Exhibit 10.1

 

EXECUTION VERSION

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT (the “Agreement”), dated as of July 11, 2019, by and between
LEAP THERAPEUTICS, INC., a Delaware corporation (the “Company”), and LINCOLN
PARK CAPITAL FUND, LLC, an Illinois limited liability company (the “Investor”).

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to buy from the Company,
571,429 shares (the “Purchase Shares”) of the Company’s common stock, $0.001 par
value per share (the “Common Stock”), at a price of $1.75 per Purchase Share,
for a total purchase price of $1,000,000.75.

 

NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor hereby
agree as follows:

 

1.                                      CERTAIN DEFINITIONS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a)                                 “Bankruptcy Law” means Title 11, U.S. Code,
or any similar federal or state law for the relief of debtors.

 

(b)                                 “Base Prospectus” means the Company’s final
base prospectus, dated March 16, 2018, a preliminary form of which is included
in the Registration Statement, including the documents incorporated by reference
therein.

 

(c)                                  “Business Day” means any day on which the
Principal Market is open for trading, including any day on which the Principal
Market is open for trading for a period of time less than the customary time.

 

(d)                                 “Confidential Information” means any
information disclosed by either party to the other party, either directly or
indirectly, in writing, orally or by inspection of tangible objects (including,
without limitation, documents, prototypes, samples, plant and equipment), which
is designated as “Confidential,” “Proprietary” or some similar designation.
Information communicated orally shall be considered Confidential Information if
such information is confirmed in writing as being Confidential Information
within ten (10) Business Days after the initial disclosure. Confidential
Information may also include information disclosed to a disclosing party by
third parties. Confidential Information shall not, however, include any
information which (i) was publicly known and made generally available in the
public domain prior to the time of disclosure by the disclosing party;
(ii) becomes publicly known and made generally available after disclosure by the
disclosing party to the receiving party through no action or inaction of the
receiving party; (iii) is already in the possession of the receiving party
without confidential restriction at the time of disclosure by the disclosing
party as shown by the receiving party’s files and records immediately prior to
the time of disclosure; (iv) is obtained by the receiving party from a third
party without a breach of such third party’s obligations of confidentiality; or
(v) is independently developed by the receiving party without use of or
reference to the disclosing party’s Confidential Information, as shown by
documents and other competent evidence in the receiving party’s possession.

 

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(e)                                  “Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.

 

(f)                                   “DTC” means The Depository Trust Company,
or any successor performing substantially the same function for the Company.

 

(g)                                  “DWAC Shares” means shares of Common Stock
that are (i) issued in electronic form, (ii) freely tradable and transferable
and without restriction on resale and (iii) timely credited by the Company to
the Investor or its designee’s specified Deposit/Withdrawal at Custodian (DWAC)
account with DTC under its Fast Automated Securities Transfer (FAST) Program or
any similar program hereafter adopted by DTC performing substantially the same
function.

 

(h)                                 “Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

(i)                                     “Initial Prospectus Supplement” means
the prospectus supplement of the Company dated July 11, 2019 relating to the
Purchase Shares, including the accompanying Base Prospectus, to be prepared and
filed by the Company with the SEC pursuant to Rule 424(b)(5) under the
Securities Act and in accordance with Section 5(a) hereof, together with all
documents and information incorporated therein by reference.

 

(j)                                    “Material Adverse Effect” means any
material adverse effect on (i) the enforceability of any Transaction Document,
(ii) the results of operations, assets, business or financial condition of the
Company and its Subsidiaries, taken as a whole, other than any material adverse
effect that resulted primarily from (A) any change in the United States or
foreign economies or securities or financial markets in general that does not
have a disproportionate effect on the Company and its Subsidiaries, taken as a
whole, (B) any change that generally affects the industry in which the Company
and its Subsidiaries operate that does not have a disproportionate effect on the
Company and its Subsidiaries, taken as a whole, (C) any change arising in
connection with earthquakes, hostilities, acts of war, sabotage or terrorism or
military actions or any escalation or material worsening of any such
hostilities, acts of war, sabotage or terrorism or military actions existing as
of the date hereof, (D) any action taken by the Investor, its affiliates or its
successors and assigns with respect to the transactions contemplated by this
Agreement, (E) the effect of any change in applicable laws or accounting
rules that does not have a disproportionate effect on the Company and its
Subsidiaries, taken as a whole, or (F) any change resulting from compliance with
terms of this Agreement or the consummation of the transactions contemplated by
this Agreement, or (iii) the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document to be
performed as of the date of determination.

 

(k)                                 “Person” means an individual or entity
including but not limited to any limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

(l)                                     “Principal Market” means The Nasdaq
Global Market (or any nationally recognized successor thereto); provided,
however, that in the event the Company’s Common Stock is ever listed or traded
on The Nasdaq Capital Market, The Nasdaq Global Select Market, the New York
Stock Exchange, the NYSE American, the NYSE Arca, the OTC Bulletin Board, or the
OTCQX or the OTCQB operated by the OTC Markets Group, Inc. (or any nationally
recognized successor to any of the foregoing), then the “Principal Market” shall
mean such other market or exchange on which the Company’s Common Stock is then
listed or traded.

 

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(m)                             “Prospectus” means the Base Prospectus, as
supplemented by any Prospectus Supplement (including the Initial Prospectus
Supplement), including the documents and information incorporated by reference
therein.

 

(n)                                 “Prospectus Supplement” means any prospectus
supplement to the Base Prospectus (including the Initial Prospectus Supplement)
filed with the SEC pursuant to Rule 424(b) under the Securities Act in
connection with the transactions contemplated by this Agreement, including the
documents and information incorporated by reference therein.

 

(o)                                 “Registration Statement” means the effective
registration statement on Form S-3 (Commission File No. 333-223419) filed by the
Company with the SEC pursuant to the Securities Act for the registration of
shares of its Common Stock, including the Purchase Shares, and certain other
securities, as such Registration Statement has been or may be amended and
supplemented from time to time, including all documents filed as part thereof or
incorporated by reference therein, and including all information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430B of the
Securities Act, including any comparable successor registration statement filed
by the Company with the SEC pursuant to the Securities Act for the registration
of shares of its Common Stock, including the Purchase Shares.

 

(p)                                 “SEC” means the U.S. Securities and Exchange
Commission.

 

(q)                                 “Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

 

(r)                                    “Subsidiary” means any Person the Company
wholly-owns or controls, or in which the Company, directly or indirectly, owns a
majority of the voting stock or similar voting interest, in each case that would
be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under
the Securities Act.

 

(s)                                   “Transaction Documents” means,
collectively, this Agreement and the schedules and exhibits hereto, and each of
the other agreements, documents, certificates and instruments entered into or
furnished by the parties hereto in connection with the transactions contemplated
hereby and thereby.

 

(t)                                    “Transfer Agent” means Continental Stock
Transfer & Trust Company or such other Person who is then serving as the
transfer agent for the Company in respect of the Common Stock.

 

2.  PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company
desires to sell to the Investor, and the Investor desires to purchase from the
Company, the Purchase Shares as follows:

 

(a)                                                           Purchase of Common
Stock.  Upon the satisfaction of the conditions set forth in Sections 7 and 8
hereof (the “Closing” and the date of satisfaction of such conditions the
“Closing Date”), the Investor shall purchase from the Company, and the Company
shall issue or cause to be issued and sell to the Investor, for a total purchase
price of $1,000,000.75 (the “Purchase Price”), 571,429 Purchase Shares, at a
price of $1.75 per Purchase Share.

 

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(b)                                 Payment of Purchase Price.   The Investor
shall pay the Purchase Price to the Company as full payment for all of the
Purchase Shares to be purchased by it hereunder by wire transfer of immediately
available funds on the same Business Day that the Investor receives all of the
Purchase Shares as DWAC Shares, if all of the Purchase Shares are so received by
the Investor before 1:00 p.m., Eastern time, or, if any of the Purchase Shares
are received by the Investor after 1:00 p.m., Eastern time, the next Business
Day. All payments made under this Agreement shall be made in lawful money of the
United States of America or wire transfer of immediately available funds to the
account designated by the Company by written notice to the Investor prior to the
date of this Agreement.

 

3.                                                   INVESTOR’S REPRESENTATIONS
AND WARRANTIES.

 

The Investor represents and warrants to the Company that as of the date hereof
and as of the Closing Date:

 

(a)                                 Organization, Authority. Investor is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with the requisite power and authority to
enter into and to consummate the transactions contemplated by this Agreement and
the other Transaction Documents to which it is a party and otherwise to carry
out its obligations hereunder and thereunder.

 

(b)                                 Information.  The Investor understands that
its investment in the Purchase Shares involves a high degree of risk.  The
Investor (i) is able to bear the economic risk of an investment in the Purchase
Shares including a total loss thereof, (ii) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the proposed investment in the Purchase Shares and (iii) has had an
opportunity to ask questions of and receive answers from the officers of the
Company concerning the financial condition and business of the Company and
others matters related to an investment in the Purchase Shares. Neither such
inquiries nor any other due diligence investigations conducted by the Investor
or its representatives shall modify, amend or affect the Investor’s right to
rely on the Company’s representations and warranties contained in Section 4
below. The Investor has sought such accounting, legal and tax advice from its
own independent advisors as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Purchase Shares and
is not relying on any accounting, legal, tax or other advice from the Company or
its officers, employees, representatives or advisors. The Investor acknowledges
and agrees that the Company neither makes nor has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 4 hereof.

