         to it any shares of Common Stock or shares of any other capital stock
         or other equity interests of the Company, (ii) no person has any
         preemptive rights, resale rights, rights of first refusal or other
         rights to purchase from the Company any shares of Common Stock or
         shares of any other capital stock or other securities of the Company,
         and (iii) except as provided herein, no person has the right to act as
         an underwriter, placement agent or financial advisor to the Company in
         connection with and as a result of the offer and sale of the Stock, in
         the case of each of the foregoing clauses (i), (ii) and (iii), whether
         as a result of the filing or effectiveness of the Registration
         Statement or the sale of the Stock as contemplated thereby or
         otherwise; no person has the right, contractual or otherwise, to cause
         the Company to register under the Securities Act any shares of Common
         Stock or shares of any other capital stock or other securities of the
         Company, or to include any such shares or interests in the Registration
         Statement or the offering contemplated thereby, whether as a result of
         the filing or effectiveness of the Registration Statement or the sale
         of the Stock as contemplated thereby or otherwise, except for persons
         and entities who have had their shares already registered under the
         Securities Act, who have expressly waived such right or who have been
         given timely and proper notice and have failed to exercise such right
         within the time or times required under the terms and conditions of
         such right, and the Company is not required to file any registration
         statement for the registration of any securities of any person or
         register any such securities pursuant to any other registration
         statement filed by the Company under the Securities Act for a period of
         at least 180 days after the date hereof.

         (o) The financial statements, together with the related notes and
         schedules, of the Company included in the Base Prospectus, the
         Prospectus Supplement or the Registration Statement, the Time of Sale
         Prospectus, if any, or incorporated by reference therein, as the case
         may be, present fairly the financial condition, results of operations
         and cash flows of the Company and its consolidated subsidiary as of the
         dates and for the periods indicated, comply in all material respects
         with the Securities Act and the Rules and Regulations thereunder, and
         have been prepared in conformity with generally accepted accounting
         principles applied on a consistent basis throughout the periods
         involved; provided, however, that statements that are unaudited are
         subject to year-end adjustments and do not contain notes required under
         generally accepted accounting principles. No other financial statements
         or supporting schedules or exhibits are required by the Securities Act
         or the Rules and Regulations thereunder to be included in the Base
         Prospectus, the Prospectus Supplement or the Registration Statement,
         the Time of Sale Prospectus, if any, or incorporated by reference
         therein, as the case may be.

         (p) Except as set forth in the Base Prospectus, there is no legal or
         governmental proceeding pending to which the Company or its Subsidiary
         is a party or of which any property or assets of the Company or its
         Subsidiary is the subject which is required to be described in the Base
         Prospectus, and is not described therein, or which, singularly or in
         the aggregate, if determined adversely to the Company or its
         Subsidiary, might have a Material Adverse

                                       8
<PAGE>

         Effect or would prevent or adversely affect the ability of the Company
         or its Subsidiary to perform its obligations under this Agreement; and
         to the best of the Company's knowledge, no such proceedings are
         threatened or contemplated by governmental authorities or threatened by
         others.

         (q) The Company and its Subsidiary have good and marketable title to
         all property (real and personal) described in the Registration
         Statement, the Base Prospectus and the Prospectus Supplement and the
         Time of Sale Prospectus, if any as being owned by the Company or its
         Subsidiary, free and clear of any Liens, except for those Liens that do
         not materially interfere with the use made or proposed to be made of
         such property by the Company or its Subsidiary or that would not have a
         Material Adverse Effect; all the property described in the Registration
         Statement, the Base Prospectus the Time of Sale Prospectus, if any, and
         the Prospectus Supplement as being held under lease by the Company or
         its Subsidiary is held thereby under valid, subsisting and enforceable
         leases except where the failure to be valid, subsisting or enforceable
         would not have a Material Adverse Effect.

         (r) Neither the Company nor its Subsidiary is (i) in violation of any
         provision of its charter or bylaws, (ii) in default in any respect, and
         no event has occurred which, with notice or lapse of time or both,
         would constitute such a default, in the due performance or observance
         of any term, covenant, or condition of any indenture, contract, lease,
         mortgage, deed of trust, note agreement, loan agreement or other
         agreement, obligation, condition, covenant or instrument to which it is
         a party or by which it is bound or to which any of its property or
         assets is subject, or (iii) in violation in any respect of any statute,
         law, rule, regulation, ordinance, judgment, order or decree of any
         court, regulatory body, administrative agency, governmental body,
         arbitrator or other authority having jurisdiction over the Company or
         its Subsidiary, or any of their properties, as applicable (including,
         without limitation, those administered by the Food and Drug
         Administration of the U.S. Department of Health and Human Services (the
         "FDA") or by any foreign, federal, state or local governmental or
         regulatory authority performing functions similar to those performed by
         the FDA), except, with respect to clauses (ii) and (iii), any
         violations or defaults which, singularly or in the aggregate, would not
         have a Material Adverse Effect.

         (s) The contracts described in the Company's regular reports on Forms
         10-Q, 10-K, and 8-K as filed by the Company with the Commission or
         incorporated by reference therein that are material to the Company are
         in full force and effect on the date hereof, and neither the Company
         nor, to the Company's knowledge, any other party to such contracts is
         in breach of or default under any of such contracts which would have a
         Material Adverse Effect.

         (t) No labor problem or dispute with the employees of the Company or
         its Subsidiary exists or, to the Company's knowledge, is threatened or
         imminent, which might be expected to have a Material Adverse Effect.
         Neither the Company nor its Subsidiary is aware that any key employee
         of the Company or its Subsidiary or significant group of employees of
         the Company or its

                                       9
<PAGE>

         Subsidiary plans to terminate employment with the Company or its
         Subsidiary.

         (u) Each of the Company and its Subsidiary has fulfilled its
         obligations, if any, under the minimum funding standards of Section 302
         of the United States Employee Retirement Income Security Act of 1974
         ("ERISA") and the regulations and published interpretations thereunder
         with respect to each "PLAN" (as defined in Section 3(3) of ERISA and
         such regulations and published interpretations) in which employees of
         the Company and its Subsidiary are eligible to participate and each
         such plan is in compliance in all material respects with the presently
         applicable provisions of ERISA and such regulations and published
         interpretations. No "PROHIBITED TRANSACTION" (as defined in Section 406
         of ERISA, or Section 4975 of the Internal Revenue Code of 1986, as
         amended from time to time (the "CODE")) has occurred with respect to
         any employee benefit plan which could have a Material Adverse Effect.
         Each of the Company and its Subsidiary has not incurred any unpaid
         liability to the Pension Benefit Guaranty Corporation (other than for
         the payment of premiums in the ordinary course) or to any such plan
         under Title IV of ERISA. Each "PENSION PLAN" (as defined in ERISA) for
         which the Company or its Subsidiary would have any liability that is
         intended to be qualified under Section 401(a) of the Code is so
         qualified in all material respects and nothing has occurred, whether by
         action or by failure to act, which could cause the loss of such
         qualification.

         (v) The Company and its Subsidiary maintain insurance in such amounts
         and covering such risks as is adequate for the conduct of its business
         and the value of its properties and as is customary for companies
         engaged in similar businesses in similar industries; all such insurance
         is fully in force on the date hereof and will be fully in force on the
         Closing Date.

         (w) Each of the Company and its Subsidiary has made all filings,
         applications and submissions required by, and possesses all approvals,
         licenses, certificates, certifications, clearances, consents,
         exemptions, marks, notifications, orders, permits and other
         authorizations issued by, the appropriate federal, state or foreign
         regulatory authorities (including, without limitation, the FDA, and any
         other foreign, federal, state or local government or regulatory
         authorities performing functions similar to those performed by the FDA)
         necessary to conduct its business as presently conducted (collectively,
         "PERMITS"), except for such Permits which the failure to obtain would
         not have a Material Adverse Effect, and is in compliance with the terms
         and conditions of all such Permits; all of such Permits held by each of
         the Company and its Subsidiary are valid and in full force and effect;
         there is no pending or threatened action, suit, claim or proceeding
         which may cause any such Permit to be limited, revoked, cancelled,
         suspended, modified or not renewed and each of the Company and its
         Subsidiary has not received any notice of proceedings relating to the
         limitation, revocation, cancellation, suspension, modification or
         non-renewal of any such Permit which, singularly or in the aggregate,
         if the subject of an unfavorable decision, ruling or finding, would
         have a Material Adverse Effect, whether or not arising from

                                       10
<PAGE>

         transactions in the ordinary course of business, except as set forth in
         or contemplated by the Base Prospectus.

