Exhibit 10.1

 

Execution Copy

 

COMMON STOCK PURCHASE AGREEMENT

 

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of December 14, 2012
by and between CYCLACEL PHARMACEUTICALS, INC., a Delaware corporation (the
“Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company
(the “Buyer”).  Capitalized terms used herein and not otherwise defined herein
are defined in Section 10 hereof.

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, up to
Twenty Million Dollars ($20,000,000) of the Company’s common stock, par value
$0.001 per share (the “Common Stock”), in an at the market offering.  The shares
of Common Stock to be purchased hereunder are referred to herein as the
“Purchase Shares.”

 

NOW THEREFORE, the Company and the Buyer hereby agree as follows:

 

1.                                    PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Buyer, and the Buyer has the obligation to purchase
from the Company, Purchase Shares as follows:

 

(a)                                 Initial Purchase; Commencement of Purchases
of Common Stock.  Immediately upon the execution of this Agreement, the Buyer
shall purchase from the Company 158,982 Purchase Shares and upon receipt of such
Purchase Shares pay to the Company as the purchase price therefor, via wire
transfer, One Million Dollars ($1,000,000) (such purchase the “Initial Purchase”
and such Purchase Shares are referred to herein as “Initial Purchase Shares”).
 Upon issuance and payment therefor as provided herein, such Initial Purchase
Shares shall be validly issued and fully paid and non-assessable.  The Initial
Purchase Shares shall be issued to the Buyer bearing the restrictive legend set
forth in Section 4(e).  Thereafter, the purchase and sale of Purchase Shares
hereunder shall occur from time to time upon written notices by the Company to
the Buyer on the terms and conditions as set forth herein following the
satisfaction of the conditions (the “Commencement”) as set forth in Sections 6
and 7 below (the date of satisfaction of such conditions, the “Commencement
Date”).

 

(b)                                 The Company’s Right to Require Regular
Purchases.  Subject to the terms and conditions of this Agreement, on any given
Business Day after the Commencement Date, the Company shall have the right but
not the obligation to direct the Buyer by its delivery to the Buyer of a
Purchase Notice from time to time, and the Buyer thereupon shall have the
obligation, to buy the number of Purchase Shares specified in such notice, up to
a maximum of 100,000 Purchase Shares, on such Business Day (as long as such
notice is delivered on or before 5:00 p.m. Eastern time on such Business Day)
(each such purchase, a “Regular Purchase”) at the Purchase Price on the Purchase
Date; however, in no event shall the Purchase Amount of a Regular Purchase
exceed Five Hundred Thousand Dollars ($500,000) per Business Day.  The Company
may deliver additional Purchase Notices to the Buyer from time to time so long
as the most recent purchase has been completed.  The share amounts in the first

 

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sentence of this Section 1(b) shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split, or other similar transaction.

 

(c)                                  VWAP Purchases.  Subject to the terms and
conditions of this Agreement, in addition to purchases of Purchase Shares as
described in Section 1(b) above, with one Business Day’s prior written notice
(as long as such notice is delivered on or before 5:00 p.m. Eastern time on the
Business Day immediately preceding the VWAP Purchase Date), the Company shall
also have the right but not the obligation to direct Buyer by the Company’s
delivery to Buyer of a VWAP Purchase Notice from time to time, and Buyer
thereupon shall have the obligation, to buy the VWAP Purchase Share Percentage
of the trading volume of the Common Stock on the VWAP Purchase Date up to the
VWAP Purchase Share Volume Maximum on the VWAP Purchase Date (each such
purchase, a “VWAP Purchase”) at the VWAP Purchase Price.  The Company may
deliver a VWAP Purchase Notice to the Buyer only on a date on which the Company
also submitted a Purchase Notice for a Regular Purchase of 100,000 Purchase
Shares to the Buyer.  A VWAP Purchase shall automatically be deemed completed at
such time on the VWAP Purchase Date that the Sale Price falls below the VWAP
Minimum Price Threshold; in such circumstance, the VWAP Purchase Amount shall be
calculated using (i) the VWAP Purchase Share Percentage of the aggregate shares
traded on the Principal Market for such portion of the VWAP Purchase Date prior
to the time that the Sale Price fell below the VWAP Minimum Price Threshold and
(ii) a VWAP Purchase Price calculated using the volume weighted average price of
Common Stock sold during such portion of the VWAP Purchase Date prior to the
time that the Sale Price fell below the VWAP Minimum Price Threshold.  Each VWAP
Purchase Notice must be accompanied by instructions to the Company’s Transfer
Agent to immediately issue to the Buyer an amount of Common Stock equal to the
VWAP Purchase Share Estimate, a good faith estimate by the Company of the number
of Purchase Shares that the Buyer shall have the obligation to buy pursuant to
the VWAP Purchase Notice.  In no event shall the Buyer, pursuant to any VWAP
Purchase, purchase a number of Purchase Shares that exceeds the VWAP Purchase
Share Estimate issued on the VWAP Purchase Date in connection with such VWAP
Purchase Notice; however, the Buyer will immediately return to the Company any
amount of Common Stock issued pursuant to the VWAP Purchase Share Estimate that
exceeds the number of Purchase Shares the Buyer actually purchases in connection
with such VWAP Purchase.  Upon completion of each VWAP Purchase Date, the Buyer
shall submit to the Company a confirmation of the VWAP Purchase in form and
substance reasonably acceptable to the Company.  The Company may deliver
additional VWAP Purchase Notices to the Buyer from time to time so long as the
most recent purchase has been completed.  The Company may, by written notice to
the Buyer, in its sole discretion at any time after the date of this Agreement,
irrevocably terminate this Section 1(c) and its right to direct the Buyer to
make VWAP Purchases.

 

(d)                                 Payment for Purchase Shares.  For each
Regular Purchase, the Buyer shall pay to the Company an amount equal to the
Purchase Amount as full payment for such Purchase Shares via wire transfer of
immediately available funds on the same Business Day that the Buyer receives
such Purchase Shares.  For each VWAP Purchase, the Buyer shall pay to the
Company an amount equal to the VWAP Purchase Amount as full payment for such
Purchase Shares via wire transfer of immediately available funds on the third
Business Day following the VWAP Purchase Date.  All payments made under this
Agreement shall be made in lawful money of the United States of America via wire
transfer of immediately available funds to such account as the Company may from
time to time designate by written notice in accordance with the provisions of
this Agreement.  Whenever any amount expressed to be due by the terms of this
Agreement is due on any day that is not a Business Day, the same shall instead
be due on the next succeeding day that is a Business Day.

 

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(e)                                  Purchase Price Floor.  The Company and the
Buyer shall not effect any sales under this Agreement on any Purchase Date where
the Closing Sale Price is less than the Floor Price.  “Floor Price” means $1.00
per share of Common Stock, which shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction.

 

(f)                                   Records of Purchases.  The Buyer and the
Company shall each maintain records showing the remaining Available Amount at
any given time and the dates and purchase amounts for each purchase, or shall
use such other method reasonably satisfactory to the Buyer and the Company to
reconcile the remaining Available Amount.

 

(g)                                  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 Buyer made under this
Agreement.

 

(h)                                 Compliance with Principal Market Rules. 
Notwithstanding anything in this Agreement to the contrary, and in addition to
the limitations set forth in Section 1(e), the total number of shares of Common
Stock that may be issued under this Agreement, including the Commitment Shares
(as defined in Section 4(e) hereof), shall be limited to 1,689,317 shares of
Common Stock (the “Exchange Cap”), which equals 19.99% of the Company’s
outstanding shares of Common Stock as of the date hereof, unless stockholder
approval is obtained to issue more than such 19.99%.  The foregoing limitation
shall not apply if stockholder approval has not been obtained and at any time
the Exchange Cap is reached and at all times thereafter the average price paid
for all shares issued under this Agreement is equal to or greater than $6.56
(the “Minimum Price”), a price equal to the Closing Sale Price on the Business
Day prior to the date hereof (in such circumstance, for purposes of the
Principal Market, the transaction contemplated hereby would not be “below
market” and the Exchange Cap would not apply).  Notwithstanding the foregoing,
the Company shall not be required or permitted to issue, and the Buyer shall not
be required to purchase, any shares of Common Stock under this Agreement if such
issuance would violate the rules or regulations of the Principal Market.

