Common use of The Placement Clause in Contracts

The Placement. The Placement is expected to consist of a sale of a minimum of $4.0 million (the “Minimum Amount”) and up to $30.0 million (the “Maximum Amount”) of the Company’s Securities, which may be conducted in one or more closings (each a “Closing”). The initial closing (“Initial Closing”) will not occur until the Minium Amount has been received in escrow. Additional closings (each an “Additional Closing”) may occur to achieve the Maximum Amount; provided, however, that the final closing of the Placement shall not occur later than March 31, 2025, or such earlier date agreed to by the Company and Aegis, in writing (the “Final Closing”), and provided, further, that (b) the pricing of any placement conducted as an Additional Closing shall be the higher of (i) the highest Per Unit Purchase Price for any prior Closing or (ii) the Nasdaq Minimum Price applicable for the date of any such Additional Closing. Aegis will act as placement agent for the Placement subject to, among other matters referred to herein and additional customary conditions, completion of Aegis’s due diligence examination of the Company and its affiliates, listing approval by the Nasdaq Capital Market (“Exchange”) of the Securities to be issued, and the execution of a definitive Securities Purchase Agreement in connection with the Placement (the “Securities Purchase Agreement”). The actual size of the Placement, the precise number of Securities to be offered by the Company and the offering price will be the subject of continuing negotiations between the Company and the investors thereto. In connection with the entry into the Securities Purchase Agreement, the Company (i) will meet with Aegis and its representatives to discuss such due diligence matters and to provide such documents as Aegis may require; (ii) will not file with the Commission any document regarding the Placement without the prior approval of Aegis and its counsel; (iii) will deliver to Aegis and the investors in the Placement such legal and accounting opinions and letters (including, without limitation, accounting comfort letters, legal opinions, negative assurance letters, good standing certificates and officers’ and secretary certificates) as Aegis may require, all in form and substance acceptable to Aegis and (iv) will ensure that Aegis is a third party beneficiary of all representations, warranties, covenants, closing conditions and deliverables in connection with the Placement. If at any time prior to the completion of the offer and sale of the Securities an event occurs that would cause the Transaction Documents (as supplemented or amended) to contain an untrue statement of a material fact or to 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 Company will notify Aegis immediately of such event and Aegis will suspend solicitations of the prospective purchasers of the Securities until such time as the Company shall prepare a supplement or amendment to the Transaction Documents that corrects such statement or omission.