         (x) Cacciamatta Accountancy Corp., who have certified certain financial
         statements of the Company and delivered their report with respect to
         the audited consolidated financial statements and schedules included in
         the Base Prospectus, the Prospectus Supplement or the Registration
         Statement, or incorporated by reference therein, as the case may be,
         are independent registered public accountants with respect to the
         Company within the meaning of the Securities Act and the Rules and
         Regulations.

         (y) Each of the Company and its Subsidiary has filed all foreign,
         federal, state and local tax returns that are required to be filed or
         has requested extensions thereof (except in any case in which the
         failure so to file would not have a Material Adverse Effect, except as
         set forth in the Base Prospectus) and has paid all taxes required to be
         paid by it and any other assessment, fine or penalty levied against it,
         to the extent that any of the foregoing is due and payable, except for
         any such assessment, fine or penalty that is currently being contested
         in good faith or as would not have a Material Adverse Effect, except as
         set forth in the Base Prospectus.

         (z) The principal executive officer and principal financial officer of
         the Company have made all certifications required by the Sarbanes-Oxley
         Act of 2002 and the rules and regulations promulgated in connection
         therewith (the "SARBANES-OXLEY ACT"), and the statements contained in
         any such certification are complete and correct. The Company maintains
         "disclosure controls and procedures" (as defined in Rule 13a-14(c)
         under the Exchange Act), and such controls and procedures are designed
         (i) to ensure that information required to be disclosed by the Company
         in the reports that it files or submits under the Exchange Act is
         recorded, processed, summarized and reported, within the time periods
         specified in the Commission's rules and forms and (ii) to ensure that
         information required to be disclosed by the Company in the reports that
         it files or submits under the Exchange Act is accumulated and
         communicated to the Company's management, including its principal
         executive officer and principal financial officer, as appropriate to
         allow timely decisions regarding required disclosure. The Company does
         not have any material weaknesses in internal controls, and to the
         Company's knowledge there has been no fraud, whether or not material,
         that involves management or other employees of the Company or its
         Subsidiary who have a significant role in the Company's internal
         controls. The Company is otherwise in compliance in all respects with
         all applicable effective provisions of the Sarbanes-Oxley Act and the
         rules and regulations promulgated by the Commission (and intends to
         comply with all applicable provisions that are not yet effective upon
         effectiveness).

         (aa) Each of the Company and its Subsidiary maintains a system of
         internal accounting controls sufficient to provide reasonable assurance
         that (i) transactions are executed in accordance with management's
         general or specific authorizations; (ii) transactions are recorded as
         necessary to permit preparation of financial statements in conformity
         with generally accepted accounting

                                       11
<PAGE>

         principles and to maintain accountability of assets; (iii) access to
         assets is permitted only in accordance with management's general or
         specific authorization; and (iv) the recorded accountability for assets
         is compared with the existing assets at reasonable intervals and
         appropriate action is taken with respect to any differences. Except as
         described in the Base Prospectus, since the end of the Company's most
         recent fiscal year, there has been no change in the Company's or its
         Subsidiary's internal control over financial reporting that has
         materially affected, or is reasonably likely to materially affect, the
         Company's internal control over financial reporting.

         (bb) Each of the Company and its Subsidiary (i) is in compliance in all
         material respects with any and all applicable foreign, federal, state
         and local laws and regulations relating to the protection of human
         health and safety, the environment or hazardous or toxic substances or
         wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has
         received and is in compliance with all permits, licenses or other
         approvals required of it under applicable Environmental Laws to conduct
         its business and (iii) has not received notice of any actual or
         potential liability for the investigation or remediation of any
         disposal or release of hazardous or toxic substances or wastes,
         pollutants or contaminants, except where such non-compliance with
         Environmental Laws, failure to receive required permits, licenses or
         other approvals, or liability would not, individually or in the
         aggregate, have a Material Adverse Effect, whether or not arising from
         transactions in the ordinary course of business, except as set forth in
         or contemplated by the Base Prospectus (exclusive of any supplement
         thereto). Neither the Company nor its Subsidiary has been named as a
         "POTENTIALLY RESPONSIBLE PARTY" under the Comprehensive Environmental
         Response, Compensation, and Liability Act of 1980, as amended.

         (cc) There has been no storage, disposal, generation, manufacture,
         refinement, transportation, handling or treatment of medical wastes,
         toxic wastes, hazardous wastes or hazardous substances by the Company
         or its Subsidiary (or, to the Company's knowledge, any of the Company's
         or its Subsidiary's predecessors in interest) at, upon or from any of
         the property now or previously owned or leased by the Company or its
         Subsidiary in violation of any applicable Environmental Law which would
         require remedial action under any applicable Environmental Law, except
         for any violation or remedial action which would not cause, singularly
         or in the aggregate with all such violations and remedial actions, a
         Material Adverse Effect; there has been no material spill, discharge,
         leak, emission, injection, escape, dumping or release of any kind onto
         such property or of any medical wastes, toxic wastes, hazardous wastes
         or hazardous substances due to or caused by the Company or its
         Subsidiary or with respect to which the Company or its Subsidiary had
         knowledge, except for any such spill, discharge, leak, emission,
         injection, escapes, dumpings or releases which would not cause or would
         not be reasonably likely to cause, singularly or in the aggregate with
         all such spills, discharges, leaks, emissions, injections, escapes,
         dumpings or releases, a Material Adverse Effect; and the terms
         "hazardous substances," "toxic wastes," "hazardous wastes" and "medical
         wastes" shall have the meanings specified in any applicable
         Environmental Laws.

                                       12
<PAGE>

         (dd) In the ordinary course of its business, the Company and its
         Subsidiary periodically reviews the effect of Environmental Laws on the
         business, operations and properties of each of the Company and its
         Subsidiary in the course of which it identifies and evaluates
         associated costs and liabilities (including, without limitation, any
         capital or operating expenditures required for clean-up, closure of
         properties or compliance with Environmental Laws, or any permit,
         license or approval, any related constraints on operating activities
         and any potential liabilities to third parties). On the basis of such
         review, the Company and its Subsidiary has reasonably concluded that
         such associated costs and liabilities would not, singularly or in the
         aggregate, have a Material Adverse Effect, whether or not arising from
         transactions in the ordinary course of business, except as set forth in
         or contemplated by the Base Prospectus.

         (ee) Each of the Company and its Subsidiary owns, possesses, licenses
         or has other rights to use all foreign and domestic patents, patent
         applications, trade and service marks, trade and service mark
         registrations, trade names, copyrights, licenses, inventions, trade
         secrets, technology, Internet domain names, know-how and other
         intellectual property (collectively, the "INTELLECTUAL PROPERTY")
         necessary for the conduct of the Company's business as now conducted or
         as proposed in the Base Prospectus, the Prospectus Supplement and the
         Time of Sale Prospectus, if any, to be conducted. Except as set forth
         in the Base Prospectus, (a) there are no rights of third parties to any
         such Intellectual Property; (b) to the best of the Company's knowledge,
         there is no infringement by third parties of any such Intellectual
         Property; (c) there is no pending or, to the best of the Company's
         knowledge, threatened action, suit, proceeding or claim by others
         challenging each of the Company's and the Subsidiary's rights in or to
         any such Intellectual Property, and neither the Company nor its
         Subsidiary is unaware of any facts which would form a reasonable basis
         for any such claim; (d) there is no pending or, to the best of the
         Company's knowledge, threatened action, suit, proceeding or claim by
         others challenging the validity or scope of any such Intellectual
         Property; (e) there is no pending or, to the best of the Company's
         knowledge, threatened action, suit, proceeding or claim by others that
         the Company or its Subsidiary infringe or otherwise violate any patent,
         trademark, copyright, trade secret or other proprietary rights of
         others, and neither the Company nor its Subsidiary is unaware of any
         other fact which would form a reasonable basis for any such claim; (f)
         to the Company's knowledge, there is no third-party U.S. patent or
         published U.S. patent application which contains claims for which an
         Interference Proceeding could be commenced against any patent or patent
         application that is part of the Intellectual Property; (g) there is no
         pending or, to the best of the Company's knowledge, threatened action,
         suit, proceeding or claim by others claiming the ownership of and
         interest in the Intellectual Property; and (h) to the best of the
         Company's knowledge, the Company and its Subsidiary have taken all
         steps necessary to perfect its ownership of and interest in the
         Intellectual Property.