 

(i)                                     Beneficial Ownership Limitation. The
Company shall not issue, and the Buyer shall not purchase any shares of Common
Stock under this Agreement, if such shares proposed to be issued and sold, when
aggregated with all other shares of Common Stock then owned beneficially (as
calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3
promulgated thereunder) by the Buyer and its affiliates would result in the
beneficial ownership by the Buyer and its affiliates of more than 19.99% of the
then issued and outstanding shares of Common Stock of the Company.

 

2.                                      BUYER’S REPRESENTATIONS AND WARRANTIES.

 

The Buyer represents and warrants to the Company that as of the date hereof and
as of the Commencement Date:

 

(a)                                 Investment Purpose.  The Buyer is entering
into this Agreement and acquiring the Commitment Shares and the Purchase Shares
(the Purchase Shares and the Commitment Shares are collectively referred to
herein as the “Securities”), for its own account for investment only and not
with a view towards, or for resale in connection with, the public sale or
distribution thereof; provided

 

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however, by making the representations herein, the Buyer does not agree to hold
any of the Securities for any minimum or other specific term.

 

(b)                                 Accredited Investor Status.  The Buyer is an
“accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D
of the 1933 Act.

 

(c)                                  Reliance on Exemptions.  The Buyer
understands that the Securities are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying in part upon the truth
and accuracy of, and the Buyer’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Buyer to acquire the Securities.

 

(d)                                 Information.  The Buyer has been furnished
with all materials relating to the business, finances and operations of the
Company and materials relating to the offer and sale of the Securities that have
been reasonably requested by the Buyer, including, without limitation, the SEC
Documents (as defined in Section 3(f) hereof).  The Buyer understands that its
investment in the Securities involves a high degree of risk.  The Buyer (i) is
able to bear the economic risk of an investment in the Securities including a
total loss, (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 Securities 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 other matters related to an investment
in the Securities.  Neither such inquiries nor any other due diligence
investigations conducted by the Buyer or its representatives shall modify, amend
or affect the Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below.  The Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Securities.

 

(e)                                  No Governmental Review.  The Buyer
understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.

 

(f)                                   Transfer or Sale.  The Buyer understands
that except as provided in the Registration Rights Agreement (as defined in
Section 4(a) hereof): (i) the Securities have not been and are not being
registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder or (B) an exemption exists permitting such Securities to
be sold, assigned or transferred without such registration; (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the 
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register the Securities
under the 1933 Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder.

 

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(g)                                  Organization.  The Buyer is a limited
liability company duly organized and validly existing in good standing under the
laws of the jurisdiction in which it is organized, and has the requisite
organizational power and authority to own its properties and to carry on its
business as now being conducted.

 

(h)                                 Validity; Enforcement.  This Agreement has
been duly and validly authorized, executed and delivered on behalf of the Buyer
and is a valid and binding agreement of the Buyer enforceable against the Buyer
in accordance with its terms, subject as to enforceability to (i) 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 and (ii)
public policy underlying any law, rule or regulation (including any federal or
state securities law, rule or regulation) with regards to indemnification,
contribution or exculpation. The execution and delivery of the Transaction
Documents by the Buyer and the consummation by it of the transactions
contemplated hereby and thereby do not conflict with the Buyer’s certificate of
organization or operating agreement or similar documents, and do not require
further consent or authorization by the Buyer, its managers or its members.

 

(i)                                     Residency.  The Buyer is a resident of
the State of Illinois.

 

(j)                                    No Prior Short Selling.  The Buyer
represents and warrants to the Company that at no time prior to the date of this
Agreement has any of the Buyer, 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 Section 242.200 of Regulation SHO
of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of the
Common Stock or (ii) hedging transaction, which establishes a net short position
with respect to the Common Stock.

 

3.                                      REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 

The Company represents and warrants to the Buyer that as of the date hereof and
as of the Commencement Date:

 

(a)                                 Organization and Qualification.  The Company
and its “Subsidiaries” (which for purposes of this Agreement means any entity in
which the Company, directly or indirectly, owns more than 50% of the voting
stock or capital stock or other similar equity interests) are corporations or
limited liability companies duly organized and validly existing in good standing
under the laws of the jurisdiction in which they are incorporated or organized,
and have the requisite corporate or organizational power and authority to own
their properties and to carry on their business as now being conducted.  Each of
the Company and its Subsidiaries is duly qualified as a foreign corporation or
limited liability company to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing could not reasonably be
expected to have a Material Adverse Effect.  As used in this Agreement,
“Material Adverse Effect” means any material adverse effect on any of: (i) the
business, properties, assets, operations, results of operations or financial
condition of the Company and its Subsidiaries, if any, taken as a whole, or (ii)
the authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined in Section 3(b) hereof).  The Company has no
material Subsidiaries except as set forth on Schedule 3(a).

 

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(b)                                 Authorization; Enforcement; Validity.  (i)
The Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Registration Rights Agreement
and each of the other agreements entered into by the parties on the Commencement
Date and attached hereto as exhibits to this Agreement (collectively, the
“Transaction Documents”), and to issue the Securities in accordance with the
terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation, the issuance of
the Commitment Shares and the reservation for issuance and the issuance of the
Purchase Shares issuable under this Agreement, have been duly authorized by the
Company’s Board of Directors or duly authorized committee thereof, do not
conflict with the Company’s Certificate of Incorporation or Bylaws, and do not
require further consent or authorization by the Company, its Board of Directors
or its stockholders, (iii) this Agreement has been, and each other Transaction
Document shall be on the Commencement 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, shall 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 (y) 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 and (z) public policy underlying
any law, rule or regulation (including any federal or states securities law,
rule or regulation) with regards to indemnification, contribution or
exculpation.  The Board of Directors of the Company or duly authorized committee
thereof has approved the resolutions (the “Signing Resolutions”) substantially
in the form as set forth as Exhibit B-1 attached hereto to authorize this
Agreement and the transactions contemplated hereby.  The Signing Resolutions are
valid, in full force and effect and have not been modified or supplemented in
any material respect other than by the resolutions set forth in Exhibit B-2
attached hereto regarding the registration statement referred to in Section 4
hereof.  The Company has delivered to the Buyer a true and correct copy of the
Signing Resolutions as approved by the Board of Directors of the Company.

 

(c)                                  Capitalization.  As of the date hereof, the
authorized capital stock of the Company consists of (i) 100,000,000 shares of
Common Stock,  of which as of the date hereof 8,450,811 shares are issued and
outstanding, no shares are held as treasury shares, 507,633 shares are reserved
for future issuance pursuant to the Company’s equity incentive plan(s), of which
approximately 9,410,756 shares remain available for future option grants or
stock awards, and 1,973,431 shares are issuable and reserved for issuance
pursuant to securities (other than stock options or equity based awards issued
pursuant to the Company’s stock incentive plans) exercisable or exchangeable
for, or convertible into, shares of Common Stock,  and (ii) 5,000,000 shares of
preferred stock, par value $0.001 per share, of which as of the date hereof
2,990,000 are designated as 6% Convertible Exchangeable Preferred Stock, with
per share liquidation preferences set forth on Schedule 3(c), of which 1,213,142
shares are issued and outstanding.  Set forth on Schedule 3(c) are additional
securities that may be issued pursuant to that certain Stock Purchase Agreement
dated March 22, 2012. All of such outstanding shares have been, or upon issuance
will be, validly issued and are fully paid and non-assessable.  Except as
disclosed in Schedule 3(c), (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 of the Company or any of its Subsidiaries, (iii) 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

 

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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 material
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 1933 Act
(except the Registration Rights Agreement), (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 Securities 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 or made available to the
Buyer 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”).

