Document:

EX-10.1

 Exhibit 10.1 

CONSULTING AGREEMENT 
 This Consulting
Agreement (the “Agreement”) is made effective as of January 21, 2021 (the “Effective Date”), by and between ZIOPHARM ONCOLOGY, INC., a Delaware corporation, with its principal place of business being One First Avenue, Parris
Building 34, Navy Yard Plaza, Boston, Massachusetts, 02129 (the “Company”) and Danforth Advisors, LLC, a Massachusetts limited liability company, with its principal place of business being 91 Middle Road, Southborough, MA 01772
(“Danforth”). The Company and Danforth are herein sometimes referred to individually as a “Party” and collectively as the “Parties.” 

WHEREAS, the Company is developing cell and gene immunotherapies that weaponize the body’s immune system to treat the millions of people
globally diagnosed with cancer each year; and 
 WHEREAS, Danforth has expertise in financial and corporate operations and strategy; and

 WHEREAS, Danforth desires to serve as an independent consultant for the purpose of providing the Company with certain strategic and
financial advice and support services, as more fully described in Exhibit A attached hereto, (the “Services”); and 

WHEREAS, the Company wishes to engage Danforth on the terms and conditions set forth herein. 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which are hereby acknowledged,
the Parties agree and covenant as follows. 
  

	1.	 Services of Consultant. Danforth will assist the Company with matters relating to the Services. The
Services are more fully described in Exhibit A attached hereto. Danforth and the Company will review the Services on a monthly basis to prioritize and implement the tasks listed on Exhibit A. 

 

	2.	 Compensation for Services. In full consideration of Danforth’s full, prompt and faithful
performance of the Services, the Company shall compensate Danforth a consulting fee more fully described in Exhibit A (the “Consulting Fee”). Danforth shall, from time to time, but not more frequently than twice per calendar month,
invoice the Company for Services rendered, and such invoice will be paid upon thirty (30) days of receipt. Each month the Parties shall evaluate jointly the current fee structure and scope of Services. Danforth reserves the right to an annual
increase in consultant rates of up to 4%, effective January 1 of each year. Upon termination of this Agreement pursuant to Section 3, no compensation or benefits of any kind as described in this Section 2 shall be payable or issuable to
Danforth after the effective date of such termination. In addition, the Company will reimburse Danforth for reasonable out-of-pocket business expenses, including but not limited to travel and parking, incurred by Danforth in performing the Services
hereunder, upon submission by Danforth of supporting documentation reasonably acceptable to the Company, and in accordance with the Company’s vendor travel and expense policy. Any such accrued expenses in any given three (3) month period
that exceed $1,000 shall be submitted to the Company for its prior written approval. 

  
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 All Danforth invoices and billing matters should be addressed to: 

 

			
	Company Accounts Payable Contact:	 	Christine Legal
		 	One First Avenue, Parris Building 34, Navy
		 	Yard Plaza, Boston, Massachusetts, 02129

  

			
	All Company payments and billing inquiries should be addressed to:
		
	Danforth Accounting:	 	Betsy Sherr
		 	Danforth Advisors
		 	PO Box 335
		 	Southborough, MA 01772

  

	3.	 Term and Termination. The term of this Agreement will commence on the Effective Date and will continue
until such time as either party has given notice of termination pursuant to this paragraph 3 (the “Term”). This Agreement may be terminated by either Party hereto: (a) with Cause (as defined below), upon 30 days prior written notice
to the other Party; or (b) without cause upon 60 days prior written notice to the other Party. For purposes of this Section 3, “Cause” shall include: (i) a breach of the terms of this Agreement which is not cured within 30
days of written notice of such default or (ii) the commission of any act of fraud, embezzlement or deliberate disregard of any law, rule, regulation or policy of the Company. 

 

	4.	 Time Commitment. Danforth will devote such time to perform the Services under this Agreement as may
reasonably be required. Danforth does not guarantee time and materials estimates in any way and such estimates are not fixed prices. Danforth will notify the Company as soon as practicable if an estimate will be exceeded. 

 

	5.	 Place of Performance. Danforth will perform the Services at such locations upon which the Company and
Danforth may mutually agree. Danforth will not, without the prior written consent of the Company, perform any of the Services at any facility or in any manner that might give anyone other than the Company any rights to or allow for disclosure of any
Confidential Information (as defined below). 

