Document:

Exhibit 10.1

 

Cyclacel Pharmaceuticals,
Inc.

Up to $8,350,000 of

Shares of Common Stock

(par value $0.001 per share)

 

Controlled Equity OfferingSM

 

Sales Agreement

 

July 10, 2015

 

Cantor Fitzgerald & Co.

499 Park Avenue

New York, NY 10022

 

Ladies and Gentlemen:

 

Cyclacel Pharmaceuticals,
Inc., a Delaware corporation (the “Company”), confirms its agreement (this “Agreement”)
with Cantor Fitzgerald & Co. (the “Agent”), as follows:

 

1.           Issuance
and Sale of Shares.  The Company agrees that, from time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell through the Agent, up to $8,350,000 shares of common stock (the
shares to be offered and sold hereunder being referred to as the “Placement Shares”) of the Company,
par value $0.001 per share (the “Common Stock”); provided, however, that in no event shall
the Company issue or sell through the Agent such number or dollar amount of Placement Shares that would (a) exceed the number or
dollar amount of shares of Common Stock registered on the effective Registration Statement (defined below) pursuant to which the
offering is being made, (b) exceed the number of authorized but unissued shares of Common Stock, (c) exceed the number or dollar
amount of shares of Common Stock permitted to be sold under Form S-3 (including General Instruction I.B.6 thereof, if applicable)
or (d) exceed the number or dollar amount of Common Stock for which the Company has filed a Prospectus Supplement (defined below)
(the lesser of (a), (b), (c) and (d), the “Maximum Amount”). Notwithstanding anything to the contrary
contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement
Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that Agent shall have no obligation
in connection with such compliance. The issuance and sale of Placement Shares through Agent will be effected pursuant to the Registration
Statement (as defined below) filed by the Company and declared effective by the Securities and Exchange Commission (the “Commission”)
on April 22, 2013, although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement
to issue Placement Shares.

 

The Company has filed,
in accordance with the provisions of the Securities Act of 1933, as amended and the rules and regulations thereunder (the “Securities
Act”), with the Commission a registration statement on Form S-3 (File No. 333-187801), including a base prospectus,
relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates
by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act
of 1934, as

 

    	 

    	 

    

 

amended (the “Exchange
Act”), and the rules and regulations thereunder. The Company has prepared a prospectus supplement to the base prospectus
included as part of the registration statement, which prospectus supplement relates to the Placement Shares to be issued from time
to time by the Company (the “Prospectus Supplement”). The Company will furnish to the Agent, for use
by the Agent, copies of the base prospectus included as part of such registration statement, as supplemented by the Prospectus
Supplement, relating to the Placement Shares to be issued from time to time by the Company. The Company may file one or more additional
registration statements from time to time that will contain a base prospectus and related prospectus or prospectus supplement,
if applicable (which shall be a Prospectus Supplement), with respect to the Placement Shares. Except where the context otherwise
requires, such registration statement(s), including all documents filed as part thereof or incorporated by reference therein, and
including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act or deemed to be a part of such registration statement(s) pursuant to Rule 430B of the Securities
Act, is herein called the “Registration Statement.” The base prospectus or base prospectuses, including
all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus
Supplement, in the form in which such prospectus or prospectuses and/or Prospectus Supplement have most recently been filed by
the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with the then issued Issuer Free
Writing Prospectus(es) (defined below), is herein called the “Prospectus.”

 

Any reference herein to
the Registration Statement, any Prospectus Supplement, Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer
to and include the documents, if any, incorporated by reference therein (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, any Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act on or after the most-recent effective date of the Registration Statement, or
the date of the Prospectus Supplement, Prospectus or such Issuer Free Writing Prospectus, as the case may be, and incorporated
therein by reference. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment
or supplement thereto shall be deemed to include the most recent copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval System, or if applicable, the Interactive Data Electronic Application system when used by the
Commission (collectively, “EDGAR”).

 

2.           Placements.   Each
time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will
notify the Agent by email notice (or other method mutually agreed to in writing by the parties) of the number of Placement Shares
to be issued, the time period during which sales are requested to be made, any limitation on the number of Placement Shares that
may be sold in any one day and any minimum price below which sales may not be made (a “Placement Notice”),
the form of which is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company
set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed
to each of the individuals from the Agent set forth on

 

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Schedule 3, as such
Schedule 3 may be amended from time to time. The Placement Notice shall be effective unless and until (i) the Agent declines
in writing to accept the terms contained therein for any reason, in its sole discretion, within two (2) Business Days (as defined
below) of receipt, (ii) the entire amount of the Placement Shares thereunder have been sold, (iii) the Company, in its
sole discretion, suspends or terminates the Placement Notice or (iv) this Agreement has been terminated under the provisions
of Section 12. The amount of any discount, commission or other compensation to be paid by the Company to Agent in connection with
the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expressly acknowledged
and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement
Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice
pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of a conflict between
the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.

 

3.           Sale
of Placement Shares by Agent.  Subject to the provisions of Section 5(a), the Agent, for the period specified in
the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable
state and federal laws, rules and regulations and the rules of the NASDAQ Global Market (the “Exchange”),
to sell the Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The
Agent will provide written confirmation to the Company no later than the opening of the Trading Day (as defined below) immediately
following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares
sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with respect to such sales, and the
Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Agent (as set forth in
Section 5(b)) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the Agent
may sell Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415
of the Securities Act, including without limitation sales made directly on the Exchange, on any other existing trading market for
the Common Stock or to or through a market maker. Subject to the terms of a Placement Notice, the Agent may also sell Placement
Shares by any other method permitted by law, including, but not limited to, in privately negotiated transactions. Notwithstanding
the foregoing, no sale may be made in a privately negotiated transaction without the prior consent of the Company. “Trading
Day” means any day on which Common Stock is traded on the Exchange.

 

4.           Suspension
of Sales.  The Company or the Agent may, upon notice to the other party in writing (including by email correspondence
to each of the individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged
by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable
facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend
any sale of Placement Shares (a “Suspension”); provided, however, that such suspension shall not affect
or impair any party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice.
While a Suspension is in effect any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery of certificates,
opinions, or comfort letters to the Agent, shall be waived, provided, however, that such waiver shall not apply for the Representation
Date (defined below)

 

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occurring on the date that
the Company files its annual report on Form 10-K. Each of the parties agrees that no such notice under this Section 4 shall be
effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedule may
be amended from time to time.

 

5.           Sale
and Delivery to the Agent; Settlement.

 

(a)          Sale
of Placement Shares.   On the basis of the representations and warranties herein contained and subject
to the terms and conditions herein set forth, upon the Agent’s acceptance of the terms of a Placement Notice, and unless
the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts
consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares up to the
amount specified, and otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and agrees that
(i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will incur no liability
or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure
by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law
and regulations to sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under no obligation
to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and the Company.

 

(b)          Settlement
of Placement Shares.   Unless otherwise specified in the applicable Placement Notice, settlement for
sales of Placement Shares will occur on the third (3rd) Trading Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The
Agent shall notify the Company of each sale of Placement Shares on the date of such sale. The amount of proceeds to be delivered
to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”)
will be equal to the aggregate sales price received by the Agent, after deduction for (i) the Agent’s commission, discount
or other compensation for such sales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed
by any governmental or self-regulatory organization in respect of such sales.

 

(c)         
Delivery of Placement Shares.   On or before each Settlement Date, the Company will, or will cause
its transfer agent to, electronically transfer the Placement Shares being sold by crediting the Agent’s or its designee’s
account (provided the Agent shall have given the Company written notice of such designee at least one Trading Day prior to the
Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means
of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered
shares in good deliverable form. On each Settlement Date, the Agent will deliver the related Net Proceeds in same day funds to
an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer
agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, the Company agrees that in
addition to and in no way limiting the rights and obligations set forth in Section 10(a) hereto, it will (i) hold the Agent harmless
against any loss, claim, damage, or expense (including

 

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reasonable legal fees and
expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable)
and (ii) pay to the Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent
such default.

 

(d)          Denominations;
Registration.   Certificates for the Placement Shares, if any, shall be in such denominations and registered
in such names as the Agent may request in writing at least one full Business Day (as defined below) before the Settlement Date.
The certificates for the Placement Shares, if any, will be made available by the Company for examination and packaging by the Agent
in The City of New York not later than noon (New York time) on the Business Day prior to the Settlement Date.

 

(e)          Limitations
on Offering Size.   Under no circumstances shall the Company cause or request the offer or sale of any
Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement
Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this
Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement
and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of
directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing.
Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement
at a price lower than the minimum price authorized from time to time by the Company’s board of directors, a duly authorized
committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Further, under no circumstances
shall the Company cause or permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement to exceed the
Maximum Amount.

 

6.           Representations
and Warranties of the Company.   The Company represents and warrants to, and agrees with Agent that as
of the date of this Agreement and as of each Applicable Time (as defined below), except as set forth below:

 

(a)          Registration
Statement and Prospectus.    The Company and the transactions contemplated by this Agreement meet the requirements
for and comply with the applicable conditions set forth in Form S-3 (including General Instruction I.A and I.B) under the Securities
Act. The Registration Statement has been filed with the Commission and has been declared effective by the Commission under the
Securities Act prior to the issuance of any Placement Notices by the Company. The Prospectus Supplement will name the Agent as
the agent in the section entitled “Plan of Distribution.” The Company has not received, and has no notice of, any order
of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for
that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements
of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts
or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement have been or will be so described or filed. Copies of the Registration Statement, the Prospectus,
and any amendments or supplements thereto and all Incorporated Documents that were filed with the Commission on or prior to the
date of this Agreement have been delivered, or are available through EDGAR, to the Agent and its counsel. The Company has not distributed
and, prior to

 

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the later to occur of each
Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection
with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free
Writing Prospectus (as defined below) to which the Agent has consented (such consent not to be unreasonably withheld or delayed).
The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed on the Exchange under the
trading symbol “CYCC.” The Company has 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 the Common Stock from the Exchange, nor has the Company received
any notification that the Commission or the Exchange is contemplating terminating such registration or listing (except as set forth
in the Registration Statement and the Prospectus). Except as set forth in the Registration Statement and the Prospectus, to the
Company’s knowledge, it is in material compliance with all applicable listing requirements of the Exchange. The Company has
no reason to believe that it will not in the foreseeable future continue to be in material compliance with all such listing and
maintenance requirements, subject to changes in the market price of the Common Stock, which may from time to time be lower than
the minimum allowed under the rules of the Exchange, subject to appropriate corrective action to be taken by the Company.

 

(b)          No
Misstatement or Omission.    The Registration Statement, when it became effective, did not contain an 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 and any amendment and supplement thereto, on the date thereof and at each Applicable Time
(defined below), did not or will not include an untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they were made, not misleading. The Incorporated Documents
did not, and any further Incorporated Documents filed after the date of this Agreement will not, when filed with the Commission,
contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary
to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing
shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information
furnished to the Company by Agent specifically for use in the preparation thereof.

 

(c)          Conformity
with Securities Act and Exchange Act.    The Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or any amendment or supplement thereto, and the Incorporated Documents, when such documents were or are filed with the
Commission under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may
be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.
At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material respects
with the requirements of the Securities Act.

 

(d)          Financial
Information.    The consolidated financial statements of the Company included or incorporated by reference
in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, together with the related notes
and schedules, comply in all material respects with the requirements of the Securities Act and the Exchange Act and present fairly,
in all material respects, the consolidated financial position of the Company

 

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and its Subsidiaries (as
defined below) as of the dates indicated and the consolidated statements of operations, statements of changes in stockholders’
equity, and statements of cash flows of the Company for the periods specified (subject to normal year end audit adjustments for
interim financial statements) and have been prepared in conformity with GAAP (as defined below) applied on a consistent basis during
the periods involved (except as otherwise noted therein); the summary and selected financial data with respect to the Company and
the Subsidiaries (as defined below) contained or incorporated by reference in the Registration Statement, the Prospectus and the
Issuer Free Writing Prospectuses, if any, fairly present in all material respects the information shown therein as at the respective
dates and for the respective periods specified and are derived from the consolidated financial statements and the books and records
of the Company. There are no financial statements (historical or pro forma) that are required to be included or incorporated by
reference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required. The
Company and the Subsidiaries (as defined below) do not have any material liabilities or obligations, direct or contingent (including
any off-balance sheet obligations), that are required to be described in the Registration Statement (excluding the exhibits thereto)
and the Prospectus; and all disclosures contained or incorporated by reference in the Registration Statement, the Prospectus and
the Issuer Free Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the Commission) comply, in all material respects, with Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.

 

(e)          Conformity
with EDGAR Filing.   The Prospectus delivered to the Agent for use in connection with the sale of the Placement
Shares pursuant to this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission
for filing via EDGAR, except to the extent permitted by Regulation S-T.

 

(f)           Organization.   The
Company and each of its Subsidiaries (as defined below) has been duly organized and is validly existing as a corporation or other
entity in good standing under the laws of their respective jurisdictions of organization, with corporate power and authority to
own its properties and conduct its business as currently being conducted and as described in the Registration Statement and the
Prospectus, and is duly qualified as a foreign corporation or other entity for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified in any such jurisdiction would not reasonably be expected to, individually
or in the aggregate, have a material adverse effect on the assets, business, operations, financial condition, stockholders’
equity or results of operations of the Company and the Subsidiaries (as defined below) taken as a whole (a “Material
Adverse Effect”).

 

(g)          Subsidiaries.   The
subsidiaries set forth on Schedule 4 (collectively, the “Subsidiaries”) are the Company’s
only significant subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X promulgated by the Commission). Except as
set forth in the Registration Statement and in the Prospectus, the Company does not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any other corporation or have any equity interest in any other corporation,
partnership, joint venture, association, trust or other entity. No Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the

 

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Company, from making any
other distribution on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary
from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary
of the Company that would, individually or in the aggregate, have a Material Adverse Effect.

 

(h)          No
Violation or Default.   Neither the Company nor any of its Subsidiaries is (i) in violation of its charter
or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time
or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company
or any of its Subsidiaries are subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation
of any court or arbitrator or governmental or regulatory authority, except, in the case of each of clauses (ii) and (iii) above,
for any such violation or default that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse
Effect. To the Company’s knowledge, no other party under any material contract or other agreement to which it or any of its
Subsidiaries is a party is in default in any respect thereunder where such default would have a Material Adverse Effect.