 

(c)                                  No Governmental Review.  The Investor
understands that no U.S. federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of
the Purchase Shares or the fairness or suitability of an investment in the
Purchase Shares nor have such authorities passed upon or endorsed the merits of
the offering of the Purchase Shares.

 

(d)                                 Validity; Enforcement.  This Agreement has
been duly and validly authorized, executed and delivered on behalf of the
Investor and is a valid and binding agreement of the Investor enforceable
against the Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

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(e)                                  Residency.  The Investor is a resident of
the State of Illinois.

 

(f)                                   No Short Selling.  The Investor represents
and warrants to the Company that at no time prior to the date of this Agreement
has the Investor or any of its agents, representatives or affiliates engaged in
or effected, in any manner whatsoever, directly or indirectly, any (i) “short
sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange
Act) of the Common Stock or (ii) hedging transaction, which establishes a net
short position with respect to the Common Stock.

 

4.                                      REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 

The Company represents and warrants to the Investor that, except as set forth in
the disclosure schedules attached hereto, which exceptions shall be deemed to be
a part of the representations and warranties made hereunder, as of the date
hereof and as of the Closing Date:

 

(a)                                 Organization and Qualification. The Company
and each of its Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted.  Neither the Company nor any of its
Subsidiaries is in violation or default of any of the provisions of its
respective certificate of incorporation, bylaws or other organizational or
charter documents.  Each of the Company and its Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
reasonably be expected to have a Material Adverse Effect and no proceeding has
been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or qualification. 
The Company has no Subsidiaries except as set forth on Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

(b)                                 Authorization; Enforcement; Validity. 
(i) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement and each of the other
Transaction Documents, and to issue the Purchase Shares in accordance with the
terms hereof and thereof, (ii) the execution and delivery of this Agreement and
each of the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including without
limitation, the issuance of the Purchase Shares pursuant to this Agreement, have
been duly authorized by the Company’s Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors or its
stockholders, (iii) this Agreement has been and each of the other Transaction
Document shall be on the Closing Date, duly executed and delivered by the
Company and (iv) this Agreement constitutes, and each other Transaction Document
upon its execution on behalf of the Company on the Closing Date shall on the
Closing Date constitute, the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies. The Board of Directors of the Company has approved the resolutions
(the “Signing Resolutions”) substantially in the form provided to the Investor
to authorize this Agreement, the other Transaction Documents and the
transactions contemplated hereby and thereby.  The Signing Resolutions are
valid, in full force and effect and have not been modified or supplemented in
any respect.  The Company has delivered to the Investor a true and correct copy
of minutes of a meeting of the Board of Directors of the Company at which the
Signing Resolutions were duly adopted by the Board of Directors or a unanimous
written consent adopting the Signing Resolutions executed by all of the

 

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members of the Board of Directors of the Company.  Except as set forth in this
Agreement, no other approvals or consents of the Company’s Board of Directors,
any authorized committee thereof, and/or stockholders is necessary under
applicable laws and the Company’s Certificate of incorporation and/or Bylaws to
authorize the execution and delivery of this Agreement or any of the
transactions contemplated hereby, including, but not limited to, the issuance of
the Purchase Shares.

 

(c)                                  Capitalization.  As of the date hereof, the
authorized capital stock of the Company is set forth in the Company’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2019.  Except as disclosed
in the SEC Documents (as defined in Section 4(f) below), (i) no shares of the
Company’s capital stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company,
(ii) there are no outstanding debt securities, (iii) except for outstanding
securities of the Company under the equity incentive plans of the Company (the
“Stock Plans”), there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act, (v) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Purchase Shares as described in this Agreement and (vii) the Company does
not have any stock appreciation rights or “phantom stock” plans or agreements or
any similar plan or agreement.  The Company has furnished to the Investor true
and correct copies of the Company’s certificate of incorporation, as amended and
as in effect on the date hereof (the “Certificate of incorporation”), and the
Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and summaries of the material terms of all securities convertible into or
exercisable for Common Stock, if any, (other than outstanding securities of the
Company under the Stock Plans) and copies of any documents containing the
material rights of the holders of such securities in respect thereto that are
not disclosed in the SEC Documents.

 

(d)                                 Issuance of Purchase Shares.  Upon issuance
and payment therefor in accordance with the terms and conditions of this
Agreement, the Purchase Shares shall be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens, charges, restrictions,
rights of first refusal and preemptive rights with respect to the issue thereof,
and will be issued in compliance with all federal and state securities laws,
with the holders being entitled to all rights accorded to a holder of shares of
Common Stock. The Purchase Shares are being issued pursuant to the Registration
Statement and the issuance of the Purchase Shares has been registered by the
Company pursuant to the Securities Act.  Upon receipt of the Purchase Shares,
the Investor will have good and marketable title to such Purchase Shares and
such Purchase Shares will be immediately freely tradable on the Principal
Market.

 

(e)                                  No Conflicts.  The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Purchase Shares) will not (i) result in
a violation of the Certificate of incorporation, any Certificate of
Designations, Preferences and Rights of

 

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any outstanding series of preferred stock of the Company or the Bylaws or
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal Market applicable to
the Company or any of its Subsidiaries) or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations under clause (ii), which could not reasonably be expected to have a
Material Adverse Effect.  Neither the Company nor its Subsidiaries is in
violation of any term of or in default under its Certificate of incorporation,
any Certificate of Designation, Preferences and Rights of any outstanding series
of preferred stock of the Company or Bylaws or their organizational charter or
bylaws, respectively.  Neither the Company nor any of its Subsidiaries is in
violation of any term of or is in default under any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible conflicts, defaults, terminations or
amendments that could not reasonably be expected to have a Material Adverse
Effect.  The business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations, the
sanctions for which either individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.  Except as specifically
contemplated by this Agreement and as required under the Securities Act or
applicable state securities laws and the rules and regulations of the Principal
Market, the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency or any regulatory or self-regulatory agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by the
Transaction Documents in accordance with the terms hereof or thereof.  Except as
set forth elsewhere in this Agreement, all consents, authorizations, orders,
filings and registrations which the Company is required to obtain pursuant to
the preceding sentence shall be obtained or effected on or prior to the Closing
Date. Except as disclosed in the SEC Documents since one year prior to the date
hereof, the Company has not received nor delivered any notices related to
non-compliance with the rules of the Principal Market. The Principal Market has
not commenced any delisting proceedings against the Company.

 

(f)                                   SEC Documents; Financial Statements. The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Documents”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Documents prior to the expiration of any such extension.  As of their respective
dates and to the Company’s knowledge, the SEC Documents complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as
applicable.   None of the SEC Documents, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of
filing.  Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and

 

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except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.  Except
as set forth in the SEC Documents, the Company has received no notices or
correspondence from the SEC for the one year preceding the date hereof.  To the
Company’s knowledge, the SEC has not commenced any enforcement proceedings
against the Company.

 

(g)                                  Absence of Certain Changes.  Except as
disclosed in the SEC Documents, since December 31, 2018, there has been no
material adverse change in the business, properties, operations, financial
condition or results of operations of the Company or its Subsidiaries.  The
Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or
any of its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy or insolvency proceedings.
The Company is financially solvent and is generally able to pay its debts as
they become due.

 

(h)                                 Absence of Litigation. There is no action,
suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company, the Common Stock or any of the Company’s or its
Subsidiaries’ officers or directors in their capacities as such, which could
reasonably be expected to have a Material Adverse Effect.

 

(i)                                     Acknowledgment Regarding Investor’s
Status.  The Company acknowledges and agrees that the Investor is acting solely
in the capacity of arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby.  The Company
further acknowledges that the Investor is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby and
any advice given by the Investor or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Investor’s purchase of the
Purchase Shares.  The Company further represents to the Investor that the
Company’s decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its representatives and
advisors.

 

(j)                                    No Aggregated Offering.  Neither the
Company, nor or any of its affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Purchase Shares to be aggregated with prior offerings by
the Company in a manner that would require stockholder approval pursuant to the
rules of the Principal Market on which any of the securities of the Company are
listed or designated. The issuance and sale of the Purchase Shares hereunder
does not contravene the rules and regulations of the Principal Market.

 

(k)                              Intellectual Property Rights.  The Company and
its Subsidiaries own or possess adequate rights or licenses to use all material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted.  None of the Company’s material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
government authorizations, trade secrets or other intellectual property rights
have expired or terminated, or, by the terms and conditions thereof, could
expire or terminate within two years from the date of this Agreement.

 

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The Company and its Subsidiaries do not have any knowledge of any infringement
by the Company or its Subsidiaries of any material trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others, or of any such development of similar or identical trade secrets or
technical information by others, and there is no claim, action or proceeding
being made or brought against, or to the Company’s knowledge, being threatened
against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service
marks, service mark registrations, trade secret or other infringement, which
could reasonably be expected to have a Material Adverse Effect.

 

(l)                                     Environmental Laws.  To the Company’s
knowledge, the Company and its Subsidiaries (i) are in compliance 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) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where, in each of the three foregoing clauses, the
failure to so comply could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.

 

(m)                             Title.  Except as set forth in the SEC
Documents, the Company and its Subsidiaries have good and marketable title in
fee simple to all real property owned by them and good and marketable title in
all personal property owned by them that is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects (“Liens”), except for Liens as do not materially affect
the value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its Subsidiaries and
Liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties.  Any real property and facilities
held under lease by the Company and its Subsidiaries are held by them under
valid, subsisting and enforceable leases with which the Company and its
Subsidiaries are in compliance with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

 

(n)                                 Insurance.  The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged.  Neither the Company nor any such Subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect
the condition, financial or otherwise, or the earnings, business or operations
of the Company and its Subsidiaries, taken as a whole.

