AT THE MARKET OFFERING AGREEMENT


 


 


October [*],
2013


 


T.R. Winston & Company,
LLC


376 Main Street


Bedminster, New Jersey 07921


 


Ladies
and Gentlemen:


       


Neuralstem, Inc., a
corporation organized under the laws of Delaware (the “Company”), confirms its agreement (this “Agreement”)
with T.R. Winston & Company, LLC (the “Manager”) as follows:


 


1. Definitions.
The terms that follow, when used in this Agreement and any Terms Agreement, shall have the meanings indicated.


 


“Accountants”
  shall have the meaning ascribed to such term in Section 4(m).


 


“Act”
shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.


 


“Action”
shall have the meaning ascribed to such term in Section 3(q).


 


“Affiliate”
shall have the meaning ascribed to such term in Section 3(p).


 


“Applicable
Time” shall mean, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement or any relevant
Terms Agreement.


 


“Base
Prospectus” shall mean the base prospectus contained in the Registration Statement at the Execution Time.


 


“Board”
shall have the meaning ascribed to such term in Section 2(b)(iii).


 


“Broker
Fee” shall have the meaning ascribed to such term in Section 2(b)(v).


 


“Business
Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions
or trust companies are authorized or obligated by law to close in New York City.


 


“Commission”
shall mean the Securities and Exchange Commission.


 


“Common
Stock” shall have the meaning ascribed to such term in Section 2.


 






    	 



    	 



    

 


“Common
Stock Equivalents” shall have the meaning ascribed to such term in Section 3(g).


 


“Company
Counsel” shall have the meaning ascribed to such term in Section 4(l).


 


“DTC”
shall have the meaning ascribed to such term in Section 2(b)(vii).


 


“Effective
Date” shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto
became or becomes effective.


 


“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.


 


“Execution
Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.


 


“FDA”
  shall have the meaning ascribed to such term in Section 3(hh).


 


“FDCA”
  shall have the meaning ascribed to such term in Section 3(hh).


 


“Filing
Date” shall have the meaning ascribed to such term in Section 4(w).


 


“Free
Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3(n).


 


“Incorporated
Documents” shall mean the documents or portions thereof filed with the Commission on or before the Effective Date that
are incorporated by reference in the Registration Statement or the Prospectus and any documents or portions thereof filed with
the Commission after the Effective Date that are deemed to be incorporated by reference in the Registration Statement or the Prospectus.


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3(v).


 


“Issuer
Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.


 


“Losses”
shall have the meaning ascribed to such term in Section 7(d).


 






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“Material
Adverse Effect” shall have the meaning ascribed to such term in Section 3(b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3(t).


 


“Net
Proceeds” shall have the meaning ascribed to such term in Section 2(b)(v).


 


“Permitted
Free Writing Prospectus” shall have the meaning ascribed to such term in Section 4(g).


 


“Pharmaceutical
Product”   shall have the meaning ascribed to such term in Section 3(hh).


 


“Placement”
shall have the meaning ascribed to such term in Section 2(c).


 


“Proceeding”
shall have the meaning ascribed to such term in Section 3(b).


 


“Prospectus”
shall mean the Base Prospectus, as supplemented by the most recently filed Prospectus Supplement (if any).


 


“Prospectus
Supplement” shall mean the prospectus supplement relating to the Shares prepared and filed pursuant to Rule 424(b)
from time to time.


 


“Registration
Statement” shall mean the shelf registration statement (File Number 333-190936) on Form S-3, including exhibits
and financial statements and any prospectus supplement relating to the Shares that is filed with the Commission pursuant to Rule 424(b)
and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event
any post-effective amendment thereto becomes effective, shall also mean such registration statement as so amended.


 


“Representation
Date” shall have the meaning ascribed to such term in Section 4(k).


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3(e).


 


“Rule 158”,
“Rule 163”, “Rule 164”, “Rule 172”, “Rule 173”,
“Rule 405”, “Rule 415”, “Rule 424”, “Rule 430B”
and “Rule 433” refer to such rules under the Act.


 






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“Sales
Notice” shall have the meaning ascribed to such term in Section 2(b)(i).


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3(m).


 


“Settlement
Date” shall have the meaning ascribed to such term in Section 2(b)(vii).


 


“Subsidiary”
shall have the meaning ascribed to such term in Section 3(a).


 


“Terms
Agreement” shall have the meaning ascribed to such term in Section 2(a).


 


“Time
of Delivery” shall have the meaning ascribed to such term in Section 2(c).


 


“Trading
Market” means NYSE MKT.


 


2. Sale and Delivery
of Shares. The Company proposes to issue and sell through or to the Manager, as sales agent, up to $20 million of shares (the
“Shares”) of the Company’s common stock, $0.01 par value per share (“Common Stock”),
from time to time during the term of this Agreement and on the terms set forth herein.


 


(a) Appointment
of Manager as Selling Agent; Term Agreement. For purposes of selling the Shares through the Manager, the Company hereby appoints
the Manager as exclusive agent of the Company for the purpose of soliciting purchases of the Shares from the Company pursuant to
this Agreement and the Manager agrees to use its commercially reasonable efforts to solicit purchases of the Shares on the terms
and subject to the conditions stated herein. The Company agrees that, whenever it determines to sell the Shares directly to the
Manager as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the
form of Annex I hereto, relating to such sale in accordance with Section 2 of this Agreement.


 


(b) Agent
Sales. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company
will issue and agrees to sell Shares from time to time through the Manager, acting as sales agent, and the Manager agrees to use
its commercially reasonable efforts to solicit purchases of the Shares, as sales agent for the Company, on the following terms:


 






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(i) The
Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Manager on any day that (A) is
a trading day for the Trading Market, (B) the Company has instructed the Manager by telephone (confirmed promptly by electronic
mail) to make such sales (“Sales Notice”) and (C) the Company has satisfied its obligations under Section 6
of this Agreement, provided that the deliveries required under Section 6 shall only be required to be made on the Execution Time
and on a Representation Date on which a material amendment to the Registration Statement or Prospectus is made or the Company files
its Annual Report on Form 10-K or a material amendment thereto under the Exchange Act. The Company will designate the maximum amount
of the Shares to be sold by the Manager daily (subject to the limitations set forth in Section 2(c)) and the minimum price per
Share at which such Shares may be sold. Subject to the terms and conditions hereof, the Manager shall use its commercially reasonable
efforts to solicit purchases on a particular day of all of the Shares designated for the sale by the Company on such day. The gross
sales price of the Shares sold under this Section 2(b) shall be the market price for shares of the Company’s Common
Stock sold by the Manager under this Section 2(b) on the Trading Market at the time of sale of such Shares.


