Exhibit 10.1


 


NETWORK 1 FINANCIAL


 


 


 


The Galleria ● 2 Bridge Avenue


Suite 241 ● Red Bank, NJ 07701-1106


Phone: 732-758-9001 ● Toll Free:
800-886-7007 ●  Fax: 732-758-6671


 


June 20, 2016


 


Martin M. van Brauman,


Senior Vice President, Secretary-Treasurer & Director


Zion Oil & Gas, Inc.


12655 North Central Expressway, Suite 1000


Dallas, TX 75243


 


	Re:	Placement Agent Agreement

    Proposed Public Offering of $1,000 Par Value 12% Convertible Senior Bonds




 


Dear Mr. van Brauman:


 


This Placement Agent Agreement (the “Agreement”)
is effective for the period beginning April 5, 2016 and ending on the 1st day of September 2016, unless otherwise extended by
the mutual agreement of the parties hereto (the “Engagement Period”), and is entered into by and between Network
1 Financial Securities, Inc., a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”)
(Network 1 Financial Securities, Inc. is hereinafter referred to individually and, as the context requires, collectively with
other broker-dealers that are registered with the U.S. Securities and Exchange Commission (“SEC”) and members
of FINRA that are selected by Network 1 Financial Securities, Inc. to participate in the offering set forth herein, as the “Agent”),
and Zion Oil & Gas, Inc. (the “Company”), a publicly traded corporation formed under the laws of the State
of Delaware, in connection with the proposed public offering (the “Offering”), on a “best efforts”
basis, of a minimum of $2.5 million and a maximum of $12 million of $1,000 par value 12% Convertible Senior Bonds (the “Bonds”).
The conversion price, per share of the Company’s common stock, shall be equal to the average of the closing prices of the
Company’s common stock as reported by Bloomberg L.P. for the 30 days preceding the date on which the Bonds are to be issued,
plus a 30% issuance premium. Capitalized words and phrases not defined herein shall have the meanings set forth in the Prospectus
(as defined in Section 2 (b) below). The Company and the Agent recognize and agree that in the event that the dates referred to
in clauses (iii) and (iv) of Section 1(d) below conflict with the dates set forth in the Prospectus (as defined in Section 2(b))
and any amendment thereto, said Prospectus and amendments shall govern.


 


The Company and the Agent hereby
agree as follows:


 


		1.	Agreement
                                         to Act as Placement Agent.



 


On the basis of the representations, warranties and
agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement:


 


		(a)	The
                                         Company hereby engages the Agent to act as the Company’s exclusive securities placement
                                         agent in connection with the Offering, except as otherwise provided in this Section 1.
                                         The Agent will act as sole placement agent of the Offering or lead placement agent of
                                         a group of SEC-registered and FINRA member broker-dealers that the Agent has invited
                                         to participate in the offering under the Agent’s direction. The distribution and
                                         the Agent’s obligations under the Offering shall be subject to, among other things,
                                         the completion of the Agent’s due diligence examination of the Company and its
                                         affiliates.



 






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		(b)	The
                                         Company hereby acknowledges that the Agent has agreed, as agent of the Company, to use
                                         its reasonable best efforts to solicit offers to purchase the Bonds from the Company
                                         on the terms and subject to the conditions set forth in the Prospectus (as defined below).
                                         The Agent shall use its reasonable best efforts to assist the Company in obtaining performance
                                         by each prospective investor who has been solicited by the Agent and whose subscription
                                         agreement to purchase the Bonds is accepted by the Company, but the Agent shall not,
                                         except as otherwise provided in this Agreement, have any liability to the Company in
                                         the event any such purchase is not consummated for any reason. Under no circumstances
                                         will the Agent be obligated to underwrite or purchase any Bonds for its own account and,
                                         in soliciting purchases of the Bonds, the Agent shall act solely as the Company’s
                                         agent and not as a principal. The Agent is obligated to determine the suitability of
                                         proposed investors that submit subscriptions to the Agent and do not seek to purchase
                                         the Bonds by a direct investment with the Company. Accordingly, the Agent has the right
                                         to reject, in whole or in part, any subscription application received by it from a potential
                                         investor to purchase Bonds on the grounds of such non-suitability, and such action shall
                                         not be deemed a breach of this Agreement.



 


		(c)	Subject
                                         to the provisions of this Section 1, the Agent may on behalf of the Company solicit offers
                                         for the purchase of the Bonds at such times and in such amounts as the Agent deems advisable.
                                         The Agent shall communicate to the Company, orally or in writing, each offer to purchase
                                         Bonds received by it as agent of the Company. The Company shall have the sole right to
                                         accept offers to purchase the Bonds and may reject any such offer, in whole or in part.



 


		(d)	This
                                         Offering is a “best efforts minimum/maximum offering,” which means that the
                                         Agent is not required to place any firm orders or purchase any of the Bonds. This placement
                                         arrangement with the Agent and any placement agents that it selects to participate in
                                         the solicitation of prospective investors is on an exclusive basis, except with respect
                                         to the Company’s right to secure prospective purchasers (both current security
                                         holders and new investors) directly.



 


		(i)	The
                                         Company cannot sell any of the Bonds until it has received and accepted subscriptions
                                         and payments for a minimum of $2,500,000 (the “Minimum Purchase Amount”).



 


		(ii)	The
                                         Minimum Purchase Amount is based on the Company’s and Agent’s current projections
                                         of the corporate bond market. Among various items, the actual size of the Offering, the
                                         precise number of Bonds to be offered by the Company, and the conversion price per share
                                         of Company’s common stock, are expected to be the subject of continuing discussions
                                         between the Company and the Agent and will depend upon the capitalization of the Company
                                         being acceptable to the Agent. The Agent may, subject to the Company’s approval
                                         (not to be unreasonably withheld, conditioned or delayed), invite placement agents who
                                         are members of FINRA in good standing to participate in placing a portion of the Offering.
                                         The Company will consult with the Agent for possible broker-dealers in Europe and Israel
                                         for possible placement opportunities.



 


		(iii)	If
                                         acceptable subscriptions and payments totaling at least $2,500,000 are not received on
                                         or before August 31, 2016 (the “Minimum Date”), which is 92 days following
                                         the date of the Prospectus (which the Company may, in its discretion, extend up to 60
                                         additional days), unless the Company determines, in the sole exercise of its discretion
                                         to extend the Offering as provided in the Prospectus, the Offering will terminate, and
                                         the Company will instruct the Escrow Agent to promptly refund the money raised without
                                         interest or deduction of escrow fees.



 


		(iv)	If
                                         the Minimum Purchase Amount is received on or before the Minimum Date, the Company will
                                         have the option to commence an Initial Closing prior to the Final Closing Date and the
                                         Bonds will be issued on the Initial Closing Date and on the Final Closing Date with October
                                         2, 2016, which is the 31st day following the Final Closing Date, as the beginning date
                                         of interest accrual.



 






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		(v)	All
                                         subscribers’ payments will be deposited in an escrow account at OceanFirst Bank,
                                         with whom the Company shall sign an Escrow Agreement. If the Company does not accept
                                         a prospective investor’s subscription, the Company will promptly return funds deposited
                                         into the escrow account by the prospective investor, without any interest earned or escrow
                                         fees deducted.



 


		(e)	Compensation
                                         to the Agent in connection with the Offering will consist of a commission of 6%, plus
                                         a non-accountable expense allowance of 1.5% based on the value of the Bonds sold in this
                                         Offering, including the Additional Bonds. Concurrent with the filing of the Prospectus
                                         Supplement, the Company shall advance fifty thousand dollars ($50,000) towards the non-accountable
                                         expense allowance.



 


		(i)	The
                                         Company agrees to pay the Agent or, if paid by the Agent, reimburse the latter, for the
                                         expenses relating to the Offering, including but not limited to the items set forth on
                                         Exhibit A:



 


		(ii)	The
                                         Agent reserves the right to reduce any item of its compensation or a adjust the terms
                                         thereof as specified herein in the event that a determination and/or suggestion will
                                         be made by FINRA to the effect that Agent’s aggregate compensation is in excess
                                         of FINRA rules or that the terms thereof require adjustment; provided, however,
                                         the aggregate compensation otherwise to be paid to the Agent by the Company may not be
                                         increased above the amounts stated herein without the written approval of the Company.



 


		(f)	Road
                                         Show. The Adviser may plan and arrange one or more “road show” marketing
                                         trips for the Company’s management to meet with prospective investors. Such trips
                                         will include visits to a number of prospective institutional and retail investors. The
                                         Company shall pay for all of its own expenses of the Offering, including, without limitation,
                                         travel and lodging expenses associated with road show trips.



 


		2.	Registration
                                         Statement, Prospectus Supplement and Prospectus.



 


		(a)	The
                                         Company filed with the SEC an effective shelf registration statement on Form S-3/A (File
                                         No. 333-193336) from which additional shares of its common stock and other securities
                                         can be issued. In addition, the Company may also issue additional shares of its common
                                         stock or securities convertible into or exchangeable for its common stock in connection
                                         with the hiring of personnel, future acquisitions, future private placements of our securities
                                         for capital raising purposes or for other business purposes. The current registration
                                         statement was declared effective by the SEC on March 27, 2014 and therefore, is effective
                                         until March 26, 2017 plus 180 days thereafter.