         (ff) The clinical, pre-clinical and other studies and tests conducted
         by or on behalf of or sponsored by the Company or its Subsidiary that
         are described or referred to in the Base Prospectus or Prospectus
         Supplement were and, if still pending, are being conducted in
         accordance with all statutes, laws, rules and

                                       13
<PAGE>

         regulations, as applicable (including, without limitation, those
         administered by the FDA or by any foreign, federal, state or local
         governmental or regulatory authority performing functions similar to
         those performed by the FDA). The descriptions of the results of such
         studies and tests that are described or referred to in the Base
         Prospectus or Prospectus Supplement are accurate and complete in all
         material respects and fairly present the published data derived from
         such studies and tests, and each of the Company and its Subsidiary has
         no knowledge of other studies or tests the results of which are
         materially inconsistent with or otherwise call into question the
         results described or referred to in the Base Prospectus, the Time of
         Sale Prospectus, if any, or the Prospectus Supplement. Neither the
         Company nor its Subsidiary has received any notices or other
         correspondence from the FDA or any other foreign, federal, state or
         local governmental or regulatory authority performing functions similar
         to those performed by the FDA with respect to any ongoing clinical or
         pre-clinical studies or tests requiring the termination, suspension or
         modification of such studies or tests. For the avoidance of doubt, the
         Company makes no representation or warranty that the results of any
         studies, tests or preclinical or clinical trials conducted by or on
         behalf of the Company will be sufficient to obtain governmental
         approval from the FDA or any foreign, state or local governmental body
         exercising comparable authority.

         (gg) Each of the Company and its Subsidiary has established and
         administers a compliance program (including a written compliance
         policy) applicable to the Company and its Subsidiary, to assist the
         Company, its Subsidiary and their directors, officers and employees of
         the Company and its Subsidiary in complying with applicable regulatory
         guidelines (including, without limitation, those administered by the
         FDA and any other foreign, federal, state or local governmental or
         regulatory authority performing functions similar to those performed by
         the FDA).

         (hh) Neither the Company nor its Subsidiary has failed to file with the
         applicable regulatory authorities (including, without limitation, the
         FDA or any foreign, federal, state or local governmental or regulatory
         authority performing functions similar to those performed by the FDA)
         any filing, declaration, listing, registration, report or submission;
         all such filings, declarations, listings, registrations, reports or
         submissions were in compliance with applicable laws when filed and no
         deficiencies have been asserted by any applicable regulatory authority
         (including, without limitation, the FDA or any foreign, federal, state
         or local governmental or regulatory authority performing functions
         similar to those performed by the FDA) with respect to any such
         filings, declarations, listings, registrations, reports or submissions.

         (ii) No relationship, direct or indirect, exists between or among the
         Company or its Subsidiary on the one hand and the directors, officers,
         stockholders, customers or suppliers of the Company or its Subsidiary
         on the other hand which is required to be described in the Base
         Prospectus or the Prospectus Supplement, and which is not so described.

         (jj) To the Company's knowledge, neither the Company nor any other
         person associated with or acting on behalf of the Company including,
         without

                                       14
<PAGE>

         limitation, any director, officer, agent or employee of the Company or
         its Subsidiary, has, directly or indirectly, while acting on behalf of
         the Company or its Subsidiary (i) used any corporate funds for unlawful
         contributions, gifts, entertainment or other unlawful expenses, or
         received or retained any funds, relating to political activity; (ii)
         made any unlawful payment from corporate funds to, or received or
         retained any unlawful funds from, foreign or domestic government
         officials or employees or to or from foreign or domestic political
         parties or campaigns; (iii) violated any provision of the Foreign
         Corrupt Practices Act of 1977, as amended; or (iv) made any other
         unlawful payment or received or retained any other unlawful funds.

         (kk) Neither the Company nor its Subsidiary is and, after giving effect
         to the offering and sale of the Stock and the application of the
         proceeds thereof as described in the Base Prospectus and the Prospectus
         Supplement, will become an "INVESTMENT COMPANY" as defined in the
         Investment Company Act of 1940, as amended.

         (ll) No forward-looking statement (within the meaning of Section 27A of
         the Securities Act and Section 21E of the Exchange Act) contained in
         the Base Prospectus, the Prospectus Supplement and the Time of Sale
         Prospectus, if any, has been made or reaffirmed without a reasonable
         basis or has been disclosed other than in good faith.

         (mm) Other than as contemplated by this Agreement, neither the Company
         nor its Subsidiary is a party to any contract, agreement or
         understanding with any person that would give rise to a valid claim
         against the Company or its Subsidiary or the Placement Agents for a
         brokerage commission, finder's fee or like payment in connection with
         the offering and sale of the Stock.

         (nn) Neither the Company nor its Subsidiary has sustained, since the
         date of the latest audited financial statements included in the Base
         Prospectus or the Registration Statement, or incorporated by reference
         therein, as the case may be, any material loss or interference with its
         business from fire, explosion, flood, terrorist act or other calamity,
         whether or not covered by insurance, or from any labor dispute or court
         or governmental action, order or decree, otherwise than as set forth in
         or contemplated by the Base Prospectus.

         (oo) Except as set forth in or as otherwise contemplated by the
         Registration Statement or, the Base Prospectus, subsequent to the
         respective dates as of which information is given in the Registration
         Statement or, the Base Prospectus, there has not been (i) any material
         adverse change, or any development that would reasonably be expected to
         result in a material adverse change, in the business, properties,
         management, financial condition or results of operations of the Company
         taken as a whole, (ii) any transaction which is material to the Company
         taken as a whole, (iii) any obligation, direct or contingent (including
         any off-balance sheet obligations), incurred by the Company outside the
         ordinary course of business, which is material to the Company taken as
         a whole, (iv) any change in the capital stock (other than the issuance
         of shares of Common Stock upon exercise of stock options and warrants
         disclosed as outstanding in the Registration Statement and the Base
         Prospectus, if any, and the grant of options under existing stock
         option plans

                                       15
<PAGE>

         described in the Registration Statement and the Base Prospectus) or
         outstanding indebtedness of the Company or (v) any dividend or
         distribution of any kind declared, paid or made on the capital stock of
         the Company.

         (pp) Any statistical and market-related data included in the
         Registration Statement, the Base Prospectus, the Prospectus Supplement
         or the Time of Sale Prospectus, if any, are based on or derived from
         sources that the Company believes to be reliable and accurate, and the
         Company has obtained the written consent to the use of such data from
         such sources to the extent required.

         (qq) The Stock is registered under the Exchange Act and is duly listed
         and admitted and authorized for trading, subject to official notice of
         issuance, on the American Stock Exchange ("AMEX") and the Company has
         taken no action designed to terminate, or likely to have the effect of
         terminating the registration of the Common Stock under the Exchange Act
         or delisting or suspending from trading the Common Stock from AMEX, nor
         has the Company received any information suggesting that the Commission
         or the National Association of Securities Dealers, Inc. ("NASD") is
         contemplating terminating or suspending such registration or listing.

         (rr) Neither the Company, its Subsidiary nor, to the Company's
         knowledge, any of the Company's or its Subsidiary's officers, directors
         or affiliates has taken or will take, directly or indirectly, any
         action designed or intended to stabilize or manipulate the price of any
         security of the Company, or which caused or resulted in, or which might
         in the future reasonably be expected to cause or result in,
         stabilization or manipulation of the price of any security of the
         Company.

         (ss) Neither the Company, its Subsidiary, nor any of the Company's or
         its Subsidiary's officers, directors or affiliates has offered, or
         caused any Placement Agent to offer, Stock to any person with the
         intent to influence unlawfully (i) a customer or supplier of the
         Company to alter the customer's or supplier's level or type of business
         with the Company or (ii) a trade journalist or publication to write or
         publish favorable information about the Company or any of their
         respective products or services.

         (tt) There are no affiliations with the NASD among the Company's
         officers, directors or, to the best of the knowledge of the Company,
         any five percent or greater stockholder of the Company, except as set
         forth in the Base Prospectus or otherwise disclosed in writing to the
         Placement Agents.

         (uu) The Company has provided the Placement Agents true, correct, and
         complete copies of all documentation pertaining to any extension of
         credit in the form of a personal loan made, directly or indirectly, by
         the Company to any director or executive officer of the Company, or to
         any family member or affiliate of any director or executive officer of
         the Company that is currently outstanding; and since December 31, 2003,
         the Company has not, directly or indirectly: (i) extended credit,
         arranged to extend credit, or renewed any extension of credit, in the
         form of a personal loan, to or for any director or executive officer of
         the Company, or to or for any family member or affiliate

                                       16
<PAGE>

         of any director or executive officer of the Company; or (ii) made any
         material modification, including any renewal thereof, to any term of
         any personal loan to any director or executive officer of the Company,
         or any family member or affiliate of any director or executive officer,
         which loan was outstanding on December 31, 2003, except as disclosed
         in the Base Prospectus or the Registration Statement.

         (vv) The Company has taken all necessary actions to ensure that, upon
         and at all times after the AMEX shall have approved the Stock for
         inclusion, it will be in compliance with all applicable corporate
         governance requirements set forth in the AMEX Rules that are then in
         effect and is actively taking steps to ensure that it will be in
         compliance with other applicable corporate governance requirements set
         forth in the AMEX Rules not currently in effect upon and all times
         after the effectiveness of such requirements.