 

(i)           No
Material Adverse Change.   Subsequent to the respective dates as of which information is given in the Registration
Statement, the Prospectus and the Free Writing Prospectuses, if any (including any Incorporated Document), there has not been (i)
any Material Adverse Effect, (ii) other than as contemplated by this Agreement, any transaction which is material to the Company
and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or any Subsidiary, which is material to the Company and the Subsidiaries taken as a whole
and would be required to be described in the Registration Statement and the Prospectus, (iv) any material change in the capital
stock (other than as a result of the sale of Placement Shares) or outstanding long-term indebtedness of the Company or any of its
Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any
Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement
or Prospectus (including any Incorporated Document).

 

(j)           Capitalization.   The
issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and nonassessable and, other
than as disclosed in the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal
or similar rights pursuant to the Company’s charter, bylaws or any agreement or other instrument to which the Company is
a party or by which the Company is bound. The Company has an authorized, issued and outstanding capitalization as set forth in
the Registration Statement and the Prospectus as of the dates referred to therein (other than the grant of additional options under
the Company’s existing stock option plans, or changes in the number of outstanding shares of Common Stock of the Company
due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Stock
outstanding on the date hereof) and such authorized capital stock conforms in all material respects to the description thereof
set forth in the Registration Statement and the Prospectus. The

 

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description of the securities
of the Company in the Registration Statement and the Prospectus is complete and accurate in all material respects. Except as disclosed
in the Registration Statement or the Prospectus, as of the date referred to therein, the Company does not have
outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible
into, or exchangeable for, any contracts or commitments to issue or sell, any shares of capital stock or other securities.

 

(k)          Authorization;
Enforceability.   The Company has full corporate power and authority to enter into this Agreement and perform
the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal,
valid and binding agreement of the Company, enforceable in accordance with its terms, except as rights to indemnification or contribution
hereunder may be limited by federal or state securities laws or public policy considerations and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally
and by general equitable principles.

 

(l)           Authorization
of Placement Shares.   The Placement Shares, when issued and delivered pursuant to the terms approved by the
board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment
therefor as provided herein, will be duly authorized and validly issued and fully paid and nonassessable and free and clear of
any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale
rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The
Placement Shares, when issued, will conform in all material respects to the description thereof set forth in or incorporated into
the Prospectus.

 

(m)         No
Consents Required.   No consent, approval, authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company
of this Agreement or the issuance and sale by the Company of the Placement Shares, except for (i) the registration of the
Placement Shares under the Securities Act; (ii) application(s) to the Exchange for the listing of the Placement Shares for trading
thereon in the time and manner required thereby; and (iii) such consents, approvals, authorizations, orders and registrations
or qualifications as may be required under applicable state securities laws or by the by-laws and rules of the Financial Industry
Regulatory Authority (“FINRA”) or the Exchange in connection with the sale of the Placement Shares by
the Agent.

 

(n)          No
Preferential Rights.   Except as set forth in the Registration Statement and the Prospectus, (i) no person,
as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”),
has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any
other capital stock or other securities of the Company (other than upon the exercise of options or warrants to purchase Common
Stock or upon the exercise of options or vesting of restricted stock units or other awards that may be granted from time to time
under the Company’s equity incentive plans), (ii) no Person has any preemptive rights, resale rights, rights of first
refusal, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any Common Stock
or shares of any other capital stock or other securities of the Company, (iii)  no

 

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Person has the right to act
as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Placement Shares, and (iv) no
Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common Stock or
shares of any other capital stock or other securities of the Company, or to include any such shares or other securities in the
Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration
Statement or the sale of the Placement Shares as contemplated thereby or otherwise.

 

(o)          Independent
Public Accounting Firm.    McGladrey LLP (the “Accountant”), whose report on
the consolidated financial statements of the Company is filed with the Commission as part of the Company’s most recent Annual
Report on Form 10-K filed with the Commission and incorporated by reference into the Registration Statement and the Prospectus,
are and, during the periods covered by their report, were an independent registered public accounting firm within the meaning of
the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company’s knowledge the Accountant
is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) with respect to the Company.

 

(p)          Enforceability
of Agreements.   To the Company’s knowledge, all agreements between the Company and third parties expressly
referenced in the Prospectus are, except as would not have a Material Adverse Effect, legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general
equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federal or state securities
laws or public policy considerations in respect thereof.

 

(q)          No
Litigation.    Except as set forth in the Registration Statement or the Prospectus, there are no legal, governmental
or regulatory actions, suits or proceedings pending, nor, to the Company’s knowledge, any legal, governmental or regulatory
audits or investigations, to which the Company or a Subsidiary is a party or to which any property of the Company or any of its
Subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company or any of its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; to the Company’s knowledge, no such actions, suits or proceedings are threatened
or contemplated by any governmental or regulatory authority or threatened by others; and (i) there are no current or pending
legal, governmental or regulatory audits or investigations, actions, suits or proceedings that are required under the Securities
Act to be described in the Prospectus that are not so described; and (ii) there are no contracts or other documents that are
required under the Securities Act to be filed as exhibits to the Registration Statement that are not so filed.

 

(r)           Consents
and Permits.   Except as disclosed in the Registration Statement and the Prospectus, the Company and its Subsidiaries
have made all filings, applications and submissions required by, possesses and is operating in compliance with, all approvals,
licenses, certificates, certifications, clearances, consents, grants, exemptions, marks, notifications, orders, permits and other
authorizations issued by, the appropriate federal, state or foreign governmental or regulatory authorities (including, without
limitation, the United States Food and Drug

 

    	-10-

    	 

    

 

Administration (the “FDA”),
the United States Drug Enforcement Administration or any other foreign, federal, state, provincial, court or local government or
regulatory authorities engaged in the regulation of clinical trials, pharmaceuticals, biologics or biohazardous substances or materials)
necessary for the ownership or lease of their respective properties or to conduct its businesses as described in the Registration
Statement and the Prospectus (collectively, “Permits”), except for such Permits the failure of which
to possess, obtain or make the same would not reasonably be expected to have a Material Adverse Effect; the Company and its Subsidiaries
are in compliance with the terms and conditions of all such Permits, except where the failure to be in compliance would not reasonably
be expected to have a Material Adverse Effect; all of the Permits are valid and in full force and effect, except where any invalidity,
individually or in the aggregate, would not be reasonably expected to have a Material Adverse Effect; and neither the Company nor
any of its Subsidiaries has received any written notice of proceedings relating to the limitation, revocation, cancellation, suspension,
modification or non-renewal of any such Permit which, individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would be reasonably expected to have a Material Adverse Effect, or has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the ordinary course to the extent required. To the extent required
by applicable laws and regulations of the FDA, the Company or the applicable Subsidiary has submitted to the FDA an Investigational
New Drug Application or amendment or supplement thereto for each clinical trial it has conducted or sponsored or is conducting
or sponsoring; to the Company’s knowledge, all such submissions were in material compliance with applicable laws and rules
and regulations when submitted and no material deficiencies have been asserted by the FDA with respect to any such submissions.
To the Company’s knowledge, the preclinical studies and clinical trials conducted or sponsored by the Company and described
in the Prospectus were, and, if still pending, are being, conducted in all material respects in accordance with the experimental
protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for products or
product candidates comparable to those being developed by the Company; the descriptions of such studies and trials, and the results
thereof, contained in the Prospectus are accurate and complete in all material respects; the Company is not aware of any studies
or trials not described in the Prospectus, the results of which reasonably call into question the results of the studies and trials
described in the Prospectus; and the Company has not received any written notice or correspondence from the FDA or any foreign,
state or local governmental body exercising comparable authority requiring the termination, suspension, clinical hold or material
modification of any studies or trials.

 

(s)          Regulatory
Filings.   Except as disclosed in the Registration Statement and the Prospectus, neither the Company nor any
of its Subsidiaries has failed to file with the applicable regulatory authorities (including, without limitation, the FDA, or any
foreign, federal, state, provincial or local governmental or regulatory authority performing functions similar to those performed
by the FDA) any required filing, declaration, listing, registration, report or submission, except for such failures that, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; except as disclosed in the Registration
Statement and the Prospectus, all such filings, declarations, listings, registrations, reports or submissions were in compliance
with applicable laws when filed and no deficiencies have been asserted by any applicable regulatory authority with respect to any
such filings, declarations, listings, registrations, reports or submissions, except for any deficiencies that, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse Effect. The Company

 

    	-11-

    	 

    

 

has operated and currently
is, in all material respects, in compliance with the United States Federal Food, Drug, and Cosmetic Act, all applicable rules and
regulations of the FDA and other federal, state, local and foreign governmental bodies exercising comparable authority. The Company
has not received any FDA Form 483, notice of adverse finding, warning letter, or other correspondence or notice from the FDA or
any other governmental authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws, except for such
failure of which to possess, obtain or make the same would not reasonably be expected to have a Material Adverse Effect. Additionally,
neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any of their respective employees, officers,
directors, agents or contractors has been excluded, suspended or debarred from participation in any federal health care program
or, to the knowledge of Company and its Subsidiaries, is subject to an inquiry, investigation, proceeding, or other similar matter
that could subject the Company, any of its Subsidiaries, or any of their respective employees, officers, directors, agents or contractors
to exclusion, suspension or debarment.

 

(t)           Intellectual
Property.   Except as disclosed in the Registration Statement and the Prospectus, the Company and its Subsidiaries
own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks,
trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet domain
names, know-how and other intellectual property (collectively, the “Intellectual Property”), necessary
for the conduct of their respective businesses as now conducted except to the extent that the failure to own, possess, license
or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as disclosed in the Registration Statement and the Prospectus (i) there are
no rights of third parties to any such Intellectual Property owned by the Company and its Subsidiaries; (ii) to the Company’s
knowledge, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s and its Subsidiaries’ rights
in or to any such Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis for any such
action, suit, proceeding or claim; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual Property; (v) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others that the Company and its Subsidiaries infringe or otherwise violate
any patent, trademark, copyright, trade secret or other proprietary rights of others; (vi) to the Company’s knowledge, there
is no third-party U.S. patent or published U.S. patent application which contains claims for which an Interference Proceeding (as
defined in 35 U.S.C. § 135) has been commenced against any patent or patent application described in the Prospectus as being
owned by or licensed to the Company; and (vii) the Company and its Subsidiaries have complied with the terms of each agreement
pursuant to which Intellectual Property has been licensed to the Company or such Subsidiary, and all such agreements are in full
force and effect, except, in the case of any of clauses (i)-(vii) above, for any such infringement by third parties or any such
pending or threatened suit, action, proceeding or claim as would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect, and (y) in the case of clause (vii) above, for any non-compliance as would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

    	-12-

    	 

    

 

(u)          Reserved.

 

(v)          Market
Capitalization.   At the time the Registration Statement was or will be declared effective, and at the time
the Company’s most recent Annual Report on Form 10-K was filed with the Commission, the Company met or will meet the then
applicable requirements for the use of Form S-3 under the Securities Act, including, but not limited to, General Instruction I.B.6
of Form S-3. The aggregate market value of the outstanding voting and non-voting common equity (as defined in Securities Act Rule
405) of the Company held by persons other than affiliates of the Company (pursuant to Securities Act Rule 144, those that directly,
or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company)
(the “Non-Affiliate Shares”), was greater than $30 million (calculated by multiplying (x) the highest price at which
the common equity of the Company closed on the Exchange within 60 days of the date of this Agreement times (y) the number of Non-Affiliate
Shares). The Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company
for at least 12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10
information (as defined in General Instruction I.B.6 of Form S-3) with the Commission at least 12 calendar months previously reflecting
its status as an entity that is not a shell company.

 

(w)         No
Material Defaults.   Neither the Company nor any of the Subsidiaries is in default on any installment on indebtedness
for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange
Act since the filing of its last Annual Report on Form 10-K, indicating that it (i) has failed to pay any dividend or sinking
fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any
rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect.

 

(x)           Certain
Market Activities.   Neither the Company, nor any of the Subsidiaries, nor, to the Company’s knowledge,
any of their respective directors, officers or controlling persons has taken, directly or indirectly, any unlawful action designed,
or that has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.

 

(y)          Broker/Dealer
Relationships.   Neither the Company nor any of the Subsidiaries or any related entities (i) is required
to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly
or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated
person of a member” (within the meaning set forth in the FINRA Manual).

 

(z)           No
Reliance.   The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting
advice in connection with the offering and sale of the Placement Shares.

 

(aa)         Taxes.   The
Company and each of its Subsidiaries have filed all federal, state, local and foreign income and franchise tax returns and other
material tax returns which

 

    	-13-

    	 

    

 

have been required to be
filed by the Company or a Subsidiary, or have properly requested extensions thereof, and paid all taxes shown thereon through the
date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where the failure
to so file or pay would not reasonably be expected to have a Material Adverse Effect. Except as otherwise disclosed in or contemplated
by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company or any of its Subsidiaries
which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company
has no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted
against it which would not reasonably be expected to have a Material Adverse Effect.

 

(bb)        Title
to Real and Personal Property.   Except as set forth in the Registration Statement or the Prospectus, the Company
and its Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title
in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free
and clear of all liens, except for (i) liens as do not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) liens for the payment of
federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP and, the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(cc)        Environmental
Laws. Except as set forth in the Registration Statement or the Prospectus, to the Company’s knowledge the Company
and its Subsidiaries (i) are in compliance with all applicable federal, state, local and foreign laws, rules, regulations,
and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
as described in the Registration Statement and the Prospectus; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants
or contaminants, except, in the case of any of clauses (i), (ii) or (iii) above, for any such failure to comply or failure to receive
required permits, licenses, other approvals or liability as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The representations and warranties made in this Section 6(cc) are the only representations and
warranties made by the Company under this Agreement with respect to Environmental Laws.