 


		(b)	The
                                         Company will file with the SEC pursuant to Rule 424(b)(5) under the U.S. Securities Act
                                         of 1933, as amended (the “Securities Act”) and applicable state securities
                                         authorities a prospectus supplement relating to the Bonds, which together with the Prospectus
                                         under the effective shelf registration, is referred to as the “Prospectus.”



 


		(c)	The
                                         Company shall, if necessary, prepare and file with the SEC and the appropriate state
                                         securities authorities an amended Prospectus Supplement under the Securities Act covering
                                         any material amendments to the terms of the Bonds and Warrants, and the Offering.



 


		(d)	The
                                         Agent and its outside counsel shall be given the opportunity to make such review and
                                         investigation pertaining to the Company and the Prospectus as they deem desirable. The
                                         Agent and the Company shall coordinate on the distribution of escrow proceeds of the
                                         Offering, which shall be described, in detail, within the Prospectus and Escrow Agreement,
                                         it being further understood and agreed that, except as may expressly be approved by the
                                         Agent, no proceeds from the Offering will be used to pay outstanding loans owed by the
                                         Company to any Company officers, directors or stockholders.



 






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		3.	Representations
                                         and Warranties of the Company Regarding the Offering.



 


		(a)	The
                                         Company represents and warrants to, and agrees with, the Agent, as of the date hereof
                                         and as of the Closing Date (as defined below), except as otherwise indicated, as follows:



 


		(i)	At
                                         the date hereof and at the Closing Date, the Registration Statement and any post-effective
                                         amendment thereto complied or will comply in all material respects with the requirements
                                         of the Securities Act and the Rules and Regulations thereunder and did not, does not
                                         and will not contain any untrue statement of a material fact or omit to state a material
                                         fact required to be stated therein or necessary to make the statements therein not misleading.
                                         The Prospectus, as amended or supplemented, as of its date, at the time of filing pursuant
                                         to Rule 424(b) under the Securities Act and at the Closing Date, does not and will not
                                         contain any untrue statement of a material fact or omit to state a material fact required
                                         to be stated therein or necessary to make the statements therein, in the light of the
                                         circumstances under which they were made, not misleading. The representations and warranties
                                         set forth in the two immediately preceding sentences shall not apply to statements in
                                         or omissions from the Registration Statement or any Prospectus in reliance upon, and
                                         in conformity with, written information furnished to the Company by the Agent specifically
                                         for use in the preparation thereof, which written information is described in Section
                                         8(f) below. The Registration Statement contains all exhibits and schedules required to
                                         be filed by the Securities Act or the Rules and Regulations. No order preventing or suspending
                                         the effectiveness or use of the Registration Statement or any Prospectus is in effect
                                         and no proceedings for such purpose have been instituted or are pending, or, to the knowledge
                                         of the Company, are contemplated or threatened by the Commission.



 


		(ii)	The
                                         Company has not distributed any prospectus or other offering material in connection with
                                         the offering and sale of the Bonds other than the Prospectus and Subscription Documents.



 


		(iii)	All
                                         Information, as described in Section 6(f) of this Agreement, (A) made available by the
                                         Company to the Agent or the Agent’s agents, representatives and any potential syndicate
                                         or selling group member, (B) contained in any Prospectus or amended Prospectus prepared
                                         by the Company in connection with the Offering, and (C) contained in any filing by the
                                         Company with any court or governmental regulatory agency, commission or instrumentality,
                                         will, as of the date made available or filed, be complete and correct in all material
                                         respects and will not, as of the date made available or filed, contain any untrue statement
                                         of material fact or omit to state a material fact necessary to make the statements therein
                                         not misleading in light of the circumstances under which such statements are made, provided
                                         that the Company will update any such information as required prior to the Closing. The
                                         Company further represents and warrants to the Agent that all such information will have
                                         been prepared by the Company in good faith and will be based upon assumptions which,
                                         in light of the circumstances under which they were made, are reasonable. The Company
                                         acknowledges and agrees that in rendering its services hereunder, the Agent will be using
                                         and relying on such information without independent verification thereof by the Agent
                                         or independent appraisal by the Agent of any of the Company’s assets.



 






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		(iv)	The
                                         consolidated financial statements of the Company, together with the related notes, included
                                         in the Registration Statement and the Prospectus comply in all material respects with
                                         the applicable requirements of the Securities Act and fairly present the consolidated
                                         financial condition of the Company as of the dates indicated and the results of operations
                                         and changes in cash flows for the periods therein specified in conformity with U.S. generally
                                         accepted accounting principles (“GAAP”) consistently applied throughout
                                         the periods involved; and the supporting schedules included in the Registration Statement
                                         present fairly the information required to be stated therein. The pro forma and pro forma
                                         as adjusted financial information included in the Registration Statement and the Prospectus
                                         has been properly compiled and prepared in all material respects in accordance with the
                                         applicable requirements of the Securities Act and the Rules and Regulations and include
                                         all adjustments necessary to present fairly in accordance with U.S. GAAP the pro forma
                                         and as adjusted financial position of the respective entity or entities presented therein
                                         at the respective dates indicated and their cash flows and the results of operations
                                         for the respective periods specified. The assumptions used in preparing the pro forma
                                         and pro forma as adjusted financial information included in the Registration Statement
                                         and the Prospectus provide a reasonable basis for presenting the significant effects
                                         directly attributable to the transactions or events described therein. The related pro
                                         forma and pro forma as adjusted adjustments give appropriate effect to those assumptions;
                                         and the pro forma and pro forma as adjusted financial information reflect the proper
                                         application of those adjustments to the corresponding historical financial statement
                                         amounts. No other financial statements, pro forma financial information or schedules
                                         are required under the Securities Act to be included or incorporated by reference in
                                         the Registration Statement or the Prospectus.



 


		(v)	To
                                         the Company’s knowledge, MaloneBailey, LLP, which has expressed its opinion with
                                         respect to certain of the financial statements and schedules filed as a part of the Registration
                                         Statement and included in the Registration Statement and the Prospectus, is an independent
                                         public accounting firm with respect to the Company within the meaning of the Securities
                                         Act and the Rules and Regulations.



 


		(vi)	The
                                         Company had a reasonable basis for, and made in good faith, each “forward-looking
                                         statement” (within the meaning of Section 27A of the Securities Act or Section
                                         21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
                                         contained or incorporated by reference in the Registration Statement, the Time of Sale
                                         Disclosure Package, the Final Prospectus, in each case at the time such “forward-looking
                                         statement” was made.



 


		(vii)	All
                                         statistical or market-related data included in the Registration Statement and the Prospectus
                                         are based on or derived from sources that the Company reasonably believes to be reliable
                                         and accurate, and the Company has obtained the written consent to the use of such data
                                         from such sources, to the extent required, other than such consents the failure of which
                                         to obtain is not reasonably likely to result in a Material Adverse Effect (as defined
                                         below in Section 4(a).



 


		(viii)	The
                                         Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is quoted
                                         on the Nasdaq Global Market or the Nasdaq Capital Market under the symbol "ZN"
                                         and its Common Stock warrant under the symbol "ZNWAA. Except as set forth in the
                                         Registration Statement and the Prospectus, there is no action pending by the Company
                                         or, to the Company’s knowledge, by the Nasdaq Global Market to terminate the quotation
                                         of the Common Stock on the Nasdaq Global Market, nor has the Company received any notification
                                         that the Nasdaq Global Market is contemplating terminating such quotation.



 






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		(ix)	The
                                         Company has not taken, directly or indirectly, any action that is designed to or that
                                         has constituted or that would reasonably be expected to cause or result in the stabilization
                                         or manipulation of the price of any security of the Company to facilitate the sale or
                                         resale of the Bonds.



 


		(x)	The
                                         Company is not and, after giving effect to the offering and sale of the Bonds and the
                                         application of the net proceeds thereof, will not be an “investment company,”
                                         as such term is defined in the Investment Company Act of 1940, as amended.



 


		(xi)	The
                                         Company has the corporate power and authority to issue the Agent’s Warrants (as
                                         defined in Section 5(b) below) and to perform its obligations thereunder. The Agent’s
                                         Warrants have been duly authorized and constitute valid and binding obligations of the
                                         Company, enforceable against the Company in accordance with their terms except (A) as
                                         such enforceability may be limited by applicable bankruptcy, insolvency, reorganization
                                         or similar laws of general applicability affecting the rights of creditors generally,
                                         and (B) as enforceability of any indemnification or contribution provision may be limited
                                         under the federal and state securities laws in the United States. The shares of Common
                                         Stock underlying the Agent’s Warrants have been duly authorized and reserved for
                                         issuance and, upon issuance following exercise of the Agent’s Warrants will be
                                         validly issued, fully paid and non-assessable, and the issuance of such Common Stock
                                         is free of statutory and contractual preemptive rights, resale rights, rights of first
                                         refusal and restrictions upon voting and transfer (except for applicable transfer restrictions
                                         under the Securities Act and any applicable state securities laws). The offering and
                                         issuance of the Agent’s Warrants (as defined in Section 5(b) below) are pursuant
                                         to an exemption from or have been duly registered in accordance with the registration
                                         requirements of the Securities Act.