 

(o)                                 Regulatory Permits.  The Company and its
Subsidiaries possess all material certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.

 

(p)                                 Tax Status.  The Company and each of its
Subsidiaries has made or filed all federal and state income and all other
material tax returns, reports and declarations required by any jurisdiction to

 

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which it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

 

(q)                                 Transactions With Affiliates.   Except as
set forth in the SEC Documents, to the knowledge of the Company, none of the
officers or directors of the Company, the Company’s stockholders, the officers
or directors of any stockholder of the Company, or any family member or
affiliate of any of the foregoing, has either directly or indirectly any
interest in, or is a party to, any transaction that would be required to be
disclosed as a related party transaction pursuant to Rule 404 of Regulation S-K
promulgated under the Securities Act.

 

(r)                                    Application of Takeover Protections.  The
Company and its board of directors have taken or will take prior to the Closing
Date all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation or the laws of the state of its incorporation which
is or could become applicable to the Investor as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Purchase Shares and the Investor’s ownership of the Purchase
Shares.

 

(s)                                   Disclosure.  Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents or any other agreements to be entered into by the Company
and the Investor that, in each case, will be timely publicly disclosed by the
Company, the Company confirms that neither it nor any other Person acting on its
behalf has provided the Investor or its agents or counsel with any information
that the Company believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Registration Statement, the
Prospectus or the SEC Documents.   The Company understands and confirms that the
Investor will rely on the foregoing representation in effecting purchases and
sales of securities of the Company.  All of the disclosure furnished by or on
behalf of the Company to the Investor regarding the Company, its business and
the transactions contemplated hereby, including the disclosure schedules to this
Agreement, is true and correct in all material respects and does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The press releases disseminated by
the Company during the twelve months preceding the date of this Agreement taken
as a whole did not, when issued, contain any untrue statement of a material fact
or omit to state a 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 and when made, not misleading.  The Company acknowledges and
agrees that the Investor neither makes nor has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3 hereof.

 

(t)                                    Foreign Corrupt Practices.   Neither the
Company, nor to the knowledge of the Company, any agent or other Person acting
on behalf of the Company, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to

 

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disclose fully any contribution made by the Company (or made by any Person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.

 

(u)                                 Registration Statement.  The Company has
prepared and filed with the SEC in accordance with the provisions of the
Securities Act the Registration Statement. The Registration Statement was
declared effective by order of the SEC on March 16, 2018. The Registration
Statement is effective pursuant to the Securities Act and available for the
issuance of the Purchase Shares thereunder, and the Company has not received any
written notice that the SEC has issued or intends to issue a stop order or other
similar order with respect to the Registration Statement or the Prospectus or
that the SEC otherwise has (i) suspended or withdrawn the effectiveness of the
Registration Statement or (ii) issued any order preventing or suspending the use
of the Prospectus or any Prospectus Supplement, in either case, either
temporarily or permanently or intends or has threatened in writing to do so. The
“Plan of Distribution” section of the Prospectus permits the issuance of the
Purchase Shares under the terms of this Agreement. At the time the Registration
Statement and any amendments thereto became effective, at the date of this
Agreement and at each deemed effective date thereof pursuant to
Rule 430B(f)(2) of the Securities Act, the Registration Statement and any
amendments thereto complied and will comply in all material respects with the
requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Base Prospectus and any Prospectus Supplement thereto, at the time such Base
Prospectus or such Prospectus Supplement thereto was issued and on the Closing
Date, complied and will comply in all material respects with the requirements of
the Securities Act and did not and will not contain an 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; provided that this representation and warranty does not apply to
statements in or omissions from any Prospectus Supplement made in reliance upon
and in conformity with information relating to the Investor furnished to the
Company in writing by or on behalf of the Investor expressly for use therein.
The Company meets all of the requirements for the use of a registration
statement on Form S-3 pursuant to the Securities Act for the offering and sale
of the Purchase Shares contemplated by this Agreement in reliance on General
Instruction I.B.6. of Form S-3, and the SEC has not notified the Company of any
objection to the use of the form of the Registration Statement pursuant to
Rule 401(g)(1) of the Securities Act. The Company hereby confirms that the
issuance of the Purchase Shares to the Investor pursuant to this Agreement would
not result in non-compliance with the Securities Act or any of the applicable
General Instructions to Form S-3. Specifically, the Company has not sold an
amount securities pursuant to General Instruction I.B.6 of Form S-3 during the
12 calendar months prior to, and including, the date hereof, such that the
Registration Statement will be unavailable for the sale of the Purchase Shares
pursuant to General Instruction I.B.6 of Form S-3.  The Registration Statement,
as of its effective date, meets the requirements set forth in
Rule 415(a)(1)(x) pursuant to the Securities Act. At the earliest time after the
filing of the Registration Statement that the Company or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
Securities Act) relating to any of the Purchase Shares, the Company was not and
is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act).  The
Company has not distributed any offering material in connection with the
offering and sale of any of the Purchase Shares, and, until the Investor does
not hold any of the Purchase Shares, shall not distribute any offering material
in connection with the offering and sale of any of the Purchase Shares, to or by
the Investor, in each case, other than the Registration Statement or any
amendment thereto, the Prospectus or any Prospectus Supplement required pursuant
to applicable law or the Transaction Documents. The Company has not made, and
agrees that unless it obtains the prior written consent of the Investor it will
not make, an offer relating to the Purchase Shares that would constitute a “free
writing prospectus” as defined in Rule 405 under the Securities Act. The Company
shall comply

 

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with the requirements of Rules 164 and 433 under the Securities Act applicable
to any such free writing prospectus consented to by the Investor, including in
respect of timely filing with the SEC, legending and record keeping.

 

(v)                                 DTC Eligibility.  The Company, through the
Transfer Agent, currently participates in the DTC Fast Automated Securities
Transfer (FAST) Program and the Common Stock can be transferred electronically
to third parties via the DTC Fast Automated Securities Transfer (FAST) Program.

 

(w)                               Sarbanes-Oxley. The Company is in compliance
with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are
applicable to it as of the date hereof.

 

(x)                                 Certain Fees. No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction
Documents. The Investor shall not have any obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of
a type contemplated in this Section 4(x) that may be due in connection with the
transactions contemplated by the Transaction Documents.

 

(y)                                 Investment Company. The Company is not
required to be registered as, and immediately after receipt of payment for the
Purchase Shares will not be required to be registered as, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

(z)                                  Listing and Maintenance Requirements. The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely
to have the effect of, terminating the registration of the Common Stock pursuant
to the Exchange Act nor has the Company received any notification that the SEC
is currently contemplating terminating such registration. Except as disclosed in
the SEC Documents, the Company has not, in the twelve (12) months preceding the
date hereof, received any notice from any Person to the effect that the Company
is not in compliance with the listing or maintenance requirements of the
Principal Market. Except as disclosed in the SEC Documents, the Company is in
compliance with all such listing and maintenance requirements.

 

(aa)                          Accountants.  The Company’s accountants are set
forth in the SEC Documents and, to the knowledge of the Company, such
accountants are an independent registered public accounting firm as required by
the Securities Act.

 

(bb)                          No Market Manipulation. The Company has not, and
to its knowledge no Person acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Purchase Shares, (ii) sold, bid for, purchased, or, paid
any compensation for soliciting purchases of, any of the Purchase Shares, or
(iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company in violation of
Regulation M promulgated under the Exchange Act.

 

(cc)                            Shell Company Status. The Company is not
currently, and has never been, an issuer identified in Rule 144(i)(1) under the
Securities Act.

 

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5.                                      COVENANTS.

 

(a)                                 Filing of Current Report and Initial
Prospectus Supplement.  The Company agrees that it shall, within the time
required under the Exchange Act, file with the SEC a report on Form 8-K relating
to the transactions contemplated by, and describing the material terms and
conditions of, the Transaction Documents (the “Current Report”). The Company
further agrees that it shall, within the time required under Rule 424(b) under
the Securities Act, file with the SEC the Initial Prospectus Supplement pursuant
to Rule 424(b)(5) under the Securities Act, which Initial Prospectus Supplement
shall specifically relate to the Purchase Shares and shall describe the material
terms and conditions of the Transaction Documents, contain information
previously omitted at the time of effectiveness of the Registration Statement in
reliance on Rule 430B under the Securities Act, and disclose all information
relating to the Purchase Shares and the transactions contemplated by the
Transaction Documents required to be disclosed in the Registration Statement and
the Prospectus as of the date of the Initial Prospectus Supplement, including,
without limitation, information required to be disclosed in the section
captioned “Plan of Distribution” in the Prospectus. The Company shall permit the
Investor to review and comment upon the final pre-filing draft versions of the
Current Report and the Initial Prospectus Supplement at least two (2) Business
Days prior to their filing with the SEC and the Company shall not file the
Current Report or the Initial Prospectus Supplement in a form to which the
Investor reasonably objects. The Investor shall use its reasonable best efforts
to comment upon the final pre-filing draft versions of the Current Report and
the Initial Prospectus Supplement within one (1) Business Day from the date the
Investor receives them from the Company. The Investor shall furnish to the
Company such information regarding itself, the Purchase Shares beneficially
owned by it and the intended method of distribution thereof, including any
arrangement between the Investor and any other Person relating to the sale or
distribution of the Purchase Shares, as shall be reasonably requested by the
Company in connection with the preparation and filing of the Current Report and
the Initial Prospectus Supplement, and shall otherwise cooperate with the
Company as reasonably requested by the Company in connection with the
preparation and filing of the Current Report and the Initial Prospectus
Supplement with the SEC.