  

	6.	 Compliance with Policies and Guidelines.     Danforth will perform the Services in
accordance with all applicable law, rules and regulations, or any policies adopted by the Company that the Company discloses in writing to Danforth. 

  
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	7.	 Confidential Information. Danforth acknowledges and agrees that during the course of performing the
Services, the Company or its representatives may furnish, disclose or make available to Danforth information, including, but not limited to, material, compilations, data, formulae, products, sciences, technologies, developments, models, patent
disclosures, procedures, processes, business plans, alliances, research, business projections, protocols, results of experimentation and testing, specifications, strategies and techniques, and all tangible and intangible embodiments thereof of any
kind whatsoever (including, but not limited to, any apparatus, biological or chemical materials, animals, cells, compositions, documents, drawings, machinery, patent applications, records and reports), which is owned or controlled by the Company and
is identified, marked or designated as confidential at the time of disclosure or is of a type that is customarily considered to be confidential information (collectively the “Confidential Information”). Danforth acknowledges that the
Confidential Information or any part thereof is the exclusive property of the Company and shall not be disclosed to any third party without first obtaining the prior written consent of the Company. Danforth further agrees to take all practical steps
to ensure that the Confidential Information, and any part thereof, shall not be disclosed or issued to its affiliates, agents or employees, except on written terms of confidentiality at least as stringent as those hereunder. The above provisions of
confidentiality shall survive the expiration or earlier termination of this Agreement for a period of five(5) years. The Company agrees to permit the use of its name and logo in a roster of Danforth clients, which may appear on the Danforth website
and in its marketing materials. 

  

	8.	 Intellectual Property. Danforth agrees that all ideas, inventions, discoveries, creations, manuscripts,
properties, innovations, improvements, know-how, designs, developments, apparatus, techniques, methods, and formulae that Danforth conceives, makes, develops or improves as a result of performing the Services, whether or not reduced to practice and
whether or not patentable, alone or in conjunction with any other party and whether or not at the request or upon the suggestion of the Company (all of the foregoing being hereinafter collectively referred to as the “Inventions”), shall be
the sole and exclusive property of the Company. Danforth shall promptly and fully disclose to the Company any and all Inventions. Danforth hereby does sell, transfer, assign, agree to assign, and set over to the Company all worldwide right, title
and interest in and to the Inventions and any intellectual property relating to the Inventions. At Company’s sole cost and expense, Danforth shall provide, and shall cause its employees, officers, agents, directors, trustees, consultants and/or
members to provide, cooperation and assistance to Company, both during and after the term of this Agreement, with respect to the filing, procurement, maintenance, defense and enforcement of the Inventions. Danforth hereby covenants and agrees that
all persons who will have access to Confidential Information or will perform work for Danforth have enforceable, written intellectual property assignment agreements wherein those persons have assigned and will assign all intellectual property rights
to Danforth. At Company’s sole prepaid cost and expense, Danforth hereby agrees to perform all acts deemed necessary or desirable by Company to permit and assist Company in obtaining and enforcing the full benefits, enjoyment, rights and title
throughout the world in any Invention. Danforth hereby agrees in consideration of the Company’s agreement to engage Danforth and pay compensation for the Services rendered to the Company and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged that Danforth shall not, without the prior written consent of the Company, directly or indirectly, consult 

  
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	 	for, or become an employee of, any company which conducts business in the Field of Interest anywhere in the world. As used herein, the term “Field of Interest” shall mean the research, development, manufacture
and/or sale of the products resulting from the Company’s technology. The limitations on competition contained in this Section 8 shall continue during the time that Danforth performs any Services for the Company, and for a period of three
months following the termination of any such Services that Danforth performs for the Company. If any part of this section should be determined by a court of competent jurisdiction to be unreasonable in duration, geographic area, or scope, then this
Section 8 is intended to and shall extend only for such period of time, in such area and with respect to such activity as is determined to be reasonable. Except as expressly provided herein, nothing in this Agreement shall preclude Danforth
from consulting for or being employed by any other person or entity. 