 


		(b)	Any
                                         certificate signed by any officer of the Company and delivered to the Agent or to the
                                         Agent’s counsel shall be deemed a representation and warranty by the Company to
                                         the Agent as to the matters covered thereby.



 


		4.	Representations
                                         and Warranties Regarding the Company.



 


The Company represents and warrants to and agrees
with, the Agent, as of the date hereof and as of the Closing Date (as defined in Section 5(a) below), except as set forth in the
Registration Statement and the Prospectus, as follows:


 


		(a)	The
                                         Company has been duly organized and validly exists as a corporation or other entity in
                                         good standing under the laws of the State of Delaware, its jurisdiction of organization.
                                         The Company has the power and authority (corporate or otherwise) to own its properties
                                         and conduct its business as currently being carried on and as described in the Registration
                                         Statement and the Prospectus, and is duly qualified to do business as a foreign corporation
                                         or other entity in good standing in each jurisdiction in which it owns or leases real
                                         property or in which the conduct of its business makes such qualification necessary and
                                         in which the failure to so qualify would have or is reasonably likely to result in a
                                         material adverse effect upon the business, properties, operations, condition (financial
                                         or otherwise) or results of operations of the Company and its subsidiaries, taken as
                                         a whole, or in its ability to perform its obligations under this Agreement (“Material
                                         Adverse Effect”).



 


		(b)	The
                                         Company has the power and authority to enter into this Agreement and to authorize, issue
                                         and sell the Bonds and Agent’s Warrants as contemplated by this Agreement. Each
                                         of this Agreement, the Subscription Agreement, the Bonds and the Warrants has been duly
                                         authorized, executed and delivered by the Company, and constitutes a valid, legal and
                                         binding obligation of the Company, enforceable against the Company in accordance with
                                         its terms, except as rights to indemnity hereunder may be limited by federal or state
                                         securities laws and except as such enforceability may be limited by bankruptcy, insolvency,
                                         reorganization or similar laws affecting the rights of creditors generally and subject
                                         to general principles of equity.



 






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		(c)	The
                                         execution, delivery and performance of this Agreement, the Subscription Agreement, the
                                         Bonds and the Warrants and the consummation of the transactions herein contemplated will
                                         not (A) result in a breach or violation of any of the terms and provisions of, or constitute
                                         a default under, any law, order, rule or regulation to which the Company or any subsidiary
                                         is subject, or by which any property or asset of the Company or any subsidiary is bound
                                         or affected, except to the extent such breach, violation or default is not reasonably
                                         likely to have a Material Adverse Effect, (B) conflict with, result in any violation
                                         or breach of, or constitute a default (or an event that with notice or lapse of time
                                         or both would become a default) under, or give to others any right of termination, amendment,
                                         acceleration or cancellation (with or without notice, lapse of time or both) (a “Default
                                         Acceleration Event”) of, any agreement, lease, credit facility, debt, note,
                                         bond, mortgage, indenture or other instrument (the “Contracts”) or
                                         obligation 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,
                                         except to the extent that such conflict, default or Default Acceleration Event is not
                                         reasonably likely to result in a Material Adverse Effect, or (C) result in a breach or
                                         violation of any of the terms and provisions of, or constitute a default under, the Company’s
                                         certificate of incorporation, as amended, or by-laws, as amended.



 


		(d)	Neither
                                         the Company nor any of its subsidiaries is in violation, breach or default under its
                                         certificate of incorporation, as amended, by-laws, as amended, or other equivalent organizational
                                         or governing documents, except where the violation, breach or default in the case of
                                         a subsidiary of the Company is not reasonably likely to result in a Material Adverse
                                         Effect.



 


		(e)	No
                                         consents, approvals, orders, authorizations or filings are required on the part of the
                                         Company and its subsidiaries in connection with the execution, delivery or performance
                                         of this Agreement, the Subscription Agreement the Warrants and the issue and sale of
                                         the Bonds, except (i) the registration under the Securities Act of the Bonds, (ii) such
                                         consents, approvals, authorizations, registrations or qualifications as may be required
                                         under state or foreign securities or Blue Sky laws and FINRA’s in connection with
                                         the offer and sale of the Bonds by the several Agent and sub-agents, (iii) such consents,
                                         approvals, orders, authorizations and filings the failure of which to make or obtain
                                         is not reasonably likely to result in a Material Adverse Effect and (iv) such consents,
                                         approvals and waivers which have been obtained by the Company, and which are in full
                                         force and effect as of the date hereof.



 


		(f)	The
                                         Company has an authorized capitalization as set forth in the Registration Statement and
                                         the Prospectus. All of the issued and outstanding shares of capital stock of the Company
                                         are duly authorized and validly issued, fully paid and nonassessable, and have been issued
                                         in compliance with all applicable securities laws, and conform in all material respects
                                         to the description thereof in the Registration Statement and the Prospectus. Registration
                                         Statement and the Prospectus. Except for the issuances of options or restricted stock
                                         in the ordinary course of business, since the respective dates as of which information
                                         is provided in the Registration Statement or the Prospectus, the Company has not entered
                                         into or granted any convertible or exchangeable securities, options, warrants, agreements,
                                         contracts or other rights in existence to purchase or acquire from the Company any shares
                                         of the capital stock of the Company. The Bonds, when issued, will be duly authorized
                                         and validly issued, fully paid and nonassessable, will be issued in compliance with all
                                         applicable securities laws, and will be free of preemptive, registration or similar rights
                                         and will conform to the description of the Bonds of the Company contained in the Registration
                                         Statement and the Prospectus. The Warrant Shares, when issued, paid for and delivered
                                         upon due exercise of the Warrants, will be duly authorized and validly issued, fully
                                         paid and nonassessable, will be issued in compliance with all applicable securities laws,
                                         and will be free of preemptive, registration or similar rights. The Warrant Shares have
                                         been reserved for issuance.



 






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		(g)	The
                                         Company has (i) filed all returns (as hereinafter defined) required to be filed with
                                         taxing authorities prior to the date hereof or has duly obtained extensions of time for
                                         the filing thereof and (ii) paid all taxes (as hereinafter defined) shown as due on such
                                         returns that were filed and has paid all taxes imposed on or assessed against the Company
                                         except, in all cases, for any such amounts that the Company is contesting in good faith
                                         and except in any case in which the failure to so file or pay would not reasonably be
                                         expected to have a Material Adverse Effect. The provisions for taxes payable, if any,
                                         shown on the financial statements filed with or as part of the Registration Statement
                                         are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all
                                         periods to and including the dates of such consolidated financial statements. No issues
                                         have been raised and are currently pending by any taxing authority in connection with
                                         any of the returns or taxes asserted as due from the Company or its subsidiaries, and
                                         no waivers of statutes of limitation with respect to the returns or collection of taxes
                                         have been given by or requested from the Company or its subsidiaries. The term “taxes”
                                         means all federal, state, local, foreign, and other net income, gross income, gross receipts,
                                         sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service
                                         use, withholding, payroll, employment, excise, severance, stamp, occupation, premium,
                                         property, windfall profits, customs, duties or other taxes, fees, assessments, or charges
                                         of any kind whatever, together with any interest and any penalties, additions to tax,
                                         or additional amounts with respect thereto. The term “returns” means
                                         all returns, declarations, reports, statements, and other documents required to be filed
                                         in respect to taxes.



 


		(h)	Since
                                         the respective dates as of which information is given in the Registration Statement,
                                         or the Prospectus, (i) the Company has not incurred any material liabilities or obligations,
                                         direct or contingent, or entered into any material transactions other than in the ordinary
                                         course of business, (ii) the Company has not declared or paid any dividends or made any
                                         distribution of any kind with respect to its capital stock, there has not been any change
                                         in the capital stock of the Company or any of its subsidiaries (other than a change in
                                         the number of outstanding shares of Common Stock due to the issuance of shares in connection
                                         with the Company’s Direct Stock Participation plan warrants or the issuance of
                                         restricted stock awards or restricted stock units under the Company’s existing
                                         stock awards plan, or any new grants thereof in the ordinary course of business), (iii)
                                         there has not been any material change in the Company’s long-term or short-term
                                         debt, and (iv) there has not been the occurrence of any Material Adverse Effect.



 


		(i)	Except
                                         as a set forth in the Registration Statement and the Prospectus, there is not pending
                                         or, to the knowledge of the Company, threatened, any action, suit or proceeding to which
                                         the Company or any of its subsidiaries is a party or of which any property or assets
                                         of the Company or its subsidiaries is the subject before or by any court or governmental
                                         agency, authority or body, or any arbitrator or mediator, which is reasonably likely
                                         to result in a Material Adverse Effect or adversely affect the consummation of the transactions
                                         contemplated by this Agreement.



 


		(j)	The
                                         Company holds, and is in compliance with, all franchises, grants, authorizations, licenses,
                                         permits, easements, consents, certificates and orders (“Permits”)
                                         of any governmental or self-regulatory agency, authority or body required for the conduct
                                         of its business, and all such Permits are in full force and effect, in each case except
                                         where the failure to hold, or comply with, any of them is not reasonably likely to result
                                         in a Material Adverse Effect.