 

(d)                                 Issuance of Securities.  The Commitment
Shares have been duly authorized and, upon issuance in accordance with the terms
hereof, the Commitment Shares shall be (i) validly issued, fully paid and
non-assessable and (ii) free from all taxes, liens and charges with respect to
the issuance thereof.  1,689,317 shares of Common Stock have been duly
authorized and reserved for issuance upon purchase under this Agreement.  Upon
issuance and payment therefore in accordance with the terms and conditions of
this Agreement, the Purchase Shares shall be validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock.

 

(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 reservation for issuance and 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 any outstanding
series of preferred stock of the Company or the Bylaws or (ii) 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, to the Company’s
knowledge, 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 defaults,
terminations, amendments, accelerations, cancellations and violations under
clause (ii), which could not reasonably be expected to result in 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.  Except as disclosed in Schedule 3(e), 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 violations, defaults,
terminations or amendments that could not reasonably be expected to have a

 

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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, reporting obligations under the
1934 Act or as required under the 1933 Act or applicable state securities laws
or the filing of a Listing of Additional Shares Notification Form with 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 for reporting obligations under the 1934 Act, 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 Commencement Date.  The Company is not subject to any notices or
actions from or to the Principal Market, other than routine matters incident to
listing on the Principal Market and not involving a violation of the rules of
the Principal Market.  To the Company’s knowledge, the Principal Market has not
commenced any delisting proceedings against the Company.

 

(f)                                   SEC Documents; Financial Statements.
Except as disclosed in Schedule 3(f), since January 1, 2012, the Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the 1934
Act (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC
Documents”).  As of their respective dates (except as they have been correctly
amended), the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC (except as they may have
been properly amended), 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 light of the circumstances under which
they were made, not misleading.  As of their respective dates (except as they
have been properly amended), the financial statements of the Company included in
the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto.  Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  Except for routine
correspondence, such as comment letters and notices of effectiveness in
connection with previously filed registration statements or periodic reports
publicly available on EDGAR, to the Company’s knowledge, the Company or any of
its Subsidiaries are not presently the subject of any inquiry, investigation or
action by the SEC.

 

(g)                                  Absence of Certain Changes.  Since
September 30, 2012, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries taken as a whole.  For purposes of this Agreement,
neither a decrease in cash or cash equivalents nor losses incurred in the
ordinary course of the Company’s business shall be

 

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deemed or considered a material adverse change.  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. To the Company’s
knowledge, 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 the Company, the Common Stock or any of the Company’s
Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or
directors in their capacities as such, which could reasonably be expected to
have a Material Adverse Effect (each, an “Action”).  A description of each such
Action is set forth in Schedule 3(h).

 

(i)                                     Acknowledgment Regarding Buyer’s
Status.  The Company acknowledges and agrees that the Buyer 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 Buyer 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 Buyer 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 Buyer’s purchase of the Securities.  The Company
further represents to the Buyer 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)                                    Intellectual Property Rights. To the
Company’s knowledge, 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
other intellectual property rights (collectively, “Intellectual Property”)
necessary to conduct their respective businesses as now conducted, except as set
forth in Schedule 3(j) or to the extent that the failure to own, possess,
license or otherwise hold adequate rights to use Intellectual Property would
not, individually or in the aggregate, have a Material Adverse Effect.  Except
as disclosed in Schedule 3(j), to the Company’s knowledge, none of the Company’s
active and registered Intellectual Property have expired or terminated, or, by
the terms and conditions thereof, will expire or terminate within two years from
the date of this Agreement.  The Company and its Subsidiaries do not have any
knowledge of any infringement by the Company or its Subsidiaries of any
Intellectual Property of others, or of any such development of similar or
identical trade secrets or technical information by others with respect to the
Company’s or its Subsidiaries’ Intellectual Property and, except as set forth on
Schedule 3(j), 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 Intellectual Property, which could reasonably be
expected to have a Material Adverse Effect.

 

(k)                                 Environmental Laws.  To the Company’s
knowledge, the Company and its Subsidiaries (i) are in material compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of the environment or human health and safety and
with respect to hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii)

 

9

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have received all material permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in material 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 or receive such approvals could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.

 

(l)                                     Title.  The Company and its Subsidiaries
have good and marketable title to all personal property owned by them that is
material to the business of the Company and its Subsidiaries, free and clear of
all liens, encumbrances and defects or such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company and any of its Subsidiaries or could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  Any real property and facilities held under lease by the
Company and any of its Subsidiaries, to the Company’s knowledge, are held by
them under valid, subsisting and enforceable leases 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.

 

(m)                             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 reasonable and customary in the businesses in which the Company
and its Subsidiaries are engaged.  To the Company’s knowledge, since September
30, 2010, 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, to the Company’s knowledge, will be unable 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 reasonably be expected to have a Material Adverse Effect.

 

(n)                                 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 as currently conducted, and
neither the Company nor any such Subsidiary has received any written notice of
proceedings relating to the revocation or modification of any such material
certificate, authorization or permit.

 

(o)                                 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
which it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books reserves reasonably adequate for the
payment of all unpaid and unreported taxes or filed valid extensions) 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 reserves reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. 
To the Company’s knowledge, there are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction.

 

(p)                                 Transactions With Affiliates.  Other than
the grant or exercise of stock options or any other equity securities offered
pursuant to duly adopted stock or incentive compensation plans  as disclosed on
Schedule 3(c), none of the officers, directors or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as

 

10

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employees, officers and directors and reimbursement for expenses incurred on
behalf of the Company), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a material interest or is an officer, director, trustee
or general partner.

 

(q)                                 Application of Takeover Protections.  The
Company and its board of directors have taken or will take prior to the
Commencement 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 Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and the Buyer’s ownership of the
Securities.

 

4.                                      COVENANTS.

 

(a)                                 Filing of Form 8-K and Registration
Statement.  The Company agrees that it shall, within the time required under the
1934 Act, file a Current Report on Form 8-K disclosing this Agreement and the
transaction contemplated hereby.  The Company shall also file within fifteen
(15) Business Days from the date hereof a new registration statement covering
the sale of the Securities by the Buyer in accordance with the terms of the
Registration Rights Agreement between the Company and the Buyer, dated as of the
date hereof (“Registration Rights Agreement”).

 

(b)                                 Blue Sky. The Company shall take such
action, if any, as is reasonably necessary in order to obtain an exemption for
or to qualify (i) the initial sale of the Securities to the Buyer under this
Agreement and (ii) any subsequent sale of the Securities by the Buyer, 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 Buyer from time to time,
and shall provide evidence of any such action so taken to the Buyer at its
written request.

 

(c)                                  Listing.  The Company shall promptly secure
the listing of all of the Securities upon each national securities exchange and
automated quotation system that requires an application by the Company for
listing, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and shall maintain such listing, so long as any
other shares of Common Stock shall be so listed.  The Company shall use its
commercially reasonable efforts to maintain the Common Stock’s listing on the
Principal Market in accordance with the requirements of the Registration Rights
Agreement.  Neither the Company nor any of its Subsidiaries shall take any
action that would be reasonably expected to result in the delisting or
suspension of the Common Stock on the Principal Market, unless the Common Stock
is immediately thereafter traded on the New York Stock Exchange, the NYSE Amex
Equities, the Nasdaq Global Select Market, the Nasdaq Global Market, the NASDAQ
Capital Market, or the OTCQB or OTCQX market places of the OTC Markets.  The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section.

 

(d)                                 Limitation on Short Sales and Hedging
Transactions.  The Buyer agrees that beginning on the date of this Agreement and
ending on the date of termination of this Agreement as provided in Section
11(k), the Buyer and its agents, representatives and affiliates shall not in any
manner

 

11

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whatsoever enter into or effect, directly or indirectly, any (i) “short sale”
(as such term is defined in Section 242.200 of Regulation SHO of the 1934 Act)
of the Common Stock or (ii) hedging transaction, which establishes a net short
position with respect to the Common Stock.