  

	9.	 Non Solicitation. All personnel representing Danforth are employees or contracted agents of Danforth.
Accordingly, they are not retainable as employees or contractors by the Company and the Company hereby agrees not to solicit, hire or retain the services of any Danforth individual who performs services under this Agreement for so long as they are
employees or contracted agents of Danforth and for two years thereafter. Should the Company violate this restriction, it agrees to pay Danforth liquidated damages equal to thirty 30% of the employee’s starting annual base salary and target
annual cash bonus for each Danforth contracted agent hired by the Company in violation of this Agreement, plus Danforth’s reasonable attorneys’ fees and costs incurred in enforcing this agreement should the Company fail or refuse to pay
the liquidated damages amount in full within 30 days following its violation. 

  

	10.	 Placement Services. In the event that Danforth refers a potential employee to the Company and that
individual is hired, Danforth shall receive a fee equal to 20% of the employee’s starting annual base salary and target annual cash bonus (this fee excludes any non-cash compensation). This fee is due and owing whether an individual is hired,
directly or indirectly on a permanent basis or on a contract or consulting basis by the Company, as a result of Danforth’s efforts within one year of the date applicant(s) are submitted to the Company, provided however, no fee shall be due if
Company promptly notifies Danforth of recent and prior employment conversation that Company has conducted with such candidate prior to Danforth’s referral. Such payment shall be invoiced to Company within 30 days of the employee’s start
date. 

  

	11.	 Danforth Warranties. Danforth represents and warrants that no trade secrets or other confidential information
of any other person, firm, corporation, institution or other entity will be wrongfully disclosed by it to Company in connection with any of the Services. Danforth further represents and warrants that none of the provisions of this Agreement, nor the
Services performed by Danforth hereunder, contravenes or is in conflict with any agreement of Danforth with, or obligation to, any other person, firm, corporation, institution or other entity including, without limiting the generality of the
foregoing, employment agreements, consulting agreements, service agreements, disclosure agreements or agreements for assignment of inventions. 

  
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	12.	 No Implied Warranty. Except for any express warranties stated herein, the Services are provided on an
“as is” basis, and the Company disclaims any and all other warranties, conditions, or representations (express, implied, oral or written), relating to the Services or any part thereof. Further, in performing the Services Danforth is not
engaged to disclose illegal acts, including fraud or defalcations, which may have taken place. The foregoing notwithstanding, Danforth will promptly notify the Company if Danforth becomes aware of any such illegal acts during the performance of the
Services. Because the Services do not constitute an examination in accordance with standards established by the American Institute of Certified Public Accountants (the “AICPA”), Danforth is precluded from expressing an opinion as to
whether financial statements provided by the Company are in conformity with generally accepted accounting principles or any other standards or guidelines promulgated by the AICPA, or whether the underlying financial and other data provide a
reasonable basis for the statements. 

  

	12.1	 Indemnification. Each Party hereto agrees to indemnify and hold the other Party hereto, its directors,
officers, agents and employees harmless against any claim based upon circumstances alleged to be inconsistent with such representations and/or warranties contained in this Agreement. Further, the Company shall indemnify and hold harmless Danforth
and any of its subcontractors against any claims, losses, damages or liabilities (or actions in respect thereof) that arise out of or are based on the Services performed hereunder, except for any such claims, losses, damages or liabilities arising
out of the gross negligence, willful misconduct, of Danforth or any of its subcontractors. The Company will endeavor to add Consultant and any applicable subcontractor to its General Liability insurance policies as additional insureds. Furthermore,
during the Term of this Agreement, Company shall maintain a Crime including “Social Engineering” and Cyber Insurance. 

  

	13.	 Equipment and IT Security. Danforth will use a business facing email address for all correspondence with
Company and any other parties with whom Danforth or its employees may exchange information on behalf of the Company or in performance of the Services. Danforth will ensure that the computers and equipment used to perform Services under this
Agreement will have up to date virus protection software and other reasonable and necessary security. 