 

(dd)        Disclosure
Controls.   The Company and each of its Subsidiaries maintain systems of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles (“GAAP”) and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect
to any

 

    	-14-

    	 

    

 

differences. 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 (other than as set forth in the Prospectus). Since the date of the latest audited financial statements
of the Company included in 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 (other than as set forth in the Prospectus). The Company has established disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material
information relating to the Company and each of its Subsidiaries is made known to the certifying officers by others within those
entities, including during the period in which the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures as of a date within 90 days prior to the filing date of the Form 10-K for the fiscal year most
recently ended (such date, the “Evaluation Date”). The Company presented in its Form 10-K for the fiscal
year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date and the disclosure controls and procedures were effective. Since the Evaluation
Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Securities Act) or, to the Company’s knowledge, in other factors that could significantly affect
the Company’s internal controls.

 

(ee)        Sarbanes-Oxley.   There
is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors
or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley
Act and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer
of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company
as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports,
schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission. For purposes
of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the
meanings given to such terms in the Sarbanes-Oxley Act.

 

(ff)          Finder’s
Fees.   Neither the Company nor any of the Subsidiaries has incurred any liability for any finder’s fees,
brokerage commissions or similar payments in connection with the transactions herein contemplated, except as may otherwise exist
with respect to Agent pursuant to this Agreement.

 

(gg)        Labor
Disputes.   No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists
or, to the knowledge of the Company, is threatened which would reasonably be expected to result in a Material Adverse Effect.

 

(hh)        Investment
Company Act.   Neither the Company nor any of the Subsidiaries is or, after giving effect to the offering and
sale of the Placement Shares, will be an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company
Act”).

 

    	-15-

    	 

    

 

(ii)          Operations.   The
operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”), except as would not reasonably be expected to result in a Material Adverse
Effect; 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 Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

 

(jj)          Off-Balance
Sheet Arrangements.    There are no transactions, arrangements and other relationships between and/or among
the Company, and/or, to the knowledge of the Company, any of its affiliates and any unconsolidated entity, including, but not limited
to, any structural finance, special purpose or limited purpose entity (each, an “Off Balance Sheet Transaction”)
that would reasonably be expected to affect materially the Company’s liquidity or the availability of or requirements for
its capital resources, including those Off Balance Sheet Transactions described in the Commission’s Statement about Management’s
Discussion and Analysis of Financial Conditions and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61), required to
be described in the Prospectus which have not been described as required.

 

(kk)        Underwriter
Agreements.   Except as previously disclosed to the Agents, the Company is not a party to any agreement with
an agent or underwriter for any other “at-the-market” or continuous equity transaction.

 

(ll)          ERISA.   To
the knowledge of the Company, each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to
by the Company or any of its affiliates for employees or former employees of the Company and any of its Subsidiaries has been maintained
in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including,
but not limited to, ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred which would result in a material
liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative
exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value
of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all
benefits accrued under such plan determined using reasonable actuarial assumptions.

 

(mm)      Forward
Looking Statements.   No forward-looking statement (within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act) (a “Forward Looking Statement”) contained in the Registration Statement
and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

    	-16-

    	 

    

 

(nn)        Agent
Purchases.   The Company acknowledges and agrees that the Agent has informed the Company that the Agent may,
to the extent permitted under the Securities Act and the Exchange Act, purchase and sell Common Stock for its own account while
this Agreement is in effect, provided, that (i) no such purchase or sales shall take place while a Placement Notice is in
effect (except to the extent each Agent may engage in sales of Placement Shares purchased or deemed purchased from the Company
as a “riskless principal” or in a similar capacity), (ii) the Company shall not be deemed to have authorized or
consented to any such purchases or sales by the Agent and (iii) the Agent has implemented and will use reasonable policies and
procedures to ensure that individuals making investment decisions on behalf of the Agent or any of its subsidiaries or affiliates
will not violate laws prohibiting trading on the basis of material nonpublic information in connection with such purchases and
sales.

 

(oo)        Margin
Rules.   Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds
thereof by the Company as described in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

(pp)        Insurance.   The
Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company
and each of its Subsidiaries reasonably believe are adequate for the conduct of their properties and as is customary for companies
engaged in similar businesses of comparable size in similar industries.

 

(qq)        No
Improper Practices.   (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries,
nor to the Company’s knowledge, any of their respective executive officers has, in the past five years, made any unlawful
contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law) or made
any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other
person charged with similar public or quasi-public duty in violation of any law or of the character required to be disclosed in
the Prospectus; (ii) no relationship, direct or indirect, exists between or among the Company or, to the Company’s knowledge,
any Subsidiary or any affiliate of any of them, on the one hand, and the directors, officers and stockholders of the Company or,
to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the Securities Act to be described in
the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists
between or among the Company or any Subsidiary or any affiliate of them, on the one hand, and the directors, officers, or stockholders
of the Company or, to the Company’s knowledge, any Subsidiary, on the other hand, that is required by the rules of FINRA
to be described in the Registration Statement and the Prospectus that is not so described; (iv) except as described in the
Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the
Company’s knowledge, any Subsidiary to or for the benefit of any of their respective officers or directors or any of the
members of the families of any of them; (v) the Company has not offered, or caused any placement agent to offer, Common Stock to
any person with the intent to influence unlawfully (A) a customer or supplier of the Company or any Subsidiary to alter the
customer’s or supplier’s level or type of business with the Company or any Subsidiary or (B) a trade journalist
or publication to write or publish favorable information about the Company or any Subsidiary or any of their respective products
or services, and (vi) neither the Company nor any Subsidiary nor, to the Company’s knowledge, any employee or agent of the
Company or any Subsidiary has made any payment of funds of the Company or any

 

    	-17-

    	 

    

 

Subsidiary or received or
retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act
of 1977), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement
or the Prospectus.

 

(rr)          Status
Under the Securities Act.   The Company was not and is not an ineligible issuer as defined in Rule 405 under
the Securities Act at the times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the
Placement Shares.

 

(ss)         No
Misstatement or Omission in an Issuer Free Writing Prospectus.    Each Issuer Free Writing Prospectus, as of
its issue date and as of each Applicable Time (as defined in Section 24 below), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus,
including any Incorporated Document that has not been superseded or modified. The foregoing sentence does not apply to statements
in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the
Company by the Agent specifically for use therein.

 

(tt)          No
Conflicts.   Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement Shares,
nor the consummation of any of the transactions contemplated herein, nor the compliance by the Company with the terms and provisions
hereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute
a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or to which
any of the property or assets of the Company is subject, except (i) such conflicts, breaches or defaults as may have been waived
and (ii) such conflicts, breaches and defaults that would not reasonably be expected to have a Material Adverse Effect; nor will
such action result (x) in any violation of the provisions of the organizational or governing documents of the Company, or (y) to
the Company’s knowledge, in any material violation of the provisions of any statute or any order, rule or regulation applicable
to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction
over the Company, other than, with respect to clause (y) only, any violation that would not reasonably be expected to have a Material
Adverse Effect.

 

(uu)        Sanctions.   (i)
The Company represents that, neither the Company nor any of its Subsidiaries (collectively, the “Entity”)
or any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in
this paragraph (uu), “Person”) that is, or is owned or controlled by a Person that is:

 

(A)  the
subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control,
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively,
“Sanctions”), nor

 

(B)  located,
organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar,
Cuba, Iran, North Korea, Sudan and Syria).

 

    	-18-

    	 

    

 

(ii)  The
Entity represents and covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:

 

(A)  to
fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding
or facilitation, is the subject of Sanctions; or

 

(B)  in
any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or otherwise).

 

(iii)  The
Entity represents and covenants that, except as detailed in the Registration Statement and the Prospectus, for the past 5 years,
it has not knowingly engaged in, is not now knowingly engaged in, and will not engage in, any dealings or transactions with any
Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

 

(vv)        Stock
Transfer Taxes.   On each Settlement Date, all stock transfer or similar transfer taxes (other than income taxes)
which are required to be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or
will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied
with, except in each case for any taxes or compliance that would not reasonably be expected to have a Material Adverse Effect.

 

(ww)      Reserved.

 

Any certificate signed
by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement
shall be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.

 

7.           Covenants
of the Company.  The Company covenants and agrees with Agent that:

 

(a)          Registration
Statement Amendments.   After the date of this Agreement and during any period in which a Prospectus relating
to any Placement Shares is required to be delivered by Agent under the Securities Act (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify the Agent promptly of the time
when any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has been filed with
the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any request by
the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information, (ii) the
Company will prepare and file with the Commission, promptly upon the Agent’s request, any amendments or supplements to the
Registration Statement or Prospectus that, in such Agent’s reasonable opinion, may be necessary or advisable in connection
with the distribution of the Placement Shares by the Agent (provided, however, that the failure of the Agent to make such request
shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations
and

 

    	-19-

    	 

    

 

warranties made by the Company
in this Agreement and provided, further, that the only remedy the Agent shall have with respect to the failure to make such filing
shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not
file any amendment or supplement to the Registration Statement or Prospectus disclosing a material change in the terms of the Placement
Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to Agent within a reasonable
period of time before the filing and the Agent has not reasonably objected in writing thereto within two (2) Business Days (provided,
however, that the failure of the Agent to make such objection shall not relieve the Company of any obligation or liability hereunder,
or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and the Company
has no obligation to provide the Agent any advance copy of such filing or to provide the Agent any opportunity to object to such
filing if such filing does not name the Agent and does not relate to the transactions contemplated by this Agreement, and provided,
further, that the only remedy Agent shall have with respect to the failure by the Company to seek such consent shall be to cease
making sales under this Agreement) and the Company will furnish to the Agent at the time of filing thereof a copy of any document
that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents
available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus to be filed with the Commission
as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed
(the determination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company’s
reasonable opinion or reasonable objections, shall be made exclusively by the Company).

 

(b)          Notice
of Commission Stop Orders.   The Company will advise the Agent, promptly after it receives notice or obtains
knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction,
or of the initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company
will advise the Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement
or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to
the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any
Issuer Free Writing Prospectus.

 

(c)          Delivery
of Prospectus; Subsequent Changes.   During any period in which a Prospectus relating to the Placement Shares
is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, (including
in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use reasonable
best efforts to comply in all material respects with all requirements imposed upon it by the Securities Act, as from time to time
in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under
the Exchange Act. If the Company has

 

    	-20-

    	 

    

 

omitted any information from
the Registration Statement pursuant to Rule 430B under the Securities Act, it will use its commercially reasonable efforts to comply
with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agent promptly
of all such filings if not available on EDGAR. If during such period any event occurs as a result of which the Prospectus as then
amended or supplemented 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 then existing, not misleading, or if during such period it is necessary
to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify
Agent to suspend the offering of the Placement Shares during such period and the Company will promptly amend or supplement the
Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such
compliance; provided, however, that the Company may delay any such amendment or supplement if, in the reasonable judgment of the
Company, it is in the best interests of the Company to do so.

 

(d)          Listing
of Placement Shares.   During any period in which the Prospectus relating to the Placement Shares is required
to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, the Company will
use its commercially reasonable efforts to cause the Placement Shares to be listed on the Exchange.

 

(e)          Delivery
of Registration Statement and Prospectus.   The Company will furnish to the Agent and its counsel (at the expense
of the Company) copies of the Registration Statement, the Prospectus (including all Incorporated Documents) and all amendments
and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus
relating to the Placement Shares is required to be delivered under the Securities Act (including all Incorporated Documents filed
with the Commission during such period), in each case as soon as reasonably practicable and in such quantities as the Agent may
from time to time reasonably request and, at the Agent’s request, will also furnish copies of the Prospectus to each exchange
or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish
any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.

 

(f)           Earnings
Statement.   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 covering
a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.

 

(g)          Use
of Proceeds.   The Company will use the Net Proceeds as described in the Prospectus in the section entitled
“Use of Proceeds.”

 

(h)          Notice
of Other Sales.   Without the prior written consent of Agent, which such consent shall not be unreasonably withheld,
the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose
of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable
for Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the fifth (5th)
Trading Day immediately prior to the date on which any Placement Notice is delivered to Agent hereunder and ending on

 

    	-21-

    	 

    

 

the fifth (5th)
Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice
(or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement
Notice, the date of such suspension or termination); and will not directly or indirectly in any other “at-the-market”
or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common
Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common
Stock, warrants or any rights to purchase or acquire, Common Stock prior to the later of the termination of this Agreement and
the thirtieth (30th) day immediately following the final Settlement Date with respect to Placement Shares sold pursuant
to such Placement Notice; provided, however, that such restrictions will not be required in connection with the Company’s
issuance or sale of (i) Common Stock, options to purchase Common Stock or restricted stock units or stock awards or Common
Stock issuable upon the exercise of options, pursuant to any employee, consultant or director stock option or benefits plan, stock
ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment
plan) of the Company whether now in effect or hereafter implemented, (ii) Common Stock issuable upon conversion of securities
or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available
on EDGAR or otherwise in writing to the Agent and (iii) Common Stock or securities convertible into or exchangeable for shares
of Common Stock as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after
the date of this Agreement which are not issued for capital raising purposes.

 

(i)           Change
of Circumstances.   The Company will, at any time during the pendency of a Placement Notice, advise the Agent
promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would adversely affect
in any material respect any opinion, certificate, letter or other document required to be provided to the Agent pursuant to this
Agreement.

 

(j)           Due
Diligence Cooperation.   The Company will cooperate with any reasonable due diligence review conducted by the
Agent or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing
information and making available documents and senior corporate officers, during regular business hours and at the Company’s
principal offices, as the Agent may reasonably request.

 

(k)          Required
Filings Relating to Placement of Placement Shares.   The Company agrees that on such dates as the Securities
Act shall require the filing of a prospectus supplement with respect to the sale of Placement Shares hereunder, the Company will
(i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act
(each and every filing date under Rule 424(b), a “Filing Date”), which prospectus supplement will set
forth, within the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the
compensation payable by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies
of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules
or regulations of such exchange or market.