 

(e)                                  Issuance of Commitment Shares and Initial
Purchase Shares.  Immediately upon the execution of this Agreement, the Company
shall issue to the Buyer as consideration for the Buyer entering into this
Agreement 74,548 shares of Common Stock (the “Commitment Shares”) and, pursuant
to Section 1(a), the Buyer shall purchase the Initial Purchase Shares.  The
Commitment Shares and Initial Purchase Shares shall be issued in certificated
form and (subject to Section 5 hereof) shall bear the following restrictive
legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM REASONABLY ACCEPTABLE TO THE COMPANY’S COUNSEL, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

 

(f)                                   Due Diligence.  The Buyer shall have the
right, from time to time as the Buyer may reasonably deem appropriate, to
perform reasonable due diligence on the Company during normal business hours and
subject to reasonable prior notice to the Company.  The Company and its officers
and employees shall provide information and reasonably cooperate with the Buyer
in connection with any reasonable request by the Buyer related to the Buyer’s
due diligence of the Company, including, but not limited to, any such request
made by the Buyer in connection with (i) the filing of the registration
statement described in Section 4(a) hereof and (ii) the Commencement; provided,
however, that at no time is the Company required to disclose material nonpublic
information to the Buyer or breach any obligation of confidentiality or
non-disclosure to a third party or make any disclosure that could cause a waiver
of attorney-client privilege.  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 of such other party 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.   All disclosures of Confidential Information
shall be subject to the terms and conditions of the Non-Disclosure Agreement
dated December 7, 2012 between the Company and the Buyer.

 

5.                                      TRANSFER AGENT INSTRUCTIONS.

 

Immediately upon the execution of this Agreement, the Company shall deliver to
the Transfer Agent a letter in the form as set forth as Exhibit D attached
hereto with respect to the issuance of the Commitment Shares and the Initial
Purchase Shares.  On the Commencement Date, the Company shall cause any
restrictive legend on the Commitment Shares and the Initial Purchase Shares to
be removed

 

12

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upon surrender of the originally issued certificate(s) for such shares.  All of
the Purchase Shares to be issued under this Agreement shall be issued without
any restrictive legend unless the Buyer expressly consents otherwise.  The
Company shall issue irrevocable instructions to the Transfer Agent, and any
subsequent transfer agent, to issue Common Stock in the name of the Buyer for
the Purchase Shares (the “Irrevocable Transfer Agent Instructions”).  The
Company warrants to the Buyer that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5, will be given by the
Company to the Transfer Agent with respect to the Purchase Shares and that the
Commitment Shares and the Purchase Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights Agreement, subject to the provisions of
Section 4(e) in the case of the Commitment Shares and the Initial Purchase
Shares.

 

6.                                      CONDITIONS TO THE COMPANY’S RIGHT TO
COMMENCE SALES OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT.

 

The right of the Company hereunder to commence sales of the Purchase Shares
(other than the Initial Purchase Shares) is subject to the satisfaction of each
of the following conditions on or before the Commencement Date (the date that
the Company may begin sales of Purchase Shares):

 

(a)                                 The Buyer shall have executed each of the
Transaction Documents and delivered the same to the Company;

 

(b)                                 The representations and warranties of the
Buyer shall be true and correct as of the Commencement 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 in all material respects as of such
specific date) and the Buyer shall have performed, satisfied and complied in all
material respects with the covenants and agreements required by this Agreement
to be performed, satisfied or complied with by the Buyer at or prior to the
Commencement Date, and the Company shall have received a certificate, executed
by a duly authorized officer of the Buyer, dated as of the Commencement Date, to
the foregoing effect; and

 

(c)                                  A registration statement covering the sale
of the Securities shall have been declared effective under the 1933 Act by the
SEC and no stop order with respect to the registration statement shall be
pending or threatened by the SEC.

 

7.                                      CONDITIONS TO THE BUYER’S OBLIGATION TO
MAKE PURCHASES OF SHARES OF COMMON STOCK.

 

The obligation of the Buyer to buy Purchase Shares (other than the Initial
Purchase Shares) under this Agreement is subject to the satisfaction of each of
the following conditions on or before the Commencement Date (the date that the
Company may begin sales of Purchase Shares other than the Initial Purchase
Shares) and once such conditions have been initially satisfied, there shall not
be any ongoing obligation to satisfy such conditions after the Commencement has
occurred:

 

(a)                                 The Company shall have executed each of the
Transaction Documents and delivered the same to the Buyer;

 

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(b)                                 The Company shall have issued to the Buyer
the Commitment Shares and, in the event that the Buyer shall have surrendered
the originally issued certificate(s), shall have removed the restrictive
transfer legend from the certificate representing the Commitment Shares and
Initial Purchase Shares;

 

(c)                                  The Common Stock shall be authorized for
quotation 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
the Securities shall be approved for listing upon the Principal Market;

 

(d)                                 The Buyer shall have received the opinion of
the Company’s legal counsel dated as of the Commencement Date in customary form
and substance;

 

(e)                                  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 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as of the
date of this Agreement and as of the Commencement 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 in all material respects as of such
specific 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 Commencement Date.  The Buyer shall have received a
certificate, executed by the CEO, President or CFO of the Company, dated as of
the Commencement Date, to the foregoing effect in the form attached hereto as
Exhibit A;

 

(f)                                   The Board of Directors of the Company or a
duly authorized committee thereof shall have adopted resolutions substantially
in the form attached hereto as Exhibit B-1 which shall be in full force and
effect without any amendment or supplement thereto as of the Commencement Date;

 

(g)                                  As of the Commencement Date, the Company
shall have reserved out of its authorized and unissued Common Stock, solely for
the purpose of effecting purchases of Purchase Shares hereunder, 1,689,317
shares of Common Stock;

 

(h)                                 The Irrevocable Transfer Agent Instructions,
in form acceptable to the Buyer shall have been signed by the Company and the
Buyer and have been delivered to the Transfer Agent;

 

(i)                                     The Company shall have delivered to the
Buyer 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 Commencement Date;

 

(j)                                    The Company shall have delivered to the
Buyer 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
Commencement Date;

 

(k)                                 The Company shall have delivered to the
Buyer a secretary’s certificate executed by the Secretary of the Company, dated
as of the Commencement Date, in the form attached hereto as Exhibit C;

 

14

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(l)                                     A registration statement covering the
sale of (i) all of the Commitment Shares, (ii) all of the Initial Purchase
Shares and (iii) such number of additional Purchase Shares as reasonably
determined by the Company shall have been declared effective under the 1933 Act
by the SEC and no stop order with respect thereto shall be pending or threatened
by the SEC.  The Company shall have prepared and delivered to the Buyer a final
and complete form of prospectus, dated and current as of the Commencement Date,
to be used by the Buyer in connection with any sales of any Securities, and to
be filed by the Company one (1) Business Day after the Commencement Date
pursuant to Rule 424(b).  The Company shall have made all filings under all
applicable federal and state securities laws necessary to consummate the
issuance of the Commitment Shares and the Purchase Shares pursuant to this
Agreement in compliance with such laws;

 

(m)                             No Event of Default has occurred and is
continuing, or any event which, after notice and/or lapse of time, would become
an Event of Default has occurred;

 

(n)                                 On or prior to the Commencement Date, the
Company shall take all necessary action, if any, and such actions as reasonably
requested by the Buyer, in order to render inapplicable any control share
acquisition, business combination, stockholder rights plan or 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, other than Section 203 of the Delaware General
Corporation Law, that is or could become applicable to the Buyer as a result of
the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and the Buyer’s ownership of the
Securities; and

 

(o)                                 The Company shall have provided the Buyer
with the information reasonably requested by the Buyer in connection with its
due diligence requests made prior to, or in connection with, the Commencement,
in accordance with the terms of Section 4(f) hereof.

 

8.                                      INDEMNIFICATION.

 

In consideration of the Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Buyer and all of its
affiliates, members, officers, directors, and employees, and any of the
foregoing person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (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 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 the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
other than with respect to Indemnified Liabilities which directly and primarily
result from (A) a breach of any

 

15

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of the Buyer’s representations and warranties, covenants or agreements contained
in this Agreement, or (B) the gross negligence, bad faith or willful misconduct
of the Buyer or any other Indemnitee.  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.