         (ww) No approval of the stockholders of the Company under the rules and
         regulations of any trading market, and no approval of the stockholders
         of the Company thereunder is required for the Company to issue and
         deliver to the Purchasers the Stock.

         Any certificate signed by any officer of the Company and delivered to
the Placement Agents or counsel for the Placement Agents in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company, as to the matters covered thereby, to the Placement Agents and the
Purchasers.

3. THE CLOSING. The time and date of closing and delivery of the documents
required to be delivered to the Placement Agents pursuant to Section 6 hereof
shall be at 10:00 A.M., local time, on December 16, 2005 (the "CLOSING DATE") at
the office of DLA Piper Rudnick Gray Cary LLP located at 4365 Executive Drive,
Suite 1100, San Diego, CA 92101.

4. Further Agreements of the Company. The Company agrees with the Placement
Agents and the Purchasers:

         (a) (i) to make no further amendment or supplement prior to the Closing
         Date to the Registration Statement or any amendment or supplement to
         the Prospectus Supplement, without the prior written consent of the
         Representative, which consent shall not be unreasonably withheld; (ii)
         for so long as the delivery of a prospectus is required in connection
         with the offering or sale of the Stock, to advise the Representative
         promptly after it receives notice thereof, of the time when any
         amendment to the Registration Statement has been filed or becomes
         effective or any supplement to the Prospectus Supplement or any amended
         Prospectus Supplement has been filed and to furnish the Representative
         with copies thereof; (iii) to file promptly all reports and any
         definitive proxy or information statements required to be filed by the
         Company with the Commission and AMEX pursuant to Section 13(a), 15 or
         15(d) of the Exchange Act subsequent to the date of the Prospectus
         Supplement and for so long as the delivery of a prospectus is required
         in connection with the offering or sale of the Stock; (iv) to advise
         the Representative, promptly after it receives notices thereof, (x) of
         any request by the Commission to amend the Registration Statement or to
         amend or

                                       17
<PAGE>

         supplement the Prospectus Supplement or for additional information and
         (y) of the issuance by the Commission, of any stop order suspending the
         effectiveness of the Registration Statement or any post-effective
         amendment thereto or any order directed at any Incorporated Document or
         any amendment or supplement thereto or any order preventing or
         suspending the use of the Base Prospectus or the Prospectus Supplement
         or any amendment or supplement thereto, of the suspension of the
         qualification of the Stock for offering or sale in any jurisdiction, of
         the institution or threatening of any proceeding for any such purpose,
         or of any request by the Commission for the amending or supplementing
         of the Registration Statement or Prospectus Supplement or for
         additional information; and, (v) in the event of the issuance of any
         stop order or of any order preventing or suspending the use of the Base
         Prospectus or Prospectus Supplement or suspending any such
         qualification, promptly to use its reasonable best efforts to obtain
         the withdrawal of such order.

         (b) To comply with the Securities Act and the Exchange Act, and the
         Rules and Regulations thereunder, so as to permit the completion of the
         distribution of the Stock as contemplated in this Agreement and the
         Prospectus Supplement. If during the period in which a prospectus is
         required by law to be delivered by a Placement Agents or a dealer in
         connection with the distribution of Stock contemplated by the
         Prospectus Supplement, any event shall occur as a result of which, in
         the judgment of the Company or in the reasonable opinion of the
         Placement Agents or counsel for the Placement Agents, it becomes
         necessary to amend or supplement the Prospectus Supplement in order to
         make the statements therein, in the light of the circumstances existing
         at the time the Prospectus Supplement is delivered to a purchaser, not
         misleading, or, if it is necessary at any time to amend or supplement
         the Prospectus Supplement to comply with any law, the Company promptly
         will prepare and file with the Commission, and furnish at its own
         expense to the Representative and to dealers, an appropriate amendment
         to the Registration Statement or supplement to the Prospectus
         Supplement so that the Prospectus Supplement as so amended or
         supplemented will not, in the light of the circumstances when it is so
         delivered, be misleading, or so that the Prospectus Supplement will
         comply with such law. Before amending the Registration Statement or
         supplementing the Base Prospectus in connection with the Offering, the
         Company will furnish the Representative with a copy of such proposed
         amendment or supplement and will not file such amendment or supplement
         to which the Representative reasonably and timely objects.

         (c) To furnish promptly to the Representative and to counsel for the
         Representative a copy of the Registration Statement as originally filed
         with the Commission, and each amendment thereto filed with the
         Commission, including all consents and exhibits filed therewith.

         (d) To deliver promptly to the Representative such number of the
         following documents as the Representative shall reasonably request: (i)
         conformed copies of the Registration Statement as originally filed with
         the Commission and each amendment thereto (in each case excluding
         exhibits), (ii) the Base Prospectus, (iii) the Prospectus Supplement
         (not later than 10:00

                                       18
<PAGE>

         A.M., New York time, on the Business Day following the execution and
         delivery of this Agreement) and any amendment or supplement thereto
         (not later than 10:00 A.M., New York City time, on the Business Day
         following the date of such amendment or supplement); (iv) the Time of
         Sale Prospectus, if any, and (v) any document incorporated by reference
         in the Base Prospectus, the Time of Sale Prospectus, if any, or the
         Prospectus Supplement. The Company will pay the expenses of printing or
         other production of all documents relating to the Offering.

         (e) To make generally available to its stockholders and the
         Representative as soon as practicable, but in any event not later than
         eighteen months after the effective date of the Registration Statement
         (as defined in Rule 158(c) under the Securities Act), an earnings
         statement of the Company (which need not be audited) complying with
         Section 11(a) of the Securities Act and the Rules and Regulations
         (including, at the option of the Company, Rule 158).

         (f) To promptly take from time to time such actions as the
         Representative may reasonably request to qualify the Stock for offering
         and sale under the securities, or blue sky, laws of such jurisdictions
         (including without limitation any post-filing requirements) as the
         Representative may designate and to continue such qualifications in
         effect for so long as required for the distribution of the Stock, and
         the Company will pay the fee of the NASD in connection with its review
         of the Offering, if applicable. The Company shall not be obligated to
         qualify as a foreign corporation in any jurisdiction in which it is not
         so qualified or to file a general consent to service of process in any
         jurisdiction.

         (g) Not to directly or indirectly offer, sell, assign, transfer,
         pledge, contract to sell, or otherwise dispose of any shares of Common
         Stock or securities convertible into or exercisable or exchangeable for
         Common Stock for a period of 90 days from the date of the Prospectus
         Supplement without the prior written consent of the Representative,
         other than the Company's sale of the Stock and shares or options to
         purchase shares pursuant to currently existing stock plans, currently
         outstanding options, warrants or rights. The Company will cause each of
         its executive officers and directors to furnish to the Placement
         Agents, prior to the Closing Date, a letter, substantially in the form
         of Exhibit B attached hereto, pursuant to which each such person shall
         agree not to directly or indirectly offer, sell, assign, transfer,
         pledge, contract to sell, or otherwise dispose of any shares of Common
         Stock or securities convertible into or exercisable or exchangeable for
         Common Stock for a period of 90 days from the date of the Prospectus
         Supplement, without the prior written consent of the Representative. If
         (i) the Company issues an earnings release or material news or a
         material event relating to the Company occurs during the last 17 days
         of the lock-up period, or (ii) prior to the expiration of the lock-up
         period, the Company announces that it will release earnings results
         during the 16-day period beginning on the last day of the lock-up
         period, the restrictions imposed by this Section 4(g) shall continue to
         apply until the expiration of the 18-day period beginning on the
         issuance of the earnings release or the occurrence of the material news
         or material event.

                                       19
<PAGE>

         (h) Prior to the Closing Date, to furnish to the Placement Agents, as
         soon as they have been prepared, copies of any unaudited interim
         consolidated financial statements of the Company for any periods
         subsequent to the periods covered by the financial statements appearing
         or incorporated by reference in the Base Prospectus, the Prospectus
         Supplement, the Time of Sale Prospectus, if any, or the Registration
         Statement.

         (i) Prior to the Closing Date, not to issue any press release or other
         communication directly or indirectly or hold any press conference with
         respect to the Company, its condition, financial or otherwise, or
         earnings, business affairs or business prospects (except for routine
         oral marketing communications in the ordinary course of business and
         consistent with the past practices of the Company and of which the
         Representative is notified), without the prior written consent of the
         Representative, unless in the judgment of the Company and its counsel,
         and after notification to the Representative, such press release or
         communication is required by law. In such event, the Company shall
         consult with the Representative as to the contents of such press
         release.

         (j) To apply the net proceeds from the sale of the Stock as set forth
         in the Prospectus Supplement under the heading "USE OF PROCEEDS."