  

	14.	 Independent Contractor. Danforth is not, nor shall Danforth be deemed to be at any time during the term
of this Agreement, an employee of the Company, and therefore Danforth shall not be entitled to any benefits provided by the Company to its employees, if applicable. Danforth’s status and relationship with the Company shall be that of an
independent contractor and consultant. Danforth shall not state or imply, directly or indirectly, that Danforth is empowered to bind the Company without the Company’s prior written consent. Nothing herein shall create, expressly or by
implication, a partnership, joint venture or other association between the parties. Danforth will be solely responsible for payment of all charges and taxes arising from his or her relationship to the Company as a consultant. 

  
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	15.	 Records. Upon termination of Danforth’s relationship with the Company, or upon Company’s
earlier written request, Danforth shall deliver to the Company any property or Confidential Information of the Company relating to the Services which may be in its possession including products, project plans, materials, memoranda, notes, records,
reports, laboratory notebooks, or other documents or photocopies and any such information stored using electronic medium. Notwithstanding the foregoing, neither party is obligated to return or destroy Confidential Information that is contained in an
archived computer system or backup made by the recipient in accordance with its standard security or disaster recovery procedures; provided that, the confidentiality obligations of the parties under this Agreement with respect to any retained copy
shall survive any termination of this Agreement. 

  

	16.	 Notices. Any notice under this Agreement shall be in writing (except in the case of verbal
communications, emails and teleconferences updating either Party as to the status of work hereunder) and shall be deemed delivered upon personal delivery, one day after being sent via a reputable nationwide overnight courier service or two days
after deposit in the mail or on the next business day following transmittal via facsimile. Notices under this Agreement shall be sent to the following representatives of the Parties: 

 

					
	                	 	If to the Company:	  	
			
		 	Name:	  	Robert Hadfield
		 	Title:	  	EVP, General Counsel
		 	Address:	  	One First Avenue, Parris Building 34, 
		 		  	Navy Yard Plaza,
		 		  	Boston, Massachusetts, 02129
		 	Phone:	  	
		 	E-mail:	  	
		 	Cc:	  	
			
		 	If to Danforth:	  	
			
		 	Name:	  	Gregg Beloff
		 	Title:	  	Managing Director
		 	Address:	  	91 Middle Road
		 		  	Southborough, MA 01772
		 	Phone:	  	
		 	E-mail:	  	

  

	17.	 Assignment and Successors. This Agreement may not be assigned by a Party without the consent of the
other which consent shall not be unreasonably withheld, except that each Party may assign this Agreement and the rights, obligations and interests of such Party, in whole or in part, to any of its Affiliates, to any purchaser of all or substantially
all of its assets or to any successor corporation resulting from any merger or consolidation of such Party with or into such corporation. 

  

	18.	 Force Majeure. Neither Party shall be liable for failure of or delay in performing the Services set
forth in this Agreement if such failure or delay is due to natural disasters or any causes beyond the reasonable control of either Party. In the event of such force majeure, the Party affected thereby shall use reasonable efforts to cure or overcome
the same and resume performance of its obligations hereunder. 

  
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	19.	 Headings. The Section headings are intended for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement. 

  

	20.	 Integration; Severability. This Agreement is the sole agreement with respect to the subject matter
hereof and shall supersede all other agreements and understandings between the Parties with respect to the same. If any provision of this Agreement is or becomes invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the Parties that the remainder of the Agreement shall not be affected. 

  

	21.	 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, excluding choice of law principles. The Parties agree that any action or proceeding arising out of or related in any way to this Agreement shall be brought solely in a Federal or State court of competent jurisdiction
sitting in the Commonwealth of Massachusetts. 

  

	22.	 Counterparts. This Agreement may be executed in counterparts, including via e-mail delivery of a
portable document format (*.pdf) data file or similar electronic means, each of which will be deemed an original, but all of which together will constitute one agreement. Electronic, facsimile, or PDF image signatures will be treated as original
signatures. 

 If you are in agreement with the foregoing, please sign where indicated below, whereupon this Agreement shall become
effective as of the Effective Date. 
  

									
	DANFORTH ADVISORS, LLC	 		 	ZIOPHARM ONCOLOGY, INC.
					