 


(ii) The
Company acknowledges and agrees that (A) there can be no assurance that the Manager will be successful in soliciting purchases
of the Shares, (B) the Manager will incur no liability or obligation to the Company or any other person or entity if it does
not solicit purchases of the Shares for any reason other than a failure by the Manager to use its commercially reasonable efforts
consistent with its normal trading and sales practices and applicable law and regulations to solicit purchases of such Shares as
required under this Agreement, and (C) the Manager shall be under no obligation to purchase Shares on a principal basis pursuant
to this Agreement, except as otherwise specifically agreed by the Manager and the Company pursuant to a Terms Agreement.


 


(iii) The
Company shall not authorize the issuance and sale of, and the Manager shall not be obligated to use its commercially reasonable
efforts to solicit purchases of, any Share at a price lower than the minimum price therefor designated from time to time by the
Company’s Board of Directors (the “Board”), or a duly authorized committee thereof, or such duly authorized
officers of the Company, and notified to the Manager in writing. The Company or the Manager may, upon notice to the other party
hereto by telephone (confirmed promptly by electronic mail), suspend the offering of the Shares for any reason and at any time;
provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations
with respect to the Shares sold hereunder prior to the giving of such notice.


 


(iv) The
Manager may solicit purchases of Shares by any method permitted by law deemed to be an “at the market offering” as
defined in Rule 415 under the Act, including without limitation sales made directly on the Trading Market, on any other existing
trading market for the Common Stock or to or through a market maker. The Manager may also solicit purchases of Shares in privately
negotiated transactions.


 






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(v) The
compensation to the Manager for sales of the Shares under this Section 2(b) shall be a placement fee of 4% of the gross sales price
of the Shares sold pursuant to this Section 2(b) (“Broker Fee”). The foregoing rate of compensation shall not
apply when the Manager acts as principal, in which case the Company may sell Shares to the Manager as principal at a price agreed
upon at the relevant Applicable Time pursuant to a Terms Agreement. The remaining proceeds, after deduction of the Broker Fee and
deduction for any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).


 


(vi) The
Manager shall provide written confirmation (which may be by facsimile or electronic mail) to the Company following the close of
trading on the Trading Market each day in which the Shares are sold under this Section 2(b) setting forth the number of the Shares
sold on such day, the aggregate gross sales proceeds and the Net Proceeds to the Company, and the compensation payable by the Company
to the Manager with respect to such sales.


 


(vii) Upon
delivery of a Sales Notice, the Company shall issue and deliver the maximum number of Shares to be sold pursuant to the Sales Notice
to the Manager’s account at The Depository Trust Company (“DTC”) via the DWAC system, which Shares shall
be deposited by the Manager in the Company’s account with the Manager. The Manager shall have no obligation to attempt to
solicit purchases of the Shares until the Company has delivered the Shares to the Manager. Settlement for sales of the Shares pursuant
to this Section 2(b) will occur at 10:00 a.m. (New York City time), or at such time as the Company and the Manager may mutually
agree, on the third Business Day following delivery of the Shares issued pursuant to the Sale Notice (each such day, a “Settlement
Date”). On each Settlement Date, the Manager shall deliver the Net Proceeds from the sale of the Shares to the Company.
If on any Settlement Date not all Shares were sold as issued pursuant to the Sales Notice, then, at the election of and upon notice
from the Company, the Shares shall be applied to a future Settlement Date or returned to the Company.


 


(viii) At
each Applicable Time, Settlement Date, Representation Date and Filing Date, the Company shall be deemed to have affirmed each representation
and warranty contained in this Agreement as if such representation and warranty were made as of such date, modified as necessary
to relate to the Registration Statement and the Prospectus as amended as of such date. Any obligation of the Manager to use its
commercially reasonable efforts to solicit purchases of the Shares on behalf of the Company shall be subject to the continuing
accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in Section 6 of this Agreement.


 






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(c) Term
Sales. If the Company wishes to sell the Shares pursuant to this Agreement but other than as set forth in Section 2(b) of this
Agreement (each, a “Placement”), the Company will notify the Manager of the proposed terms of such Placement.
If the Manager, acting as principal, wishes to accept such proposed terms (which it may decline to do for any reason in its sole
discretion) or, following discussions with the Company, the Manager wishes to accept amended proposed terms, the Manager and the
Company will enter into a Terms Agreement setting forth the terms of such Placement. The terms set forth in a Terms Agreement will
not be binding on the Company or the Manager unless and until the Company and the Manager have each executed such Terms Agreement
accepting all of the terms of such Terms Agreement. In the event of a conflict between the terms of this Agreement and the terms
of a Terms Agreement, the terms of such Terms Agreement will control. A Terms Agreement may also specify certain provisions relating
to the reoffering of such Shares by the Manager. The commitment of the Manager to purchase the Shares pursuant to any Terms Agreement
shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms Agreement shall specify the number of the Shares to be purchased
by the Manager pursuant thereto, the price to be paid to the Company for such Shares, any provisions relating to rights of, and
default by, underwriters acting together with the Manager in the reoffering of the Shares, and the time and date (each such time
and date being referred to herein as a “Time of Delivery”) and place of delivery of and payment for such Shares.
Such Terms Agreement shall also specify any requirements for opinions of counsel, accountants’ letters and officers’
certificates pursuant to Section 6 of this Agreement and any other information or documents required by the Manager.


 


(d) Maximum
Number of Shares. Under no circumstances shall the number and aggregate amount of the Shares sold pursuant to this Agreement
and any Terms Agreement exceed the lesser of : (i) the aggregate amount set forth in Section 2, (ii) the number of shares of the
Common Stock available for issuance under the currently effective Registration Statement,
or (iii) the number and aggregate amount of Shares authorized from time to time to be issued and sold under this Agreement by the
Board, or a duly authorized committee thereof, and notified to the Manager in writing.


 


(e) Regulation
M Notice. Unless the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are
satisfied with respect to the Shares, the Company shall give the Manager at least one Business Day’s prior notice of its
intent to sell any Shares in order to allow the Manager time to comply with Regulation M.


 






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3. Representations
and Warranties. The Company represents and warrants to, and agrees with, the Manager at the Execution Time and on each such
time the following representations and warranties are repeated or deemed to be made pursuant to this Agreement, as set forth below
or in the Registration Statement, the Prospectus or the Incorporated Documents.


 


(a) Subsidiaries.
All of the direct and indirect “significant subsidiaries” (as such term is defined in Rule 1-02 of Regulation S-X)
(individually, a “Subsidiary”) of the Company are set forth on Exhibit 21.01 to the Company’s most recent
Annual Report on Form 10-K filed with the Commission. Except as disclosed in the Registration Statement, the Prospectus,
the Incorporated Documents or SEC Reports, the Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary free and clear of any “Liens” (which for purposes of this
Agreement shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction),
and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. 