         (k) To comply in all material respects with all applicable securities
         and other applicable laws, rules and regulations, including, without
         limitation, the Sarbanes-Oxley Act, and use its best efforts to cause
         the Company's directors and officers, in their capacities as such, to
         comply with such laws, rules and regulations, including, without
         limitation, the provisions of the Sarbanes-Oxley Act.

         (l) To engage and maintain, at its expense, a registrar and transfer
         agent for the Stock.

         (m) To not take any action prior to the Closing Date which would
         require the Prospectus Supplement to be amended or supplemented
         pursuant to Section 4(b).

         (n) To supply the Representative with copies of all correspondence to
         and from, and all documents issued to and by, the Commission in
         connection with the registration of the Stock under the Securities Act.

         (o) The Company will use its best efforts to ensure that the Stock is
         quoted on the AMEX at the Closing Date.

         (p) To furnish to the Placement Agents a copy of each proposed free
         writing prospectus to be prepared by or on behalf of, used by, or
         referred to by the Company and not use or refer to any free writing
         prospectus to which the Representative reasonably objects.

         (q) Not to take any action that would result in any Placement Agent or
         the Company being required to file with the Commission pursuant to Rule
         433(d) under the Securities Act a free writing prospectus prepared by
         or on behalf of

                                       20
<PAGE>

         any Placement Agent that such Placement Agent otherwise would not have
         been required to file thereunder.

         (r) If the Time of Sale Prospectus, if any, is being used and any event
         shall occur or condition exist as a result of which it is necessary to
         amend or supplement the Time of Sale Prospectus in writing in order to
         make the statements therein, not misleading, or if, in the opinion of
         counsel to the Placement Agents, it is necessary to amend or supplement
         the Time of Sale Prospectus to comply with applicable law, forthwith to
         prepare, file with the Commission and furnish, at its own expense, to
         the Placement Agents upon request, either amendments or supplements to
         the Time of Sale Prospectus so that the statements in the Time of Sale
         Prospectus as so amended or supplemented will not, in light of the
         circumstances when the Time of Sale Prospectus is delivered to a
         prospective purchaser, be misleading or so that the Time of Sale
         Prospectus, as amended or supplemented, will comply with law.

5. PAYMENT OF EXPENSES. The Company agrees with the Placement Agents to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock to the Purchasers and any taxes payable in that
connection; (b) the costs incident to the Registration of the Stock under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, Base Prospectus and Prospectus
Supplement and any amendments and exhibits thereto or any document incorporated
by reference therein, and the costs of printing, reproducing and distributing,
this Agreement by mail, telex or other means of communication; (d) the fees and
expenses (including related fees and expenses of counsel for the Placement
Agents) incurred in connection with filings, if any, made with the NASD, if
applicable not to exceed $10,000; (e) any applicable listing or other similar
fees; (f) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 4(f) and of preparing,
printing and distributing Blue Sky Memoranda (including related fees and
expenses of counsel to the Placement Agents); (g) all fees and expenses of the
registrar and transfer agent of the Stock; (h) fifty percent (50%) of the fees
and expenses of the Placement Agents' legal counsel; and (i) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the
Company's counsel and the Company's independent accountants and the travel and
other expenses incurred by Company personnel in connection with any "roadshow"
including, without limitation, any expenses advanced by the Placement Agents on
the Company's behalf (which will be promptly reimbursed)).

6. CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENTS AND THE PURCHASERS, AND
THE SALE OF THE STOCK. The respective obligations of each Placement Agent and
the Purchasers, and the closing of the sale of the Stock hereunder are subject
to the accuracy, when made and on the Closing Date, of the representations and
warranties on the part of the Company and its Subsidiary contained herein, to
the accuracy of the statements of the Company and its Subsidiary made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and of its Subsidiary of their obligations hereunder, and to each of the
following additional terms and conditions:

                                       21
<PAGE>

         (a) No stop order suspending the effectiveness of the Registration
         Statement shall have been issued and no proceedings for that purpose
         shall have been initiated or threatened by the Commission, and any
         request for additional information on the part of the Commission (to be
         included in the Registration Statement, the Base Prospectus, the Time
         of Sale Prospectus, if any, or the Prospectus Supplement or otherwise)
         shall have been complied with to the reasonable satisfaction of the
         Representative. Any filings required to be made by the Company in
         accordance with Section 4(a) shall have been timely filed with the
         Commission.

         (b) None of the Placement Agents shall have discovered and disclosed to
         the Company on or prior to the Closing Date that the Registration
         Statement, the Base Prospectus, the Time of Sale Prospectus, if any, or
         the Prospectus Supplement or any amendment or supplement thereto
         contains an untrue statement of a fact which, in the opinion of counsel
         for the Placement Agents, is material or omits to state any fact which,
         in the opinion of such counsel, is material and is required to be
         stated therein or is necessary to make the statements therein not
         misleading.

         (c) All corporate proceedings and other legal matters incident to the
         authorization, form, execution, delivery and validity of each of this
         Agreement, the Stock, the Registration Statement, the Base Prospectus,
         the Time of Sale Prospectus, if any, and the Prospectus Supplement and
         all other legal matters relating to this Agreement and the transactions
         contemplated hereby shall be reasonably satisfactory in all material
         respects to counsel for the Placement Agents, and the Company shall
         have furnished to such counsel all documents and information that they
         may reasonably request to enable them to pass upon such matters.

         (d) The Placement Agents shall have received from each of (i) DLA Piper
         Rudnick Gray Cary US LLP, corporate counsel for the Company (ii) Hale
         Lane Peek Dennison and Howard, special counsel for the Company (iii)
         DLA Piper Rudnick Gray Cary US LLP, intellectual property counsel for
         the Company, such counsel's written opinion, addressed to the Placement
         Agents and the Purchasers and dated as of the Closing Date, in form and
         substance reasonably satisfactory to the Placement Agents as set forth
         in Exhibits C-1, C-2 and C-3 attached hereto, respectively.

                  DLA Piper Rudnick Gray Cary US LLP shall also have furnished
         to the Placement Agents a written statement, addressed to the Placement
         Agents and the Purchasers and dated the Closing Date, in form and
         substance satisfactory to the Representative, to the effect that (x)
         such counsel has acted as counsel to the Company in connection with the
         preparation of the Registration Statement, (y) based on such counsel's
         examination of the Registration Statement and such counsel's
         investigations made in connection with the preparation of the
         Registration Statement and conferences with certain officers and
         employees of and with auditors for and counsel to the Company, such
         counsel has no reason to believe that (I) the Registration Statement,
         as of its effective date, contained any untrue statement of a material
         fact or omitted to state any material fact required to be stated
         therein or

                                       22
<PAGE>

         necessary in order to make the statements therein not misleading, or
         that the Base Prospectus, the Time of Sale Prospectus, if any, or the
         Prospectus Supplement contains any untrue statement of a material fact
         or omits to state any material fact required to be stated therein or
         necessary in order to make the statements therein, in light of the
         circumstances under which they were made, not misleading or (II) any
         document incorporated by reference in the Base Prospectus, the Time of
         Sale Prospectus, if any, or the Prospectus Supplement or any further
         amendment or supplement to any such incorporated document made by the
         Company prior to the Closing Date, when they became effective or were
         filed with the Commission, as the case may be, contained, in the case
         of a registration statement which became effective under the Securities
         Act, any untrue statement of a material fact or omitted to state any
         material fact required to be stated therein or necessary in order to
         make the statements therein not misleading, or, in the case of other
         documents which were filed under the Exchange Act with the Commission,
         any untrue statement of a material fact or omitted to state any
         material fact necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading;
         it being understood that such counsel need express no opinion as to the
         financial statements or other financial data contained in the
         Registration Statement, the Base Prospectus, the Time of Sale
         Prospectus, if any, or the Prospectus Supplement.

         (e) The Placement Agents shall have received from Brown Raysman
         Millstein Felder & Steiner LLP, such opinion or opinions, dated the
         Closing Date and addressed to the Placement Agents, with respect to the
         issuance and sale of the Stock, the Registration Statement, the Base
         Prospectus, the Time of Sale Prospectus, if any, the Prospectus
         Supplement (together with any supplement thereto) and other related
         matters as the Representative may reasonably require, and the Company
         shall have furnished to such counsel such documents as they request for
         the purpose of enabling them to pass upon such matters.