 

9.                                      EVENTS OF DEFAULT.

 

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:

 

(a)                                 during any period in which the effectiveness
of any registration statement is required to be maintained pursuant to the terms
of the Registration Rights Agreement, the effectiveness of such registration
statement lapses for any reason (including, without limitation, the issuance of
a stop order) or is unavailable to the Buyer for the sale of all of the
Registrable Securities (as defined in the Registration Rights Agreement), and
such lapse or unavailability continues for a period of ten (10) consecutive
Business Days or for more than an aggregate of thirty (30) Business Days in any
365-day period, which is not in connection with a post-effective amendment to
any such registration statement or the filing of a new registration statement;
provided, however, that in connection with any post-effective amendment to such
registration statement or filing of a new registration statement that is
required to be declared effective by the SEC, such lapse or unavailability may
continue for a period of no more than twenty (20) consecutive Business Days,
which such period shall be extended for an additional twenty (20) Business Days
if the Company receives a comment letter from the SEC in connection therewith;

 

(b)                                 the suspension from trading or failure of
the Common Stock to be listed on a Principal Market for a period of three (3)
consecutive Business Days;

 

(c)                                  the delisting of the Common Stock from the
Principal Market, and the Common Stock is not immediately thereafter trading on
the New York Stock Exchange, the NYSE Amex Equities, the Nasdaq Global Select
Market, the Nasdaq Global Market, the NASDAQ Capital Market, or the OTCQB or
OTCQX market places of the OTC Markets;

 

(d)                                 the failure for any reason by the Transfer
Agent to issue Purchase Shares to the Buyer within five (5) Business Days after
the applicable Purchase Date that the Buyer is entitled to receive;

 

(e)                                  the breach of any representation, warranty,
covenant or other term or condition under any Transaction Document if such
breach could reasonably be expected to have a Material Adverse Effect and
except, in the case of a breach of a covenant which is reasonably curable, only
if such breach continues uncured for a period of at least five (5) Business
Days;

 

(f)                                   if any Person commences a proceeding
against the Company pursuant to or within the meaning of any Bankruptcy Law;

 

(g)                                  if the Company pursuant to or within the
meaning of any Bankruptcy Law; (A) commences a voluntary case, (B) consents to
the entry of an order for relief against it in an involuntary

 

16

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case, (C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, (D) makes a general assignment for the
benefit of its creditors or (E) becomes insolvent; or

 

(h)                                 a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that (A) is for relief against the
Company in an involuntary case, (B) appoints a Custodian of the Company or for
all or substantially all of its property, or (C) orders the liquidation of the
Company or any Subsidiary.

 

(i)                                     if at any time after the Commencement
Date, the Exchange Cap is reached unless and until stockholder approval is
obtained pursuant to Section 1(h) hereof. The Exchange Cap shall be deemed to be
reached at such time if, upon submission of a Purchase Notice or VWAP Purchase
Notice under this Agreement, the issuance of such shares of Common Stock would
exceed that number of shares of Common Stock which the Company may issue under
this Agreement without breaching the Company’s obligations under the rules or
regulations of the Principal Market.

 

In addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Closing Sale Price is below the
Floor Price, the Company may not require and the Buyer shall not be obligated or
permitted to purchase any shares of Common Stock under this Agreement.  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, (any of which would be an Event of Default as described in Sections
9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without
any liability or payment to the Company without further action or notice by any
Person.  No such termination of this Agreement under Section 11(k)(i) shall
affect the Company’s or the Buyer’s obligations under this Agreement with
respect to pending purchases and the Company and the Buyer shall complete their
respective obligations with respect to any pending purchases under this
Agreement.

 

10.                               CERTAIN DEFINED TERMS.

 

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

 

(a)                                 “1933 Act” means the Securities Act of 1933,
as amended.

 

(b)                                 “Available Amount” means initially Twenty
Million Dollars ($20,000,000) in the aggregate which amount shall be reduced by
the Initial Purchase and the Purchase Amount each time the Buyer purchases
shares of Common Stock pursuant to Section 1 hereof.

 

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

 

(d)                                 “Business Day” means any day on which the
Principal Market is open for trading during normal trading hours (i.e., 9:30
a.m. to 4:00 p.m. Eastern Time), including any day on which the Principal Market
is open for trading for a period of time less than the customary time.

 

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(e)                                  “Closing Sale Price” means the last closing
trade price for the Common Stock on the Principal Market as reported by the
Principal Market.

 

(f)                                   “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, protocols, development plans, commercialization
plans, samples, compounds and clinical and pre-clinical trial results). 
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 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; (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; or (vi) is required by law to be disclosed by the receiving
party, provided that the receiving party gives the disclosing party prompt
written notice of such requirement prior to such disclosure and assistance in
obtaining an order protecting the information from public disclosure.

 

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

 

(h)                                 “Maturity Date” means the date that is
twenty-four (24) months from the Commencement Date.

 

(i)                                     “Person” means an individual or entity
including 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.

 

(j)                                    “Principal Market” means the Nasdaq
Global Market; provided however, that in the event the Company’s Common Stock is
ever listed or traded on the New York Stock Exchange, the NYSE Amex Equities,
the Nasdaq Global Select Market, the NASDAQ Capital Market, or either one of the
OTCQB or the OTCQX market places of the OTC Markets, then the “Principal Market”
shall mean such other market or exchange on which the Company’s Common Stock is
then listed or traded.

 

(k)                                 “Purchase Amount” means, with respect to any
particular purchase made hereunder, the portion of the Available Amount to be
purchased by the Buyer pursuant to Section 1 hereof as set forth in a valid
Purchase Notice or VWAP Purchase Notice which the Company delivers to the Buyer.

 

(l)                                     “Purchase Date” means with respect to
any Regular Purchase made hereunder, the Business Day of receipt by the Buyer of
a valid Purchase Notice that the Buyer is to buy Purchase Shares pursuant to
Section 1(b) hereof.

 

18

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(m)                             “Purchase Notice” shall mean an irrevocable
written notice from the Company to the Buyer directing the Buyer to buy Purchase
Shares pursuant to Section 1(b) hereof as specified by the Company therein at
the applicable Purchase Price on the Purchase Date.

 

(n)                                 “Purchase Price” means the lesser of (i) the
lowest Sale Price of the Common Stock on the Purchase Date or (ii) the
arithmetic average of the three (3) lowest Closing Sale Prices for the Common
Stock during the twelve (12) consecutive Business Days ending on the Business
Day immediately preceding such Purchase Date (to be appropriately adjusted for
any reorganization, recapitalization, non-cash dividend, stock split, reverse
stock split or other similar transaction).

 

(o)                                 “Sale Price” means any trade price for the
shares of Common Stock on the Principal Market during normal trading hours, as
reported by the Principal Market.

 

(p)                                 “SEC” means the United States Securities and
Exchange Commission.

 

(q)                                 “Transfer Agent” means the transfer agent of
the Company as set forth in Section 11(f) hereof or such other person who is
then serving as the transfer agent for the Company in respect of the Common
Stock.

 

(r)                                    “VWAP Minimum Price Threshold” means,
with respect to any particular VWAP Purchase Notice, the Sale Price on the VWAP
Purchase Date equal to the greater of (i) 90% of the Closing Sale Price on the
Business Day immediately preceding the VWAP Purchase Date or (ii) such higher
price as set forth by the Company in the VWAP Purchase Notice.

 

(s)                                   “VWAP Purchase Amount” means, with respect
to any particular VWAP Purchase Notice, the portion of the Available Amount to
be purchased by the Buyer pursuant to Section 1(c) hereof as set forth in a
valid VWAP Purchase Notice which requires the Buyer to buy the VWAP Purchase
Share Percentage of the aggregate shares traded on the Principal Market during
normal trading hours on the VWAP Purchase Date up to the VWAP Purchase Share
Volume Maximum, subject to the VWAP Minimum Price Threshold.