 

(b)                                 Blue Sky. The Company shall take all such
action, if any, as is reasonably necessary in order to obtain an exemption for
or to register or qualify (i) the issuance of the Purchase Shares to the
Investor under this Agreement and (ii) any subsequent resale of all Purchase
Shares by the Investor, in each case, under applicable securities or “Blue Sky”
laws of the states of the United States in such states as is reasonably
requested by the Investor from time to time, and shall provide evidence of any
such action so taken to the Investor.

 

(c)                                  Listing/DTC.  The Company shall promptly
secure the listing of all of the Purchase Shares to be issued to the Investor
hereunder on the Principal Market (subject to official notice of issuance) and
upon each other national securities exchange or automated quotation system, if
any, upon which the Common Stock is then listed, and shall maintain, so long as
any shares of Common Stock shall be so listed, such listing of all such Purchase
Shares. The Company shall maintain the listing of the Common Stock on the
Principal Market and shall comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules and regulations of the
Principal Market. Neither the Company nor any of its Subsidiaries shall take any
action that would reasonably be expected to result in the delisting or
suspension of the Common Stock on the Principal Market.  The Company shall
promptly, and in no event later than the following Business Day, provide to the
Investor copies of any notices it receives from any Person regarding the
continued eligibility of the Common Stock for listing on the Principal Market;
provided, however, that the Company shall not be required to provide the
Investor copies of any such notice that the Company reasonably believes
constitutes material non-public information and the Company would not be
required to publicly disclose such notice in any report or

 

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statement filed with the SEC under the Exchange Act or the Securities Act. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 5(c).  The Company shall take all action
necessary to ensure that its Common Stock can be transferred electronically as
DWAC Shares.

 

(d)                                 Prohibition of Short Sales and Hedging
Transactions.  During the term of this Agreement, neither the Investor nor any
of its agents, representatives or affiliates shall in any manner whatsoever
enter into or effect, directly or indirectly, any (i) “short sale” (as such term
is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

 

(e)                                  Sales Under Registration Statement. From
the date hereof until the Closing Date, the Company shall not sell any
securities pursuant to General Instruction I.B.6 of Form S-3.

 

(f)                                   Non-Public Information.  Each party hereto
agrees not to disclose any Confidential Information of the other party to any
third party and shall not use the Confidential Information for any purpose other
than in connection with, or in furtherance of, the transactions contemplated
hereby.  Each party hereto acknowledges that the Confidential Information shall
remain the property of the disclosing party and agrees that it shall take all
reasonable measures to protect the secrecy of any Confidential Information
disclosed by the other party. The receiving party may disclose Confidential
Information to the extent such information is required to be disclosed by law,
regulation or order of a court of competent jurisdiction or regulatory
authority, provided that the receiving party shall promptly notify the
disclosing party when such requirement to disclose arises, and shall cooperate
with the disclosing party so as to enable the disclosing party to: (i) seek an
appropriate protective order; and (ii) make any applicable claim of
confidentiality in respect of such Confidential Information; and provided,
further, that the receiving party shall disclose Confidential Information only
to the extent required by the protective order or other similar order, if such
an order is obtained, and, if no such order is obtained, the receiving party
shall disclose only the minimum amount of such Confidential Information required
to be disclosed in order to comply with the applicable law, regulation or order.
In addition, any such Confidential Information disclosed pursuant to this
section shall continue to be deemed Confidential Information. Notwithstanding
anything in this Agreement or in any other Transaction Document to the contrary,
the Company and the Investor hereby confirm that neither the Company nor any
other Person acting on the Company’s behalf shall provide the Investor or its
agents or counsel with any information that constitutes or the Company believes
might constitute material, non-public information, unless a simultaneous public
announcement thereof is made by the Company in the manner contemplated by
Regulation FD. In the event of a breach of the foregoing covenant by the Company
or any Person acting on its behalf (as determined in the reasonable good faith
judgment of the Investor), in addition to any other remedy provided herein or in
the other Transaction Documents, if the Investor is holding any Purchase Shares
at the time of the disclosure of such material, non-public information, the
Investor shall have the right to make a public disclosure, in the form of a
press release, public advertisement or otherwise, of such material, non-public
information without the prior approval by the Company; provided (i) the Investor
shall have first provided notice to the Company that it believes it has received
information that constitutes material, non-public information, (ii) the Company
shall have at least 24 hours to publicly disclose such material, non-public
information prior to any such disclosure by the Investor, (iii) the Company
shall have failed, in the reasonable good faith judgment of  the Investor, to
demonstrate to the Investor within such time period that such information does
not constitute material, non-public information, and (iv) the Company shall have
failed to publicly disclose such material, non-public information within such
time period. The Investor shall not have any liability to the Company, any of
its Subsidiaries, or any of their respective directors, officers, employees,
stockholders or agents, for any such disclosure. The Company understands and
confirms that

 

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the Investor shall be relying on the foregoing covenants in effecting
transactions in securities of the Company.

 

(g)                                  Reserved.

 

(h)                                 Taxes.   The Company shall pay any and all
transfer, stamp or similar taxes that may be payable with respect to the
issuance and delivery of any shares of Common Stock to the Investor made under
this Agreement.

 

(i)                                     Securities Law Compliance. The Company
shall use its reasonable best efforts to keep the Registration Statement
effective pursuant to Rule 415 promulgated under the Securities Act, and to keep
the Registration Statement and the Prospectus current and available for
issuances and sales of all of the Purchase Shares by the Company to the
Investor, and for the resale of all the Purchase Shares by the Investor, at all
times until the date on which the Investor shall have sold all the Purchase
Shares (the “Registration Period”). Without limiting the generality of the
foregoing, during the Registration Period, the Company shall (a) take all action
necessary to cause the Common Stock to continue to be registered as a class of
securities under Sections 12(g) or 12(b) of the Exchange Act, shall comply with
its reporting and filing obligations under the Exchange Act, and shall not take
any action or file any document (whether or not permitted by the Exchange Act)
to terminate or suspend such registration or to terminate or suspend its
reporting and filing obligations under the Exchange Act, and (b) prepare and
file with the SEC, at the Company’s expense, such amendments (including, without
limitation, post-effective amendments) to the Registration Statement and such
Prospectus Supplements pursuant to Rule 424(b) under the Securities Act, in each
case, as may be necessary to keep the Registration Statement effective pursuant
to Rule 415 promulgated under the Securities Act, and to keep the Registration
Statement and the Prospectus current and available for issuances and sales of
all of the Purchase Shares by the Company to the Investor, and for the resale of
all of the Purchase Shares by the Investor, at all times during the Registration
Period (it being hereby acknowledged and agreed that the Company shall prepare
and file with the SEC, at the Company’s expense, immediately prior to the third
anniversary of the initial effective date of the Registration Statement (the
“Renewal Date”), a new Registration Statement relating to the Purchase Shares,
in a form satisfactory to the Investor and its counsel, and the Company shall
use its reasonable best efforts to cause such Registration Statement to be
declared effective within 180 days after the Renewal Date). The Investor shall
furnish to the Company such information regarding itself, its affiliates, the
Purchase Shares beneficially owned by it and the intended method of distribution
thereof as shall be reasonably requested by the Company in connection with the
preparation and filing of any such amendment to the Registration Statement (or
new Registration Statement) or any such Prospectus Supplement, and shall
otherwise cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any such amendment to the
Registration Statement (or new Registration Statement) or any such Prospectus
Supplement. The Company shall comply with all applicable federal, state and
foreign securities laws in connection with the offer, issuance and sale by the
Company of the Purchase Shares contemplated by the Transaction Documents.
Without limiting the generality of the foregoing, neither the Company nor any of
its officers, directors or affiliates will take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any security
of the Company, or which would reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company in
violation of Regulation M promulgated under the Exchange Act.

 

(j)                                    Stop Orders.  The Company shall advise
the Investor promptly (but in no event later than 24 hours) and shall confirm
such advice in writing: (i) of the Company’s receipt of notice of any request by
the SEC for amendment of or a supplement to the Registration Statement, the
Prospectus, any

 

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Prospectus Supplement or for any additional information pertaining to any of the
foregoing; (ii) of the Company’s receipt of notice of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement or
prohibiting or suspending the use of the Prospectus or any Prospectus
Supplement, or of the Company’s receipt of any notification of the suspension of
qualification of the Purchase Shares for offering or sale in any jurisdiction or
the initiation or contemplated initiation of any proceeding for such purpose;
and (iii) of the Company becoming aware of the happening of any event, which
makes any statement of a material fact made in the Registration Statement, the
Prospectus or any Prospectus Supplement untrue or which requires the making of
any additions to or changes to the statements then made in the Registration
Statement, the Prospectus or any Prospectus Supplement in order to state a
material fact required by the Securities Act to be stated therein or necessary
in order to make the statements then made therein (in the case of the Prospectus
or any Prospectus Supplement, in light of the circumstances under which they
were made) not misleading, or of the necessity to amend the Registration
Statement or supplement the Prospectus or any Prospectus Supplement to comply
with the Securities Act or any other law. The Company shall not be required to
disclose to the Investor the substance or specific reasons of any of the events
set forth in clauses (i) through (iii) of the immediately preceding sentence,
but rather, shall only be required to disclose that the event has occurred. If
at any time the SEC shall issue any stop order suspending the effectiveness of
the Registration Statement or prohibiting or suspending the use of the
Prospectus or any Prospectus Supplement, the Company shall use its reasonable
best efforts to obtain the withdrawal of such order at the earliest possible
time. The Company shall furnish to the Investor, without charge, a copy of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to the Registration Statement or the Prospectus, as the
case may be.