         (f) The Company shall have furnished to the Placement Agents and the
         Purchasers a certificate, dated as of the Closing Date, executed by its
         Chief Executive Officer and its Chief Financial Officer on behalf of
         the Company stating that (i) such officers have carefully examined the
         Registration Statement, the Base Prospectus, the Time of Sale
         Prospectus, if any, and the Prospectus Supplement and, in their
         opinion, the Registration Statement (including the Base Prospectus) as
         of its effective date, the Time of Sale Prospectus, if any, as of each
         such effective date and the Prospectus Supplement, as of each such
         effective date, did not include any untrue statement of a material fact
         and did not omit to state a material fact required to be stated therein
         or necessary to make the statements therein not misleading, (ii) since
         the effective date of the Registration Statement no event has occurred
         which should have been set forth in a supplement or amendment to the
         Registration Statement, the Base Prospectus, the Time of Sale
         Prospectus, if any, or the Prospectus Supplement and that is not
         already included in such document by reason of materials incorporated
         by reference therein, (iii) to the best of their knowledge after
         reasonable investigation, as of the Closing Date, the representations
         and warranties of the Company and its Subsidiary in this

                                       23
<PAGE>

         Agreement are true and correct and the Company and its Subsidiary have
         complied with all agreements and covenants contained in this Agreement
         and satisfied all conditions on its part to be performed or satisfied
         hereunder at or prior to the Closing Date, (iv) subsequent to the date
         of the most recent financial statements included or incorporated by
         reference in the Base Prospectus, there has been no change in the
         financial position or results of operation of the Company and its
         Subsidiary that could have a Material Adverse Effect, or any material
         change, or any material development including a prospective change, in
         or affecting the condition (financial or otherwise), results of
         operations, business or prospects of the Company taken as a whole,
         except as set forth in, or contemplated by, the Base Prospectus, and
         (v) the Registration Statement became effective on June 17, 2005, and
         to their knowledge, as of the Closing Date (I) no stop order suspending
         the effectiveness of the Registration Statement has been issued and no
         proceedings for that purpose have been commenced or are pending before
         or are contemplated by the Commission and (II) no action has been taken
         by any governmental agency, body or official, and no injunction,
         restraining order or order of any nature by any federal or state court
         has been issued, which would prevent the issuance of the Stock.

         (g) At the Execution Time, the Placement Agents shall have received
         from Cacciamatta Accountancy Corp. a letter, addressed to the Placement
         Agents and dated such date, in form and substance satisfactory to the
         Placement Agents (i) confirming that they are independent registered
         public accountants with respect to the Company within the meaning of
         the Securities Act and the Rules and Regulations and (ii) stating the
         conclusions and findings of such firm with respect to the financial
         statements and certain financial information contained or incorporated
         by reference in the Base Prospectus, the Time of Sale Prospectus, if
         any, and the Prospectus Supplement.

         (h) On the Closing Date, the Placement Agents shall have received a
         letter (the "BRING-DOWN LETTER") from Cacciamatta Accountancy Corp.
         addressed to the Placement Agents and dated the Closing Date
         confirming, as of the date of the bring-down letter (or, with respect
         to matters involving changes or developments since the respective dates
         as of which specified financial information is given in the Base
         Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
         Supplement as of a date not more than three Business Days prior to the
         date of the bring-down letter), the conclusions and findings of such
         firm with respect to the financial information and other matters
         covered by its letter delivered to the Placement Agents concurrently
         with the execution of this Agreement pursuant to Section 6(g).

         (i) (i) Neither the Company nor its Subsidiary shall have sustained
         since the date of the latest audited financial statements included or
         incorporated by reference in the Base Prospectus or the Prospectus
         Supplement any loss or interference with its business from fire,
         explosion, flood, terrorist act or other calamity, whether or not
         covered by insurance, or from any labor dispute or court or
         governmental action, order or decree, otherwise than as set forth in or
         contemplated by the Base Prospectus, and (ii) except for the exercise
         of stock options in the ordinary course of the Company's business,
         since such date

                                       24
<PAGE>

         there shall not have been any change in the capital stock or long-term
         debt of the Company or its Subsidiary or any change, or any development
         involving a prospective change, in or affecting the business, general
         affairs, management, financial position, stockholders' equity, results
         of operations or prospects of the Company or its Subsidiary, otherwise
         than as set forth in or contemplated by the Base Prospectus, the effect
         of which, in any such case described in clause (i) or (ii), is, in the
         judgment of the Representative, so material and adverse as to make it
         impracticable or inadvisable to proceed with the sale or delivery of
         the Stock on the terms and in the manner contemplated by the Base
         Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
         Supplement.

         (j) The Stock is registered under the Exchange Act and, as of the
         Closing Date, the Stock shall be listed and admitted and authorized for
         trading on the AMEX and satisfactory evidence of such actions shall
         have been provided to the Representative. The Company shall have taken
         no action designed to, or likely to have the effect of terminating the
         registration of the Stock under the Exchange Act or delisting or
         suspending from trading the Stock from AMEX, nor has the Company
         received any information suggesting that the Commission or the AMEX is
         contemplating terminating such registration or listing.

         (k) At the Execution Time, the Company shall have furnished to the
         Representative a letter substantially in the form of Exhibit B hereto
         from each executive officer and director of the Company.

         (l) Subsequent to the execution and delivery of this Agreement, there
         shall not have occurred any of the following: (i) trading in securities
         generally on the New York Stock Exchange, the Nasdaq National Market or
         the American Stock Exchange or in the over-the-counter market, or
         trading in any securities of the Company on any exchange or in the
         over-the-counter market, shall have been suspended or minimum or
         maximum prices or maximum ranges for prices shall have been established
         on any such exchange or such market by the Commission, by such exchange
         or by any other regulatory body or governmental authority having
         jurisdiction, (ii) a banking moratorium shall have been declared by
         Federal or state authorities or a material disruption has occurred in
         commercial banking or securities settlement or clearance services in
         the United States, (iii) the United States shall have become engaged in
         hostilities, or the subject of an act of terrorism, there shall have
         been an escalation in hostilities involving the United States or there
         shall have been a declaration of a national emergency or war by the
         United States or (iv) there shall have occurred any other calamity or
         crisis or any change in general economic, political or financial
         conditions in the United States or elsewhere, if the effect of any such
         event in clause (iii) or (iv) makes it, in the sole judgment of the
         Representative, impracticable or inadvisable to proceed with the sale
         or delivery of the Stock on the terms and in the manner contemplated by
         the Base Prospectus and the Prospectus Supplement.

         (m) No action shall have been taken and no statute, rule, regulation or
         order shall have been enacted, adopted or issued by any governmental
         agency or

                                       25
<PAGE>

         body which would, as of the Closing Date, prevent the issuance or sale
         of the Stock or materially and adversely affect or potentially
         materially and adversely affect the business or operations of the
         Company; and no injunction, restraining order or order of any other
         nature by any federal or state court of competent jurisdiction shall
         have been issued as of the Closing Date which would prevent the
         issuance or sale of the Stock or materially and adversely affect or
         potentially materially and adversely affect the business or operations
         of the Company.

         (n) The Company shall have prepared and filed with the Commission a
         Current Report on Form 8-K with respect to the Offering, including as
         an exhibit thereto this Agreement and any other documents relating
         thereto which are required to be filed therewith.

         (o) The Company shall have entered into Subscription Agreements with
         each of the Purchasers and such agreements shall be in full force and
         effect.

         (p) Prior to the Closing Date, the Company shall have furnished to the
         Placement Agents such further information, certificates and documents
         as the Representative may reasonably request.

         All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Placement Agents.

7. INDEMNIFICATION AND CONTRIBUTION.

         (a) The Company shall indemnify and hold harmless the Placement Agents,
         their respective officers, employees, representatives and agents and
         each person, if any, who controls such Placement Agents within the
         meaning of the Securities Act (collectively the "PLACEMENT AGENT
         INDEMNIFIED PARTIES" and each a "PLACEMENT AGENT INDEMNIFIED PARTY")
         against any loss, claim, damage or liability, joint or several, or any
         action in respect thereof, to which that Placement Agent Indemnified
         Party may become subject, under the Securities Act or otherwise,
         insofar as such loss, claim, damage, liability or action arises out of
         or is based upon (i) any untrue statement or alleged untrue statement
         of a material fact contained in the Base Prospectus, the Registration
         Statement, the Time of Sale Prospectus, if any, or the Prospectus
         Supplement or in any amendment or supplement thereto, (ii) the omission
         or alleged omission to state in the Base Prospectus, the Registration
         Statement, the Time of Sale Prospectus, if any, or the Prospectus
         Supplement or in any amendment or supplement thereto a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, (iii) any breach of the representations and
         warranties of the Company contained herein or (iv) any act or failure
         to act, or any alleged act or failure to act, by any Placement Agent in
         connection with, or relating in any manner to, the Stock or the
         offering contemplated hereby, and which is included as part of or
         referred to in any loss, claim, damage, liability or action arising out
         of or based upon matters covered by clause (i), (ii) or (iii) above;
         (provided that the Company shall not be liable in the case of any
         matter covered by this clause (iv) to the extent that