	By:	 	 /s/ Chris Connors
	 		 	By:	 	 /s/ Kevin Lafond

	Print Name:	 	Chris Connors	 		 	Print Name:	 	Kevin Lafond
	Title:	 	President	 		 	Title:	 	Chief Accounting Officer
	Date:	 	January 20, 2021	 		 	Date:	 	1/22/2021

  
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 EXHIBIT A 

Description of Services and Schedule of Fees 

Danforth will perform mutually agreed to finance and accounting functions which are necessary to support the management and operations of the Company, certain
of which are set forth below: 
 Initial Staffing: 
  

					
	 Role
	  	 Name
	  	 Hourly Rate

	 CFO
	  	Tim Cunningham	  	$375/Hour

  
 8Exhibit 4.1

 

DESCRIPTION OF ENZON PHARMACEUTICALS, INC.’S
REGISTERED SECURITIES

 

The following description of the common
stock, $0.01 par value (“Common Stock”), of Enzon Pharmaceuticals, Inc. (“us”, “our”,
or the “Company”) and the Series A-1 Junior Participating Preferred Stock Purchase Rights (the “Rights”)
is a summary. This summary is not complete and is subject to and qualified in its entirety by reference to the complete text of
our Amended and Restated Certificate of Incorporation, as amended (“Certificate”), and our Second Amended and Restated
By-Laws, as amended (“By-Laws”), each previously filed with the Securities and Exchange Commission and incorporated
by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part, as well as to the relevant
provisions of the Delaware General Corporation Law (the “DGCL”). The Common Stock and the Rights are the only classes
of securities of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended.

 

General

 

The authorized capital stock of the Company
consists of: (i) 170,000,000 shares of Common Stock, and (ii) 3,000,000 shares of preferred stock, par value $0.01 per
share (“Preferred Stock”).

 

Common Stock

 

Dividends

 

Holders of Common Stock are entitled to
receive dividends when, as and if declared by our Board of Directors out of funds legally available for their payment, subject
to the rights of holders of any Preferred Stock that may be issued and outstanding and to restrictions contained in agreements
to which the Company is a party.

 

Voting Rights

 

Each holder of our Common Stock is entitled
to one vote per share on all matters submitted to a vote of stockholders. Generally, a matter submitted for stockholder action
shall be approved if a majority of the votes cast at such meeting by the holders of shares of Common Stock present in person or
represented by proxy and entitled to vote thereon are cast “for” the matter, unless a greater or different vote is
required by statute, any applicable law or regulation, the rights of any authorized series of Preferred Stock, or our Certificate
or By-Laws. Other than in a contested election where directors are elected by a plurality vote, a director nominee shall be elected
to the board if the votes cast “for” such nominee’s election exceed the votes cast “against” such
nominee’s election. Subject to any rights of the holders of any series of Preferred Stock pursuant to applicable law or the
certificate of designations creating that series, all voting rights are vested in the holders of shares of our Common Stock. Holders
of shares of our Common Stock do not have cumulative voting rights.

 

Rights Upon Liquidation

 

Upon our liquidation, dissolution or winding
up, the holders of Common Stock are entitled to share ratably in our net assets available after the payment of all debts and other
liabilities, and after the satisfaction of the rights of any outstanding Preferred Stock.

 

Other Rights

 

Holders of our Common Stock have no preemptive,
subscription, redemption or conversion rights, nor are they entitled to the benefit of any sinking fund. The outstanding shares
of Common Stock are validly issued, fully paid and non-assessable.

 

    

     

    

 

Preferred Stock

 

Our Board of Directors is authorized, without
further action by our stockholders, to issue up to 3,000,000 shares of “blank check” Preferred Stock, in one or more
series, and to fix the designations, powers, preferences and the relative, participating, optional or other special rights and
any qualifications, limitations and restrictions of the shares of each series of Preferred Stock. The issuance of Preferred Stock
could have the effect of delaying, deferring or preventing a change in control, as well as decrease the amount of earnings and
assets available for distribution to holders of our Common Stock or otherwise adversely affect their rights and powers, including
voting rights. Of our currently authorized Preferred Stock, 100,000 shares are designated as Series A-1 Junior Participating
Preferred Stock in connection with the Company’s Section 382 Rights Plan (as defined below), which was adopted August 14,
2020, and 40,000 shares are designated as Series C Non-Convertible Redeemable Preferred Stock, which were issued in connection
with a rights offering completed by the Company during October 2020.