 

    	-22-

    	 

    

 

(l)           Representation
Dates; Certificate.    (1) On or prior to the date of the first Placement Notice and (2) following the delivery
of the first Placement Notice each time during the term of this Agreement that the Company:

 

(i) files the Prospectus
relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering of
securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means
of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration
Statement or the Prospectus relating to the Placement Shares;

 

(ii) files an annual
report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information or a material amendment
to the previously filed Form 10-K);

 

(iii) files its
quarterly reports on Form 10-Q under the Exchange Act; or

 

(iv) files a current
report on Form 8-K containing amended financial information (other than information “furnished” pursuant to Items 2.02
or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain
properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange
Act (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation
Date”);

 

the Company shall furnish
the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such
Form 8-K is material) with a certificate dated the Representation Date, in the form and substance satisfactory to the Agent and
its counsel, substantially similar to the form previously provided to the Agent and its counsel, modified, as necessary, to relate
to the Registration Statement and the Prospectus as amended or supplemented. The requirement to provide a certificate under this
Section 7(l) shall be waived for any Representation Date occurring at a time in which no Placement Notice is pending (including
as a result of a Suspension being in effect), which waiver shall continue until the earlier to occur of the date the Company delivers
instructions for the sale of Placement Shares hereunder (which for such calendar quarter shall be considered a Representation Date)
and the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement
Shares following a Representation Date when such waiver applied and did not provide the Agent with a certificate under this Section
7(l), then before the Company delivers the instructions for the sale of Placement Shares or the Agent sells any Placement Shares
pursuant to such instructions, the Company shall provide the Agent with a certificate in conformity with this Section 7(l) dated
as of the date that the instructions for the sale of Placement Shares are issued.

 

(m)          Legal
Opinions.    (1) On or prior to the date of the first Placement Notice and (2) unless a Suspension is in
effect, within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate
pursuant to Section 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause to
be furnished to the Agent a written opinion of each of (A) Mintz, Levin, Cohn,

 

    	-23-

    	 

    

 

Ferris, Glovsky and Popeo,
P.C. (“Company Counsel”), or other counsel satisfactory to the Agent and (B) D Young & Co LLP
and Nelson Mullins Riley & Scarborough LLP (“IP Counsel”), or other counsel satisfactory to the Agent,
in each case in form and substance satisfactory to Agent and its counsel, substantially similar to the form previously provided
to the Agent and its counsel, respectively, modified, as necessary, to relate to the Registration Statement and the Prospectus
as then amended or supplemented; provided, however, the Company shall be required to furnish to Agent no more than one opinion
from each of Company Counsel and the IP Counsel hereunder per calendar quarter and the Company shall not be required to furnish
any such letter if the Company does not intend to deliver a Placement Notice in such calendar quarter until such time as the Company
delivers its next Placement Notice; provided, further, that in lieu of such opinions for subsequent periodic filings under the
Exchange Act, counsel may furnish the Agent with a letter (a “Reliance Letter”) to the effect that the
Agent may rely on a prior opinion delivered under this Section 7(m) to the same extent as if it were dated the date of such
letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus
as amended or supplemented as of the date of the Reliance Letter).

 

(n)          Comfort
Letter.   (1) On or prior to the date of the first Placement Notice and (2) unless a Suspension is in effect,
within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate
pursuant to Section 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause its
independent registered public accounting firm to furnish the Agent letters (the “Comfort Letters”), dated
the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(n); provided, that if requested
by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of the date of
occurrence of any material transaction or event, including the restatement of the Company’s financial statements. The Comfort
Letter from the Company’s independent registered public accounting firm shall be in a form and substance satisfactory to
the Agent, (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act
and the PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial
Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date
and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of
such letter.

 

(o)          Market
Activities.   The Company will not, directly or indirectly, (i) take any action designed to cause or result
in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for, or purchase the Placement Shares, or
pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent.

 

(p)          Investment
Company Act.   The Company will conduct its affairs in such a manner so as to reasonably ensure that neither
it nor any of its Subsidiaries will be or become, at

 

    	-24-

    	 

    

 

any time prior to the termination
of this Agreement, required to register as an “investment company,” as such term is defined in the Investment Company
Act.

 

(q)          No
Offer to Sell.   Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent
in its capacity as agent hereunder, neither the Agent nor the Company (including its agents and representatives, other than the
Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in
Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation
of an offer to buy Placement Shares hereunder.

 

(r)           Blue
Sky and Other Qualifications.   The Company will use its commercially reasonable efforts, in cooperation
with the Agent, to qualify the Placement Shares for offering and sale, or to obtain an exemption for the Placement Shares to be
offered and sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Agent
may reasonably designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution
of the Placement Shares (but in no event for less than one year from the date of this Agreement); provided, however,
that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Placement Shares
have been so qualified or exempt, the Company will file such statements and reports as may be required by the laws of such jurisdiction
to continue such qualification or exemption, as the case may be, in effect for so long as required for the distribution of the
Placement Shares (but in no event for less than one year from the date of this Agreement) so long as the Company has approved in
advance the sale of Placement Shares in such jurisdiction.

 

(s)          Sarbanes-Oxley
Act.   The Company and the Subsidiaries will maintain and keep accurate books and records reflecting their assets
and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with GAAP and including those policies
and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded
as necessary to permit the preparation of the Company’s consolidated financial statements in accordance with GAAP, (iii) that
receipts and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’
authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on its financial statements. The Company and
the Subsidiaries will maintain such controls and other procedures, including, without limitation, those required by Sections 302
and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls
and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the

 

    	-25-

    	 

    

 

Company’s management,
including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company or the
Subsidiaries is made known to them by others within those entities, particularly during the period in which such periodic reports
are being prepared.

 

(t)           Secretary’s
Certificate; Further Documentation.   On or prior to the date of the first Placement Notice, the Company shall
deliver to the Agent a certificate of the Secretary of the Company and attested to by an executive officer of the Company, dated
as of such date, certifying as to (i) the Amended and Restated Certificate of Incorporation of the Company, (ii) the Amended and
Restated Bylaws of the Company, (iii) the resolutions of the Board of Directors of the Company, or a duly authorized committee
of the Board of Directors, authorizing the execution, delivery and performance of this Agreement and the issuance of the Placement
Shares and (iv) the incumbency of the officers duly authorized to execute this Agreement and the other documents contemplated by
this Agreement. Unless a Suspension is in effect, within five (5) Trading Days of each Representation Date, the Company shall have
furnished to the Agent such further information, certificates and documents as the Agent may reasonably request.

 

8.           Payment
of Expenses.   The Company will pay all expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation and filing of the Registration Statement, including any fees required by the Commission, and
the printing or electronic delivery of the Prospectus as originally filed and of each amendment and supplement thereto, in such
number as the Agent shall deem necessary, (ii) the printing and delivery to the Agent of this Agreement and such other documents
as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the
preparation, issuance and delivery of the certificates, if any, for the Placement Shares to the Agent, including any stock or other
transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance or delivery of the
Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company,
(v)  the fees and disbursements of the counsel to the Agent, payable upon the execution of this Agreement, in an amount not
to exceed $50,000; (vi) the qualification or exemption of the Placement Shares under state securities laws in accordance with
the provisions of Section 7(r) hereof, including filing fees, but excluding fees of the Agent’s counsel, (vii) the
printing and delivery to the Agent of copies of any Permitted Issuer Free Writing Prospectus and the Prospectus and any amendments
or supplements thereto in such number as the Agent shall reasonably deem necessary, (viii) the preparation, printing and delivery
to the Agent of copies of the blue sky survey, if applicable, (ix) the fees and expenses of the transfer agent and registrar
for the Common Stock, (x) the filing and other fees incident to any review by FINRA of the terms of the sale of the Placement
Shares including the fees of the Agent’s counsel (subject to the cap, set forth in clause (v) above), and (xi) the fees
and expenses incurred in connection with the listing of the Placement Shares on the Exchange.

 

9.           Representations
and Covenants of Agent.  Agent represents and warrants that it is duly registered as a broker-dealer under FINRA, the
Exchange Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold,
except such states in which Agent is exempt from registration or such registration is not otherwise required. Agent shall continue,
for the term of this Agreement, to be duly registered as a broker-dealer

 

    	-26-

    	 

    

 

under FINRA, the Exchange
Act and the applicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such
states in which Agent is exempt from registration or such registration is not otherwise required, during the term of this Agreement.
Agent will comply with all applicable law and regulations in connection with the Placement Shares, including, but not limited to,
Regulation M.

 

10.         Conditions
to Agent’s Obligations.   The obligations of the Agent hereunder with respect to a Placement will be subject
to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance
by the Company of its obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to it in its
reasonable judgment, and to the continuing satisfaction (or waiver by the Agent in its sole discretion) of the following additional
conditions as of each Representation Date.

 

(a)          Registration
Statement Effective.   The Registration Statement shall have become effective and shall be available for the
(i) resale of all Placement Shares issued to the Agent and not yet sold by the Agent and (ii) sale of all Placement Shares
contemplated to be issued by any Placement Notice.

 

(b)          No
Material Notices.   None of the following events shall have occurred and be continuing: (i) receipt by
the Company of any request for additional information from the Commission or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments
or supplements to the Registration Statement or the Prospectus (other than immaterial amendments or supplements to documents incorporated
by reference therein) if such post effective amendments or supplements have not been made and become effective; (ii) the issuance
by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any material
statement made in the Registration Statement or the Prospectus or any material Incorporated Document by reference untrue in any
material respect or that requires the making of any changes in the Registration Statement, the Prospectus or material Incorporated
Document so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading
and so that, in the case of the Prospectus, it will not contain any materially untrue statement of a material fact or omit to state
any 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.

 

(c)          No
Misstatement or Material Omission.   The Agent shall not have advised the Company that the Registration Statement
or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable
opinion is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required to be stated
therein or is necessary to make the statements therein not misleading.

 

    	-27-

    	 

    

 

(d)          Material
Changes.   Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with
the Commission, there shall not have been any material adverse change in the authorized capital stock of the Company or any Material
Adverse Effect or any development that would reasonably be expected to cause a Material Adverse Effect, or a downgrading in or
withdrawal of the rating assigned to any of the Company’s securities (other than asset backed securities) by any rating organization
or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company’s
securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described
above, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwise have),
is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and
in the manner contemplated in the Prospectus.

 

(e)          Legal
Opinions.   The Agent shall have received the opinions of Company Counsel and the IP Counsel required to be
delivered pursuant to Section 7(m) on or before the date on which such delivery of such opinion is required pursuant to Section 7(m).

 

(f)           Comfort
Letter.   The Agent shall have received the Comfort Letter required to be delivered pursuant to Section 7(n)
on or before the date on which such delivery of such Comfort Letter is required pursuant to Section 7(n).

 

(g)          Representation
Certificate.   The Agent shall have received the certificate required to be delivered pursuant to Section 7(l)
on or before the date on which delivery of such certificate is required pursuant to Section 7(l).

 

(h)          No
Suspension.   Trading in the Common Stock shall not have been suspended on the Exchange and the Common Stock
shall not have been delisted from the Exchange.

 

(i)           Other
Materials.   On each date on which the Company is required to deliver a certificate pursuant to Section 7(l),
the Company shall have furnished to the Agent such appropriate further information, opinions, certificates, letters and other documents
as the Agent may reasonably request. All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof.

 

(j)           Securities
Act Filings Made.   All filings with the Commission with respect to the Placement Shares required by Rule 424
under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within
the applicable time period prescribed for such filing by Rule 424.

 

(k)          Approval
for Listing.   The Placement Shares shall either have been approved for listing on the Exchange, subject only
to notice of issuance, or the Company shall have filed an application for listing of the Placement Shares on the Exchange at, or
prior to, the issuance of any Placement Notice.

 

(l)           FINRA.   FINRA
shall have raised no objection to the terms of this offering and the amount of compensation allowable or payable to the Agent as
described in the Prospectus.

 

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(m)         No
Termination Event.   There shall not have occurred any event that would permit the Agent to terminate this Agreement
pursuant to Section 13(a).

 

11.         Indemnification
and Contribution.

 

(a)          Company
Indemnification.   The Company agrees to indemnify and hold harmless the Agent, its partners, members, directors,
officers, employees and agents and each person, if any, who controls the Agent within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act as follows:

 

(i)          against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto),
or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related
Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading;

 

(ii)         against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 11(d) below) any such settlement is effected with the written consent of the Company,
which consent shall not unreasonably be delayed or withheld; and

 

(iii)        against
any and all expense whatsoever, as incurred (including the documented fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,

 

provided, however,
that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the Registration Statement (or any amendment thereto), or
in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto).

 

(b)          Agent
Indemnification.   Agent agrees to indemnify and hold harmless the Company and its directors and each officer
and director of the Company who signed the Registration Statement, 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 against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 11(a), as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or

 

    	-29-

    	 

    

 

omissions, made in the Registration
Statement (or any amendments thereto) or the Prospectus (or any amendment or supplement thereto) or any Issuer Free Writing Prospectus
in reliance upon and in conformity with information furnished to the Company in writing by the Agent expressly for use therein.
The Company hereby acknowledges that the only information that the Agent has furnished to the Company expressly for use in the
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement thereto) are the statements
set forth in the seventh and eighth paragraphs under the caption “Plan of Distribution” in the Prospectus.

 

(c)          Procedure.   Any
party that proposes to assert the right to be indemnified under this Section 11 will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this
Section 11, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but
the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 11 and (ii) any liability that it may have to any indemnified
party under the foregoing provision of this Section 11 unless, and only to the extent that, such omission results in the forfeiture
of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent
that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the
action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but
the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment
of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) 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, (3) 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
(4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges
of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties
shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party
promptly as they are incurred and after the indemnifying party receives a written notice relating to the fees, disbursements and
other charges in reasonable detail. An indemnifying party will not, in any

 

    	-30-

    	 

    

 

event, be liable for any
settlement of any action or claim effected without its written consent if such consent is required by this Section 11(c). No indemnifying
party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 11 (whether or not
any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release
of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (2) 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)          Settlement
Without Consent if Failure to Reimburse.   If an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for reasonable fees and expenses of counsel for which it is entitled to reimbursement
under this Section 11, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by
Section 11(a)(ii) effected without its written consent if (1) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (2) such indemnifying party shall have received notice of the
terms of such settlement at least 30 days prior to such settlement being entered into and (3) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

(e)          Contribution.   In
order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 11 is applicable in accordance with its terms but for any reason is held to be unavailable from the
Company or the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons
other than the Agent, such as persons who control the Company within the meaning of the Securities Act, officers of the Company
who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company
and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Agent on the other hand. The relative benefits received by the Company on the one hand and the Agent on
the other hand shall be deemed to be in the same proportion as the total Net Proceeds from the sale of the Placement Shares (before
deducting expenses) received by the Company bear to the total compensation received by the Agent (before deducting expenses) from
the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only
the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the
Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage,
or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent
of the parties and their relative knowledge, access to information and opportunity to

 

    	-31-

    	 

    

 

correct or prevent such statement
or omission. The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section
11(e) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above in this Section 11(e) shall be deemed to include, for the purpose
of this Section 11(e), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim to the extent consistent with Section 11(c) hereof. Notwithstanding the foregoing provisions
of this Section 11(e), the Agent shall not be required to contribute any amount in excess of the commissions received by it under
this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 11(e), any person who controls a party to this Agreement within the meaning of the Securities Act, and any officers,
directors, partners, employees or agents of the Agent, will have the same rights to contribution as that party, and each officer
and director of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for contribution may be made under this Section 11(e), will notify any
such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties
from whom contribution may be sought from any other obligation it or they may have under this Section 11(e) except to the extent
that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom
contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 11(c) hereof, no party will
be liable for contribution with respect to any action or claim settled without its written consent if such consent is required
pursuant to Section 11(c) hereof.