 


(b) Organization
and Qualification. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither
the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not reasonably be expected to result in (i) a material adverse effect on the legality,
validity or enforceability of this Agreement, (ii) a material adverse change in the results of operations, assets, business, or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, from that set forth in the Registration
Statement, the Base Prospectus, any Prospectus Supplement, the Prospectus or the Incorporated Documents, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no “Proceeding” (which for purposes
of this Agreement shall mean any action, claim, suit, investigation or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition), whether commenced or threatened) has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 






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(c) Authorization
and Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board or its stockholders in connection herewith
other than in connection with the Required Approvals. This Agreement has been duly executed and delivered by the Company and constitutes
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.


 


(d) No
Conflicts. The execution, delivery and performance of this Agreement by the Company, the issuance and sale of the Shares and
the consummation by the Company of the other transactions contemplated herein do not and will not (i) conflict with or violate
any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational
or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would
become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary,
or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary
is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary
is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected, except in the case of each of clauses (ii) and (iii), such as could not reasonably be expected
to result in a Material Adverse Effect.


 


(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as an individual or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity
of any kind, including the Trading Market) in connection with the execution, delivery and performance by the Company of this Agreement,
other than (i) the filings required by this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii)
the filing of application(s) to and approval by the Trading Market for the listing of the Shares for trading thereon in the time
and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws and the rules
and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) (collectively, the “Required
Approvals”).


 






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(f) Issuance
of Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved or will
maintain an adequate reserve from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant
to this Agreement. The issuance by the Company of the Shares has been registered under the Act and all of the Shares are
freely transferable and tradable by the purchasers thereof without restriction (other than any restrictions arising solely from
an act or omission of such purchaser). The Shares are being issued pursuant to the Registration Statement and the issuance of the
Shares has been registered by the Company under the Act. The “Plan of Distribution” section within the Registration
Statement permits the issuance and sale of the Shares as contemplated by this Agreement. Upon receipt of the Shares, the purchasers
of such Shares will have good and marketable title to such Shares and the Shares will be freely tradable on the Trading Market.


 


(g) Capitalization.
The capitalization of the Company is as set forth in the Registration Statement, the Base Prospectus, the Prospectus Supplement
and the Prospectus. Except as disclosed on Schedule 3(g), the Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s
stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase
plan, and pursuant to the conversion or exercise of securities exercisable, exchangeable or convertible into Common Stock (“Common
Stock Equivalents”). No Person has any right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by this Agreement. Except (i) pursuant to the Company’s stock option
plans and (ii) pursuant to agreements or instruments filed as exhibits to Incorporated Documents, there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any
shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or
may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Shares will
not obligate the Company to issue shares of Common Stock or other securities to any Person and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. There are no stockholders agreements, voting agreements or other similar agreements
with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between
or among any of the Company’s stockholders.


 






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(h) Registration
Statement. The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the Commission
the Registration Statement, including a related Base Prospectus, for registration under the Act of the offering and sale of the
Shares. Such Registration Statement is effective and available for the offer and sale of the Shares as of the date hereof. As filed,
the Base Prospectus contains all information required by the Act and the rules thereunder, and, except to the extent the Manager
shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the Manager prior to the
Execution Time or prior to any such time this representation is repeated or deemed to be made. The Registration Statement, at the
Execution Time, each such time this representation is repeated or deemed to be made, and at all times during which a prospectus
is required by the Act to be delivered (whether physically or through compliance with Rule 172, 173 or any similar rule) in
connection with any offer or sale of the Shares, meets the requirements set forth in Rule 415(a)(1)(x). The initial Effective
Date of the Registration Statement was not earlier than the date three years before the Execution Time.


 


(i) Accuracy
of Incorporated Documents. The Incorporated Documents, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules thereunder, and none of the Incorporated Documents, when they were
filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were made not misleading; and any further documents so filed
and incorporated by reference in the Registration Statement, the Base Prospectus, the Prospectus Supplement or the Prospectus,
when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act
and the rules thereunder, as applicable, and will not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; notwithstanding
anything to the contrary contained herein, this representation shall not extend to any written information provided by the Manager
specifically for inclusion or incorporation by reference into any such documents. 


 






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(j) Ineligible
Issuer. (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution Time and on
each such time this representation is repeated or deemed to be made (with such date being used as the determination date for purposes
of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account
of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible
Issuer.


 


(k) Free
Writing Prospectus. The Company is eligible to use Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus does
not include any information the substance of which conflicts with the information contained in the Registration Statement, including
any Incorporated Documents and any prospectus supplement deemed to be a part thereof that has not been superseded or modified;
and each Issuer Free Writing Prospectus does not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Manager specifically for use therein. Any Issuer
Free Writing Prospectus that the Company is required to file pursuant to Rule 433(d) has been, or will
be, filed with the Commission in accordance with the requirements of the Act and the rules thereunder. Each Issuer Free
Writing Prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) or that
was prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the
Act and the rules thereunder. The Company will not, without the prior consent of the Manager, prepare, use or refer to, any Issuer
Free Writing Prospectuses.


 


(l) Proceedings
Related to Registration Statement. The Registration Statement is not the subject of a pending proceeding or examination under
Section 8(d) or 8(e) of the Act, and the Company is not the subject of a pending proceeding under Section 8A of the Act
in connection with the offering of the Shares. The Company has not received any notice that the Commission
has issued or intends to issue a stop-order with respect to the Registration Statement or that the Commission otherwise has suspended
or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in
writing to do so. 


 






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(m) SEC
Reports. The Company has complied in all material respects with requirements to file all reports, schedules, forms, statements
and other documents required to be filed by it under the Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred
to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension.


 


(n) Financial
Statements. The consolidated financial statements incorporated by reference in the Registration Statement, the Prospectus or
the Incorporated Documents and any amendments thereof or supplements thereto comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing or as amended or corrected in a subsequent filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(o)  Accountants.
The Company’s accountants are Stegman & Company. To the knowledge of the Company, Stegman
& Company is a registered public accounting firm as required by the Act. The Company expects that Stegman
& Company will express their opinion with respect to the financial statements to be included in the Company’s next Annual
Report on Form 10-K.


 


(p) Material
Adverse Events. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically
disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv)
the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its capital stock and (v) except as disclosed on Schedule 3(p),
the Company has not issued any equity securities to any officer, director or “Affiliate” (defined as any Person
that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the Act), except pursuant to the existing Company stock option
plans. The Company does not have pending before the Commission any request for confidential treatment of information. No event,
liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the
time this representation is deemed made that has not been publicly disclosed at least 1 Business Day prior to the date that this
representation is deemed made.


 






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(q) Litigation.
Except as set forth in the SEC Reports, the Registration Statement, the Prospectus or the Incorporated Documents, there is no action,
suit, inquiry, notice of violation, Proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties before or by any United States court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of this Agreement or the Shares or (ii) could,
if there were an unfavorable decision, reasonably be expected to result in a Material Adverse Effect. Except as set forth in the
SEC Reports, the Registration Statement, the Prospectus or the Incorporated Documents, neither
the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Act. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement,
and the Company and its Subsidiaries believe that their relationships with their employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to
any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal,
state, local laws and regulations relating to employment and employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.