 

(k)                                 Amendments to Registration Statement;
Prospectus Supplements. Except as provided in this Agreement and other than
periodic and current reports required to be filed pursuant to the Exchange Act,
the Company shall not file with the SEC any amendment to the Registration
Statement or any supplement to the Base Prospectus that refers to the Investor,
the Purchase Shares, the Transaction Documents or the transactions contemplated
thereby (including, without limitation, any Prospectus Supplement filed in
connection with the transactions contemplated by the Transaction Documents), in
each case with respect to which (a) the Investor shall not previously have been
advised and afforded the opportunity to review and comment thereon at least two
(2) Business Days prior to filing with the SEC, as the case may be, (b) the
Company shall not have given due consideration to any comments thereon received
from the Investor or its counsel, or (c) the Investor shall reasonably object,
unless the Company reasonably has determined that it is necessary to amend the
Registration Statement or make any supplement to the Prospectus to comply with
the Securities Act or any other applicable law or regulation, in which case the
Company shall promptly (but in no event later than 24 hours) so inform the
Investor, the Investor shall be provided with a reasonable opportunity to review
and comment upon any disclosure referring to the Investor, the Transaction
Documents or the transactions contemplated thereby, as applicable, and the
Company shall expeditiously furnish to the Investor a copy thereof. In addition,
for so long as, in the reasonable opinion of counsel for the Investor, a
Prospectus is required to be delivered in connection with any acquisition or
sale of Purchase Shares by the Investor, the Company shall not file any
Prospectus Supplement with respect to the Purchase Shares without furnishing to
the Investor as many copies of such Prospectus Supplement, together with the
Prospectus, as the Investor may reasonably request.

 

(l)                                     Prospectus Delivery.  The Company
consents to the use of the Prospectus (and of each Prospectus Supplement
thereto) in accordance with the provisions of the Securities Act and with the
securities or “blue sky” laws of the jurisdictions in which the Purchase Shares
may be sold by the Investor, in connection with the offering and sale of the
Purchase Shares and for such period of time

 

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thereafter as a Prospectus is required by the Securities Act to be delivered in
connection with sales of the Purchase Shares. The Company will make available to
the Investor upon request, and thereafter from time to time will furnish to the
Investor, as many copies of the Prospectus (and each Prospectus Supplement
thereto) as the Investor may reasonably request for the purposes contemplated by
the Securities Act within the time during which the Prospectus is required by
the Securities Act to be delivered in connection with sales of the Purchase
Shares. If during such period of time any event shall occur that in the
reasonable judgment of the Company and its counsel, or in the reasonable
judgment of the Investor and its counsel, is required to be set forth in the
Registration Statement, the Prospectus or any Prospectus Supplement or should be
set forth therein in order to make the statements made therein (in the case of
the Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or if in the reasonable judgment of the
Company and its counsel, or in the reasonable judgment of the Investor and its
counsel, it is otherwise necessary to amend the Registration Statement or
supplement the Prospectus or any Prospectus Supplement to comply with the
Securities Act or any other applicable law or regulation, the Company shall
forthwith prepare and, subject to Section 5(k) above, file with the SEC an
appropriate amendment to the Registration Statement or an appropriate Prospectus
Supplement and in each case shall expeditiously furnish to the Investor, at the
Company’s expense, such amendment to the Registration Statement or such
Prospectus Supplement, as applicable, as may be necessary to reflect any such
change or to effect such compliance. The Company shall have no obligation to
separately advise the Investor of, or deliver copies to the Investor of, the SEC
Documents, all of which the Investor shall be deemed to have notice of.

 

(m)                             Aggregation. From and after the date of this
Agreement, neither the Company, nor any of its affiliates will, and the Company
shall use its reasonable best efforts to ensure that no Person acting on any of
their behalf will, directly or indirectly, make any offers or sales of any
security or solicit any offers to buy any security, under circumstances that
would cause this offering of the Purchase Shares to be aggregated with other
offerings of securities by the Company in a manner that would require
stockholder approval pursuant to the rules and regulations of the Principal
Market on which any of the securities of the Company are listed or designated,
unless stockholder approval is obtained before the closing of such subsequent
transaction in accordance with the rules of such Principal Market.

 

(n)                                 Use of Proceeds. The Company will use the
net proceeds from the offering of the Purchase Shares as described in the
Prospectus.

 

(o)                                 Other Transactions. The Company shall not
enter into, announce or recommend to its stockholders any agreement, plan,
arrangement or transaction in or of which the terms thereof would restrict,
materially delay, conflict with or impair the ability or right of the Company to
perform its obligations under any of the Transaction Documents to which it is a
party, including, without limitation, the obligation of the Company to deliver
the Purchase Shares to the Investor in accordance with the terms of this
Agreement.

 

6.                                      TRANSFER AGENT INSTRUCTIONS.

 

On the Closing Date, the Company shall issue to the Transfer Agent (and any
subsequent transfer agent) irrevocable instructions, in the form heretofore
furnished to the Company, to issue the Purchase Shares in accordance with the
terms of this Agreement (the “Irrevocable Transfer Agent Instructions”). All
Purchase Shares to be issued to or for the benefit of the Investor pursuant to
this Agreement shall be issued as DWAC Shares. The Company represents and
warrants to the Investor that no instruction other than the Irrevocable Transfer
Agent Instructions referred to in this Section 6 will be given by the Company to
the Transfer Agent with respect to the Purchase Shares, and the Purchase Shares
shall

 

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otherwise be freely transferable on the books and records of the Company.
Certificates and any other instruments evidencing the Purchase Shares shall not
bear any restrictive or other legend.  If the Investor effects a sale,
assignment or transfer of the Purchase Shares, the Company shall permit the
transfer and shall promptly instruct the Transfer Agent (and any subsequent
transfer agent) to issue DWAC Shares in such name and in such denominations as
specified by the Investor to effect such sale, transfer or assignment. The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investor. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 6 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 6, that the Investor shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required. The Company shall cause its counsel to issue the legal
opinion or notice of effectiveness referred to in the Irrevocable Transfer Agent
Instructions to the Transfer Agent (and any subsequent transfer agent) to the
extent required or requested by the Transfer Agent (or any subsequent transfer
agent). Any fees (with respect to the Transfer Agent, counsel to the Company or
otherwise) associated with the issuance of such opinion shall be borne by the
Company.

 

7.                                      CONDITIONS TO THE COMPANY’S OBLIGATION
TO ISSUE AND SELL THE PURCHASE SHARES.

 

The obligation of the Company hereunder to issue and sell the Purchase Shares to
the Investor on the Closing Date is subject to the satisfaction or, where
legally permissible, the waiver of each of the following conditions:

 

(a)                                 The Investor shall have executed this
Agreement and delivered the same to the Company;

 

(b)                                 No stop order with respect to the
Registration Statement shall be pending or threatened by the SEC; and

 

(c)                                  The representations and warranties of the
Investor shall be true and correct in all material respects as of the date
hereof and as of the Closing Date as though made at that time.

 

8.                                      CONDITIONS TO THE INVESTOR’S OBLIGATION
TO PURCHASE THE PURCHASE SHARES.

 

The obligation of the Investor to purchase the Purchase Shares under this
Agreement is subject to the satisfaction or, where legally permissible, the
waiver of each of the following conditions:

 

(a)                                 The Company shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Investor;

 

(b)                                 The Common Stock shall be listed or quoted
on the Principal Market, trading in the Common Stock shall not have been within
the last 365 days suspended by the SEC or the Principal Market, and all Purchase
Shares to be issued by the Company to the Investor pursuant to this Agreement
shall have been, if applicable, approved for listing or quotation on the
Principal Market in accordance with the applicable rules and regulations of the
Principal Market, subject only to official notice of issuance;

 

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(c)                                  The Investor shall have received the
opinions of the Company’s legal counsel dated as of the Closing Date
substantially in the form heretofore agreed by the parties hereto;

 

(d)                                 The representations and warranties of the
Company shall be true and correct in all material respects (except to the extent
that any of such representations and warranties is already qualified as to
materiality in Section 4 above, in which case, the portion of such
representations and warranties so qualified shall be true and correct without
further qualification) as of the date hereof and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such date) and the
Company shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at or prior
to the Closing Date.  The Investor shall have received a certificate, executed
by the CEO, President or CFO of the Company, dated as of the Closing Date, to
the foregoing effect in the form attached hereto as Exhibit A;

 

(e)                                  The Board of Directors of the Company shall
have adopted resolutions in substantially the form previously provided to the
Investor, which shall be in full force and effect without any amendment or
supplement thereto as of the Closing Date;

 

(f)                                   The Irrevocable Transfer Agent
Instructions shall have been delivered to and acknowledged in writing by the
Company and the Company’s Transfer Agent;

 

(g)                                  The Company shall have delivered to the
Investor a certificate evidencing the incorporation and good standing of the
Company in the State of Delaware issued by the Secretary of State of the State
of Delaware as of a date within ten (10) Business Days of the Closing Date;

 

(h)                                 The Company shall have delivered to the
Investor a certified copy of the Certificate of incorporation as certified by
the Secretary of State of the State of Delaware within ten (10) Business Days of
the Closing Date;

 