 

Series A-1 Junior Participating Preferred Stock Purchase
Rights

 

On August 14, 2020 (the “Rights
Dividend Declaration Date”), the Board of Directors (the “Board”) of the Company adopted a Section 382 rights
plan (the “Section 382 Rights Plan”) and declared a dividend distribution of one Right for each outstanding share
of Common Stock to stockholders of record at the close of business on August 24, 2020. Each Right entitles its holder, under
certain circumstances described below, to purchase from the Company one one-thousandth of a share of Series A-1 Junior Participating
Preferred Stock of the Company, par value $0.01 per share (the “Series A-1 Junior Participating Preferred Stock”),
at an exercise price of $1.20 per Right, subject to adjustment (the “Purchase Price”). The description and terms of
the Rights are set forth in a Section 382 Rights Agreement, dated as of August 14, 2020, by and between the Company and
Continental Stock Transfer & Trust Company, as Rights Agent (the “Section 382 Rights Agreement”).

 

The Board adopted the Section 382 Rights
Plan in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s ability
to use its net operating loss carryforwards (“NOLs”). If the Company experiences an “ownership change,”
as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), the Company’s ability
to fully utilize the NOLs on an annual basis will be substantially limited, and the timing of the usage of the NOLs could be substantially
delayed, which could therefore significantly impair the value of those benefits. The Section 382 Rights Plan is intended to
act as a deterrent to any person (an “Acquiring Person”) acquiring (together with all affiliates and associates of
such person) beneficial ownership of 4.9% or more of the Company’s outstanding common stock within the meaning of Section 382
of the Code, without the approval of the Board. Stockholders who beneficially own 4.9% or more of the Company’s outstanding
common stock as of the Rights Dividend Declaration Date will not be deemed to be an Acquiring Person.

 

The Rights

 

Initially, the Rights are associated with
shares of Common Stock certificates or, in the case of uncertificated shares of Common Stock, the book-entry account that evidences
record ownership of such shares, which will contain a notation incorporating the Section 382 Rights Plan by reference, and
are transferable with and only with the underlying shares of Common Stock. New Rights will attach to any shares of Common Stock
that become outstanding after the Record Date and prior to the earlier of the Distribution Date (as defined below) and the Expiration
Date (as defined below). If Series A-1 Junior Participating Preferred Stock is issued upon exercise of the Rights, each fractional
share of Series A-1 Junior Participating Preferred Stock would give the stockholder approximately the same dividend, voting
and liquidation rights as does one share of Common Stock. However, prior to exercise, a Right does not give its holder any rights
as a stockholder of the Company, including any dividend, voting or liquidation rights.

 

Initial Exercisability

 

Subject to certain exceptions, the Rights
are not exercisable until the “Distribution Date,” which occurs upon the earlier of:

 

		·	the close of business on the tenth day after the “Stock Acquisition Date,” which is (a) the first date of
public announcement that an Acquiring Person has become such or (b) such earlier date as a majority of the Board has become
aware of the existence of an Acquiring Person (in each case, subject to certain exceptions), or

 

    

     

    

 

		·	the close of business on the tenth business day (or such later date as may be determined by the Board prior to such time as
any person or group becomes an Acquiring Person) following the commencement of a tender offer or exchange offer which, if consummated,
would result in a person or group becoming an Acquiring Person.

 

Any existing stockholder or group that beneficially
owned 4.9% or more of Common Stock as of August 14, 2020 has been grandfathered at its current ownership level, but the Rights
will not be exercisable if, at any time after the announcement of the Section 382 Rights Plan, such stockholder or group increases
its ownership of Common Stock by one share of Common Stock. Certain synthetic interests in securities created by derivative positions,
whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation
13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares of Common Stock
equivalent to the economic exposure created by the derivative position, to the extent actual shares of Common Stock are directly
or indirectly held by counterparties to the derivatives contracts.

 

Separation and Distribution of Rights

 

Until the earlier of the Distribution Date
and the Expiration Date, the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights
associated with those shares. As soon as practicable after the Distribution Date, separate rights certificates will be mailed to
holders of record of Common Stock as of the close of business on the Distribution Date. From and after the Distribution Date, the
separate rights certificates alone will represent the Rights, and the Rights may be transferred apart from the transfer of the
underlying shares of Common Stock, unless and until the Board has determined to effect an exchange pursuant to the Section 382
Rights Agreement (as described below).