 

(t)                                    “VWAP Purchase Date” means, with respect
to any VWAP Purchase made hereunder, the Business Day following the receipt by
the Buyer of a valid VWAP Purchase Notice that the Buyer is to buy Purchase
Shares pursuant to Section 1(c) hereof.

 

(u)                                 “VWAP Purchase Notice” shall mean an
irrevocable written notice from the Company to the Buyer directing the Buyer to
buy Purchase Shares on the VWAP Purchase Date pursuant to Section 1(c) hereof as
specified by the Company therein at the applicable VWAP Purchase Price with the
applicable VWAP Purchase Share Percentage specified therein.

 

(v)                                 “VWAP Purchase Share Percentage” means, with
respect to any particular VWAP Purchase Notice pursuant to Section 1(c) hereof,
the percentage set forth in the VWAP Purchase Notice which the Buyer will be
required to buy as a specified percentage of the aggregate shares traded on the
Principal Market during normal trading hours up to the VWAP Purchase Share
Volume Maximum on the VWAP Purchase Date subject to Section 1(c) hereof but in
no event shall this percentage exceed thirty percent (30%) of such VWAP Purchase
Date’s share trading volume of the Common Stock on the Principal Market during
normal trading hours.

 

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(w)                               “VWAP Purchase Price” means the lesser of (i)
the Closing Sale Price on the VWAP Purchase Date; or (ii) ninety-six percent
(96%) of volume weighted average price for the Common Stock traded on the
Principal Market during normal trading hours on (A) the VWAP Purchase Date if
the aggregate shares traded on the Principal Market on the VWAP Purchase Date
have not exceeded the VWAP Purchase Share Volume Maximum, or (B) the portion of
the VWAP Purchase Date until such time as the sooner to occur of (1) the time at
which the aggregate shares traded on the Principal Market has exceeded the VWAP
Purchase Share Volume Maximum, or (2) the time at which the sale price of Common
Stock falls below the VWAP Minimum Price Threshold (to be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split,
reverse stock split or other similar transaction).

 

(x)                                 “VWAP Purchase Share Estimate” means the
number of shares of Common Stock that the Company has in its sole discretion
irrevocably instructed its Transfer Agent to issue to the Buyer via the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program in
connection with a VWAP Purchase Notice pursuant to Section 1(c) hereof and
issued to the Buyer’s or its designee’s balance account with DTC through its
Deposit Withdrawal At Custodian (DWAC) system on the VWAP Purchase Date (to be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction).

 

(y)                                 “VWAP Purchase Share Volume Maximum” means a
number of shares of Common Stock traded on the Principal Market during normal
trading hours on the VWAP Purchase Date equal to: (i) the VWAP Purchase Share
Estimate, divided by (ii) the VWAP Purchase Share Percentage (to be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split, reverse stock split or other similar transaction).

 

11.                               MISCELLANEOUS.

 

(a)                                 Governing Law; Jurisdiction; Jury Trial. 
The 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 Illinois, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Illinois or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Illinois.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
Chicago, 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 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

 

20

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OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(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 or pdf (or other electronic reproduction) signature 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, not a facsimile
or pdf (or other electronic reproduction) 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.  This Agreement and the
Registration Rights Agreement supersede all other prior oral or written
agreements between the Buyer, the Company, their affiliates and persons acting
on their behalf with respect to the matters discussed herein, 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 Buyer 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 set
forth in this Agreement.

 

(f)                                   Notices.  Any notices, consents 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
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Business Day
after timely deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

If to the Company:

 

Cyclacel Pharmaceuticals, Inc.

1500 Connell Drive, Suite 1500

Berkeley Heights, NJ 07922

Telephone:          908-517-7330

Facsimile:           866-271-3466

Attention:           Chief Executive Officer

 

With a copy to (which shall not constitute delivery to the Company):

 

Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

 

21

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666 Third Avenue

New York, NY 10017

Telephone:          212-935-3000

Facsimile:           212-983-3115

Attention:           Joel I. Papernik, Esq.

 

If to the Buyer:

 

Aspire Capital Fund, LLC

155 North Wacker Drive, Suite 1600

Chicago, IL 60606

Telephone:          312-658-0400

Facsimile:           312-658-4005

Attention:           Steven G. Martin

 

With a copy to (which shall not constitute delivery to the Buyer):

 

O’Melveny & Myers LLP

1625 Eye Street, NW

Washington, DC 20006

Telephone:          202-383-5418

Facsimile:           202-383-5414

Attention:           Martin P. Dunn, Esq.

 

If to the Transfer Agent:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Telephone:         718-921-8360

Attention:           Marianela Patterson

 

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 one (1) Business Day prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of receipt 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 their
respective successors and assigns.  The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Buyer, including by merger or consolidation.  The Buyer may not assign its
rights or obligations under this Agreement.

 

22

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(h)                                 No Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.

 

(i)                                     Publicity.  The Buyer shall have the
right to approve before issuance any press release, SEC filing or any other
public disclosure made by or on behalf of the Company whatsoever with respect
to, in any manner, the Buyer, its purchases hereunder or any aspect of this
Agreement or the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of the Buyer, to make any
press release or other public disclosure (including any filings with the SEC)
with respect to such transactions as is required by applicable law and
regulations so long as the Company and its counsel consult with the Buyer in
connection with any such press release or other public disclosure at least one
(1) Business Day prior to its release.  The Buyer must be provided with a copy
thereof at least one (1) Business Day prior to any release or use by the Company
thereof.

 

(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.

 

(k)                                 Termination.  This Agreement may be
terminated only as follows:

 

(i)                                     By the Buyer any time an Event of
Default exists without any liability or payment to the Company.  However, 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, (any of which would be an Event of Default as described in Sections
9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without
any liability or payment to the Company without further action or notice by any
Person.  No such termination of this Agreement under this Section 11(k)(i) shall
affect the Company’s or the Buyer’s obligations under this Agreement with
respect to pending purchases and the Company and the Buyer shall complete their
respective obligations with respect to any pending purchases under this
Agreement.

 

(ii)                                  In the event that the Commencement shall
not have occurred the Company shall have the option to terminate this Agreement
for any reason or for no reason without any liability whatsoever of either party
to the other party under this Agreement except as set forth in
Section 11(k)(viii) hereof.

 

(iii)                               In the event that the Commencement shall not
have occurred on or before June 1, 2013, due to the failure to satisfy any of
the conditions set forth in Sections 6 and 7 above with respect to the
Commencement, either party shall have the option to terminate this Agreement at
the close of business on such date or thereafter without liability of either
party to any other party; provided, however, that the right to terminate this
Agreement under this Section 11(k)(iii) shall not be available to either party
if such failure to satisfy any of the conditions set forth in Sections 6 and 7
is the result of a breach of this Agreement by such party

 

23

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or the failure of any representation or warranty of such party included in this
Agreement to be true and correct in all material respects.

 

(iv)                              At any time after the Commencement Date, the
Company shall have the option to terminate this Agreement for any reason or for
no reason by delivering notice (a “Company Termination Notice”) to the Buyer
electing to terminate this Agreement without any liability whatsoever of either
party to the other party under this Agreement except as set forth in
Section 11(k)(viii) hereof.  The Company Termination Notice shall not be
effective until one (1) Business Day after it has been received by the Buyer.

 

(v)                                 This Agreement shall automatically terminate
on the date that the Company sells and the Buyer purchases the full Available
Amount as provided herein, without any action or notice on the part of any party
and without any liability whatsoever of any party to any other party under this
Agreement except as set forth in Section 11(k)(viii) hereof.

 

(vi)                              If by the Maturity Date for any reason or for
no reason the full Available Amount under this Agreement has not been purchased
as provided for in Section 1 of this Agreement, this Agreement shall
automatically terminate on the Maturity Date, without any action or notice on
the part of any party and without any liability whatsoever of any party to any
other party under this Agreement except as set forth in
Section 11(k)(viii) hereof.