 






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(r) Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material Adverse Effect.


 


(s) No
Existing Defaults. Except as set forth in the SEC Reports, the Registration Statement, the Prospectus or the Incorporated
Documents, neither the Company nor any Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of
any order of any U.S. court, arbitrator or governmental body, or (iii) is or has been in violation of any U.S. statute, rule or
regulation of any governmental authority, including without limitation all U.S. federal, state and local laws and foreign laws
relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor
matters, except in each case as could not reasonably be expected to result in a Material Adverse Effect.


 


(t) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate U.S.
federal, state, local regulatory authorities necessary to conduct their respective businesses as described in the Registration
Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus, except where the failure to possess such permits could
not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company
nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.


 


(u) Title
to Assets. Except as set forth in the SEC Reports, the Registration Statement, the Prospectus or the Incorporated Documents,
the Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material
to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens disclosed
in the SEC Reports, the Registration Statement, the Prospectus or the Incorporated Documents
and such Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries and Liens for the payment of U.S. federal, state or other taxes,
the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries
are in compliance, except where such non-compliance would not reasonably be expected to have a Material Adverse Effect.


 






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(v) Intellectual
Property. Except as set forth in the SEC Reports, the Registration Statement, the Prospectus or the Incorporated Documents,
the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other similar intellectual property rights necessary
or material for use in connection with their respective businesses as described in the Registration Statement, the Base Prospectus,
any Prospectus Supplement or the Prospectus and which the failure to so have could reasonably be expected to have a Material Adverse
Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included within the SEC Reports, a notice (written or otherwise) that
the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have a Material Adverse
Effect, except as disclosed in the SEC Reports. To the knowledge of the Company, all such Intellectual Property Rights are enforceable
(other than patent and trademark applications) and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 


(w) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary for companies of similar size as the Company in the businesses in which the Company
and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. To the knowledge of
the Company, such insurance contracts and policies are accurate and complete. Neither the Company nor any Subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.


 


(x) Affiliate
Transactions. Except as set forth in the SEC Reports or the Registration Statement, the Base Prospectus, any Prospectus Supplement
or the Prospectus, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees
of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees,
officers and directors), 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 entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess of $120,000, other than (i) for payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other
employee benefits, including stock option agreements under any stock option plan of the Company.


 






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(y) Sarbanes-Oxley
Compliance. Except as disclosed in the SEC Reports or the Registration Statement, the Base Prospectus, any Prospectus Supplement
or the Prospectus, the Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable
to it as of the Effective Date.


 


(z) Finder’s
Fees. Other than payments to be made to the Manager, no brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by this Agreement. The Manager shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this Agreement.


 


(aa) No
Other Sales Agency Agreement. As of the Effective Date, the Company is not a party to any other sales agency agreements or
other similar arrangements with any agent or any other representative in respect of at the market offerings of the Shares.


 


(bb) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Shares or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Manager in connection with sales of
the Shares.


 


(cc) Listing
and Maintenance Requirements. The issuance and sale of the Shares as contemplated in this Agreement does not contravene the
rules and regulations of the Trading Market. The Common Stock is registered pursuant to Section
12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that
the Commission is contemplating terminating such registration. Except as disclosed in the Registration Statement, the Base Prospectus,
any Prospectus Supplement or the Prospectus, the Company has not, in the 12 months preceding the date hereof, received notice from
any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market.


 






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(dd) Application
of Takeover Protections. Except as set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement
or the Prospectus, the Company and its Board have taken 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 Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the purchasers of the Shares.


 


(ee) Investment
Company. The Company is not registered, and after giving effect to the offering and sale of the Shares and application of proceeds
thereof, will not be required to register, as an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. The Company currently intends to conduct its business in a manner so that it will not become subject to
the Investment Company Act of 1940, as amended.


 


(ff) Solvency.
Except as set forth in the SEC Reports, the Registration Statement, the Prospectus or the Incorporated Documents,
based on the financial condition of the Company as of the Effective Date, (i) the Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing current debts and other current
liabilities (including known contingent liabilities) as they mature and (ii) the current cash flow of the Company, together with
the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses
of the cash, would be sufficient to pay all amounts on or in respect of its current debt when such amounts are required to be paid.
The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary,
or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
shall mean (a) any liabilities for borrowed money or amounts owed in excess of $250,000 (other than accrued liabilities and trade
accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business, and (c) the present value of any lease payments in excess of $250,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 






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(gg) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary have filed all necessary federal, state and foreign income and franchise
tax returns and have paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary which has not been accrued on the Company’s consolidated
financial statements described in Section 3(n).


 


(hh) FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”)
under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”)
that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its subsidiaries (each
such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being
manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements
under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure,
or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas,
labeling, advertising, record keeping and filing of reports. Except as disclosed in the SEC Reports, there is no pending, completed
or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any
of its subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity,
which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing
or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval
of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials
relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its
Subsidiaries, (iv) enjoins production at any facility owned by the Company or any of its Subsidiaries, (v) enters or proposes to
enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any
violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the
aggregate, would have a Material Adverse Effect. The properties,
business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable
laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing,
sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has
the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed
by the Company.


 






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(ii) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.


 


(jj) FINRA
Member Shareholders. There are no affiliations with any FINRA member firm among the Company’s officers or directors,
based on information provided to the Company thereby, or, to the knowledge of the Company, any five percent (5%) or greater stockholder
of the Company, except as set forth in the Registration Statement, the Base Prospectus, any Prospectus Supplement or the Prospectus.


 


4. Agreements.
The Company agrees with the Manager that:


 


(a) Right
to Review Amendments and Supplements to Registration Statement and Prospectus. During any period when the delivery of a prospectus
relating to the Shares is required (including in circumstances where such requirement may be satisfied pursuant to Rule 172,
173 or any similar rule) to be delivered under the Act in connection with the offering or the sale of Shares, the Company will
not file any amendment to the Registration Statement or supplement (including any Prospectus Supplement) to the Base Prospectus
unless the Company has furnished to the Manager a copy for its review prior to filing and will not file any such proposed amendment
or supplement to which the Manager reasonably objects. The Company has properly completed the Prospectus, in a form approved by
the Manager, and filed such Prospectus, as amended at the Execution Time, with the Commission pursuant to the applicable paragraph
of Rule 424(b) by the Execution Time and will cause any supplement to the Prospectus to be properly completed, in a form approved
by the Manager, and will file such supplement with the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed thereby and will provide evidence reasonably satisfactory to the Manager of such timely filing. The
Company will promptly advise the Manager (i) when the Prospectus, and any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b), (ii) when, during any period when the delivery of a prospectus (whether
physically or through compliance with Rule 172, 173 or any similar rule) is required under the Act in connection with the
offering or sale of the Shares, any amendment to the Registration Statement shall have been filed or become effective (other than
any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act), (iii) of any request by the
Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening
of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose.
The Company will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or
objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon
as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an
amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new
registration statement declared effective as soon as practicable.