 

Expiration Date

 

The Section 382 Rights Agreement will
expire on the earliest of the following:

 

		·	the close of business on August 13, 2021 (the “Final Expiration Date”);

		·	the redemption of the Rights;

		·	the exchange of the Rights;

		·	the close of business on the effective date of the repeal of Section 382 of the Code or any successor statute if the Board
determines that the Section 382 Rights Agreement is no longer necessary or desirable for the preservation of certain tax benefits;
or

		·	the close of business on the first day of a taxable year to which the Board determines that no tax benefits may be carried
forward.

 

“Flip-In” Event

 

In the event that a person becomes an Acquiring
Person (a “Flip-in Event”), each holder of a Right, other than Rights that are or, under certain circumstances, were
beneficially owned by the Acquiring Person (which will thereupon become void), will, from and after the Distribution Date, have
the right to receive, upon exercise of a Right and payment of the Purchase Price, a number of shares of Common Stock having a market
value of two times the Purchase Price.

 

For example, at an exercise price of $1.20
per Right, each Right not owned by an Acquiring Person (or certain related parties) following a Flip-in Event will entitle its
holder to purchase $2.40 worth of shares of Common Stock for $1.20. If the Common Stock at the time of exercise had a market value
per share of $0.20, the holder of each valid Right would be entitled to purchase twelve shares of Common Stock for $1.20.

 

However, Rights are not exercisable following
the occurrence of a person becoming an Acquiring Person until such time as the Rights are no longer redeemable by the Company (as
described below).

 

    

     

    

 

“Flip-Over” Event

 

In the event that, at any time following
the Stock Acquisition Date, any of the following occurs (each, a “Flip-over Event”):

 

		·	The Company consolidates with, or merges with and into, any other entity, and the Company is not the continuing or surviving
entity;

		·	Any entity engages in a share exchange with or consolidates with, or merges with or into, the Company, and the Company is the
continuing or surviving entity and, in connection with such share exchange, consolidation or merger, all or part of the outstanding
shares of Common Stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property;
or

		·	The Company sells or otherwise transfers, in one transaction or a series of related transactions, fifty percent (50%) or more
of the Company’s assets, cash flow or earning power,

 

each holder of a Right (except Rights which
previously have been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right.

 

Preferred Share Provisions

 

Each share of Series A-1 Junior Participating
Preferred Stock, if issued: will not be redeemable, will entitle the holder thereof, when, as and if declared, to quarterly dividend
payments equal to the greater of $1.20 per share and 1,000 times the amount of all cash dividends plus 1,000 times the amount of
non-cash dividends or other distributions paid on one share of Common Stock, will entitle the holder thereof to receive $1,200
plus accrued and unpaid dividends per share upon liquidation, will have the same voting power as 1,000 shares of Common Stock and,
if shares of Common Stock are exchanged via merger, consolidation or a similar transaction, will entitle the holder thereof to
a per share payment equal to the payment made on 1,000 shares of Common Stock.

 

Exempted Persons and Exempted Transactions

 

The Board recognizes that there may be instances
when an acquisition of shares of Common Stock that would cause a stockholder to become an Acquiring Person may not jeopardize or
endanger in any material respect the availability of the NOLs to the Company. Accordingly, the Section 382 Rights Agreement
provides that the following “Exempted Persons” cannot become an Acquiring Person:

 

		·	The Company or any of its subsidiaries;

		·	Any officer, director or employee of the Company or any of its subsidiaries solely in respect of such person’s status
or authority as such;

		·	Any employee benefit plan of the Company or any of its subsidiaries or any entity or trustee holding (or acting in a fiduciary
capacity in respect of) shares of capital stock of the Company for or pursuant to the terms of any such plan, or for the purpose
of funding other employee bene-fits for employees of the Company or any of its subsidiaries; and

		·	Any other person (together with all of its affiliates and associates) whose beneficially ownership of 4.9% or more of the then
outstanding shares of Common Stock will not jeopardize or endanger the availability to the Company of any tax benefit, as determined
by the Board in its sole discretion prior to the time any person becomes an Acquiring Person; provided, however, that the Board
can revoke such person’s “Exempted Person Status” if it subsequently makes a contrary determination regarding
whether the person jeopardizes or endangers the availability of any tax benefit to the Company.