 

(vii)                           Except as set forth in Sections 11(k)(i) (in
respect of an Event of Default under Sections 9(f), 9(g) and 9(h)), 11(k)(v) and
11(k)(vi), any termination of this Agreement pursuant to this
Section 11(k) shall be effected by written notice from the Company to the Buyer,
or the Buyer to the Company, as the case may be, setting forth the basis for the
termination hereof.

 

(viii)                        The representations and warranties of the Company
and the Buyer contained in Sections 2, 3 and 5 hereof, the indemnification
provisions set forth in Section 8 hereof and the agreements and covenants set
forth in Sections 4(e) and 11, shall survive the Commencement and any
termination of this Agreement.  No termination of this Agreement shall affect
the Company’s or the Buyer’s rights or obligations (A) under the Registration
Rights Agreement which shall survive any such termination in accordance with its
terms or (B) under this Agreement with respect to pending purchases and the
Company and the Buyer shall complete their respective obligations with respect
to any pending purchases under this Agreement.

 

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

 

24

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(m)                             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.

 

(n)                                 Failure or Indulgence Not Waiver.  No
failure or delay 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.

 

*     *     *     *     *

 

25

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

 

 

 

THE COMPANY:

 

 

 

CYCLACEL PHARMACEUTICALS, INC.

 

 

 

By:

/s/ Spiro Rombotis

 

Name: Spiro Rombotis

 

Title: President and Chief Executive Officer

 

 

 

 

 

BUYER:

 

 

 

ASPIRE CAPITAL FUND, LLC

 

BY: ASPIRE CAPITAL PARTNERS, LLC

 

BY: CHRISKO INVESTORS, INC.

 

 

 

By:

/s/ Christos Komissopoulos

 

Name: Christos Komissopoulos

 

Title: President

 

26

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SCHEDULES

 

Schedule
3(a)                                                                     
Subsidiaries

Schedule
3(c)                                                                      
Capitalization

Schedule
3(h)                                                                     
Litigation

Schedule
3(j)                                                                        
Intellectual Property Rights

 

EXHIBITS

 

Exhibit A                                                                                            
Form of Officer’s Certificate

Exhibit B                                                                                            
Form of Resolutions of Board of Directors of the Company

Exhibit C                                                                                            
Form of Secretary’s Certificate

Exhibit D                                                                                            
Form of Letter to Transfer Agent

 

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EXHIBIT A

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 7(e) of that certain Common Stock Purchase Agreement dated as of
December 14, 2012 (the “Common Stock Purchase Agreement”), by and between
CYCLACEL PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and
ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”). 
Terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Common Stock Purchase Agreement.

 

The undersigned,                            ,                             of the
Company, hereby certifies as follows:

 

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

 

2.                                      The representations and warranties of
the Company 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 3 of the Common Stock 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 Commencement Date as
though made at that time (except for representations and warranties that speak
as of a specific date);

 

3.                                      The Company has performed, satisfied and
complied in all material respects with covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by the Company at or prior to the Commencement 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 Cyclacel Pharmaceuticals, Inc., a Delaware
corporation, hereby certifies that                       is the duly elected,
appointed, qualified and acting                     of Cyclacel
Pharmaceuticals, Inc. and that the signature appearing above is his/her genuine
signature.

 

 

 

 

Secretary

 

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

 

EXHIBIT B-1

 

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

 

WHEREAS, management has reviewed with the Board of Directors the background,
terms and conditions of the transactions subject to the Common Stock Purchase
Agreement (the “Purchase Agreement”) by and between the Company and Aspire
Capital Fund, LLC (“Aspire”), including all materials terms and conditions of
the transactions subject thereto, providing for the purchase by Aspire of up to
Twenty Million Dollars ($20,000,000) of the Company’s common stock, par value
$0.001 per share (the “Common Stock”); and

 

WHEREAS, after careful consideration of the Purchase Agreement, the documents
incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best
interests of the Company to engage in the transactions contemplated by the
Purchase Agreement, including, but not limited to, the issuance of 74,548 shares
of Common Stock to Aspire as a commitment fee (the “Commitment Shares”) and the
sale of shares of Common Stock to Aspire up to the available amount under the
Purchase Agreement (the “Purchase Shares,” and together with the Commitment
Shares, the “Aspire Shares”).

 

Transaction Documents

 

NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and the Chief Executive Officer and Chief
Financial Officer (the “Authorized Officers”) are severally authorized to
execute and deliver the Purchase Agreement, and any other agreements or
documents contemplated thereby including, without limitation, a registration
rights agreement (the “Registration Rights Agreement”) providing for the
registration of the shares of the Company’s Common Stock issuable in respect of
the Purchase Agreement on behalf of Aspire, with such amendments, changes,
additions and deletions as the Authorized Officers may deem to be appropriate
and approve on behalf of, the Company, such approval to be conclusively
evidenced by the signature of an Authorized Officer thereon; and

 

FURTHER RESOLVED, that the terms and provisions of the Registration Rights
Agreement by and among the Company and Aspire are hereby approved and the
Authorized Officers are authorized to execute and deliver the Registration
Rights Agreement (pursuant to the terms of the Purchase Agreement), with such
amendments, changes, additions and deletions as the Authorized Officer may deem
appropriate and approve on behalf of, the Company, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

 

FURTHER RESOLVED, that the terms and provisions of the Form of Transfer Agent
Instructions (the “Instructions”) are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement), with such amendments, changes, additions and
deletions as the Authorized Officers may deem appropriate and approve on behalf
of, the Company, such approval to be conclusively evidenced by the signature of
an Authorized Officer thereon; and

 

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

 

Execution of Purchase Agreement

 

FURTHER RESOLVED, that the Company be and it hereby is authorized to execute the
Purchase Agreement providing for the purchase of common stock of the Company
having an aggregate value of up to $20,000,000; and

 

Issuance of Common Stock

 

FURTHER RESOLVED, that the Company is hereby authorized to issue the Commitment
Shares to Aspire as Commitment Shares and that upon issuance of the Commitment
Shares pursuant to the Purchase Agreement, the Commitment Shares shall be duly
authorized, validly issued, fully paid and non-assessable; and

 

FURTHER RESOLVED, that the Company is hereby authorized to issue shares of
Common Stock upon the purchase of Purchase Shares up to the available amount
under the Purchase Agreement in accordance with the terms of the Purchase
Agreement and that, upon issuance of the Purchase Shares pursuant to the
Purchase Agreement, the Purchase Shares will be duly authorized, validly issued,
fully paid and non-assessable; and

 

FURTHER RESOLVED, that the Corporation shall initially reserve 1,689,317 shares
of Common Stock for issuance as Purchase Shares under the Purchase Agreement;
and

 

Listing of Shares on the Nasdaq Global Market

 

FURTHER RESOLVED, that the officers of the Company with the assistance of
counsel be, and each of them hereby is, authorized and directed to take all
necessary steps and do all other things necessary and appropriate to effect the
listing of the Aspire Shares on the Nasdaq Global Market; and

 

Approval of Actions

 

FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Company and to take all such steps as deemed necessary or appropriate, with
the advice and assistance of counsel, to cause the Company to consummate the
agreements referred to herein and to perform its obligations under such
agreements;

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the Company,
to take or cause to be taken all such further actions and to execute and deliver
or cause to be executed and delivered all such further agreements, amendments,
documents, certificates, reports, schedules, applications, notices, letters and
undertakings and to incur and pay all such fees and expenses as in their
judgment shall be necessary, proper or desirable to carry into effect the
purpose and intent of any and all of the foregoing resolutions, and that all
actions heretofore taken by any officer or director of the Company in connection
with the transactions contemplated by the agreements described herein are hereby
approved, ratified and confirmed in all respects; and

 

FURTHER RESOLVED, that any and all actions heretofore or hereinafter taken on
behalf of the Company by any of said persons or entities within the terms of the
foregoing resolutions are hereby approved, ratified and confirmed in all
respects as the acts and deeds of the Company.