 

12.         Representations
and Agreements to Survive Delivery.  The indemnity and contribution agreements contained in Section 11 of this Agreement
and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of
their respective dates, regardless of (i) any investigation made by or on behalf of the Agent, any controlling persons, or
the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement
Shares and payment therefor or (iii) any termination of this Agreement.

 

13.         Termination.

 

(a)          The
Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been,
since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any change,
or any development or event involving a prospective change, in the condition, financial or otherwise, or in the business, properties,
earnings, results of operations or prospects of the Company and its Subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, which individually or in the aggregate, in the sole judgment of the Agent is material and adverse
and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares,
(2) if there has occurred any material

 

    	-32-

    	 

    

 

adverse change in the financial
markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or
inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) if trading in
the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange has been
suspended or limited, or minimum prices for trading have been fixed on the Exchange, (4) if any suspension of trading of any securities
of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption
of securities settlements or clearance services in the United States shall have occurred and be continuing, or (6) if a banking
moratorium has been declared by either U.S. Federal or New York authorities. Any such termination shall be without liability of
any party to any other party except that the provisions of Section 8 (Payment of Expenses), Section 11 (Indemnification and Contribution),
Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and
Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination. If the Agent
elects to terminate this Agreement as provided in this Section 13(a), the Agent shall provide the required notice as specified
in Section 14 (Notices).

 

(b)          The
Company shall have the right, by giving ten (10) days’ notice as hereinafter specified to terminate this Agreement in its
sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 8, Section 11, Section 12, Section 18 and Section 19 hereof shall remain in full
force and effect notwithstanding such termination.

 

(c)          The
Agent shall have the right, by giving ten (10) days’ notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 8, Section 11, Section 12, Section 18 and Section 19 hereof shall remain in full force
and effect notwithstanding such termination.

 

(d)          This
Agreement shall remain in full force and effect unless terminated pursuant to Sections 13(a), (b), or (c) above or otherwise by
mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed
to provide that Section 8, Section 11, Section 12, Section 18 and Section 19 shall remain in full force and effect.

 

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

 

    	-33-

    	 

    

 

14.         Notices.
All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing, unless otherwise specified, and if sent to the Agent, shall be delivered to:

 

Cantor Fitzgerald
& Co.

499 Park Avenue

New York, New York
10022

Attention:      Capital
Markets/Jeffrey Lumby

Facsimile:      (212) 307-3730

 

with copies to

 

Cantor Fitzgerald
& Co.

499 Park Avenue

New York, New York
10022

Attention:      Stephen
Merkel

General Counsel

Facsimile:      (212)
307-3730

 

and with a copy to:

 

Reed Smith LLP

599 Lexington Avenue

New York, New York 10022

Attention:      Daniel
I. Goldberg, Esq.

Facsimile:     
(212) 521-5450

 

and if to the
Company, shall be delivered to:

 

Cyclacel Pharmaceuticals,
Inc.

200 Connell Drive

Suite 1500

Berkeley Heights, New
Jersey, 07922

Attention:      Chief Executive Officer

Facsimile:      (866) 271-3466

 

with a copy (which shall
not constitute notice) to:

 

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

666 Third Avenue

New York, New York 10017

Attention:      Joel
I. Papernik, Esq.

Facsimile:     
(212) 983-3115

 

and

 

Cyclacel Limited

1 James Lindsay
Place

 

    	-34-

    	 

    

 

Dundee DD1 5JJ

UK

Attention:      COO

Facsimile:      +44
1382 206067

 

Each 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.
Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission
(with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight
courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day
on which the Exchange and commercial banks in the City of New York are open for business.

 

An electronic communication
(“Electronic Notice”) shall be deemed written notice for purposes of this Section 14 if sent to the electronic
mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the
party sending Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice
may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”)
which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.

 

15.         Successors
and Assigns.  This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their
respective successors and the affiliates, controlling persons, officers and directors referred to in Section 11 hereof. References
to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except
as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior
written consent of the other party; provided, however, that the Agent may assign its rights and obligations hereunder to an affiliate,
so long as such affiliate is a registered broker-dealer, thereof without obtaining the Company’s consent.

 

16.         Adjustments
for Stock Splits.  The parties acknowledge and agree that all share-related numbers contained in this Agreement shall
be adjusted to take into account any stock split, stock dividend or similar event effected with respect to the Placement Shares.

 

17.         Entire
Agreement; Amendment; Severability.  This Agreement (including all schedules and exhibits attached hereto and Placement
Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements
and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agent. In the event
that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable as written by a court of competent jurisdiction, then such provision shall

 

    	-35-

    	 

    

 

be given full force and effect
to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall
be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that
giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of
the parties as reflected in this Agreement.

 

18.         GOVERNING
LAW AND TIME; WAIVER OF JURY TRIAL.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

19.         CONSENT
TO JURISDICTION.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
(CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT
AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

20.         Use
of Information.  The Agent may not provide any information gained in connection with this Agreement and the transactions
contemplated by this Agreement, including due diligence, to any third party other than its legal counsel advising it on this Agreement
unless expressly approved by the Company in writing.

 

21.         Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile or
electronic transmission.

 

22.         Effect
of Headings.  The section and exhibit headings herein are for convenience only and shall not affect the construction
hereof.

 

    	-36-

    	 

    

 

23.         Permitted
Free Writing Prospectuses.  The Company represents, warrants and agrees that, unless it obtains the prior consent
of the Agent, which consent shall not be unreasonably withheld, conditioned or delayed, and the Agent represents, warrants and
agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Placement
Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,”
as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Agent
or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company
represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer
free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and
record keeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in Exhibit 23
hereto are Permitted Free Writing Prospectuses.

 

24.         Absence
of Fiduciary Relationship.  The Company acknowledges and agrees that:

 

(a)          the
Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction
contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between
the Company or any of its respective affiliates, stockholders (or other equity holders), creditors or employees or any other party,
on the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated
by this Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent
has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly
set forth in this Agreement;

 

(b)          it
is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated
by this Agreement;

 

(c)          neither
the Agent nor its affiliates have provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated
by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;

 

(d)          it
is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and the Agent and its affiliates have no obligation to disclose such interests and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and

 

(e)          it
waives, to the fullest extent permitted by law, any claims it may have against the Agent or its affiliates for breach of fiduciary
duty or alleged breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the
Agent and its affiliates shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect
of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company,
employees or creditors of Company, other than in respect of the Agent’s obligations under this Agreement and to keep information

 

    	-37-

    	 

    

 

provided by the Company to
the Agent and the Agent's counsel confidential to the extent not otherwise publicly-available.

 

25.         Definitions.  As
used in this Agreement, the following terms have the respective meanings set forth below:

 

“Applicable
Time” means (i) each Representation Date and (ii) the time of each sale of any Placement Shares pursuant to this
Agreement.

 

“Issuer Free
Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating
to the Placement Shares that (1) is required to be filed with the Commission by the Company, (2) is a “road show”
that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed
with the Commission, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of
the Placement Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule
433(g) under the Securities Act.

 

“Rule 164,”
“Rule 172,” “Rule 405,” “Rule 415,” “Rule
424,” “Rule 424(b),” “Rule 430B,” and “Rule 433”
refer to such rules under the Securities Act.

 

All references in this
Agreement to financial statements and schedules and other information that is “contained,” “included” or
“stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other information that is incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.

 

All references in this
Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed
to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus
(other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission)
shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to
“supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar
materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agent outside of the
United States.

 

[Signature Page Follows]

 

 

    	-38-

    	 

    

 

If the foregoing correctly
sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company and the Agent.

 

	 	Very truly yours,
	 	 
	 	CYCLACEL PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Paul McBarron
	 	 	Name:	Paul McBarron
	 	 	Title:	Executive Vice President – Finance, Chief Financial Officer and Chief Operating Officer
	 	 	 
	 	ACCEPTED as of the date first-above written:
	 	 
	 	CANTOR FITZGERALD & CO.
	 	 	 
	 	By:	/s/ Jeffrey Lumby
	 	 	Name:	Jeffrey Lumby
	 	 	Title:	Senior Managing Director

 

Signature
Page

Cyclacel
Pharmaceuticals, Inc. – Sales Agreement

  

    	 

    	 

    

 

SCHEDULE 1

__________________________

 

Form of Placement Notice

__________________________

 

	From:	Cyclacel Pharmaceuticals, Inc.
	 	 
	To:	Cantor Fitzgerald & Co.
	 	Attention:  [•]
	 	 
	Subject:	Placement Notice
	 	 
	Date:	[•], 2015
	 	 
	Gentlemen:	 

 

Pursuant to the terms and
subject to the conditions contained in the Sales Agreement between Cyclacel Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and Cantor Fitzgerald & Co. (“Agent”), dated July [•],
2015, the Company hereby requests that the Agent sell up to [•] of the Company’s common stock, par value $0.001 per
share, at a minimum market price of $[•] per share, during the time period beginning [month, day, time] and ending [month,
day, time].

 

 

    	 

    	 

    

 

SCHEDULE 2

__________________________

 

Compensation

__________________________

 

The Company shall pay to
the Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to 3.0% of the aggregate gross
proceeds from each sale of Placement Shares.

 

    	 

    	 

    

 

SCHEDULE 3

__________________________

 

Notice Parties

__________________________

 

The Company

 

Paul McBarron (pmcbarron@cyclacel.com)

 

With copies to:

 

Spiro Rombotis (srombotis@cyclacel.com)

 

The Agent

 

Jeff Lumby (jlumby@cantor.com)

 

Josh Feldman (jfeldman@cantor.com)

 

Sameer Vasudev (svasudev@cantor.com)

 

With copies to:

 

CFControlledEquityOffering@cantor.com

 

    	 

    	 

    

 

SCHEDULE 4

__________________________

 

Subsidiaries

__________________________

 

Cyclacel Limited

 

    	 

    	 

    

 

Exhibit 23

 

Permitted Free Writing
Prospectus

 

None.exhibittenone.htm

EXPLORATION AGREEMENT AND OPTION

THIS EXPLORATION AGREEMENT AND OPTION (“Agreement”) is dated and effective this 9th day of July, 2015 (“Effective Date”) by and between LKA GOLD INCORPORATED, a Delaware corporation (“LKA”) and KINROSS GOLD U.S.A, INC., a Nevada corporation (“Kinross”).

RECITALS

A.           LKA owns those patented mining claims described in Part 1 of Exhibit A hereto, which are situated in Hinsdale County, Colorado (“Patented Claims”).  LKA also owns those unpatented mining claims described in Part 2 of Exhibit A hereto, which are situated in Hinsdale County, Colorado (“Unpatented Claims”). The Patented Claims and Unpatented Claims are collectively referred to herein as the “Property.”

B.           LKA is currently conducting mineral exploration, development and mining activities on a portion of the Property described in Exhibit B hereto (“Carve-Out Area”).  The portion of the Property that is not included within the Carve-Out Area is referred to herein as the “Exploration Property.”

C.           LKA and Kinross desire to provide for the exploration, development and mining of minerals on and in the Property pursuant to the terms of this Agreement.

THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, LKA and Kinross agree as follows:

TERMS OF AGREEMENT

1.           Grant.

(a)           LKA grants to Kinross, for so long as this Agreement is in effect, the exclusive right to prospect and explore for Minerals on and in the Exploration Property and to use, occupy, excavate and disturb so much of the surface and subsurface of the Exploration Property as is reasonably necessary and convenient in exploring and prospecting for Minerals, subject to the terms of this Agreement.  For purposes of this Agreement, “Minerals” shall mean any and all metals, minerals, ores and mineral rights of whatever kind and nature that are included in the Property.

(b)           Without limiting the scope of the grant under Section 1(a), LKA grants to Kinross the exclusive right: (i) to prospect and explore for Minerals by any method now known or hereafter discovered, and the right to use any water rights appurtenant to the Property for such purposes; (ii) to erect, construct, maintain, and operate, on and in the Exploration Property, buildings, structures, facilities, roads, machinery, and equipment, and to use, occupy, excavate, and disturb so much of the Exploration Property as Kinross may reasonably determine to be useful, desirable, or convenient, (iii) to stockpile, deposit or store on the Exploration Property any waste, water or other materials related to Mineral prospecting or exploration, and (iv) to use and improve all roads, access routes and access rights running with LKA’s rights or title in the Property.

 

 

  

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(c)           LKA further grants to Kinross the nonexclusive right to access across and through the Carve-Out Area for purposes of prospecting and exploring for Minerals, including, but not limited to, drilling through the Carve-Out Area to reach targets within the Exploration Property.  Kinross shall have the right to use the surface and subsurface of the Carve-Out Area and any shafts, roads, access routes, openings, and underground workings sunk or made on or within the Carve-Out Area for the prospecting and exploration of any Minerals. If Kinross encounters or identifies any Minerals within the Carve-Out Area not previously encountered and identified by LKA and confirmed through exploratory mining or drilling as a result of its prospecting or exploration activities, Kinross shall have the exclusive right to further explore and define those Minerals, and to include those Minerals in any mineral resource determination pursuant to Section 6(a) below, and LKA shall have no rights to explore for, develop or mine any Minerals that were encountered or identified by Kinross. LKA reserves the right to conduct mineral exploration, development and mining activities within the Carve-Out Area, in accordance with this Section and the other terms of this Agreement.