 

Additionally, the Section 382 Rights
Agreement provides that an “Exempted Transaction,” as determined by the Board, cannot result in a person becoming an
Acquiring Person.

 

Redemption

 

At any time prior to the earlier of (1) the
Stock Acquisition Date and (2) the Final Expiration Date, the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right (the “Redemption Price”) (subject to adjustment). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon
any redemption of the Rights (or such later time as the Board may establish), the Right to exercise the Rights will terminate,
and the only right of the holders of Rights will be to receive the Redemption Price for each Right so held.

 

    

     

    

 

Exchange

 

At any time after any person or group becomes
an Acquiring Person and prior to the acquisition by the Acquiring Person of 50% or more of the outstanding shares of Common Stock,
the Board may exchange the Rights (other than Rights that are void), in whole or in part, at an exchange ratio equal to (i) a
number of shares of Common Stock per Right with a value equal to the spread between the value of the number of shares of Common
Stock for which the Rights may then be exercised and the Purchase Price or (ii) if prior to the acquisition by the Acquiring
Person of 50% or more of the then-outstanding shares of Common Stock, one share of Common Stock per Right (subject to adjustment).
Immediately upon an exchange of any Rights, the right to exercise such Rights will terminate and the only right of the holders
of Rights will be to receive the number of shares of Common Stock equal to the number of such Rights held by such holder multiplied
by an exchange ratio.

 

Anti-Dilution Provisions

 

The Board may adjust the Purchase Price
of the Series A-1 Junior Participating Preferred Stock, the number of shares of Series A-1 Junior Participating Preferred
Stock issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including
among others, a share dividend, a share split or a reclassification of the Series A-1 Junior Participating Preferred Stock
or of the Common Stock. With certain exceptions, no adjustments to the Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price.

 

Amendments

 

Prior to the Distribution Date, the Board
may supplement or amend any provision of the Section 382 Rights Agreement in any respect without the approval of the holders
of the Rights. From and after the Distribution Date, no amendment can materially adversely affect the interests of the holders
of the Rights (excluding the interests of any Acquiring Person).

 

Other Provisions of Our Certificate and By-Laws and State
Law Provisions That May Have Anti-Takeover Effects

 

Advance Notice Provisions

 

Our By-Laws provide that a stockholder must
notify us in writing, within timeframes specified in the By-Laws, of any stockholder nomination of a director and of any other
business that the stockholder intends to bring at a meeting of stockholders.

 

Amendments to Bylaws

 

Our Certificate and By-Laws provide that
our By-Laws may be amended by our Board or by vote of the holders of the shares entitled to vote in the election of directors.

 

Changes to Board and Vacancies

 

Our By-Laws provide that directors may be
removed only for cause by the affirmative vote of the holders of a majority of the shares then entitled to vote at an election
of directors. The By-Laws also provide that the number of directors may be increased or decreased, within established limits, by
affirmative vote of a majority of the whole Board. Under our Certificate, any vacancy on the Board, however occurring, including
a vacancy resulting from an enlargement of the Board, may only be filled by vote of a majority of the directors then in office,
whether or not a quorum.

 

State Law Provisions

 

In general, Section 203 of the DGCL
prohibits a Delaware corporation with a class of voting stock listed on a national securities exchange or held of record by 2,000
or more shareholders from engaging in a business combination with an interested stockholder (generally, the beneficial owner of
15% or more of the corporation’s outstanding voting stock) for three years following the time the stockholder became an interested
stockholder, unless, prior to that time: (1) the corporation’s board of directors approved either the business combination
or the transaction that resulted in the stockholder becoming an interested stockholder, (2) at least two-thirds of the outstanding
shares not owned by that interested stockholder approve the business combination, or (3) upon becoming an interested stockholder,
that stockholder owned at least 85% of the outstanding shares, excluding those held by officers, directors and some employee stock
plans. A “business combination” includes a merger, asset sale, or other transaction resulting in a financial benefit,
other than proportionately as a stockholder, to the interested stockholder.

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