Exhibit 10.1


 


SUBSCRIPTION ESCROW AGREEMENT


 


This Subscription
Escrow Agreement (the “Escrow Agreement”), dated as of the effective date (the “Effective Date”) set forth
on Schedule 1 attached hereto (“Schedule 1”), by and among the corporation identified on Schedule 1 (the “Issuer”),
the corporation identified on Schedule 1 (the “Depositor”) and Delaware Trust Company, as escrow agent hereunder (the
“Escrow Agent”).


 


WHEREAS, the Issuer will offer to
investors, pursuant to a registration statement on Form S-3, Registration Statement File No. 333-208784, as may be subsequently
amended, the subscription and sale of up to 2,594,082 Units, with each Unit consisting of one share of common stock, $0.0001 par
value (“Common Stock”), and one warrant to purchase up to one share of Common Stock, at a per Unit price of $4.00 (the
“Units”); and


 


WHEREAS, the Depositor has been
named as the placement agent in connection with the proposed offering of the Units.


 


NOW
THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree
as follows:


 


1.            Appointment.
The Issuer and Depositor hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow
Agent hereby accepts such appointment under the terms and conditions set forth herein.


 


2.            Escrow
Fund. All funds received by the Depositor and the Issuer in connection with the sale of Units shall be deposited with the Escrow
Agent (the “Escrow Deposit”). The Escrow Agent shall, subject to the terms and conditions hereof, hold the Escrow Deposit
and any proceeds thereof (the “Escrow Fund”) as directed in Section 3.


 


3.            Investment
of Escrow Fund. During the term of this Escrow Agreement, the Escrow Fund shall be held in a non-interest bearing account by
the Escrow Agent as indicated on Schedule 1 or such other non-interest bearing investments as shall be directed in writing by the
Issuer and the Depositor and as shall be acceptable to the Escrow Agent. The Escrow Agent may earn compensation in the form of
short-term interest (“float”) on items like uncashed distribution checks (from the date issued until the date cashed),
funds that it is directed not to invest, deposits awaiting investment direction or received too late to be invested overnight in
previously directed investments.


 


4.            Disposition
and Termination. The Depositor and the Issuer agree to notify the Escrow Agent in writing of the closing date of the offering
(the “Offering Closing Date”), on or before January 31, 2017. There is no minimum subscription amount. The sale of
the Units is being made on a best efforts, no minimum amount basis. Upon receipt of such written notification the following procedure
will take place.


 


		(i)	If the Issuer receives subscriptions for the Units, and
the Issuer and the Depositor agree to a closing date, so long as the closing date is on or before the close of business on January
31, 2017, the Escrow Fund will be promptly paid to or credited to the accounts of, or otherwise transferred to, the Issuer and
the Depositor pursuant to the joint-instructions from the Issuer and the Depositor.



 


		(ii)	If the Issuer does not receive subscriptions for the Units
being sold, or if any subscription is not accepted by the Issuer, or the fundamental terms of the offering are changed, or the
offering is abandoned or terminated, the Escrow Agent shall be provided with suitable notice and a list containing the amount
received from each subscriber whose funds have been deposited with the Escrow Agent (with respect to each subscriber the “Subscriber
Investment Amount”) and the name, address and Taxpayer Identification Number (“TIN”) of each subscriber. The
aggregate of all Subscriber Investment Amounts shall not exceed the amount of the Escrow Fund. The Escrow Agent shall distribute
to each subscriber the appropriate Subscriber Investment Amount pursuant to joint written instructions of the Issuer and Depositor
within 10 days of receipt of the information described in this Section 4(ii).



 






     

     


    

 


Upon delivery of the Escrow Fund to the
Issuer or the subscribers as the case may be, by the Escrow Agent, this Escrow Agreement shall terminate, subject to the provisions
of Section 8.


 


5.            Escrow
Agent. The Escrow Agent undertakes to perform only such duties as are expressly set forth herein and no duties shall be implied.
The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement other than this Escrow
Agreement. The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper
party or parties. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any
such document. The Escrow Agent shall have no duty to solicit any payments which may be due it or the Escrow Fund. The Escrow Agent
shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction
determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss to the Issuer or Depositor.
The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through agents or attorneys
(and shall be liable only for the careful selection of any such agent or attorney) and may consult with counsel, accountants and
other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons. In the
event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands
from any party hereto which, in its opinion, conflict with any of the provisions of this Escrow Agreement, it shall be entitled
to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be
directed otherwise in writing by all of the other parties hereto or by a final order or judgment of a court of competent jurisdiction.
Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has
been advised of the likelihood of such loss or damage and regardless of the form of action.


 


6.           Succession.
The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving 10 days advance notice in writing
of such resignation to the other parties hereto specifying a date when such resignation shall take effect. The Escrow Agent shall
have the right to withhold an amount equal to any amount due and owing to the Escrow Agent, plus any costs and expenses the Escrow
Agent shall reasonably believe may be incurred by the Escrow Agent in connection with the termination of the Escrow Agreement.
Any corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated shall
be the Escrow Agent under this Escrow Agreement without further act.