(d)           LKA and Kinross recognize that allowing Kinross to drill and conduct other exploration activities from within existing mine workings in the Carve-Out Area will be beneficial to both parties and may promote the identification of Mineral resources on or within the Property. LKA and Kinross shall coordinate the planning and conduct of their respective activities within the Carve-Out Area so as to minimize any interference with each other’s activities. If there is a conflict between Kinross’s and LKA’s use of the Carve-Out Area, Kinross shall undertake reasonable alternative measures to accommodate LKA’s uses.

(e)           LKA may access across the Exploration Property to the extent such access is reasonably necessary to support LKA’s mineral exploration, development and mining activities in the Carve-Out area.  LKA shall provide Kinross advance notice of any proposed uses within the Exploration Property, and LKA shall undertake reasonable alternative measures to accommodate Kinross’s uses of the Exploration Property.

2.           Term.  Unless earlier terminated pursuant to the provisions of this Agreement, the term of this Agreement shall be for five (5) years from the Effective Date hereof, unless Kinross provides a Resource Notice within such five year period pursuant to Section 6(a) below, in which case this Agreement shall continue in effect until (i) a final Venture Agreement is executed by the parties pursuant to Section 6(d), in the event LKA exercises the Venture Option, or (ii) completion of the Closing pursuant to Section 6(f) below.

  

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3.           Conduct of Operations.

(a)           All activities carried out by or on behalf of Kinross under this Agreement shall materially conform to all applicable Laws.  Kinross will apply for any government permits required to conduct Kinross’s operations and will post any bonds or other financial assurances required by Laws.  LKA will cooperate with Kinross’s efforts to obtain any required permits or other government approvals. For purposes of this Agreement, the term “Laws” shall mean applicable common law and any statute, ordinance, code or other law, rule, regulation, order, requirement, or procedure enacted, adopted, promulgated, applied, or followed by any federal, state or local governmental authority with jurisdiction over the Property or activities conducted on the Property.

(b)           In conducting any activities within the Carve-Out Area in areas or mine workings that are being operated by LKA, Kinross shall comply with LKA’s reasonable safety rules and worker safety training procedures.  LKA makes no representation or warranty with respect to the suitability of any existing workings for Kinross’ use or the safety or security of any such workings and such workings are made available for Kinross’ use on an “AS IS/WHERE IS” basis.  Before using any existing mine workings in the Carve-Out Area, Kinross shall inspect such workings and undertake such activities as Kinross deems necessary to make such workings safe and secure for its use.  Kinross will be solely responsible for the safety of its employees, contractors, subcontractors, guests or invitees within such workings and shall indemnify, defend, release and hold harmless LKA with respect to any claim made by Kinross or any of its employees, contractors, subcontractors, guests or invitees as a result of any damage to property or injury to Kinross’ employees, contractors, subcontractors, guests or invitees, except to the extent that such claim, injury or damage is a result of the willful misconduct or gross negligence of LKA or its employees, contractors or subcontractors.

(c)           Kinross shall conduct all activities on the Property in a good and workman-like manner in accordance with generally accepted mineral exploration practices.

(d)           Kinross shall provide to LKA a copy of any governmental permit application relating to activities conducted by Kinross on the Property prior to submission to the applicable governmental entity, and LKA shall have ten (10) days to provide comments to Kinross, which comments, if any, Kinross will consider prior to submitting the application to the agency.  Kinross shall provide LKA copies of any other formal written correspondence or notices sent to or received from any governmental agency having jurisdiction over the Property that relates to Kinross’s activities on the Property.

(e)           All activities carried out by or on behalf of LKA on or within the Carve-Out Area or Exploration Property shall materially conform to all applicable Laws.  LKA will apply for any government permits required to conduct LKA’s operations and will post any bonds or other financial assurances required by Laws.  LKA shall provide to Kinross a copy of any governmental permit application relating to activities conducted by LKA on the Property prior to submission to the applicable governmental entity, and Kinross shall have ten (10) days to provide comments to LKA, which comments, if any, LKA will consider prior to submitting the application to the agency.  LKA shall provide Kinross copies of any other formal written correspondence or notices sent to or received from any governmental agency having jurisdiction over the Property that relates to LKA’s activities on the Property. LKA shall conduct all activities on the Property in a good and workman-like manner in accordance with generally accepted mineral exploration, development and mining practices.

  

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(f)           No implied covenants or conditions whatsoever shall be read into this Agreement relating to the prospecting or exploration of the Exploration Property and Area of Interest (defined below) or any other operations of Kinross hereunder, including but not limited to the time therefor or measure of diligence thereof.  Any operations conducted by Kinross upon or relating to the Property or Area of Interest shall be conducted at such time and in such manner as Kinross, in its sole discretion deems advisable, subject only to the express provisions of this Agreement.

(g)           If Kinross desires to use any of LKA’s buildings or equipment in conducting its operations, Kinross and LKA shall first enter an agreement for such use which will provide for maintenance of such buildings or equipment and reasonable compensation to LKA.

4.           Representations and Warranties.

(a)           LKA represents and warrants that: (1) subject to the rights of the United States in the Unpatented Claims, LKA owns the entire right, title, and interest in and to the Property; (2) to the best of LKA’s knowledge, the Unpatented Claims were properly located and have been maintained in good standing in accordance with applicable federal, state and local laws; (3) except for the Existing Royalty (defined below) and the Existing Liens defined in Section 4(b) below, the Property is not subject to any agreements, liens, encumbrances, royalties, overriding royalties, net profit interests, payments on or out of production, or any other burden or restriction; (4) there have been no orders, judgments, claims, suits, actions, or proceedings (including government investigations) pending or effective or, to the knowledge of LKA, threatened relating to the Property or any conditions or activities thereon, and LKA has no knowledge of any reasonable grounds therefore; (5) all permits, licenses, permissions and other authorizations relating to the Property and LKA’s activities on the Property, which are required under applicable Law, have been obtained and LKA is in material compliance with all such terms and conditions; and (6) to LKA’s knowledge there has been no unpermitted disposal, release or discharge of hazardous substances, pollutants or hazardous wastes on or from the Property.  For purposes of this Agreement, “Existing Royalty” means the six percent (6.0%) net smelter return royalty payable pursuant to that Settlement Agreement and Release between LKA and Au Mining, Inc., dated August 24, 2007 and that Royalty Agreement dated August 24, 2007 executed by LKA (attached as Exhibit E to the Settlement Agreement and Release (collectively “Settlement Agreement”).  As set forth in the Settlement Agreement, the Existing Royalty has a cap of $12,647,505.00.  LKA represents and warrants that, as of the Effective Date of this Agreement, it has paid $275,690.96 in royalties pursuant to the Settlement Agreement, and has otherwise complied with the terms of the Settlement Agreement.  To LKA’s knowledge, all requirements of the Settlement Agreement that have become or are due have been satisfied.

  

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(b)           For purposes of this Agreement, the “Existing Liens” are: (i) that lien placed on the Golden Wonder Patented Claim, dated March 13, 2015, by Hansen Drilling of Phillipsburg Montana in the amount of $22,538.10, which is recorded in the records of Hinsdale County, Colorado at Document No. 101279; and (ii) past due real property taxes on the Patented Claims for 2013 and 2014 totaling $10,458.60.  LKA shall pay all past due property taxes on the Patented Claims within thirty (30) days following the Effective Date of this Agreement.

(c)           Each party represents and warrants to the other party that it is in good standing under the laws of the jurisdiction in which it is incorporated, and that it has all the requisite power, right and authority to enter into this Agreement, to perform its present and future obligations under this Agreement, and to commit to this Agreement.  The execution and delivery of this Agreement, and the consummation of the obligations, indemnities and payments provided herein have been duly and validly authorized by all necessary corporate or company action on the part of each party, and will not result in a default or violation of any other agreement or commitment by that party.

(d)           For purposes of this Agreement, the terms “disposal,” “release,” “discharge,” “hazardous substances,” “pollutants,” and “hazardous wastes” shall have the definitions assigned thereto by the Comprehensive Environmental Response Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976 and the Federal Water Pollution Control Act of 1972, as presently amended.

5.           Area of Interest.  For purposes of this Agreement, the Area of Interest is defined as all lands and minerals within the area defined in Exhibit C hereto.  If LKA acquires any additional interest in the Property or Area of Interest while this Agreement is in effect, including any production royalty interest, LKA shall promptly deliver to Kinross written notice of such acquisition and such acquired interests shall be, at Kinross’s election, to be exercised, if at all, within 60 days after delivery of a notice of acquisition by LKA, included within the Property that is subject to this Agreement, at no cost to Kinross.  If Kinross elects to include such acquired interests within the Property, LKA and Kinross shall promptly prepare and execute an amendment to this Agreement documenting such inclusion.  If Kinross fails to elect to have the acquired interests included in the Property, the interest acquired by LKA shall not be further subject to this Agreement.

6.           Venture Option.

(a)           If, during the term of this Agreement, Kinross identifies one or more “mineral resources” (as defined in the Canadian Securities Administration, National Instrument 43-101, Standards of Disclosure for Mineral Projects, as amended) on or within the Property or Area of Interest containing a collective total of fifty thousand (50,000) or more ounces of gold, Kinross may provide LKA with written notice thereof (“Resource Notice”).  Such Resource Notice shall include: (i) a copy of all factual data in Kinross’ possession relating to the Property and Area of Interest that Kinross has not previously provided to LKA, and (ii) a detailed summary of all Exploration Expenditures (defined below) incurred by Kinross on or for the benefit of the Property or Area of Interest.  LKA shall thereafter have a one-time option (“Venture Option”) to enter into a joint venture (“Venture”) covering the Property and Area of Interest, including the Carve-Out Area (“Venture Property”).

  

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(b)           For purposes of this Agreement, “Exploration Expenditures” shall mean all expenses incurred by Kinross following the Effective Date of this Agreement in ascertaining the existence, location, quantity, quality or commercial value of deposits of Minerals on or within the Venture Property, including reclamation of such activities (“Exploration Work”), described below:

(i)           Actual field salaries and wages (or the allocable portion thereof), including benefit costs and payroll taxes, of employees or contractors of Kinross actually performing Exploration Work;

(ii)           Costs and expenses for the use of machinery, facilities, equipment and supplies required for Exploration Work;

(iii)           Travel expenses and transportation of employees and contractors, materials, equipment and supplies reasonably necessary for the conduct of Exploration Work;

(iv)           All payments to contractors for Exploration Work;

(v)           Costs of assays, or other costs incurred to determine the quality and quantity of minerals on or within the Venture Property;

(vi)           Costs incurred to obtain permits, rights of way and other similar rights as may be incurred in connection with Exploration Work, including any environmental studies;

(vii)           Costs and expenses of performing feasibility or other studies to evaluate the economic feasibility of mining on the Venture Property;

(viii)           All taxes levied against the Property and paid by Kinross and the cost of any reclamation bonds required to be posted for reclamation of disturbance associated with Exploration Work;

(ix)           All land holding costs or fees and other necessary expenditures made to preserve in good standing the status and title of the Venture Property;

 

  

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(x)           All land and mineral acquisition costs for any interests acquired by Kinross within the Venture Property; and

(xi)           Any payments made by Kinross to acquire all or any portion of the Existing Royalty pursuant to Section 9 below.

(c)           LKA shall exercise the Venture Option, if at all, by delivering and paying to Kinross within ninety (90) days of Kinross’s delivery of a Resource Notice: (i) a written notice of its election to participate in the Venture, and (ii) a cash payment, by check or wire transfer, in an amount equal to forty and one-quarter percent (40.25%) of all Exploration Expenditures incurred by Kinross. The amount of this payment shall be reduced by the sum of (i) one million eight hundred thousand dollars ($1,800,000.00), plus (ii) an amount equal to sixty-five percent (65%) of one hundred fifteen percent (115%) of any cash that LKA paid following the Effective Date of this Agreement to acquire any real property interests within the Area of Interest that Kinross elected to have included in the Property pursuant to Section 5 above, and which will be contributed by LKA to the Venture.  If LKA disputes either the estimate of mineral resources or, subject to the time limits set forth in Section 8(c) below, the amount of Exploration Expenditures set forth in the Resource Notice, LKA may within thirty (30) days following delivery of the Resource Notice deliver to Kinross a Dispute Notice in accordance with Section 17(c) below, in which case the  remaining time period for electing whether to participate in the Venture shall be tolled until final resolution of the dispute in accordance with Section 17(c).

(d)           If LKA elects to exercise the Venture Option, Kinross and LKA shall, within one hundred twenty (120) days following Kinross’s delivery of its Resource Notice, negotiate in good faith and enter into a joint venture agreement (“Venture Agreement”), covering the Venture Property, which will generally follow the form of Rocky Mountain Mineral Law Foundation, Form 5 (1984), and will include the following terms:

(i)           LKA shall contribute to the Venture all of its right, title and interest in the Venture Property and all improvements, buildings, mine workings structures, facilities and equipment situated on or within the Venture Property, including all of its rights in any permits relating to the exploration, development or mining of Minerals on or within the Venture Property free and clear of all liens or encumbrances arising by or through LKA.  Kinross shall contribute to the Venture all of its right, title and interest in the Venture Property, including all of its rights in any permits relating to the exploration, development or mining of Minerals on or within the Venture Property.

(ii)            The initial participating interest of Kinross shall be sixty-five percent (65.0%) and the initial participating interest of LKA shall be thirty-five percent (35.0%).  The initial contributions of the parties will be valued at sixty-five percent (65.0%) and thirty-five percent (35.0%), respectively, of the sum of Exploration Expenditures, plus one million eight hundred thousand dollars ($1,800,000.00), plus any cash that LKA paid following the Effective Date of this Agreement to acquire any real property interests within the Area of Interest that Kinross elected to have included in the Property pursuant to Section 5 above.

  

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(iii)           Kinross shall have the right to be the manager of the Venture so long as it maintains a Fifty Percent (50%) or greater participating interest in the Venture.  The manager of the Venture shall earn a management fee from the Venture of (i) seven percent (7%) of the Venture exploration expenditures during exploration (except for invoices exceeding $50,000.00, in which case the fee would be five percent (5%) for the amount over $50,000.00), and (ii) five percent (5%) of Venture development expenses during development (except for invoices exceeding $50,000.00, in which case the fee would be three percent (3%) for the amount over $50,000.00).  Upon commencement of production, the management fee will be adjusted to reflect the manager’s actual costs, so that the manager makes neither a profit nor loss from being manager.  The manager shall be required to conduct all Venture operations in a good, workmanlike and efficient manner, in accordance with sound mining and other applicable industry standards and practices.