 


		(k)	The
                                         Company and its subsidiaries have good and marketable title to all property (whether
                                         real or personal) described in the Registration Statement and the Prospectus as being
                                         owned by them that is material to the business of the Company, in each case free and
                                         clear of all liens, claims, security interests, other encumbrances or defects, except
                                         those that are not reasonably likely to result in a Material Adverse Effect. The property
                                         held under lease by the Company and its subsidiaries is held by them under valid, subsisting
                                         and enforceable leases with only such exceptions with respect to any particular lease
                                         as do not interfere in any material respect with the conduct of the business of the Company
                                         and its subsidiaries.



 






    	 	8	 



     


    

 


		(l)	The
                                         Company and each of its subsidiaries owns or possesses or has valid right to use all
                                         patents, patent applications, trademarks, service marks, trade names, trademark registrations,
                                         service mark registrations, copyrights, licenses, inventions, trade secrets and similar
                                         rights (“Intellectual Property”) necessary for the conduct of the
                                         business of the Company and its subsidiaries as currently carried on and as described
                                         in the Registration Statement and the Prospectus. To the knowledge of the Company, no
                                         action or use by the Company or any of its subsidiaries will involve or give rise to
                                         any infringement of, or license or similar fees for, any Intellectual Property of others,
                                         except where such action, use, license or fee is not reasonably likely to result in a
                                         Material Adverse Effect. Neither the Company nor any of its subsidiaries has received
                                         any notice alleging any such infringement or fee.



 


		(m)	The
                                         Company and each of its subsidiaries has complied with, is not in violation of, and has
                                         not received any notice of violation relating to any law, rule or regulation relating
                                         to the conduct of its business, or the ownership or operation of its property and assets,
                                         including, without limitation, (i) the Currency and Foreign Transactions Reporting Act
                                         of 1970, as amended, or any money laundering laws, rules or regulations, (ii) any laws,
                                         rules or regulations related to health, safety or the environment, including those relating
                                         to the regulation of hazardous substances, (iii) the Sarbanes-Oxley Act and the rules
                                         and regulations of the Commission thereunder, (iv) the Foreign Corrupt Practices Act
                                         of 1977 and the rules and regulations thereunder, and (v) the Employment Retirement Income
                                         Security Act of 1974 and the rules and regulations thereunder, in each case except where
                                         the failure to be in compliance is not reasonably likely to result in a Material Adverse
                                         Effect.



 


		(n)	Neither
                                         the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director,
                                         officer, employee, representative, agent or affiliate of the Company or any of its subsidiaries
                                         is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
                                         Control (“OFAC”) of the U.S. Treasury Department (“OFAC”);
                                         and the Company will not directly or indirectly use the proceeds of the offering of the
                                         Bonds contemplated hereby, or lend, contribute or otherwise make available such proceeds
                                         to any person or entity, for the purpose of financing the activities of any person currently
                                         subject to any U.S. sanctions administered by OFAC.



 


		(o)	The
                                         Company carries, or is covered by, insurance in such amounts and covering such risks
                                         as, in the Company’s reasonable judgment, is adequate for the conduct of its business
                                         and the value of its properties and as is customary for similarly sized companies engaged
                                         in similar businesses in similar industries.



 


		(p)	No
                                         labor dispute with the employees of the Company exists or, to the knowledge of the Company,
                                         is imminent, that is reasonably likely to result in a Material Adverse Effect.



 


		(q)	Except
                                         as set forth in the Registration Statement and the Prospectus, neither the Company nor,
                                         to its knowledge, any other party is in violation, breach or default of any Contract
                                         that is reasonably likely to result in a Material Adverse Effect.



 


		(r)	No
                                         supplier, customer, distributor or sales agent of the Company has notified the Company
                                         that it intends to discontinue or decrease the rate of business done with the Company,
                                         except where such decrease is not reasonably likely to result in a Material Adverse Effect.



 


		(s)	There
                                         are no claims, payments, issuances, arrangements or understandings for services in the
                                         nature of a finder’s, consulting or origination fee with respect to the introduction
                                         of the Company to any Agent or the sale of the Bonds hereunder or any other arrangements,
                                         agreements, understandings, payments or issuances with respect to the Company that may
                                         affect the Agent’s compensation, as determined by FINRA.



 






    	 	9	 



     


    

 


		(t)	Except
                                         as set forth in the Registration Statement and the Prospectus, the Company has not made
                                         within the 12-month period prior to the date on which the Registration Statement was
                                         filed with the Commission (“Filing Date”) any direct or indirect payments
                                         (in cash, securities or otherwise) to (i) any person, as a finder’s fee, investing
                                         fee or otherwise, in consideration of such person raising capital for the Company or
                                         introducing to the Company persons who provided capital to the Company, (ii) any FINRA
                                         member, or (iii) any person or entity that has any direct or indirect affiliation or
                                         association with any FINRA member.



 


		(u)	None
                                         of the net proceeds of the offering will be paid by the Company to any participating
                                         FINRA member or any affiliate or associate of any participating FINRA member, except
                                         as specifically authorized herein.



 


		(v)	Except
                                         as set forth in the Registration Statement and the Prospectus, to the Company’s
                                         knowledge, no (i) officer or director of the Company or its subsidiaries, (ii) owner
                                         of 5% or more of the Company’s unregistered securities or that of its subsidiaries
                                         or (iii) owner of any amount of the Company’s unregistered securities acquired
                                         within the 180-day period prior to the Filing Date, has any direct or indirect affiliation
                                         or association with any FINRA member. The Company will advise the Agent and their counsel
                                         if it becomes aware at any time prior to the 90th day following the Initial
                                         or Final Closing that any officer, director or stockholder of 5% or more of the Company’s
                                         unregistered securities of the Company or its subsidiaries is or becomes an affiliate
                                         or associated person of a FINRA member participating in the offering.



 


		(w)	Other
                                         than the Agent and its selected participating agents, no person has the right to act
                                         as a placement agent or as a financial advisor to the Company in connection with the
                                         transactions contemplated hereby.



 


		(x)	The
                                         statements set forth in the Registration Statement and the Prospectus under the caption
                                         “Description of Bonds” insofar as they purport to constitute a summary of
                                         the terms of the Bonds and under the captions “Business,” “Certain
                                         Relationships and Related Party Transactions”, and “Plan of Distribution”,
                                         insofar as they purport to describe the provisions of the laws and documents referred
                                         to therein, are accurate, complete and fair in all material respects.



 


		(y)	Except
                                         as set forth in the Registration Statement and the Prospectus, there are no contracts,
                                         agreements or understandings between the Company and any person granting such person
                                         the right (other than rights which have been waived in writing or otherwise satisfied
                                         or not enforceable in connection with the offering of the Bonds) to require the Company
                                         to file a registration statement under the Securities Act with respect to any securities
                                         of the Company owned or to be owned by such person or to require the Company to include
                                         such securities in the securities registered pursuant to the Registration Statement or
                                         in any securities being registered pursuant to any other registration statement filed
                                         by the Company under the Securities Act.



 


		(z)	Except
                                         as set forth in the Registration Statement and the Prospectus, the Company has not sold
                                         or issued any shares of Common Stock during the six-month period preceding the date of
                                         the Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or
                                         S of, the Securities Act, other than shares issued pursuant to employee benefit plans,
                                         stock option plans or other employee compensation plans or pursuant to outstanding options,
                                         rights or warrants.



 


		(aa)	The
                                         Company and each of its subsidiaries (i) are in compliance with all, and have not violated
                                         any, laws, regulations, ordinances, rules, orders, judgments, decrees, permits or other
                                         legal requirements of any governmental authority, including without limitation any United
                                         States or non-United States federal, state, provincial, regional, or local authority,
                                         relating to the protection of human health or safety, the environment, or natural resources,
                                         or to hazardous or toxic substances or wastes, pollutants or contaminants (including,
                                         without limitation, all health and safety laws) (“Environmental Laws”)
                                         applicable to such entity, which compliance includes, without limitation, obtaining,
                                         maintaining and complying with all permits and authorizations and approvals required
                                         by Environmental Laws to conduct their respective businesses as described in the Registration
                                         Statement and the Prospectus, except where the failure to comply would not, singularly
                                         or in the aggregate, have a Material Adverse Effect, and (ii) have not received notice
                                         of any actual or alleged violation of Environmental Laws, or of any potential liability
                                         for or other obligation concerning the presence, disposal or release of hazardous or
                                         toxic substances or wastes, pollutants or contaminants.



 






    	 	10	 



     


    

 


(A)       There
are no proceedings that are pending, or known to be contemplated, against the Company or any of its subsidiaries under Environmental
Laws in which a governmental authority is also a party.


 


(B)       The
Company and its subsidiaries are not aware of any existing liabilities concerning hazardous or toxic substances or wastes, pollutants
or contaminants that could reasonably be expected to have a Material Adverse Effect on the capital expenditures, earnings or competitive
position of the Company and its subsidiaries.


 


(C)       To
the knowledge of the Company, no property which is or has been owned, leased, used, operated or occupied by the Company or its
subsidiaries has been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation of Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.), or otherwise designated as a contaminated site under applicable state
or local law.


 


		(bb)	The
                                         Company maintains a system of internal control over financial reporting (as such term
                                         is defined in Rule 13a-15(f) under the Exchange Act) that complies in all material respects
                                         with the requirements of the Exchange Act and has been designed by the Company’s
                                         principal executive officer and principal financial officer, or under their supervision,
                                         to provide reasonable assurance regarding the reliability of financial reporting and
                                         the preparation of financial statements for external purposes in accordance with U.S.
                                         generally accepted accounting principles. The Company’s internal control over financial
                                         reporting is effective and the Company is not aware of any material weaknesses in its
                                         internal control over financial reporting.