 






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(b) Subsequent
Events. If, at any time on or after an Applicable Time but prior to the related Settlement Date, any event occurs as a result
of which the Registration Statement or Prospectus would include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances
then prevailing not misleading, the Company will (i) notify promptly the Manager so that any use of the Registration Statement
or Prospectus may cease until they are amended or supplemented; (ii) amend or supplement the Registration Statement or Prospectus
to correct such statement or omission; and (iii) supply any amendment or supplement to the Manager in such quantities as the
Manager may reasonably request.


 


(c) Notification
of Subsequent Filings. During any period when the delivery of a prospectus relating to the Shares is required (including in
circumstances where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under
the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which
they were made at such time not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration
statement or supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, including
in connection with use or delivery of the Prospectus, the Company promptly will (i) notify the Manager of any such event,
(ii) subject to Section 4(a), prepare and file with the Commission an amendment or supplement or new registration statement
which will correct such statement or omission or effect such compliance, (iii) use its best efforts to have any amendment
to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption
in use of the Prospectus and (iv) supply any supplemented Prospectus to the Manager in such quantities as the Manager may
reasonably request.


 






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(d) Earnings
Statements. As soon as practicable, the Company will make generally available to its security holders and to the Manager an
earnings statement or statements of the Company and its Subsidiaries which will satisfy the provisions of Section 11(a) of
the Act and Rule 158.


 


(e) Delivery
of Registration Statement. Upon the request of the Manager, the Company will furnish to the Manager and counsel for the Manager,
without charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus
by the Manager or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172, 173 or any similar rule), as many copies of the Prospectus and each Issuer Free Writing Prospectus and any supplement
thereto as the Manager may reasonably request. The Company will pay the expenses of printing or other production of all documents
relating to the offering.


 


(f) Qualification
of Shares. The Company will arrange, if necessary, for the qualification of the Shares for sale under the laws of such jurisdictions
as the Manager may designate and will maintain such qualifications in effect so long as required for the distribution of the Shares;
provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale
of the Shares, in any jurisdiction where it is not now so subject.


 


(g) Free
Writing Prospectus. The Company agrees that, unless it has or shall have obtained the prior written consent of the Manager,
and the Manager agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent
of the Company, it has not made and will not make any offer relating to the Shares that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to
be filed by the Company with the Commission or retained by the Company under Rule 433. Any such free writing prospectus consented
to by the Manager or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company
agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free
Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and
433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and
record keeping.


 






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(h) Subsequent
Equity Issuances. Neither the Company nor any Subsidiary will offer, sell, issue, contract to sell, contract to issue or otherwise
dispose of, directly or indirectly, any shares of Common Stock or any Common Stock Equivalents (other than the Shares) for the
primary purpose of raising capital (a “Subsequent Financing”) during the term of this Agreement (i) without
giving the Manager at least two (2) Business Days’ prior written notice specifying the nature of the proposed transaction
and the date of such proposed transaction and (ii) unless the Manager suspends acting under this Agreement for such period
of time requested by the Company or as deemed appropriate by the Manager in light of the proposed transaction; provided,
however, that the Company may issue and sell Common Stock pursuant to any employee stock option plans, stock ownership plan
or dividend reinvestment plan of the Company and the Company may issue Common Stock issuable upon the conversion or the exercise
of Common Stock Equivalents. Notwithstanding anything to the contrary herein, in the event that the proposed Subsequent Financing
is a registered offering of Common Stock or Common Stock Equivalents using a placement agent, Manager (or any affiliate designated
by Manager) shall have the right to act as lead placement agent for such Subsequent Financing. If Manager or one of its affiliates
decides to accept any such engagement, the agreement governing such engagement will contain, among other things, provisions for
customary fees for transactions of similar size and nature and the provisions of this Agreement, including indemnification, which
are appropriate to such a transaction.


 


(i) Market
Manipulation. Until the termination of this Agreement, the Company will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation in violation of the Act, Exchange Act or the rules and regulations thereunder of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise violate any provision of Regulation M under the Exchange Act.


 


(j) Notification
of Incorrect Certificate. The Company will, at any time during the term of this Agreement, as supplemented from time to time,
advise the Manager immediately after it shall have received notice or obtained knowledge thereof, of any information or fact that
would alter or affect any opinion, certificate, letter and other document provided to the Manager pursuant to Section 6 hereof.


 


(k) Certification
of Accuracy of Disclosure. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement
of the offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than
30 trading days), and each time that (i) the Registration Statement or Prospectus shall be amended or supplemented, other than
by means of Incorporated Documents, (ii) the Company files its Annual Report on Form 10-K under the Exchange Act, (iii) the Company
files its quarterly reports on Form 10-Q under the Exchange Act, (iv) the Company files a Current Report on Form 8-K containing
amended financial information (other than information that is furnished and not filed), if the Manager reasonably determines that
the information in such Form 8-K is material, or (v) the Shares are delivered to the Manager as principal at the Time of Delivery
pursuant to a Terms Agreement (such commencement or recommencement date and each such date referred to in (i), (ii), (iii), (iv)
and (v) above, a “Representation Date”), unless waived by the Manager, the Company shall furnish or cause to
be furnished to the Manager forthwith a certificate dated and delivered on the Representation Date, in form reasonably satisfactory
to the Manager to the effect that the statements contained in the certificate referred to in Section 6 of this Agreement which
were last furnished to the Manager are true and correct at the Representation Date, as though made at and as of such date (except
that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6, modified
as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the date of delivery of
such certificate.


 






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(l) Bring
Down Opinions; Negative Assurance. At each Representation Date, unless waived by the Manager, the Company shall furnish or
cause to be furnished forthwith to the Manager and to counsel to the Manager a written opinion of counsel to the Company (“Company
Counsel”) addressed to the Manager and dated and delivered on such Representation Date, in form and substance reasonably
satisfactory to the Manager, including a negative assurance representation.


 


(m) Accountants’
Bring Down “Comfort” Letter. At each Representation Date, unless waived by the Manager, the Company shall cause
(1) the Company’s auditors (the “Accountants”), or other independent accountants satisfactory to
the Manager forthwith to furnish the Manager a letter, and (2) the Chief Financial Officer of the Company forthwith to furnish
the Manager a certificate, in each case dated on such Representation Date, in form satisfactory to the Manager, of the same tenor
as the letters and certificate referred to in Section 6 of this Agreement but modified to relate to the Registration Statement
and the Prospectus, as amended and supplemented to the date of such letters and certificate; provided, however, that
the Company will not be required to cause the Accountants to furnish such letters to the Manager in connection with the filing
of a Current Report on Form 8-K unless (i) such Current Report on Form 8-K is filed at any time during which a prospectus
relating to the Shares is required to be delivered under the Act and (ii) the Manager has requested such letter based upon
the event or events reported in such Current Report on Form 8-K.