(iv)           A management committee shall be formed, consisting of up to two representatives from each Venture participant.  The management committee members shall have voting rights in proportion to the participants’ respective participating interests.  The manager shall present work programs and budgets to the management committee for approval.  Management committee decisions shall be made by a majority vote, provided that: (i) in the event of a tie vote, the manager shall have the deciding vote; and (ii) any decision to dispose of all or substantially all of the Venture Property or to amend an approved program and budget to increase the expenditures during that budget period by more than fifteen percent (15%) shall require a vote of the participants holding at least seventy percent (70%) of the participating interests in the Venture.

(v)           If either participant elects not to contribute its proportionate share to an approved program and budget, such participants’ participating interest shall be subject to straight-line dilution.  If either participant elects to contribute to an approved program and budget, but fails to make such contribution, the amount of dilution shall be twice the amount that would have occurred if the defaulting participant initially elected not to contribute.  In the event that either participant’s participating interest is diluted to below ten percent (10.0%), it shall relinquish its participating interest to the other participant, in return for a royalty agreement in the form of Exhibit D hereto conveying to the diluting participant a two and one-half percent (2.5%) net profits interest on all Minerals thereafter produced and removed from the  Property.  The royalty agreement shall further provide that following full satisfaction or termination of the Existing Royalty, the royalty payable to the diluting participant with respect to the Property shall convert to a one and one-half percent (1.5%) net smelter return royalty as further set forth in Exhibit D.  As to any portion of the Venture Property not burdened by the Existing Royalty or any third party royalty, the royalty payable to the diluting participant shall be a one and one-half percent (1.5%) net smelter return royalty as further set forth in Exhibit D, and as to any portion of the Venture Property not burdened by the Existing Royalty but burdened by a third party royalty, the royalty payable to the diluting participant shall be a one percent (1.0%) net smelter return royalty as further set forth in Exhibit D.

  

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(e)           At such time as the parties enter into the Venture Agreement and title to the Property is transferred to the manager, this Agreement shall terminate.

(f)           If LKA does not timely exercise the Venture Option following delivery of a Resource Notice by delivering to Kinross the notice and payments provided in Section 6(c) above, LKA and Kinross shall hold a closing (“Closing”) within one hundred twenty (120) days following Kinross’ delivery of the Resource Notice.  At such Closing: (i) LKA shall deliver to Kinross a fully executed and authorized Special Warranty Deed conveying to Kinross, free and clear of all liens or encumbrances arising by or through LKA, all of LKA’s right, title and interest in the Property, (ii) LKA shall assign to Kinross, subject to any government approvals, any existing permits or authorizations governing exploration , development or mining activities within the Carve-Out Area that Kinross elects to have transferred; and  (iii) Kinross shall deliver to LKA a royalty agreement in the form of Exhibit D hereto conveying to LKA a two and one-half percent (2.5%) net profits interest on all Minerals thereafter produced and removed from the  Property.  The royalty agreement shall further provide that, following full satisfaction or termination of the Existing Royalty, the royalty payable to LKA with respect to the  Property shall convert to a one and one-half percent (1.5%) net smelter return royalty as further set forth in Exhibit D.  As to any portion of the Venture Property not burdened by the Existing Royalty or any third party royalty, the royalty payable to LKA shall be a one and one-half percent (1.5%) net smelter return royalty as further set forth in Exhibit D, and as to any portion of the Venture Property not burdened by the Existing Royalty but burdened by a third party royalty, the royalty payable to LKA shall be a one percent (1.0%) net smelter return royalty as further set forth in Exhibit D.     Following any such Closing, this Agreement shall terminate and LKA shall promptly deliver possession of the Property to Kinross.

(g)           Kinross shall cooperate with LKA’s efforts to secure financing for LKA’s share of Venture expenditures by providing informational and technical support.  Kinross shall have no obligation to provide any financial assurances or guarantees.

(h)           LKA will have the right to continue mineral exploration, development and mining within the Carve-Out Area at its sole cost and for its sole benefit in accordance with the terms of this Agreement through ninety (90) days following Kinross’s delivery of a Resource Notice.  LKA shall be solely responsible for complying with any permits and applicable Laws related to such mining activities.  Following the expiration of that ninety-day period, LKA shall, in coordination with Kinross, cease all exploration, development and mining activities, and place all operations and workings in a care and maintenance status in accordance with applicable Laws, until finalization of the Venture Agreement, or completion of the Closing, as applicable.  Following execution of a Venture Agreement, any operations and workings within the Carve-Out Area shall be managed by and on behalf of the Venture for the benefit of the Venture participants.

  

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7.           Property Maintenance.

(a)           Except as provided in Section 7(b) below, LKA shall take such actions as are necessary to maintain the Property in good standing, including, but not limited to, payment of property taxes and satisfying royalty payments.  Upon making any such payment or required filing, LKA shall promptly deliver to Kinross a copy of the documents that were filed, and written evidence of any payment that was made.  LKA shall satisfy all requirements to maintain the Property in good standing as required  by this Section 7(a), and deliver to Kinross written documentation of such satisfaction at least 45 days prior to the legal deadline for satisfying such requirement.  If Kinross has not received such documentation by such time, Kinross may, but has no obligation to, satisfy such requirement(s), and LKA shall promptly reimburse Kinross for the amount of any payment made by Kinross, and any related costs, plus fifteen percent (15%) of the amount of those payments and costs.  

(b)           Kinross shall pay all federal maintenance fees for the Unpatented Claims and satisfy any federal and state filing requirements for maintaining the Unpatented Claims in good standing.  Upon making any such payment or filing, Kinross shall promptly deliver to LKA a copy of the documents that were filed, and written evidence of any payment that was made.  Kinross shall satisfy the requirements of this Section 7(b), and deliver to LKA written documentation of such satisfaction, at least 45 days prior to the legal deadline for satisfying such requirement.  If LKA has not received such documentation by such time, LKA may, but has no obligation to, satisfy such requirement(s), and Kinross shall promptly reimburse LKA for the amount of any payment made by LKA, and any related costs, plus fifteen percent (15%) of the amount of those payments and costs.  

(c)           If Kinross determines that any of the Unpatented Claims should be amended or relocated, Kinross may take such curative action, provided that Kinross shall provide prior notice to LKA and any such amendment or relocation shall be made in the name of LKA.  LKA shall cooperate in making any filings necessary to achieve any such amendment or relocation.

8.           Reporting Meetings and Audit.

(a)           On or before February 28 of each calendar year, Kinross shall deliver to LKA an annual report that: (i) summarizes Kinross's operations on the Property and Area of Interest during the prior calendar year, (ii) includes a copy of all factual geologic data developed from activities conducted on the Property and Area of Interest by or on behalf of Kinross that was not previously provided to LKA, (iii) includes a summary of all Exploration Expenditures completed during the prior calendar year, and (iv) summarizes projected activities to be conducted by or on behalf of Kinross on the Property and Area of Interest during the present calendar year.  For purposes of this paragraph and paragraph 8(b) below, "factual geologic data" includes any drilling logs, assay data and seismic data generated from prospecting or exploration activities on the Property.  Neither Kinross nor LKA has any obligation under this Agreement, including Section 10 below, to provide the other party with any interpretation of such data.  Neither party makes any representation or warranty as to the accuracy or completeness of any data or geologic information provided pursuant to this Agreement and neither party shall have any liability for any damages relating to any inaccuracies or incompleteness of such data or information.

  

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(b)           On or before February 28 of each calendar year, LKA shall deliver to Kinross an annual report that: (i) summarizes LKA’s operations on the Property and Area of Interest during the prior calendar year, (ii) includes a copy of all factual geologic data developed from activities conducted on the Property and Area of Interest by or on behalf of LKA that was not previously provided to Kinross, and (iii) summarizes projected activities to be conducted by or on behalf of LKA on the Property and Area of Interest during the present calendar year.

(c)           At least once during each calendar quarter, Kinross representatives shall meet with LKA representatives, by telephone or in person.  During these quarterly meetings or calls, each party shall provide the other with an update of the activities they have conducted and intend to conduct on the Property and Area of Interest, and shall use good faith efforts to coordinate their respective activities to avoid conflicts with the other’s activities in accordance with Section 1 above.

(d)            LKA shall have the right to audit the books and records pertaining to the Exploration Expenditures reported in an annual report required under Section 8(a) above for a period of twelve (12) months following the delivery of that report to LKA.  The reported Exploration Expenditures shall be deemed conclusively correct and not subject to any future dispute, unless LKA objects to them in writing within that twelve (12) month period and provides a detailed basis for its objection.

9.           Acquisition of Existing Royalty.  LKA agrees to pursue negotiations with the current owners of the Existing Royalty in good faith on an agreement to purchase all or a portion of the Existing Royalty interests.  Kinross agrees to coordinate with LKA in developing mutually acceptable agreement terms, which would provide that Kinross would fund any agreed upon purchase payments that would be made during the term of this Agreement.  Upon acquisition, the Existing Royalty would be terminated.

10.           Inspections.  LKA shall be entitled to enter the Property for purposes of inspecting any of Kinross’s operations, facilities or structures at reasonable times, upon reasonable advance notice, provided that LKA shall so enter at its own risk and shall indemnify and hold Kinross and its Affiliates harmless against and from any and all loss, cost, damage, liability and expense (including but not limited to reasonable attorneys' fees and costs) by reason of injury to LKA or its agents or representatives, or damage to or destruction of any property of LKA or its agents or representatives while on the Property, or in such workings, facilities and structures, except to the extent that such injury, damage, or destruction is a result of the willful misconduct or gross negligence of Kinross.  LKA shall comply with all rules and polices established by Kinross for the protection of worker and public health and safety.  LKA shall have the right during regular business hours to review and copy all of Kinross’s non-privileged files and documents relating to activities on the Property, including, but not limited to, all invoices and other documentation of Expenditures.

  

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11.           Indemnities.

 

 

(a)           In addition to Kinross’ obligations under Section 3(b), Kinross shall indemnify, defend, release and hold harmless LKA and its successors, along with their respective officers, shareholders, directors, employees and agents from any and all claims, losses, damages, demands, and liabilities whatsoever arising from or in connection with Kinross’s breach of its representations or warranties or other terms of this Agreement or in connection with its operations or activities on the Property during the term of this Agreement, except as provided in Section 10 above or to the extent caused by the negligence or misconduct of LKA, its employees, agents, contractors or subcontractors.

(b)           In addition to LKA’s obligations under Section 10, LKA shall indemnify, defend, release and hold harmless Kinross, its affiliates and subsidiaries and its successors, along with their respective officers, shareholders directors, employees and agents, from and against any and all claims, losses, damages, demands, and liabilities whatsoever arising from or in connection with LKA’s breach of its representations or warranties or other terms of this Agreement or in connection with its operations or activities on the Property whether occurring before or after the Effective Date of this Agreement, except to the extent caused by the negligence or misconduct of Kinross, its employees, agents, contractors or subcontractors.   The condition of the underground workings or any claims, losses, damages, demands, and liabilities arising out of Kinross’ use of such workings shall not be subject to the provisions of this Section 11(b), except as provided in Section 3(b) above.

(c)           The indemnities set forth in Section 3(b), this Section and Section 10 shall survive the expiration or termination of this Agreement.

12.           Liens.

(a)           Kinross shall keep the Property free of all liens for labor or materials furnished to it in its operations hereunder, except for any such liens not yet due; provided that Kinross may refuse to pay any claims asserted against it or the Property that Kinross disputes in good faith.  Kinross, however, shall defend and hold LKA harmless against any such disputed claims, and shall comply with any final court orders with respect to such disputed claims.  Kinross may, but shall have no obligation to, contest the validity of any lien on the Property at its expense, and LKA shall cooperate in such contest, including but not limited to allowing such contest to be taken and prosecuted in LKA’s name.  Any such lien shall not be deemed a default unless finally adjudicated to be valid and not discharged by Kinross.

  

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(b)           Subject to Kinross’s obligations under Section 12(a), LKA shall not cause or allow any liens, encumbrances, or adverse claims to accrue against the Property, except for any such liens not yet due; provided that LKA may refuse to pay any claims asserted against it or the Property that LKA disputes in good faith.

13.           Insurance.

(a)           Kinross and LKA shall each carry at all times during the term of this Agreement, with insurance companies authorized to do business in the State of Colorado and having a BEST rating of B+ or better, the following minimum insurance coverages:

(i)           Workers compensation insurance as required by law;

(ii)           Employer’s liability insurance with minimum limits of one million dollars ($1,000,000) for all personal injuries or death resulting from any accident or occupational disease;

(iii)           Commercial General Liability and/or Umbrella Liability insurance with a limits of not less than four million dollars ($4,000,000) each occurrence covering bodily injury to or death of persons and/or loss of or damage to property; and

(iv)           Automobile liability insurance, covering all owned, non-owned and hired vehicles in the amount of not less than one million dollars ($1,000,000) per each occurrence.

(b)           Policies obtained by each party pursuant to this Section shall not be subject to cancellation or material change, except on 30 days advance written notice to the other party.

(c)           Each party shall name the other party as an additional insured on the commercial general liability policies that they obtain pursuant to this Section.

(d)           Kinross and LKA shall require any contractor doing work on the Property on their respective behalf to have the same type of insurance coverage required by this Section.

(e)            Within ten (10) business days following the Effective Date of this Agreement, each party shall provide the other party certificates of insurance for each above-required insurance policy that contain the following:

(i)           a statement that the other party is named as an additional insured on the commercial general liability policy;

  

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(ii)           a statement that the insurance provider has waived subrogation rights with respect to the other party; and

(iii)           a statement that the policy will not be materially changed or cancelled with at least thirty (30) days prior Notice to the other party.

Upon request of the other party, each party shall promptly provide to the requesting party copies of the insurance policies that are required by this Section.