 


		(cc)	Since
                                         the date of the latest audited financial statements included in the Registration Statement
                                         and the Prospectus, there has been no change in the Company’s internal control
                                         over financial reporting that has materially affected, or is reasonably likely to materially
                                         affect, the Company’s internal control over financial reporting.



 


		(dd)	The
                                         Company maintains disclosure controls and procedures (as such term is defined in Rule
                                         13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act;
                                         such disclosure controls and procedures have been designed to ensure that material information
                                         relating to the Company and its subsidiaries is made known to the Company’s principal
                                         executive officer and principal financial officer by others within those entities; and
                                         such disclosure controls and procedures are effective.



 


		(ee)	The
                                         operations of the Company and its subsidiaries are being conducted in material compliance
                                         with applicable employment laws, the rules and regulations thereunder and any related
                                         or similar rules, regulations or guidelines, issued, administered or enforced by any
                                         governmental agency (collectively, the “Employee Benefit Laws”) and
                                         no action, suit or proceeding by or before any court or governmental agency, authority
                                         or body or any arbitrator involving the Company or any of its subsidiaries with respect
                                         to the Employee Benefit Laws is pending or, to the knowledge of the Company, threatened.



 


		(ff)	Neither
                                         the Company nor any of its affiliates, nor any director, officer, or employee, nor, to
                                         the Company’s knowledge, any agent or representative of the Company or of any of
                                         its affiliates, has taken any action in furtherance of an offer, payment, promise to
                                         pay, or authorization or approval of the payment or giving of money, property, gifts
                                         or anything else of value, directly or indirectly, to any “government official”
                                         (including any officer or employee of a government or government-owned or controlled
                                         entity or of a public organization, or any person acting in an official capacity for
                                         or on behalf of any of the foregoing, or any political party or party official or candidate
                                         for political office) to influence official action or secure an improper advantage; and
                                         the Company and its subsidiaries and affiliates conduct their businesses in compliance
                                         in all material respects with applicable anti-corruption laws and have instituted and
                                         maintain and will continue to maintain policies and procedures designed to promote and
                                         achieve compliance in all material respects with such laws and with the representation
                                         and warranty contained herein.



 






    	 	11	 



     


    

 


		5.	Purchase,
                                         Sale and Delivery of Bonds.



 


		(a)	The
                                         time and date of delivery of the closing and the delivery of the funds, securities and
                                         documents required to be delivered to the Agent is referred to herein as the “Closing
                                         Date.” On the Closing Date, the Company shall deliver the Placement Fee to the
                                         respective accounts previously specified in writing to the Company by the Agent and the
                                         Agent’s Warrants and the documents referred to herein to the Agent at such place
                                         as shall be agreed upon by the Company and the Agent.



 


		(b)	Agent’s
                                         Warrants. The Company hereby agrees to issue to Agent (and/or its designees) on the Closing
                                         Date, Warrants to purchase a number of shares of Common Stock equal to up to an aggregate
                                         of 5% of that number of Bonds issued at such closing (the “Agent’s Warrants”).
                                         The Agent’s Warrants shall be exercisable, in whole or in part, commencing after
                                         6 months from the closing and expiring on the three-year anniversary of the closing at
                                         an initial exercise price equal to one hundred and twenty five percent (125%) of the
                                         conversion price of the Bonds into shares of common stock underlying the Bonds, which
                                         will be fixed upon the issuance of the Bonds as disclosed in the Prospectus.



 


		6.	Covenants.



 


The Company covenants and agrees
with the several Agents as follows:


 


		(a)	To
                                         prepare the Prospectus in a form approved by the Agent and to file such Prospectus pursuant
                                         to Rule 424(b) under the Securities Act not later than the Commission’s close of
                                         business on the second business day following the execution and delivery of this Agreement,
                                         or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the
                                         Securities Act.



 


		(b)	During
                                         the period beginning on the date hereof and ending on the date that the Prospectus is
                                         no longer required by law to be delivered in connection with sales by an underwriter
                                         or dealer (the “Prospectus Delivery Period”), prior to amending or
                                         supplementing the Registration Statement, including any Rule 462 Registration Statement,
                                         or the Prospectus, the Company shall furnish to the Agent for review and comment a copy
                                         of each such proposed amendment or supplement, and the Company shall not file any such
                                         proposed amendment or supplement to which the Agent reasonably objects.



 


		(c)	From
                                         the date of this Agreement until the end of the offering, the Company shall promptly
                                         advise the Agent in writing (A) of the receipt of any comments of, or requests for additional
                                         or supplemental information from, the Commission, (B) of the time and date of any filing
                                         of any post-effective amendment to the Registration Statement or any amendment or supplement
                                         to the offering the Prospectus, (C) of the time and date that any post-effective amendment
                                         to the Registration Statement becomes effective and (D) of the issuance by the SEC of
                                         any stop order suspending the effectiveness of the Registration Statement or Prospectus,
                                         or of any proceedings to remove, suspend or terminate from listing or quotation the Bonds
                                         or the Company’s Common Stock from any securities exchange upon which it is listed
                                         for trading or included or designated for quotation, or of the threatening or initiation
                                         of any proceedings for any of such purposes. If the SEC shall enter any such stop order
                                         at any time during the Offering, the Company will use its reasonable efforts to obtain
                                         the lifting of such Offering order at the earliest possible moment. Additionally, the
                                         Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B,
                                         as applicable, under the Securities Act and will use its reasonable efforts to confirm
                                         that any filings made by the Company under Rule 424(b) or Rule 433 were received in a
                                         timely manner by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the
                                         Securities Act).



 






    	 	12	 



     


    

 


		(d)	During
                                         the Offering, the Company will comply with all requirements imposed upon it by the Securities
                                         Act, as now and hereafter amended, and by the Rules and Regulations, as from time to
                                         time in force, and by the Exchange Act, as now and hereafter amended, so far as necessary
                                         to permit the continuance of sales of or dealings in the Bonds as contemplated by the
                                         provisions hereof, the Registration Statement and the Prospectus. If during such period
                                         any event occurs as the result of which the Prospectus would include an untrue statement
                                         of a material fact or omit to state a material fact necessary to make the statements
                                         therein, in the light of the circumstances under which such statement was made, not misleading
                                         or, if during such period it is necessary or appropriate in the opinion of the Company
                                         or its counsel or the Agent or its counsel, to amend the Registration Statement or supplement
                                         the Prospectus to comply with the Securities Act, the Company will promptly notify the
                                         Agent and will amend the Registration Statement or the Prospectus so as to correct such
                                         statement or omission or effect such compliance.



 


		(e)	The
                                         Company will provide reasonable notice to the Agent regarding all press releases and
                                         other communications and publicity undertaken by the Company with respect to the Offering.



 


		(f)	During
                                         the Offering, the Company agrees to cooperate with the Agent and to furnish, or cause
                                         to be furnished, to the Agent, any and all information and data concerning the Company,
                                         its affiliates and the Offering that the Agent reasonably deems appropriate, including,
                                         without limitation, the Company’s acquisition plans and plans for raising capital
                                         or an additional financing (the “Information”). The Company shall
                                         provide the Agent reasonable access during normal business hours from and after the date
                                         of execution of this Agreement until the Closing to all of the Company’s and its
                                         affiliates’ assets, properties, books, contracts, commitments and records and to
                                         the Company’s officers, directors, employees, appraisers, independent accountants,
                                         legal counsel and other consultants and advisors except those assets and personnel related
                                         to confidential and proprietary geological and seismic analysis.



 


		(g)	The
                                         Company shall take or cause to be taken all necessary action to qualify the Bonds for
                                         sale under the securities laws of such jurisdictions as the Agent reasonably designate
                                         and to continue such qualifications in effect so long as required for the distribution
                                         of the Bonds, except that the Company shall not be required in connection therewith to
                                         file a prospectus in Canada, to qualify as a foreign corporation or as a dealer in securities
                                         in any jurisdiction in which it is not so qualified, to execute a general consent to
                                         service of process in any state or to subject itself to taxation in respect of doing
                                         business in any jurisdiction in which it is not otherwise subject.



 


		(h)	The
                                         Company will furnish to the Agent and counsel for the Agent copies of the Registration
                                         Statement, Prospectus, and all amendments and supplements to such documents, in each
                                         case as soon as available and in such quantities as the Agent may from time to time reasonably
                                         request.



 


		(i)	The
                                         Company will make generally available to its security holders as soon as practicable,
                                         but in any event not later than 15 months after the end of the Company’s current
                                         fiscal quarter, an earnings statement (which need not be audited) covering a 12-month
                                         period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule
                                         158 of the Rules and Regulations.



 


		(j)	The
                                         Company, whether or not the transactions contemplated hereunder are consummated or this
                                         Agreement is terminated, will pay or cause to be paid the expenses set forth on Exhibit
                                         A. If this Agreement is terminated by the Agent in accordance with the provisions
                                         of Section 7 or Section 11, the Company will reimburse the Agent for all out-of-pocket
                                         reasonable and documented disbursements (including, but not limited to, reasonable fees
                                         and disbursements of counsel, travel expenses, postage, facsimile and telephone charges)
                                         incurred by the Agent in connection with its investigation, preparing to market and marketing
                                         the Bonds or in contemplation of performing its obligations hereunder, not to exceed
                                         $75,000.