The Placement. A. The Units will be offered on a Two Hundred Fifty Thousand (250,000) Unit minimum (the "Minimum") or none to Two Million (2,000,000) Unit maximum (the "Maximum") "best efforts" basis for the Offering Period. B. The Units will be offered by the Company through the Agent, by means of offering materials, (the "Offering Materials") to be approved by the Company, which shall include (i) the Subscription Agreement, (ii) the Company's December 31, 1996 Form 10-KSB, (iii) the Company's March 31, 1997 Form 10-QSB, (iv) the Company's June 30, 1997 Form 10-QSB, and (v) the Company's February 19, 1997 Form 8-K. Payment for the Units shall be made by check or wire transfer as more fully described in the Subscription Agreement. The Placement is expected will be effected pursuant to consist an exemption from the registration provisions of a sale Sections 4(2) of a minimum Regulation D promulgated under the Securities Act of $4.0 million 1933 (the “Minimum Amount”) and up to $30.0 million (the “Maximum Amount”) of the Company’s Securities, which may be conducted in one or more closings (each a “Closing”"Securities Act"). The initial closing Units will be sold only to "Accredited Investors" within the meaning of Rule 501 of Regulation D of the Securities Act (“Initial Closing”"Accredited Investors"). C. All funds received from subscriptions will be promptly transmitted to a special bank escrow account at The Chase Manhattan Bank (the "Escrow Agent") will not occur until pursuant to SEC Rule 15c2-4 promulgated under the Minium Amount Securities and Exchange Act of 1934 (the "Exchange Act"), and further pursuant to that certain August 18, 1997 Escrow Agreement by and between the Agent and the Escrow Agent, a copy of which has been received provided to the Company by the Agent. In the event that less than the Minimum number of Units are subscribed for during the Offering Period and the Offering Period is not extended, all funds will be promptly returned in escrowfull to subscribers without deduction therefrom or interest thereon. Additional closings (each an “Additional Closing”) may occur to achieve In the Maximum Amount; providedevent, however, that the final closing Minimum number of Units are subscribed and paid for, the Placement shall not occur later than March 31funds therefrom will be forwarded to the Company, 2025against delivery of both the Shares and Warrant certificates comprising the Units as soon as the funds received from such subscriptions have cleared the banking system in the normal course of business, or such earlier date agreed to by the Company and Aegis, in writing (the “Final Closing”), and provided, further, that (b) the pricing of any placement conducted as an Additional Closing shall be the higher net of (i) 10% commissions due to the highest Per Unit Purchase Price for any prior Closing or Agent and (ii) a two percent (2%) non-accountable expense allowance to cover the Nasdaq Minimum Price applicable for the date of any such Additional Closing. Aegis will act as placement agent for the Placement subject toAgent's legal, among other matters referred to herein and additional customary conditions, completion of Aegis’s due diligence examination of the Company and its affiliates, listing approval by the Nasdaq Capital Market (“Exchange”) of the Securities to be issued, and the execution of a definitive Securities Purchase Agreement in connection with the Placement (the “Securities Purchase Agreement”). The actual size of the Placement, the precise number of Securities to be offered by the Company and the offering price will be the subject of continuing negotiations between the Company and the investors thereto. In connection with the entry into the Securities Purchase Agreement, the Company (i) will meet with Aegis and its representatives to discuss such due diligence matters and to provide such documents as Aegis may require; (ii) will not file with the Commission any document regarding the Placement without the prior approval of Aegis and its counsel; (iii) will deliver to Aegis and the investors in the Placement such legal and accounting opinions and letters (including, without limitation, accounting comfort letters, legal opinions, negative assurance letters, good standing certificates and officers’ and secretary certificates) as Aegis may require, all in form and substance acceptable to Aegis and (iv) will ensure that Aegis is a third party beneficiary of all representations, warranties, covenants, closing conditions and deliverables selling expenses in connection with the Placement, and (iii) any escrow fees or expenses payable by the Company. If at any time prior to the completion of the offer and sale of the Securities an event occurs that would cause the Transaction Documents (as supplemented or amended) to contain an untrue statement of a material fact or to 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 misleadingIn addition, the Company will notify Aegis immediately of such event and Aegis will suspend solicitations grant to the Agent and/or its designees, pursuant to a separate Agent Warrant agreement, five (5) year warrants (the "Agent Warrants") to purchase Units equal to ten percent (10%) of the prospective purchasers Units sold in the Placement at an exercise price of $2.40 per Unit (the "Agent Warrants"). The Agent Warrants shall be substantially in the same form as the Warrant attached to the Subscription Agreement as Exhibit "B" thereto. D. The Agent shall not be obligated to sell any of the Securities until such time as Units, but shall only be obligated to offer the Units on a "best efforts" basis. The Company reserves the right, in its sole and absolute discretion, to reject any subscriber, in whole or in part, in its sole discretion, provided that the Company shall prepare a supplement or amendment notifies the Agent in writing of its election to the Transaction Documents that corrects reject such statement or omission.subscriber not less than two (2) business days prior to any Closing. Page 45 of 58 Pages

The Placement. The Placement is expected to consist of a sale of a minimum of approximately $4.0 9.15 million (the “Minimum Amount”) and up to $30.0 million (the “Maximum Amount”) of the Company’s Securities, which may be conducted in one or more closings (each a “Closing”). The initial closing (“Initial Closing”) will not occur until the Minium Amount has been received in escrow. Additional closings (each an “Additional Closing”) may occur to achieve the Maximum Amount; provided, however, that the final closing of the Placement shall not occur later than March 31, 2025, or such earlier date agreed to by the Company and Aegis, in writing (the “Final Closing”), and provided, further, that (b) the pricing of any placement conducted as an Additional Closing shall be the higher of (i) the highest Per Unit Purchase Price for any prior Closing or (ii) the Nasdaq Minimum Price applicable for the date of any such Additional Closing. Aegis will act as placement agent for the Placement subject to, among other matters referred to herein and additional customary conditions, completion of Aegis’s due diligence examination of the Company and its affiliates, listing approval by the Nasdaq Capital Market (“Exchange”) of the Securities to be issued, and the execution of a definitive Securities Purchase Agreement in connection with the Placement (the “Securities Purchase Agreement”). The actual size of the Placement, the precise number of Securities to be offered by the Company and the offering price will be the subject of continuing negotiations between the Company and the investors thereto. In connection with the entry into the Securities Purchase Agreement, the Company (i) will meet with Aegis and its representatives to discuss such due diligence matters and to provide such documents as Aegis may require; (ii) will not file with the Commission any document regarding the Placement without the prior approval of Aegis and its counsel; (iii) will deliver to Aegis and the investors in the Placement such legal and accounting opinions and letters (including, without limitation, accounting comfort letters, legal opinions, negative assurance letters, good standing certificates and officers’ and secretary certificates) as Aegis may require, all in form and substance acceptable to Aegis and (iv) will ensure that Aegis is a third party beneficiary of all representations, warranties, covenants, closing conditions and deliverables in connection with the Placement. If at any time prior to the completion of the offer and sale of the Securities an event occurs that would cause the Transaction Documents (as supplemented or amended) to contain an untrue statement of a material fact or to 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 Company will notify Aegis immediately of such event and Aegis will suspend solicitations of the prospective purchasers of the Securities until such time as the Company shall prepare a supplement or amendment to the Transaction Documents that corrects such statement or omission.