                                       26
<PAGE>

         it is determined in a final judgment by a court of competent
         jurisdiction that such loss, claim, damage, liability or action
         resulted directly from any such act or failure to act undertaken or
         omitted to be taken by such Placement Agent through its gross
         negligence or willful misconduct) and shall reimburse each Placement
         Agent Indemnified Party promptly upon demand for any legal or other
         expenses reasonably incurred by that Placement Agent Indemnified Party
         in connection with investigating or preparing to defend or defending
         against or appearing as a third party witness in connection with any
         such loss, claim, damage, liability or action as such expenses are
         incurred; provided, however, that the Company shall not be liable in
         any such case to the extent that any such loss, claim, damage,
         liability or action arises out of or is based upon an untrue statement
         or alleged untrue statement in or omission or alleged omission from the
         Base Prospectus, the Registration Statement, the Time of Sale
         Prospectus, if any, or the Prospectus Supplement or any such amendment
         or supplement in reliance upon and in conformity with written
         information furnished to the Company by or on behalf of any Placement
         Agent through the Representative specifically for use therein, which
         information the parties hereto agree is limited to the Placement
         Agents' Information (as defined in Section 16). This indemnity
         agreement is not exclusive and will be in addition to any liability,
         which the Company might otherwise have and shall not limit any rights
         or remedies which may otherwise be available at law or in equity to
         each Placement Agent Indemnified Party.

         (b) Each Placement Agent, severally and not jointly, shall indemnify
         and hold harmless the Company its officers, employees, representatives
         and agents, each of its directors and each person, if any, who controls
         the Company within the meaning of the Securities Act (collectively the
         "COMPANY INDEMNIFIED PARTIES" and each a "COMPANY INDEMNIFIED PARTY")
         against any loss, claim, damage or liability, joint or several, or any
         action in respect thereof, to which the Company Indemnified Parties may
         become subject, under the Securities Act or otherwise, insofar as such
         loss, claim, damage, liability or action arises out of or is based upon
         (i) any untrue statement or alleged untrue statement of a material fact
         contained in the Base Prospectus, the Registration Statement, the Time
         of Sale Prospectus, if any, or the Prospectus Supplement or in any
         amendment or supplement thereto or (ii) the omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading, but in each
         case only to the extent that the untrue statement or alleged untrue
         statement or omission or alleged omission was made in reliance upon and
         in conformity with written information furnished to the Company by or
         on behalf of that Placement Agent through the Representative
         specifically for use therein, and shall reimburse the Company
         Indemnified Parties for any legal or other expenses reasonably incurred
         by such parties in connection with investigating or preparing to defend
         or defending against or appearing as third party witness in connection
         with any such loss, claim, damage, liability or action as such expenses
         are incurred; provided that the parties hereto hereby agree that such
         written information provided by the Placement Agents consist solely of
         the Placement Agents Information. This indemnity agreement is not
         exclusive and will be in addition to any liability, which each of the
         Placement Agents and the Purchasers might otherwise have and shall not
         limit any rights

                                       27
<PAGE>

         or remedies which may otherwise be available at law or in equity to the
         Company Indemnified Parties. Notwithstanding the provisions of this
         Section 7(b), in no event shall any indemnity by any Placement Agent
         under this Section 7(b) exceed the total compensation received by such
         Placement Agent in accordance with Section 1(e).

         (c) Promptly after receipt by an indemnified party under this Section 7
         of notice of any claim or the commencement of any action, the
         indemnified party shall, if a claim in respect thereof is to be made
         against the indemnifying party under this Section 7, notify the
         indemnifying party in writing of the claim or the commencement of that
         action; provided, however, that the failure to notify the indemnifying
         party shall not relieve it from any liability which it may have under
         this Section 7 except to the extent it has been materially prejudiced
         by such failure; and, provided, further, that the failure to notify the
         indemnifying party shall not relieve it from any liability which it may
         have to an indemnified party otherwise than under this Section 7. If
         any such claim or action shall be brought against an indemnified party,
         and it shall notify the indemnifying party thereof, the indemnifying
         party shall be entitled to participate therein and, to the extent that
         it wishes, jointly with any other similarly notified indemnifying
         party, to assume the defense thereof with counsel reasonably
         satisfactory to the indemnified party. After notice from the
         indemnifying party to the indemnified party of its election to assume
         the defense of such claim or action, the indemnifying party shall not
         be liable to the indemnified party under this Section 7 for any legal
         or other expenses subsequently incurred by the indemnified party in
         connection with the defense thereof other than reasonable costs of
         investigation; provided, however, that any indemnified party shall have
         the right to employ separate counsel in any such action and to
         participate in the defense thereof but the fees and expenses of such
         counsel shall be at the expense of such indemnified party unless (i)
         the employment thereof has been specifically authorized by the
         indemnifying party in writing, (ii) such indemnified party shall have
         been advised by such counsel that there may be one or more legal
         defenses available to it which are different from or additional to
         those available to the indemnifying party and in the reasonable
         judgment of such counsel it is advisable for such indemnified party to
         employ separate counsel or (iii) the indemnifying party has failed to
         assume the defense of such action in accordance with the terms hereof
         and employ counsel reasonably satisfactory to the indemnified party, in
         which case, if such indemnified party notifies the indemnifying party
         in writing that it elects to employ separate counsel at the expense of
         the indemnifying party, the indemnifying party shall not have the right
         to assume the defense of such action on behalf of such indemnified
         party, it being understood, however, that the indemnifying party shall
         not, in connection with any one such action or separate but
         substantially similar or related actions in the same jurisdiction
         arising out of the same general allegations or circumstances, be liable
         for the reasonable fees and expenses of more than one separate firm of
         attorneys at any time for all such indemnified parties, which firm
         shall be designated in writing by the Representative, if the
         indemnified parties under this Section 7 consist of any Placement Agent
         Indemnified Party, or by the Company if the indemnified parties under
         this Section 7 consist of any Company Indemnified Parties. Each
         indemnified party, as a condition of the indemnity agreements

                                       28
<PAGE>

         contained in Sections 7(a) and 7(b) shall use all reasonable efforts to
         cooperate with the indemnifying party in the defense of any such action
         or claim. Subject to the provisions of Section 7(d) below, no
         indemnifying party shall be liable for any settlement, compromise or
         consent to the entry of judgment in connection with any such action
         effected without its written consent (which consent shall not be
         unreasonably withheld), but if settled with its written consent or if
         there be a final judgment for the plaintiff in any such action (other
         than a judgment entered with the consent of such indemnified party),
         the indemnifying party agrees to indemnify and hold harmless any
         indemnified party from and against any loss or liability by reason of
         such settlement or judgment.

         (d) If at any time an indemnified party shall have requested that an
         indemnifying party reimburse the indemnified party for fees and
         expenses of counsel, such indemnifying party agrees that it shall be
         liable for any settlement of the nature contemplated by this Section 7
         effected without its written consent if (i) such settlement is entered
         into more than 45 days after receipt by such indemnifying party of the
         request for reimbursement, (ii) such indemnifying party shall have
         received notice of the terms of such settlement at least 30 days prior
         to such settlement being entered into and (iii) such indemnifying party
         shall not have reimbursed such indemnified party in accordance with
         such request prior to the date of such settlement.

         (e) If the indemnification provided for in this Section 7 is
         unavailable or insufficient to hold harmless an indemnified party under
         Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
         indemnifying such indemnified party, contribute to the amount paid or
         payable by such indemnified party as a result of such loss, claim,
         damage or liability, or action in respect thereof, (i) in such
         proportion as shall be appropriate to reflect the relative benefits
         received by the Company on the one hand and the Placement Agents on the
         other from the offering of the Stock or (ii) if the allocation provided
         by clause (i) above is not permitted by applicable law, in such
         proportion as is appropriate to reflect not only the relative benefits
         referred to in clause (i) above but also the relative fault of the
         Company on the one hand and the Placement Agents on the other with
         respect to the statements or omissions which resulted in such loss,
         claim, damage or liability, or action in respect thereof, as well as
         any other relevant equitable considerations. The relative benefits
         received by the Company on the one hand and the Placement Agents on the
         other with respect to such offering shall be deemed to be in the same
         proportion as the total net proceeds from the offering of the Stock
         purchased under this Agreement (before deducting expenses) received by
         the Company bears to the total compensation received by the Placement
         Agents with respect to the Stock purchased under this Agreement. The
         relative fault shall be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a material fact or
         the omission or alleged omission to state a material fact relates to
         information supplied by the Company on the one hand or the Placement
         Agents on the other, the intent of the parties and their relative
         knowledge, access to information and opportunity to correct or prevent
         such untrue statement or omission; provided that the parties hereto
         agree that the written information furnished to the Company by the
         Placement

                                       29
<PAGE>

         Agents for use in the Prospectus Supplement consists solely of the
         Placement Agents' Information. The Company and the Placement Agents
         agree that it would not be just and equitable if contributions pursuant
         to this Section 7(e) were to be determined by pro rata allocation or by
         any other method of allocation which does not take into account the
         equitable considerations referred to herein. The amount paid or payable
         by an indemnified party as a result of the loss, claim, damage or
         liability, or action in respect thereof, referred to above in this
         Section 7(e) shall be deemed to include, for purposes of this Section
         7(e), any legal or other expenses reasonably incurred by such
         indemnified party in connection with investigating or defending any
         such action or claim. Notwithstanding the provisions of this Section
         7(e), the Placement Agents shall not be required to contribute any
         amount in excess of the total compensation received by such Placement
         Agent in accordance with Section 1(e) less the amount of any damages
         which such Placement Agent has otherwise paid or become liable to pay
         by reason of any untrue or alleged untrue statement or omission or
         alleged omission. No person guilty of fraudulent misrepresentation
         (within the meaning of Section 11(f) of the Securities Act) shall be
         entitled to contribution from any person who was not guilty of such
         fraudulent misrepresentation.