(i)                                     The Company shall have delivered to the
Investor a secretary’s certificate executed by the Secretary of the Company,
dated as of the Closing Date, in the form attached hereto as Exhibit B;

 

(j)                                    The Registration Statement shall be
effective and no stop order with respect to the Registration Statement shall be
pending or threatened by the SEC. The Company shall have a maximum dollar amount
certain of securities, including the Purchase Shares, registered and unused in
connection with any other offering under the Registration Statement which is
sufficient to issue to the Investor not less than all of the Purchase Shares to
be purchased under the Purchase Agreement. The Current Report and the Initial
Prospectus Supplement each shall have been filed with the SEC, as required
pursuant to Section 5(a), and copies of the Prospectus shall have been delivered
to the Investor in accordance with Section 5(l) hereof. The Prospectus shall be
current and available for the issuance and sale of all of the Purchase Shares by
the Company to the Investor, and for the resale of all of the Purchase Shares by
the Investor. Any other Prospectus Supplements required to have been filed by
the Company with the SEC under the Securities Act at or prior to the Closing
Date shall have been filed with the SEC within the applicable time periods
prescribed for such filings under the Securities Act. All reports, schedules,
registrations, forms, statements, information and other documents required to
have been filed by the Company with the SEC at or during the 12-month period
immediately preceding the Closing Date pursuant to the reporting requirements of
the Exchange Act shall have been filed with the SEC within the

 

19

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applicable time periods prescribed for such filings under the Exchange Act,
including any applicable extension periods contemplated by the Exchange Act;

 

(k)                                 The Company shall be eligible to transfer
its Common Stock, including all of the Purchase Shares, electronically as DWAC
Shares;

 

(l)                                     All federal, state and local
governmental laws, rules and regulations applicable to the transactions
contemplated by the Transaction Documents and necessary for the execution,
delivery and performance of the Transaction Documents and the consummation of
the transactions contemplated thereby in accordance with the terms thereof shall
have been complied with, and all consents, authorizations and orders of, and all
filings and registrations with, all federal, state and local courts or
governmental agencies and all federal, state and local regulatory or
self-regulatory agencies necessary for the execution, delivery and performance
of the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall have been
obtained or made, including, without limitation, in each case those required
under the Securities Act, the Exchange Act, applicable state securities or “Blue
Sky” laws or applicable rules and regulations of the Principal Market, or
otherwise required by the SEC, the Principal Market or any state securities
regulators;

 

(m)                             No statute, regulation, order, decree, writ,
ruling or injunction shall have been enacted, entered, promulgated, threatened
or endorsed by any federal, state, local or foreign court or governmental
authority of competent jurisdiction which prohibits the consummation of or which
would materially modify or delay any of the transactions contemplated by the
Transaction Documents;

 

(n)                                 No action, suit or proceeding before any
federal, state, local or foreign arbitrator or any court or governmental
authority of competent jurisdiction shall have been commenced or threatened, and
no inquiry or investigation by any federal, state, local or foreign governmental
authority of competent jurisdiction shall have been commenced or threatened,
against the Company, or any of the officers, directors or affiliates of the
Company, in each case seeking to restrain, prevent or change the transactions
contemplated by the Transaction Documents, or seeking material damages in
connection with such transactions;

 

(o)                                 No Person shall have commenced a proceeding
against the Company pursuant to or within the meaning of any Bankruptcy Law;

 

(p)                                 The Company, pursuant to or within the
meaning of any Bankruptcy Law, shall not have (i) commenced a voluntary case,
(ii) consented to the entry of an order for relief against it in an involuntary
case, (iii) consented to the appointment of a Custodian of it or for all or
substantially all of its property, or (iv) made a general assignment for the
benefit of its creditors or is generally unable to pay its debts as the same
become due; and

 

(q)                                 A court of competent jurisdiction shall not
have entered an order or decree under any Bankruptcy Law that (i) is for relief
against the Company in an involuntary case, (ii) appoints a Custodian of the
Company or for all or substantially all of its property, or (iii) orders the
liquidation of the Company or any Subsidiary.

 

9.                                      INDEMNIFICATION.

 

In consideration of the Investor’s execution and delivery of this Agreement and
acquiring the Purchase Shares, and in addition to all of the Company’s other
obligations under the Transaction

 

20

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Documents to which it is a party, the Company shall defend, protect, indemnify
and hold harmless the Investor and all of its affiliates, officers, directors
and employees, members, managers, employees and direct or indirect investors and
any of the foregoing Person’s agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by the Transaction Documents) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by
any Indemnitee as a result of, or arising out of, or relating to: (a) any
misrepresentation or breach of any representation or warranty made by the
Company in any of the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in any of the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, (c) any cause of action, suit or claim brought or made against such
Indemnitee by a third party and arising out of or resulting from the execution,
delivery, performance or the enforcement of any of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(d) any violation of the Securities Act, the Exchange Act, state securities or
“Blue Sky” laws, or the rules and regulations of the Principal Market in
connection with the transactions contemplated by the Transaction Documents by
the Company or any of its affiliates, officers, directors or employees, (e) any
untrue statement or alleged untrue statement of a material fact contained, or
incorporated by reference, in the Registration Statement or any amendment
thereto or any omission or alleged omission to state therein, or in any document
incorporated by reference therein, a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (f) any untrue
statement or alleged untrue statement of a material fact contained, or
incorporated by reference, in the Prospectus, or any omission or alleged
omission to state therein, or in any document incorporated by reference therein,
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that (I) the indemnity contained in clause
(c) of this Section 9 shall not apply to any Indemnified Liabilities which
directly and primarily result from the fraud, gross negligence or willful
misconduct of an Indemnitee, (II) the indemnity contained in clauses (d),
(e) and (f) of this Section 9 shall not apply to any Indemnified Liabilities to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Investor expressly for use in any Prospectus
Supplement (it being hereby acknowledged and agreed that the written information
set forth on Exhibit C attached hereto is the only written information furnished
to the Company as of the date of this Agreement by or on behalf of the Investor
expressly for use in the Initial Prospectus Supplement), provided that, if
applicable, the Prospectus was amended or supplemented and such amended or
supplemented Prospectus was timely made available by the Company to the Investor
pursuant to Section 5(l), (III) the indemnity contained in clauses (d), (e) and
(f) of this Section 9 shall not inure to the benefit of the Investor to the
extent such Indemnified Liabilities are based on a failure of the Investor to
deliver or to cause to be delivered the Prospectus made available by the
Company, if such Prospectus was timely made available by the Company pursuant to
Section 5(l), and if delivery of the Prospectus by the Investor was required
under the Securities Act with respect to the Purchase Shares and such delivery
by the Investor would have cured the defect giving rise to such Indemnified
Liabilities, and (IV) the indemnity in this Section 9 shall not apply to amounts
paid in settlement of any claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, conditioned or delayed. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  Any required
indemnification payment for any particular claim shall be

 

21

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made within thirty (30) days from the date the Investor makes a written request
for it. A certificate containing reasonable detail as to the amount of
Indemnified Liabilities to which an Indemnitee is entitled to indemnification
under this Section 9 shall be conclusive evidence, absent manifest error, of the
amount of such Indemnified Liabilities due from the Company to the Investor. If
any action shall be brought against any Indemnitee in respect of which indemnity
may be sought pursuant to this Agreement, such Indemnitee shall promptly notify
the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
Indemnitee. Any Indemnitee shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee, except to
the extent that (i) the employment thereof has been specifically authorized by
the Company in writing, (ii) the Company has failed after a reasonable period of
time to assume such defense and to employ counsel or (iii) in such action there
is, in the reasonable opinion of such separate counsel, a material conflict on
any material issue between the position of the Company and the position of such
Indemnitee, in which case the Company shall be responsible for the reasonable
fees and expenses of no more than one such separate counsel.

 

10.                               RESERVED.

 

11.                               TERMINATION

 

This Agreement may be terminated only as follows:

 

(a)                                 If pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding against the Company, a Custodian is appointed for the Company or for
all or substantially all of its property, or the Company makes a general
assignment for the benefit of its creditors, in each such case at any time prior
to the Closing, this Agreement shall automatically terminate without any
liability or payment obligation incurred by the Company (except as set forth
below) without further action or notice by any Person.

 

(b)                                 In the event that the Closing shall not have
occurred on or before July 31, 2019, due to the failure to satisfy the
conditions set forth in Sections 7 and 8 above with respect to the Closing,
either the Company, on the one hand, or the Investor, on the other hand, shall
have the option to terminate this Agreement at the close of business on such
date or thereafter without liability of any party to any other party (except as
set forth below); provided, however, that the right to terminate this Agreement
under this Section 11(b) shall not be available to any party if such party is
then in breach of any covenant or agreement contained in this Agreement or any
representation or warranty of such party contained in this Agreement fails to be
true and correct such that the conditions set forth in Section 7(c) or
Section 8(d), as applicable, could not then be satisfied. Any termination of
this Agreement pursuant to this Section 11(b) shall be effected by written
notice from the Company to the Investor, or the Investor to the Company, as the
case may be, setting forth the basis for the termination hereof.

 

The representations and warranties and covenants of the Company and the Investor
contained in Sections 3, 4, 5, and 6 hereof, the indemnification provisions set
forth in Section 9 hereof and the agreements and covenants set forth in Sections
11 and 12, shall survive the Closing and any termination of this Agreement.  No
termination of this Agreement shall be deemed to release the Company or the
Investor from any liability for intentional misrepresentation or willful breach
of any of the Transaction Documents to which it is a party or for liability for
indemnification pursuant to Section 9 hereof to the extent that such liability
for indemnification pertains to any such liability for intentional
misrepresentation or willful breach.