 

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EXHIBIT B-2

 

FORM OF COMPANY RESOLUTIONS APPROVING REGISTRATION STATEMENT

 

WHEREAS, there has been presented to the Board of Directors of the Company a
Common Stock Purchase Agreement (the “Purchase Agreement”) by and among the
Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for the purchase
by Aspire of up to Twenty Million Dollars ($20,000,000) of the Company’s common
stock, par value $0.001 (the “Common Stock”); and

 

WHEREAS, after careful consideration of the Purchase Agreement, the documents
incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has approved the Purchase Agreement and the transactions
contemplated thereby and the Company has executed and delivered the Purchase
Agreement to Aspire; and

 

WHEREAS, in connection with the transactions contemplated pursuant to the
Purchase Agreement, the Company has agreed to file a registration statement with
the Securities and Exchange Commission (the “Commission”) registering the
Commitment Shares (as defined in the Purchase Agreement) and the Purchase Shares
(as defined in the Purchase Agreement) and to list the Commitment Shares and
Purchase Shares on the Nasdaq Global Market;

 

WHEREAS, the management of the Company has prepared an initial draft of a
Registration Statement on Form S-1 (the “Registration Statement”) in order to
register the sale of the Purchase Shares and the Commitment Shares
(collectively, the “Securities”) by Aspire; and

 

WHEREAS, the Board of Directors has determined to approve the Registration
Statement and to authorize the appropriate officers of the Company to take all
such actions as they may deem appropriate to effect the offering.

 

NOW, THEREFORE, BE IT RESOLVED, that the officers and directors of the Company
be, and each of them hereby is, authorized and directed, with the assistance of
counsel and accountants for the Company, to prepare, execute and file with the
Commission the Registration Statement, which Registration Statement shall be
filed substantially in the form presented to the Board of Directors, with such
changes therein as the Chief Executive Officer or Chief Executive Officer of the
Company shall deem desirable and in the best interest of the Company and its
stockholders (such officer’s execution thereof including such changes shall be
deemed to evidence conclusively such determination); and

 

FURTHER RESOLVED, that the officers of the Company be, and each of them hereby
is, authorized and directed, with the assistance of counsel and accountants for
the Company, to prepare, execute and file with the Commission all amendments,
including post-effective amendments, and supplements to the Registration
Statement, and all certificates, exhibits, schedules, documents and other
instruments relating to the Registration Statement, as such officers shall deem
necessary or appropriate (such officer’s execution and filing thereof shall be
deemed to evidence conclusively such determination); and

 

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FURTHER RESOLVED, that the execution of the Registration Statement and of any
amendments and supplements thereto by the officers of the Company be, and the
same hereby is, specifically authorized either personally or by the Chief
Executive Officer and Chief Financial Officer (the “Authorized Officers”) as
such officer’s true and lawful attorneys-in-fact and agents; and

 

FURTHER RESOLVED, that the Authorized Officers are hereby designated as “Agent
for Service” of the Company in connection with the Registration Statement and
the filing thereof with the Commission, and the Authorized Officers hereby are
authorized to receive communications and notices from the Commission with
respect to the Registration Statement; and

 

FURTHER RESOLVED, that the officers of the Company be, and each of them hereby
is, authorized and directed to pay all fees, costs and expenses that may be
incurred by the Company in connection with the Registration Statement; and

 

FURTHER RESOLVED, that it is desirable and in the best interest of the Company
that the Securities be qualified or registered for sale in various states; that
the officers of the Company be, and each of them hereby is, authorized to
determine the states in which appropriate action shall be taken to qualify or
register for sale all or such part of the Securities as they may deem advisable;
that said officers be, and each of them hereby is, authorized to perform on
behalf of the Company any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such states, and in
connection therewith to execute and file all requisite papers and documents,
including, but not limited to, applications, reports, surety bonds, irrevocable
consents, appointments of attorneys for service of process and resolutions; and
the execution by such officers of any such paper or document or the doing by
them of any act in connection with the foregoing matters shall conclusively
establish their authority therefor from the Company and the approval and
ratification by the Company of the papers and documents so executed and the
actions so taken; and

 

FURTHER RESOLVED, that if, in any state where the securities to be registered or
qualified for sale to the public, or where the Company is to be registered in
connection with the public offering of the Securities, a prescribed form of
resolution or resolutions is required to be adopted by the Board of Directors,
each such resolution shall be deemed to have been and hereby is adopted, and the
Secretary is hereby authorized to certify the adoption of all such resolutions
as though such resolutions were now presented to and adopted by the Board of
Directors; and

 

FURTHER RESOLVED, that the officers of the Company with the assistance of
counsel be, and each of them hereby is, authorized and directed to take all
necessary steps and do all other things necessary and appropriate to effect the
listing of the Securities on the Nasdaq Global Market; and

 

Approval of Actions

 

FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Company and to take all such steps as are deemed necessary or appropriate,
with the advice and assistance of counsel, to cause the Company to take all such
action referred to herein and to perform its obligations incident to the
registration, listing and sale of the Securities; and

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the Company,
to take or cause to be taken all

 

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such further actions and to execute and deliver or cause to be executed and
delivered all such further agreements, amendments, documents, certificates,
reports, schedules, applications, notices, letters and undertakings and to incur
and pay all such fees and expenses as in their judgment shall be necessary,
proper or desirable to carry into effect the purpose and intent of any and all
of the foregoing resolutions, and that all actions heretofore taken by any
officer or director of the Company in connection with the transactions
contemplated by the agreements described herein are hereby approved, ratified
and confirmed in all respects.

 

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EXHIBIT C

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (the “Certificate”) is being delivered pursuant to
Section 7(k) of that certain Common Stock Purchase Agreement dated as of
December 14, 2012 (the “Common Stock Purchase Agreement”), by and between
CYCLACEL PHARMACEUTICALS, INC., a Delaware corporation (the “Company”) and
ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”),
pursuant to which the Company may sell to the Buyer up to Twenty Million Dollars
($20,000,000) of the Company’s Common Stock, par value $0.001 (the “Common
Stock”).  Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Common Stock Purchase Agreement.

 

The undersigned,                                            Secretary of the
Company, hereby certifies as follows in his capacity as such:

 

1.                                      I am the Secretary of the Company and
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 (“Certificate of Incorporation”), in
each case, as amended 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 Articles.

 

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 on December 14, 2012, at which a quorum was present and
acting throughout.  Such resolutions have not been 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 any committee
thereof, or the stockholders of the Company relating to or affecting (i) the
entering into and performance of the Common Stock Purchase Agreement, or the
issuance, offering and sale of the Purchase Shares and the Commitment 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
                         .

 

 

 

 

 

, Secretary

 

The undersigned as                                  of Cyclacel
Pharmaceuticals, Inc., a Delaware corporation, hereby certifies that
                    is the duly elected, appointed, qualified and acting
Secretary of Cyclacel Pharmaceuticals, Inc., and that the signature appearing
above is his/her genuine signature.

 

 

 

 

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EXHIBIT E

 

FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE COMMITMENTS SHARES
AT SIGNING OF THE PURCHASE AGREEMENT

 

[COMPANY LETTERHEAD]

 

December     , 2012

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attention:  Marianela Patterson

 

Re: Issuance of Common Shares to Aspire Capital Fund, LLC

 

Ladies and Gentlemen:

 

On behalf of Cyclacel Pharmaceuticals, Inc. (the “Company”), you are hereby
instructed to issue as soon as possible 233,530 shares of our common stock in
the name of Aspire Capital Fund, LLC.  The share certificate should be dated
December 14, 2012.  I have included a true and correct copy of a unanimous
written consent executed by all of the members of the Board of Directors of the
Company adopting resolutions approving the issuance of these shares.  The shares
should be issued subject to the following restrictive legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S
COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS.

 

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The share certificate should be sent as soon as possible via overnight mail to
the following address:

 

Aspire Capital Fund, LLC

155 North Wacker Drive, Suite 1600

Chicago, IL 60606

Attention: Steven G. Martin

 

Thank you very much for your help.  Please call
                                 , at                           if you have any
questions or need anything further.

 

Cyclacel Pharmaceuticals, Inc.

 

 

 

BY:

 

 

 

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