 


7.            Fees.
The Issuer agrees to (i) pay the Escrow Agent upon execution of this Escrow Agreement and from time to time thereafter reasonable
compensation for the services to be rendered hereunder, which unless otherwise agreed in writing shall be as described in Schedule
1 attached hereto, and (ii) pay or reimburse the Escrow Agent upon request for all expenses, disbursements and advances, including
reasonable attorney’s fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery,
modification and termination of this Escrow Agreement. Provided subscription funds are received and an Offering Closing Date is
established, upon such closing the Escrow Agent is authorized to deduct such fees from the Escrow Fund without prior authorization
from the Issuer or Depositor.


 






     

     


    

 


8.            Indemnity.
The Issuer and the Depositor shall jointly and severally indemnify, defend and save harmless the Escrow Agent and its directors,
officers, agents and employees (the “indemnitees”) from all loss, liability or expense (including the fees and expenses
of in house or outside counsel) arising out of or in connection with (i) the Escrow Agent’s execution and performance of this Escrow
Agreement, except in the case of any indemnitee to the extent that such loss, liability or expense is due to the gross negligence
or willful misconduct of the Escrow Agent, or (ii) its following any instructions or other directions from the Issuer or the Depositor,
except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof. The parties
hereto acknowledge that the foregoing indemnities shall survive the resignation or removal of the Escrow Agent or the termination
of this Escrow Agreement. The parties hereby grant the Escrow Agent a lien on, right of set-off against and security interest in
the Escrow Fund for the payment of any claim for indemnification, compensation, expenses and amounts due hereunder.


 


9.            TINs.
The Issuer and the Depositor represent that its correct Taxpayer Identification Number (“TIN”) assigned by the Internal
Revenue Service or any other taxing authority is set forth in Schedule 1. All interest or other income earned under the Escrow
Agreement, if any, shall be allocated to the Issuer and reported, to the extent required by law, by the Escrow Agent to the IRS
or any other taxing authority, as applicable, on IRS form 1099 or 1042S (or other appropriate form) as income earned from the Escrow
Fund by the Issuer whether or not said income has been distributed during the year.  Unless otherwise indicated in writing
by the parties hereto, no taxes or other withholdings are required to be made under applicable law or otherwise with respect to
any payment to be made by Escrow Agent. All documentation necessary to support a claim of exemption or reduction in such taxes
or other withholdings has been timely collected by Issuer and copies will be provided to Escrow Agent promptly upon a request therefor.
Unless otherwise agreed to in writing by Escrow Agent, all tax returns required to be filed with the IRS and any other taxing authority
as required by law with respect to payments made hereunder shall be timely filed and prepared by Issuer, including but not limited
to, any applicable reporting or withholding pursuant to the Foreign Account Tax Reporting Act (“FATCA”).  The parties
hereto acknowledge and agree that the Escrow Agent shall have no responsibility for the preparation and/or filing of any tax return
or any applicable FATCA reporting with respect to the Escrow Fund.  The Escrow Agent shall withhold any taxes it
deems appropriate, including but not limited to required withholding in the absence of proper tax documentation, and shall remit
such taxes to the appropriate authorities as it determines may be required by any law or regulation in effect at the time of the
distribution.


 


10.          Notices.
All communications hereunder shall be in writing and shall be deemed to be duly given and received:


 


(i)
upon delivery if delivered personally or upon confirmed transmittal if by facsimile or by other electronic means;


 


(ii)
on the next Business Day (as hereinafter defined) if sent by overnight courier; or


 


(iii)
four (4) Business Days after mailing if mailed by prepaid registered mail, return receipt requested, to the appropriate notice
address set forth on Schedule 1 or at such other address as any party hereto may have furnished to the other parties in writing
by registered mail, return receipt requested.


 






     

     


    

 


Notwithstanding the above, in the case
of communications delivered to the Escrow Agent pursuant to (ii) and (iii) of this Section 10, such communications shall be deemed
to have been given on the date received by the Escrow Agent. In the event that the Escrow Agent, in its sole discretion, shall
determine that an emergency exists, the Escrow Agent may use such other means of communication as the Escrow Agent deems appropriate.
“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located at
the notice address set forth on Schedule 1 is authorized or required by law or executive order to remain closed.


 


11.          Security
Procedures. In the event Escrow Fund transfer instructions are given (other than in writing at the time of execution of this
Escrow Agreement), whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of such
instructions by telephone call-back to the person or persons designated on schedule 2 hereto (“Schedule 2”), and the
Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone
numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. The Escrow Agent
and the beneficiary’s bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers
provided by the Issuer or the Depositor to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary
bank. The Escrow Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number,
even where its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than
the beneficiary’s bank or an intermediary bank designated. The parties to this Escrow Agreement acknowledge that these security
procedures are commercially reasonable.