 

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12.                               MISCELLANEOUS.

 

(a)                                 Governing Law; Jurisdiction; Jury Trial. 
The corporate laws of the State of Delaware shall govern all issues concerning
the relative rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the other Transaction Documents shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the State of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
under the other Transaction Documents or in connection herewith or therewith, or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and the
other Transaction Documents and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY OF
THE OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR
THEREBY.

 

(b)                                 Counterparts.  This Agreement may be
executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party; provided that a
facsimile signature or signature delivered by e-mail in a “.pdf” format data
file shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original
signature.

 

(c)                                  Headings.  The headings of this Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

(d)                                 Severability.  If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

(e)                                  Entire Agreement; Amendment.  This
Agreement and the other Transaction Documents supersede all other prior oral or
written agreements among the Investor, the Company, their respective affiliates
and Persons acting on their behalf with respect to the subject matter hereof,
and this Agreement, the other Transaction Documents and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such matters. 
The Company acknowledges and agrees that is has not relied on, in any manner
whatsoever, any representations or statements, written or oral, other than as
expressly

 

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set forth in the Transaction Documents. No provision of this Agreement or the
other Transaction Documents may be amended other than by a written instrument
signed by both parties hereto.

 

(f)                                   Notices.  Any notices, consents, waivers
or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt when delivered personally; (ii) upon receipt when sent by
facsimile or email (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses for such communications shall be:

 

If to the Company:

Leap Therapeutics, Inc.

47 Thorndike Street, Suite B1-1

Cambridge, MA 02141

Telephone:

(617) 714-0360

Facsimile:

(617) 395-2647

E-mail:

donsi@leaptx.com

Attention:

Douglas E. Onsi, Chief Financial Officer

 

With a copy to (which shall not constitute notice or service of process):

Morgan, Lewis & Bockius, LLP

One Federal Street

Boston, MA

Telephone:

(617) 951-8000

Facsimile:

 

E-mail:

julio.vega@morganlewis.com

Attention:

Julio E. Vega, Esq.

 

If to the Investor:

Lincoln Park Capital Fund, LLC

440 North Wells, Suite 410

Chicago, IL 60654

Telephone:

312-822-9300

Facsimile:

312-822-9301

E-mail:

jscheinfeld@lpcfunds.com/jcope@lpcfunds.com

Attention:

Josh Scheinfeld/Jonathan Cope

 

 

With a copy to (which shall not constitute notice or service of process):

K&L Gates LLP

200 South Biscayne Boulevard

Southeast Financial Center, Suite 3900

Miami, FL 33131

Telephone:

(305) 539-3306

Facsimile:

(305) 358-7095

E-mail:

clayton.parker@klgates.com

Attention:

Clayton E. Parker, Esq.

 

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If to the Transfer Agent:

Continental Stock Transfer and Trust Company

1 State Street 30th Floor

New York, New York 10004

Tel:

212.845.3296

E-mail:

mlloyd@continentalstock.com

Attention:

Margaret Lloyd, Vice President & Account Administrator

 

or at such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine or email account
containing the time, date, and recipient facsimile number or email address, as
applicable, and an image of the first page of such transmission or (C) provided
by a nationally recognized overnight delivery service, shall be rebuttable
evidence of personal service, receipt by facsimile or email or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

 

(g)                                  Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and any permitted
successors and assigns of the Company.  The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Investor, including by merger or consolidation.  The Investor may
not assign its rights or obligations under this Agreement.

 

(h)                                 No Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and any permitted
successors and assigns of the Company and, except as set forth in Section 9, is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

(i)                                     Publicity.  The Company shall afford the
Investor and its counsel with the opportunity to review and comment upon the
form and substance of, and shall give reasonable consideration to all such
comments from the Investor or its counsel on, any press release, SEC filing or
any other public disclosure by or on behalf of the Company relating to the
Investor, its purchases hereunder or any aspect of the Purchase Shares, any of
the Transaction Documents or the transactions contemplated thereby, not less
than 24 hours prior to the issuance, filing or public disclosure thereof. At
least 24 hours prior to any release, filing or use by the Company of any such
any such press release, SEC filing or other public disclosure, the Investor must
be provided with a final version of such press release, SEC filing or other
public disclosure if it has material changes with respect to Investor or any
aspect of the Purchase Shares or the transactions contemplated under any of the
Transactions Documents from the version of any such press release, SEC filing or
other public disclosure previously provided for review and commentary by the
Investor and its counsel pursuant to the foregoing provisions of this
Section 12(i) . The Company agrees and acknowledges that its failure to fully
comply with this provision constitutes a Material Adverse Effect.

 

(j)                                    Further Assurances.  Each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

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(k)                                 No Financial Advisor, Placement Agent,
Broker or Finder.    The Company represents and warrants to the Investor that it
has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby.  The Investor represents
and warrants to the Company that it has not engaged any financial advisor,
placement agent, broker or finder in connection with the transactions
contemplated hereby.  The Company shall be responsible for the payment of any
fees or commissions, if any, of any financial advisor, placement agent, broker
or finder relating to or arising out of the transactions contemplated hereby. 
The Company shall pay, and hold the Investor harmless against, any liability,
loss or expense (including, without limitation, reasonable attorneys’ fees and
out of pocket expenses) arising in connection with any such claim.

 

(l)                                     No Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be
applied against any party.

 

(m)                             Remedies, Other Obligations, Breaches and
Injunctive Relief.  The Investor’s remedies provided in this Agreement,
including, without limitation, the Investor’s remedies provided in Section 9,
shall be cumulative and in addition to all other remedies available to the
Investor under this Agreement, at law or in equity (including a decree of
specific performance and/or other injunctive relief).   No remedy of the
Investor contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit the
Investor’s right to pursue actual damages for any failure by the Company to
comply with the terms of this Agreement.  The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Investor
and that the remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
Investor shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

(n)                                Enforcement Costs.  If: (i) this Agreement is
placed by the Investor in the hands of an attorney for enforcement or is
enforced by the Investor through any legal proceeding, in each case in
connection with any of the Company’s obligations under this Agreement; (ii) an
attorney is retained to represent the Investor in any bankruptcy,
reorganization, receivership or other proceedings affecting creditors’ rights
and involving a claim under this Agreement; or (iii) an attorney is retained to
represent the Investor in any other proceedings whatsoever in connection with
this Agreement, then the Company shall pay to the Investor, as incurred by the
Investor, all reasonable costs and expenses including reasonable attorneys’ fees
incurred in connection therewith, in addition to all other amounts due
hereunder. If: (1)  this Agreement is placed by the Company in the hands of an
attorney for enforcement or is enforced by the Company through any legal
proceeding, in each case in connection with any of the Investor’s obligations
under this Agreement;  (2) an attorney is retained to represent the Company in
any bankruptcy, reorganization, receivership or other proceedings affecting
creditors’ rights and involving a claim under this Agreement; or (3) an attorney
is retained to represent the Company in any other proceedings whatsoever in
connection with this Agreement, then the Investor shall pay to the Company, as
incurred by the Company, all reasonable costs and expenses including reasonable
attorneys’ fees incurred in connection therewith, in addition to all other
amounts due hereunder.  All amounts paid hereunder shall be immediately refunded
upon a finding in any such legal proceeding that the party to which costs and
expenses are paid pursuant to this Section 12(n) is in breach of this Agreement
with respect to any matter at issue in such legal proceeding.

 

(o)                                Waivers.  No provision of this Agreement may
be waived other than in a written instrument signed by the party against whom
enforcement of such waiver is sought.  No failure or delay

 

26

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in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.

 

*     *     *     *     *

 

27

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IN WITNESS WHEREOF, the Investor and the Company have caused this Agreement to
be duly executed as of the date first written above.

 

 

THE COMPANY:

 

 

 

LEAP THERAPEUTICS, INC.

 

 

 

By:

/s/ Christopher K. Mirabelli

 

Name:

Christopher K. Mirabelli

 

Title:

President and Chief Executive Officer

 

 

 

 

 

INVESTOR:

 

 

 

LINCOLN PARK CAPITAL FUND, LLC

 

BY: LINCOLN PARK CAPITAL, LLC

 

BY: ALEX NOAH INVESTORS, INC.

 

 

 

 

 

By:

/s/ Jonathan Cope

 

Name:

Jonathan Cope

 

Title:

President

 

28

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EXHIBITS

 

Exhibit A                                                                                            
Form of Officer’s Certificate

Exhibit B                                                                                            
Form of Secretary’s Certificate

Exhibit C                                                                                            
Information About the Investor Furnished to the Company

 

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EXHIBIT A

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(d) of that certain Purchase Agreement dated as of July 11, 2019,
(“Purchase Agreement”), by and between LEAP THERAPEUTICS, INC., a Delaware
corporation (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC (the
“Investor”).  Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.

 

The undersigned,            ,                of the Company, hereby certifies,
on behalf of the Company and not in his individual capacity, as follows:

 

1.                                      I am the               of the Company
and in such capacity make the statements contained in this Certificate;

 

2.                                      The representations and warranties of
the Company in Section 4 of the Purchase Agreement are true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 4 of the Purchase
Agreement, in which case, such representations and warranties are true and
correct without further qualification) as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, in which case such representations
and warranties are true and correct as of such date);

 

3.                                      The Company has performed, satisfied and
complied with in all material respects the covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Closing Date.

 

4.                                      The Company has not taken any steps, and
does not currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings. The Company is financially solvent and is
generally able to pay its debts as they become due.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this     day of
           .