 


(n) Due
Diligence Session. Upon commencement of the offering of the Shares under this Agreement (and upon the recommencement of the
offering of the Shares under this Agreement following the termination of a suspension of sales hereunder lasting more than 30 trading
days), and at each Representation Date, the Company will conduct a due diligence session, in form and substance, reasonably satisfactory
to the Manager, which shall include representatives of management and the Accountants. The Company shall cooperate timely with
any reasonable due diligence request from or review conducted by the Manager or its agents from time to time in connection with
the transactions contemplated by this Agreement, including, without limitation, providing information and available documents and
access to appropriate corporate officers and the Company’s agents during regular business hours and at the Company’s
principal offices, and timely furnishing or causing to be furnished such certificates, letters and opinions from the Company, its
officers and its agents, as the Manager may reasonably request.


 






    	24



    	 



    

 


(o) Acknowledgment
of Trading. The Company consents to the Manager trading in the Common Stock for the Manager’s own account and for the
account of its clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement.


 


(p) Disclosure
of Shares Sold. The Company will disclose in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q,
as applicable, the number of Shares sold through the Manager under this Agreement, the Net Proceeds to the Company and the compensation
paid by the Company with respect to sales of Shares pursuant to this Agreement during the relevant quarter.


 


(q) Rescission
Right. If to the knowledge of the Company, the conditions set forth in Section 6 shall not have been satisfied as of the applicable
Settlement Date, the Company will offer to any person who has agreed to purchase Shares from the Company as the result of an offer
to purchase solicited by the Manager the right to refuse to purchase and pay for such Shares.


 


(r) Bring
Down of Representations and Warranties. Each acceptance by the Company of an offer to purchase the Shares hereunder, and each
execution and delivery by the Company of a Terms Agreement, shall be deemed to be an affirmation to the Manager that the representations
and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance
or of such Terms Agreement as though made at and as of such date, and an undertaking that such representations and warranties will
be true and correct as of the Settlement Date for the Shares relating to such acceptance or as of the Time of Delivery relating
to such sale, as the case may be, as though made at and as of such date (except that such representations and warranties shall
be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).


 


(s) Reservation
of Shares. The Company shall ensure that there are at all times sufficient shares of Common Stock to provide for the issuance,
free of any preemptive rights, out of its authorized but unissued shares of Common Stock or shares of Common Stock held in treasury,
of the maximum aggregate number of Shares authorized for issuance by the Board pursuant to the terms of this Agreement. The Company
will use its commercially reasonable efforts to cause the Shares to be listed for trading on the Trading Market and to maintain
such listing.


 






    	25



    	 



    

 


(t) Obligation
Under Exchange Act. During any period when the delivery of a prospectus relating to the Shares is required (including in circumstances
where such requirement may be satisfied pursuant to Rule 172, 173 or any similar rule) to be delivered under the Act, the
Company will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required
by the Exchange Act and the regulations thereunder.


 


(u) DTC
Facility. The Company shall cooperate with Manager and use its reasonable efforts to permit the Shares to be eligible for clearance
and settlement through the facilities of DTC.


 


(v) Use
of Proceeds. The Company will apply the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.


 


(w) Filing
of Prospectus Supplement. To the extent required under applicable law or under interpretations by the Commission thereof, on
or prior to the earlier of (i) the date on which the Company shall file a Quarterly Report on Form 10-Q or an Annual Report
on Form 10-K in respect of any fiscal quarter in which sales of Shares were made by the Manager pursuant to Section 2(b) of this
Agreement and (ii) the date on which the Company shall be obligated to file such document referred to in clause (i) in
respect of such quarter (each such date, and any date on which an amendment to any such document is filed, a “Filing Date”),
the Company will file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b), which prospectus
supplement will set forth, with regard to such quarter, the number of the Shares sold through the Manager as agent pursuant to
Section 2(b) of this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect to such sales
of the Shares pursuant to Section 2(b) of this Agreement and deliver such number of copies of each such prospectus supplement to
the Trading Market as are required by such exchange.


 


(x) Additional
Registration Statement. To the extent that the Registration Statement is not available for the sales of the Shares as contemplated
by this Agreement, (other than as a result of reaching the limitation set forth in General Instruction I.B.6. of Form S-3) the
Company shall file a new registration statement with respect to any additional shares of Common Stock necessary to complete such
sales of the Shares and shall cause such registration statement to become effective as promptly as practicable. After the effectiveness
of any such registration statement, all references to “Registration Statement” included in this Agreement shall
be deemed to include such new registration statement, including all documents incorporated by reference therein pursuant to Item 12
of Form S-3, and all references to “Base Prospectus” included in this Agreement shall be deemed to include the
final form of prospectus, including all documents incorporated therein by reference, included in any such registration statement
at the time such registration statement became effective.


 






    	26



    	 



    

 


5. Payment of
Expenses. The Company agrees to pay the costs and expenses incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated hereby are consummated, including without limitation: (i) the preparation, printing
or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto),
the Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Prospectus, and each Issuer Free Writing Prospectus, and all amendments or supplements to any of
them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Shares; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for the Shares, including any stamp or transfer taxes
in connection with the original issuance and sale of the Shares; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with
the offering of the Shares; (v) the listing of the Shares on the Trading Market; (vi) any registration or qualification of
the Shares for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable
fees and expenses of counsel for the Manager relating to such registration and qualification); (vii) the transportation and
other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of
the Shares; (viii) the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; (ix) the filing fee under FINRA Rule 5110; (x) the reasonable fees and expenses of
the Manager’s counsel, not to exceed $35,000, $15,000 of which has been paid prior to the date hereof and the balance of
which shall be paid upon the filing of the initial Prospectus Supplement in connection with the offering contemplated by this Agreement;
(xi) the reasonable fees and expenses of the Manager for due diligence, not to exceed $35,000, $15,000 of which has been paid prior
to the date hereof and the balance of which shall be paid upon the filing of the initial Prospectus Supplement in connection with
the offering contemplated by this Agreement; and (xii) all other costs and expenses of the Company incident to the performance
by the Company of its obligations hereunder.