 






    	 	13	 



     


    

 


		(k)	The
                                         Company intends to apply the net proceeds from the sale of the Bonds to be sold by it
                                         hereunder for the purposes set forth in the Prospectus.



 


		(l)	The
                                         Company has not taken and will not take, directly or indirectly, during the Offering
                                         any action designed to or which might reasonably be expected to cause or result in, or
                                         that has constituted, the stabilization or manipulation of the price of any security
                                         of the Company to facilitate the sale or resale of the Bonds.



 


		(m)	The
                                         Company represents and agrees that, and the Agent and other placement agents, if any,
                                         severally and not jointly, represent and agree that, it shall inform the other party(ies)
                                         if it has made and will make any offer or other communication that would constitute an
                                         “free writing prospectus,” as defined in Rule 405 under the Securities Act,
                                         relating to the Bonds.



 


		(n)	For
                                         a period of at least three (3) years from the Effective Date, the Company shall retain
                                         an internationally recognized PCAOB registered independent public accounting firm reasonably
                                         acceptable to the Agent. The Agent acknowledges that MaloneBailey LLP is acceptable to
                                         the Agent.



 


		(o)	To
                                         engage and maintain, at its expense, a registrar and transfer agent for the Common Stock.



 


		(p)	The
                                         Company will use its best efforts to maintain its listing on Nasdaq and effect the listing
                                         of the Bonds, if applicable, on Nasdaq or another applicable securities market within
                                         six months of the Closing Date.



 


		(q)	To
                                         not take, directly or indirectly, any action designed to cause or result in, or that
                                         has constituted or might reasonably be expected to constitute, under the Exchange Act
                                         or otherwise, the stabilization or manipulation of the price of any securities of the
                                         Company to facilitate the sale or resale of the Bonds.



 


		(r)	Concurrently
                                         with, or as soon as practicable after, the filing of the Prospectus with the Commission,
                                         the Company shall make all necessary state “blue sky” securities law filings
                                         with respect to the Bonds (including the Additional Bonds) and the securities underlying
                                         the Bonds and Additional Bonds. The Company and the Agent will cooperate in obtaining
                                         the necessary approvals and qualifications in such states as the Agent deems necessary
                                         and/or desirable.



 


		(s)	The
                                         Company shall treat this Agreement and the terms hereof as confidential and will not
                                         disclose them to anyone other than the officers and directors of the Company and the
                                         Company’s accountants and legal counsel. Except as contemplated by the terms hereof,
                                         or as required by applicable law, the Company and the Agent shall keep strictly confidential
                                         all non-public information concerning the Company provided to the Agent. No obligation
                                         or confidentiality shall apply to information that (A) is in the public domain as of
                                         the date hereof or hereafter enters the public domain without breech by the Agent, (B)
                                         was known or became known by the Agent prior to the Company’s disclosure thereof
                                         to the Agent, (C) becomes known to the Agent from a source other than the company, and
                                         other than by the breech of an obligation of confidentiality owed to the Company, (D)
                                         is disclosed by the Company to a third party without restrictions on its disclosure or,
                                         (v) is independently developed by the Agent, in each case as demonstrated by contemporary
                                         written evidence.



 






    	 	14	 



     


    

 







		7.	Conditions
                                         of the Agent’s Obligations.



 


The respective obligations of the
several Agent hereunder are subject to the accuracy, as of the date hereof and at the Closing Date, of and compliance in all material
respects with all representations, warranties and agreements of the Company contained herein, the performance by the Company of
its obligations hereunder and the following additional conditions.


 


		(a)	If
                                         filing of the Prospectus, or any amendment or supplement thereto, is required under the
                                         Securities Act or the Rules and Regulations, the Company shall have filed the Prospectus
                                         (or such amendment or supplement) with the SEC in the manner and within the time period
                                         so required (without reliance on Rule 424(b)(8) or 164(b) under the Securities Act);
                                         the Registration Statement shall remain effective; no stop order suspending the effectiveness
                                         of the Registration Statement or any part thereof, any Rule 462 Registration Statement,
                                         or any amendment thereof, nor suspending or preventing the use of the Prospectus shall
                                         have been issued; no proceedings for the issuance of such an order shall have been initiated
                                         or threatened; any request of the SEC or an Agent for additional information (to be included
                                         in the Registration Statement the Prospectus or otherwise) shall have been complied with
                                         to the Agent’ satisfaction.



 


		(b)	FINRA
                                         shall have raised no objection to the fairness and reasonableness of the placement terms
                                         and arrangements.



 


		(c)	None
                                         of the Agent shall have reasonably determined, and advised the Company, that the Registration
                                         Statement the Prospectus, or any amendment thereof or supplement thereto, contains an
                                         untrue statement of fact which, in such Agent’s reasonable opinion, is material,
                                         or omits to state a fact which, in such Agent’s reasonable opinion, is material
                                         and is required to be stated therein or necessary to make the statements therein not
                                         misleading.



 


		(d)	On
                                         the Closing Date, there shall have been furnished to the Agent the opinion of Pearl Cohen
                                         Zedek Latzer Baratz, LLP, U.S. counsel for the Company, dated the Closing Date, and addressed
                                         to the Agent, in form and substance reasonably satisfactory to the Agent.



 


		(e)	On
                                         the Closing Date, there shall have been furnished to the Agent the negative assurance
                                         letter of Quintairos, Prieto, Wood & Boyer, P.A., counsel to the Agent, dated the
                                         Closing Date, and addressed to the Agent, in form and substance reasonably satisfactory
                                         to the Agent.



 


		(f)	The
                                         Agent shall have received a letter from, or other confirmation by the Company acceptable
                                         to the Agent, stating that MaloneBailey LLP, on the date hereof and on the Closing Date,
                                         is an independent public accountant within the meaning of the Securities Act and is in
                                         compliance with the requirements relating to the qualifications of accountants under
                                         Rule 2-01 of Regulation S-X of the Commission, and confirming the conclusions and findings
                                         of said firm with respect to the financial information and other matters required by
                                         the Agent.



 


		(g)	On
                                         the Closing Date, there shall have been furnished to the Agent a certificate, dated the
                                         Closing Date, and addressed to the Agent, signed by the chief executive officer and the
                                         chief financial officer of the Company, in their capacity as officers of the Company,
                                         to the effect that:



 


		(i)	The
                                         representations and warranties of the Company in this Agreement that are qualified by
                                         materiality or by reference to any Material Adverse Effect are true and correct in all
                                         respects, and all other representations and warranties of the Company in this Agreement
                                         are true and correct, in all material respects, as if made at and as of the Closing 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 the Closing Date;



 


		(ii)	No
                                         stop order or other order (A) suspending the effectiveness of the Registration Statement
                                         or any part thereof or any amendment thereof, (B) suspending the qualification of the
                                         Bonds for offering or sale, or (C) suspending or preventing the use of the Prospectus
                                         has been issued, and no proceeding for that purpose has been instituted or, to their
                                         knowledge, is contemplated by the Commission or any state or regulatory body; and



 



    	 	15	 



     


    

 


		(iii)	There
                                         has been no occurrence of any event resulting or reasonably likely to result in a Material
                                         Adverse Effect during the period from and after the date of this Agreement and prior
                                         to the Closing Date.



 


		(h)	On
                                         the Closing Date, there shall have been issued to the Agent, an Agent’ Warrant.



 


		(i)	The
                                         Common Stock shall remain approved for listing on the Nasdaq Market. The Company shall
                                         have taken no action designed to, or likely to have the effect of terminating the registration
                                         of the Common Stock under the Exchange Act or delisting or suspending from trading the
                                         Common Stock from the Nasdaq Market, nor shall the Company have received any information
                                         suggesting that the Commission or the Nasdaq Market is contemplating terminating such
                                         registration or listing. The Warrants and shares of Common Stock underlying the Agent’
                                         Warrants shall be DTC eligible.



 


		(j)	The
                                         Company shall have furnished to the Agent and its counsel such additional documents,
                                         certificates and evidence as the Agent or their counsel may have reasonably requested.



 


If any condition specified in this
Section 7 shall not have been fulfilled when and as required to be fulfilled in all material respects, this Agreement may be terminated
by any Agent by notice to the Company at any time at or prior to the Closing Date, and such termination shall be without liability
of any party to any other party, except that Section 6(j), Section 8 and Section 9 shall survive any such termination and remain
in full force and effect.