 

 

 

 

Name:

 

Title:

 

 

The undersigned as Secretary of LEAP THERAPEUTICS, INC., a Delaware corporation,
hereby certifies, solely on behalf of the Company and not in his individual
capacity, that             is the duly elected, appointed, qualified and acting
         of           and that the signature appearing above is his genuine
signature.

 

--------------------------------------------------------------------------------

 

 

 

 

Name:

 

Title: Secretary

 

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EXHIBIT B

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(i) of that certain Purchase Agreement dated as of [             ],
2019 (“Purchase Agreement”), by and between LEAP THERAPEUTICS, INC., a Delaware
corporation (the “Company”), LINCOLN PARK CAPITAL FUND, LLC (the “Investor”),
pursuant to which the Company may sell to the Investor 571,429 shares (the
“Purchase Shares”) of the Company’s common stock, $0.001 par value per share
(the “Common Stock”), for a total purchase price of $1,000,000.75.  Terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Purchase Agreement.

 

The undersigned,              , Secretary of the Company, hereby certifies, on
behalf of the Company and not in his individual capacity, as follows:

 

1.                                      I am the Secretary of the Company and in
such capacity make the statements contained in this Secretary’s Certificate.

 

2.                                      Attached hereto as Exhibit A and
Exhibit B are true, correct and complete copies of the Company’s bylaws
(“Bylaws”) and Certificate of Incorporation (“Charter”), in each case, as
amended or restated through the date hereof, and no action has been taken by the
Company, its directors, officers or stockholders, in contemplation of the filing
of any further amendment relating to or affecting the Bylaws or Charter.

 

3.                                      Attached hereto as Exhibit C are true,
correct and complete copies of the resolutions duly adopted by the Board of
Directors of the Company (or a duly authorized committee thereof) on
[            ], 2019, by unanimous written consent.  Such resolutions have not
been materially amended, modified or rescinded and remain in full force and
effect and such resolutions are the only resolutions adopted by the Company’s
Board of Directors (or a duly authorized committee thereof) or the stockholders
of the Company relating to or affecting (i) the entering into and performance of
the Purchase Agreement, or the issuance, offering and sale of the Purchase
Shares and (ii) and the performance of the Company of its obligation under the
Transaction Documents as contemplated therein.

 

4.                                      As of the date hereof, the authorized,
issued and reserved capital stock of the Company is as set forth on Exhibit D
hereto.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this     day of
            .

 

 

 

 

Name:

 

Title: Secretary

 

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The undersigned as                 of LEAP THERAPEUTICS, INC., a Delaware
corporation, hereby certifies, solely on behalf of the Company and not in his
individual capacity, that             is the duly elected, appointed, qualified
and acting          of           and that the signature appearing above is his
genuine signature.

 

 

 

 

Name:

 

Title:

 

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EXHIBIT C

 

Information About the Investor Furnished To The Company By the Investor

Expressly For Use In Connection With The Initial Prospectus Supplement

 

Information With Respect to Lincoln Park Capital

 

As of the date of the Purchase Agreement, Lincoln Park Capital Fund, LLC,
beneficially owned 770,000 shares of our common stock (Including warrants to
purchase 440,000 shares of common stock).  Josh Scheinfeld and Jonathan Cope,
the Managing Members of Lincoln Park Capital, LLC, the manager of Lincoln Park
Capital Fund, LLC, are deemed to be beneficial owners of all of the shares of
common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and
Scheinfeld have shared voting and investment power over the shares being offered
under the prospectus supplement filed with the SEC in connection with the
transactions contemplated under the Purchase Agreement. Lincoln Park Capital,
LLC is not a licensed broker dealer or an affiliate of a licensed broker dealer.

 

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FORM OF COMPANY COUNSEL OPINION

 

Capitalized terms used herein but not defined herein, have the meaning set forth
in the Purchase Agreement.  Based on the foregoing, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:

 

1.              The Company is a corporation validly existing and in corporate
good standing under the Delaware General Corporation Law.  The Company is
qualified to do business as a foreign corporation and is in good standing in the
Commonwealth of Massachusetts.

 

2.              The Company has the corporate power to execute and deliver, and
perform its obligations under, each of the Purchase Agreement and the other
Transaction Documents to which it is a party.  To our knowledge, the Company has
the corporate power to conduct its business as it is now conducted as described
in the Prospectus, and to own and use the properties owned and used by it.

 

3.              The execution, delivery and performance by the Company of each
of the Purchase Agreement and the other Transaction Documents to which it is a
party have been duly authorized by all necessary corporate action on the part of
the Company.  The execution and delivery by the Company of each of the Purchase
Agreement and the other Transaction Documents to which it is a party, the
performance of the obligations of the Company thereunder and the consummation by
it of the transactions contemplated therein have been duly authorized and
approved by the Company’s Board of Directors and no further consent, approval or
authorization of the Company, its Board of Directors or its stockholders is
required.  Each of the Purchase Agreement and the other Transaction Documents to
which the Company is a party has been duly executed and delivered by the Company
and constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting creditor’s rights and remedies.

 

4.              The execution, delivery and performance by the Company of each
of the Purchase Agreement and the other Transaction Documents to which it is a
party, the consummation by the Company of the transactions contemplated thereby
including the offering, sale and issuance of the Purchase Shares in accordance
with the terms and conditions of the Purchase Agreement, and fulfillment and
compliance by the Company with each of its obligations thereunder in accordance
with the terms thereof, do not and will not: (i) conflict with or violate any
provision of the Certificate of Incorporation or the Bylaws of the Company,
(ii) to our knowledge, conflict with, constitute a breach of or default or an
event which, with the giving of notice or lapse of time or both, constitutes or
could constitute a breach or a default under any material agreement, note,
lease, mortgage, deed or other material instrument to which the Company is a
party or by which the Company or any of its assets are bound and that is filed
as an exhibit to the Registration Statement (collectively, the “Material
Agreements”), (iii) violate the Delaware General Corporation Law or any Federal
or New York law, rule or regulation which, in our experience, is generally
applicable to similar transactions, provided, however, that we express no
opinion as to federal or state securities or “blue sky” laws, or (iv) violate
any order, writ, injunction or decree known to us that is applicable to the
Company.

 

5.              The issuance of the Purchase Shares pursuant to the terms and
conditions of the Purchase Agreement have been duly authorized by all necessary
corporate action on the part of the Company. When issued and paid for in
accordance with the Purchase Agreement, the Purchase Shares shall be validly
issued, fully paid and non-assessable, and, to our knowledge, free of all rights
of first

 

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refusal and preemptive rights that may exist under the Delaware General
Corporation Law, the Certificate of Incorporation, the By-Laws, or any provision
of any Material Agreement.

 

6.              Based solely on our review of the Certificate of Incorporation, 
as of the date hereof, the authorized capital stock of the Company consists of
  ,   ,    shares of common stock, par value $0.001 per share, and   ,   ,   
shares of preferred stock, par value $0.001 per share.

 

7.              No authorization, approval, consent, filing or other order of
any federal or state governmental body, regulatory agency, or stock exchange or
market, or any court, is required to be obtained by the Company to enter into
and perform its obligations under each of the Purchase Agreement and the other
Transaction Documents to which it is a party, or for the Company to issue and
sell the Purchase Shares as contemplated by the Purchase Agreement, except such
as have been obtained or made by the Company and are in full force and effect
under the Securities Act, state securities or “blue sky” laws or the rules and
regulations of The Nasdaq Stock Market LLC.

 

.

 

8.  The Initial Prospectus Supplement and any other Prospectus Supplement
required under the Securities Act to have been filed with the SEC on or prior to
the date hereof pursuant to Rule 424(b) under the Securities Act has been made
in the manner and within the time period required by such Rule.

 

9.  The statements in the Registration Statement and the Prospectus under the
captions “Description of Capital Stock” and the statements in the Registration
Statement under Part II, Item 15, insofar as such statements contain
descriptions of laws, rules or regulations, and insofar as they describe the
terms of agreements or the Company’s Certificate of incorporation or Bylaws, in
each case fairly summarize in all material respects such laws, rules or
regulations, such terms of such agreements or the Company’s Certificate of
Incorporation or Bylaws, as the case may be.

 

10. The Company is not, and after giving effect to the issuance of the Purchase
Shares and the application of the proceeds as described in the Prospectus, will
not be required to register as an investment company under the Investment
Company Act of 1940, as amended.

 

11. Except as described in the Registration Statement and the Prospectus, none
of the Material Agreements grants to any person the right to require the Company
to file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act.

 

12.  The Registration Statement became effective under the Securities Act on
March 18, 2018 and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act.

 

13. The Registration Statement, at the time it initially became effective, and
the Prospectus, as of its date and as of the date hereof (except in each case as
to the financial statements, the notes thereto, schedules and other financial
and accounting data included therein or omitted therefrom, as to which we
express no opinion), appeared or appears on its face to comply as to form, in
all material respects, with the requirements of the Securities Act and the
rules and regulations of the SEC thereunder.  Each of the documents incorporated
by reference in the Registration Statement and the Prospectus (other than the
financial statements, the notes thereto, schedules and other financial and
accounting data

 

--------------------------------------------------------------------------------

 

included therein or omitted therefrom, as to which we express no opinion), at
the time such document was filed with the SEC, complied as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC thereunder.

 

14. We are not representing the Company in any pending litigation in which it is
a named defendant that challenges the validity or enforceability of, or seeks to
enjoin the performance of, the Purchase Agreement or any of the other
Transaction Documents.

 

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