 


6. Conditions
to the Obligations of the Manager. The obligations of the Manager under this Agreement and any Terms Agreement shall be subject
to (i) the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution
Time, each Representation Date, and as of each Applicable Time, Settlement Date and Time of Delivery, (ii) to the performance
by the Company of its obligations hereunder and (iii) the following additional conditions:


 






    	27



    	 



    

 


(a) Filing
of Prospectus Supplement. The Prospectus, and any supplement thereto, required by Rule 424 to be filed with the Commission
have been filed in the manner and within the time period required by Rule 424(b) with respect to any sale of Shares; each
Prospectus Supplement shall have been filed in the manner required by Rule 424(b) within the time period required hereunder
and under the Act; any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have
been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.


 


(b) Delivery
of Opinion. The Company shall have caused the Company Counsel to furnish to the Manager, as requested by the Manager and upon
reasonable advance notice in connection with any offering of the Shares, its opinion and negative assurance statement, dated as
of such date and addressed to the Manager in form and substance acceptable to the Manager.


 


(c) Delivery
of Officer’s Certificate. The Company shall have furnished or caused to be furnished to the Manager, to the extent requested
by the Manager and upon reasonable advance notice in connection with any offering of the Shares, a certificate of the Company signed
by the Chief Executive Officer or the President and the principal financial or accounting officer of the Company, dated as of such
date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Base Prospectus,
the Prospectus, any Prospectus Supplement and any documents incorporated by reference therein and this Agreement and that:


 


(i) the
representations and warranties of the Company in this Agreement are true and correct on and as of such date with the same effect
as if made on such date and the Company has complied with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such date;


 


(ii) no
stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no
proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and


 


(iii) since
the date of the most recent financial statements included in the Registration Statement, the Prospectus and the Incorporated Documents,
there has been no Material Adverse Effect on the condition (financial or otherwise), earnings, business or properties of the Company
and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Registration Statement and the Prospectus.


 






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(d) Delivery
of Accountants’ “Comfort” Letter. The Company shall have requested and caused the Accountants to have furnished
to the Manager, to the extent requested by the Manager and upon reasonable advance notice in connection with any offering of the
Shares, letters (which may refer to letters previously delivered to the Manager), dated as of such date, in form and substance
satisfactory to the Manager, confirming that they are independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable rules and regulations adopted by the Commission thereunder and that they have performed a review
of any unaudited interim financial information of the Company and included or incorporated by reference in the Registration Statement
and the Prospectus and provide customary “comfort” as to such review in form and substance satisfactory to the Manager.


 


(e) No
Material Adverse Event. Since the respective dates as of which information is disclosed in the Registration Statement, the
Prospectus and the Incorporated Documents, except as otherwise stated therein, there shall not have been (i) any change or
decrease in previously reported results specified in the letter or letters referred to in paragraph (d) of this Section 6
or (ii) any Material Adverse Effect on the condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Registration Statement, the Prospectus and the Incorporated Documents (exclusive of any
amendment or supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the
sole judgment of the Manager, so material and adverse as to make it impractical or inadvisable to proceed with the offering or
delivery of the Shares as contemplated by the Registration Statement (exclusive of any amendment thereof), the Incorporated Documents
and the Prospectus (exclusive of any amendment or supplement thereto).


 


(f) Payment
of All Fees. The Company shall have paid the required Commission filing fees relating to the Shares within the time period
required by Rule 456(b)(1)(i) of the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b)
and 457(r) of the Act and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance
with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the cover page of a
prospectus filed pursuant to Rule 424(b).


 


(g) No
FINRA Objections. FINRA shall not have raised any objection with respect to the fairness and reasonableness of the terms and
arrangements under this Agreement.


 


(h) Shares
Listed on Trading Market. The Shares shall have been listed and admitted and authorized for trading on the Trading Market,
and satisfactory evidence of such actions shall have been provided to the Manager.


 






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(i) Other
Assurances. Prior to each Settlement Date and Time of Delivery, as applicable, the Company shall have furnished to the Manager
such further information, certificates and documents as the Manager may reasonably request.


 


If any of the conditions
specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Manager
and counsel for the Manager, this Agreement and all obligations of the Manager hereunder may be canceled at, or at any time prior
to, any Settlement Date or Time of Delivery, as applicable, by the Manager. Notice of such cancellation shall be given to the Company
in writing or by telephone or facsimile confirmed in writing.


 


The documents required
to be delivered by this Section 6 shall be delivered at the office of Ellenoff Grossman & Schole LLP, counsel for the Manager,
at 150 East 42nd Street, New York, New York 10017, on each such date as provided in this Agreement.


 


7. Indemnification
and Contribution.


 


(a) Indemnification
by Company. The Company agrees to indemnify and hold harmless the Manager, the directors, officers, employees and agents of
the Manager and each person who controls the Manager within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment
thereof, or in the Base Prospectus, any Prospectus Supplement, the Prospectus, any Issuer Free Writing Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified
party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to
the Company by the Manager specifically for inclusion therein. This indemnity agreement will be in addition to any liability that
the Company may otherwise have.


 






    	30



    	 



    

 


(b) Indemnification
by Manager. The Manager agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity from the Company to the Manager, but only with reference to written information
relating to the Manager furnished to the Company by the Manager specifically for inclusion in the documents referred to in the
foregoing indemnity; provided, however, that in no case shall the Manager be responsible for any amount in excess
of the Broker Fee applicable to the Shares and paid hereunder. This indemnity agreement will be in addition to any liability which
the Manager may otherwise have.


 


(c) Indemnification
Procedures. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will
not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election
to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without
the prior written consent of each of the indemnified parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding.


 






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(d) Contribution.
In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 7 is unavailable to or
insufficient to hold harmless an indemnified party for any reason, the Company and the Manager agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating
or defending the same) (collectively “Losses”) to which the Company and the Manager may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Manager on the other from
the offering of the Shares; provided, however, that in no case shall the Manager be responsible for any amount in
excess of the Broker Fee applicable to the Shares and paid hereunder. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Manager severally shall contribute in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company on the one hand and of the Manager on the other in connection
with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received
by it, and benefits received by the Manager shall be deemed to be equal to the Broker Fee applicable to the Shares and paid hereunder,
in each case as determined by this Agreement. Relative fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates
to information provided by the Company on the one hand or the Manager on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Manager
agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d),
no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls
the Manager within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of the Manager
shall have the same rights to contribution as the Manager, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions
of this paragraph (d).


 






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8. Termination.


 


(a) The
Company shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement
in its sole discretion at any time upon five (5) Business Days’ prior written notice. Any such termination shall be without
liability of any party to any other party except that (i) with respect to any pending sale, through the Manager for the Company,
the obligations of the Company, including in respect of compensation of the Manager, shall remain in full force and effect notwithstanding
the termination and (ii) the provisions of Sections 5, 6, 7, 8, 9, 10, 12 and 14 of this Agreement shall remain in full
force and effect notwithstanding such termination.