 


		8.	Indemnification
                                         and Contribution.



 


		(a)	The
                                         Company agrees to indemnify, defend and hold harmless the Agent, its affiliates, directors
                                         and officers and employees, and each person, if any, who controls any Agent within the
                                         meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
                                         against any losses, claims, damages or liabilities to which such Agent or such person
                                         may become subject, under the Securities Act or otherwise (including in settlement of
                                         any litigation if such settlement is effected with the written consent of the Company),
                                         insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
                                         arise out of or are based upon (i) an untrue statement or alleged untrue statement of
                                         a material fact contained in the Registration Statement, including the information deemed
                                         to be a part of the Registration Statement at the time of effectiveness and at any subsequent
                                         time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out of or
                                         are based upon the omission from the Registration Statement, or alleged omission to state
                                         therein, a material fact required to be stated therein or necessary to make the statements
                                         therein not misleading, (ii) an untrue statement or alleged untrue statement of a material
                                         fact contained in the Prospectus, or any amendment or supplement thereto (including any
                                         documents filed under the Exchange Act and deemed to be incorporated by reference into
                                         the Registration Statement or the Prospectus), or in any other materials used in connection
                                         with the offering of the Bonds, 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, in light of the circumstances under which they were made,
                                         not misleading, (iii) an untrue statement or alleged untrue statement of a material fact
                                         contained in any materials or information provided to investors by, or with the approval
                                         of, the Company in connection with the marketing of the offering of the Bonds, including
                                         any roadshow or investor presentations made to investors by the Company (whether in person
                                         or electronically), 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, in light of the circumstances under which they were made, not misleading,
                                         (iv) in whole or in part, any material breach in the representations and warranties of
                                         the Company contained herein, or (v) in whole or in part, any failure of the Company
                                         to perform its obligations hereunder, under the Subscription Agreements or under applicable
                                         law, and will reimburse the Agent for any legal or other expenses reasonably incurred
                                         by it in connection with evaluating, investigating or defending against such loss, claim,
                                         damage, liability or action; provided, however, that the Company shall not be liable
                                         in any such case to the extent that any such loss, claim, damage, liability or action
                                         arises out of or is based upon an untrue statement or alleged untrue statement or omission
                                         or alleged omission made in the Registration Statement, the Prospectus, or any amendment
                                         or supplement thereto, in reliance upon and in conformity with written information furnished
                                         to the Company by such Agent specifically for use in the preparation thereof, which written
                                         information is described in Section 8(f).



 



    	 	16	 



     


    

 


		(b)	The Agent and each other placement
                                         agent, if any, severally and not jointly, will indemnify, defend and hold harmless the
                                         Company, its affiliates, directors, officers and employees, and each person, if any,
                                         who controls the Company within the meaning of Section 15 of the Securities Act or Section
                                         20 of the Exchange Act, from and against any losses, claims, damages or liabilities to
                                         which the Company may become subject, under the Securities Act or otherwise (including
                                         in settlement of any litigation, if such settlement is effected with the written consent
                                         of such Agent), insofar as such losses, claims, damages or liabilities (or actions in
                                         respect thereof) arise out of or are based upon an untrue statement or alleged untrue
                                         statement of a material fact contained in the Registration Statement the Prospectus,
                                         or any amendment 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, in each case to the extent,
                                         but only to the extent, that such untrue statement or alleged untrue statement or omission
                                         or alleged omission was made in the Registration Statement, the Prospectus, or any amendment
                                         or supplement thereto, in reliance upon and in conformity with written information furnished
                                         to the Company by such Agent specifically for use in the preparation thereof, which written
                                         information is described in Section 8(f), and will reimburse the Company for any legal
                                         or other expenses reasonably incurred by the Company in connection with defending against
                                         any such loss, claim, damage, liability or action.



 


		(c)	Promptly
                                         after receipt by an indemnified party under subsection (a) or (b) above of notice of
                                         the commencement of any action, such indemnified party shall, if a claim in respect thereof
                                         is to be made against the indemnifying party under such subsection, notify the indemnifying
                                         party in writing of the commencement thereof; but the failure to notify the indemnifying
                                         party shall not relieve the indemnifying party from any liability that it may have to
                                         any indemnified party except to the extent such indemnifying party has been materially
                                         prejudiced by such failure. In case any such action shall be brought against any indemnified
                                         party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying
                                         party shall be entitled to participate in, and, to the extent that it shall wish, jointly
                                         with any other indemnifying party similarly notified, to assume the defense thereof,
                                         with counsel satisfactory to such indemnified party, and after notice from the indemnifying
                                         party to such indemnified party of the indemnifying party’s election so to assume
                                         the defense thereof, the indemnifying party shall not be liable to such indemnified party
                                         under such subsection for any legal or other expenses subsequently incurred by such indemnified
                                         party in connection with the defense thereof; provided, however, that if (i) the indemnified
                                         party has reasonably concluded (based on advice of counsel) that there may be legal defenses
                                         available to it or other indemnified parties that are different from or in addition to
                                         those available to the indemnifying party, (ii) a conflict or potential conflict exists
                                         (based on advice of counsel to the indemnified party) between the indemnified party and
                                         the indemnifying party (in which case the indemnifying party will not have the right
                                         to direct the defense of such action on behalf of the indemnified party), or (iii) the
                                         indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified
                                         party to assume the defense of such action within a reasonable time after receiving notice
                                         of the commencement of the action, the indemnified party shall have the right to employ
                                         a single counsel to represent it in any claim in respect of which indemnity may be sought
                                         under subsection (a) or (b) of this Section 8, in which event the reasonable fees and
                                         expenses of such separate counsel shall be borne by the indemnifying party or parties
                                         and reimbursed to the indemnified party as incurred.



 



    	 	17	 



     


    

 


The indemnifying party
under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment
in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named
and indemnity was or would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes
an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit
or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.


 


		(d)	If the indemnification provided for
                                         in this Section 8 is unavailable or insufficient to hold harmless an indemnified party
                                         under subsection (a) or (b) above, then each indemnifying party shall contribute to the
                                         amount paid or payable by such indemnified party as a result of the losses, claims, damages
                                         or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as
                                         is appropriate to reflect the relative benefits received by the Company on the one hand
                                         and the Agent on the other from the offering and sale of the Bonds or (ii) if the allocation
                                         provided by clause (i) above is not permitted by applicable law, in such proportion as
                                         is appropriate to reflect not only the relative benefits referred to in clause (i) above
                                         but also the relative fault of the Company on the one hand and the Agent on the other
                                         in connection with the statements or omissions that resulted in such losses, claims,
                                         damages or liabilities, as well as any other relevant equitable considerations. The relative
                                         benefits received by the Company on the one hand and the Agent on the other shall be
                                         deemed to be in the same proportion as the total net proceeds from the offering (before
                                         deducting expenses) received by the Company bear to the total underwriting discounts
                                         and commissions received by the Agent, in each case as set forth in the table on the
                                         cover page of the Final Prospectus. The relative fault shall be determined by reference
                                         to, among other things, whether the untrue or alleged untrue statement of a material
                                         fact or the omission or alleged omission to state a material fact relates to information
                                         supplied by the Company or the Agent and the parties’ relevant intent, knowledge,
                                         access to information and opportunity to correct or prevent such untrue statement or
                                         omission. The Company and the Agent agree that it would not be just and equitable if
                                         contributions pursuant to this subsection (d) were to be determined by pro rata allocation
                                         or by any other method of allocation that does not take account of the equitable considerations
                                         referred to in the first sentence of this subsection (d). The amount paid by an indemnified
                                         party as a result of the losses, claims, damages or liabilities referred to in the first
                                         sentence of this subsection (d) shall be deemed to include any legal or other expenses
                                         reasonably incurred by such indemnified party in connection with investigating or defending
                                         against any action or claim that is the subject of this subsection (d). Notwithstanding
                                         the provisions of this subsection (d), no Agent shall be required to contribute any amount
                                         in excess of the amount of such Agent’s Placement Fee referenced in Section 1(e)
                                         actually received by such Agent pursuant to this Agreement. No person guilty of fraudulent
                                         misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
                                         entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
                                         The Agent’s obligations to contribute as provided in this Section 8 are several
                                         in proportion to their respective underwriting obligations and not joint.



 


		(e)	The obligations of the Company under
                                         this Section 8 shall be in addition to any liability that the Company may otherwise have
                                         and the benefits of such obligations shall extend, upon the same terms and conditions,
                                         to each person, if any, who controls any Agent within the meaning of Section 15 of the
                                         Securities Act or Section 20 of the Exchange Act; and the several obligations of the
                                         Agent under this Section 8 shall be in addition to any liability that such Agent may
                                         otherwise have and the benefits of such obligations shall extend, upon the same terms
                                         and conditions, to the Company, and its officers, directors and each person who controls
                                         the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
                                         Exchange Act.



 



    	 	18	 



     


    

 


		(f)	For purposes of this Agreement, the
                                         Agent confirms, and the Company acknowledges, that there is no information concerning
                                         such Agent furnished in writing to the Company by such Agent specifically for preparation
                                         of or inclusion in the Registration Statement or the Prospectus, other than the statements
                                         set forth in the last paragraph on the cover page of the Prospectus and the statements
                                         set forth in the “Plan of Distribution” section of the Prospectus only insofar
                                         as such statements relate to the amount commissions and related activities that may be
                                         undertaken by such Agent.



 


		9.	Representations
                                         and Agreements to Survive Delivery.



 


All representations, warranties, covenants and agreements
of the Company herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the Agent
or other placement agents, if applicable, and the Company contained in Section 6(j), Section 6(s), and Section 8 hereof, shall
remain operative and in full force and effect regardless of any investigation made by or on behalf of the several Agent or any
controlling person thereof, or the Company or any of its officers, directors, or controlling persons, and shall survive delivery
of, and payment for, the Bonds to and by the Agent hereunder.