14.           Termination.

(a)           Kinross may terminate this Agreement at any time upon providing LKA written notice thereof.  Upon termination of this Agreement by Kinross, except as otherwise provided in this Agreement, all liabilities and obligations of Kinross to LKA, with respect to the Property, not then due or accrued, shall cease and terminate.  LKA shall have the right, within ten (10) days following delivery of a termination notice to deliver written notice to Kinross of its election to acquire all or any part of Kinross's interest, if any, in any lands or minerals within the Area of Interest.  Within sixty (60) days following timely receipt of such election notice, Kinross shall, to the extent allowable, transfer to LKA by quitclaim deed or assignment any interest it holds in the Area of Interest, subject to its rights under Section 14(c) below.

 

 

(b)             If Kinross defaults in any of its material obligations hereunder, LKA may give Kinross written notice thereof and specify the default or defaults relied on.  If Kinross has not begun to cure such default within a reasonable time after receipt of such notice (which shall not, in any case, be less than thirty (30) days), LKA may terminate this Agreement by written notice to Kinross; provided, however, that if Kinross disputes that any default has occurred, the matter shall be determined pursuant to Section 17(k) below, and if Kinross is found to be in default hereunder, Kinross shall have a reasonable time (which in any case shall not be less than sixty (60) days from receipt by Kinross of the final decision adverse to Kinross) to cure such default, and if so cured, LKA shall have no right to terminate this Agreement by reason of such default.

(c)           Upon any termination of this Agreement prior to Kinross’s delivery of a Resource Notice, Kinross shall within 60 days after the effective date of termination: (i) surrender the Property to LKA free and clear of any encumbrances created by or under Kinross, if requested by LKA as provided in Section 14(a), transfer to LKA by quitclaim deed or assignment any interest in lands or minerals it holds within the Area of Interest, and deliver to LKA a written instrument or instruments, in a form appropriate for recording and acceptable to LKA, further evidencing termination of this Agreement; and (ii) deliver to LKA copies of all factual data obtained by Kinross in conducting activities or operations on the Property and the Area of Interest, not already provided to LKA.  Upon any termination of this Agreement prior to Kinross’s delivery of a Resource Notice, Kinross shall promptly reclaim all disturbance caused by its activities on the Property and the Area of Interest (to the extent being transferred) in accordance with applicable statutory and regulatory requirements, unless LKA agrees in writing to assume such reclamation obligations and relieve Kinross of the performance thereof.  Following termination of this Agreement, Kinross shall have the continued right of ingress to and egress from the Property and the Area of Interest and the right to complete such reclamation and restoration of the Property and the Area of Interest and to make such inspections as may be required by the terms by law, for so long as is reasonably necessary to complete all such reclamation, restoration, and inspections.

  

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15.           Force Majeure.  The terms of this Agreement may be extended or this Agreement terminated in the case of an event of force majeure in accordance with the following:

(a)           If Kinross is prevented from complying with any of its obligations under this Agreement by a force majeure (the “Affected Obligations”), the Affected Obligations shall be suspended and Kinross shall not be deemed in default or liable for damages or other remedies as a result thereof for so long as Kinross is prevented from complying with the Affected Obligations by the force majeure.  For purposes of this Agreement, “force majeure” shall mean any matter (whether foreseeable or unforeseeable) beyond Kinross’s reasonable control, including but not limited to:  acts of God; unusually inclement weather; acts of war, insurrection, riots or terrorism, strikes, lockouts or other labor disputes; inability to obtain necessary equipment or materials, or obtain permits, approvals or consents; damage to, destruction of, or unavoidable shutdown of necessary facilities or equipment; and acts or failures to act on the part of local, state, federal, or foreign governmental agencies or courts, allegedly sovereign Native entities or organizations, or any officer or official acting under color of governmental authority (any such agency, court, entity, organization, officer, or official, a “Governmental Authority”); provided, however, that (i) challenging (by protest, petition, appeal, or any other means) or consenting to any actions or inactions of any Governmental Authority, and (ii) settling strikes, lockouts, and other labor disputes, shall be entirely within the discretion of Kinross; and, provided further, that Kinross shall promptly notify LKA of the existence of an event of force majeure and shall exercise reasonable diligence, subject to the foregoing, in an effort to remove or overcome the cause of such inability to comply.

(b)           In entering into this Agreement, the parties assume that Kinross’s access to the Property is and will continue to be unrestricted.  Kinross’s reasonable belief that the actions or inactions of any Governmental Authority or other third party might prevent or impede access to the Property, or otherwise limit Kinross’s ability to operate thereon, shall also be considered an event of force majeure for purposes of this Agreement, and shall be referred to as an “access force majeure.”  If an access force majeure occurs, Kinross shall have the right to suspend this Agreement for a period not to exceed two years, without payment or penalty to LKA, while the access force majeure is in effect; provided, however, that Kinross shall resume operations on the Property within a reasonable time after access to the Property is no longer restricted.  In determining “reasonableness” under this Section, Kinross shall be under no duty to challenge (by protest, petition, appeal, or any other means) or to consent to any actions or inactions of any Governmental Authority.

  

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16.           Transfer of Interests, Right of First Refusal.

(a)           If LKA or Kinross (“Transferring Party”) receives a bona fide offer to acquire all or any part of its interest in this Agreement or the Property (the “Offered Property”), the Transferring Party shall promptly provide written notice (“Offer Notice”) to the other party (“Non-Transferring Party”).  The Offer Notice shall specifically identify the Offered Property and the person or entity submitting the offer (“Transferee”) and shall state the price and all other pertinent terms and conditions of the offer.  If the offer includes provision of any non-monetary consideration by the Transferee, the Offer Notice shall include a good faith estimate of the cash equivalent value of such non-cash consideration.  If the Non-Transferring Party does not agree with any such estimate, and the parties are not able to resolve the issue, the Non-Transferring Party may seek appropriate injunctive relief from a court to stay the transaction pending resolution of the valuation dispute as provided in Section 17(k) below.  If the Non-Transferring Party desires to acquire the Offered Property it will deliver notice of such election to the Transferring Party within 30 days from the date of receipt of the Offer Notice at the same price and on the same terms as set forth in the Offer Notice.  If the Non-Transferring Party does elect to acquire the Offered Property, such closing shall occur within 30 days after notice of such election is delivered to the Transferring Party.  If the Non-Transferring Party fails to provide the Transferring Party with notice of its election to acquire the Offered Property within the 30-day election period, such failure shall be deemed to be an election to not acquire the property.  If the Non-Transferring Party elects to not acquire the Offered Property, the Transferring Party shall have 120 days following the expiration of such 30-day period to complete the transfer of the entire Offered Property to the Transferee at a price and on terms set forth in its Offer Notice.  If the Transferring Party fails to complete the transfer of the Offered Property to the Transferee within that period, the Non-Transferring Party’s right of first refusal in the Offered Property shall be revived.  Any subsequent proposal by the Transferring Party to transfer the Offered Property, or any part thereof, shall be conducted in accordance with all of the procedures set forth in this Section.  A transfer may be made under this Section only if the Transferee first agrees in writing with the Non-Transferring Party to be bound by the terms of this Agreement, including this Section, to the same extent as the Transferring Party with respect to the transferred interests; provided, however, no transfer of any interest in the Property or this Agreement shall relieve the Transferring Party of its obligations under this Agreement, unless the Non-Transferring Party otherwise agrees in writing, which agreement shall not be unreasonably withheld based on the financial and technical capabilities of the Transferee. 

  

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(b)           This Section 16 shall apply to LKA and Kinross and any successor or transferee (including any Affiliate or successor by merger), but shall not apply to (i) a corporate merger, consolidation or reorganization by the Transferring Party by which the surviving entity possesses substantially all of the stock or all of the property rights and interests, and is subject to substantially all of the liabilities and obligations of the Transferring Party; (ii) any equity offering made by a Transferring Party; (iii) a transfer of direct or indirect Control of a Transferring Party to a non-Affiliate third party (whether in a single transaction or series of related transactions), but only if the fair market value of the Transferring Party’s interest in the Property or this Agreement that is being transferred does not exceed twenty-five percent (25%) of the combined market value of all of the assets of the Transferring Party and all of its Affiliates, if any, direct or indirect Control of which is also being transferred; or (iv) a transfer of Control of a Transferring Party to an Affiliate, provided that in each case, the acquiring party shall agree in writing with the other party to assume the Transferring Party’s obligations under this Agreement or any other agreement hereunder, as to the transferred interest.  For purposes of this Agreement, “Affiliate” means any person or entity that Controls, is Controlled by or under common Control with LKA or Kinross.  The term “Control” used as a verb means the ability, directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity through (i) the legal or beneficial ownership of voting securities or membership interests; (ii) the right to appoint managers, directors or corporate management; (iii) contract; (iv) operating agreement; or (v) voting trust.  The term “Control” used as a noun means an interest which gives the holder the ability to exercise any of the foregoing powers.

17.           General Provisions.

(a)           Notice.  All notices or other communications to either party shall be in writing and shall be sufficiently given if (i) delivered in person, (ii) sent by registered or certified mail, return receipt requested, or (iii) sent by overnight mail by a courier that maintains a delivery tracking system.  Subject to the following sentence, all notices shall be effective and shall be deemed delivered (i) if by personal delivery, on the date of delivery, (ii) if by mail, on the date of delivery as shown on the actual receipt, and (iii) if by overnight courier, as documented by the courier’s tracking system.  If the date of such delivery or receipt is not a business day, the notice or other communication delivered or received shall be effective on the next business day (“business day” means a day, other than a Saturday, Sunday or statutory holiday observed by banks in the jurisdiction in which the intended recipient of a notice or other communication is situated.)  A party may change its address from time to time by notice to the other party as indicated above.

All notices to LKA shall be addressed to:

LKA Gold Incorporated

3724 47th St Ct NW

Gig Harbor, WA 98335

  

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All notices to Kinross shall be addressed to:

Kinross Gold U.S.A., Inc.

Attn: Land Department

5075 South Syracuse Street, Suite 800

Denver, CO  80237

(b)           Inurement.  All covenants, conditions, indemnities, limitations and provisions contained in this Agreement apply to, and are binding upon, the parties to this Agreement, their heirs, representatives, successors and assigns.

(c)           Implied Covenants.  The only implied covenants in this Agreement are those of good faith and fair dealing.

(d)           Waiver.  No waiver of any provision of this Agreement, or waiver of any breach of this Agreement, shall be effective unless the waiver is in writing and is signed by the party against whom the waiver is claimed.  No waiver of any breach shall be deemed to be a waiver of any other subsequent breach.

(e)           Modification.  No modification, variation or amendment of this Agreement shall be effective unless it is in writing and signed by all parties to this Agreement.

(f)           Entire Agreement.  This Agreement sets forth the entire agreement of the parties with respect to the transactions contemplated herein and supersede any other agreement, representation, warranty or undertaking, written or oral.

(g)           Memorandum.  A short form of this Agreement in the form attached as Exhibit E shall be recorded in the records of Hinsdale County, Colorado promptly after execution of this Agreement.  This Agreement shall not be recorded.

(h)           Confidentiality of Information; Press Releases.  Except for recording the Memorandum pursuant to Section 17(g) above, and as otherwise provided in this Section 17(h), the terms and conditions of this Agreement, and all data, reports, records and other information developed or acquired by any party in connection with this Agreement, shall be treated by the parties as confidential, and no party shall reveal or otherwise disclose such information to third parties without the prior written consent of the other party.  This restriction shall not apply to disclosures to any Affiliate, to any public or private financing agency or institution, to any securities regulatory authority, to any contractors or subcontractors the parties may engage and to employees or consultants of the parties, or to any third party to which a party contemplates the transfer, sale, assignment, encumbrance or other disposition of their interest in the Property, or with which a party or its Affiliate contemplates a merger, amalgamation or other corporate reorganization; provided, however, that any such third party to whom disclosure is made has a legitimate business need to know the disclosed information, and shall first agree in writing to protect the confidential nature of such information at least to the same extent as the parties are obligated under this Section.  In the event a party is required to disclose the terms of this Agreement to any federal, state or local government, any court, agency or department thereof, or any stock exchange or securities regulatory authority, the party so required shall immediately notify the other party of such requirement and the proposed form and content of the disclosure.  To the extent legally permissible, such notice shall be delivered at least two business days prior to the date of the disclosure.  The non-disclosing party shall have the right to review and comment upon the form and content of the disclosure and to object to such disclosure to the entity seeking the information, and to seek confidential treatment of that information by the receiving entity.  Before issuing any press release relating to this Agreement or the Property, the releasing party shall provide the other party three business days advance written notice, with a copy of the proposed release.  The releasing party shall make any reasonable changes to the proposed release requested by the other party.  The confidentiality obligations under this Section shall survive for two (2) years following termination of this Agreement.

  

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(i)           Amendment.  This Agreement may not be amended or modified except by an instrument in writing, signed by both parties hereto.

(j)           Further Assurances.  Each of the parties agrees that it shall take from time to time such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement.

(k)           Dispute Resolution.  Disputes arising under or in connection with this Agreement, or the construction or enforcement thereof shall be resolved in accordance with this Section.  In the event of any such dispute, a party may provide a notice to the other party summarizing the grounds for the dispute (“Dispute Notice”). The parties shall endeavor to resolve any dispute amicably by negotiation between a member of each party having a title of Vice President or above who has authority to settle the dispute, each of whom is at a higher level of management than the persons with direct responsibility for administration or performance of this Agreement. Any dispute that is not resolved by such negotiation shall be finally resolved by a federal or state court in the State of Colorado having jurisdiction over the disputed matter.  The parties agree that the exclusive venue for any such litigation shall be in Denver, Colorado.  The parties agree to waive any right to trial by jury in any such litigation.

(l)           Construction.  The section and paragraph headings contained in this Agreement are for convenience only, and shall not be used in the construction of this Agreement.  The invalidity of any provision of this Agreement shall not affect the enforceability of any other provision of this Agreement.

(m)           Currency.  All references to dollars herein shall mean United States dollars.

(n)           Governing Law.  This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of Colorado, without regard to its conflicts of laws provisions.

  

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(o)           Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

LKA GOLD INCORPORATED

By:  /s/ Kye Abraham

Name:  Kye Abraham

Title:  President

KINROSS GOLD U.S.A., INC.

By:  /s/ Lauren Roberts

Name:  Lauren Roberts

Title:  President

 

  

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