 


(b) The
Manager shall have the right, by giving written notice as hereinafter specified, to terminate the provisions of this Agreement
relating to the solicitation of offers to purchase the Shares in its sole discretion at any time. Any such termination shall be
without liability of any party to any other party except that the provisions of Sections 5, 6, 7, 8, 9, 10, 12 and 14 of this
Agreement shall remain in full force and effect notwithstanding such termination.


 


(c) This
Agreement shall remain in full force and effect until the earlier of the 2 year anniversary of the date hereof and such date that
this Agreement is terminated pursuant to Sections 8(a) or (b) above or otherwise by mutual agreement of the parties;
provided that any such termination by mutual agreement shall in all cases be deemed to provide that Sections 5, 6, 7, 8, 9,
10, 12 and 14 shall remain in full force and effect.


 


(d) Any
termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination
shall not be effective until the close of business on the date of receipt of such notice by the Manager or the Company, as the
case may be. If such termination shall occur prior to the Settlement Date or Time of Delivery for any sale of the Shares, such
sale shall settle in accordance with the provisions of Section 2(b) of this Agreement.


 


(e) In
the case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the obligations of the Manager pursuant to such
Terms Agreement shall be subject to termination, in the absolute discretion of the Manager, by prompt oral notice given to the
Company prior to the Time of Delivery relating to such Shares, if any, and confirmed promptly by facsimile or electronic mail,
if since the time of execution of the Terms Agreement and prior to such delivery and payment, (i) trading in the Company’s
Common Stock shall have been suspended by the Commission or the Trading Market or trading in securities generally on the Trading
Market shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole judgment of the Manager, impractical or inadvisable
to proceed with the offering or delivery of the Shares as contemplated by the Prospectus (exclusive of any amendment or supplement
thereto).


 






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9. Representations
and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Manager set forth in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by the Manager or the Company or any of the officers, directors, employees, agents or controlling
persons referred to in Section 7, and will survive delivery of and payment for the Shares.


 


10. Notices.
All communications hereunder will be in writing and effective only on receipt, and, if sent to the Manager, will be mailed, delivered
or facsimiled to the address set forth on the signature page hereto.


 


11. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 7, and no other person will have any right or
obligation hereunder.


 


12. No Fiduciary
Duty. The Company hereby acknowledges that (a) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length
commercial transaction between the Company, on the one hand, and the Manager and any affiliate through which it may be acting,
on the other, (b) the Manager is acting solely as sales agent and/or principal in connection with the purchase and sale of
the Company’s securities and not as a fiduciary of the Company and (c) the Company’s engagement of the Manager
in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity.
Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective
of whether the Manager has advised or is currently advising the Company on related or other matters). The Company agrees that it
will not claim that the Manager has rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar
duty to the Company, in connection with such transaction or the process leading thereto.


 


13. Integration.
This Agreement and any Terms Agreement supersede all prior agreements and understandings (whether written or oral) between the
Company and the Manager with respect to the subject matter hereof.


 






    	34



    	 



    

 


14. Applicable
Law. This Agreement and any Terms Agreement will be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New York.


 


15. Waiver
of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right
to trial by jury in any legal proceeding arising out of or relating to this Agreement, any Terms Agreement or the transactions
contemplated hereby or thereby. 


 


16. Counterparts.
This Agreement and any Terms Agreement may be signed in one or more counterparts, each of which shall constitute an original and
all of which together shall constitute one and the same agreement, which may be delivered by facsimile or in .pdf file via e-mail.


 


17. Headings.
The section headings used in this Agreement and any Terms Agreement are for convenience only and shall not affect the construction
hereof.


 



    	35



    	 



    


 


If the foregoing is
in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company and the Manager.


 


 


Very truly yours,


 


NEURALSTEM,
INC.


 


By: ________________________


Name: Richard Garr


Title: President and Chief Executive Officer


 


Address for Notice:


9700 Great Seneca Highway


Rockville, Maryland 20850


Facsimile: Richard Garr


Attention: _____________


 


The foregoing Agreement is hereby confirmed and
accepted as of the date first written above.


 


T.R. WINSTON & COMPANY, LLC


	
         

         

        By: ________________________

        Name:

        Title:

         



Address for Notice:


376 Main Street


Bedminster, New Jersey 07921


Facsimile: G. Tyler Runnels


Attention: (310) 424-1990


 




    	36



    	 



    


 


Form of Terms Agreement


ANNEX I 


NEURALSTEM, INC. TERMS AGREEMENT


 


Dear Sirs:


 


      Neuralstem,
Inc. (the “Company”) proposes, subject to the terms and conditions stated herein and in the At The Market Offering
Agreement, dated October [*], 2013 (the “At The Market Offering Agreement”), between the Company and T.R. Winston
& Company, LLC (“T.R. Winston”), to issue and sell to T.R. Winston the securities specified in the Schedule I
hereto (the “Purchased Shares”).


 


      Each
of the provisions of the At The Market Offering Agreement not specifically related to the solicitation by T.R. Winston, as agent
of the Company, of offers to purchase securities is incorporated herein by reference in its entirety, and shall be deemed to be
part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations
and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement and the Time of
Delivery (as defined in the At The Market Offering Agreement), except that each representation and warranty in Section 3 of
the At The Market Offering Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a representation
and warranty as of the date of the At The Market Offering Agreement in relation to the Prospectus, and also a representation and
warranty as of the date of this Terms Agreement and the Time of Delivery in relation to the Prospectus as amended and supplemented
to relate to the Purchased Shares.


 


      An
amendment to the Registration Statement (as defined in the At The Market Offering Agreement), or a supplement to the Prospectus,
as the case may be, relating to the Purchased Shares, in the form heretofore delivered to T.R. Winston is now proposed to be filed
with the Securities and Exchange Commission.


 


      Subject
to the terms and conditions set forth herein and in the At The Market Offering Agreement which are incorporated herein by reference,
the Company agrees to issue and sell to T.R. Winston and T.R. Winston agrees to purchase from the Company the number of shares
of the Purchased Shares at the time and place and at the purchase price set forth in the Schedule I hereto.


 




    	37



    	 



    


 


If the foregoing
is in accordance with your understanding, please sign and return to us a counterpart hereof, whereupon this Terms Agreement, including
those provisions of the At The Market Offering Agreement incorporated herein by reference, shall constitute a binding agreement
between T.R. Winston and the Company.


 


NEURALSTEM,
INC.


 


By: ________________________


Name: Richard Garr


Title: President and Chief Executive Officer


 


Address for Notice:


9700 Great Seneca Highway


Rockville, Maryland 20850


Facsimile: Richard Garr


Attention: _____________


 


The foregoing Agreement is hereby confirmed and
accepted as of the date first written above.


 


T.R. WINSTON & COMPANY, LLC


	
         

         

        By: ________________________

        Name:

        Title:

         



Address for Notice:


376 Main Street


Bedminster, New Jersey 07921


Facsimile: G. Tyler Runnels


Attention: (310) 424-1990


 






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