 


		10.	Termination
                                         of this Agreement.



 


		(a)	The Agent shall have the right to
                                         terminate this Agreement by giving notice to the Company as hereinafter specified at
                                         any time at or prior to the Closing Date, if in the reasonable opinion of such Agent,
                                         (i) there has occurred any material adverse change in the securities markets or any event,
                                         act or occurrence that has materially disrupted, or in the opinion of such Agent, will
                                         in the future materially disrupt, the securities markets or there shall be such a material
                                         adverse change in general financial, political or economic conditions or the effect of
                                         international conditions on the financial markets in the United States is such as to
                                         make it, in the judgment of such Agent, inadvisable or impracticable to market the Bonds
                                         or enforce contracts for the sale of the Bonds, (ii) trading in the Company’s Common
                                         Stock shall have been suspended by the Commission, or on the Nasdaq Stock Market shall
                                         have been suspended, (iii) minimum or maximum prices for trading shall have been fixed,
                                         or maximum ranges for prices for securities shall have been required, on the Nasdaq Stock
                                         Market, by such exchange or by order of the Commission or any other governmental authority
                                         having jurisdiction, (iv) a banking moratorium shall have been declared by federal or
                                         New York or California state authorities, (v) there shall have occurred any attack on,
                                         outbreak or escalation of hostilities or act of terrorism involving the United States,
                                         any declaration by the United States of an international 1 emergency or war, any substantial
                                         change or development involving a prospective substantial change in United States or
                                         international political, financial or economic conditions or any other calamity or crisis,
                                         (vi) the Company suffers any loss by strike, fire, flood, earthquake, accident or other
                                         calamity, whether or not covered by insurance, which is likely to have a Material Adverse
                                         Effect or (vii) in the judgment of the Agent, there has been, since the time of execution
                                         of this Agreement or since the respective dates as of which information is given in the
                                         Prospectus, any material adverse change in the assets, properties, condition, financial
                                         or otherwise, or in the results of operations, business affairs of the Company and its
                                         subsidiaries considered as a whole, whether or not arising in the ordinary course of
                                         business. Any such termination shall be without liability of any party to any other party
                                         except that the provisions of Section 6(f), Section 6(s) and Section 8 hereof shall at
                                         all times be effective and shall survive such termination.



 


		(b)	If any Agent elects to terminate
                                         this Agreement as provided in this Section, the Company and the other Agent shall be
                                         notified promptly by such Agent by telephone, confirmed by letter.



 



    	 	19	 



     


    

 


		11.	Notices.



 


Except
as otherwise provided herein, all communications hereunder shall be in writing and, 


 


		(a)	If to the Agent, shall be mailed, delivered or telecopied to



 


Network 1 Financial Securities, Inc.

The Galleria, Penthouse

2 Bridge Avenue, Building 2

Red Bank, NJ 07701

Telephone: (732) 758-9001

www.network1financial.comand

Attention: William R. Hunt, Jr.


 


if to the Company, shall be mailed, delivered
or telecopied to it at



Zion Oil & Gas, Inc.

12655 North Central Expressway, Suite 1000

Dallas, TX 75243

Telephone: (214) 221-4610 or (888) 891-9466

Fax: ( 214) 221-6510

e-mail: martin.vanbrauman@zionoil.com

Attention: Martin Van Brauman, Senior Vice-President, Secretary-Treasurer and Director


 


		(b)	or in each case to such other address as the person to be notified
                                         may have requested in writing.



 


Any
party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new
address for such purpose.


 


		12.	Persons
                                         Entitled to Benefit of Agreement.



 


This
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns and
the controlling persons, officers and directors referred to in Section 8. Nothing in this Agreement is intended or shall be construed
to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement
or any provision herein contained. The term “successors and assigns” as herein used shall not include any purchaser,
as such purchaser, of any of the Bonds from any Agent.


 


		13.	Absence
                                         of Fiduciary Relationship.



 


The
Company acknowledges and agrees that: 


 


		(a)	the Agent has been retained solely
                                         to act as an agent in connection with the sale of the Bonds and that no fiduciary, advisory
                                         or agency relationship between the Company and any Agent has been created in respect
                                         of any of the transactions contemplated by this Agreement, irrespective of whether any
                                         Agent has advised or is advising the Company on other matters;



 


		(b)	the
                                         price and other terms of the Bonds and Agent’s Warrants set forth in this Agreement
                                         were established by the Company following discussions and arms-length negotiations with
                                         the Agent and the Company is capable of evaluating and understanding and understands
                                         and accepts the terms, risks and conditions of the transactions contemplated by this
                                         Agreement;



 


		(c)	it
                                         has been advised that the Agent and its affiliates are engaged in a broad range of transactions
                                         that may involve interests that differ from those of the Company and that no Agent has
                                         any obligation to disclose such interest and transactions to the Company by virtue of
                                         any fiduciary, advisory or agency relationship; and



 


		(d)	it
                                         has been advised that the Agent is acting, in respect of the transactions contemplated
                                         by this Agreement, solely for the benefit of such Agent, and not on behalf of the Company.



 






    	 	20	 



     


    

 


		14.	Amendments
                                         and Waivers.



 


No
supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby.
The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise
expressly provided.


 


		15.	Partial
                                         Unenforceability.



 


The
invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph, clause or provision.


 


		16.	Governing
                                         Law.



 


This
Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey without reference to its conflicts
of law principles.


 


		17.	Dispute
                                         Resolution.



 


The Company and the Agent agree that in the
event a dispute arises between the Agent and the Company or any of its officers, directors, employees, agents, attorneys or accountants,
arising out of, in connection with, or as a result of the execution of this Agreement, or as a result of any subscription tendered
by any purchaser of the shares, such dispute shall be resolved through arbitration rather than litigation. The parties agree to
submit such disputes for resolution to FINRA within five (5) days after receiving a written request from any of the aforesaid
parties to do so. The failure by the Company or the Agent to submit any dispute to arbitration as requested may result in the
commencement of an arbitration proceeding against such party. The parties further agree that any hearing scheduled after an arbitration
proceeding is initiated by any of the aforesaid parties shall take place in New Jersey. The parties acknowledge that the result
of the arbitration proceeding shall be final and binding on all of the parties to the proceeding, and by agreeing to arbitration
the parties are waiving their respective rights to seek remedies in Court.


 


		18.	Dollar
                                         Amounts.



 


All dollar amounts in this Agreement are in United
States Dollars.


 


		19.	Counterparts.



 


This
Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts
shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument. Signatures
of authorized individuals made and transmitted via electronic means (facsimile or scanned as a PDF) are deemed acceptable to all
parties.


 


Please sign and return to the Company
the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company and the Agent
in accordance with its terms.


 


Very truly yours,


 


NETWORK 1 FINANCIAL SECURITIES, INC. (Agent)


 


	By:	/s/ William R. Hunt Jr.	 
	 	William R. Hunt, Jr., President	 



 


Confirmed as of the date first above-mentioned.



 


ZION OIL AND GAS, INC. (Company)


 


	By:	/s/ Martin M. van Brauman	 
	 	Martin M. van Brauman, 

    Senior Vice President, Secretary-Treasurer & Director	 



 






    	 	21	 



     


    

 


EXHIBIT A


 


	 	Description	Maximum
    Liability

of the Company

is limited to

such amount (1)
	A.	The
    Agent’s reasonable and documented legal and accounting fees and disbursements, including but not limited to, fees, disbursements
    and expenses of the Agent’s counsel, the costs of preparing, filing, mailing and delivering the Prospectus Supplement
    and amendments thereto, post-effective amendments and supplements thereto (all in such quantities as the Agent
    may reasonably require), the costs of preparing the Placement Agreement and related documents, and submission to Advertising
    Department.	Up
    to $50,000
	 	 	 
	B.	The
    cost of any “due diligence” meetings and research, as needed.	Up
    to $5,000
	 	 	 
	C.	All
    reasonable and documented fees and expenses for travel and conducting a road show presentation, and related out-of-pocket
    expenses with the Company’s prior written  approval	Up
    to $5,000
	 	 	 
	D.	FINRA
    filing fees and expenses incident to any required review and approval by FINRA of the Agent’s terms of compensation
    for the sale of the Bonds and compliance with advertising guidelines.	$5,000
	 	 	 
	E.	Broker-dealer
    clearing firm charges, including but not limited to review fees, Depositary Trust Company fees for clearing, and other services,
    including but not limited to fees required by Depositary Trust Company and the Deposit and Withdrawal as Custodian (DWAC)
    System Transfer taxes, if any, payable upon the transfer of securities from the Company to investors, and fees and expenses
    of the transfer agent and registrar for the Bonds, Warrants and the underlying Common Stock.	[To
    be determined
	 	 	 
	F.	All
    other costs and expenses incident to the performance of the Agent’s obligations hereunder that are not otherwise specifically
    provided for herein.	[To
    be determined]


 


	(1)	These figures in this column are estimates only. They are provided by the Agent as a courtesy to assist the Company with respect
to its financial planning and are not intended to, and shall not, bind the Agent or the Company in any way. Notwithstanding the
foregoing sentence, Agent agrees to limit such costs and expenses, with the exception of the fees and expenses described in row
E, to $75,000.




 



    	 	22	 



     


    




 


EXHIBIT B


 


Form of U.S. Subscription Agreement


 


[To be provided separately]


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


23