 


12.          Miscellaneous.
The provisions of this Escrow Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing
signed by all of the parties hereto. Neither this Escrow Agreement nor any right or interest hereunder may be assigned in whole
or in part by any party, except as provided in Section 6, without the prior consent of the other parties. This Escrow Agreement
shall be governed by and construed under the laws of the State of Delaware. Each party hereto irrevocably waives any objection
on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or
in any other manner permitted by applicable law and consents to the jurisdiction of the courts located in the State of Delaware.
The parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating
to this Escrow Agreement. No party to this Escrow Agreement is liable to any other party for losses due to, or if it is unable
to perform its obligations under the terms of this Escrow Agreement because of, acts of God, fire, floods, strikes, equipment or
transmission failure, or other causes reasonably beyond its control. This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.


 






     

     


    

 


IN WITNESS WHEREOF, the parties
hereto have executed this Escrow Agreement as of the date set forth in Schedule 1.


 


	 	Delaware Trust
Company as Escrow Agent	 
	 	 	 
	 	 	 
	 	By: 	/s/
Alan R. Halpern	 
	 	 	 	 
	 	 	 	 
	 	ClearSign
Combustion Corporation	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/
James N. Harmon	 
	 	 	Name:
James N. Harmon	 
	 	 	Its: Chief
Financial Officer	 
	 	 	 	 
	 	 	 	 
	 	MDB Capital
Group LLC	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Gary
Schuman	 
	 	 	Name: Gary
Schuman	 
	 	 	Its: CFO
& CCO	 



 



     

     


    


 


Schedule
1


 





	Effective Date:	 	December 7, 2016
	 	 	 
	Name of Issuer:	 	Clearsign Combustion Corporation
	Issuer Notice Address:	 	12870 Interurban Avenue South, Seattle, Washington 98168
	Issuer E-mail:	 	Jim Harmon <jim@clearsign.com>
	Issuer TIN:  	 	26-2056298
	 	 	 
	Name of Depositor:	 	MDB Capital Group LLC
	Depositor Notice Address:	 	2425 Cedar Springs Road, Dallas, Texas 75201
	Depositor E-mail:	 	d@mdb.com
	Depositor TIN:	 	 
	 	 	 
	Name of Escrow Agent:	 	Delaware Trust Company
	Escrow Agent Notice Address:	 	2711 Centerville Road, Suite 400
	 	 	Wilmington, DE 19808
	 	 	Attn: Escrow Administration
	 	 	E-mail: trust@delawaretrust.com
	 	 	Telephone: 866-291-6119
	 	 	Facsimile: 302-636-8666










 


Investment:


 




		 ̈	BlackRock Temp Fund Cash Management Shares (the “Share
Class”), an institutional money market mutual fund for which the Escrow Agent serves as shareholder servicing agent and/or
custodian or subcustodian. The parties hereto: (i) acknowledge Escrow Agent’s disclosure of the services the Escrow Agent
is providing to and the fees it receives from BlackRock; (ii) consent to the Escrow Agent’s receipt of these fees in return
for providing shareholder services for the Share Class; and (iii) acknowledge that the Escrow Agent has provided on or before
the date hereof a BlackRock Temp Fund Cash Management Shares prospectus which discloses, among other things, the various expenses
of the Share Class and the fees to be received by the Escrow Agent.



 


		 ̈	Such other investments as Issuer, Depositor and Escrow
Agent may from time to time mutually agree upon in a writing executed and delivered by the Issuer and the Depositor and accepted
by the Escrow Agent.



 


		x	The funds shall not be invested.



 


Escrow
Agent’s compensation: See Appended Schedule 3


 




     

     


    


 


Schedule
2


 


Telephone
Number(s) for Call-Backs and


Person(s)
Designated to Confirm Funds Transfer Instructions


 


	If to Issuer:	 	 
	 	 	 
	Name	 	Telephone Number
	 	 	 
	1.    Jim Harmon	 	(206) 669-0441
	 	 	 
	If to Depositor:	 	 
	 	 	 
	Name	 	Telephone Number
	 	 	 
	1.    Anthony DiGiandomenico	 	(310) 526-3015
	 	 	 
	2.    Gary Schuman	 	(310) 526-3006



 


Telephone call-backs may be made to each
Issuer and Depositor if joint instructions are required pursuant to this Escrow Agreement.


 



     

     


    

 


Schedule 3


 


Escrow
Agent Fees:


 


$1,000
 – set-up fee payable in advance of the closing of the transaction


 


$3,000
– annual administration fee covering up to 100 deposits, payable in advance of the closing of the transaction and upon each
subsequent annual anniversary date. There is an additional administration fee of $750.00 for each block of 50 deposits over the
initial 100 deposits.


 


TRANSACTION FEES:


 


Wire transfer of fund: $35.00/domestic wire
initiated; $75.00/international payment


Checks Cut: $10.00/check cut


1099 Preparation: $12.00/1099 prepared


1042-S Preparation: $50.00/per 1042-S


Returned Check: $30.00/returned item


 


An additional annual fee of 15 basis points
on the escrow account balance payable in advance may be charged for investments other than institutional money market funds with
which the Escrow Agent has established servicing arrangements. Out-of-pocket expenses, fees and disbursements and services of an
unanticipated or unexpected nature are not included in the above schedule.