         (f) The Placement Agents' obligations to contribute as provided in this
         Section 7(f) are several in proportion to the total compensation
         received by each of the Placement Agents in accordance with Section
         1(e) and not joint.

8. TERMINATION. The obligations of the Placement Agents and the Purchasers
hereunder and under the Subscription Agreements may be terminated by the
Representative, in its absolute discretion by notice given to the Company prior
to delivery (including electronic delivery) of and payment for the Stock if,
prior to that time, any of the events described in Sections 6(i) or 6(l) have
occurred or if the Purchasers shall decline to purchase the Stock for any reason
permitted under this Agreement or the Subscription Agreements.

9. REIMBURSEMENT OF PLACEMENT AGENTS' EXPENSES. If the sale of the Stock
provided for herein is not consummated because any condition to the obligations
of the Placement Agents and the Purchasers set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 8 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Placement Agents, the Company will reimburse the Placement Agents
upon demand for all out-of-pocket expenses (including fees and disbursements of
counsel and any expenses advanced by the Placement Agents on the Company's
behalf) that shall have been incurred by the Placement Agents in connection with
this Agreement and the proposed purchase and sale of the Stock and, upon demand,
the Company shall pay the full amount thereof to Representative.

10. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Placement Agents, the
Purchasers, the Company, and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable

                                       30
<PAGE>

right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Placement Agent Indemnified Parties, and
the indemnities of the Placement Agents shall also be for the benefit of the
Company Indemnified Parties.

11. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees that:

         (a) each Placement Agent's responsibility to the Company is solely
         contractual in nature, the Placement Agents have been retained solely
         to act as placement agents in connection with the sale of the Stock and
         no fiduciary, advisory or agency relationship between the Company and
         the Placement Agents has been created in respect of any of the
         transactions contemplated by this Agreement, irrespective of whether
         any of the Placements Agents has advised or is advising the Company on
         other matters;

         (b) the price of the Stock set forth in this Agreement was established
         by the Company following discussions and arms-length negotiations with
         the Representative, the Purchasers, and the Company is capable of
         evaluating and understanding, and understands and accepts, the terms,
         risks and conditions of the transactions contemplated by this
         Agreement;

         (c) the Company has been advised that the Placement Agents and their
         affiliates are engaged in a broad range of transactions which may
         involve interests that differ from those of the Company and that the
         Placement Agents have no obligation to disclose such interests and
         transactions to the Company by virtue of any fiduciary, advisory or
         agency relationship; and

         (d) the Company waives, to the fullest extent permitted by law, any
         claims it may have against the Placement Agents for breach of fiduciary
         duty or alleged breach of fiduciary duty and agrees that the Placement
         Agents shall have no liability (whether direct or indirect) to the
         Company in respect of such a fiduciary duty claim or to any person
         asserting a fiduciary duty claim on behalf of or in right of the
         Company, including stockholders, employees or creditors of the Company.

12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, its Subsidiary and the Placement Agents, as set forth
in this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Placement Agents, the Company, the Purchasers or any person
controlling any of them and shall survive delivery of and payment for the Stock.

                                       31
<PAGE>

13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:

         (a) if to the Placement Agents, shall be delivered or sent by mail,
         telex or facsimile transmission to SG Cowen & Co., LLC, 1221 Avenue of
         the Americas, New York, New York 10020, Attention: Veronica Iuliano
         (E-mail) (Fax: 212-278-7995), with a copy to: Brown Raysman Millstein
         Felder & Steiner LLP, 900 Third Avenue, New York, New York 10022,
         Attention: Stuart Bressman, Esq. (Fax: 212-895-2900).

         (b) if to the Company shall be delivered or sent by mail, telex or
         facsimile transmission to Halozyme Therapeutics, Inc., 11588 Sorrento
         Valley Road, Suite 17, San Diego, CA 92121, Attention: David A. Ramsay
         (Fax: (858) 259-2539, with a copy to: DLA Piper Rudnick Gray Cary US
         LLP, 4365 Executive Drive, Suite 1100, San Diego, CA 92121, Attention:
         Douglas J. Rein (Fax: (858) 677-1477).

14. DEFINITIONS OF CERTAIN TERMS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.

         "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, a
legal holiday, a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or any day on which the
Nasdaq National Market is not open for trading.

         "EFFECTIVE DATE" shall mean each date and time that the Registration
Statement (and any post-effective amendment or amendments thereto) became or
becomes effective.

         "EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.

         "INTERFERENCE PROCEEDING" shall have the meaning set forth in 35 U.S.C.
Section 135.

         "TO THE COMPANY'S KNOWLEDGE" and words of similar import shall mean
that which the Company or its Subsidiary knows or should have known using the
exercise of reasonable due diligence.

15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

16. PLACEMENT AGENTS' INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agents' Information
consists solely of the statements concerning the Placement Agents contained in
the third paragraph under the heading "Plan of Distribution" in the Prospectus
Supplement.

17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or

                                       32
<PAGE>

unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.

18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Placement Agents.

19. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

20. CONSENT TO ACT AS REPRESENTATIVE. Rodman & Renshaw, LLC ("RR") and Roth
Capital Partners, LLC ("ROTH") each consent and agree that SG Cowen & Co., LLC
("SG COWEN") will act as Representative of the Placement Agents under this
Agreement and with respect to the sale of the Stock. Accordingly, each of RR and
Roth authorizes SG Cowen to manage the Offering and the sale of the Stock and to
take such action in connection therewith as SG Cowen in its sole discretion
deems appropriate or desirable, consistent with the provisions of each Agreement
Among Underwriters previously entered into between SG Cowen and RR, and SG Cowen
and Roth, respectively, taking into account that the Offering of the Stock will
be in the form of a best efforts placement and not a firm commitment
underwriting.

                                       33
<PAGE>

         If the foregoing is in accordance with your understanding of the
agreement between the Company and the Placement Agents, kindly indicate your
acceptance in the space provided for that purpose below.

                                                     Very truly yours,

                                                     HALOZYME THERAPEUTICS, INC.

                                                     By: /s/ Jonathan Lim
                                                         --------------------
                                                          Name: Jonathan Lim
                                                          Title: CEO

Accepted as of
the date first above written:

SG COWEN & CO., LLC

By: /s/ Richard E. Gormley
    ----------------------
     Name: Richard E. Gormley
     Title: Managing Director

RODMAN & RENSHAW, LLC

By: /s/ Edward Rubin
    ----------------------
     Name: Edward Rubin
     Title: Managing Director

ROTH CAPITAL PARTNERS, LLC

By: /s/ Theodore D. Roth
    ----------------------
     Name: Theodore D. Roth
     Title: Managing Director

                                       34
<PAGE>

                                   SCHEDULE 1

                                PLACEMENT AGENTS

SG Cowen & Co., LLC
Rodman & Renshaw, LLC
Roth Capital Partners, LLC

                                       35
<PAGE>

                                    EXHIBIT A

                         FORM OF SUBSCRIPTION AGREEMENT

                                       36
<PAGE>

                                    EXHIBIT B

                            FORM OF LOCK-UP AGREEMENT

                                       37
<PAGE>

                                   EXHIBIT C-1

               LEGAL OPINION OF DLA PIPER RUDNICK GRAY CARY US LLP

                                       38
<PAGE>

                                   EXHIBIT C-2

               LEGAL OPINION OF HALE LANE PEEK DENNISON AND HOWARD

                                       39
<PAGE>

                                   EXHIBIT C-3

               LEGAL OPINION OF DLA PIPER RUDNICK GRAY CARY US LLP

                                       40

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